Akamai(US:AKAM)2025-02-24 22:10Revenue Performance - Total revenue for 2024 was $3,991,168, representing a 4.7% increase compared to 2023, driven primarily by growth in security and compute solutions[171]. - Security solutions revenue increased to $2,042,661 in 2024, a 15.7% rise from 2023, attributed to growth in segmentation and web application solutions[171][172]. - Compute solutions revenue grew by 25.0% in 2024, reaching $630,376, supported by sales of cloud optimization solutions and the acquisition of Linode[171][174]. - Delivery solutions revenue decreased by 14.5% in 2024 to $1,318,131, impacted by economic and geopolitical headwinds affecting customer traffic growth[171][173]. - U.S. revenue for 2024 was $2,075,533, representing 52.0% of total revenue, with a 5.4% increase from $1,968,779 in 2023[175]. - International revenue for 2024 was $1,915,635, accounting for 48.0% of total revenue, with a 3.9% increase from $1,843,141 in 2023[175]. Profitability and Income - Net income for 2024 was 12.7% of revenue, down from 14.2% in 2023, indicating a decline in profitability[170]. - Net income for 2024 was $504,918, down from $547,629 in 2023, but up from $523,672 in 2022[213]. - The company reported a net income margin of 12.7% in 2024, down from 14.4% in 2023 and 14.5% in 2022, indicating pressure on profitability[219]. - The diluted net income per share for 2024 was $3.27, down from $3.52 in 2023, indicating a decrease of approximately 7.1%[290]. - Comprehensive income for 2024 was $444,255, down 25.0% from $592,631 in 2023[292]. Expenses and Costs - Cost of revenue increased to 40.6% of total revenue in 2024, up from 39.6% in 2023, reflecting rising bandwidth and co-location costs[170]. - Research and development expenses for 2024 totaled $470,876, a 16.0% increase from $406,048 in 2023, accounting for 11.8% of total revenue[181]. - Sales and marketing expenses for 2024 were $556,781, a 4.4% increase from $533,226 in 2023, maintaining 14.0% of total revenue[186]. - General and administrative expenses for 2024 increased to $621,785,000, a 3.5% rise from $600,851,000 in 2023[190]. - Stock-based compensation in research and development increased by 22.8% to $152,114 in 2024 from $123,896 in 2023[181]. - Stock-based compensation rose by 8.7% to $102,494,000 in 2024, compared to $94,316,000 in 2023[190]. - Restructuring charges for 2024 were $95,441,000, a 68.5% increase from $56,643,000 in 2023[194]. Acquisitions and Investments - The company acquired Noname Security in June 2024 to enhance its API Security offerings, integrating approximately 200 employees[166]. - The acquisition of customer contracts from Edgio in December 2024 aims to strengthen delivery services and transition customers to the company's platform[166]. - Cash paid for business acquisitions in 2024 was $434,066, significantly higher than $106,171 in 2023[294]. - The acquisition of Noname Gate Ltd. was completed for $452.3 million in cash, with $132.3 million recorded as completed technologies[283]. Cash Flow and Liquidity - Net cash provided by operating activities for 2024 was $1,519.2 million, an increase from $1,348.4 million in 2023, attributed to increased customer collections and a shift to stock-based compensation[226]. - Cash used in investing activities decreased to $798.7 million in 2024 from $1,848.2 million in 2023, primarily due to increased cash proceeds from marketable securities and reduced property and equipment purchases[228]. - The company reported cash, cash equivalents, and marketable securities totaling $1.9 billion as of December 31, 2024[222]. - The company expects its current cash and marketable securities, along with forecasted cash flows, to meet foreseeable cash needs for at least the next 12 months[239]. Market and Economic Factors - Changes in foreign currency exchange rates negatively impacted revenue by $22.5 million in 2024 compared to 2023[175]. - Fluctuations in foreign currency exchange rates are expected to continue impacting the company's financial results, particularly when local currencies weaken against the U.S. dollar[220]. - The company experienced a foreign currency translation adjustment loss of $59,064 in 2024, contrasting with a gain of $18,439 in 2023[292]. Financial Position - Total assets increased to $10.369 billion in 2024 from $9.900 billion in 2023, marking a growth of approximately 4.7%[289]. - The company's total liabilities were $5.490 billion as of December 31, 2024, compared to $5.303 billion in 2023, representing an increase of about 3.5%[289]. - As of December 31, 2024, total stockholders' equity increased to $4,878.357 million from $4,360.187 million at the end of 2022, reflecting a growth of approximately 11.9%[299]. Tax and Regulatory Matters - Provision for income taxes decreased by 22.8% to $82,095,000 in 2024 from $106,373,000 in 2023[200]. - Effective income tax rate for 2024 was 14.0%, down from 16.3% in 2023[202]. - The company has recorded certain tax reserves to address potential exposures involving its income tax positions, which are based on past experiences and judgments[352]. - The company is evaluating the impact of new FASB guidance issued in December 2023 to improve income tax disclosures, effective for the annual period ending December 31, 2025[358]. Operational Insights - The company maintains effective internal control over financial reporting, although inherent limitations exist that may not prevent or detect misstatements[276]. - The company recognizes revenue primarily from long-term contracts, with most services being recognized over time due to consistent monthly usage commitments[280]. - The company assesses collectability of accounts receivable based on historical loss rates and ongoing credit evaluations, with specific reserves created for customers deemed unable to pay[249]. - The company has no customer with an accounts receivable balance of 10% or more, indicating limited concentration of credit risk[269].