Akamai(US:AKAM)2023-11-08 03:27Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $965 million, representing a 9% year-over-year increase [5][14] - Non-GAAP operating margin was 31%, exceeding guidance by 2 percentage points [5][17] - Non-GAAP earnings per share (EPS) was $1.63, up 29% year-over-year [5][17] - Cash gross margin was 73% [17] - Non-GAAP net income was $251 million [17] Business Line Data and Key Metrics Changes - Security revenue grew to $456 million, a 20% year-over-year increase [14][15] - Compute revenue was $130 million, growing 19% year-over-year [14][16] - Delivery revenue declined to $379 million, a 4% year-over-year decrease [14][16] - Security and compute combined represented 61% of total revenue, growing 20% year-over-year [16] Market Data and Key Metrics Changes - International revenue was $467 million, up 11% year-over-year [17] - Foreign exchange fluctuations had a negative impact of $3 million sequentially and a positive impact of $7 million year-over-year [17] Company Strategy and Development Direction - Akamai is focusing on expanding its security portfolio and cloud computing capabilities [5][10] - The company aims to leverage its distributed edge network to differentiate itself in the cloud computing market [9][10] - Akamai plans to sell security and compute solutions to newly acquired CDN customers [12][33] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for security solutions due to increasing ransomware threats [5][6] - The company is optimistic about its growth trajectory despite potential macroeconomic challenges [62] - Akamai expects to see continued growth in security revenue and a strong performance in cloud computing [24][62] Other Important Information - Akamai has raised its full-year 2023 revenue guidance to a range of $3.802 billion to $3.82 billion [24] - The company plans to spend approximately $143 million to $153 million in CapEx for Q4 2023 [23] Q&A Session Summary Question: What is the sales process like outside of the CDN installed base? - Management indicated that there has been significant success in selling to new customers, particularly through channel partnerships [27][28] Question: What is the impact of recent contract acquisitions on pricing dynamics? - Management clarified that the acquisitions were driven by customer needs and compelling financial terms, not a shift in market strategy [33] Question: How is the company addressing the increase in sophisticated malware attacks? - Management noted that while there is an increase in attacks, the company is enhancing its security offerings to address these threats [63][64] Question: What is the current state of enterprise IT spending? - Management observed a cautious approach among companies but noted that security spending remains strong [62] Question: Can you provide insights on the nature of compute deals now versus 6-12 months ago? - Management stated that the company is now able to handle mission-critical applications, indicating a significant improvement in its compute capabilities [50]