Core Insights - Akamai Technologies, Inc. (AKAM) reported strong fourth-quarter 2024 results, with both revenue and net income exceeding Zacks Consensus Estimates, driven by robust demand across various end markets [1][4]. Financial Performance - GAAP net income for the fourth quarter was $140 million or $0.91 per share, down from $161 million or $1.03 in the same quarter last year, primarily due to increased operating expenses [2]. - Non-GAAP net income was $253.9 million or $1.66 per share, a slight decrease from $262.6 million or $1.69 a year ago, but still beating the Zacks Consensus Estimate by $0.14 [2]. - For the full year 2024, GAAP net income was $504.9 million or $3.27 per share, compared to $547.6 million or $3.52 in 2023. Non-GAAP net income increased to $995.6 million or $6.48 per share from $960 million or $6.20 in 2023 [3]. Revenue Breakdown - Akamai generated $1 billion in revenues for the fourth quarter, up from $995 million in the previous year, with a $5 million beat over the Zacks Consensus Estimate [4]. - Revenue from the Security Technology Group was $534.6 million, reflecting a 14% year-over-year growth, driven by strong demand for Guardicore segmentation solutions and API security solutions [5]. - The Delivery segment's revenue decreased to $317.8 million from $389 million year-over-year, facing challenges from macroeconomic headwinds [5]. - The Compute segment saw revenues rise to $167.5 million from $135 million in the prior year, supported by strong enterprise customer traction [6]. Operating Expenses and Cash Flow - Total operating expenses increased to $871.9 million from $810.2 million year-over-year, with non-GAAP operating income declining to $298.1 million from $302.7 million [7]. - Akamai generated $343.8 million in cash from operating activities in the fourth quarter, down from $389.2 million in the prior year, but for the full year 2024, cash from operations increased to $1.51 billion from $1.34 billion in 2023 [8]. Liquidity Position - As of December 31, 2024, Akamai had $517.7 million in cash and cash equivalents, with operating lease liabilities of $829.7 million, compared to $489.5 million and $774.8 million, respectively, in the previous year [9]. Future Outlook - For Q1 2025, Akamai estimates revenues between $1 billion and $1.02 billion, with non-GAAP earnings expected in the range of $1.54 to $1.59 per share [10]. - For the full year 2025, management anticipates revenues between $4 billion and $4.2 billion, with non-GAAP earnings projected to be between $6 and $6.4 per share [11].

Financial Data and Key Metrics Changes - Akamai reported total revenue of $1.02 billion for Q4 2024, representing a 3% year-over-year increase [45][46] - Non-GAAP earnings per share (EPS) was $1.66, exceeding guidance and down 2% year-over-year [50][64] - Security revenue reached $535 million, growing 14% year-over-year, while compute revenue grew to $167 million, a 24% year-over-year increase [48][46] Business Line Data and Key Metrics Changes - Security became the majority revenue contributor for the first time, surpassing $2 billion in annual revenue and growing 16% year-over-year [10][12] - Cloud computing revenue was $630 million, growing 25% over 2023, with cloud infrastructure services contributing $230 million, up 32% [10][11] - Combined revenue from security and compute accounted for 69% of total revenue in Q4 [48] Market Data and Key Metrics Changes - International revenue was $490 million, up 2% year-over-year, representing 48% of total revenue [49] - The company signed significant contracts, including a $5.8 million deal with Petrobras in Brazil and a large contract for API security with a major U.S. asset manager [15][14] Company Strategy and Development Direction - Akamai is transforming from a CDN provider to a cybersecurity and cloud computing company, focusing on expanding its security offerings and cloud infrastructure services [9][12] - The company aims to achieve a compounded annual growth rate (CAGR) of about 10% for security products over the next three to five years, targeting over $3 billion in security revenue by the end of the decade [16][17] - Akamai plans to grow total cloud infrastructure services ARR by 40% to 45% in constant currency for 2025 [29][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong demand for security solutions and cloud infrastructure services [41][76] - The company anticipates a stabilization in delivery revenue decline, projecting a reduction to about 10% year-over-year in 2025 [36][76] - Management highlighted the importance of optimizing the sales operating model to drive growth in higher segments [38][39] Other Important Information - Akamai's capital expenditures (CapEx) for Q4 were $193 million, representing 19% of revenue, with plans to continue share buybacks [51][52] - The company expects foreign exchange fluctuations to negatively impact revenue by approximately $38 million in 2025 [70][72] Q&A Session Summary Question: Can you expand on the large cloud deal and the competitive environment? - Management confirmed that the customer is increasing their usage of Akamai's cloud infrastructure services and highlighted a special build-out for them in Scandinavia [81][82] Question: Is the $100 million compute deal the same as the five-year deal with the largest delivery customer? - Management clarified that they are indeed the same customer [86] Question: Can you elaborate on the $60 million headwind from the largest customer? - Management indicated that the headwind is primarily due to the customer's DIY strategy and political challenges, but the five-year agreement mitigates exposure [92][93] Question: What is the outlook for retaining Edgio contracts? - Management expressed confidence in retaining Edgio contracts, noting that they were selective in the customers taken over and do not anticipate significant churn [118] Question: What steps are being taken to minimize disruption from changes in the go-to-market strategy? - Management acknowledged that the transformation is a two-year process and is focused on increasing the number of specialized sales teams and optimizing pricing strategies [105][106]

Core Insights - Akamai Technologies reported $1.02 billion in revenue for Q4 2024, a year-over-year increase of 2.5% [1] - The EPS for the same period was $1.66, slightly down from $1.69 a year ago, with a surprise of +9.21% compared to the consensus estimate of $1.52 [1] - The revenue exceeded the Zacks Consensus Estimate of $1.01 billion, resulting in a surprise of +0.49% [1] Revenue Breakdown - International revenue was $490.06 million, slightly below the estimated $494.99 million, reflecting a year-over-year increase of +2.4% [4] - U.S. revenue reached $529.88 million, surpassing the estimated $527.22 million, with a year-over-year increase of +2.6% [4] - Security revenue was reported at $534.60 million, exceeding the average estimate of $533.06 million, marking a significant year-over-year increase of +13.5% [4] - Compute revenue was $167.50 million, close to the estimated $167.63 million, showing a year-over-year increase of +24.1% [4] - Delivery revenue was $317.84 million, above the estimated $311.62 million, but represented a year-over-year decline of -18.3% [4] Stock Performance - Akamai Technologies' shares returned +5.4% over the past month, outperforming the Zacks S&P 500 composite's +2.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Group 1: Earnings Performance - Akamai Technologies reported quarterly earnings of $1.66 per share, exceeding the Zacks Consensus Estimate of $1.52 per share, but down from $1.69 per share a year ago, representing an earnings surprise of 9.21% [1] - The company posted revenues of $1.02 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.49% and up from $995.02 million year-over-year [2] Group 2: Stock Performance and Outlook - Akamai Technologies shares have increased approximately 4.8% since the beginning of the year, compared to the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $1.67 on revenues of $1.05 billion, and for the current fiscal year, it is $6.76 on revenues of $4.28 billion [7] Group 3: Industry Context - The Internet - Services industry, to which Akamai belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]

Revenue Performance - Fourth quarter revenue was $1.020 billion, a 3% increase year-over-year from $995 million in Q4 2023[4] - Full-year revenue for 2024 was $3.991 billion, up 5% from $3.812 billion in 2023[4] - Total revenue for Q4 2024 reached $1,019,939, a 3% increase year-over-year, with total revenue for the year at $3,991,168, up 5% from 2023[28] - U.S. revenue for Q4 2024 was $530 million, up 3% year-over-year[17] - U.S. revenue for Q4 2024 was $529,879, a 3% increase year-over-year, while international revenue was $490,060, growing by 2%[29] Profitability Metrics - GAAP net income per diluted share for Q4 2024 was $0.91, a 12% decrease from $1.03 in Q4 2023[14] - Non-GAAP net income per diluted share for 2024 was $6.48, a 5% increase from $6.20 in 2023[14] - Net income for Q4 2024 was $139,905,000, compared to $57,907,000 in Q3 2024 and $161,165,000 in Q4 2023, reflecting a significant quarter-over-quarter increase[24] - Non-GAAP net income per diluted share for Q4 2024 was $1.66, up from $1.59 in Q3 2024 and $1.69 in Q4 2023[34] - Total net income for the year ended December 31, 2024, was $504.9 million, down from $547.6 million in 2023[36] Operating Expenses and Cash Flow - Cash from operations for Q4 2024 was $344 million, representing 34% of revenue[15] - Operating cash flow for Q4 2024 was $343,788,000, up from $392,542,000 in Q3 2024 and $389,193,000 in Q4 2023[25] - Total costs and operating expenses for Q4 2024 were $871,879,000, a decrease from $934,042,000 in Q3 2024 and an increase from $810,231,000 in Q4 2023[24] - Research and development expenses for Q4 2024 were $120,245,000, compared to $120,347,000 in Q3 2024 and $109,202,000 in Q4 2023, indicating a year-over-year increase of 10.4%[24] Shareholder Returns - The company repurchased 1.4 million shares for $138 million at an average price of $97.43 per share in Q4 2024[16] - The company repurchased $138,371,000 of common stock in Q4 2024, compared to $165,839,000 in Q3 2024[26] Guidance and Future Expectations - The company provided guidance for Q1 2025 revenue between $1.000 billion and $1.020 billion[19] - Non-GAAP operating margin for 2025 is expected to be 28%[19] - Forward-looking statements indicate expectations for future financial performance, with potential risks including competition, economic uncertainty, and geopolitical conditions[53] Non-GAAP Financial Measures - The company emphasizes the use of non-GAAP financial measures to provide a clearer view of its ongoing business performance[37] - Adjusted EBITDA for Q4 2024 was $429.4 million, with an adjusted EBITDA margin of 42%, consistent with Q3 2024[36] - Adjusted EBITDA excludes various items such as interest, taxes, depreciation, and legal settlements, providing a clearer view of operational performance[47] Capital Expenditures - Capital expenditures for Q4 2024 amounted to $192,668, representing 19% of total revenue, with annual capital expenditures at $675,901[30] - Total cash used in investing activities for the year ended December 31, 2024, was $798,679,000, compared to $1,848,238,000 for the year ended December 31, 2023[26] Employee Metrics - The number of employees at the end of Q4 2024 was 10,748, an increase from 10,281 in the previous year[30] Currency Impact - Foreign currency exchange rates significantly impact revenue and earnings from international operations, with management expecting continued effects[51] - The impact of foreign currency exchange rates is calculated by translating current period results using prior period average rates, enhancing financial performance understanding[52]

Core Insights - Akamai Technologies has entered into a multi-year strategic usage agreement with a major technology company, involving an investment of over $100 million in Akamai's cloud computing capabilities [1][2]. Group 1: Agreement Details - The agreement allows the customer to utilize Akamai's full portfolio to enhance and secure its infrastructure services [2]. - Akamai will implement managed Kubernetes clusters in secure virtual private cloud environments, balancing user traffic and integrating application and network security to optimize performance and cost [3]. Group 2: Company Overview - Akamai is recognized as a leader in cybersecurity and cloud computing, providing robust security solutions and superior threat intelligence to protect enterprise data globally [4]. - The company’s cloud computing solutions are designed for performance and affordability, making it a trusted partner for global enterprises seeking reliability and scalability [4].

Core Viewpoint - Akamai Technologies, Inc. is expected to report fourth-quarter 2024 results on February 20, with anticipated year-over-year revenue growth driven by strong demand across various sectors and an increase in security solutions demand [1][2]. Group 1: Company Developments - Akamai upgraded its Akamai Guardicore Segmentation and Enterprise Application Access solution to enhance performance, security, and scalability in cloud environments, providing real-time visualization of cloud workloads [3]. - The integration of Avesha Technologies into Akamai's Qualified Compute Partner Program aims to improve content delivery through advanced Kubernetes solutions, expected to positively impact Akamai's revenue [4]. - A strategic partnership with Smartbig USA Inc. will utilize Akamai's cloud computing platform to support global gaming infrastructure, enhancing Akamai's international presence and performance [5]. - Akamai acquired select assets from the bankrupt Edgio Inc., including customer contracts and patent rights, which is projected to be accretive and expand its customer base [6]. Group 2: Financial Expectations - Revenue estimates for the security segment are projected at $537.7 million, reflecting a 14.2% year-over-year increase, while the compute vertical is expected to generate $168.7 million, indicating a 24.9% growth [7]. - The overall revenue consensus estimate for the fourth quarter of 2024 is $1.01 billion, up from $995 million year-over-year, with adjusted earnings per share expected to decline to $1.52 from $1.69 [8]. Group 3: Earnings Predictions - The current earnings ESP for Akamai is 0.00%, indicating no expected earnings beat, despite a Zacks Rank of 2 (Buy) [9][10][11].

Core Viewpoint - Akamai Technologies (AKAM) is expected to report a quarterly earnings per share (EPS) of $1.52, reflecting a year-over-year decline of 10.1%, while revenues are anticipated to reach $1.01 billion, showing a 2% increase compared to the previous year [1] Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating that analysts have not changed their initial forecasts during this period [2] - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3] Revenue Breakdown - Analysts estimate 'Revenue- Security' to be $533.06 million, representing a year-over-year increase of 13.2% [5] - The 'Revenue- Compute' is projected to be $167.63 million, indicating a 24.2% increase from the prior-year quarter [5] - The consensus estimate for 'Revenue- Delivery' is $311.62 million, reflecting a year-over-year decline of 19.9% [5] - 'Revenue- International' is expected to be $494.99 million, showing a 3.4% increase from the year-ago quarter [6] - 'Revenues- United States' are projected to reach $527.22 million, indicating a 2.1% increase from the previous year [6] Stock Performance - Over the past month, Akamai Technologies shares have returned 10.1%, outperforming the Zacks S&P 500 composite's 4.9% change, and the company holds a Zacks Rank 2 (Buy), suggesting it is likely to outperform the overall market in the near future [7]

Investors interested in stocks from the Internet - Services sector have probably already heard of Akamai Technologies (AKAM) and Zscaler (ZS) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on ...

In the latest trading session, Akamai Technologies (AKAM) closed at $101.38, marking a -0.71% move from the previous day. This change lagged the S&P 500's daily gain of 0.03%. On the other hand, the Dow registered a gain of 0.28%, and the technology-centric Nasdaq decreased by 0.36%.Heading into today, shares of the cloud services provider had gained 13.94% over the past month, outpacing the Computer and Technology sector's gain of 2.31% and the S&P 500's gain of 4.19% in that time.Market participants will ...