Akamai Technologies Inc (AKAM, Financial) released its 8-K filing on August 8, 2024, reporting financial results for the second quarter ended June 30, 2024. Akamai, a leading content delivery network (CDN) provider, also offers security and cloud computing solutions, which have grown to be larger than its legacy CDN business.
Performance Overview
For Q2 2024, Akamai Technologies Inc (AKAM, Financial) reported revenue of $980 million, a 5% increase year-over-year, surpassing the analyst estimate of $977.24 million. However, the company's GAAP net income per diluted share was $0.86, slightly below the analyst estimate of $0.94. Non-GAAP net income per diluted share was $1.58, reflecting a 6% increase year-over-year.
Revenue Breakdown
Revenue by solution showed significant growth in security and compute segments:
| Solution | Revenue | Year-over-Year Change |
|---|---|---|
| Security | $499 million | +15% |
| Delivery | $329 million | -13% |
| Compute | $151 million | +23% |
Geographical Revenue
Geographically, U.S. revenue was $509 million, up 6% year-over-year, while international revenue was $471 million, up 3% year-over-year.
Income and Margins
GAAP income from operations was $148 million, a 1% decrease from Q2 2023, with a GAAP operating margin of 15%. Non-GAAP income from operations was $282 million, a 3% increase from Q2 2023, maintaining a non-GAAP operating margin of 29%.
Cash Flow and Share Repurchases
Cash from operations for Q2 2024 was $431 million, or 44% of revenue. Akamai repurchased 1.4 million shares of its common stock for $128 million at an average price of $94.29 per share.
Financial Guidance
Akamai provided the following financial guidance for Q3 and full year 2024:
| Metric | Q3 2024 Low End | Q3 2024 High End | FY 2024 Low End | FY 2024 High End |
|---|---|---|---|---|
| Revenue (in millions) | $988 | $1,008 | $3,970 | $4,010 |
| Non-GAAP net income per diluted share | $1.56 | $1.62 | $6.34 | $6.47 |
Commentary
"Akamai delivered solid results in the second quarter highlighted by our strong bottom-line performance and continued strength in our security and cloud computing solutions, which now represent approximately two-thirds of total revenue," said Dr. Tom Leighton, Akamai's Chief Executive Officer.
Analysis
Akamai Technologies Inc (AKAM, Financial) demonstrated robust performance in its security and compute segments, which are crucial growth areas for the company. The decline in delivery revenue, however, highlights ongoing challenges in its legacy CDN business. The company's ability to maintain strong cash flow and execute share repurchases underscores its commitment to returning value to shareholders.
Overall, Akamai's Q2 2024 results reflect a balanced performance with notable achievements in key growth areas, despite some challenges in its traditional business segments. Investors will be keen to see how the company navigates these dynamics in the coming quarters.
Explore the complete 8-K earnings release (here) from Akamai Technologies Inc for further details.
