Akamai Technologies Inc (AKAM) Q2 2024 Earnings Call Highlights: Strong Security and Compute ...

GuruFocus News
4 min read

In This Article:

  • Total Revenue: $980 million, up 5% year-over-year as reported and 6% in constant currency.

  • Non-GAAP Operating Margin: 29%.

  • Non-GAAP Earnings Per Share: $1.58, up 6% year-over-year and 9% in constant currency.

  • Compute Revenue: $151 million, up 23% year-over-year as reported and 24% in constant currency.

  • Security Revenue: $499 million, up 15% year-over-year and 16% in constant currency.

  • Delivery Revenue: $329 million, declined 13% year-over-year as reported and 12% in constant currency.

  • International Revenue: $471 million, up 3% year-over-year and 5% in constant currency.

  • Cash and Marketable Securities: Approximately $1.9 billion as of June 30.

  • Share Repurchases: $128 million spent repurchasing approximately 1.4 million shares.

  • Noname Security Acquisition: Expected to add $8 million to $10 million in Q3 revenue and $18 million to $20 million for the full year 2024.

  • Q3 Revenue Guidance: $988 million to $1.008 billion, up 2% to 4% as reported and 3% to 5% in constant currency.

  • Full Year Revenue Guidance: $3.970 billion to $4.010 billion, up 4% to 5% year-over-year as reported and 5% to 6% in constant currency.

  • Full Year Non-GAAP EPS Guidance: $6.34 to $6.47.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Akamai Technologies Inc (NASDAQ:AKAM) reported strong growth in its security portfolio, with revenue reaching $499 million in Q2, up 15% year-over-year.

  • The company's compute revenue grew to $151 million, marking a 23% increase year-over-year, indicating strong early momentum in its cloud offerings.

  • Akamai Technologies Inc (NASDAQ:AKAM) achieved a non-GAAP operating margin of 29%, maintaining robust profitability.

  • The company successfully integrated Noname Security, enhancing its API security solutions and expanding its market presence.

  • Akamai Technologies Inc (NASDAQ:AKAM) is experiencing strong customer interest in its new Akamai Guardicore platform, which offers a comprehensive zero trust security solution.

Negative Points

  • Delivery revenue declined by 13% year-over-year, reflecting ongoing challenges in this segment due to macroeconomic and geopolitical headwinds.

  • The company faces a challenging macroeconomic environment and geopolitical tensions, which could impact future business performance.

  • Akamai Technologies Inc (NASDAQ:AKAM) anticipates a modest uptick in traffic in Q3, but expects a more muted seasonal impact in Q4 compared to previous years.

  • The integration of Noname Security is expected to be dilutive to non-GAAP EPS by approximately $0.04 to $0.05 for the full year 2024.

  • Foreign exchange fluctuations had a negative impact on revenue, with a $10 million year-over-year impact.

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