AKAMAI REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS
Akamai Technologies (NASDAQ: AKAM) reported strong Q2 2025 financial results with revenue reaching $1.043 billion, up 7% year-over-year. The company's performance was driven by robust growth in security and cloud computing segments, with Security revenue up 11% to $552 million and Cloud Infrastructure Services revenue surging 30% to $71 million.
The company reported GAAP EPS of $0.71 (down 17% YoY) and non-GAAP EPS of $1.73 (up 9% YoY). Cash flow from operations was strong at $459 million, representing 44% of revenue. Akamai also conducted significant share repurchases, buying back 3.9 million shares for $300 million.
Based on strong performance, Akamai raised its full-year 2025 guidance, projecting revenue between $4.135-$4.205 billion and non-GAAP EPS of $6.60-$6.80.
Akamai Technologies (NASDAQ: AKAM) ha comunicato solidi risultati finanziari per il secondo trimestre 2025, con ricavi pari a 1,043 miliardi di dollari, in aumento del 7% rispetto all'anno precedente. La crescita è stata trainata dai settori della sicurezza e del cloud computing, con ricavi dalla sicurezza in aumento dell'11% a 552 milioni di dollari e ricavi dai servizi di infrastruttura cloud in crescita del 30% a 71 milioni di dollari.
L'azienda ha riportato un utile per azione GAAP di 0,71 dollari (in calo del 17% su base annua) e un utile per azione non-GAAP di 1,73 dollari (in crescita del 9% su base annua). Il flusso di cassa operativo è stato solido, pari a 459 milioni di dollari, equivalenti al 44% dei ricavi. Akamai ha inoltre effettuato rilevanti riacquisti di azioni, comprando 3,9 milioni di azioni per 300 milioni di dollari.
Grazie a queste performance positive, Akamai ha rivisto al rialzo le previsioni per l'intero anno 2025, stimando ricavi tra 4,135 e 4,205 miliardi di dollari e un utile per azione non-GAAP compreso tra 6,60 e 6,80 dollari.
Akamai Technologies (NASDAQ: AKAM) reportó sólidos resultados financieros en el segundo trimestre de 2025, con ingresos que alcanzaron 1.043 millones de dólares, un aumento del 7% interanual. El desempeño de la empresa fue impulsado por un fuerte crecimiento en los segmentos de seguridad y computación en la nube, con ingresos de seguridad aumentando un 11% hasta 552 millones de dólares y ingresos de servicios de infraestructura en la nube que se dispararon un 30% hasta 71 millones de dólares.
La compañía reportó un EPS GAAP de 0,71 dólares (una caída del 17% interanual) y un EPS no GAAP de 1,73 dólares (un aumento del 9% interanual). El flujo de caja operativo fue sólido, con 459 millones de dólares, representando el 44% de los ingresos. Akamai también realizó significativas recompras de acciones, comprando 3,9 millones de acciones por 300 millones de dólares.
Basándose en este sólido desempeño, Akamai elevó sus previsiones para todo el año 2025, proyectando ingresos entre 4.135 y 4.205 millones de dólares y un EPS no GAAP de 6,60 a 6,80 dólares.
Akamai Technologies (NASDAQ: AKAM)는 2025년 2분기 강력한 재무 실적을 발표했으며, 매출은 전년 대비 7% 증가한 10억 4,300만 달러에 달했습니다. 회사의 성과는 보안 및 클라우드 컴퓨팅 부문의 견고한 성장에 힘입었으며, 보안 매출은 11% 증가한 5억 5,200만 달러, 클라우드 인프라 서비스 매출은 30% 급증한 7,100만 달러를 기록했습니다.
회사는 GAAP 주당순이익(EPS) 0.71달러(전년 대비 17% 감소)와 비-GAAP EPS 1.73달러(전년 대비 9% 증가)를 보고했습니다. 영업 현금 흐름은 4억 5,900만 달러로 매출의 44%를 차지했습니다. 또한 Akamai는 3.9백만 주를 3억 달러에 재매입하는 대규모 자사주 매입을 실시했습니다.
강력한 실적을 바탕으로 Akamai는 2025년 연간 가이던스를 상향 조정하여 매출을 41억 3,500만 달러에서 42억 500만 달러 사이, 비-GAAP EPS를 6.60달러에서 6.80달러로 전망했습니다.
Akamai Technologies (NASDAQ: AKAM) a publié de solides résultats financiers pour le deuxième trimestre 2025, avec un chiffre d'affaires atteignant 1,043 milliard de dollars, en hausse de 7 % par rapport à l'année précédente. La performance de l'entreprise a été portée par une forte croissance dans les segments de la sécurité et de l'informatique en nuage, avec un chiffre d'affaires sécurité en hausse de 11 % à 552 millions de dollars et un chiffre d'affaires des services d'infrastructure cloud en forte hausse de 30 % à 71 millions de dollars.
L'entreprise a enregistré un BPA GAAP de 0,71 dollar (en baisse de 17 % en glissement annuel) et un BPA non-GAAP de 1,73 dollar (en hausse de 9 % en glissement annuel). Les flux de trésorerie opérationnels ont été solides, atteignant 459 millions de dollars, soit 44 % du chiffre d'affaires. Akamai a également procédé à d'importants rachats d'actions, rachetant 3,9 millions d'actions pour 300 millions de dollars.
Sur la base de cette solide performance, Akamai a relevé ses prévisions pour l'ensemble de l'année 2025, projetant un chiffre d'affaires compris entre 4,135 et 4,205 milliards de dollars et un BPA non-GAAP de 6,60 à 6,80 dollars.
Akamai Technologies (NASDAQ: AKAM) meldete starke Finanzergebnisse für das zweite Quartal 2025 mit einem Umsatz von 1,043 Milliarden US-Dollar, was einem Anstieg von 7 % im Jahresvergleich entspricht. Das Wachstum wurde durch robuste Zuwächse in den Bereichen Sicherheit und Cloud-Computing angetrieben, wobei die Sicherheitsumsätze um 11 % auf 552 Millionen US-Dollar stiegen und die Umsätze im Bereich Cloud-Infrastruktur-Dienste um 30 % auf 71 Millionen US-Dollar zulegten.
Das Unternehmen berichtete einen GAAP-Gewinn je Aktie (EPS) von 0,71 US-Dollar (ein Rückgang von 17 % im Jahresvergleich) und einen non-GAAP EPS von 1,73 US-Dollar (ein Anstieg von 9 % im Jahresvergleich). Der operative Cashflow war mit 459 Millionen US-Dollar stark und entspricht 44 % des Umsatzes. Akamai führte zudem bedeutende Aktienrückkäufe durch und kaufte 3,9 Millionen Aktien für 300 Millionen US-Dollar zurück.
Aufgrund der starken Leistung hob Akamai seine Prognose für das Gesamtjahr 2025 an und erwartet einen Umsatz zwischen 4,135 und 4,205 Milliarden US-Dollar sowie einen non-GAAP EPS von 6,60 bis 6,80 US-Dollar.
- Revenue grew 7% YoY to $1.043 billion, exceeding expectations
- Cloud Infrastructure Services revenue surged 30% YoY to $71 million
- Security revenue increased 11% YoY to $552 million
- Strong cash flow from operations at $459 million (44% of revenue)
- Company raised full-year 2025 guidance for revenue and earnings
- Significant share repurchase of $300 million executed in Q2
- GAAP net income decreased 21% YoY
- GAAP EPS declined 17% YoY to $0.71
- Delivery revenue dropped 3% YoY to $320 million
Insights
Akamai posted strong Q2 results with robust security and cloud growth, raising guidance despite GAAP profit pressures.
Akamai delivered solid Q2 results with revenue reaching
Looking at profitability, there's a notable divergence between GAAP and non-GAAP performance. While non-GAAP operating income improved
The company's cash position remains strong with
The results reveal a company successfully transitioning toward higher-growth security and cloud services while managing the decline in its traditional delivery business (down
Second quarter revenue of
Cloud Infrastructure Services** revenue of
GAAP net income per diluted share of
"Akamai reported excellent results in the second quarter, highlighted by outperformance in both revenue and profitability. Building on our solid momentum from the first two quarters, we are increasing our guidance for revenue and earnings for the remainder of the year, while continuing to invest in key growth areas of security and cloud computing. These investments are paying off — our Cloud Infrastructure Services grew
Akamai delivered the following results for the second quarter ended June 30, 2025:
Revenue: Revenue was
Revenue by solution:
- Security revenue was
$552 million 11% year-over-year and up10% when adjusted for foreign exchange* - Delivery revenue was
$320 million 3% year-over-year and down4% when adjusted for foreign exchange* - Cloud computing revenue was
$171 million 13% year-over-year and up13% when adjusted for foreign exchange*- Cloud Infrastructure Services** revenue of
$71 million 30% year-over-year and up29% when adjusted for foreign exchange*
- Cloud Infrastructure Services** revenue of
Revenue by geography:
U.S. revenue was$528 million 4% year-over-year- International revenue was
$516 million 10% year-over-year and up8% when adjusted for foreign exchange*
Income from operations: GAAP income from operations was
Non-GAAP income from operations* was
Net income: GAAP net income was
EPS: GAAP net income per diluted share was
Adjusted EBITDA*: Adjusted EBITDA* was
Supplemental cash information: Cash from operations for the second quarter of 2025 was
Share repurchases: The Company spent
Financial guidance:
The Company reports the following financial guidance for the third quarter and full year 2025:
Three Months Ending September 30, 2025 | Year Ending December 31, 2025 | ||||||
Low End | High End | Low End | High End | ||||
Revenue (in millions) | $ 1,035 | $ 1,050 | $ 4,135 | $ 4,205 | |||
Non-GAAP operating margin * | 28 % | 28 % | 29 % | 29 % | |||
Non-GAAP net income per diluted share * | $ 1.62 | $ 1.66 | $ 6.60 | $ 6.80 | |||
Non-GAAP tax rate* | 19 % | 19 % | 19 % | 19 % | |||
Shares used in non-GAAP per diluted share calculations * (in millions) | 145 | 145 | 147 | 147 | |||
Capex as a percentage of revenue * | 22 % | 22 % | 20 % | 20 % | |||
The guidance that is provided on a non-GAAP basis cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items Akamai excludes from non-GAAP measures. For example, stock-based compensation is unpredictable for Akamai's performance-based awards, which can fluctuate significantly based on current expectations of the future achievement of performance-based targets. Amortization of intangible assets, acquisition-related costs and restructuring costs are all impacted by the timing and size of potential future actions, which are difficult to predict. In addition, from time to time, Akamai excludes certain items that occur infrequently, which are also inherently difficult to predict and estimate. It is also difficult to predict the tax effect of the items Akamai excludes and to estimate certain discrete tax items, such as the resolution of tax audits or changes to tax laws. As such, the costs that are being excluded from non-GAAP guidance are difficult to predict and a reconciliation or a range of results could lead to disclosure that would be imprecise or potentially misleading. Material changes to any one of the exclusions could have a significant effect on our guidance and future GAAP results.
* | See Use of Non-GAAP Financial Measures below for definitions |
** | Cloud Infrastructure Services consist of the compute and storage solutions based on Linode, along with our EdgeWorkers product and the partner solutions running on our cloud platform |
Quarterly Conference Call
Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-833-634-5020 (or 1-412-902-4238 for international calls) and using passcode Akamai Technologies call. A live webcast of the call may be accessed at www.akamai.com in the Investor Relations section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-877-344-7529 (or 1-412-317-0088 for international calls) and using passcode 6719927. The archived webcast of this event may be accessed through the Akamai website.
About Akamai
Akamai is the cybersecurity and cloud computing company that powers and protects business online. Our market-leading security solutions, superior threat intelligence and global operations team provide defense in depth to safeguard enterprise data and applications everywhere. Akamai's full-stack cloud computing solutions deliver performance and affordability on the world's most distributed platform. Global enterprises trust Akamai to provide the industry-leading reliability, scale and expertise they need to grow their business with confidence. Learn more at akamai.com and akamai.com/blog, or follow Akamai Technologies on X and LinkedIn.
AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(in thousands) | June 30, | December 31, | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 850,302 | $ 517,707 | |
Marketable securities | 116,322 | 1,078,876 | |
Accounts receivable, net | 779,165 | 727,687 | |
Prepaid expenses and other current assets | 288,038 | 253,827 | |
Total current assets | 2,033,827 | 2,578,097 | |
Marketable securities | 591,249 | 275,592 | |
Property and equipment, net | 2,213,629 | 1,995,071 | |
Operating lease right-of-use assets | 1,063,348 | 1,006,738 | |
Acquired intangible assets, net | 675,217 | 727,585 | |
Goodwill | 3,170,024 | 3,151,077 | |
Deferred income tax assets | 597,015 | 483,249 | |
Other assets | 191,826 | 151,376 | |
Total assets | $ 10,536,135 | $ 10,368,785 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 146,617 | $ 130,447 | |
Accrued expenses | 272,144 | 370,888 | |
Deferred revenue | 179,761 | 149,222 | |
Convertible senior notes | — | 1,149,116 | |
Operating lease liabilities | 271,500 | 259,134 | |
Other current liabilities | 10,497 | 32,516 | |
Total current liabilities | 880,519 | 2,091,323 | |
Deferred revenue | 25,301 | 26,314 | |
Deferred income tax liabilities | 23,378 | 16,066 | |
Convertible senior notes | 4,100,977 | 2,396,695 | |
Operating lease liabilities | 898,638 | 829,660 | |
Other liabilities | 139,814 | 130,370 | |
Total liabilities | 6,068,627 | 5,490,428 | |
Total stockholders' equity | 4,467,508 | 4,878,357 | |
Total liabilities and stockholders' equity | $ 10,536,135 | $ 10,368,785 | |
AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Revenue | $ 1,043,494 | $ 1,015,139 | $ 979,580 | $ 2,058,633 | $ 1,966,550 | ||||
Costs and operating expenses: | |||||||||
Cost of revenue (1) (2) | 426,535 | 418,945 | 402,888 | 845,480 | 797,631 | ||||
Research and development (1) | 125,838 | 123,549 | 113,352 | 249,387 | 230,284 | ||||
Sales and marketing (1) | 146,239 | 134,131 | 139,039 | 280,370 | 273,609 | ||||
General and administrative (1) (2) | 162,597 | 155,933 | 153,854 | 318,530 | 306,284 | ||||
Amortization of acquired intangible assets | 27,721 | 27,637 | 21,076 | 55,358 | 42,099 | ||||
Restructuring charge | 3,103 | 361 | 1,385 | 3,464 | 1,929 | ||||
Total costs and operating expenses | 892,033 | 860,556 | 831,594 | 1,752,589 | 1,651,836 | ||||
Income from operations | 151,461 | 154,583 | 147,986 | 306,044 | 314,714 | ||||
Interest and marketable securities income, net | 14,129 | 19,530 | 26,628 | 33,659 | 54,469 | ||||
Interest expense | (8,201) | (6,750) | (6,829) | (14,951) | (13,647) | ||||
Other (expense) income, net | (5,451) | 6,020 | (949) | 569 | (438) | ||||
Income before provision for income taxes | 151,938 | 173,383 | 166,836 | 325,321 | 355,098 | ||||
Provision for income taxes | (48,320) | (50,212) | (35,148) | (98,532) | (47,992) | ||||
Net income | $ 103,618 | $ 123,171 | $ 131,688 | $ 226,789 | $ 307,106 | ||||
Net income per share: | |||||||||
Basic | $ 0.72 | $ 0.83 | $ 0.86 | $ 1.54 | $ 2.02 | ||||
Diluted | $ 0.71 | $ 0.82 | $ 0.86 | $ 1.53 | $ 1.97 | ||||
Shares used in per share calculations: | |||||||||
Basic | 144,757 | 149,052 | 152,265 | 146,905 | 151,946 | ||||
Diluted | 145,249 | 151,064 | 153,588 | 148,156 | 155,527 | ||||
(1) Includes stock-based compensation (see supplemental table for figures) |
(2) Includes depreciation and amortization (see supplemental table for figures) |
AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Cash flows from operating activities: | |||||||||
Net income | $ 103,618 | $ 123,171 | $ 131,688 | $ 226,789 | $ 307,106 | ||||
Adjustments to reconcile net income to | |||||||||
Depreciation and amortization | 175,461 | 174,022 | 158,549 | 349,483 | 314,732 | ||||
Stock-based compensation | 112,776 | 111,978 | 98,466 | 224,754 | 191,726 | ||||
Provision for deferred income taxes | 12,680 | 31,383 | 13,946 | 44,063 | 3,479 | ||||
Amortization of debt issuance costs | 1,645 | 1,605 | 1,660 | 3,250 | 3,342 | ||||
(Gain) loss on investments | — | (9,313) | 66 | (9,313) | 66 | ||||
Other non-cash reconciling items, net | 1,840 | 2,142 | 1,896 | 3,982 | 3,958 | ||||
Changes in operating assets and | |||||||||
Accounts receivable | (7,440) | (25,677) | 17,538 | (33,117) | 16,802 | ||||
Prepaid expenses and other current | 7,430 | (37,129) | 1,253 | (29,699) | (24,763) | ||||
Accounts payable and accrued | 25,365 | (109,906) | 19,523 | (84,541) | (47,426) | ||||
Deferred revenue | 8,169 | 14,948 | (11,619) | 23,117 | 22,697 | ||||
Other current liabilities | (2,181) | (20,276) | 624 | (22,457) | 980 | ||||
Other non-current assets and | 19,786 | (5,748) | (2,627) | 14,038 | (9,858) | ||||
Net cash provided by operating | 459,149 | 251,200 | 430,963 | 710,349 | 782,841 | ||||
Cash flows from investing activities: | |||||||||
Cash received (paid) for business | 790 | — | (434,066) | 790 | (434,066) | ||||
Cash paid for asset acquisitions | — | (29,930) | (4,796) | (29,930) | (4,796) | ||||
Purchases of property and equipment | (223,781) | (196,008) | (163,537) | (419,789) | (337,291) | ||||
Purchases of short- and long-term | (662,715) | (7,080) | (16,103) | (669,795) | (186,122) | ||||
Proceeds from sales, maturities and | 206,270 | 1,112,955 | 337,220 | 1,319,225 | 519,475 | ||||
Other, net | (3,430) | (3,091) | (5,400) | (6,521) | 4,535 | ||||
Net cash (used in) provided by | (682,866) | 876,846 | (286,682) | 193,980 | (438,265) | ||||
AKAMAI TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Cash flows from financing activities: | |||||||||
Proceeds from borrowings under | 250,000 | — | — | 250,000 | — | ||||
Repayment of borrowings under | (250,000) | — | — | (250,000) | — | ||||
Proceeds from the issuance of | 1,702,188 | — | — | 1,702,188 | — | ||||
Proceeds from the issuance of warrants | 330,855 | — | — | 330,855 | — | ||||
Purchases of note hedges related to | (605,820) | — | — | (605,820) | — | ||||
Repayment of convertible senior notes | (1,149,992) | — | — | (1,149,992) | — | ||||
Proceeds related to the issuance of | 9,059 | 20,182 | 7,956 | 29,241 | 28,266 | ||||
Employee taxes paid related to net share | (25,866) | (72,063) | (31,914) | (97,929) | (141,247) | ||||
Repurchases of common stock | (300,000) | (499,963) | (127,809) | (799,963) | (253,258) | ||||
Other, net | (1,629) | (406) | (8,678) | (2,035) | (10,187) | ||||
Net cash used in financing | (41,205) | (552,250) | (160,445) | (593,455) | (376,426) | ||||
Effects of exchange rate changes on cash, | 16,070 | 5,431 | (5,293) | 21,501 | (9,306) | ||||
Net (decrease) increase in cash, cash | (248,852) | 581,227 | (21,457) | 332,375 | (41,156) | ||||
Cash, cash equivalents and restricted cash | 1,100,311 | 519,084 | 470,771 | 519,084 | 490,470 | ||||
Cash, cash equivalents and restricted cash | $ 851,459 | $ 1,100,311 | $ 449,314 | $ 851,459 | $ 449,314 | ||||
AKAMAI TECHNOLOGIES, INC. SUPPLEMENTAL REVENUE DATA – REVENUE BY SOLUTION | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Security | $ 551,914 | $ 530,695 | $ 498,708 | $ 989,389 | |||||
Delivery | 320,125 | 318,988 | 329,399 | 639,113 | 681,157 | ||||
Cloud computing | 171,455 | 165,456 | 151,473 | 336,911 | 296,004 | ||||
Total revenue | $ 1,043,494 | $ 1,015,139 | $ 979,580 | ||||||
Revenue growth rates year-over-year: | |||||||||
Security | 11 % | 8 % | 15 % | 9 % | 18 % | ||||
Delivery | (3) | (9) | (13) | (6) | (12) | ||||
Cloud computing | 13 | 14 | 23 | 14 | 24 | ||||
Total revenue | 7 % | 3 % | 5 % | 5 % | 6 % | ||||
Revenue growth rates year-over-year, | |||||||||
Security | 10 % | 10 % | 16 % | 10 % | 19 % | ||||
Delivery | (4) | (8) | (12) | (6) | (11) | ||||
Cloud computing | 13 | 15 | 24 | 14 | 24 | ||||
Total revenue | 6 % | 4 % | 6 % | 5 % | 7 % | ||||
AKAMAI TECHNOLOGIES, INC. SUPPLEMENTAL REVENUE DATA – REVENUE BY GEOGRAPHY | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
$ 527,607 | $ 528,739 | $ 508,696 | |||||||
International | 515,887 | 486,400 | 470,884 | 1,002,287 | 945,507 | ||||
Total revenue | $ 1,043,494 | $ 1,015,139 | $ 979,580 | ||||||
Revenue growth rates year-over-year: | |||||||||
4 % | 3 % | 6 % | 3 % | 7 % | |||||
International | 10 | 2 | 3 | 6 | 5 | ||||
Total revenue | 7 % | 3 % | 5 % | 5 % | 6 % | ||||
Revenue growth rates year-over-year, | |||||||||
4 % | 3 % | 6 % | 3 % | 7 % | |||||
International | 8 | 5 | 5 | 7 | 7 | ||||
Total revenue | 6 % | 4 % | 6 % | 5 % | 7 % | ||||
(1) See Use of Non-GAAP Financial Measures below for a definition |
AKAMAI TECHNOLOGIES, INC. OTHER SUPPLEMENTAL DATA | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands, except end of period statistics) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Stock-based compensation: | |||||||||
Cost of revenue | $ 19,314 | $ 18,928 | $ 15,864 | $ 38,242 | $ 28,482 | ||||
Research and development | 39,803 | 42,268 | 36,951 | 82,071 | 74,996 | ||||
Sales and marketing | 22,263 | 22,440 | 18,976 | 44,703 | 37,787 | ||||
General and administrative | 31,396 | 28,342 | 26,675 | 59,738 | 50,461 | ||||
Total stock-based compensation | $ 112,776 | $ 111,978 | $ 98,466 | $ 224,754 | $ 191,726 | ||||
Depreciation and amortization: | |||||||||
Network-related depreciation | $ 81,824 | $ 78,325 | $ 68,936 | $ 160,149 | $ 134,611 | ||||
Capitalized internal-use software | 38,059 | 40,095 | 42,407 | 78,154 | 86,039 | ||||
Other depreciation and amortization | 15,874 | 15,884 | 15,983 | 31,758 | 32,013 | ||||
Non-GAAP depreciation and | 135,757 | 134,304 | 127,326 | 270,061 | 252,663 | ||||
Capitalized stock-based compensation | 11,864 | 11,963 | 10,048 | 23,827 | 19,760 | ||||
Capitalized interest expense amortization (2) | 119 | 118 | 99 | 237 | 210 | ||||
Amortization of acquired intangible assets | 27,721 | 27,637 | 21,076 | 55,358 | 42,099 | ||||
Total depreciation and amortization | $ 175,461 | $ 174,022 | $ 158,549 | $ 349,483 | $ 314,732 | ||||
Capital expenditures (1) (3): | |||||||||
Purchases of property and equipment | $ 135,597 | $ 147,990 | $ 94,463 | $ 283,587 | $ 169,098 | ||||
Capitalized internal-use software | 78,584 | 77,910 | 72,653 | 156,494 | 150,144 | ||||
Total capital expenditures | $ 214,181 | $ 225,900 | $ 167,116 | $ 440,081 | $ 319,242 | ||||
Capex as a percentage of revenue (1) | 21 % | 22 % | 17 % | 21 % | 16 % | ||||
End of period statistics: | |||||||||
Number of employees | 10,944 | 10,811 | 10,920 | ||||||
(1) | See Use of Non-GAAP Financial Measures below for a definition |
(2) | Amortization of capitalized stock-based compensation and interest expense in this table excludes amortization of capitalized stock-based compensation and interest expense related to cloud-computing arrangements and contract fulfillment costs. However, the amounts are included in our total amortization of capitalized stock-based compensation and interest expense that is excluded from our non-GAAP measures (see reconciliations of GAAP to non-GAAP measures). |
(3) | Capital expenditures presented in this table are reported on an accrual basis, which differs from the cash-basis presentation in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods. |
AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND TAX RATE | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Income from operations | $ 151,461 | $ 154,583 | $ 147,986 | $ 306,044 | $ 314,714 | ||||
GAAP operating margin | 15 % | 15 % | 15 % | 15 % | 16 % | ||||
Amortization of acquired intangible | 27,721 | 27,637 | 21,076 | 55,358 | 42,099 | ||||
Stock-based compensation | 112,776 | 111,978 | 98,466 | 224,754 | 191,726 | ||||
Amortization of capitalized stock-based | 12,288 | 12,359 | 10,434 | 24,647 | 20,557 | ||||
Restructuring charge | 3,103 | 361 | 1,385 | 3,464 | 1,929 | ||||
Acquisition-related costs | 1,274 | 95 | 2,179 | 1,369 | 2,351 | ||||
Operating adjustments | 157,162 | 152,430 | 133,540 | 309,592 | 258,662 | ||||
Non-GAAP income from operations | $ 308,623 | $ 307,013 | $ 281,526 | $ 615,636 | $ 573,376 | ||||
Non-GAAP operating margin | 30 % | 30 % | 29 % | 30 % | 29 % | ||||
Net income | $ 103,618 | $ 123,171 | $ 131,688 | $ 226,789 | $ 307,106 | ||||
Operating adjustments (from above) | 157,162 | 152,430 | 133,540 | 309,592 | 258,662 | ||||
Amortization of debt issuance costs | 1,645 | 1,605 | 1,660 | 3,250 | 3,342 | ||||
(Gain) loss on cost method investments, | — | (9,313) | 66 | (9,313) | 66 | ||||
Income tax effect of above non-GAAP | (11,069) | (11,797) | (24,306) | (22,866) | (71,033) | ||||
Non-GAAP net income | $ 251,356 | $ 256,096 | $ 242,648 | $ 507,452 | $ 498,143 | ||||
GAAP tax rate | 32 % | 29 % | 21 % | 30 % | 14 % | ||||
Income tax effect of non-GAAP | (13) | (10) | (1) | (11) | 5 | ||||
Non-GAAP tax rate | 19 % | 19 % | 20 % | 19 % | 19 % | ||||
AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED SHARE | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
GAAP net income per diluted share | $ 0.71 | $ 0.82 | $ 0.86 | $ 1.53 | $ 1.97 | ||||
Adjustments to net income: | |||||||||
Amortization of acquired intangible | 0.19 | 0.18 | 0.14 | 0.37 | 0.27 | ||||
Stock-based compensation | 0.78 | 0.74 | 0.64 | 1.52 | 1.23 | ||||
Amortization of capitalized stock-based | 0.08 | 0.08 | 0.07 | 0.17 | 0.13 | ||||
Restructuring charge | 0.02 | — | 0.01 | 0.02 | 0.01 | ||||
Acquisition-related costs | 0.01 | — | 0.01 | 0.01 | 0.02 | ||||
Amortization of debt issuance costs | 0.01 | 0.01 | 0.01 | 0.02 | 0.02 | ||||
(Gain) loss on cost method investments, | — | (0.06) | — | (0.06) | — | ||||
Income tax effect of above non-GAAP | (0.08) | (0.08) | (0.16) | (0.15) | (0.46) | ||||
Adjustment for shares (1) | — | — | — | — | 0.03 | ||||
Non-GAAP net income per diluted share | $ 1.73 | $ 1.70 | $ 1.58 | $ 3.43 | $ 3.23 | ||||
Shares used in GAAP per diluted share | 145,249 | 151,064 | 153,588 | 148,156 | 155,527 | ||||
Impact of benefit from note hedge | — | — | (199) | — | (1,157) | ||||
Shares used in non-GAAP per diluted share | 145,249 | 151,064 | 153,389 | 148,156 | 154,370 | ||||
(1) | Shares used in non-GAAP per diluted share calculations have been adjusted for the three and six months ended June 30, 2024 for the benefit of Akamai's note hedge transactions. During these periods, Akamai's average stock price was in excess of |
AKAMAI TECHNOLOGIES, INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | |||||||||
Three Months Ended | Six Months Ended | ||||||||
(in thousands) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||
Net income | $ 103,618 | $ 123,171 | $ 131,688 | $ 226,789 | $ 307,106 | ||||
Net income margin | 10 % | 12 % | 13 % | 11 % | 16 % | ||||
Interest and marketable securities | (14,129) | (19,530) | (26,628) | (33,659) | (54,469) | ||||
Provision for income taxes | 48,320 | 50,212 | 35,148 | 98,532 | 47,992 | ||||
Depreciation and amortization | 135,757 | 134,304 | 127,326 | 270,061 | 252,663 | ||||
Amortization of capitalized stock-based | 12,288 | 12,359 | 10,434 | 24,647 | 20,557 | ||||
Amortization of acquired intangible | 27,721 | 27,637 | 21,076 | 55,358 | 42,099 | ||||
Stock-based compensation | 112,776 | 111,978 | 98,466 | 224,754 | 191,726 | ||||
Restructuring charge | 3,103 | 361 | 1,385 | 3,464 | 1,929 | ||||
Acquisition-related costs | 1,274 | 95 | 2,179 | 1,369 | 2,351 | ||||
Interest expense | 8,201 | 6,750 | 6,829 | 14,951 | 13,647 | ||||
(Gain) loss on cost method investments, | — | (9,313) | 66 | (9,313) | 66 | ||||
Other expense, net | 5,451 | 3,293 | 883 | 8,744 | 372 | ||||
Adjusted EBITDA | $ 444,380 | $ 441,317 | $ 408,852 | $ 885,697 | $ 826,039 | ||||
Adjusted EBITDA margin | 43 % | 43 % | 42 % | 43 % | 42 % | ||||
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in
Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparison of financial results across accounting periods and may be comparable to those of our peer companies. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may exclude expenses and gains that may be unusual in nature, infrequent or not reflective of Akamai's ongoing operating results.
The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial measures and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP. Akamai has provided a reconciliation of non-GAAP financial measures used in its financial reporting and investor presentations to the most directly comparable GAAP financial measures. This reconciliation can be found in the "Supplemental Financial Information" on the Investor Relations section of Akamai's website.
The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below:
- Amortization of acquired intangible assets – Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions Akamai has made. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and is unique to each acquisition; therefore, Akamai excludes amortization of acquired intangible assets from its non-GAAP financial measures to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
- Stock-based compensation and amortization of capitalized stock-based compensation – Stock-based compensation is an important aspect of the compensation paid to Akamai's employees which includes long-term incentive plans to encourage retention, performance-based plans to encourage achievement of specified financial targets, short-term incentive awards with a one year vest and shares issued as part of a retirement savings program. The grant date fair value of the stock-based compensation awards varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of Akamai's current financial results to previous and future periods difficult to interpret; therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from its non-GAAP financial measures in order to highlight the performance of Akamai's core business and to be consistent with the way many investors evaluate its performance and compare its operating results to peer companies.
- Acquisition-related costs – Acquisition-related costs include transaction fees, advisory fees, due diligence costs and other direct costs associated with strategic activities, as well as certain additional compensation costs payable to employees acquired from the Linode Limited Liability Company acquisition if employed for a certain period of time. The additional compensation cost was initiated by and determined by the seller, and is in addition to normal levels of compensation, including retention programs, offered by Akamai. Acquisition-related costs are impacted by the timing and size of the acquisitions, and Akamai excludes acquisition-related costs from its non-GAAP financial measures to provide a useful comparison of operating results to prior periods and to peer companies because such amounts vary significantly based on the magnitude of the acquisition transactions and do not reflect Akamai's core operations.
- Restructuring charge – Akamai has incurred restructuring charges from programs that have significantly changed either the scope of the business undertaken by the Company or the manner in which that business is conducted. These charges include severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including acquired intangible assets, right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. Akamai excludes these items from its non-GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business.
- Amortization of debt issuance costs and capitalized interest expense – The issuance costs of Akamai's convertible senior notes are amortized to interest expense and are excluded from Akamai's non-GAAP results because management believes the non-cash amortization expense is not representative of ongoing operating performance.
- Gains and losses on cost method investments – Akamai has recorded gains and losses from the disposition, changes to fair value and impairment of cost method investments. Akamai believes excluding these amounts from its non-GAAP financial measures is useful to investors as the types of events giving rise to these gains and losses are not representative of Akamai's core business operations and ongoing operating performance.
- Income tax effect of non-GAAP adjustments and certain discrete tax items – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as the impact of intercompany sales of intellectual property related to acquisitions), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows Akamai to highlight income attributable to its core operations.
Akamai's definitions of its non-GAAP financial measures are outlined below:
Non-GAAP income from operations – GAAP income from operations adjusted for the following items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; amortization of capitalized interest expense; acquisition-related costs; restructuring charges; legal settlements; and other non-recurring or unusual items that may arise from time to time.
Non-GAAP operating margin – Non-GAAP income from operations stated as a percentage of revenue.
Non-GAAP net income – GAAP net income adjusted for the following tax-affected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; amortization of debt issuance costs; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time.
Non-GAAP net income per diluted share, or EPS – Non-GAAP net income divided by weighted average diluted common shares outstanding. Diluted weighted average common shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to Akamai pursuant to the note hedge transactions entered into in connection with the issuances of Akamai's convertible senior notes. Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully-diluted share calculation until they are delivered. However, Akamai would receive a benefit from the note hedge transactions and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of operating performance. With respect to the convertible senior notes due in each of 2033, 2029 and 2027, and those that matured in 2025, unless Akamai's weighted average stock price is greater than
Adjusted EBITDA – GAAP net income excluding the following items: interest and marketable securities income and losses; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; foreign exchange gains and losses; interest expense; amortization of capitalized interest expense; gains and losses on cost method investments; and other non-recurring or unusual items that may arise from time to time.
Adjusted EBITDA margin – Adjusted EBITDA stated as a percentage of revenue.
Non-GAAP tax rate – GAAP tax rate excluding the tax effect of non-GAAP adjustments and certain discrete tax items.
Capital expenditures, or capex – Purchases of property and equipment and capitalization of internal-use software development costs presented on an accrual basis, which differs from the cash-basis presentation included in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods.
Capex as a percentage of revenue – Capital expenditures, or capex, stated as a percentage of revenue.
Non-GAAP depreciation and amortization – GAAP depreciation and amortization (which consists of depreciation and amortization of property and equipment, capitalized stock-based compensation, capitalized interest expense and acquired intangible assets), less depreciation and amortization excluded from non-GAAP results (which consists of depreciation and amortization of capitalized stock-based compensation, capitalized interest expense and acquired intangible assets).
Impact of foreign currency exchange rate – Revenue and earnings from international operations have historically been important contributors to Akamai's financial results. Consequently, Akamai's financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, when the local currencies of our international subsidiaries weaken, our consolidated results stated in
Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. The dollar impact of changes in foreign currency exchange rates presented is calculated by translating current period results using monthly average foreign currency exchange rates from the comparative period and comparing them to the reported amount. The percentage growth rate impacted by foreign currency exchange rates, sometimes referred to as constant currency, is calculated by comparing the prior period amounts as reported and the current period amounts translated using the same monthly average foreign currency exchange rates from the comparative period.
Akamai Statement Under the Private Securities Litigation Reform Act
This release and related management commentary on our quarterly earnings conference call scheduled for later today contain statements that are not statements of historical fact and constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about expected future financial performance, expectations, plans and prospects of Akamai, including our outlook, guidance and growth objectives. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, inability to continue to generate cash at the same level as prior years; failure of our investments in innovation to generate solutions that are accepted in the market; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; effects of competition, including pricing pressure and changing business models; impact of macroeconomic trends, including economic uncertainty, turmoil in the financial services industry, the effects of inflation, rising and fluctuating interest rates, foreign currency exchange rate and monetary supply fluctuations, international tensions and volatility in capital markets; conditions and uncertainties in the geopolitical environment, including sanctions and disruptions resulting from the ongoing war in
In addition, the statements in this press release and on our quarterly earnings conference call represent Akamai's expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai's expectations or beliefs as of any date subsequent to the date of this press release.
Contacts:
Johanna Schmitt
Media Relations
Akamai Technologies
AkamaiPR@akamai.com
Mark Stoutenberg
Investor Relations
Akamai Technologies
mstouten@akamai.com
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SOURCE Akamai Technologies, Inc.
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