AKAMAI REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS
PR Newswire
CAMBRIDGE, Mass., May 9, 2024
First quarter revenue of $987 million, up 8% year-over-year and when adjusted for foreign exchange*
Security and compute revenue represented 64% of total revenue in the first quarter and combined grew 22% year-over-year and when adjusted for foreign exchange*
GAAP net income per diluted share of $1.11, up 79% year-over-year and up 81% when adjusted for foreign exchange*, and non-GAAP net income per diluted share* of $1.64, up 17% year-over-year and up 18% when adjusted for foreign exchange*
Board of directors authorizes a new, three-year, $2.0 billion share repurchase program
CAMBRIDGE, Mass., May 9, 2024 /PRNewswire/ — Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today reported financial results for the first quarter ended March 31, 2024.
“We are pleased with our continuing execution on our long-term strategy to drive revenue growth in our security and compute solutions,” said Dr. Tom Leighton, Akamai’s Chief Executive Officer. “Both solutions had a strong start to 2024 and collectively grew more than 20% year-over-year, representing almost two-thirds of total revenue. We’re particularly excited about our planned acquisition of Noname Security, which will enhance Akamai’s existing API Security solution and accelerate our ability to meet growing customer demand.”
Akamai delivered the following results for the first quarter ended March 31, 2024:
Revenue: Revenue was $987 million, an 8% increase over first quarter 2023 revenue of $916 million and an 8% increase when adjusted for foreign exchange.*
Revenue by solution:
-- Security revenue was $491 million, up 21% year-over-year and when
adjusted for foreign exchange*
-- Delivery revenue was $352 million, down 11% year-over-year and down 10%
when adjusted for foreign exchange*
-- Compute revenue was $145 million, up 25% year-over-year and when adjusted
for foreign exchange*
Revenue by geography:
-- U.S. revenue was $512 million, up 8% year-over-year
-- International revenue was $475 million, up 7% year-over-year and up 8%
when adjusted for foreign exchange*
Income from operations: GAAP income from operations was $167 million, a 32% increase from first quarter 2023. GAAP operating margin for the first quarter was 17%, up 3 percentage points from the same period last year.
Non-GAAP income from operations* was $292 million, an 11% increase from first quarter 2023. Non-GAAP operating margin* for the first quarter was 30%, up 1 percentage point from the same period last year.
Net income: GAAP net income was $175 million, an 81% increase from first quarter 2023. Non-GAAP net income* was $255 million, a 17% increase from first quarter 2023.
EPS: GAAP net income per diluted share was $1.11, a 79% increase from first quarter 2023 and an 81% increase when adjusted for foreign exchange.* Non-GAAP net income per diluted share* was $1.64, a 17% increase from first quarter 2023 and an 18% increase when adjusted for foreign exchange.*
Adjusted EBITDA*: Adjusted EBITDA* was $417 million, an 11% increase from first quarter 2023.
Supplemental cash information: Cash from operations for the first quarter of 2024 was $352 million, or 36% of revenue. Cash, cash equivalents and marketable securities was $2.3 billion as of March 31, 2024.
Share repurchases: The Company spent $125 million in the first quarter of 2024 to repurchase 1.1 million shares of its common stock at an average price of $109.79 per share. The Company had 152 million shares of common stock outstanding as of March 31, 2024.
Share repurchase program: The Company also announces today that its board of directors has authorized a new, $2.0 billion share repurchase program, effective from today through June 30, 2027. The new authorization is in addition to the Company’s remaining stock purchase authorization of $412 million (as of March 31, 2024), which expires at the end of 2024. The Company’s goals for the share repurchase program are to offset the dilution created by its employee equity compensation programs over time and provide the flexibility to return capital to shareholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities.
The timing and amount of any shares repurchased will be determined by the Company’s management based upon the evaluation of market conditions and other factors. Repurchases will be executed in the open market subject to Rule 10b-18, and may also be made under a Rule 10b5-1 plan, which would permit the Company to repurchase shares when the Company might otherwise be precluded from doing so under insider trading laws. Other structured repurchase programs may be considered from time to time. The Company may choose to suspend, expand or discontinue the repurchase program at any time.
Financial guidance:
“Our updated full year 2024 guidance reflects the impacts of the strengthening U.S. dollar, a large social media customer optimizing costs and slowing traffic growth across the industry,” said Ed McGowan, Akamai’s Executive Vice President and Chief Financial Officer. “It also reflects increased full year expectations for our security and compute solutions.”
The Company reports the following financial guidance for the second quarter and full year 2024:
Three Months Ended Year Ended
June 30, 2024 December 31, 2024
------------------------ --------------------
Low End High End Low End High End
----------- ----------- --------- ---------
Revenue (in millions) $ 967 $ 986 $ 3,950 $ 4,020
Security revenue
growth rates
year-over-year * 15 % 17 %
Compute revenue
growth rates
year-over-year * 21 % 23 %
Non-GAAP operating
margin * 28 % 29 % 28 % 29 %
Non-GAAP net income per
diluted share * $ 1.51 $ 1.56 $ 6.20 $ 6.40
Non-GAAP tax rate* 19.0 % 19.5 % 19.0 % 19.5 %
Shares used in non-GAAP
per diluted share
calculations * (in
millions) 155 155 155 155
Capex as a percentage of
revenue * 18 % 19 % 16 % 16 %
This guidance is provided on a non-GAAP basis and 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.