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Akamai (AKAM) Q1 Earnings Beat Estimates on Higher Revenues
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Akamai Technologies, Inc. (AKAM - Free Report) reported modest first-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The company recorded a top-line expansion year over year, driven by solid momentum in security and compute verticals in multiple end markets. The planned buyout of Noname Security will significantly boost Akamai’s API security portfolio and enhance prospects.
Net Income
GAAP net income improved to $175.4 million or $1.11 per share from $97.1 million or 62 cents per share in the year-ago quarter. The improvement was primarily attributed to year-over-year net sales growth during the quarter.
Non-GAAP net income was $255.5 million or $1.64 per share, up from $218.3 million or $1.40 per share a year ago. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Akamai Technologies, Inc. Price, Consensus and EPS Surprise
Quarterly net sales were $987 million compared with $916 million reported in the year-ago quarter. The 8% year-over-year uptick was driven by rising customer engagement in the Security and Compute businesses. However, revenues missed the Zacks Consensus Estimate by $4 million.
By product groups, revenues from Security Technology Group were $490.7 million compared with $405.6 million in the year-ago quarter. The 21% year-over-year growth was primarily backed by growing demand for Guardicore Segmentation Solution. Demand for Zero Trust Network Access Solution also remains strong. The company is witnessing healthy traction for its API security solutions in various end markets, including financial services, retail, electric vehicles and more. Net sales exceeded our estimate of $460.8 million.
The Delivery segment contributed $351.8 million, down from $394.4 million in the year-ago quarter. The segment’s revenues missed our estimate of $387.7 million.
The Compute segment registered $144.5 million in revenues, up from $115.8 million in the prior-year quarter. The company secured multiple cloud computing deals during the quarter, which includes a major luxury goods brand in Europe, one of the world’s prominent gaming companies and one of India’s biggest conglomerates. Its cloud computing portfolio boasts a solid customer base of more than 200 enterprise customers. The segment’s revenues beat our estimate of $140.2 million.
Region-wise, net sales from the United States came in at $512.3 million, up 8% year over year. International revenues stood at $474.6 million, up from $441.9 million in the year-earlier quarter.
Other Details
In the March quarter, total operation expenses rose to $820.3 million from $789.1 million. Non-GAAP income from operations improved to $291.8 million from $263.8 million, with respective margins of 30% and 29%. Adjusted EBITDA was $417 million, up from 11% year over year.
Cash Flow & Liquidity
In the first quarter of 2024, Akamai generated $351.9 million in cash from operating activities compared with $233.5 million in the prior-year quarter. As of Mar 31, 2024, the company had $467.7 million in cash and cash equivalents with $232.7 million of operating lease liabilities. During the quarter, it repurchased approximately 1.1 million shares for around $125 million.
Outlook
For the second quarter of 2024, Akamai expects revenues in the range of $967-$986 million. Non-GAAP operating margin is projected in the range of 28-29%. Non-GAAP earnings are forecasted in the range of $1.51-$1.56 per share. Capital expenditure is anticipated to be 18-19% of revenues.
For 2024, Akamai expects revenues in the range of $3.95-4 billion. It expects a non-GAAP operating margin of 28-29%. Non-GAAP earnings are now projected in the range of $6.20-6.40 per share. Capital expenditure is likely to be around 16% of total revenues.
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Akamai (AKAM) Q1 Earnings Beat Estimates on Higher Revenues
Akamai Technologies, Inc. (AKAM - Free Report) reported modest first-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The company recorded a top-line expansion year over year, driven by solid momentum in security and compute verticals in multiple end markets. The planned buyout of Noname Security will significantly boost Akamai’s API security portfolio and enhance prospects.
Net Income
GAAP net income improved to $175.4 million or $1.11 per share from $97.1 million or 62 cents per share in the year-ago quarter. The improvement was primarily attributed to year-over-year net sales growth during the quarter.
Non-GAAP net income was $255.5 million or $1.64 per share, up from $218.3 million or $1.40 per share a year ago. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Akamai Technologies, Inc. Price, Consensus and EPS Surprise
Akamai Technologies, Inc. price-consensus-eps-surprise-chart | Akamai Technologies, Inc. Quote
Revenues
Quarterly net sales were $987 million compared with $916 million reported in the year-ago quarter. The 8% year-over-year uptick was driven by rising customer engagement in the Security and Compute businesses. However, revenues missed the Zacks Consensus Estimate by $4 million.
By product groups, revenues from Security Technology Group were $490.7 million compared with $405.6 million in the year-ago quarter. The 21% year-over-year growth was primarily backed by growing demand for Guardicore Segmentation Solution. Demand for Zero Trust Network Access Solution also remains strong. The company is witnessing healthy traction for its API security solutions in various end markets, including financial services, retail, electric vehicles and more. Net sales exceeded our estimate of $460.8 million.
The Delivery segment contributed $351.8 million, down from $394.4 million in the year-ago quarter. The segment’s revenues missed our estimate of $387.7 million.
The Compute segment registered $144.5 million in revenues, up from $115.8 million in the prior-year quarter. The company secured multiple cloud computing deals during the quarter, which includes a major luxury goods brand in Europe, one of the world’s prominent gaming companies and one of India’s biggest conglomerates. Its cloud computing portfolio boasts a solid customer base of more than 200 enterprise customers. The segment’s revenues beat our estimate of $140.2 million.
Region-wise, net sales from the United States came in at $512.3 million, up 8% year over year. International revenues stood at $474.6 million, up from $441.9 million in the year-earlier quarter.
Other Details
In the March quarter, total operation expenses rose to $820.3 million from $789.1 million. Non-GAAP income from operations improved to $291.8 million from $263.8 million, with respective margins of 30% and 29%. Adjusted EBITDA was $417 million, up from 11% year over year.
Cash Flow & Liquidity
In the first quarter of 2024, Akamai generated $351.9 million in cash from operating activities compared with $233.5 million in the prior-year quarter. As of Mar 31, 2024, the company had $467.7 million in cash and cash equivalents with $232.7 million of operating lease liabilities. During the quarter, it repurchased approximately 1.1 million shares for around $125 million.
Outlook
For the second quarter of 2024, Akamai expects revenues in the range of $967-$986 million. Non-GAAP operating margin is projected in the range of 28-29%. Non-GAAP earnings are forecasted in the range of $1.51-$1.56 per share. Capital expenditure is anticipated to be 18-19% of revenues.
For 2024, Akamai expects revenues in the range of $3.95-4 billion. It expects a non-GAAP operating margin of 28-29%. Non-GAAP earnings are now projected in the range of $6.20-6.40 per share. Capital expenditure is likely to be around 16% of total revenues.
Zacks Rank & Stocks to Consider
Akamai currently has a Zacks Rank #3 (Hold).
NVIDIA Corporation (NVDA - Free Report) , carrying a Zacks Rank #2 (Buy) at present, delivered a trailing four-quarter average earnings surprise of 20.18%. In the last reported quarter, it delivered an earnings surprise of 13.41%.. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista delivered an earnings surprise of 15.39%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Silicon Motion Technology Corporation (SIMO - Free Report) , sporting a Zacks Rank #1 at present, delivered a trailing four-quarter average earnings surprise of 4.72%.
It is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (“OEM”) and other customers.