Akamai's Q3 Earnings In Line With Estimates, Revenues Rise Y/Y

Akamai Technologies, Inc. AKAM reported relatively healthy third-quarter 2024 results, wherein adjusted earnings matched the Zacks Consensus Estimate while revenues beat the same.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The company recorded higher revenues year over year, driven by healthy demand trends in multiple end markets. Strength in API security solutions was a positive factor. The introduction of advanced video workflow capabilities and the integration of Yospace into its Qualified Compute Partner Program have been driving more value for customers and boosting the top line.Net IncomeGAAP net income declined to $57.9 million or 38 cents per share from $160.5 million or $1.04 per share in the year-ago quarter. Despite top-line growth, the decline in GAAP earnings was primarily due to high operating expenses.Non-GAAP net income was $243.5 million or $1.59 per share, down from $251.1 million or $1.63 per share a year ago. The bottom line was in sync with the Zacks Consensus Estimate.Akamai Technologies, Inc. Price, Consensus and EPS Surprise Akamai Technologies, Inc. price-consensus-eps-surprise-chart | Akamai Technologies, Inc. QuoteRevenuesAkamai generated $1,004.7 million in revenues compared with $965.5 million in the year-ago quarter. Solid momentum in the Security and Compute vertical drove the top line during the quarter. Revenues beat the Zacks Consensus Estimate of $1,000 million.By product groups, revenues from Security Technology Group were $518.7 million compared with $455.8 million in the year-ago quarter. The 14% year-over-year growth was primarily driven by strength in segmentation products. Demand for Zero Trust Network Access Solution also remained strong. The Delivery segment contributed $319.1 million, down from $379.3 million in the year-earlier quarter. Despite boasting a leadership position in the market, the segment is facing challenges due to macro headwinds and geopolitical instability around the world. The Compute segment registered $166.9 million in revenues, up from $130.4 million in the prior year quarter. Healthy traction among enterprise customers and multiple deal wins in various verticals drove net sales in this segment. Region-wise, net sales from the United States came in at $524.6 million, up 5% year over year. International revenues were $480.1 million, up from $466.9 million in the year-earlier quarter.Other DetailsIn the September quarter, total operating expenses rose to $934 million from $789.4 million. Non-GAAP operating income  remained almost flat at $295.8 million, with respective margins of 29% and 31%. Adjusted EBITDA was $426.3 million, up from $417.6 million in the year-ago quarter.Cash Flow & LiquidityIn the third quarter of 2024, Akamai generated $392.5 million in cash from operating activities compared with $359.4 million in the prior-year quarter. As of Sept. 30, 2024, the company had $569.7 million in cash and cash equivalents with $854.7 million of operating lease liabilities. During the quarter, the company repurchased approximately 1.7 million shares for around $166 million.OutlookFor the fourth quarter of 2024, Akamai estimates revenues in the range of $995-$1,020 million. Non-GAAP operating margin is projected between 27% and 28%. Non-GAAP earnings are forecast to be in the range of $1.49-$1.56 per share. Capital expenditure, as a percentage of revenue, is anticipated to be in the band of 18-19%.For 2024, management expects revenues in the range of $3,966-$3,991 million. It expects a non-GAAP operating margin of 29%. Non-GAAP earnings are now expected in the range of $6.31-6.38 per share. Capital expenditure is likely to be around 17% of total revenues.AKAM’s Zacks RankAkamai currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesLight and Wonder LNW is scheduled to release third-quarter 2024 earnings on Nov. 12. The Zacks Consensus Estimate for earnings is pegged at $1.11 per share, indicating growth of 37% from the year-ago figure.Keysight Technologies, Inc. KEYS is scheduled to release third-quarter earnings on Nov. 19. The Zacks Consensus Estimate for earnings is pegged at $1.57 per share, indicating a decline of 21.1% from the year-ago reported figure.Workday, Inc. WDAY is scheduled to release third-quarter fiscal 2025 earnings on Nov. 26. The Zacks Consensus Estimate for earnings is pegged at $1.72 per share, indicating growth of 12.4% from the year-ago reported figure.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Akamai Technologies, Inc. (AKAM): Free Stock Analysis Report Workday, Inc. (WDAY): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Light & Wonder, Inc. 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