Akamai Technologies (AKAM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $980 million, up 5% year-over-year and 6% in constant currency, driven by strong security and compute growth, while delivery declined due to macroeconomic headwinds and customer cost optimization.

• Security became the largest revenue segment at $499 million, up 15% year-over-year, and compute revenue grew 23% to $151 million, with new enterprise use cases.

• Delivery revenue declined 13% year-over-year to $329 million, reflecting ongoing macroeconomic and traffic headwinds.

• Non-GAAP EPS was $1.58, up 6% year-over-year; GAAP net income was $132 million, with diluted EPS of $0.86.

• The company acquired Noname Security for $452.3 million to expand API security, expected to add $20 million in 2024 revenue but be dilutive to EPS.

Financial highlights

• Security and compute now represent 66% of total revenue, up from one-third five years ago.

• International revenue was $471 million, up 3% year-over-year, representing 48% of total revenue.

• Cash, cash equivalents, and marketable securities totaled $1.9 billion as of June 30, 2024.

• Adjusted EBITDA margin was 42% in Q2; non-GAAP operating margin was 29%.

• Share repurchases totaled $128 million in Q2; $2.3 billion remains authorized.

Outlook and guidance

• Q3 2024 revenue projected at $988–$1,008 million; full-year 2024 revenue expected at $3.97–$4.01 billion.

• Security revenue growth expected at 15–17% and compute at 23–25% for Q3 and full year.

• Non-GAAP operating margin guidance at 29% for Q3 and full year; non-GAAP EPS for 2024 guided at $6.34–$6.47.

• CapEx expected at 16% of total revenue for the year.

• Noname Security acquisition expected to add $20 million in 2024 revenue and be dilutive to EPS.