Akamai Technologies (AKAM) Q2 2024 earnings summary

Executive summary

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

• Security became the largest revenue segment at $499 million, up 15% year-over-year, and compute revenue grew 23% to $151 million, reflecting strong adoption of cloud solutions.

• Delivery revenue declined 13% year-over-year to $329 million, now representing one-third of total revenue.

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

• Non-GAAP operating margin was 29%, and non-GAAP EPS was $1.58, up 6% year-over-year; GAAP net income was $132 million, with diluted EPS of $0.86.

Financial highlights

• Q2 2024 revenue: $980 million (+5% year-over-year); H1 2024 revenue: $1.97 billion (+6.2%).

• Q2 2024 net income: $132 million; H1 2024 net income: $307.1 million (+36% year-over-year).

• Adjusted EBITDA margin for Q2 2024 was 42%; non-GAAP operating margin was 29%.

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

• Share repurchases totaled $128 million for 1.4 million shares in Q2; $2.3 billion remains authorized.

Outlook and guidance

• Q3 2024 revenue projected at $988 million–$1.008 billion; full-year 2024 revenue expected at $3.97–$4.01 billion.

• Security revenue growth expected at 15%–17% and compute at 23%–25% in constant currency for 2024.

• Non-GAAP operating margin expected at 29% and EPS at $6.34–$6.47 for the full year.

• CapEx expected at 16%–17% of total revenue for 2024.

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