Akamai Technologies, Inc. has recently released its 10-Q report, providing a detailed insight into the company's financial performance and operations. Akamai Technologies, Inc. provides cloud computing, security, and content delivery services globally. The company's offerings include cloud solutions for infrastructure, websites, applications, and users, as well as web and mobile performance solutions, media delivery solutions, and cloud computing services.
In the 10-Q report, Akamai Technologies, Inc. highlights that it primarily derives revenue from the sale of services to customers with contracts of one year or longer, which provides a consistent and predictable base level of revenue. The report also mentions that the company's revenue is impacted by factors such as customer renewals, pricing, traffic growth, and global economic and geopolitical conditions. The company has observed increased sales of security and compute solutions, contributing significantly to revenue growth. However, it notes that traffic growth on its network has been moderate, particularly in verticals such as media and gaming, due to global economic and geopolitical headwinds.
The report also discusses the company's expenses, including co-location costs, network bandwidth costs, network build-out and supporting service costs, employee-related expenses, and depreciation expenses. It highlights the impact of these expenses on the company's profitability, emphasizing the need to effectively manage costs to maintain or improve current levels of profitability.
Furthermore, the report mentions the recent acquisition of Noname Security, which is expected to expand Akamai's existing API Security offering and accelerate its ability to meet increasing customer and market demand. The acquisition is expected to add approximately $20.0 million of revenue for 2024 and is projected to be dilutive to the company's earnings per share through 2024.
The 10-Q report also addresses the impact of global macroeconomic and geopolitical conditions on the company's customers and its business and revenue growth rates. It highlights the need to manage through uncertain periods of fluctuating inflation, regulations, economic and political uncertainty, and other external factors that may adversely affect the company's business, operations, and financial results.
The market has reacted to these announcements by moving the company's shares -14.4% to a price of $89.37. Check out the company's full 10-Q submission here.
