Akamai Technologies : May 8th – Akamai Reports First Quarter 2025 Financial Results

Published: 2025-05-08 17:08:40 ET AKAM

Published on 05/08/2025 at 17:08

Johanna Schmitt Mark Stoutenberg

Media Relations Investor Relations

Akamai Technologies Akamai Technologies

"Akamai delivered a solid start to the year with our results meeting or exceeding expectations," said Dr. Tom Leighton, Akamai's Chief Executive Officer. "We were particularly pleased with the continued momentum of our fast-growing segmentation, API security and cloud solutions. Looking ahead, we remain focused on driving profitable growth that powers our transformation into a leading cybersecurity and cloud computing company."

Akamai delivered the following results for the first quarter ended March 31, 2025:

Revenue by solution:

Security revenue was $531 million, up 8% year-over-year and up 10% when adjusted for foreign exchange*

Delivery revenue was $319 million, down 9% year-over-year and down 8% when adjusted for foreign exchange*

Cloud computing revenue was $165 million, up 14% year-over-year and up 15% when adjusted for foreign exchange*

Revenue by geography:

U.S. revenue was $529 million, up 3% year-over-year

International revenue was $486 million, up 2% year-over-year and up 5% when adjusted for foreign exchange*

Non-GAAP income from operations* was $307 million, up 5% from first quarter 2024. Non-GAAP operating margin* for the first quarter was 30%, flat from the same period last year.

The Company reports the following financial guidance for the second quarter and full year 2025:

Three Months Ending June 30, 2025

Year Ending December 31, 2025

Low End

High End

Low End

High End

Revenue (in millions)

$ 1,012

$ 1,032

$ 4,050

$ 4,200

Non-GAAP operating margin *

28 %

Non-GAAP net income per diluted share *

$ 1.52

$ 1.58

$ 6.10

$ 6.40

Non-GAAP tax rate*

19 %

20 %

19 %

20 %

Shares used in non-GAAP per diluted share calculations * (in millions)

148

150

Capex as a percentage of revenue *

22 %

23 %

19 %

20 %

The guidance that is provided on a non-GAAP basis cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items Akamai excludes from non-GAAP measures. For example, stock-based compensation is unpredictable for Akamai's performance-based awards, which can fluctuate significantly based on current expectations of the future achievement of performance-based targets. Amortization of intangible assets, acquisition-related costs and restructuring costs are all impacted by the timing and size of potential future actions, which are difficult to predict. In addition, from time to time, Akamai excludes certain items that occur infrequently, which are also inherently difficult to predict and estimate. It is also difficult to predict the tax effect of the items Akamai excludes and to estimate certain discrete tax items, such as the resolution of tax audits or changes to tax laws. As such, the costs that are being excluded from non-GAAP guidance are difficult to predict and a reconciliation or a range of results could lead to disclosure that would be imprecise or potentially misleading. Material changes to any one of the exclusions could have a significant effect on our guidance and future GAAP results.

* See Use of Non-GAAP Financial Measures below for definitions

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-833-634-5020 (or 1-412-902-4238 for international calls) and using passcode Akamai Technologies call. A live webcast of the call may be accessed at https://www.akamai.com in the Investor Relations section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-877-344-7529 (or 1-412-317-0088 for international calls) and using passcode 9406971. The archived webcast of this event may be accessed through the Akamai website.

Akamai is the cybersecurity and cloud computing company that powers and protects business online. Our market-leading security solutions, superior threat intelligence and global operations team provide defense-in-depth to safeguard enterprise data and applications everywhere. Akamai's full-stack cloud computing solutions deliver performance and affordability on the world's most distributed platform. Global enterprises trust Akamai to provide the industry-leading reliability, scale and expertise they need to grow their business with confidence. Learn more about Akamai's cloud computing, security and content delivery solutions at akamai.com and akamai.com/blog, or follow Akamai Technologies on X, formerly known as Twitter, and LinkedIn.

‌AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

March 31,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

$ 1,097,026

$ 517,707

Marketable securities

224,204

1,078,876

Accounts receivable, net

759,438

727,687

Prepaid expenses and other current assets

294,303

253,827

Total current assets

2,374,971

2,578,097

Marketable securities

23,020

275,592

Property and equipment, net

2,110,054

1,995,071

Operating lease right-of-use assets

977,419

1,006,738

Acquired intangible assets, net

700,717

727,585

Goodwill

3,157,409

3,151,077

Deferred income tax assets

454,568

483,249

Other assets

184,032

151,376

Total assets

$ 9,982,190

$ 10,368,785

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 155,917

$ 130,447

Accrued expenses

265,371

370,888

Deferred revenue

169,529

149,222

Convertible senior notes

1,149,761

1,149,116

Operating lease liabilities

263,365

259,134

Other current liabilities

12,586

32,516

Total current liabilities

2,016,529

2,091,323

Deferred revenue

22,945

26,314

Deferred income tax liabilities

18,151

16,066

Convertible senior notes

2,397,953

2,396,695

Operating lease liabilities

807,697

829,660

Other liabilities

134,354

130,370

Total liabilities

5,397,629

5,490,428

Total stockholders' equity

4,584,561

4,878,357

Total liabilities and stockholders' equity

$ 9,982,190

$ 10,368,785

(in thousands, except per share data)

March 31,

2025

Three Months Ended December 31,

2024

March 31,

2024

Revenue $ 1,015,139 $ 1,019,939 $ 986,970

Costs and operating expenses:

Cost of revenue (1) (2)418,945 414,356 394,743

Research and development (1)123,549 120,245 116,932

Sales and marketing (1)134,131 144,621 134,570

General and administrative (1) (2)155,933 155,544 152,430

Amortization of acquired intangible assets 27,637 25,614 21,023

Restructuring charge 361 11,499 544

Total costs and operating expenses 860,556 871,879 820,242

Income from operations 154,583 148,060 166,728

Interest and marketable securities income, net 19,530 22,746 27,841

Interest expense (6,750) (6,735) (6,818)

Other income (expense), net 6,020 (5,962) 511

Income before provision for income taxes 173,383 158,109 188,262

Provision for income taxes (50,212) (18,204) (12,844)

Net income $ 123,171 $ 139,905 $ 175,418

Net income per share:

Basic $ 0.83 $ 0.93 $ 1.16

Diluted $ 0.82 $ 0.91 $ 1.11

Shares used in per share calculations:

Basic 149,052 150,240 151,628

Diluted 151,064 153,091 157,466

Includes stock-based compensation (see supplemental table for figures)

Includes depreciation and amortization (see supplemental table for figures)

‌AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

(in thousands)

March 31,

2025

December 31,

2024

March 31,

2024

Cash flows from operating activities:

Net income

$ 123,171

$ 139,905

$ 175,418

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

174,022

167,949

156,183

Stock-based compensation

111,978

99,045

93,260

Provision (benefit) for deferred income taxes

31,383

(71,206)

(10,467)

Amortization of debt issuance costs

1,605

1,588

1,682

(Gain) loss on investments

(9,313)

5,000

Other non-cash reconciling items, net

2,142

19,797

2,062

Changes in operating assets and liabilities, net of effects of acquisitions:

Accounts receivable

(25,677)

(50,392)

(736)

Prepaid expenses and other current assets

(37,129)

(20,614)

(26,016)

Accounts payable and accrued expenses

(109,906)

79,535

(66,949)

Deferred revenue

14,948

6,709

34,316

Other current liabilities

(20,276)

(15,490)

356

Other non-current assets and liabilities

(5,748)

(18,038)

(7,231)

Net cash provided by operating activities

251,200

343,788

351,878

Cash flows from investing activities:

Cash paid for asset acquisition

(29,930)

(127,973)

Purchases of property and equipment and capitalization of internal-use

software development costs

(196,008)

(162,859)

(173,754)

Purchases of short- and long-term marketable securities

(7,080)

(34,535)

(170,019)

Proceeds from sales, maturities and redemptions of short- and long-term

marketable securities

1,112,955

81,368

182,255

Other, net

(3,091)

(187)

9,935

Net cash provided by (used in) investing activities

876,846

(244,186)

(151,583)

Cash flows from financing activities:

Proceeds from the issuance of common stock under stock plans

20,182

13,805

20,310

Employee taxes paid related to net share settlement of stock-based awards

(72,063)

(16,061)

(109,333)

Repurchases of common stock

(499,963)

(138,371)

(125,449)

Other, net

(406)

(213)

(1,509)

Net cash used in financing activities

(552,250)

(140,840)

(215,981)

Effects of exchange rate changes on cash, cash equivalents and restricted

cash

5,431

(12,431)

(4,013)

Net increase (decrease) in cash, cash equivalents and restricted cash

581,227

(53,669)

(19,699)

Cash, cash equivalents and restricted cash at beginning of period

519,084

572,753

490,470

Cash, cash equivalents and restricted cash at end of period

$ 1,100,311 $ 519,084

470,771

(in thousands)

March 31,

2025

Three Months Ended December 31,

2024

March 31,

2024

Security $ 530,695 $ 534,602 $ 490,681

Delivery 318,988 317,842 351,758

Cloud computing 165,456 167,495 144,531

Total revenue $ 1,015,139 $ 1,019,939 $ 986,970

Security 8 % 14 % 21 %

Delivery (9) (18) (11)

Cloud computing 14 24 25

Total revenue 3 % 3 % 8 %

Security 10 % 14 % 21 %

Cloud computing 15 25 25

Delivery (8) (18) (10)

Total revenue 4 % 3 % 8 %

U.S. $ 528,739 $ 529,879 $ 512,347

(in thousands)

March 31,

2025

Three Months Ended December 31,

2024

March 31,

2024

Total revenue $ 1,015,139 $ 1,019,939 $ 986,970

International 486,400 490,060 474,623

U.S. 3 % 3 % 8 %

Total revenue 3 % 3 % 8 %

International 2 2 7

U.S. 3 % 3 % 8 %

Total revenue 4 % 3 % 8 %

International 5 4 8

See Use of Non-GAAP Financial Measures below for a definition

(in thousands, except end of period statistics)

March 31,

2025

Three Months Ended December 31,

2024

March 31,

2024

Cost of revenue $ 18,928 $ 16,129 $ 12,618

Research and development 42,268 37,843 38,045

Sales and marketing 22,440 18,730 18,811

General and administrative 28,342 26,343 23,786

Total stock-based compensation $ 111,978 $ 99,045 $ 93,260

Network-related depreciation $ 78,325 $ 74,949 $ 65,675

Capitalized internal-use software development amortization 40,095 40,343 43,632

Other depreciation and amortization 15,884 15,983 16,030

Non-GAAP depreciation and amortization (1)134,304 131,275 125,337

Capitalized stock-based compensation amortization (2)11,963 10,952 9,712

Capitalized interest expense amortization (2)118 108 111

Amortization of acquired intangible assets 27,637 25,614 21,023 Total depreciation and amortization $ 174,022 $ 167,949 $ 156,183

Purchases of property and equipment $ 147,990 $ 122,694 $ 74,635 Capitalized internal-use software development costs 77,910 69,974 77,491

Total capital expenditures $ 225,900 $ 192,668 $ 152,126

Capex as a percentage of revenue (1)22 % 19 % 15 %

Number of employees

10,811

10,748

10,533

See Use of Non-GAAP Financial Measures below for a definition.

Amortization of capitalized stock-based compensation and interest expense in this table excludes amortization of capitalized stock-based compensation and interest expense capitalized related to cloud-computing arrangements and contract fulfillment costs. However, the amounts are included in our total amortization of capitalized stock-based compensation and interest expense that is excluded from our non-GAAP measures (see reconciliations of GAAP to non-GAAP measures).

Capital expenditures presented in this table are reported on an accrual basis, which differs from the cash-basis presentation in the statements of cash flows. The primary difference between the two is the change in purchases of property and equipment and capitalization of internal-use software development costs accrued for, but not paid, at period end versus prior periods.

Three Months Ended

(in thousands)

March 31,

2025

December 31,

2024

March 31,

2024

Income from operations

$ 154,583

$ 148,060

$ 166,728

GAAP operating margin

15 %

17 %

Amortization of acquired intangible assets

27,637

25,614

21,023

Stock-based compensation

111,978

99,045

93,260

Amortization of capitalized stock-based compensation and capitalized

interest expense

12,359

11,264

10,123

Restructuring charge

361

11,499

544

Acquisition-related costs

115

172

Legal settlements

2,500

Operating adjustments

152,430

150,037

125,122

Non-GAAP income from operations $ 307,013 $ 298,097 $ 291,850

Non-GAAP operating margin

30 %

29 %

30 %

Net income

$ 123,171

$ 139,905

$ 175,418

Operating adjustments (from above)

152,430

150,037

125,122

Amortization of debt issuance costs

1,605

1,588

1,682

(Gain) loss on cost method investments, net

(9,313)

5,000

Income tax effect of above non-GAAP adjustments and certain discrete tax items

(11,797)

(42,605)

(46,727)

Non-GAAP net income

$ 256,096 $ 253,925

255,495

GAAP tax rate

29 %

12 %

7 %

Income tax effect of non-GAAP adjustments and certain discrete tax items

(10)

Non-GAAP tax rate 19 % 19 % 19 %

Three Months Ended

(in thousands, except per share data)

March 31,

2025

December 31,

2024

March 31,

2024

GAAP net income per diluted share

$ 0.82

$ 0.91

$ 1.11

Adjustments to net income:

Amortization of acquired intangible assets

0.18

0.17

0.13

Stock-based compensation

0.74

0.65

0.59

Amortization of capitalized stock-based compensation and capitalized

interest expense

0.08

0.07

0.06

Restructuring charge

0.08

Acquisition-related costs

Legal settlements

0.02

Amortization of debt issuance costs

0.01

(Gain) loss on cost method investments, net

(0.06)

0.03

Income tax effect of above non-GAAP adjustments and certain discrete

tax items

(0.08)

(0.28)

(0.30)

Adjustment for shares (1)

0.02

Non-GAAP net income per diluted share $ 1.70 $ 1.66 $ 1.64

Shares used in GAAP per diluted share calculations

151,064

153,091

157,466

Impact of benefit from note hedge transactions (1)

(368)

(2,114)

Shares used in non-GAAP per diluted share calculations (1) 151,064 152,723 155,352

Shares used in non-GAAP per diluted share calculations have been adjusted for the three months ended December 31, 2024 and March 31,2024 for the benefit of Akamai's note hedge transactions. During these periods, Akamai's average stock price was in excess of $95.10, which is the initial conversion price of Akamai's convertible senior notes due in May 2025. See Use of Non-GAAP Financial Measures below for further definition.

Three Months Ended

(in thousands)

March 31,

2025

December 31,

2024

March 31,

2024

Net income

$ 123,171

$ 139,905

$ 175,418

Net income margin

12 %

14 %

18 %

Interest and marketable securities income, net

(19,530)

(22,746)

(27,841)

Provision for income taxes

50,212

18,204

12,844

Depreciation and amortization

134,304

131,275

125,337

Amortization of capitalized stock-based compensation and capitalized

interest expense

12,359

11,264

10,123

Amortization of acquired intangible assets

27,637

25,614

21,023

Stock-based compensation

111,978

99,045

93,260

Restructuring charge

361

11,499

544

Acquisition-related costs

115

172

Legal settlements

2,500

Interest expense

6,750

6,735

6,818

(Gain) loss on cost method investments, net

(9,313)

5,000

Other expense (income), net

3,293

962

(511)

Adjusted EBITDA $ 441,317 $ 429,372 $ 417,187

Adjusted EBITDA margin 43 % 42 % 42 %

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP financial measures). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate Akamai's financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP tax rate, capital expenditures, non-GAAP depreciation and amortization, capex as a percentage of revenue and impact of foreign currency exchange rates, as discussed below.

Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparison of financial results across accounting periods and may be comparable to those of our peer companies. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may exclude expenses and gains that may be unusual in nature, infrequent or not reflective of Akamai's ongoing operating results.

The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial measures and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP. Akamai has provided a reconciliation of non-GAAP financial measures used in its financial reporting and investor presentations to the most directly comparable GAAP financial measures. This reconciliation can be found in the "Supplemental Financial Information" on the Investor Relations section of Akamai's website.

The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below:

significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business.

Akamai's definitions of its non-GAAP financial measures are outlined below:

and losses; interest expense; amortization of capitalized interest expense; gains and losses on cost method investments; gains and losses from equity method investment; and other non-recurring or unusual items that may arise from time to time.

Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. The dollar impact of changes in foreign currency exchange rates presented is calculated by translating current period results using monthly average foreign currency exchange rates from the comparative period and comparing them to the reported amount. The percentage growth rate impacted by foreign currency exchange rates, sometimes referred to as constant currency, is calculated by comparing the prior period amounts as reported and the current period amounts translated using the same monthly average foreign currency exchange rates from the comparative period.

This release and related management commentary on our quarterly earnings conference call scheduled for later today contain statements that are not statements of historical fact and constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about expected future financial performance, expectations, plans and prospects of Akamai, including our outlook, guidance and growth objectives. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, inability to continue to generate cash at the same level as prior years; failure of our investments in innovation to generate solutions that are accepted in the market; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; effects of competition, including pricing pressure and changing business models; impact of macroeconomic trends, including economic uncertainty, turmoil in the financial services industry, the effects of inflation, rising and fluctuating interest rates, foreign currency exchange rate and monetary supply fluctuations, international tensions and volatility in capital markets; conditions and uncertainties in the geopolitical environment, including sanctions and disruptions resulting from the ongoing war in Ukraine and the Israel-Hamas war; continuing supply chain and logistics costs, constraints, changes or disruptions; defects or disruptions in our products or IT systems, including cyber-attacks, data breaches or malware; difficulties in integrating our acquisitions and investments; failure to realize the expected benefits of any of our acquisitions, reorganizations or investments; changes to economic, political and regulatory conditions in the United States and internationally, including changes in government policies, regulations and resources; our ability to attract and retain key personnel; delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities or failure of such solutions to operate as expected, and other factors that are discussed in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents filed with the SEC.

In addition, the statements in this press release and on our quarterly earnings conference call represent Akamai's expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai's expectations or beliefs as of any date subsequent to the date of this press release.

Disclaimer

Akamai Technologies Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 20:59 UTC.