Akamai Reports Second Quarter 2017 Financial Results

• Revenue of $609 million, up 6% year-over-year and 7% when adjusted for foreign exchange* 
• Revenue excluding Internet Platform Customers⁽¹⁾ up 9% year-over-year and 10% when adjusted for foreign exchange* 
• GAAP EPS of $0.33 per diluted share, down 21% year-over-year and up 1% when adjusted for foreign exchange and the dilutive effect of the Soasta acquisition* 
• Non-GAAP EPS of $0.62 per diluted share, down 3% year-over-year and up 4% when adjusted for foreign exchange and the dilutive effect of the Soasta acquisition* 

Akamai Technologies, Inc. (NASDAQ: AKAM), the world's largest and most trusted cloud delivery platform, today reported financial results for the second quarter ended June 30, 2017.

"Akamai delivered another solid quarter for revenue and earnings as we continued to diversify our portfolio and customer base," said Dr. Tom Leighton, Chief Executive Officer. "Revenue from our Web Division customers grew 15% and now accounts for a majority of revenue.  Revenue from our security products alone grew 32% year-over-year to an annualized revenue run rate of nearly half-a-billion dollars."

Akamai delivered the following financial results for the second quarter ended June 30, 2017:

Revenue: Revenue was $609 million, a 6% increase over second quarter 2016 revenue of $572 million and a 7% increase when adjusted for foreign exchange.*

Customer Revenue by Division⁽²⁾: 

• Web Division revenue was $315 million, up 15% year-over-year and up 16% when adjusted for foreign exchange* 
• Media Division revenue was $276 million, down 2% year-over-year and down 1% when adjusted for foreign exchange* 
• Enterprise and Carrier Division revenue was $18 million, up 9% year-over-year and up 10% when adjusted for foreign exchange* 

Revenue by Solution Category⁽³⁾: 

• Performance and Security Solutions revenue was $376 million, up 15% year-over-year and up 16% when adjusted for foreign exchange* 
• Cloud Security Solutions revenue, a component of Performance and Security, was $115 million, up 32% year-over-year and up 34% when adjusted for foreign exchange*
• Media Delivery Solutions revenue was $179 million, down 9% year-over-year and when adjusted for foreign exchange*
• Services and Support Solutions revenue was $54 million, up 12% year-over-year and up 13% when adjusted for foreign exchange*

Revenue by Geography: 

• U.S. revenue was $403 million, up 2% year-over-year 
• International revenue was $206 million, up 16% year-over-year and up 19% when adjusted for foreign exchange* 

Revenue from Internet Platform Customers⁽¹⁾: 

• Revenue from Internet Platform Customers was $51 million, down 17% year-over-year and when adjusted for foreign exchange* 
• Revenue excluding Internet Platform Customers was $558 million, up 9% year-over-year and up 10% when adjusted for foreign exchange*

Income from operations: GAAP income from operations was $87 million, a 21% decrease from second quarter 2016. GAAP operating margin for the second quarter was 14%, down 5 percentage points from the same period last year. 

Non-GAAP income from operations* was $147 million, a 6% decrease from second quarter 2016. Non-GAAP operating margin* for the second quarter was 24%, down 3 percentage points from the same period last year.

Net income: GAAP net income was $58 million, a 22% decrease from second quarter 2016. Non-GAAP net income* was $108 million, a 4% decrease from second quarter 2016.

EPS: GAAP EPS was $0.33 per diluted share, a 21% decrease from second quarter 2016 and an 18% decrease when adjusted for foreign exchange.* The year-over-year GAAP EPS growth rate, when adjusted for both foreign exchange* and the dilutive impact of the Company's acquisition of Soasta, Inc.,* was an increase of 1%.

Non-GAAP EPS was $0.62 per diluted share, a 3% decrease from second quarter 2016 and flat when adjusted for foreign exchange.* The year-over-year non-GAAP EPS growth rate, when adjusted for both foreign exchange* and the dilutive impact of the Company's acquisition of Soasta, Inc.,* was an increase of 4%.

Adjusted EBITDA*: Adjusted EBITDA was $224 million, a 3% decrease from second quarter 2016. Adjusted EBITDA margin* was 37%, down 3 percentage points from second quarter of 2016.

Other first quarter 2017 results: 

• Cash from operations was $225 million, or 37% of revenue 
• Cash, cash equivalents and marketable securities as of June 30, 2017 was $1.4 billion
• The Company spent $105 million to repurchase 2.0 million shares of its common stock at an average price of $52.06 per share
• The Company had approximately 172 million shares of common stock outstanding as of June 30, 2017

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-844-578-9671 (or 1-508-637-5655 for international calls) and using passcode 45211864. A live webcast of the call may be accessed at www.akamai.com in the Investor section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-855-859-2056 (or 1-404-537-3406 for international calls) and using passcode 45211864. The archived webcast of this event may be accessed through the Akamai website.