Akamai Reports First Quarter 2018 Financial Results

Record first quarter revenue of $669 million, up 11% year-over-year; Cloud Security Solutions revenue grew 36%, now at $600 million annualized run rate; GAAP EPS of $0.31 and non-GAAP EPS of $0.79

Cambridge, MA |

Akamai Technologies, Inc. (NASDAQ: AKAM), the world's largest and most trusted cloud delivery platform, today reported financial results for the first quarter ended March 31, 2018.

“We are very pleased with the results of our first quarter performance, which featured continued outstanding growth in our security business, substantial improvement in our media business, margin expansion and accelerated revenue growth overall." said Dr. Tom Leighton, Chief Executive Officer.

Akamai delivered the following financial results for the first quarter ended March 31, 2018.

Revenue: Revenue was $669 million, an 11% increase over first quarter 2017 revenue of $600 million and a 9% increase when adjusted for foreign exchange.*

Revenue by Division(1):

  • Web Division revenue was $353 million, up 16% year-over-year and up 13% when adjusted for foreign exchange*
  • Media and Carrier Division revenue was $316 million, up 6% year-over-year and up 4% when adjusted for foreign exchange*

Revenue from Cloud Security Solutions(2):

  • Cloud Security Solutions revenue was $149 million, up 36% year-over-year and up 32% when adjusted for foreign exchange*

Revenue from Internet Platform Customers(3):

  • Revenue from Internet Platform Customers was $44 million, down 14% year-over-year and when adjusted for foreign exchange*
  • Revenue excluding Internet Platform Customers was $624 million, up 14% year-over-year and up 11% when adjusted for foreign exchange*

Revenue by Geography:

  • U.S. revenue was $423 million, up 6% year-over-year
  • International revenue was $245 million, up 22% year-over-year and up 14% when adjusted for foreign exchange*

Income from operations: GAAP income from operations was $69 million, a 35% decrease from first quarter 2017. GAAP operating margin for the first quarter was 10%, down 8 percentage points from the same period last year. The first quarter of 2018 was impacted by a $15 million restructuring charge and $23 million for legal settlements and non-recurring professional advisory fees associated with a non-routine stockholder matter.

Non-GAAP income from operations* was $167 million, a 5% increase from fourth quarter 2017 and a 7% increase from first quarter 2017. Non-GAAP operating margin* for the first quarter was 25%, up 1 percentage point from the fourth quarter of 2017 due to operational efficiency improvements, but down 1 percentage point from the same period last year due to two acquisitions that were completed subsequent to the first quarter of 2017.

Net income: GAAP net income was $54 million, a 28% decrease from first quarter 2017. Non-GAAP net income* was $136 million, a 19% increase from first quarter 2017.

EPS: GAAP EPS was $0.31 per diluted share, a 28% decrease from first quarter 2017 and a 33% decrease when adjusted for foreign exchange.* Non-GAAP EPS was $0.79 per diluted share, a 22% increase from first quarter 2017 and a 17% increase when adjusted for foreign exchange.*

Adjusted EBITDA*: Adjusted EBITDA was $256 million, an 11% increase from first quarter 2017. Adjusted EBITDA margin* was 38%, flat compared to the first quarter of 2017.

Other first quarter 2018 results:

  • Cash from operations was $192 million, or 29% of revenue
  • Cash, cash equivalents and marketable securities was $1.3 billion as of March 31, 2018
  • The Company spent $20 million to repurchase 0.3 million shares of its common stock at an average price of $67.38 per share
  • The Company had approximately 171 million shares of common stock outstanding as of March 31, 2018

Adoption of new revenue recognition standard: Prior period results have been revised for the adoption of the new revenue recognition standard. Under this standard, the way revenue is recognized changed for some of Akamai's customers and primarily impacts the revenue timing of a small number of licensed software customers. The way Akamai recognizes revenue for its core Web and Media products is substantially unchanged. Akamai will also begin capitalizing certain commission and incentive payments. The revisions as a result of the new standard did not have a material impact on Akamai's annual revenue or results of operations, but did cause quarter-to-quarter fluctuations. For more information, see the posted revisions to the consolidated statements of income and other key disaggregated revenue amounts in the Investor Relations section of Akamai's website at www.akamai.com.


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

(1) Revenue by Division – A customer-focused reporting view that reflects revenue from customers that are managed by the division. As of January 1, 2018, Akamai now reports its revenue in two divisions compared to the three divisions reported in 2017; the Media Division and Enterprise and Carrier Division were combined to form the new Media and Carrier Division. In addition, as the purchasing patterns and required account expertise of customers changes over time, Akamai may reassign a customer's division from one to another. In 2018 Akamai reassigned some of its customers from the Media and Carrier Division to the Web Division and revised historical results in order to reflect the most recent categorization and to provide a comparable view for all periods presented.

(2) Revenue from Cloud Security Solutions – A product-focused reporting view that illustrates revenue from Cloud Security Solutions separately from all other solution categories. During 2018, Akamai updated its methodology for allocating revenue to specific solutions when solutions are sold as a bundle. During 2018, Akamai reassigned amounts from CDN and other solutions revenue to Cloud Security Solutions revenue and revised historical results in order to reflect the most recent allocation methodologies and to provide a comparable view for all periods presented.

(3) Revenue from Internet Platform Customers – Revenue from six customers that are large Internet platform companies: Amazon, Apple, Facebook, Google, Microsoft and Netflix.

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 4695086. 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 4695086. The archived webcast of this event may be accessed through the Akamai website.

Akamai 소개

Akamai는 최고의 신뢰를 받고 있는 세계 최대의 클라우드 전송 플랫폼으로 고객이 사용하는 장소와 디바이스에 상관없이 안전하고 원활한 디지털 경험을 쉽게 제공할 수 있도록 지원합니다. 전 세계 각지에 대규모로 분산 배치된 Akamai의 플랫폼은 130개국에서 20만 대의 서버에 배포되어 독보적인 규모를 갖추고 있으며 고객에게 탁월한 성능과 위협 방어 기능을 제공합니다. 웹·모바일 성능 향상, 클라우드 보안, 기업 접속, 비디오 전송 솔루션으로 구성된 Akamai의 솔루션 제품군은 탁월한 고객 서비스와 24시간 연중무휴 모니터링의 지원을 받습니다. 금융 기관, 유명 이커머스 기업, 미디어 & 엔터테인먼트 제공업체, 정부 기관이 Akamai를 신뢰하는 이유를 알아보려면 Akamai 홈페이지(www.akamai.com) 또는 블로그(blogs.akamai.com)를 방문하거나 Twitter에서 @Akamai를 팔로우하십시오.