Akamai (AKAM) Surpasses Q4 Earnings & Revenue Estimates
Akamai Technologies, Inc. AKAM reported fourth-quarter 2021 adjusted earnings of $1.49 per share that beat the Zacks Consensus Estimate by 4.9% and improved 12% year over year.
Revenues of $905.4 million surpassed the Zacks Consensus Estimate by 0.7% and increased 7% year over year. Growth in the security business contributed to the top line.
Region-wise, U.S. revenues were $476 million, up 2% year over year. International revenues were $429 million, up 13%.
By product groups, Security Technology Group revenues were $365 million, up 23% year over year. Revenues from Edge Technology Group amounted to $541 million, down 2%.
Web Division revenues increased 4.6% year over year to $454.4 million, led by growth in the security business. Media and Carrier Division revenues of $450.9 million rose 9.4%.
Akamai Technologies, Inc. Price, Consensus and EPS Surprise
Akamai Technologies, Inc. price-consensus-eps-surprise-chart | Akamai Technologies, Inc. Quote
Operating margin expanded 600 basis points (bps) year over year to 22%. Non-GAAP operating margin grew 100 bps to 31%. Adjusted EBITDA margin of 45% increased 200 bps.
Akamai has inked a deal to acquire Linode, a leading Infrastructure-as-a-service (IaaS) platform provider, for almost $900 million. The move will combine Linode’s developer-friendly cloud computing capabilities with Akamai’s market-leading edge platform and security services. Together with Linode, Akamai will likely become the world’s most distributed compute platform, from cloud to edge. The deal is expected to close in the first quarter of 2022.
Cash Flow & Liquidity
In 2021, Akamai generated $1,404.6 million of cash from operations compared with $1,215 million in 2020. Free cash flow was $859 million, up 78% year over year. As of Dec 31, 2021, the company had $536.7 million in cash and cash equivalents with $1,976.2 million of senior notes.
During the reported quarter, Akamai repurchased 2.4 million shares for $271 million.
For the first quarter of 2022, Akamai expects revenues between $896 million and $910 million. Cash gross margin is estimated to be 76%. Adjusted EBITDA margin is expected to be 43%. Akamai expects a non-GAAP operating margin of 30%. Non-GAAP earnings are envisioned in the range of $1.39-$1.43 per share.
Zacks Rank & Stocks to Consider
Akamai currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vocera Communications, Inc. VCRA is a better-ranked stock in the broader Zacks Computer and Technology sector that sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 4.9% over the past 60 days.
Vocera Communications pulled off a trailing four-quarter earnings surprise of 115.4%, on average. The stock has returned 72.7% in the past year.
SeaChange International, Inc. SEAC carries a Zacks Rank #2 (Buy). The consensus estimate for current-year earnings has been revised upward by 10% over the past 60 days.
SeaChange International delivered a trailing four-quarter earnings surprise of 37.2%, on average. The stock has, however, declined 16.3% in the past year.
Qualcomm, Inc. QCOM, carrying a Zacks Rank #2, is another solid pick for investors. The consensus estimate for current-year earnings has been revised 12.2% upward over the past 60 days.
Qualcomm delivered a trailing four-quarter earnings surprise of 12.2%, on average. It has appreciated 19.5% in the past year.
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