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Yahoo Finance Plus AKAMAI REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS
Third quarter revenue of $882 million, up 3% year-over-year and up 7% when adjusted for foreign exchange*
Security and compute revenue represented 55% of total revenue in the third quarter and grew 23% year-over-year and 28% when adjusted for foreign exchange*
GAAP EPS of $0.68, down 37% year-over-year and down 29% when adjusted for foreign exchange*, and non-GAAP EPS* of $1.26, down 13% year-over-year and down 7% when adjusted for foreign exchange*
CAMBRIDGE, Mass., Nov. 8, 2022 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today reported financial results for the third quarter ended September 30, 2022.
"Akamai delivered another quarter of solid results despite global macroeconomic challenges, including foreign exchange headwinds," said Dr. Tom Leighton, Akamai's chief executive officer. "Our performance continued to be led by the strong growth of our security and compute product groups, which collectively grew 23% year-over-year and 28% when adjusted for foreign exchange* comprising 55% of our overall revenue."
Akamai delivered the following financial results for the third quarter ended September 30, 2022:
Revenue: Revenue was $882 million, a 3% increase over third quarter 2021 revenue of $860 million and a 7% increase when adjusted for foreign exchange.*
Revenue by solution:
Security revenue was $380 million, up 13% year-over-year and up 19% when adjusted for foreign exchange*
Delivery revenue was $393 million, down 15% year-over-year and down 11% when adjusted for foreign exchange*
Compute revenue was $109 million, up 72% year-over-year and up 77% when adjusted for foreign exchange*
Revenue by geography:
U.S. revenue was $461 million, up 3% year-over-year
International revenue was $421 million, up 2% year-over-year and up 12% when adjusted for foreign exchange*
Income from operations: GAAP income from operations was $160 million, a 22% decrease from third quarter 2021. GAAP operating margin for the third quarter was 18%, down 6 percentage points from the same period last year.
Non-GAAP income from operations* was $243 million, a 12% decrease from third quarter 2021. Non-GAAP operating margin* for the third quarter was 28%, down 4 percentage points compared to the same period last year.
Net income: GAAP net income was $108 million, a 40% decrease from third quarter 2021. Non-GAAP net income* was $200 million, a 16% decrease from third quarter 2021.
EPS: GAAP EPS was $0.68 per diluted share, a 37% decrease from third quarter 2021 and a 29% decrease when adjusted for foreign exchange.* Non-GAAP EPS* was $1.26 per diluted share, a 13% decrease from third quarter 2021 and a 7% decrease when adjusted for foreign exchange.*
Adjusted EBITDA*: Adjusted EBITDA* was $368 million, a 7% decrease from third quarter 2021.
Supplemental cash information: Cash from operations for the third quarter of 2022 was $369 million, or 42% of revenue. Cash, cash equivalents and marketable securities was $1.4 billion as of September 30, 2022.
Share repurchases: Akamai spent $163 million in the third quarter of 2022 to repurchase 1.8 million shares of its common stock at an average price of $90.93 per share. Akamai had 158 million shares of common stock outstanding as of September 30, 2022.
* See Use of Non-GAAP Financial Measures below for definitions |
Quarterly Conference Call
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 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: 6562695. The archived webcast of this event may be accessed through the Akamai website.
About Akamai
Akamai powers and protects life online. Leading companies worldwide choose Akamai to build, deliver, and secure their digital experiences – helping billions of people live, work, and play every day. With the world's most distributed compute platform – from cloud to edge – we make it easy for customers to develop and run applications, while we keep experiences closer to users and threats farther away. Learn more about Akamai's security, compute, and delivery solutions at www.akamai.com, blogs.akamai.com, or follow Akamai Technologies on Twitter and LinkedIn.
AKAMAI TECHNOLOGIES, INC. | |||
(in thousands) | September 30, | December 31, | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 457,816 | $ 536,725 | |
Marketable securities | 406,332 | 541,470 | |
Accounts receivable, net | 622,027 | 675,926 | |
Prepaid expenses and other current assets | 209,398 | 166,313 | |
Total current assets | 1,695,573 | 1,920,434 | |
Marketable securities | 488,526 | 1,088,048 | |
Property and equipment, net | 1,520,428 | 1,534,329 | |
Operating lease right-of-use assets | 803,404 | 815,754 | |
Acquired intangible assets, net | 455,030 | 313,225 | |
Goodwill | 2,753,369 | 2,156,254 | |
Deferred income tax assets | 285,722 | 168,342 | |
Other assets | 105,317 | 142,287 | |
Total assets | $ 8,107,369 | $ 8,138,673 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 119,051 | $ 109,928 | |
Accrued expenses | 329,211 | 411,590 | |
Deferred revenue | 109,792 | 86,517 | |
Operating lease liabilities | 187,776 | 175,683 | |
Other current liabilities | 7,181 | 6,623 | |
Total current liabilities | 753,011 | 790,341 | |
Deferred revenue | 22,290 | 25,342 | |
Deferred income tax liabilities | 38,146 | 40,974 | |
Convertible senior notes | 2,284,147 | 1,976,167 | |
Operating lease liabilities | 681,407 | 707,087 | |
Other liabilities | 95,184 | 68,748 | |
Total liabilities | 3,874,185 | 3,608,659 | |
Total stockholders' equity | 4,233,184 | 4,530,014 | |
Total liabilities and stockholders' equity | $ 8,107,369 | $ 8,138,673 | |
AKAMAI TECHNOLOGIES, INC. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
(in thousands, except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||
Revenue | $ 881,896 | $ 903,332 | $ 860,333 | $ 2,688,875 | $ 2,555,865 | ||||
Costs and operating expenses: | |||||||||
Cost of revenue (1) (2) | 346,450 | 346,649 | 316,866 | 1,025,851 | 943,553 | ||||
Research and development (1) | 94,047 | 92,070 | 82,899 | 286,052 | 242,199 | ||||
Sales and marketing (1) | 123,935 | 126,665 | 108,514 | 373,319 | 336,762 | ||||
General and administrative (1) (2) | 139,425 | 141,219 | 134,265 | 433,906 | 405,275 | ||||
Amortization of acquired intangible assets | 17,374 | 16,972 | 11,959 | 47,990 | 35,446 | ||||
Restructuring charge | 227 | 4,715 | 565 | 12,958 | 5,567 | ||||
Total costs and operating expenses | 721,458 | 728,290 | 655,068 | 2,180,076 | 1,968,802 | ||||
Income from operations | 160,438 | 175,042 | 205,265 | 508,799 | 587,063 | ||||
Interest and marketable securities income (loss), net | 782 | (2,331) | 2,872 | (1,760) | 12,186 | ||||
Interest expense | (2,785) | (2,932) | (18,144) | (8,412) | (54,015) | ||||
Other (expense) income, net | (275) | 816 | 3,635 | (9,024) | 2,007 | ||||
Income before provision for income taxes | 158,160 | 170,595 | 193,628 | 489,603 | 547,241 | ||||
Provision for income taxes | (50,006) | (51,058) | (13,648) | (135,114) | (43,555) | ||||
Loss from equity method investment | — | — | (1,064) | (7,635) | (12,578) | ||||
Net income | $ 108,154 | $ 119,537 | $ 178,916 | $ 346,854 | $ 491,108 | ||||
Net income per share: | |||||||||
Basic | $ 0.68 | $ 0.75 | $ 1.10 | $ 2.17 | $ 3.01 | ||||
Diluted | $ 0.68 | $ 0.74 | $ 1.08 | $ 2.15 | $ 2.96 | ||||
Shares used in per share calculations: | |||||||||
Basic | 158,715 | 160,038 | 162,767 | 159,749 | 162,967 | ||||
Diluted | 159,068 | 161,710 | 166,318 | 161,472 | 166,090 | ||||
(1) | Includes stock-based compensation (see supplemental table for figures) |
(2) | Includes depreciation and amortization (see supplemental table for figures) |
AKAMAI TECHNOLOGIES, INC. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
(in thousands) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||
Cash flows from operating activities: | |||||||||
Net income | $ 108,154 | $ 119,537 | $ 178,916 | $ 346,854 | $ 491,108 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 150,985 | 150,604 | 139,747 | 444,184 | 408,933 | ||||
Stock-based compensation | 50,702 | 51,882 | 49,018 | 158,811 | 153,804 | ||||
Provision (benefit) for deferred income taxes | 8,917 | (29,885) | (37,560) | (34,547) | (30,335) | ||||
Amortization of debt discount and issuance costs | 1,086 | 1,091 | 16,567 | 3,296 | 49,284 | ||||
(Gain) loss on investments | — | (641) | (2,616) | 15,895 | 8,898 | ||||
Other non-cash reconciling items, net | 2,451 | 10,045 | 977 | 25,094 | 3,117 | ||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||
Accounts receivable | 30,796 | 35,251 | (10,821) | ||||||
