EPS of $0.91 decreased by 13.1% from previous year
Gross margin of 59.4%
Net income of 139.91M
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Akamai Technologies Inc (0HBQ.L) QQ4 2024 Results Analysis – Resilient Revenue with Margin Dynamics and Robust Free Cash Flow
Executive Summary
Akamai Technologies reported a solid Q4 2024 with revenue of $1.020 billion, up 2.5% year over year and 1.5% quarter over quarter, underscoring steady demand for its cloud-based content delivery, security, and web performance offerings. The company delivered a robust gross margin of 59.37%, supporting an EBITDA of $338.6 million and net income of $139.9 million (EPS diluted $0.91). While year-over-year operating income declined about 19.9% due to higher operating costs, the quarter posted a strong QoQ improvement of 109.6% in operating income, highlighting cost discipline and favourable mix in a seasonally stronger period. Free cash flow (FCF) reached $180.9 million, with operating cash flow of $343.8 million, reinforcing Akamai’s ability to convert earnings into cash and fund strategic initiatives and capital returns.
Liquidity remained robust, with cash and short-term investments totaling approximately $1.60 billion and total assets of about $10.37 billion. The balance sheet shows substantial goodwill and intangible assets, reflecting prior M&A activity, and a net debt position of roughly $4.12 billion. Management commentary in the dataset emphasizes continued investment in edge compute and security offerings to sustain growth, though no formal forward guidance is captured here. Valuation appears rich versus some peers (P/S ~14x, P/E ~25–26x), indicating confidence in Akamai’s differentiated platform but underscoring the need for continued margin expansion and sustained free cash flow generation to justify the multiple over time.
Key Performance Indicators
Revenue
1.02B
QoQ: 1.52% | YoY:2.50%
Gross Profit
605.58M
59.37% margin
QoQ: 1.63% | YoY:0.66%
Operating Income
148.06M
QoQ: 109.61% | YoY:-19.87%
Net Income
139.91M
QoQ: 141.60% | YoY:-13.19%
EPS
0.93
QoQ: 144.74% | YoY:-13.08%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 1,019.939 million; YoY +2.50%; QoQ +1.52%. Indicates stable, recurring revenue from core cloud services, security, and media delivery.
Operating Income: 148.060 million; Operating Margin 14.52%; YoY -19.87%; QoQ +109.61%. YOY decline suggests higher year-over-year operating costs, while QoQ strength points to cost control and favorable quarterly dynamics.
Net Income: 139.905 million; Net Margin 13.72%; YoY -13.19%; QoQ +141.60%. Solidly profitable quarter with substantial QoQ acceleration.
EPS (diluted): 0.91; YoY -13.08%; QoQ +144.74%. Supports a constructive view on profitability per share despite broader margin pressure.
Financial Highlights
Revenue and profitability metrics (USD, trailing Q4 2024)
- Revenue: 1,019.939 million; YoY +2.50%; QoQ +1.52%. Indicates stable, recurring revenue from core cloud services, security, and media delivery.
- Gross Profit: 605.583 million; Gross Margin 59.37%; YoY +0.66%; QoQ +1.63%. Reflects favorable mix and scalable cost structure.
- Operating Income: 148.060 million; Operating Margin 14.52%; YoY -19.87%; QoQ +109.61%. YOY decline suggests higher year-over-year operating costs, while QoQ strength points to cost control and favorable quarterly dynamics.
- Net Income: 139.905 million; Net Margin 13.72%; YoY -13.19%; QoQ +141.60%. Solidly profitable quarter with substantial QoQ acceleration.
- EPS (diluted): 0.91; YoY -13.08%; QoQ +144.74%. Supports a constructive view on profitability per share despite broader margin pressure.
- EBITDA: 338.640 million; EBITDA Margin ~33.2%. Indicates strong cash-generating capability and potential for debt service and capex funding.
- Cash Flow and liquidity: Net cash from operating activities 343.788 million; Free Cash Flow 180.929 million; Capex 162.859 million (cash outflow). Cash at end of period 519.084 million; Cash & short-term investments total 1,596.583 million.
- Balance Sheet: Total assets 10,368.785 million; Total liabilities 5,490.428 million; Total stockholders’ equity 4,878.357 million. Current ratio 1.198; Quick ratio 1.198; Cash ratio 0.248.
- Leverage and coverage: Short-term debt 1.408B; Long-term debt 3.226B; Total debt 4.635B; Debt/Equity 0.95; Debt ratio 0.447; Interest coverage 23.71. Per-share metrics include Operating Cash Flow per Share 2.29 and Free Cash Flow per Share 1.204.
- Valuation (USD): P/S 14.08; P/E 25.66; P/B 2.94; Enterprise Value Multiple ~55.52; Price to Free Cash Flows ~79.37. Relative to peers, Akamai trades at a premium on revenue multiples, with solid efficiency but a higher cost structure implied by mixed YoY margin trends.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.02B
2.50%
1.52%
Gross Profit
605.58M
0.66%
1.63%
Operating Income
148.06M
-19.87%
109.61%
Net Income
139.91M
-13.19%
141.60%
EPS
0.93
-13.08%
144.74%
Key Financial Ratios
currentRatio
1.2
grossProfitMargin
55.2%
operatingProfitMargin
15.7%
netProfitMargin
13.7%
returnOnAssets
1.35%
returnOnEquity
2.87%
debtEquityRatio
0.95
operatingCashFlowPerShare
$2.29
freeCashFlowPerShare
$1.2
priceToBookRatio
2.94
priceEarningsRatio
25.66
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Notes: The dataset provided contains an empty earnings transcript. As such, there are no management quotes or on-call highlights to quote or contextualize here. The analysis relies on the disclosed financials and any available ratio-driven commentary. If transcripts become available, we will augment this section with thematic grouping (strategy, operations, market conditions) and direct quotes to anchor the narrative.
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Forward Guidance
Management guidance is not captured in the provided data. Based on the QQ4 2024 results, the implicit trajectory hinges on continued execution of Akamai’s growth initiatives (edge compute, security, and media delivery), with profitability improvements contingent on operating leverages and cost discipline. Investors should monitor: (1) revenue growth trajectory and mix across security, web performance, and media solutions; (2) margin expansion or contraction driven by R&D, SG&A, and scaling efficiencies; (3) free cash flow generation and capital allocation (debt reduction, potential buybacks, or strategic acquisitions); (4) balance sheet resilience amid macro volatility, and (5) any updated guidance or qualitative outlook in subsequent communications.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HBQ.L Focus
59.37%
15.70%
2.87%
25.66%
0EDE.L
53.70%
26.60%
5.39%
26.68%
0L3I.L
79.20%
43.50%
3.80%
18.47%
0M3Q.L
68.00%
33.00%
12.20%
31.47%
0HVF.L
27.40%
21.40%
2.33%
20.74%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Akamai demonstrates durable cash generation, a stable revenue base, and a strategic position in the evolving CDN, security, and edge compute landscape. The QQ4 2024 results show resilience in top-line performance with a solid gross margin, but operating profitability remains below peer leaders on a YoY basis, underscoring the need for margin expansion through operating leverage and cost discipline. Valuation remains premium relative to sales and earnings, reflecting confidence in Akamai’s differentiated platform and multi-year growth runway. The key catalysts include scale-driven margin improvement, accelerated adoption of edge compute and security offerings, and disciplined capital allocation (debt management, potential share repurchases or strategic acquisitions). Investors should monitor margin trajectory, free cash flow progression, and any new guidance in forthcoming communications to validate the sustainability of the current multiple. In a diversified technology market characterized by active consolidation and rapid innovation, Akamai’s moat in content delivery and security remains a meaningful asset, but execution around profitability and cash returns will largely determine the risk-adjusted upside near term.
Key Investment Factors
Growth Potential
Growth is anchored in Akamai’s differentiated CDN platform, security offerings, and expanding edge compute capabilities. Expected drivers include multi-cloud integration, increased streaming/media delivery demand, and enterprise adoption of edge-native applications, which could support revenue growth and improved margins as scale improves.
Profitability Risk
Key risks include competitive pressure from major CDN and cloud-native players, pricing competition, cyclical enterprise IT spending, integration risk from acquisitions (given large goodwill/intangible balances), and currency/foreign exchange exposure for international revenue streams. Also, leverage remains a consideration given net debt around $4.12B which could constrain capital allocation flexibility.
Financial Position
Solid cash generation (Operating cash flow $343.8M; FCF $180.9M) with substantial liquidity (cash + short-term investments ~$1.60B) and a diversified asset base. However, total debt remains elevated (Total debt ~$4.63B) against equity (~$4.88B) and sizable goodwill/intangible assets, implying vigilance on impairment and amortization dynamics and potential credit cost sensitivity.
SWOT Analysis
Strengths
High gross margin (~59.4%) supports robust profitability,