Summary
Akamai closed fiscal 2024 with fourth-quarter revenue of $1.020 billion, up 2.5% from the prior-year quarter. Full-year revenue reached $3.991 billion, up 4.7%. The top line held up, but profitability moved the other way. Fourth-quarter GAAP operating income fell 19.9% to $148.1 million, and full-year operating income fell 16.3% to $533.4 million. GAAP net income was $139.9 million in the quarter, down 13.2%, and $504.9 million for the year, down 7.8%. Full-year GAAP diluted EPS was $3.27, down 7.1%. GAAP operating margin was 14.5% in the fourth quarter, down 4.1 percentage points from the prior-year quarter, and 13.4% for the full year, down 3.4 percentage points. Restructuring charges, amortization of acquired intangibles and stock-based compensation all weighed on GAAP results. Non-GAAP operating margin was 29% in both the fourth quarter and the full year, down 1 percentage point in each period, and non-GAAP net income per diluted share was $1.66 in the quarter, down 2%, and $6.48 for the full year, up 5%. Non-GAAP net income was $254 million in the quarter, down 3%, and $996 million for the year, up 4%. Adjusted EBITDA was $429 million in the quarter, up 1%, and $1.682 billion for the year, up 5%.
The mix continues to shift toward security and compute. Security and compute revenue represented 69% of fourth-quarter revenue and grew 16% year over year, with compute up 24% and security up 14%. Delivery revenue fell 18% in the quarter. For the full year, security and compute represented 67% of revenue and grew 18%; compute rose 25%, security rose 16%, and delivery fell 15%. Akamai also reported remaining performance obligations of $4.30 billion, up 26.5% from the prior-year quarter, and current deferred revenue of $149.2 million, up 38.8%. Those commitments support the subscription-like base, but delivery remains a clear drag as traffic growth slows and customers optimize their own networks.
Cash generation was mixed. Fourth-quarter operating cash flow was $343.8 million, down 11.7% from the prior-year quarter. For the full year, operating cash flow was $1.519 billion, up 12.7%, helped by collections and the shift of some compensation from cash to stock. Cash capital expenditures were $92.9 million in the fourth quarter, up 31.9%, and $390.4 million for the full year, down 14.7%. The company continued to invest in its network and compute platform, which lifted fourth-quarter capital spending while full-year spending declined.
Guidance points to slower near-term growth and steady non-GAAP profitability. For the first quarter of 2025, Akamai guides revenue to $1.000 billion to $1.020 billion and a non-GAAP operating margin of 28%. For full-year 2025, the company guides revenue to $4.000 billion to $4.200 billion, a non-GAAP operating margin of 28%, non-GAAP net income per diluted share of $6.00 to $6.40, a non-GAAP tax rate of 19.5%, and capex at 19% of revenue. First-quarter capex is guided at 24% of revenue. The guidance implies that management expects continued pressure on reported growth, with non-GAAP margins held near recent levels.
The main risks remain familiar. The 10-K describes slowing traffic growth, especially in media and gaming, and a large social media customer that has reduced reliance on U.S. providers and moved some work in-house. Management also points to competition and downward pricing on renewals, rising co-location and bandwidth costs, network build-out spending, foreign currency swings, and the integration of recent acquisitions such as Noname Security and the Edgio customer contracts. Those factors, along with global economic and geopolitical uncertainty, are likely to shape revenue growth and margins through 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.02B | $1.00B | +1.5% | $995.0M | +2.5% |
| Gross profit | $605.6M | $595.9M | +1.6% | $601.6M | +0.7% |
| Gross margin | 59.4% | 59.3% | +0.1 pp | 60.5% | -1.1 pp |
| Research & development | $120.2M | $120.3M | -0.1% | $109.2M | +10.1% |
| Sales & marketing | $144.6M | $138.6M | +4.4% | $135.3M | +6.9% |
| General & administrative | $155.5M | $160.0M | -2.8% | $155.6M | -0.0% |
| Total operating expenses | $871.9M | $934.0M | -6.7% | $810.2M | +7.6% |
| Operating income (loss) | $148.1M | $70.6M | +109.6% | $184.8M | -19.9% |
| Operating margin | 14.5% | 7.0% | +7.5 pp | 18.6% | -4.1 pp |
| Net income (loss) | $139.9M | $57.9M | +141.6% | $161.2M | -13.2% |
| Net margin | 13.7% | 5.8% | +8.0 pp | 16.2% | -2.5 pp |
| Diluted EPS | $0.91 | $0.38 | +$0.53 | $1.04 | -$0.13 |
Risks
Slowing revenue growth may continue to hurt profitability and the stock price. Total revenue was up 4.7% for FY2024 year to date, but delivery solutions revenue decreased 14.5% in 2024 and the company expects delivery declines to continue in the near future.
A large social media customer is reducing costs and reliance on U.S. providers by optimizing its platform with a do-it-yourself component, which reduced traffic on Akamai's network and negatively impacted revenue in 2024. Akamai expects revenue from this customer to decline over the next few years, and other large customers could adopt similar DIY or multi-vendor strategies.
Global macroeconomic and geopolitical conditions, including inflation, tariffs, trade barriers, and warfare, can cause customers to cut spending and optimize traffic. Approximately six percent of global employees are located in Israel and some have been mobilized for military reserves, which could disrupt operations.
Akamai competes in intensely competitive markets, especially compute, where a small number of very large competitors are established leaders with greater resources. Delivery and security prices paid by some customers have declined due to competition and contract renewals, negatively impacting revenue growth rates.
Failure to control expenses could reduce profitability. Operating income was down 16.3% for FY2024 year to date and operating margin was down 3.4 pp, while cost of revenue increased 7.3% in 2024, driven by co-location fees, depreciation of network equipment, and payroll costs.
Akamai depends on third-party transmission capacity, co-location facilities, and hardware including hundreds of thousands of servers. It is experiencing volatility in server component costs, and tariffs and counter-tariffs could increase costs and disrupt supply chains for its compute buildout.
Akamai is investing significant resources in compute solutions and adapting offerings to artificial intelligence workloads, but success is not guaranteed. It must source additional co-location facilities, manage an uncertain server hardware supply chain, and compete for enterprise customers against more established compute providers.
Akamai has recently acquired Edgio customer contracts and Noname Security, and previously Linode, creating integration risks. These include difficulty integrating technologies and personnel, cybersecurity vulnerabilities during the post-close period, dilution, and failure to realize expected benefits.
Akamai regularly faces attacks, and the use of artificial intelligence by bad actors has heightened the sophistication and effectiveness of threats. Risks include abuse of Linode compute products, undiscovered vulnerabilities such as the AMD Inception issue, and costly mitigation efforts that can negatively impact near-term profitability.
U.S. legislation concerning a Chinese application could expose Akamai to fines, litigation, indemnification claims, and reputational harm, though the U.S. Attorney General determined that current services to this customer do not violate the law. Akamai also faces content and internet regulations that could reduce revenue or increase compliance costs.
Akamai depends on key employees and faces significant competition for talent in security and cloud computing. Competition increases cash and stock-based compensation costs, equity volatility can hurt retention, and the Israel-Hamas War has impacted and could continue to impact employees in Israel.
As of December 31, 2024, Akamai had $3,565.0 million of convertible senior notes outstanding, including $1,150.0 million due in May 2025. Its ability to repay or refinance depends on market conditions and future performance, and failure to have sufficient cash upon conversion or repurchase could cause a default.
SaaS KPIs
All quarters →Adjusted EBITDA margin
Non-GAAP operating margin
Summary, forecast, risks and KPIs are extracted from AKAMAI TECHNOLOGIES INC's SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.