CAMBRIDGE, Mass.,
Aug. 3, 2021 /PRNewswire/
-- Akamai Technologies, Inc. (NASDAQ: AKAM), the world's most
trusted solution for protecting and delivering digital experiences,
today reported financial results for the second quarter ended
June 30, 2021.
"Akamai's excellent second quarter financial performance
was highlighted by continued strong growth across our security
solutions globally," said Dr. Tom
Leighton, Akamai's Chief Executive Officer. "As the internet
has become increasingly critical to consumers and businesses, our
customers have turned to us more than ever to power and protect
exceptional online experiences."
Akamai delivered the following financial results for the
second quarter ended June 30, 2021:
Revenue: Revenue was $853 million, a 7% increase over second quarter
2020 revenue of $795 million and a 5%
increase when adjusted for foreign exchange.*
Revenue by Product Group:
- Security Technology Group revenue was $325 million, up 25% year-over-year and up 22%
when adjusted for foreign exchange*
- Edge Technology Group revenue was $528 million, down 1% year-over-year and down 4%
when adjusted for foreign exchange*
Revenue by Geography:
- U.S. revenue was $450
million, up 1% year-over-year
- International revenue was $403
million, up 15% year-over-year and up 9% when adjusted for
foreign exchange*
Income from operations: GAAP income
from operations was $199 million, a
5% increase from second quarter 2020. GAAP operating margin for the
second quarter was 23%, down 1 percentage point from the same
period last year.
Non-GAAP income from operations* was $270 million, a 5% increase from second quarter
2020. Non-GAAP operating margin* for the second quarter was 32%,
flat compared to the same period last year.
Net income: GAAP net income was
$156 million, a 3% decrease from
second quarter 2020. Non-GAAP net income* was $233 million, a 3% increase from second quarter
2020.
EPS: GAAP EPS was $0.94 per diluted share, a 4% decrease from
second quarter 2020 and a 9% decrease when adjusted for foreign
exchange.* Non-GAAP EPS was $1.42 per
diluted share, a 3% increase from second quarter 2020 and a 1%
decrease when adjusted for foreign exchange.*
Adjusted EBITDA*: Adjusted EBITDA* was
$386 million, a 9% increase from
second quarter 2020. Adjusted EBITDA margin* for the second quarter
was 45%, flat compared to the same period last year.
Supplemental cash information: Cash
from operations for the second quarter of 2021 was $378 million, or 44% of revenue. Cash, cash
equivalents and marketable securities was $2.6 billion as of June 30, 2021.
Share repurchases: Akamai spent
$96 million in the second quarter of
2021 to repurchase 0.9 million shares of its common stock at an
average price of $110.51 per share.
The Company had 163 million shares of common stock outstanding as
of June 30, 2021.
*
|
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 1-844-578-9671 (or
1-508-637-5655 for international calls) and using passcode 3968976.
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 3968976. The archived webcast of this event may be
accessed through the Akamai website.
About Akamai
Akamai secures and
delivers digital experiences for the world's largest companies.
Akamai's intelligent edge platform surrounds everything, from the
enterprise to the cloud, so customers and their businesses can be
fast, smart and secure. Top brands globally rely on Akamai to help
them realize competitive advantage through agile solutions that
extend the power of their multi-cloud architectures. Akamai keeps
decisions, apps and experiences closer to users than anyone – and
attacks and threats far away. Akamai's portfolio of edge security,
web and mobile performance, enterprise access and video delivery
solutions is supported by unmatched customer service, analytics and
24/7/365 monitoring. To learn why the world's top brands trust
Akamai, visit www.akamai.com, blogs.akamai.com, or @Akamai on
Twitter.
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
(in thousands)
|
June 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
581,068
|
|
|
$
|
352,917
|
|
Marketable
securities
|
835,420
|
|
|
745,156
|
|
Accounts receivable,
net
|
656,609
|
|
|
660,052
|
|
Prepaid expenses and
other current assets
|
180,155
|
|
|
171,406
|
|
Total current
assets
|
2,253,252
|
|
|
1,929,531
|
|
Marketable
securities
|
1,164,620
|
|
|
1,398,802
|
|
Property and
equipment, net
|
1,538,422
|
|
|
1,478,272
|
|
Operating lease
right-of-use assets
|
830,022
|
|
|
793,945
|
|
Acquired intangible
assets, net
|
217,519
|
|
|
234,724
|
|
Goodwill
|
1,685,859
|
|
|
1,674,371
|
|
Deferred income tax
assets
|
99,634
|
|
|
106,918
|
|
Other
assets
|
131,610
|
|
|
147,567
|
|
Total
assets
|
$
|
7,920,938
|
|
|
$
|
7,764,130
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
93,465
|
|
|
$
|
118,546
|
|
Accrued
expenses
|
289,189
|
|
|
380,468
|
|
Deferred
revenue
|
95,216
|
|
|
76,600
|
|
Operating lease
liabilities
|
158,390
|
|
|
154,801
|
|
Other current
liabilities
|
11,189
|
|
|
27,755
|
|
Total current
liabilities
|
647,449
|
|
|
758,170
|
|
Deferred
revenue
|
4,623
|
|
|
5,262
|
|
Deferred income tax
liabilities
|
36,124
|
|
|
37,458
|
|
Convertible senior
notes
|
1,941,113
|
|
|
1,906,707
|
|
Operating lease
liabilities
|
733,523
|
|
|
715,404
|
|
Other
liabilities
|
81,449
|
|
|
89,833
|
|
Total
liabilities
|
3,444,281
|
|
|
3,512,834
|
|
Total stockholders'
equity
|
4,476,657
|
|
|
4,251,296
|
|
Total liabilities and
stockholders' equity
|
$
|
7,920,938
|
|
|
$
|
7,764,130
|
|
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands, except per share
data)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Revenue
|
$
|
852,824
|
|
|
$
|
842,708
|
|
|
$
|
794,715
|
|
|
$
|
1,695,532
|
|
|
$
|
1,559,017
|
|
Costs and operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
revenue(1) (2)
|
320,000
|
|
|
306,687
|
|
|
276,804
|
|
|
626,687
|
|
|
545,386
|
|
Research and
development(1)
|
77,255
|
|
|
82,045
|
|
|
64,090
|
|
|
159,300
|
|
|
135,314
|
|
Sales and
marketing(1)
|
111,894
|
|
|
116,354
|
|
|
123,469
|
|
|
228,248
|
|
|
247,255
|
|
General and
administrative(1) (2)
|
134,295
|
|
|
136,715
|
|
|
129,709
|
|
|
271,010
|
|
|
257,070
|
|
Amortization of
acquired intangible assets
|
12,060
|
|
|
11,427
|
|
|
10,381
|
|
|
23,487
|
|
|
20,815
|
|
Restructuring
(benefit) charge
|
(2,114)
|
|
|
7,116
|
|
|
(167)
|
|
|
5,002
|
|
|
10,418
|
|
Total costs and
operating expenses
|
653,390
|
|
|
660,344
|
|
|
604,286
|
|
|
1,313,734
|
|
|
1,216,258
|
|
Income from
operations
|
199,434
|
|
|
182,364
|
|
|
190,429
|
|
|
381,798
|
|
|
342,759
|
|
Interest
income
|
4,736
|
|
|
4,578
|
|
|
9,502
|
|
|
9,314
|
|
|
16,545
|
|
Interest
expense
|
(18,037)
|
|
|
(17,834)
|
|
|
(17,249)
|
|
|
(35,871)
|
|
|
(34,454)
|
|
Other expense,
net
|
(811)
|
|
|
(817)
|
|
|
(1,603)
|
|
|
(1,628)
|
|
|
(5,711)
|
|
Income before
provision for income taxes
|
185,322
|
|
|
168,291
|
|
|
181,079
|
|
|
353,613
|
|
|
319,139
|
|
Provision for income
taxes
|
(18,009)
|
|
|
(11,898)
|
|
|
(18,671)
|
|
|
(29,907)
|
|
|
(32,963)
|
|
Loss from equity
method investment
|
(10,816)
|
|
|
(698)
|
|
|
(493)
|
|
|
(11,514)
|
|
|
(1,115)
|
|
Net income
|
$
|
156,497
|
|
|
$
|
155,695
|
|
|
$
|
161,915
|
|
|
$
|
312,192
|
|
|
$
|
285,061
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.96
|
|
|
$
|
0.95
|
|
|
$
|
1.00
|
|
|
$
|
1.91
|
|
|
$
|
1.76
|
|
Diluted
|
$
|
0.94
|
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
|
$
|
1.88
|
|
|
$
|
1.74
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
|
|
Basic
|
163,074
|
|
|
163,061
|
|
|
162,413
|
|
|
163,067
|
|
|
162,203
|
|
Diluted
|
166,263
|
|
|
165,688
|
|
|
164,768
|
|
|
165,976
|
|
|
164,226
|
|
|
|
(1)
|
Includes stock-based
compensation (see supplemental table for figures)
|
(2)
|
Includes depreciation
and amortization (see supplemental table for figures)
|
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
156,497
|
|
|
$
|
155,695
|
|
|
$
|
161,915
|
|
|
$
|
312,192
|
|
|
$
|
285,061
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
137,715
|
|
|
131,471
|
|
|
115,580
|
|
|
269,186
|
|
|
231,788
|
|
Stock-based
compensation
|
50,481
|
|
|
54,305
|
|
|
49,191
|
|
|
104,786
|
|
|
96,684
|
|
Provision for deferred
income taxes
|
5,461
|
|
|
1,764
|
|
|
14,282
|
|
|
7,225
|
|
|
11,394
|
|
Amortization of debt
discount and issuance costs
|
16,460
|
|
|
16,257
|
|
|
15,677
|
|
|
32,717
|
|
|
31,310
|
|
Other non-cash
reconciling items, net
|
12,428
|
|
|
1,226
|
|
|
2,752
|
|
|
13,654
|
|
|
14,804
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
11,176
|
|
|
(15,580)
|
|
|
(31,633)
|
|
|
(4,404)
|
|
|
(105,546)
|
|
Prepaid expenses and
other current assets
|
24,539
|
|
|
(35,388)
|
|
|
455
|
|
|
(10,849)
|
|
|
(9,979)
|
|
Accounts payable and
accrued expenses
|
(10,073)
|
|
|
(72,986)
|
|
|
(19,944)
|
|
|
(83,059)
|
|
|
(47,402)
|
|
Deferred
revenue
|
(7,345)
|
|
|
25,439
|
|
|
(5,647)
|
|
|
18,094
|
|
|
21,342
|
|
Other current
liabilities
|
(15,514)
|
|
|
(716)
|
|
|
(2,043)
|
|
|
(16,230)
|
|
|
(1,115)
|
|
Other non-current
assets and liabilities
|
(3,692)
|
|
|
(11,694)
|
|
|
(1,894)
|
|
|
(15,386)
|
|
|
(6,407)
|
|
Net cash provided by
operating activities
|
378,133
|
|
|
249,793
|
|
|
298,691
|
|
|
627,926
|
|
|
521,934
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Cash (paid) received
for business acquisitions, net of cash acquired
|
—
|
|
|
(15,638)
|
|
|
—
|
|
|
(15,638)
|
|
|
106
|
|
Cash paid for asset
acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,376)
|
|
Purchases of property
and equipment and capitalization of internal-use software
development costs
|
(154,569)
|
|
|
(164,719)
|
|
|
(120,239)
|
|
|
(319,288)
|
|
|
(335,668)
|
|
Purchases of short-
and long-term marketable securities
|
(291,957)
|
|
|
(90,279)
|
|
|
(452,737)
|
|
|
(382,236)
|
|
|
(842,516)
|
|
Proceeds from sales
and maturities of short- and long-term marketable
securities
|
287,297
|
|
|
234,149
|
|
|
483,184
|
|
|
521,446
|
|
|
1,014,000
|
|
Other non-current
assets and liabilities
|
(391)
|
|
|
179
|
|
|
155
|
|
|
(212)
|
|
|
79
|
|
Net cash used in
investing activities
|
(159,620)
|
|
|
(36,308)
|
|
|
(89,637)
|
|
|
(195,928)
|
|
|
(200,375)
|
|
AKAMAI TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS,
continued
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the
issuance of common stock under stock plans
|
9,712
|
|
|
21,410
|
|
|
10,259
|
|
|
31,122
|
|
|
29,805
|
|
Employee taxes paid
related to net share settlement of stock-based awards
|
(12,314)
|
|
|
(63,946)
|
|
|
(13,095)
|
|
|
(76,260)
|
|
|
(63,930)
|
|
Repurchases of common
stock
|
(96,175)
|
|
|
(58,241)
|
|
|
(27,330)
|
|
|
(154,416)
|
|
|
(107,880)
|
|
Other non-current
assets and liabilities
|
(67)
|
|
|
—
|
|
|
—
|
|
|
(67)
|
|
|
—
|
|
Net cash used in
financing activities
|
(98,844)
|
|
|
(100,777)
|
|
|
(30,166)
|
|
|
(199,621)
|
|
|
(142,005)
|
|
Effects of exchange
rate changes on cash, cash equivalents and restricted
cash
|
3,003
|
|
|
(7,151)
|
|
|
8,155
|
|
|
(4,148)
|
|
|
(828)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
122,672
|
|
|
105,557
|
|
|
187,043
|
|
|
228,229
|
|
|
178,726
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
459,023
|
|
|
353,466
|
|
|
385,829
|
|
|
353,466
|
|
|
394,146
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
581,695
|
|
|
$
|
459,023
|
|
|
$
|
572,872
|
|
|
$
|
581,695
|
|
|
$
|
572,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE BY PRODUCT GROUP
(1)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Security Technology
Group
|
$
|
325,128
|
|
|
$
|
310,219
|
|
|
$
|
259,316
|
|
|
$
|
635,347
|
|
|
$
|
499,616
|
|
Edge Technology
Group
|
527,696
|
|
|
532,489
|
|
|
535,399
|
|
|
1,060,185
|
|
|
1,059,401
|
|
Total
revenue
|
$
|
852,824
|
|
|
$
|
842,708
|
|
|
$
|
794,715
|
|
|
$
|
1,695,532
|
|
|
$
|
1,559,017
|
|
Revenue growth rates
year-over-year:
|
|
|
|
|
|
|
|
|
|
Security Technology
Group
|
25
|
%
|
|
29
|
%
|
|
27
|
%
|
|
27
|
%
|
|
27
|
%
|
Edge Technology
Group
|
(1)
|
|
|
2
|
|
|
7
|
|
|
—
|
|
|
4
|
|
Total
revenue
|
7
|
%
|
|
10
|
%
|
|
13
|
%
|
|
9
|
%
|
|
10
|
%
|
Revenue growth rates year-over-year, adjusted for the
impact of foreign exchange
rates(2):
|
|
|
|
|
|
|
|
|
|
Security Technology
Group
|
22
|
%
|
|
27
|
%
|
|
28
|
%
|
|
24
|
%
|
|
28
|
%
|
Edge Technology
Group
|
(4)
|
|
|
—
|
|
|
8
|
|
|
(2)
|
|
|
5
|
|
Total
revenue
|
5
|
%
|
|
8
|
%
|
|
14
|
%
|
|
7
|
%
|
|
11
|
%
|
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE BY
GEOGRAPHY
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
U.S.
|
$
|
449,553
|
|
|
$
|
463,180
|
|
|
$
|
443,668
|
|
|
$
|
912,733
|
|
|
$
|
872,598
|
|
International
|
403,271
|
|
|
379,528
|
|
|
351,047
|
|
|
782,799
|
|
|
686,419
|
|
Total
revenue
|
$
|
852,824
|
|
|
$
|
842,708
|
|
|
$
|
794,715
|
|
|
$
|
1,695,532
|
|
|
$
|
1,559,017
|
|
Revenue growth rates
year-over-year:
|
|
|
|
|
|
|
|
|
|
U.S.
|
1
|
%
|
|
8
|
%
|
|
6
|
%
|
|
5
|
%
|
|
4
|
%
|
International
|
15
|
|
|
13
|
|
|
22
|
|
|
14
|
|
|
19
|
|
Total
revenue
|
7
|
%
|
|
10
|
%
|
|
13
|
%
|
|
9
|
%
|
|
10
|
%
|
Revenue growth rates year-over-year, adjusted for the
impact of foreign exchange
rates(2):
|
|
|
|
|
|
|
|
|
|
U.S.
|
1
|
%
|
|
8
|
%
|
|
6
|
%
|
|
5
|
%
|
|
4
|
%
|
International
|
9
|
|
|
8
|
|
|
24
|
|
|
9
|
|
|
22
|
|
Total
revenue
|
5
|
%
|
|
8
|
%
|
|
14
|
%
|
|
7
|
%
|
|
11
|
%
|
|
|
(1)
|
Effective March 1,
2021, Akamai reorganized into two groups: the Security Technology
Group and the Edge Technology Group, which both utilize the Akamai
Intelligent Edge Platform and its global sales organization. These
groups are aligned with their product offerings. Revenue from the
Security Technology Group was previously reported as revenue from
Cloud Security Solutions, and revenue from the Edge Technology
Group was previously reported as revenue from content delivery
network (CDN) services and all other solutions.
|
(2)
|
See Use of Non-GAAP
Financial Measures below for a definition
|
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE FROM INTERNET
PLATFORM CUSTOMERS (1)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Revenue from Internet
Platform Customers
|
$
|
63,634
|
|
|
$
|
59,191
|
|
|
$
|
50,752
|
|
|
$
|
122,825
|
|
|
$
|
95,454
|
|
Revenue excluding
Internet Platform Customers
|
789,190
|
|
|
783,517
|
|
|
743,963
|
|
|
1,572,707
|
|
|
1,463,563
|
|
Total
revenue
|
$
|
852,824
|
|
|
$
|
842,708
|
|
|
$
|
794,715
|
|
|
$
|
1,695,532
|
|
|
$
|
1,559,017
|
|
Revenue growth rates
year-over-year:
|
|
|
|
|
|
|
|
|
|
Revenue from Internet
Platform Customers
|
25
|
%
|
|
32
|
%
|
|
10
|
%
|
|
29
|
%
|
|
2
|
%
|
Revenue excluding
Internet Platform Customers
|
6
|
|
|
9
|
|
|
13
|
|
|
7
|
|
|
11
|
|
Total
revenue
|
7
|
%
|
|
10
|
%
|
|
13
|
%
|
|
9
|
%
|
|
10
|
%
|
Revenue growth rates year-over-year, adjusted for the
impact of foreign exchange
rates(2):
|
|
|
|
|
|
|
|
|
|
Revenue from Internet
Platform Customers
|
25
|
%
|
|
32
|
%
|
|
10
|
%
|
|
29
|
%
|
|
2
|
%
|
Revenue excluding
Internet Platform Customers
|
3
|
|
|
7
|
|
|
14
|
|
|
5
|
|
|
12
|
|
Total
revenue
|
5
|
%
|
|
8
|
%
|
|
14
|
%
|
|
7
|
%
|
|
11
|
%
|
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL REVENUE DATA – REVENUE BY DIVISION
(3)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
(4)
|
|
June 30,
2021
|
|
June 30,
2020
(4)
|
Web
Division
|
$
|
431,521
|
|
|
$
|
427,046
|
|
|
$
|
401,071
|
|
|
$
|
858,567
|
|
|
$
|
803,821
|
|
Media and Carrier
Division
|
421,303
|
|
|
415,662
|
|
|
393,644
|
|
|
836,965
|
|
|
755,196
|
|
Total
revenue
|
$
|
852,824
|
|
|
$
|
842,708
|
|
|
$
|
794,715
|
|
|
$
|
1,695,532
|
|
|
$
|
1,559,017
|
|
Revenue growth rates
year-over-year:
|
|
|
|
|
|
|
|
|
|
Web
Division
|
8
|
%
|
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
|
8
|
%
|
Media and Carrier
Division
|
7
|
|
|
15
|
|
|
19
|
|
|
11
|
|
|
13
|
|
Total
revenue
|
7
|
%
|
|
10
|
%
|
|
13
|
%
|
|
9
|
%
|
|
10
|
%
|
Revenue growth rates year-over-year, adjusted for the
impact of foreign exchange
rates(2):
|
|
|
|
|
|
|
|
|
|
Web
Division
|
5
|
%
|
|
4
|
%
|
|
8
|
%
|
|
4
|
%
|
|
9
|
%
|
Media and Carrier
Division
|
5
|
|
|
13
|
|
|
20
|
|
|
9
|
|
|
14
|
|
Total
revenue
|
5
|
%
|
|
8
|
%
|
|
14
|
%
|
|
7
|
%
|
|
11
|
%
|
|
|
(1)
|
Revenue from large
Internet platform companies: Amazon, Apple, Facebook, Google,
Microsoft and Netflix
|
(2)
|
See Use of Non-GAAP
Financial Measures below for a definition
|
(3)
|
Prior to March 1,
2021, Akamai managed its business by division, which was a
customer-focused reporting view that reflected revenue from
customers that were managed by the division. Although Akamai no
longer manages its business by division, the prior divisional view
of revenue is provided for informational purposes.
|
(4)
|
As of January 1,
2021, Akamai reassigned some of its customers between the Media and
Carrier Division and 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. As the
purchasing patterns and required account expertise of customers
change over time, Akamai may reassign a customer's division from
one to another.
|
AKAMAI TECHNOLOGIES, INC.
SUPPLEMENTAL OPERATING EXPENSE
DATA
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
General and administrative
expenses:
|
|
|
|
|
|
|
|
|
|
Payroll and related
costs
|
$
|
54,974
|
|
|
$
|
56,450
|
|
|
$
|
49,475
|
|
|
$
|
111,424
|
|
|
$
|
98,074
|
|
Stock-based
compensation
|
16,123
|
|
|
16,362
|
|
|
15,377
|
|
|
32,485
|
|
|
29,334
|
|
Depreciation and
amortization
|
20,489
|
|
|
20,909
|
|
|
20,654
|
|
|
41,398
|
|
|
41,119
|
|
Facilities-related
costs
|
24,845
|
|
|
24,347
|
|
|
23,898
|
|
|
49,192
|
|
|
48,570
|
|
Provision (benefit)
for doubtful accounts
|
971
|
|
|
(260)
|
|
|
2,893
|
|
|
711
|
|
|
5,092
|
|
Acquisition-related
costs
|
140
|
|
|
64
|
|
|
62
|
|
|
204
|
|
|
138
|
|
Legal
settlements
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
275
|
|
Professional fees and
other expenses
|
16,753
|
|
|
18,843
|
|
|
17,075
|
|
|
35,596
|
|
|
34,468
|
|
Total general and
administrative expenses
|
$
|
134,295
|
|
|
$
|
136,715
|
|
|
$
|
129,709
|
|
|
$
|
271,010
|
|
|
$
|
257,070
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
expenses–functional(1):
|
Global
functions
|
$
|
53,314
|
|
|
$
|
55,799
|
|
|
$
|
46,818
|
|
|
$
|
109,113
|
|
|
$
|
94,684
|
|
As a percentage of revenue
|
6
|
%
|
|
7
|
%
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
Infrastructure
|
79,878
|
|
|
81,109
|
|
|
79,677
|
|
|
160,987
|
|
|
156,897
|
|
As a percentage of revenue
|
9
|
%
|
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
|
10
|
%
|
Other
|
1,103
|
|
|
(193)
|
|
|
3,214
|
|
|
910
|
|
|
5,489
|
|
Total general and
administrative expenses
|
$
|
134,295
|
|
|
$
|
136,715
|
|
|
$
|
129,709
|
|
|
$
|
271,010
|
|
|
$
|
257,070
|
|
As a percentage of revenue
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation:
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
|
6,874
|
|
|
$
|
7,096
|
|
|
$
|
6,254
|
|
|
$
|
13,970
|
|
|
$
|
11,990
|
|
Research and
development
|
15,937
|
|
|
18,369
|
|
|
11,549
|
|
|
34,306
|
|
|
23,614
|
|
Sales and
marketing
|
11,547
|
|
|
12,478
|
|
|
16,011
|
|
|
24,025
|
|
|
31,746
|
|
General and
administrative
|
16,123
|
|
|
16,362
|
|
|
15,377
|
|
|
32,485
|
|
|
29,334
|
|
Total stock-based
compensation
|
$
|
50,481
|
|
|
$
|
54,305
|
|
|
$
|
49,191
|
|
|
$
|
104,786
|
|
|
$
|
96,684
|
|
|
|
(1)
|
Global functions
expense includes payroll, stock-based compensation and other
employee-related costs for administrative functions, including
finance, purchasing, order entry, human resources, legal,
information technology and executive personnel, as well as
third-party professional service fees. Infrastructure expense
includes payroll, stock-based compensation and other
employee-related costs for our network infrastructure functions, as
well as facility rent expense, depreciation and amortization of
facility and IT-related assets, software and software-related
costs, business insurance and taxes. Our network infrastructure
function is responsible for network planning, sourcing,
architecture evaluation and platform security. Other expense
includes acquisition-related costs, provision for doubtful accounts
and legal settlements.
|
AKAMAI TECHNOLOGIES, INC.
OTHER SUPPLEMENTAL DATA
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands, except end of period
statistics)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
Network-related
depreciation
|
$
|
55,601
|
|
|
$
|
51,896
|
|
|
$
|
38,806
|
|
|
$
|
107,497
|
|
|
$
|
75,203
|
|
Capitalized
internal-use software development amortization
|
40,426
|
|
|
39,223
|
|
|
38,164
|
|
|
79,649
|
|
|
78,933
|
|
Other depreciation
and amortization
|
19,833
|
|
|
20,365
|
|
|
20,193
|
|
|
40,198
|
|
|
40,212
|
|
Depreciation of
property and equipment
|
115,860
|
|
|
111,484
|
|
|
97,163
|
|
|
227,344
|
|
|
194,348
|
|
Capitalized
stock-based compensation amortization(1)
|
8,916
|
|
|
7,693
|
|
|
7,185
|
|
|
16,609
|
|
|
14,816
|
|
Capitalized interest
expense amortization(1)
|
879
|
|
|
867
|
|
|
851
|
|
|
1,746
|
|
|
1,809
|
|
Amortization of
acquired intangible assets
|
12,060
|
|
|
11,427
|
|
|
10,381
|
|
|
23,487
|
|
|
20,815
|
|
Total depreciation and
amortization
|
$
|
137,715
|
|
|
$
|
131,471
|
|
|
$
|
115,580
|
|
|
$
|
269,186
|
|
|
$
|
231,788
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, excluding stock-based
compensation and interest
expense(2)(3):
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
$
|
81,655
|
|
|
$
|
94,998
|
|
|
$
|
142,310
|
|
|
$
|
176,653
|
|
|
$
|
227,109
|
|
Capitalized
internal-use software development costs
|
56,574
|
|
|
55,065
|
|
|
53,692
|
|
|
111,639
|
|
|
104,601
|
|
Total capital
expenditures, excluding stock-based compensation and interest
expense
|
$
|
138,229
|
|
|
$
|
150,063
|
|
|
$
|
196,002
|
|
|
$
|
288,292
|
|
|
$
|
331,710
|
|
|
|
|
|
|
|
|
|
|
|
End of period statistics:
|
|
|
|
|
|
|
|
|
|
Number of
employees
|
8,275
|
|
|
8,300
|
|
|
7,951
|
|
|
|
|
|
|
|
(1)
|
Amortization of
capitalized stock-based compensation and interest expense in this
table excludes amortization of capitalized stock-based compensation
and interest expense capitalized as part of the implementation of
cloud-computing arrangements. However, the amounts are included in
our total amortization of capitalized stock-based compensation and
interest expense that is excluded from our non-GAAP measures (see
reconciliations of GAAP to non-GAAP measures).
|
(2)
|
Capital expenditures
presented in this table are reported on an accrual basis, which
differs from the cash-basis presentation in the statements of cash
flows. The primary difference between the two is the change in
purchases of property and equipment and capitalization of
internal-use software development costs accrued for, but not paid,
at period end.
|
(3)
|
See Use of Non-GAAP
Financial Measures below for a definition
|
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM
OPERATIONS AND NET INCOME
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Income from
operations
|
$
|
199,434
|
|
|
$
|
182,364
|
|
|
$
|
190,429
|
|
|
$
|
381,798
|
|
|
$
|
342,759
|
|
GAAP operating margin
|
23
|
%
|
|
22
|
%
|
|
24
|
%
|
|
23
|
%
|
|
22
|
%
|
Amortization of
acquired intangible assets
|
12,060
|
|
|
11,427
|
|
|
10,381
|
|
|
23,487
|
|
|
20,815
|
|
Stock-based
compensation
|
50,481
|
|
|
54,305
|
|
|
49,191
|
|
|
104,786
|
|
|
96,684
|
|
Amortization of
capitalized stock-based compensation and capitalized interest
expense
|
9,840
|
|
|
8,598
|
|
|
8,038
|
|
|
18,438
|
|
|
16,627
|
|
Restructuring
(benefit) charge
|
(2,114)
|
|
|
7,116
|
|
|
(167)
|
|
|
5,002
|
|
|
10,418
|
|
Acquisition-related
costs
|
140
|
|
|
64
|
|
|
62
|
|
|
204
|
|
|
138
|
|
Legal
settlements
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
275
|
|
Operating
adjustments
|
70,407
|
|
|
81,510
|
|
|
67,780
|
|
|
151,917
|
|
|
144,957
|
|
Non-GAAP income from
operations
|
$
|
269,841
|
|
|
$
|
263,874
|
|
|
$
|
258,209
|
|
|
$
|
533,715
|
|
|
$
|
487,716
|
|
Non-GAAP operating margin
|
32
|
%
|
|
31
|
%
|
|
32
|
%
|
|
31
|
%
|
|
31
|
%
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
156,497
|
|
|
$
|
155,695
|
|
|
$
|
161,915
|
|
|
$
|
312,192
|
|
|
$
|
285,061
|
|
Operating adjustments
(from above)
|
70,407
|
|
|
81,510
|
|
|
67,780
|
|
|
151,917
|
|
|
144,957
|
|
Amortization of debt
discount and issuance costs
|
16,460
|
|
|
16,257
|
|
|
15,677
|
|
|
32,717
|
|
|
31,310
|
|
Loss from equity
method investment
|
10,816
|
|
|
698
|
|
|
493
|
|
|
11,514
|
|
|
1,115
|
|
Income tax-effect of
above non-GAAP adjustments and certain discrete tax
items
|
(21,428)
|
|
|
(26,346)
|
|
|
(19,347)
|
|
|
(47,774)
|
|
|
(39,792)
|
|
Non-GAAP net
income
|
$
|
232,752
|
|
|
$
|
227,814
|
|
|
$
|
226,518
|
|
|
$
|
460,566
|
|
|
$
|
422,651
|
|
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER
DILUTED SHARE
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands, except per share
data)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
GAAP net income per
diluted share
|
$
|
0.94
|
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
|
$
|
1.88
|
|
|
$
|
1.74
|
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
0.07
|
|
|
0.07
|
|
|
0.06
|
|
|
0.14
|
|
|
0.13
|
|
Stock-based
compensation
|
0.30
|
|
|
0.33
|
|
|
0.30
|
|
|
0.63
|
|
|
0.59
|
|
Amortization of
capitalized stock-based compensation and capitalized interest
expense
|
0.06
|
|
|
0.05
|
|
|
0.05
|
|
|
0.11
|
|
|
0.10
|
|
Restructuring
(benefit) charge
|
(0.01)
|
|
|
0.04
|
|
|
—
|
|
|
0.03
|
|
|
0.06
|
|
Acquisition-related
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Legal
settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of debt
discount and issuance costs
|
0.10
|
|
|
0.10
|
|
|
0.10
|
|
|
0.20
|
|
|
0.19
|
|
Loss from equity
method investment
|
0.07
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
|
0.01
|
|
Income tax effect of
above non-GAAP adjustments and certain discrete tax
items
|
(0.13)
|
|
|
(0.16)
|
|
|
(0.12)
|
|
|
(0.29)
|
|
|
(0.24)
|
|
Adjustment for
shares(1)
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.01
|
|
Non-GAAP net income
per diluted share
|
$
|
1.42
|
|
|
$
|
1.38
|
|
|
$
|
1.38
|
|
|
$
|
2.80
|
|
|
$
|
2.58
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in GAAP
per diluted share calculations
|
166,263
|
|
|
165,688
|
|
|
164,768
|
|
|
165,976
|
|
|
164,226
|
|
Impact of benefit
from note hedge transactions(1)
|
(1,782)
|
|
|
(954)
|
|
|
(653)
|
|
|
(1,369)
|
|
|
(326)
|
|
Shares used in
non-GAAP per diluted share calculations(1)
|
164,481
|
|
|
164,734
|
|
|
164,115
|
|
|
164,607
|
|
|
163,900
|
|
|
|
(1)
|
Shares used in
non-GAAP per diluted share calculations have been adjusted for the
periods presented for the benefit of Akamai's note hedge
transactions. During the periods presented Akamai's average stock
price was in excess of $95.10, which is the initial conversion
price of Akamai's convertible senior notes due in 2025. See Use of
Non-GAAP Financial Measures below for further
definition.
|
AKAMAI TECHNOLOGIES, INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED
EBITDA
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands)
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
Net income
|
$
|
156,497
|
|
|
$
|
155,695
|
|
|
$
|
161,915
|
|
|
$
|
312,192
|
|
|
$
|
285,061
|
|
Interest
income
|
(4,736)
|
|
|
(4,578)
|
|
|
(9,502)
|
|
|
(9,314)
|
|
|
(16,545)
|
|
Provision for income
taxes
|
18,009
|
|
|
11,898
|
|
|
18,671
|
|
|
29,907
|
|
|
32,963
|
|
Depreciation and
amortization
|
115,860
|
|
|
111,484
|
|
|
97,163
|
|
|
227,344
|
|
|
194,348
|
|
Amortization of
capitalized stock-based compensation and capitalized interest
expense
|
9,840
|
|
|
8,598
|
|
|
8,038
|
|
|
18,438
|
|
|
16,627
|
|
Amortization of
acquired intangible assets
|
12,060
|
|
|
11,427
|
|
|
10,381
|
|
|
23,487
|
|
|
20,815
|
|
Stock-based
compensation
|
50,481
|
|
|
54,305
|
|
|
49,191
|
|
|
104,786
|
|
|
96,684
|
|
Restructuring
(benefit) charge
|
(2,114)
|
|
|
7,116
|
|
|
(167)
|
|
|
5,002
|
|
|
10,418
|
|
Acquisition-related
costs
|
140
|
|
|
64
|
|
|
62
|
|
|
204
|
|
|
138
|
|
Legal
settlements
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
275
|
|
Interest
expense
|
18,037
|
|
|
17,834
|
|
|
17,249
|
|
|
35,871
|
|
|
34,454
|
|
Loss from equity
method investment
|
10,816
|
|
|
698
|
|
|
493
|
|
|
11,514
|
|
|
1,115
|
|
Other expense,
net
|
811
|
|
|
817
|
|
|
1,603
|
|
|
1,628
|
|
|
5,711
|
|
Adjusted
EBITDA
|
$
|
385,701
|
|
|
$
|
375,358
|
|
|
$
|
355,372
|
|
|
$
|
761,059
|
|
|
$
|
682,064
|
|
Adjusted EBITDA margin
|
45
|
%
|
|
45
|
%
|
|
45
|
%
|
|
45
|
%
|
|
44
|
%
|
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States of America (GAAP), Akamai
provides additional financial metrics that are not prepared in
accordance with GAAP (non-GAAP). Management uses non-GAAP financial
measures, in addition to GAAP financial measures, to understand and
compare operating results across accounting periods, for financial
and operational decision making, for planning and forecasting
purposes, to measure executive compensation and to evaluate
Akamai's financial performance. These non-GAAP financial measures
are non-GAAP income from operations, non-GAAP operating margin,
non-GAAP net income, non-GAAP net income per diluted share,
Adjusted EBITDA, Adjusted EBITDA margin, capital expenditures and
impact of foreign currency exchange rates, as discussed
below.
Management believes that these non-GAAP financial measures
reflect Akamai's ongoing business in a manner that allows for
meaningful comparisons and analysis of trends in the business, as
they facilitate comparison of financial results across accounting
periods and to those of our peer companies. Management also
believes that these non-GAAP financial measures enable investors to
evaluate Akamai's operating results and future prospects in the
same manner as management. These non-GAAP financial measures may
exclude expenses and gains that may be unusual in nature,
infrequent or not reflective of Akamai's ongoing operating
results.
The non-GAAP financial measures do not replace the
presentation of Akamai's GAAP financial results and should only be
used as a supplement to, not as a substitute for, Akamai's
financial results presented in accordance with GAAP. Akamai has
provided a reconciliation of each non-GAAP financial measure used
in its financial reporting and investor presentations to the most
directly comparable GAAP financial measure. This reconciliation
captioned "Reconciliation of GAAP to Non-GAAP Financial Measures"
can be found on the Investor Relations section of Akamai's
website.
The non-GAAP adjustments, and Akamai's basis for excluding
them from non-GAAP financial measures, are outlined
below:
- Amortization of acquired intangible assets
– Akamai has incurred amortization of intangible assets,
included in its GAAP financial statements, related to various
acquisitions Akamai has made. The amount of an acquisition's
purchase price allocated to intangible assets and term of its
related amortization can vary significantly and is unique to each
acquisition; therefore, Akamai excludes amortization of acquired
intangible assets from its non-GAAP financial measures to provide
investors with a consistent basis for comparing pre- and
post-acquisition operating results.
- Stock-based compensation and amortization of
capitalized stock-based compensation –
Although stock-based compensation is an important aspect of the
compensation paid to Akamai's employees, the grant date fair value
varies based on the stock price at the time of grant, varying
valuation methodologies, subjective assumptions and the variety of
award types. This makes the comparison of Akamai's current
financial results to previous and future periods difficult to
interpret; therefore, Akamai believes it is useful to exclude
stock-based compensation and amortization of capitalized
stock-based compensation from its non-GAAP financial measures in
order to highlight the performance of Akamai's core business and to
be consistent with the way many investors evaluate its performance
and compare its operating results to peer companies.
- Acquisition-related costs –
Acquisition-related costs include transaction fees, advisory fees,
due diligence costs and other direct costs associated with
strategic activities. In addition, subsequent adjustments to
Akamai's initial estimated amounts of contingent consideration and
indemnification associated with specific acquisitions are included
within acquisition-related costs. These amounts are impacted by the
timing and size of the acquisitions. Akamai excludes
acquisition-related costs from its non-GAAP financial measures to
provide a useful comparison of Akamai's operating results to prior
periods and to its peer companies because such amounts vary
significantly based on the magnitude of the acquisition
transactions and do not reflect Akamai's core
operations.
- Restructuring charges – Akamai has
incurred restructuring charges that are included in its GAAP
financial statements, primarily related to workforce reductions and
charges associated with exiting facility lease commitments. Akamai
excludes these items from its non-GAAP financial measures when
evaluating its continuing business performance as such items vary
significantly based on the magnitude of the restructuring action
and do not reflect expected future operating expenses. In addition,
these charges do not necessarily provide meaningful insight into
the fundamentals of current or past operations of its
business.
- Amortization of debt discount and issuance costs and
amortization of capitalized interest expense – In
August 2019, Akamai issued
$1,150 million of convertible senior
notes due 2027 with a coupon interest rate of 0.375%. In
May 2018, Akamai issued $1,150 million of convertible senior notes due
2025 with a coupon interest rate of 0.125%. The imputed interest
rates of these convertible senior notes were 3.10% and 4.26%,
respectively. This is a result of the debt discounts recorded for
the conversion features that are required to be separately
accounted for as equity under GAAP, thereby reducing the carrying
value of the convertible debt instruments. The debt discounts are
amortized as interest expense together with the issuance costs of
the debt. The interest expense excluded from Akamai's non-GAAP
results is comprised of these non-cash components and is excluded
from management's assessment of the company's operating performance
because management believes the non-cash expense is not
representative of ongoing operating performance.
- Gains and losses on investments –
Akamai has recorded gains and losses from the disposition, changes
to fair value and impairment of certain investments. Akamai
believes excluding these amounts from its non-GAAP financial
measures is useful to investors as the types of events giving rise
to these gains and losses are not representative of Akamai's core
business operations and ongoing operating performance.
- Legal settlements – Akamai has
incurred losses related to the settlement of legal matters. Akamai
believes excluding these amounts from its non-GAAP financial
measures is useful to investors as the types of events giving rise
to them are not representative of Akamai's core business
operations.
- Endowment of Akamai Foundation –
Akamai has incurred expenses to endow the Akamai Foundation, a
private corporate foundation dedicated to encouraging the next
generation of technology innovators by supporting math and science
education. Akamai's first endowment was in 2018 to enable a
permanent endowment for the Akamai Foundation to allow it to expand
its reach. In the fourth quarter of 2020 Akamai supplemented the
endowment to enable specific initiatives to increase diversity in
the technology industry. Akamai believes excluding these amounts
from non-GAAP financial measures is useful to investors as these
infrequent and nearly one-time expenses are not representative of
its core business operations.
- Income and losses from equity method
investment – Akamai records income or losses on
its share of earnings and losses from its equity method investment.
Akamai excludes such income and losses because it does not direct
control over the operations of the investment and the related
income and losses are not representative of its core business
operations.
- Income tax effect of non-GAAP adjustments and certain
discrete tax items – The non-GAAP adjustments
described above are reported on a pre-tax basis. The income tax
effect of non-GAAP adjustments is the difference between GAAP and
non-GAAP income tax expense. Non-GAAP income tax expense is
computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted
for non-GAAP adjustments) and excludes certain discrete tax items
(such as recording or releasing of valuation allowances), if any.
Akamai believes that applying the non-GAAP adjustments and their
related income tax effect allows Akamai to highlight income
attributable to its core operations.
Akamai's definitions of its non-GAAP financial measures
are outlined below:
Non-GAAP income from operations
– GAAP income from operations adjusted for the following
items: amortization of acquired intangible assets; stock-based
compensation; amortization of capitalized stock-based compensation;
amortization of capitalized interest expense; acquisition-related
costs; restructuring charges; gains and losses on legal
settlements; costs incurred related to endowments to the Akamai
Foundation; and other non-recurring or unusual items that may arise
from time to time.
Non-GAAP operating margin – Non-GAAP
income from operations stated as a percentage of
revenue.
Non-GAAP net income – GAAP net
income adjusted for the following tax-affected items: amortization
of acquired intangible assets; stock-based compensation;
amortization of capitalized stock-based compensation;
acquisition-related costs; restructuring charges; gains and losses
on legal settlements; costs incurred related to endowments to the
Akamai Foundation; amortization of debt discount and issuance
costs; amortization of capitalized interest expense; certain gains
and losses on investments; income and losses from equity method
investment; and other non-recurring or unusual items that may arise
from time to time.
Non-GAAP net income per diluted share
– Non-GAAP net income divided by weighted average diluted
common shares outstanding. Diluted weighted average shares
outstanding are adjusted in non-GAAP per share calculations for the
shares that would be delivered to Akamai pursuant to the note hedge
transactions entered into in connection with the issuances of
$1,150 million of convertible senior
notes due 2027 and 2025, respectively. Under GAAP, shares delivered
under hedge transactions are not considered offsetting shares in
the fully-diluted share calculation until they are delivered.
However, the company would receive a benefit from the note hedge
transactions and would not allow the dilution to occur, so
management believes that adjusting for this benefit provides a
meaningful view of operating performance. With respect to the
convertible senior notes due in each of 2027 and 2025, unless
Akamai's weighted average stock price is greater than $116.18 and $95.10,
respectively, the initial conversion price, there will be no
difference between GAAP and non-GAAP diluted weighted average
common shares outstanding.
Adjusted EBITDA – GAAP net income
excluding the following items: interest income; income taxes;
depreciation and amortization of tangible and intangible assets;
stock-based compensation; amortization of capitalized stock-based
compensation; acquisition-related costs; restructuring charges;
gains and losses on legal settlements; costs incurred related to
endowments to the Akamai Foundation; foreign exchange gains and
losses; interest expense; amortization of capitalized interest
expense; certain gains and losses on investments; income and losses
on equity method investment; and other non-recurring or unusual
items that may arise from time to time.
Adjusted EBITDA margin – Adjusted
EBITDA stated as a percentage of revenue.
Capital expenditures, or capex, excluding stock-based
compensation and interest expense – Purchases of
property and equipment and capitalization of internal-use software
development costs presented on an accrual basis, which differs from
the cash-basis presentation included in the statements of cash
flows. The primary difference between the two is the change in
purchases of property and equipment and capitalization of
internal-use software development costs accrued for, but not paid,
at period end versus prior periods.
Impact of foreign currency exchange rate
– Revenue and earnings from international operations have
historically been an important contributor to Akamai's
financial results. Consequently, Akamai's financial results have
been impacted, and management expects they will continue to be
impacted, by fluctuations in foreign currency exchange rates. For
example, when the local currencies of our foreign subsidiaries
weaken, our consolidated results stated in U.S. dollars are
negatively impacted.
Because exchange rates are a meaningful factor in
understanding period-to-period comparisons, management believes the
presentation of the impact of foreign currency exchange rates on
revenue and earnings enhances the understanding of our financial
results and evaluation of performance in comparison to prior
periods. The dollar impact of changes in foreign currency exchange
rates presented is calculated by translating current period results
using monthly average foreign currency exchange rates from the
comparative period and comparing them to the reported amount. The
percentage change at constant currency presented is calculated by
comparing the prior period amounts as reported and the current
period amounts translated using the same monthly average foreign
currency exchange rates from the comparative period.
Akamai Statement Under the Private Securities
Litigation Reform Act
This release and/or our
quarterly earnings conference call scheduled for later today
contain information about future expectations, plans and prospects
of Akamai's management that constitute forward-looking statements
for purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995, including statements
about expected future financial performance. Actual results may
differ materially from those indicated by these forward-looking
statements as a result of various important factors including, but
not limited to, inability to continue to generate cash at the same
level as prior years; failure to realize the expected benefits from
our announced reorganization; failure of our investments in
innovation to generate solutions that are accepted in the market;
inability to increase our revenue at the same rate as in the past
and keep our expenses from increasing at a greater rate than our
revenues; impact of the COVID-19 pandemic; delay in developing or
failure to develop new service offerings or functionalities, and if
developed, lack of market acceptance of such service offerings and
functionalities or failure of such solutions to operate as
expected, and other factors that are discussed in the Company's
Annual Report on Form 10-K, quarterly reports on Form 10-Q, and
other documents periodically filed with the SEC.
In addition, the statements in this press release and on
such call represent Akamai's expectations and beliefs as of the
date of this press release. Akamai anticipates that subsequent
events and developments may cause these expectations and beliefs to
change. However, while Akamai may elect to update these
forward-looking statements at some point in the future, it
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Akamai's expectations or beliefs as of any date
subsequent to the date of this press release.
Contacts:
Gina Sorice
Media Relations
Akamai Technologies
646-320-4107
gsorice@akamai.com
Tom Barth
Investor Relations
Akamai Technologies
617-274-7130
tbarth@akamai.com
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SOURCE Akamai Technologies, Inc.