On Wednesday, Rule Breakers selection Akamai Technologies
- Our table below reports revenue and income in accordance with Generally Accepted Accounting Principles, or GAAP. But that's not necessarily a true picture of this business. On what management calls a "normalized" basis -- which excludes the cost of stock-based compensation, amortization of intangibles, restructuring, and other similar charges -- Akamai earned $50.7 million in net income, or $0.28 a share. That was in line with Street estimates, and normalized net income was up 73% versus last year's Q1.
- Though gross margin continues to lose ground, management insists that competitors such as soon-to-be public Limelight Networks, Level 3
(NASDAQ:LVLT) , and Internap(NASDAQ:INAP) aren't to blame. Instead, CFO J.D. Sherman told analysts that Akamai is agreeing to volume discounts for "huge deals" that will, over time, greatly boost the bottom line.
- But that wasn't enough for investors. The stock fell more than 10% in regular trading and was down another 3% this morning. CAPS investors, meanwhile, give the stock just three out of the maximum five stars.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$139,274 |
$90,825 |
53.3% |
|
Net Profit |
$19,179 |
$11,495 |
66.8% |
|
EPS |
$0.11 |
$0.07 |
57.1% |
|
Diluted Shares |
183,157 |
173,811 |
5.4% |
Get back to basics with a look at the income statement.
Margin Checkup|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
75.24% |
78.73% |
(3.49) |
|
Operating Margin |
19.49% |
19.43% |
0.06 |
|
Net Margin |
13.77% |
12.66% |
1.11 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$340,957 |
$284,945 |
19.7% |
|
Accounts Rec. |
$86,873 |
$55,798 |
55.7% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accts. Payable + Accrued Expenses |
$85,450 |
$61,302 |
39.4% |
|
Convertible Notes |
$199,960 |
$200,000 |
(0.0%) |
Learn the ways of the balance sheet.
Cash Flow Checkup
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$56,278 |
$33,161 |
69.7% |
|
Capital Expenditures |
$31,543 |
$16,174 |
95.0% |
|
Free Cash Flow |
$24,735 |
$16,987 |
45.6% |
Find out why Fools always follow the money.
Related Foolishness:
- Get the Q4 and full-year numbers.
- Find out what happens when Akamai gets more aggressive.
- Could application acceleration be another avenue for growth?
Akamai is a Motley Fool Rule Breakers pick. David Gardner and his team of analysts have unearthed four stocks that have more than doubled in the first two years of this market-beating service. Akamai is one; want to find out the names of the other three? Click here to test-drive Rule Breakers for 30 days. There's no obligation to subscribe.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
Fool contributor Tim Beyers, ranked 3,251 out of more than 27,800 in CAPS, is a sucker for growth stocks and a regular contributor to Rule Breakers. Tim owns shares of Akamai. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on growth stocks, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy always adds up.
