Akamai, Way Up High: Fool by Numbers
By
Anders Bylund (TMF Zahrim)
February 7, 2008
|
On Feb. 6, network load-balancing expert Akamai Technologies (Nasdaq: AKAM) released earnings for the 2007 fiscal year -- a period ending Dec. 31, 2007.
Remember the inflection point in earnings growth that happened a couple of quarters ago? Consider that trend reaffirmed, with both gusto and elan.
That's in spite of some serious share dilution, as Akamai loves to pay its employees in stock options but has never bought back a single share of its own stock.
The shares are 45% cheaper today than they were a year ago, but the five-year return is still a staggering 2,135%.
(Figures are in millions, except per-share data.)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$636.4
|
$428.7
|
48.5%
|
|
Net Profit
|
$101.0
|
$57.4
|
75.9%
|
|
EPS
|
$0.56
|
$0.34
|
64.7%
|
|
Diluted Shares
|
185.1
|
176.8
|
4.7%
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
73.7%
|
78.1%
|
(4.4)
|
|
Operating Margin
|
22.8%
|
19.4%
|
3.4
|
|
Net Margin
|
15.9%
|
13.4%
|
2.5
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + ST Invest.
|
$545.7
|
$268.7
|
103.0%
|
|
Accounts Rec.
|
$118.9
|
$86.2
|
37.9%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Long-term Debt
|
$199.9
|
$200.0
|
(0.1%)
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Cash From Ops.
|
$235.4
|
$132.0
|
78.4%
|
|
Capital Expenditures
|
$100.5
|
$69.3
|
44.9%
|
|
Free Cash Flow
|
$134.9
|
$62.6
|
115.4%
|
|
Owner Earnings
|
$72.4
|
$28.7
|
152.6%
|
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap
|
Trailing P/E Ratio
|
CAPS Rating
|
|
Citrix Systems (Nasdaq: CTXS)
|
$6,530
|
29.6
|
****
|
|
Akamai
|
$5,390
|
66.9
|
****
|
|
F5 Networks (Nasdaq: FFIV)
|
$1,780
|
24.8
|
***
|
|
SAVVIS (Nasdaq: SVVS)
|
$1,050
|
4.5
|
**
|
|
Limelight Networks (Nasdaq: LLNW)
|
$586
|
N/A
|
**
|
Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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