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Akamai Technologies Beats on Both Top and Bottom Lines

By Seth Jayson - Updated Apr 7, 2017 at 12:11PM

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Just the facts, Fool.

Akamai Technologies (Nasdaq: AKAM) reported earnings on Oct. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Akamai Technologies beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.

Gross margins increased, operating margins were steady, net margins dropped.

Revenue details
Akamai Technologies reported revenue of $345.3 million. The 21 analysts polled by S&P Capital IQ looked for revenue of $338.6 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $281.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.43. The 22 earnings estimates compiled by S&P Capital IQ averaged $0.41 per share. GAAP EPS of $0.27 for Q3 were 17% higher than the prior-year quarter's $0.23 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 68.1%, 120 basis points better than the prior-year quarter. Operating margin was 23.2%, about the same as the prior-year quarter. Net margin was 14.0%, 100 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $377.6 million. On the bottom line, the average EPS estimate is $0.48.

Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $1.74.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,026 members out of 3,171 rating the stock outperform, and 145 members rating it underperform. Among 715 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 685 give Akamai Technologies a green thumbs-up, and 30 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Akamai Technologies is outperform, with an average price target of $39.05.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Akamai Technologies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Akamai Technologies, Inc. Stock Quote
Akamai Technologies, Inc.
AKAM
$98.08 (1.03%) $1.00

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