The 10-second takeaway
For the quarter ended March 31 (Q1), Akamai Technologies beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share increased significantly.
Gross margins dropped, operating margins grew, net margins grew.
Akamai Technologies reported revenue of $368.0 million. The 23 analysts polled by S&P Capital IQ foresaw revenue of $357.8 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $319.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.51. The 24 earnings estimates compiled by S&P Capital IQ anticipated $0.47 per share. Non-GAAP EPS of $0.51 for Q1 were 24% higher than the prior-year quarter's $0.41 per share. GAAP EPS of $0.39 for Q1 were 63% higher than the prior-year quarter's $0.24 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.3%, 60 basis points worse than the prior-year quarter. Operating margin was 27.6%, 380 basis points better than the prior-year quarter. Net margin was 19.4%, 590 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $363.2 million. On the bottom line, the average EPS estimate is $0.45.
Next year's average estimate for revenue is $1.51 billion. The average EPS estimate is $1.91.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,033 members out of 3,184 rating the stock outperform, and 151 members rating it underperform. Among 677 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 649 give Akamai Technologies a green thumbs-up, and 28 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 $41.48.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Akamai Technologies on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Akamai Technologies to My Watchlist.
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 position in any of the stocks mentioned. 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.