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Akamai Technologies helps large corporations and government agencies protect and operate their online services. Security generates its largest share of revenue: customers pay to protect websites, applications, networks and data from attacks. Its API Security offering finds and monitors the interfaces through which software exchanges data, while the Akamai Guardicore Platform helps restrict access and isolate parts of a customer's network. Most services carry recurring usage commitments, with additional charges when usage exceeds those commitments.
Customers also pay Akamai to deliver websites, video, games and software through its globally distributed network, and to provide computing and storage for their applications. Delivery remains a larger revenue source than cloud computing, but cloud infrastructure is the main focus of strategic investment. Its computing platform lets customers run workloads across central sites and locations closer to users.
Revenue depends on customers' service usage and the prices Akamai can retain at renewal. Some large customers supply substantial network traffic and can shift it to competing providers or their own systems. Akamai also relies on telecommunications providers and third-party data centers for bandwidth, server space and power. Privacy and cross-border data-transfer rules constrain how it can use network-generated data to support its services.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Cloudflare competes with Akamai for businesses paying to protect and speed up internet applications and run them on distributed networks. Watch customers adding products from Cloudflare’s application-services suite: that shows how much of their security and performance spending it captures.
Fastly competes with Akamai for customers paying to deliver websites and streaming media and protect applications and APIs on distributed edge networks. Its Network Services and Security revenue give separate readings on the delivery and protection markets Akamai serves.
F5 competes with Akamai for customers paying to secure applications and APIs and manage their delivery across cloud and edge environments. Watch F5’s Distributed Cloud Services, which sells application and API protection as a subscription or usage-based service.
Radware competes with Akamai for customers paying to stop traffic-flooding attacks, filter attacks on web applications and block harmful bots. Watch its cloud security subscriptions and on-premises protection products for evidence of customer spending on these defenses.
DigitalOcean competes with Akamai’s Linode offering for developers and technology companies paying for computing capacity, storage and networking. Watch spending by growing technology companies on DigitalOcean’s cloud infrastructure, the market where Akamai concentrates most of its strategic investment.
Amazon’s AWS competes with Akamai for customers buying cloud infrastructure, content delivery and protection for web applications. For Akamai holders, AWS results and news about these services matter more directly than Amazon’s retail business.
NetScout’s Arbor competes with Akamai to protect enterprises and service providers from traffic-flooding attacks, known as DDoS. Watch service providers reselling Arbor protection as a managed service to enterprise customers—another route to the customers Akamai serves.
A10 Networks competes with Akamai for enterprise and service-provider spending on DDoS protection, application and API security, and managing application traffic. Its sales of these networking and security products, with maintenance and support, are the relevant business to watch.
Fortinet competes with Akamai for enterprise spending on application protection and secure access, but puts more emphasis on combining network security in one system. Watch its Security Fabric offerings for secure networking and access, rather than treating its whole business as a match for Akamai.
Microsoft’s Azure competes with Akamai for customers paying for cloud infrastructure, content delivery and web application protection. Watch its cloud pricing: Microsoft says large datacenters and pooled customer demand lower costs, a relevant competitive factor for Akamai’s infrastructure push.
Alphabet’s Google Cloud competes with Akamai for customers buying cloud infrastructure, content delivery and filters that protect web applications, known as web application firewalls. Google Cloud’s news about these services is more relevant to Akamai than Alphabet’s advertising revenue.
F5, Inc. earningsFFIV
F5’s report will show how enterprise spending on application and API protection is changing, a market where its Distributed Cloud competes with Akamai.
Watch F5’s Distributed Cloud business, especially customer demand for its subscription or usage-based application and API protection. Stronger traction would show that enterprises are still spending on these defenses, though F5 may be winning from the same budgets Akamai pursues. Weaker traction could mean softer demand or tougher competition; it would not, by itself, prove Akamai lost customers. The conclusion is whether this protection market’s spending looks firm and whether F5’s progress makes Akamai’s competition for those contracts harder.
Fastly, Inc. earningsFSLY
Fastly’s report will show how demand is changing for website and media delivery and for protection services, both of which compete with Akamai’s offerings.
Separate Fastly’s Network Services revenue from its Security revenue: the first reflects website and media delivery, the second security protection. Stronger Network Services would support the view that customers are still paying for delivery; weakness would add to the evidence of pressure in the market Akamai serves, though not necessarily for the same reason. Stronger Security would show continued spending on protection, but also more competition for Akamai’s security budgets; weakness could signal slower spending. Together, the two lines show whether pressure is clearer in delivery or protection.
DigitalOcean Holdings, Inc. earningsDOCN
DigitalOcean’s report will show demand for cloud infrastructure from developers and growing technology companies, the market Akamai’s Linode offering targets.
Watch DigitalOcean’s cloud infrastructure business, particularly whether developers and growing technology companies are spending more. Stronger demand would show that these customers are still buying computing, storage and networking resources, supporting the market opportunity for Akamai’s Linode cloud business; DigitalOcean is also competing for that spending. Weaker demand would make the opportunity Akamai targets less convincing, but would not prove Linode itself is losing customers. The conclusion is whether demand supports this cloud market and whether competitors are expanding alongside it.
Akamai Technologies Inc earningsThis company
Akamai’s report will show whether growth in security and cloud can offset pressure on delivery from lower renewal prices and customer traffic.
Read revenue trends in security, cloud and delivery alongside operating margin, the share of revenue left after operating costs. Continued growth in security and cloud, a narrower decline in delivery, and a steady margin would show that growth is offsetting delivery pressure without materially squeezing profitability. A deeper delivery decline, or falling margin alongside growth, would show that renewal pricing, lower traffic or cloud investment is weighing on Akamai’s ability to turn revenue into profit.
