Akamai Technologies, Inc. (NASDAQ:AKAM) Q3 2024 Earnings Conference Call November 7, 2024 4:30 PM ET

Company Participants

Mark Stoutenberg - Head of IR
Tom Leighton - CEO
Ed McGowan - CFO

Conference Call Participants

Rishi Jaluria - RBC
James Fish - Piper Sandler
Frank Louthan - Raymond James
Rudy Kessinger - D.A. Davidson
Matt Dezort - Needham

Operator

Good day. And welcome to the Akamai Technologies Third Quarter 2024 Earnings Conference Call [Operator Instructions]. Please note that today's event is being recorded. I would now like to turn the conference over to Mr. Mark Stoutenberg, Head of Investor Relations. Please go ahead, sir.

Mark Stoutenberg

Good afternoon, everyone. And thank you for joining Akamai's third quarter 2024 earnings call. Speaking today will be Tom Leighton, Akamai's Chief Executive Officer; and Ed McGowan, Akamai's Chief Financial Officer. Please note that today's comments include forward-looking statements, including statements regarding revenue and earnings guidance. These forward-looking statements are subject to certain risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied by such statements. The factors include any impact from macroeconomic trends, the integration of any acquisitions and any impact from geopolitical developments. Additional information concerning these factors is contained in Akamai's filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. These forward-looking statements included on this call represent the company's view on November 7, 2024. Akamai disclaims any obligation to update these statements to reflect new information or future events, except as required by law. As a reminder, we will be referring to certain non-GAAP financial metrics during today's call. A detailed reconciliation of GAAP and non-GAAP metrics can be found under the Financial portion of the Investor Relations section of akamai.com. I'll now hand the call off to our CEO, Dr. Tom Leighton.

Tom Leighton

Thanks, Mark. I'm pleased to report that Akamai delivered a solid third quarter in which we achieved two significant milestones. For the first time, Akamai's total annual revenue run rate exceeded $4 billion and our security annual revenue run rate exceeded $2 billion. Our compute results were also very strong, growing 28% year-over-year in constant currency. Non-GAAP operating margin was 29% and non-GAAP earnings per share was $1.59 in line with our guidance. On last quarter's earnings call, we reviewed how Akamai is undergoing a fundamental transformation from a content delivery pioneer into the cybersecurity and cloud computing company that powers and protects business online. Security now delivers the majority of Akamai revenue and compute and security combined account for more than two thirds of our revenue. Since entering the security market a little more than a decade ago with web app firewall as a cloud service, we greatly expanded our security product set into an impressive portfolio, covering infrastructure, application and enterprise network security. We now offer market leading solutions to help protect against DDoS and DNS attacks, application and API attacks, account abuse and fraud and ransomware and data exfiltration attacks. We're already leveraging generative AI to enhance the security and ease of use of our Guardicore and WAF solutions. And we set ourselves apart from the competition with our extensive threat visibility and intelligence and our expert managed services that customers rely upon to protect their businesses.