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    Akamai Technologies Inc (AKAM)

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    Business Description

    Akamai Technologies operates a massively distributed edge and cloud platform known as Akamai Connected Cloud, which supports their cloud computing, security, and content delivery solutions. The company's primary business activities are centered around these three areas, with security being the largest contributor to revenue. Akamai sells security solutions, including web application firewall, bot management, and Guardicore's micro-segmentation, as well as content delivery network services and compute solutions bolstered by the acquisition of Linode .

    1. Security Solutions - Provides web application firewall, bot management, and Guardicore's micro-segmentation services, contributing significantly to the company's revenue .
    2. Compute Solutions - Offers cloud computing services, enhanced by the acquisition of Linode, and plays a substantial role in the company's growth .
    3. Content Delivery Network (CDN) - Delivers content delivery services, which remain a profitable part of the business despite facing challenges from slower internet traffic growth and increased competition .

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    F. Thomson LeightonChief Executive Officer, President, and Director (Principal Executive Officer)January 2013F. Thomson Leighton co-founded Akamai in 1998 and has served as CEO since January 2013. He was previously the Chief Scientist and is a Professor of Applied Mathematics at MIT (currently on leave). He chaired the Presidential IT Advisory Committee on Cybersecurity from 2003 to 2005 .
    Edward McGowanExecutive Vice President and Chief Financial OfficerMarch 2019Edward McGowan joined Akamai in 2000 and became CFO in March 2019. He oversees the global IT organization since December 2021. He has held various roles, including Senior Vice President, Finance, and is a certified public accountant .
    Aaron AholaExecutive Vice President, General Counsel, and Corporate SecretaryMay 2019Aaron Ahola joined Akamai in April 2000 and became General Counsel in May 2019. He previously served as Senior Vice President, General Counsel, and Corporate Secretary from October 2017 to April 2019 .
    Robert BlumofeExecutive Vice President and Chief Technology OfficerMarch 2021Robert Blumofe joined Akamai in 1999 and became CTO in March 2021. He previously served as Executive Vice President, Platform and General Manager of the Enterprise Division .
    Adam KaronChief Operating Officer and General Manager of the Cloud Technology GroupMarch 2021Adam Karon joined Akamai in February 2005 and became COO in March 2021. He has held various leadership roles, including Executive Vice President and General Manager of the Media and Carrier Division .
    Kim Salem-JacksonExecutive Vice President and Chief Marketing OfficerMarch 2021Kim Salem-Jackson joined Akamai in August 2017 and became CMO in March 2021. She previously served as Senior Vice President of Marketing and Corporate Communications .
    Paul JosephExecutive Vice President, Global Sales and ServicesMarch 2021Paul Joseph joined Akamai in January 2000 and became Executive Vice President, Global Sales and Services in March 2021. He gained additional responsibility for Global Services in December 2021 .
    Mani SundaramExecutive Vice President and General Manager of the Security Technology GroupDecember 2021Mani Sundaram joined Akamai in February 2007 and became Executive Vice President and General Manager of the Security Technology Group in December 2021. He previously served as Executive Vice President Global Services & Support and CIO .
    Anthony WilliamsExecutive Vice President and Chief Human Resources OfficerJanuary 2020Anthony Williams joined Akamai in April 2015 and became Chief Human Resources Officer in January 2020. He previously served as Vice President, Talent Acquisition and Diversity .

    Questions to Ask Management

    1. Given the ongoing consolidation in the delivery market and the bankruptcy of competitors like EdgeCast and Limelight, how do you see this impacting Akamai's delivery business in the near and long term, and what strategies are you implementing to capitalize on potential market stabilization?
    2. With the increased investment in cloud computing capabilities and new security products, including the addition of go-to-market positions and specialists, how do you plan to manage the potential strain on operating margins, especially considering the elimination of 2.5% of roles and the need to maintain a 30% operating margin target?
    3. Despite strong growth in the compute segment, with a 28% year-over-year increase and plans to reach $100 million in ARR by year-end, why aren't we seeing greater evidence of operating leverage and improved profitability, given that compute commands better gross profit characteristics than the declining delivery segment?
    4. Can you elaborate on the challenges you're facing in the delivery business due to macroeconomic headwinds and slowed traffic growth, and how you plan to address these issues to sustain profitability and market leadership?
    5. Your strategy includes shifting investments toward hunters and sales specialists as well as strengthening your partner ecosystem to support the new compute and security products; how do you plan to balance this with your existing customer base and ensure that traditional services are not neglected while pursuing new markets?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateJanuary 2022 May 2024
    End Date/DurationDecember 2024 June 2027
    Total additional amount$1.8 billion $2.0 billion
    Remaining authorization amount$118.8 million $2.0 billion
    DetailsOffset dilution from employee equity compensation and provide flexibility to return capital to shareholders Offset dilution from employee equity compensation and provide flexibility to return capital to shareholders

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2025$1,150.0Convertible Senior Notes0.12532.3% = (1,150.0 / 3,565.0) * 100
    2027$1,150.0Convertible Senior Notes0.37532.3% = (1,150.0 / 3,565.0) * 100
    2029$1,265.0Convertible Senior Notes1.12535.5% = (1,265.0 / 3,565.0) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • AT&T - Mentioned as a channel partner, which implies competition in certain areas .
    • Avant - Mentioned as a channel partner, which implies competition in certain areas .
    • BV Tech - Mentioned as a channel partner, which implies competition in certain areas .
    • Carahsoft - Mentioned as a channel partner, which implies competition in certain areas .
    • Deutsche Telecom - Mentioned as a channel partner, which implies competition in certain areas .
    • Kyndryl - Mentioned as a channel partner, which implies competition in certain areas .
    • Microsoft Azure - Mentioned as a channel partner, which implies competition in certain areas .
    • Telefonica Group - Mentioned as a channel partner, which implies competition in certain areas .
    • Hyper-scaler cloud computing providers - Mentioned as competitors in cloud computing solutions .

    Auditor

    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP1998 PresentCurrent auditor