AKAM (Akamai Technologies) Gross Margin % : 59.31% (As of Sep. 2024)

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What is Akamai Technologies Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Akamai Technologies's Gross Profit for the three months ended in Sep. 2024 was $596 Mil. Akamai Technologies's Revenue for the three months ended in Sep. 2024 was $1,005 Mil. Therefore, Akamai Technologies's Gross Margin % for the quarter that ended in Sep. 2024 was 59.31%.

Warning Sign:

Akamai Technologies Inc gross margin has been in long-term decline. The average rate of decline per year is -1.6%.

The historical rank and industry rank for Akamai Technologies's Gross Margin % or its related term are showing as below:

AKAM' s Gross Margin % Range Over the Past 10 Years
Min: 59.66 Med: 64.84 Max: 68.89
Current: 59.66

During the past 13 years, the highest Gross Margin % of Akamai Technologies was 68.89%. The lowest was 59.66%. And the median was 64.84%.

AKAM's Gross Margin % is ranked better than
69.44% of 2618 companies
in the Software industry
Industry Median: 41.435 vs AKAM: 59.66

Akamai Technologies had a gross margin of 59.31% for the quarter that ended in Sep. 2024 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Akamai Technologies was -1.60% per year.

Akamai Technologies Gross Margin % Historical Data

The historical data trend for Akamai Technologies's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Akamai Technologies Gross Margin % Chart

Akamai Technologies Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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65.87

64.58

63.34

61.74

60.36

Akamai Technologies Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Gross Margin %	Get a 7-Day Free Trial															60.32	60.46	60.00	58.87	59.31

Competitive Comparison of Akamai Technologies's Gross Margin %

For the Software - Infrastructure subindustry, Akamai Technologies's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Akamai Technologies's Gross Margin % Distribution in the Software Industry

For the Software industry and Technology sector, Akamai Technologies's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Akamai Technologies's Gross Margin % falls into.

Akamai Technologies Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Akamai Technologies's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	2300.9	/	3811.92
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(3811.92 - 1511.063)	/	3811.92
	=	60.36 %

Akamai Technologies's Gross Margin for the quarter that ended in Sep. 2024 is calculated as

Gross Margin % (Q: Sep. 2024 )	=	Gross Profit (Q: Sep. 2024 )	/	Revenue (Q: Sep. 2024 )
	=	595.9	/	1004.679
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(1004.679 - 408.806)	/	1004.679
	=	59.31 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

Akamai Technologies (NAS:AKAM) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Akamai Technologies had a gross margin of 59.31% for the quarter that ended in Sep. 2024 => Durable competitive advantage

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

Akamai Technologies Gross Margin % Related Terms

Thank you for viewing the detailed overview of Akamai Technologies's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.

Akamai Technologies Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Akamai Technologies Inc (NAS:AKAM) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

1AKAM:Italy 0HBQ:UK AK3:Germany AK3:Germany A1KA34:Brazil

Address

145 Broadway, Cambridge, MA, USA, 02142

Website

https://www.akamai.com

Akamai operates a content delivery network, which entails locating servers at the edges of networks so its customers, which store content on Akamai servers, can reach their own customers faster, more securely, and with better quality. Akamai has over 325,000 servers distributed over 4,100 points of presence in more than 1,000 cities worldwide. The firm also offers security and cloud computing for its customers, and those businesses have grown to be bigger than the legacy CDN.

Executives

William Raymond Wagner	director	C/O VOCUS, INC., 4296 FORBES BOULEVARD, LANHAM MD 20706
Paul C Joseph	officer: EVP - Global Sales	C/O AKAMAI TECHNOLOGIES, INC., 145 BROADWAY, CAMBRIDGE MA 02142
Robert Blumofe	officer: EVP Platform	C/O AKAMAI TECHNOLOGIES, INC., 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Anthony P Williams	officer: EVP and CHRO	C/O AKAMAI TECHNOLOGIES, INC., 145 BROADWAY, CAMBRIDGE MA 02142
F Thomson Leighton	director, officer: Chief Scientist	500 TECHNOLOGY SQUARE, FIFTH FLOOR, CAMBRIDGE MA 02139
Adam Karon	officer: EVP & GM Media Division	C/O AKAMAI TECHNOLOGIES, INC., 150 BROADWAY, CAMBRIDGE MA 02142
Aaron Ahola	officer: SVP & General Counsel	C/O AKAMAI TECHNOLOGIES, INC., 150 BROADWAY, CAMBRIDGE MA 02142
Edward J Mcgowan	officer: Chief Financial Officer	C/O AKAMAI TECHNOLOGIES, INC., 150 BROADWAY, CAMBRIDGE MA 02142
Mani Sundaram	officer: EVP GSS and CIO	C/O AKAMAI TECHNOLOGIES, INC., 145 BROADWAY, CAMBRIDGE MA 02142
Kim Salem-jackson	officer: EVP, Chief Marketing Officer	C/O AKAMAI TECHNOLOGIES, INC., 145 BROADWAY, CAMBRIDGE MA 02142
Madhu Ranganathan	director	760 MARKET STREET, 4TH FLOOR, SAN FRANCISCO CA 94102
Verwaayen Bernardus Johannes Maria	director	55 GLENLAKE PARKWAY NE, ATLANTA GA 30328
Rick M Mcconnell	officer: EVP - Products and Development	LATITUDE, 2121 TASMAN DRIVE, SANTA CLARA CA 4089887256
Monte E Ford	director	C/O AKAMAI TECHNOLOGIES, INC., 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Laura Howell	officer: VP, Chief Accounting Officer	C/O AKAMAI TECHNOLOGIES, INC., 145 BROADWAY, CAMBRIDGE MA 02142