Gross Margin % is calculated as gross profit divided by its revenue. Akamai Technologies's Gross Profit for the
three
months ended in Dec. 2023 was $602 Mil. Akamai Technologies's Revenue for the
three
months ended in Dec. 2023 was $995 Mil. Therefore, Akamai Technologies's Gross Margin % for the quarter that ended in Dec. 2023 was 60.46%.
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: 60.36 Med: 64.84 Max: 68.89
Current: 60.36
During the past 13 years, the highestGross Margin % of Akamai Technologies was 68.89%. The lowest was 60.36%. And the median was 64.84%.
AKAM's Gross Margin % is ranked better than 68.59% of 2630
companies
in the Software industry
Industry Median: 41.71
vs AKAM: 60.36
Akamai Technologies had a gross margin of 60.46% for the quarter that ended in Dec. 2023 => 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 Annual Data
Trend
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Dec22
Dec23
Gross Margin %
65.87
64.58
63.34
61.74
60.36
Akamai Technologies Quarterly Data
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Sep22
Dec22
Mar23
Jun23
Sep23
Dec23
Gross Margin %
61.42
60.54
60.11
60.32
60.46
Competitive Comparison
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 Gross Margin % Distribution
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.
* 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.
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.
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 60.46% for the quarter that ended in Dec. 2023 => 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 (Akamai Technologies) Business Description
Akamai operates a content delivery network, or CDN, 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. Its customers generally include media companies, which stream video content or make video games available for download, and other enterprises that run interactive or high-traffic websites, such as e-commerce firms and financial institutions. Akamai also has a significant security business, which is integrated with its core delivery and computing businesses to protect customers from cyberthreats.
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