Why Is Akamai’s R&D Efficiency Falling?
Akamai is losing its major technology clients, who are investing in their own content delivery networks instead of outsourcing the service to Akamai. Revenue from the company’s six biggest technology companies has come down from 18% of revenue to 11% over the past year. Amid this shift, which appears a permanent one, Akamai is putting in extra resources into its R&D to develop technologies that will convince its customers to stay with Akamai instead of building their own server networks. This is why the ratio of gross profit dollars generated per dollar of R&D have been coming down. We believe the ratio is likely to trend this way, at least in the near future. In the long run though, we expect the figure to stabilize.
Have more questions about Akamai? See the links below:
- What’s Akamai’s Revenue & Earnings Breakdown Based On Expected 2016 Results?
- What’s Akamai’s Fundamental Value Based On Expected 2016 Results?
- How Has Akamai’s Revenue Composition Changed In The Last Five Years?
- What Has Led To A ~100% Increase In Akamai’s Revenues & EBITDA In The Last Five Years?
- By What Percentage Can Akamai’s Revenues Grow Over the Next Five Years?
- How Are Akamai’s Revenue & EBITDA Composition Expected To Change By 2020?
- Akamai Stock Has Seen Little Change Since 2021. Will A Q3 Earnings Beat Drive The Stock Higher?
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- Cloud Business In Focus As Akamai Reports Q1 Results
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- Up Almost 6% Last Month, Can Akamai Continue Its Run?
- Here’s Why Akamai Stock Has Failed To Outperform The S&P Since 2017
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