Where Is Akamai Spending Its Cash?

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AKAM: Akamai logo
AKAM
Akamai

Akamai’s major technology clients are reducing their reliance on the company in favor of their own Content Delivery Networks. Revenue from Akamai’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, watchful spending of cash is imperative. Akamai continues to allocate a good amount to its capital expenditure in order to build-out and upgrade the network of servers it required to retain its existing clients.

The company is also focused on placating shareholders stung by the impact its slowing growth has had on the stock, which is off almost 22% from the prior year level. To this end, the company has undertaken significant buybacks, returning over $700 million to shareholders in the last three years. And we expect Akamai to return another $600 million through share buybacks over the next couple of years.

akamai cash flow corrected

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Akamai
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