Akamai's Q4 2024: Contradictions in Compute Growth, Delivery Market Dynamics, and Sales Strategy

These are the key contradictions discussed in Akamai's latest 2024Q4 earnings call, specifically including: Compute Growth Expectations, Delivery Market Consolidation, and Go-to-Market Strategy:



Revenue and Product Segment Growth:
- Akamai Technologies reported revenue of $1.02 billion for Q4 2024, up 3% year-over-year, with compute and security products contributing 69% of total revenue.
- The growth was primarily driven by strong performance in security and cloud computing, particularly from the Guardicore platform and API security solutions, which saw significant year-over-year increases in revenue and ARR.

Security Revenue Expansion:
- Akamai's security revenue grew 14% year-over-year, reaching $535 million in Q4.
- This expansion was driven by the continued strong demand for market-leading solutions like Guardicore, and new product offerings such as API security, which grew 51% in constant currency year-over-year.

Cloud Computing and Infrastructure Services:
- The company's cloud infrastructure services revenue delivered $259 million in ARR at year-end, up significantly from the previous year, with a forecasted growth rate of 40% to 45% in constant currency for 2025.
- This growth was attributed to increasing enterprise adoption, with many large customers signing multi-year contracts and expanding their use of Akamai's cloud services.

Delivery Revenue Challenges and Stabilization:
- Akamai's delivery revenue decreased by 18% year-over-year in Q4, at $318 million.
- The decline is part of a broader trend in the delivery marketplace, though the company anticipates stabilization and potential improvement in delivery revenue over the next few years due to more predictable pricing and a shift towards longer-term contracts.