Akamai acquired Noname Gate Ltd. for $452.3 million in cash, aiming to enhance its existing API Security offering. This acquisition is expected to add approximately $20.0 million in revenue for 2024, but will be dilutive to earnings per share through 2024.

Compute solutions revenue increased by 23.1% year-over-year for the three months ended June 30, 2024. This growth is attributed to increased sales of compute products, including cloud optimization solutions, to new and existing customers.

The board of directors authorized a new $2.0 billion share repurchase program, effective May 2024 through June 2027. This indicates a continued focus on returning capital to shareholders and confidence in future cash flow generation.

Management highlights the importance of managing operating margins, particularly bandwidth and network build-out costs. They are focusing on migrating third-party cloud services onto Akamai Connected Cloud to improve profitability.

The company is improving internal-use software and managing hardware deployments to use servers more efficiently. This demonstrates a focus on improving operational efficiency and reducing co-location costs.

The restructuring charge for the three and six months ended June 30, 2024 was driven by our FlexBase program as we exited certain facilities that were no longer needed, resulting in impairments of right-of-use-assets and leasehold improvements. We do not expect to incur material additional charges related to this program.

The report acknowledges that slowing revenue growth has in the past and may continue to negatively impact profitability and stock price. This highlights the importance of maintaining growth in security, delivery, and compute solutions.

The report acknowledges that global macroeconomic and geopolitical conditions continue to impact customers and business. This includes fluctuating inflation, regulations, economic uncertainty, uncertain energy supplies, geopolitical tensions, and potential for supply chain disruptions.

The report highlights the ongoing threat of cybersecurity breaches and attacks on Akamai, its contractors, and third-party vendors, which can lead to significant costs and disruptions. The use of AI by bad actors has increased the sophistication of these attacks.

The report acknowledges that the markets are intensely competitive and rapidly changing. Competitors vary by size, product offerings and geographic region, and range from start-ups that offer solutions competing with a discrete part of the business to large technology or telecommunications companies that offer, or may be planning to introduce, products and services that are broadly competitive with what we do.

The report acknowledges that some of our larger customers have determined that it is better for them to employ a “do-it-yourself" or "DIY" strategy by putting in place equipment, software and other technology solutions for content and application delivery and security protection within their internal systems instead of using our solutions for some or all of their needs.

The report acknowledges that innovation is important to our future success. In particular, as security and compute solutions have become, and are expected to continue to be, an important part of our business, we must be particularly adept at developing new security solutions that meet the constantly-changing threat landscape and compute and compute-to-edge solutions that meet the needs of professional users and enterprises looking to increase the utility of the internet for their business.

The report acknowledges that co-location costs are a significant portion of our cost of revenue. As we continue to build out our new compute locations to provide us with the ability to scale our platform, we have entered into, and expect to continue to enter into, longer term leases that include certain financial commitments in order to achieve more favorable unit economics.

The report acknowledges that network bandwidth costs are also a significant portion of our cost of revenue. Historically, we have been able to mitigate increases in these costs through investment in internal-use software development to improve the performance and efficiency of our network.

The report acknowledges that network build-out and supporting service costs represent another significant portion of our cost of revenue. These costs include maintenance and supporting services incurred as we continue to build out our compute infrastructure and maintain our global network, and costs of third-party cloud providers used for some of our operations.

The report acknowledges that increased sales of our security solutions, led by application security solutions and segmentation solutions from our acquisition of Guardicore Ltd., and increased sales of our compute solutions, attributable to our acquisition of Linode Limited Liability Company ("Linode") and enhanced services on our compute platform, have made a significant contribution to revenue growth.

The report acknowledges that the prices paid by some of our delivery and security customers have declined in recent years due to competition and contract renewals, which negatively impacts our revenue growth rates. We have been able to mitigate some of the negative impacts to our revenue growth rates by upselling incremental solutions to our existing delivery and security customers.

The report acknowledges that we are devoting significant resources to develop and deploy our own competing cloud computing offering. The rapid development and deployment of new compute infrastructure bears the risk of bugs and unforeseen failures that could affect our reputation and ability to execute our strategies.

We plan to continue to make investments in capital expenditures, however, the focus is to further invest in support of our faster growing compute solutions and to manage our server costs.

During the three and six months ended June 30, 2024, the Company repurchased 1.4 million and 2.5 million shares of its common stock, respectively, for $127.8 million and $253.3 million, respectively.

In June 2024, the Company acquired all the outstanding equity interests of Noname Gate Ltd. ("Noname Security") for $452.3 million in cash, subject to post-closing adjustments.

While we have invested in projects to support renewable energy development, our customers, investors and other stakeholders may require us to take more steps to demonstrate that we are taking ecologically responsible measures in operating our business.

The costs and any expenses we may incur to make our network more energy-efficient and comply with any new regulations could make us less profitable in future periods. Failure to comply with applicable laws and regulations or other requirements imposed on us could lead to fines, lost revenue and damage to our reputation.

We are committed to diversity and inclusion in our workforce and in our supply chain. We are also committed to ethical and responsible business practices.

We, along with our customers, continue to manage through an uncertain period of fluctuating inflation, regulations that may negatively impact business, economic uncertainty, uncertain energy supplies, heightened geopolitical tensions, potential for supply chain disruptions, changes in international tax laws, fluctuations in foreign exchange rates and elevated interest rates.

We compete in markets that are intensely competitive and rapidly changing. Our current and potential competitors vary by size, product offerings and geographic region, and range from start-ups that offer solutions competing with a discrete part of our business to large technology or telecommunications companies that offer, or may be planning to introduce, products and services that are broadly competitive with what we do.

U.S. and international laws and regulations that apply to the internet related to, among other things, content liability, security requirements, law enforcement access to information, critical infrastructure, net neutrality, so-called "fair share" or internet content taxes, international data transfer restrictions, sanctions, export controls and restrictions on social media or other content could pose risks to our revenues, intellectual property and customer relationships as well as increase expenses or create other disadvantages to our business.