Akamai Technologies Inc (AKAM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 60.51% | 61.89% | 62.79% | 64.05% | 65.34% |
| Operating profit margin | 16.66% | 18.62% | 22.97% | 20.90% | 19.26% |
| Pretax margin | 17.09% | 17.91% | 20.95% | 19.14% | 18.65% |
| Net profit margin | 14.31% | 14.42% | 19.11% | 17.68% | 16.78% |
The profitability ratios of Akamai Technologies Inc show a general trend of declining margins over the past five years. The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, has decreased from 65.87% in 2019 to 60.36% in 2023. This suggests a decrease in the efficiency of production and distribution.
The operating profit margin, a measure of a company's operating efficiency and pricing strategies, has also decreased over the years, from 19.56% in 2019 to 18.21% in 2023. This indicates that the company's ability to generate profits from its core operations has weakened.
The pretax margin, which reflects the percentage of each dollar of revenue that translates into pre-tax profit, has shown a similar downward trend, declining from 18.36% in 2019 to 17.16% in 2023. This implies that the company is experiencing challenges in controlling operating expenses and other costs.
Lastly, the net profit margin, a key indicator of overall profitability, has also decreased from 16.52% in 2019 to 14.37% in 2023. This suggests that after accounting for all expenses, including taxes, Akamai Technologies Inc is generating lower profits relative to its revenue.
Overall, the declining profitability margins of Akamai Technologies Inc raise concerns about its operational efficiency, cost management, and overall profitability in the recent years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.44% | 8.14% | 9.62% | 8.48% | 7.83% |
| Return on assets (ROA) | 5.53% | 6.31% | 8.01% | 7.17% | 6.82% |
| Return on total capital | 8.26% | 9.95% | 12.09% | 10.91% | 10.56% |
| Return on equity (ROE) | 11.91% | 12.01% | 14.39% | 13.10% | 13.07% |
Akamai Technologies Inc's profitability ratios show varying levels of performance over the past five years.
- Operating return on assets (Operating ROA) has been gradually decreasing from 9.75% in 2021 to 7.01% in 2023, indicating a decline in the company's ability to generate profits from its operating assets.
- Return on assets (ROA) also shows a similar trend, dropping from 8.01% in 2021 to 5.53% in 2023. This suggests that the company's overall profitability in relation to its total assets has weakened.
- Return on total capital has fluctuated over the years, with a peak of 11.99% in 2021 and a low of 8.55% in 2023. This ratio measures the efficiency of the company in generating profits from both equity and debt capital employed.
- Return on equity (ROE) has shown a relatively stable performance, hovering around the range of 11% to 14% over the five-year period. This indicates the company's ability to generate profits from shareholders' equity.
Overall, Akamai Technologies Inc's profitability ratios reflect a mixed performance, with some ratios showing a decline in profitability while others remain relatively stable. It is essential for the company to address the declining trends in certain ratios to ensure sustainable profitability in the future.