Akamai Technologies Inc (AKAM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 59.71% | 60.51% | 61.89% | 62.79% | 64.05% |
| Operating profit margin | 13.26% | 16.66% | 18.62% | 22.97% | 20.90% |
| Pretax margin | 14.59% | 17.09% | 17.91% | 20.95% | 19.14% |
| Net profit margin | 12.55% | 14.31% | 14.42% | 19.11% | 17.68% |
The profitability ratios of Akamai Technologies Inc have shown a gradual decline over the years.
- The gross profit margin has decreased from 64.05% in 2020 to 59.71% in 2024, indicating a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
- The operating profit margin has experienced fluctuations, with a peak of 22.97% in 2021 but a decline to 13.26% in 2024, signaling a decrease in the efficiency of generating profits from core business operations.
- The pretax margin has also shown a downward trend, dropping from 19.14% in 2020 to 14.59% in 2024, implying a decline in the percentage of income remaining after accounting for operating expenses and interest payments.
- The net profit margin has continuously declined from 17.68% in 2020 to 12.55% in 2024, indicating a decrease in the proportion of revenue that translates into net income for shareholders after all expenses.
Overall, the consistent decline in profitability margins suggests that Akamai Technologies Inc may be facing challenges in maintaining or improving its profitability levels over the years, which could be a concern for investors and stakeholders.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.14% | 6.44% | 8.14% | 9.62% | 8.48% |
| Return on assets (ROA) | 4.87% | 5.53% | 6.31% | 8.01% | 7.17% |
| Return on total capital | 7.33% | 8.26% | 9.95% | 12.09% | 10.91% |
| Return on equity (ROE) | 10.35% | 11.91% | 12.01% | 14.39% | 13.10% |
Akamai Technologies Inc's profitability ratios exhibit a mixed performance over the five-year period from December 31, 2020, to December 31, 2024.
- Operating return on assets (Operating ROA) shows a fluctuation, starting at 8.48% in 2020, peaking at 9.62% in 2021, and then declining to 5.14% by the end of 2024. This ratio indicates the company's ability to generate operating income relative to its assets, and the downward trend suggests a potential decrease in operational efficiency.
- Return on assets (ROA) follows a similar pattern, with a slight decline from 7.17% in 2020 to 4.87% in 2024. ROA reflects the company's overall profitability in relation to the total assets employed, indicating a decreasing trend in the company's ability to generate profits from its assets.
- Return on total capital also displays a decreasing trend, starting at 10.91% in 2020 and decreasing to 7.33% by 2024. This ratio assesses the company's ability to generate profit from the total capital invested in the business, and the decline may indicate a reduced return to investors' funds over the period.
- Return on equity (ROE) shows a gradual decline from 13.10% in 2020 to 10.35% by the end of 2024. As a measure of the return on shareholders' equity, the decreasing trend suggests a diminishing ability to generate profit for the company's shareholders over the five-year period.
Overall, the profitability ratios of Akamai Technologies Inc demonstrate a general downward trend, indicating potential challenges in maintaining or improving profitability levels over the period analyzed. Investors and analysts may need to further investigate the reasons behind these declines to assess the company's future financial performance effectively.