Q4 2021 Akamai Technologies Inc Earnings and to Discuss Acquisition of Linode Call

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Good day, and thank you for standing by and welcome to the fourth quarter 2021, Akamai technologies earnings and acquisition of Lienau Conference call at.

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I'd now like to hand, the conference over to Tom Barth head of Investor Relations. Please go ahead.

Thank you operator, good afternoon, everyone and thank you for joining Akamai fourth quarter 2021, and acquisition of blend node conference call.

Before we get started with the Lenovo acquisition that we just announced today's earnings call format will be a bit different than normal we will be presenting slides and associated content and a link to the webcast can be found in the events section of our Investor Relations website, we plan to post the full slide deck following the call.

I am now on slide two.

As you can see from our agenda speaking today will be Tom Leighton Akamai, Chief Executive Officer, Adam Carron, Akamai as Chief operating Officer, and General manager of the edge Technology Group and Ed Mcgowan Akamai as Chief Financial Officer.

Moving to slide three.

Please note that today's comments include forward looking statements, including statements regarding revenue and earnings guidance, well I don't intend to read. This slide. These forward looking statements are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied by such statements.

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These factors include uncertainty stemming from the COVID-19 pandemic, the integration of any acquisitions and any impact from unexpected geopolitical developments.

Additional information concerning these factors is contained in Akamai filings with the SEC, including our annual report on Form 10-K , and quarterly reports on Form 10-Q .

The forward looking statements included in this call represent our company's view on February 15th 2022.

<unk> disclaims any obligation to update these statements to reflect future events or circumstances. As a reminder, we'll be referring to some non-GAAP financial metrics during today's call.

Detailed reconciliation of GAAP and non-GAAP metrics can be found under the financial portion of the Investor Relations section at Akamai Dot com and with that let me turn the call over to Tom and he'll start on slide four.

Thanks, Tom and thank you all for joining US today today is a very exciting day for Akamai. This afternoon, we announced that we signed a definitive agreement to acquire Lenovo.

We see this as a tremendous opportunity for Akamai and we believe that it will be transformational as we expand our business into adjacent markets become even more strategic for our customers and accelerate our growth and evolution as a company.

We'll talk more about what node in a few minutes, but first I'd like to review some of the highlights from a very strong Q4 and 2021.

Turning to slide five.

Q4 revenue was $905 million up 7% year over year, our revenue growth was driven by the continued strong demand for our security products as well as our fast growing edge applications business.

non-GAAP operating margin in Q4 was 31% up one point over Q4 and 2020.

Q4, non-GAAP EPS was $1 49 per diluted share up 12% year over year.

For the full year revenue was $3.46 billion up 8% over 2020.

We expanded non-GAAP operating margin to 32% last year and we achieved this result, while investing for future growth.

non-GAAP EPS last year was $5.74 up 10% over 2020.

2021 was also a very strong year for cash generation at Akamai.

We generated $859 million in free cash flow last year, an increase of 78% over 2020.

I think it's important to note that our excellent cash generation has allowed us to make strategic acquisitions like Garda core in Q4, and now the node to fuel our future growth. While also returning capital to shareholders. In Q4, we spent $271 million to buy back just over $2 4 million.

Shares of stock.

Over the course of the full year, we spent $522 million to buy back approximately $4 7 million shares.

Our primary use of cash is for M&A and offsetting the dilution from our equity compensation programs over the past 10 years. Akamai has also engaged in opportunistic buybacks that have resulted in a reduction of our fully diluted share count by about 12%.

Last quarter security products continued their rapid growth generating revenue of $365 million up 23% year over year for the full year security revenue reached $1.33 billion and grew 26% over 2020.

Security represented 39% of our revenue last year up from 33% in 2020.

In recent years Akamai has built one of the world's leading cloud security businesses. Our security solutions are highly differentiated and recognized as best in class by our customers who rely on akamai to protect their most important digital assets from very determined and highly capable attackers.

Results in Q4 were especially strong for our bot manager solution, which helps to defend against a wide range of automated attacks.

Our new account protector solution, which provides account takeover protection also performed very well in Q4, and only a second quarter of availability.

Our web App firewall offerings also posted excellent results in Q4, and Akamai was recognized as a leader in Gartner is 2021 magic quadrant for web application and API protection, scoring the highest of 11 vendors and ability to execute.

In October we acquired guard a core to extend our zero Trust solutions to help stop the spread of ransomware.

As a part of Akamai Garda core has continued its strong growth momentum and close major deals last quarter at one of the largest freight railways in the U S and one of the largest telecommunication companies in South America.

We're very excited about the value that guard of course micro segmentation capabilities bring to our customers and as Ed will talk about shortly we now believe that Garda core will drive significantly more revenue this year than we'd initially forecast when we announced the transaction last fall.

Our CDN business generated revenue of $541 million in Q4 down 2% from Q4 and 2020.

Traffic on our platform continued to be strong in Q4, peaking at over 200 Terabits per second.

Our edge application solutions had a great Q4 exiting the year with an annualized revenue run rate of more than $200 million and growing 30% for the full year.

Our akamai edge worker solution was adopted by a top sporting equipment company, a global business travel services and one of the largest banks in the U S.

Overall, we're very pleased with our performance last year on both the top and bottom lines, we achieved our goals in 2021 and then some.

And I want to thank our employees for delivering such strong results as they continue to cope with the challenges of the pandemic.

I'll now move on to slide six.

As many of you know Akamai is mission is to power and protects life online.

And our purpose in doing that is to make life better for billions of people billions of times a day.

Akamai has been doing this for more than 20 years enabled in part by a series of market defining innovations starting with the invention of content delivery networks in the late 19 nineties.

As you can see on the next slide number seven we follow this breakthrough and Internet technology with fundamental advances in video streaming application acceleration and web security.

And each of these areas Akamai was a major pioneer and enabling new capabilities and.

And in each of these areas, we're still the market leader today by far.

Throughout the past 20 years, we've also been a pioneer and a leader in edge computing, beginning with the invention of edge side includes in the early two thousands.

Technology that still used by thousands of our customers today.

And now turning to slide eight.

We're taking the next major step in our evolution by creating the world's most distributed compute platform.

Cloud to edge, making it easier for developers and businesses to build run and secure their applications online.

As you can see in this afternoon's press release, we have entered into a definitive agreement to acquire lienau. The privately held company that makes cloud computing simple affordable and accessible.

The note is known for its developer friendly services, the quality of their support and as a trusted infrastructure as a service platform provider.

By combining lienau developer centric cloud advantages with Akamai deep enterprise strengths. We believe that we can provide tremendous value to developers and enterprises as they build cloud applications on akamai.

We see plenty of opportunity for a differentiated offering among customers who desire ease of use wider reach beyond just a few parts lower latency stronger security and greater resiliency all from a single platform and all at an affordable price point.

Akamai is highly distributed edge platform has the global reach to enable any cloud application to deliver the best end user experience anywhere that users are services consume apps from the cloud to the edge, where more compute services will lift as five G and Iot take hold and expand.

The Akamai platform is uniquely suited for workloads that require high throughput low latency and instant scalability on demand.

<unk> been perfecting this capability for many years and it's very hard to do.

How come I also has the capabilities needed to integrate seamlessly with both DIY cloud apps and third party cloud vendors as part of the larger cloud ecosystem.

We believe that this flexibility will appeal to enterprises that want a multi vendor cloud strategy to mitigate their vendor concentration risks and to ensure resiliency and seamless availability in case, one vendor service experience as an outage.

And with Akamai is category, leading security solutions customers will be able to secure their apps from their point of origin to the edge all under Akamai protective umbrella.

Security delivered at the edge offers unique advantages since it enables customers to manage security policies across all their apps and infrastructure wherever they're located.

We believe that touch on end to end security approach will appeal to customers, who want increased efficiency and greater resiliency, along with lower security risk.

The net of all this is that we believe that akamai on Lenovo can solve customer's needs in ways that are not addressed in the market today.

Forming a powerful winning combination that will enable customers to build deliver and secure their apps on the platform that powers and protects life online.

Moving to slide nine.

We see the acquisition of the node as a transformational opportunity for Akamai.

This slide shows the way that we presented our business at our Investor day last year.

With Lenovo Akamai will expand beyond security and delivery into the world's most distributed cloud services provider with leading solutions for security delivery and compute as shown here on slide 10.

We will offer customers, a breadth and depth of services uncommon in the cloud space today, our massive content delivery platform.

The best application performance.

Usually to use cloud and edge compute and category leading security solutions.

All backed by expert services and support professionals to help power and protect life online.

Given that we're announcing this acquisition at the same time as our earnings I thought it would be helpful to have Adam Carron join us on the call today to talk more about Lenovo.

Adam is our COO and he is responsible for running our compute and delivery businesses.

Later this year, we'll also plan to hold an investor day, when you'll be able to hear for money Sundar, who leads our security business as well as from other Akamai executives.

After Adam's speaks Ed will cover the financial aspects of the acquisition and provide our outlook for 2022.

Adam.

Thanks, Tom.

I'll start on slide 12.

Tom just spoke about the three core product pillars will have at Akamai security delivery and compute.

I'm going to focus a bit deeper into the compute portfolio and what we think it will look like after the integration of Windows.

Turning to slide 13 I'll.

Start with the existing the node product portfolio, which is split into four product groupings. The first being compute which has offerings like dedicated and shared Cpus bare metal Gpus in kubernetes. The next thing storage, which provides services like block storage object storage and a managed database service and data.

Next cloud orchestration and finally, an award winning set of developer tools that make it really easy for developers to use their platform.

Their products are sold in traditional cloud models using online trials and online purchases.

Turning to slide 14, after the acquisition closes the Akamai compute product portfolio. We envision would consist of five product groupings. The first being compute inherited from Lenovo containing shared his dedicated Cpus Gpus Cooper and Eddie.

Storage, which would contain the block and object storage that came from Lenovo, but would also now included Akamai net storage.

Have cloud optimization that would include Akamai global traffic manager cloud wrapper and direct connect solutions.

The developer tools, we get from Lenovo as well as the existing Akamai developer tools now make the akamai compute platform using inaccessible to developers all over the world.

And last but certainly not least our edge applications, which contain our edge workers and edge kv products execute compute right at our edge.

It will also include our cloud with image and video manager and of course, our API acceleration products.

One of the exciting synergies would be in go to market Akamai.

Akamai can queue products would not only be sold online, but because our current globally located enterprise sales force works closely with the buyers for cloud compute they have the right relationships and we would not need to create an overlay sales force.

Another exciting go to market synergy would be our existing robust and global channel ecosystem that could also take these cloud compute offerings to market and in both cases, new wallet share within the customer base could be open for future growth.

Turning to slide 15.

Now, let's talk about how we think about compute.

Now computing at the edge or near end users and devices brings unique benefits for critical use cases that are in many locations and where data is in motion for a femoral where.

Computing in the cloud brings other benefits that are usually for applications running in a smaller number of locations and where data is stored and persistence.

Our combined platform would have both edge and cloud computing and since modern applications are built at the collection of services each with different compute needs and data needs only by combining the edge and cloud can we fulfill the varied needs of our customer base like eight of localization and low latency containerized.

Computers as well as more typical compute needs that are persistent and in fewer locations.

The unique capabilities can come together when we are able to combine akamai edge platform with Lenovo to cloud computing capabilities, and then add in our global traffic manager product to route across multiple clouds and cloud locations, our global large private network that efficiently connects cloud and edge locations and messaging.

Bringing it altogether coordinating cloud and edge services.

You end up with the world's most distributed compute platform from cloud to edge, making it easier for developers and businesses to build run and secure applications.

Now on slide 16.

While we're known and Akamai can solve a number of customer use cases separately.

I thought it would be useful to cover just a few examples of the use cases, we believe we can help fulfill for our customers with this unique combination of products.

In the sports vertical you could imagine a sports league could leverage the new welcome by platforms to deploy web RTC services to enable a watch along.

That allows a group of friends to watch a game and think while communicating with each other in real time, and they would be able to do that using our distributed BMS load balancing and high throughput egress when.

When you think of Iot and fleet management, you could see a shipping company building a distributed up to collect and parts video and telemetry data trucks en route before back calling the data to their data warehouse and they'd be able to do that using our supportive MQ T T. Our distributed and direct connect capabilities.

And e-commerce site to leverage Akamai to dynamically personalize their site based on the user's previous and current browsing activity without having to go back to their daily <unk>.

All using our managed database services Couperin eddies and functions as a service.

In the <unk>, we can help create a persistent virtual experience when a game studio needs to connect users from across the globe.

Fully immersive VR experience from any council mobile device or browser, all using our distributed gpus low latency and private backbone.

And in healthcare, our hospitals to leverage akamai to create a platform that captures and archives of videos of surgical procedures to help train doctors are new and emerging techniques using bare metal and our object store.

Now turning to slide 17.

The combination of Akamai in the node can be a truly unique offering in the market.

We plan to combine the ease of use and developer friendliness when node is known for with the wider reach lower latency strong security and greater resiliency that our akamai hallmarks, we expect our new combined offering to appeal to developers by offering core cloud compute functionality ease of use and tools they need.

Peel to enterprises with security uptime, and reliability and drive future use cases, new applications can take advantage of the throughput performance and distribution of a market leading global network.

Turning to slide 18.

So with Akamai in the node, we can have highly secure elastic compute along with storage capabilities on the world's largest edge network category, leading security and edge computing platform for latency sensitive workloads. All on Akamai is a large global private networks with a globally located enterprise sale.

All sports and robust channel ecosystem, all setting us up to win in the marketplace.

And now I'll pass it to Ed to discuss the transaction details.

Thank you Adam.

I will start my remarks with brief highlights of our very strong Q4 results.

Then provide some insight into the financial aspects of the law node acquisition, and then close with our Q1 and full year 2022 guidance.

So moving to slide 20.

Starting with the Q4 highlights we're very pleased with our strong Q4 results capping off an excellent year for Akamai Q4 revenue was $905 million up 7% year over year or 8% in constant currency.

Revenue was led by another quarter of very strong growth in security.

As well as strength in our edge applications business.

Security revenue growth in Q4 was 23% year over year or 25% in constant currency with Garda core contributing revenue of approximately $10 million. We were very pleased with the initial momentum we've seen from Garda core as well as the continued growth of the pipeline it.

It is also worth noting that our edge applications business surpassed $200 million annual revenue run rate in Q4 and grew 30% for the full year 2021.

International revenue growth was another bright spot with revenue, increasing 13% year over year or 16% in constant currency.

Sales in our international markets represented 47% of total revenue in Q4 up two points from Q4 2020.

Above the high end of our guidance range.

Finally, as Tom mentioned, we had an exceptional year from a cash flow perspective.

Moving to capital deployment during the fourth quarter, we spent approximately $271 million to buy back approximately 2.4 million shares.

Our intention is to continue to buy back shares to offset dilution from employee equity programs over time and to be opportunistic both M&A and share repurchases.

Turning now total a node on slide 21.

As you heard from Tom and Adam We believe the combination of Occam Island owed will create the world's most distributed platform for developers businesses to build run secure their applications.

Under the terms of the agreement Akamai has agreed to acquire windowed in exchange for approximately $900 million of cash.

The transaction will be treated as an asset purchase for tax purposes, and as a result, we anticipate significant cash income tax savings over the next 15 years.

While this benefit will not impact or non-GAAP effective tax rate, we estimate the present value of these savings to be approximately $120 million.

Turning to slide twenty-two.

We believe that winnowed currently has a very attractive financial profile.

And that there are considerable revenue and cost synergy opportunities in the future.

Assuming a late to one close and 20 twenty-two we expect the acquisition to AD revenue of approximately $100 million.

Have no material impact to our non-GAAP operating margin N.

Can be accretive the non-GAAP P. P S like five to six cents per share.

Looking beyond this year, we expect window to be additive to our non-GAAP operating margin as we continue to capitalize on revenue and cost synergies, including.

Leveraging our go to market channel and marketing organizations to accelerate revenue from enterprise customers. Realizing significant cost savings are utilizing our very large global private network that Adam previously talked about as well as leveraging our significant scale and supply chain along with our network deployment.

Expertise.

From a capex perspective.

We expect lienau to add approximately two points to capex as a percentage of revenue and 20 twenty-two as we plan to expand linowes capacity and locations to meet anticipated customer demand.

However over the long term, we do not expect the acquisition to meaningfully changed our previously communicated goal of Capex being in the mid teens as a percentage of revenue.

Turning to slide twenty-three.

As Tom and Adam previously mentioned upon closing the acquisition, we plan to update our revenue reporting to reflect three separate business groups security delivery and compute.

The first revenue grouping security Romain unchanged from the existing reporting of our security technology.

The second revenue group will be delivery.

Delivery will be comprised of edge delivery and services portion of our existing E. T. G organization, but will exclude are nuts storage and edge application businesses that were previously included as part of D. G revenue.

For context.

Our edge applications business, which had revenue of approximately $196 million in 2021, and our net storage business, which had revenue of approximately $57 million in 2021 will move to our new compute business.

The third and final revenue group will be called compute compute will include Lindo.

Plus our edge applications and that's storage businesses I just mentioned.

We believe that was strong execution, we can deliver more than $500 million of annual compute revenue 20th twenty-three.

Turning to slide 24.

Before I provide our queue, one and 20 twenty-two guidance I wanted to highlight a couple of factors to consider for your models.

First.

Q1 in full year 20, twenty-two guidance I am about to provide does not reflect the revenue and non-GAAP E. P. S contribution we anticipate from one node, but I previously mentioned since the acquisition.

Does not yet closed.

We plan to update our full year guidance to include Winnowed on the first earnings conference call. After the deal is closed.

Second <unk>.

International revenue now represents nearly half of our total revenue.

And the dollar has continued to strengthen since we reported in early November .

Therefore.

We currently expect a meaningful foreign exchange headwind 2022.

Current spot rates are guidance assumes that foreign exchange will have a negative 45 million dollar impact on revenue on a year over year basis.

Finally [noise].

Similar to 2019.

We have eight of our top 10 customers renewing the first half of the year.

As a reminder, we define our top customers as anyone contributing revenue of 1% or more.

And that customer that group of customers contributed approximately 19% of total revenue 2021.

Although we expect to see a negative impact of revenue growth in the near term, we expect to see incremental revenue over time these customers traffic grows with us.

I'd also note that while the cluster timing of these renewals is unusual the pricing contract terms are consistent with the broader trends in the market and these renewals have been factored into our guidance.

So with all that in mind, turning to our two one guidance on slide 25.

We are projecting revenue the range of $896 million to $910 million or up 6% to 8% as reported were 8% to 10% in constant currency over Q1 2021.

Foreign exchange fluctuations are expected to have a negative 2 million dollar impact you one revenue compared to Q4 levels and a negative $17 million in fact, you're over a year.

At these revenue levels, we expect.

Cash gross margins of approximately 76%.

Q1, non-GAAP operating expenses are projected to be 292 $296 million.

We anticipate coupon EBITDA margins of approximately 43 per cent.

We expect non-GAAP depreciation expense to be between $123 million to $124 million.

And we expect non-GAAP operating margin of approximately 30% for two one.

Moving onto Capex.

We expect to spend approximately 120 $124 million, excluding equity compensation and capitalized interest in the first quarter.

This represents approximately 13% to 14% of anticipated total revenue, which is down approximately four points from Q1 2021 levels.

And with the overall revenue and spend configuration I just outlined we expect Q1 non-GAAP P. B S and the range of one dollar and 39 cents to one dollar and 43 cents. The C. P. S guidance assumes taxes of $38 million to $39 million based on an estimated quarterly non-GAAP tax rate of approximately 14.5%.

It also reflects they fully diluted share count of approximately 162 million shares.

Moving to slide twenty-six.

Looking ahead to the full year, we expect revenue a 3.673, the $3.728 billion, which was up 6% to 8% year over year as reported or.

Or 7% to 9% in constant currency.

We expect security revenue growth to be at least 20% for the full year 20 twenty-two.

This includes an expected guard ichor contribution of approximately $50 million to $55 million.

We are estimating non-GAAP operating margin approximately 29% to 30%.

And non-GAAP earnings per diluted share of $5.82 to $5.97.

And this non-GAAP earnings guidance is based on a non-GAAP effective tax rate of approximately 14.5% fully.

[noise] fully diluted share count of approximately 162 million chairs.

Finally full year Capex is anticipated to be approximately 13% to 14% of revenue.

In closing we are very pleased with our 2021 performance and are excited to close on the node help customers build run secure their applications now I'd like to turn the call back over to Tom say, a few words before we take your questions Tom.

Thanks, Ed I'll wrap up now on slide 28.

As I mentioned earlier Akamai has had a rich and exciting history of innovation that is fundamentally enabled the internet to provide enormous benefit to billions of people around the world. We are truly making life better for billions of people billions of times a day.

That's incredible is optimized contributions to the Internet I've been I want you to know that I couldn't be more excited about akamai potential for the future as we expand our business with a note and guard decor provide even greater value for our customers and shareholders and make like even better free internet users everywhere.

Ed Adam and I will now be happy to take your questions.

If you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.

To withdraw your question press the pound key.

Our first question comes from Stirling addict with J P. Morgan.

Yeah. Thanks, Hi, guys I wondered if you could give us some context in terms of what kind of growth was windowed experiencing you know before the acquisition and then when you talked about kind of 2023 and beyond I wanted to make sure I understand that new <unk> area of the 500 million.

What kind of growth rate you expect out of that segment. Thank you.

Certainly this is thanks for the question so before the acquisition.

They were growing at about 15% give or take the bigger customers were growing faster and they were sort of containing their growth a bit. It was very closely held company. So they were holding back a bit on their investment and go to market and and their build out. So obviously, that's one of the major synergies. We bring so we think we can accelerate that business pretty considerate.

<unk> now when I talked about the different components of the business. If you take the net storage business plus the edge applications business plus we're winnowed is.

Assume I talked about how we grew the edge applications business 30 per cent and if you remember back on Investor day that was our long term target or net storage business. As it is today is kind of a flattish business kind of grows like the C. D. M. We expect that to obviously accelerated as we add new capabilities and then they'll have no business should.

Accelerated quite a bit. So if you were to put those pieces together my talked about and 23 that I expected that we would be above $500 million in revenue, that's what to get you to that 30% to 35% kind of growth rate in that business. Once you get through the acquisition.

Right and then but given those pieces would you expect that growth to be durable at that level or kind of settled back into more of a 15 to 20 that just so we understand the longer term context and that's all for me. Thank you yes.

Yeah, It's a <unk> that's a great question and that you know that.

Adam to chime in a little bit here as well you know obviously, we're getting into a very very big market and what pushed us into this market was our customers. You know we was getting more and more requests for folks to continue come with different use cases ourselves, we're spending quite a bit on third party cloud today, whether it's through acquisitions or through I T project.

Just the overall growth of this market is so significant that we think there's certainly the market there to do that let Adam talk a little bit about some of his plans in terms of future integration and another growth prospects going forward, but it's quite possible that that could be a durable growth rate going forward for that business.

Yep I agree and I I think when you see that market growing very rapidly outside of what off my head before and we see that with our customers and demand of our edge applications and asking us for this type of cloud computing as well. So we do expect it to be durable at that market continues to grow quite rapidly.

Thank you.

Our next question comes from Keith Wise with Morgan Stanley .

Excellent. Thank you guys for taking the question.

Maybe two questions one on on <unk> acquisition, [laughter] I, just wanted to kind of better understand kind of diet that to buy versus like a partner decision countless understand what what's interesting about sort of buying this asset well you could do owning sort of a windowed versus partnering with windowed or other type of.

<unk> cloud computing platforms out there and number one and then number two for for Ed. It just been looking at F Y 22, and in the margins are coming down he added nice margin performance in queue for an author 2021 and can you talk to us a little bit about what's gonna be pressuring margins into into 2022.

Yeah by owning I know, we can really scale up that business. You know we have a lot of expertise in network deployment and doing that in a cost effective way to get enormous scale also we got a large enterprise salesforce and a customer base. It is hungry for us to bring them this kind of.

Capability, we know how to make large scale systems be reliable and perform well.

And we can bring it all together as part of an end to end solution. So that our customers can take their major applications Bill's been easily on Akamai and that's where the note comes in run them of course, we have the world's largest and best content delivery platform to deliberate and then wrap it all together under our.

Security umbrella to make sure it stays secure and so that's a compelling reason for us to make the acquisition here and provide the end to end service versus just partnering you you know with the various cloud providers.

And you wanted to check on the margin yeah sure.

Yeah sure Keith just add on that if I just look at the financial profile of the business. We just acquired think about getting up to that sort of scale of revenue. The type of investment you need to make how long it would take you to get there. It's rare that you find companies that have.

Profitability Uhm margins like we do.

So to be able to bolt that on its immediately accretive gets the market much faster, there's a brilliance to the simplicity in terms of how they approach and how simple it is to use their system. That's an expertise that were acquiring as well. So there's a lot to like about that now in terms of the margins. So there's a couple of things going on there you know one of the points that I made in my <unk>.

Prepared remarks was about foreign exchange, that's a big headwind for us and we're very profitable outside the U S. So that does put a little bit of pressure on margins for us, but also we're we're making investments and keep in mind do you have the full guard a core business. We only have two little over two months and the first and.

In the fourth quarter. So in the first quarter, we have full guard decor, and we are constantly in the business.

And you've got in the middle of the year is when we do our merit increase that said two things to the point on number one we're gonna be I should we do about 30 per cent in Q1, we've done very well managing costs and then we also told you. When we did the acquisition of guard decor that in twenty-three, we'd expect to get above 30% margins again so.

Will it be expanding margins it might be slightly under 30. This year as I said somewhere between 29, and 30, but we'd anticipate to get back above that and twenty-three.

Excellent. Thanks, so much guys.

Our next question comes from James Breen with William Blair.

Thanks for taking the question just you know looking at the edge Technology Group grew up this year's been flattish off with some pretty high numbers from 2020 as a result of the pandemic you know as you think about that going forward and and with some of the repricing. This year can you just talk about some to puts and takes reality too.

Repricing some of those contracts as well as you know some of the the sectors that were hit most by the pandemic potentially improving.

Thanks, Yeah. This is I'll take that one uhm, so yeah as far as the renewals go as we've talked in the past whenever we have a combination of renewables will always call. It out for you guys. Here's what I would expect with that group of customers typical renewal pricing nothing unusual in terms of.

Anything in the market to call out there I'd expect that group of customers to decline a bit in Q1 declined due to cause I got about half the renewals already done and I got about half coming up here in April and then I would expect that revenue to start to grow again, it's pretty typical of what you see in the C. D. M business. When you have a cluster renewals now those customers have very.

In contract some of them are one year some of them are too some of the room or a three and some of them have revenue commitments that will be used up before other contracts over so it's very unusual to have this sort of a cluster. So that will put some pressure on on growth here for the next.

Couple of quarters, but then I expect that customer the group to grow they've been very you.

You know busy buying up our security products compute products I expect now they're great targets for the new acquisition. We just picked up here. So I expected to expand the wallet chair within those group of accounts and this is just something that's pretty typical on the C. D on business and we're we're seeing the pricing pressures on the delivery side, we're not seeing it in the security side not submitted address for senior.

Interested in deliberate as far as the pandemic, we are starting to feel a little bit of a of of improvement in traveling hospitality and as a reminder, that group was about 4% of our total revenue I think that will sort of evenflo with the pandemic goes is we start to have these waves of new variance travel slows down.

And as it goes away travel picks up retail is still a bit sluggish not really seeing a significant improvement in just remember we had set up a zero overage and the biggest <unk> acquires of that type of contract or the retail is especially in the U S. So you see a little bit of a muted.

Seasonality here in queue for related to retail, but still some way to go there on retail travels improving a bit and in general as soon as we get past. These renewals you'll start to see the delivery business approve of it.

Great. Thanks.

Our next question comes from call me as soon as he all mccowen.

Hi, This is Michael one for Colby two questions. If I may Yeah first following this acquisition you also did guard decor, yeah. How would you describe the appetite for additional M&A and it's part of that how does this acquisition impact the way that you're thinking about additional buybacks I thought there was a pretty notable stuff up in the in the fourth quarter.

And then one one <unk> one other question applied to squeeze it in you know with this acquisition hundred million dollars of revenue coming in and we talked about 15% grilled that seems durable how does this change the way you're thinking about the long term revenue growth profile for the company. Thank you.

Yeah. Good good questions. You know obviously, we done two large deals the largest deals we've done in about 20 years, you know over the last several months I wouldn't expect to see is you know continue at that rate certainly, we probably will do more tech tuck ins in in smaller acquisitions.

In terms of the buyback you know our primary use of cash is four M&A and to buy back the equity to offset the dilution from compensation programs now as I mentioned that said, we do also opportunistically buyback additional stock and you know if you look over the last 10 years, it's the average so.

Little more than 1% a year and so I think our general approach to Ah use of capital is not changing here. Just we saw two exceptional opportunities first with guard decor and now with a note guard decor really is that is a huge boost to our enterprise security business zero.

Oh Trust capabilities, you know we believe they have the the best solution to stop the impact of ransomware and that's a huge huge deal and you see that in the improved guidance. We've given you and just to be closed the deal a few months ago and we're looking at this year, then I'm doing 30 to 35 million and now you as you heard from him.

Substantially more than that and I can tell you from talking to many of our customers. Many of the world's major banks. They are very interested in <unk> can do both the visibility. It gives customers you know into their own networks and the ability to mitigate the impacts of ransomware now in terms of the durability.

Revenue growth from the node in the past and they were doing 15% I I think add an Adam talked about we think we can do a lot more than that I just consider that leno doesn't really have a sales force never mind, you know Ah salesforce like Akamai hats going after major enterprises and you combine that with the fact that.

<unk> are made your enterprise customers have wanted us to have this capability for them. So we think we can really accelerate their growth and that it it could well be that the 30% is sustainable <unk>, we're certainly going to try to do that and of course successful. There you can see akamai as a whole back and double digit revenue growth on them.

Sustain obtainable basis, and that's certainly our goal.

Awesome. Thank you for the call it really appreciate it.

Okay.

Our next question comes from James Fish with Piper Sandler.

Hey, guys. Thanks for the question Security you know grew 22% actually I'm, sorry, 25 per cent constant currency, but seemed like new business slowed in the normal high security number was slightly down versus last quarter. So really why are we growing faster than a segment when the market has come directly towards savvy and it's been.

Help you have a security market as as we've probably seen since 2014 and and have we seen a pick up at all and selling security outside of the existing C. D M installed base and and just was squeezing in another one here, but what was the growth Oh, our annual customer metrics you guys typically given Q4 regarding the individual products and stuff.

Segments like an access control.

I'd I'll start with that and then hand it over to add you know I I. We were very pleased to see our security business. You know grow 25 per cent in constant currency you talk about you know savvy and that is a very small portion of our business. Today you know in fact, I sassi technically wouldn't even include micros segmentation.

<unk> I would imagine that's gonna change in the near future because it's so important and it's gonna become a requirement I believe for many of the world's major enterprises certainly in the financial vertical so the sassy framework as a small amount of akamai revenue and with guard a core growing rapidly the vast majority of our security revenue was <unk>.

Web security area, where we're protecting think of it as you know beta C apps from denial of service from content corruption from account Saft you know from you know data X filtration those kinds of attacks, which technically isn't part of the sassy framework.

And so what you would think of as maybe more towards the sassy, we're getting very good growth on a small number and of course, the lion's share of our security business is in the web security at eight a P I protection, where where the market leaders and growing at a very fast clip on a a good size number for us and add maybe you Wanna take the rest of the question.

Yeah, So Jim we don't.

Like this out every quarter, but I'll just go back to the I R day, we set targets for application Security network Security and security services and as a reminder, those goals were for application security, 20% to 25% 2025 per cent of network Security and then security services 10 to 15 and I can tell you that we we achieved all of those and exceeded in many cases.

Those metrics uhm.

Other metrics that you were looking for when you're inside thank you've mentioned something about customers.

Yeah, I mean, we we use to kind of talk about penetration of you know number of customers that are on on your wife's solution at this point and I thought it'd be analysts day, we were gonna get the annual update on those subsegments, maybe you're saving up to be <unk> be analyst day.

Yeah, that's what we're gonna do an analyst day, we'll have a deep dive on that what I'll do is I'll provide I provide this mentioned before in terms of the number of customers advise security product, that's up to 68.5% expensive about 6% year over year, two or more is up to 34.5% that's up about 3% three or more is up to 20.

Per cent and we increased our customer base by about 6% for the total customer base is up about 6% security penetrations up about 6% year over year.

How about if I can squeeze in one more one notch we've heard on some of the smaller developer focused solutions like I'm Gonna note is that organizations tend to kind of graduate from the solutions to an a W. As her as her what investments are you looking to make prevent that sort of graduation to make it more enterprise grade for the akamai installed base or is it more about <unk>.

Taking akamai down market and be that developer focus that we've been looking for.

Oh yeah.

The hand this over to add him in just a minute, but we're interested in the developer base for sure because our large enterprise customers. Their apps are built in many cases managed by the developers. So we really care about a developer friendly solution, but we're gonna take this to our large enterprise customers and Adam has a robust roadmap of.

Added capabilities and Adam wanted to talk a little bit about that.

<unk> I think Tom mentioned earlier, you know our some of our expertise is just building and.

Deploying larger network presence all over the globe, so that would be our first area to go and make those locations that winnowed has just more robust and an available to our customers, but building and things like availability zones V. P. C identity access management, and then building in compliance like soft too and P. C. I R.

Really on the core parts of our roadmap so that customers can not only bring their apps onto the platform, but graduate and continue to grow in scale globally as they build running secure the application right on the Akamai platform.

<unk> and I, just went and you know our our customers have been pretty explicit with us that they are very interested in us having this capability and putting it together with the world's best content delivery capabilities, the world's best application performance and the world's best security solutions to provide an end to end solution. So.

I I think you'll hope not see this would be a situation where they migrate you know from say a window to Ah hyperscaler, but our customers are interested in alternatives and and and solutions that maybe there are some functions on hyperscalers today that I I think would migrate to akamai is new <unk>.

Platform you know it will be the world's most distributed cloud platform with now market, leading solutions and not just delivery and security, but also compute.

Thanks Scott.

Our next question comes from Richy jewelry out with I B C.

Wonderful. Thanks. Thanks, so much for taking my questions just just to one of them a note and and maybe an inverse of the last question. Obviously they are a great traction you know down market. When do you think about the ability of Akamai set you know cross so into that Lienau base you know you.

<unk>, you're obviously very very strong in the large enterprises with you both pose security as well as the court you know delivery and adds applications business can you talk about your your ability to actually take some of your more enterprise grade products and I'm actually seldom successfully down market wants a little note acquisition closes and then I I wanted to throw a.

Little bit more into queue for and what you saw from the E. Commerce season, I know you talked a little bit about the retail <unk> bounce back being sluggish, but you know I know when when we're on this call three months ago, one of the the concerns with just with with supplies and concerns and the tough comps E. Commerce was gonna be able to challenge in queue for just wanted to get a sense for what.

Did you see specifically on the e-commerce side in in the queue for thanks.

And I'll take the first question that'll take the second you know we yeah, we certainly can cross out into the adult to note base. That's not our primary objective here. The primary objective is to take or node and really scale that up and salad into the large enterprise space you know I think that.

That's a far more lucrative for US then taking our existing solutions and you know selling into the large number of small customers and that the focus will be moving the nodes capabilities into our platform and having a comprehensive solution for large enterprise customers.

And and so reset one yep I got it so richly on commerce, you're right. When we had the two three call we did talk about.

Sort of a <unk> variety as potential outcomes with commerce I would say that we pretty much ended where we expected we didn't really bacon a ton of upside for really for two reasons. One was just uncertainty around supply chain people potentially ordering earlier in the year, but the bigger factor was around dissolved zero bridge that's.

We've been in market now for over two years, we've got a pretty high penetration. So that you don't see as much of a burst thing and two four as you do from the commerce customers and as I said, it's been a mixed bag. Some companies are doing pretty well so I'm not doing so great. So again, I'd say, it's kind of as expected, but we weren't going in expecting a ton out of our.

Retail vertical discuss Q4.

Got it thank you so much.

Our next question comes from to team up with money with city.

Oh, good afternoon, and thank you for taking my questions Uhm and maybe a jump all for you I'll just with respect to syndicate, new revenue classification set if they're gonna be expecting in the next couple of months here as I think back to your last analysts day Uhm, what was certainly helpful for us to get a sense of what type of.

Traffic next you're expecting and the delivery franchise. So I'm curious with a vanilla <unk> in the family or soon to be and how would you expect that a mix of traffic to change relative to finally get expectations within belong a medium term got and then I had a quick follow up if I could.

<unk> <unk> the traffic measured by bites delivered is 95 plus percent big media and software downloads gaming downloads. That's the vast majority of the traffic that won't change with low note in fact, I would expect we'd be selling computers.

<unk> services to those same big media customers in fact several of them have expressed no interest in that capability. So leno won't change our our traffic mixed and when we get together and I are they will do the deep dive in each of these categories should get a better feel of how the revenue is breaking down.

That's very helpful and for AD I wanted to talk a little bit about the margin upside in the corner with a medium business, having some nice outperformance we were still able to see a nice leverage fell through the model. So I'm. Just curious if you can walk us through somebody to put some takes within the.

Cost control elements at the dentist in the corner that would be helpful. Thank you yeah.

Yeah sure a good question. So a couple of things to note on that one is just a mix issue. So we hope you had a strong security quartered it'll get better on security so that drives very high incremental margins and the business. The other thing on the cost of goods sold line. The margins came in on the gross margin line will get better teams done a phenomenal job on driving down our bandwidth costs.

As I look out towards next year, we expect trap is to grow sort of its normal rates and my bandwidth costs are not really going up very much. So it will drive down bandwidth costs.

That would be the big thing and we're getting a good efficiency starting to see capex come down quite a bit we won't see the depreciation fall off you ever get a peek inside the next year and a half or so then he'll start to come off but just around the.

Around all the different organizations were just doing you know really focused on efficiency and you know we've seen good flow through when we get a little bit of a revenue outside.

I appreciate that the account thank you.

Our next question comes from Alex Henderson, with Needham and company.

Thank you very much I was hoping we could talk a little bit about the architecture that you're anticipating as we go forward uhm, whether you're planning on integrating the platforms at the edge sure whether you're the as described in the slide deck, whether the <unk> the nodes orange.

<unk> relatively separate from your edge compute platform do you anticipate moving to a single.

The software stack within each node or would these be separate nodes in that context.

I'll start with that and then turn it over to Adam you want to think of Akamai platform is hierarchical you know, there's a core where functions such as storage would live where there's dozens of locations for you know archive storage migrating out all the way to the edge where.

There's you know thousand 4000, Pops, where most of our capabilities live today something else that's closer to the core in dozens of locations would be the Prolexic service, but things like delivering video delivering software accelerating your bank statement and most of all the security other.

[noise] than Prolexic all live on the the very edge out in 4000 locations edge workers lives out there to educate V lives out there in my nose starts in the car and 11 locations and will be expanding that quite a bit and it will all be integrated together as part of one hierarchical platform and then maybe Adam you could get a little.

Deeper into that in terms of the software stack and so forth.

Yeah, well I think you've covered most of it but I think that way you can think about it is that you know the window. It's stack itself can be segmented into multiple components. Just like Tom just described you might have storage our databases that might exist closer to the core and as you have more Ah Ah Ah femoral type instantiation that application you push those components further out towards our our air.

Ultimately, culminating in our deep edge, where you'd have our chrome V. Eight engine that can be instantiated on demand right on the the edge itself. So that's our edge worker solution, but but you can see kind of a node kind of stack like spanning the entire span of what Tom just described as a core all the way out to the edge.

If I could call up you talked about the the coder centric capabilities Winnowed can you talk about the you know the degree to which coders are writing to this platform and for that matter to to the Akamai platform. How many colors do you have.

Right into your platform at this point.

So I'm at I'm wanting to note that one.

Yeah on the Windows platform they have over 150000 customers today on their platform, writing and deploying applications on our.

Was that the question.

Oh, that's the the degree to which the coders are writing to the platform yes.

Oh, Yeah posted isn't necessarily customization accustomed you won't have to do some writing that the customers upon what Notre yeah, they're primarily developers, which is one of the reasons for the benefit of bringing the developer centric community that we know it brings to the the Akamai community and then those developers as Tom describe a lot of them are the decision makers and.

Side of our enterprise customer base, developing and deploying in some cases, managing those applications and that's that that developer community becomes appealing appeals through those enterprise customers right back to occupy so it's it's kind of a great system that they have.

Okay can you give us the the the Akamai related data point are Rollin' Dumbly coders are right into your your edge compute capability.

I don't think I have that stat on hand, right now.

Thank you very much.

Our next question comes from <unk> Oppenheimer.

Thanks, guys would take much investment to consolidate and he's a great <unk> both from a software and hardware perspective, and will you be operating on relatively similar hardware and I I guess the same thing for the for the go to market strategy and I, just customer care and just you know a little bit about the overall investment.

And then I'd just a quick follow up.

Sure so.

<unk>, we are looking at the ways, we can drive synergy between the hardware that the Leno platform runs on today and the Akamai plan for them and you can imagine we have a significant deep expertise in our network group and hardware engineering organizations that spend all of their time optimizing for that which gives us our great, causing capex kind of pickles side of Akamai. So we'll look.

To do that as we integrate winnowed and then can you repeat the second half of the question I think it was on <unk> just the same thing for like customer caring and and go to markedly happens that's much too.

It's great.

Yeah, no the great thing about the bullet, but it'll platform is it is very self service very frictionless for developers to come on board. They have amazing documentation that make developers use of their platform easy and they have a great customer care group inside a window that we worked very closely with your in the buildup to the the signing of a desk and so we expect to have them operate.

More as a tier two to our existing akamai customer care organization and of course, our existing enterprise Salesforce will be the salesforce. It goes to market selling those products along with their existing self service uhm model they have today.

And you mentioned you have a very large network. Obviously do you think you can get into the enterprise private line or you know global went on market or just the overall going surprised that working correctly.

Well can you ask I think in terms of enterprise when or whatnot, we do partner very closely with our telco partners and that's something that we work very closely with them when they have the opportunities we use our network in <unk>.

The nation, what there is whether it makes a synergy with those customers that want to use both dark telco partner, then akamai not sure. If that's what you were getting out of work or something yeah. Yeah, Yeah, I want to thank them Akamai is providing internet connectivity to enterprises, that's not our business. We you know that's our partners business now we.

Do provide you know that you clean access so that an enterprise can sort of hide behind Doc of mine only akamai can come you know through so that they maintain safety and security for their data centers. So we do that but we're not we don't <unk>.

<unk> based connectivity that would be our partners, which would be the carriers.

Thank you.

Our next question comes from Franklin, New them with Raymond James.

Great. Thank you Uhm, you mentioned earlier, bringing scale to the business here and I'm just curious what the strategy is.

We're bringing scale to compete increasingly with large cloud companies that have some of the bigger scale in the world and and why that is <unk> the strategic decision to move in that direction.

And not bolster more of the security or the core C D in business. Thanks.

Yeah, what we you know when you think of scale. There's a couple of ways to do it. One is just how many servers do you have obviously, we have we have a lot but the way we think about scale is more in terms of being distributed and none of the hyperscalers come anywhere close to us in terms of being in 4000 Pops and having a real <unk>.

<unk> network now what we haven't had before is you know the managed B M manage container services in our customers have asked for that that's been the one missing piece on our platform because customers for many of their apps would like to take the you know the entire at build it on Akamai rotted on Akamai.

I deliver it through us where they know they get you know fabulous performance instant scalability, where it becomes relevant to do so you know to have the edge computing really done on the edge and then to have it all be secure so that we can provide the end to end service and so that's why we're doing this.

And in some cases, there may be some you know we wish we have been competing with a hyperscalers for 15 years and I I think that'll continue and I I think the hyperscalers themselves several of them our largest customers and several of them are already using us for our compute capabilities and I expect that to any.

<unk> you know with the acquisition of lent out and so it's it's an environment, where you know we we compete of course have and for many years and successfully and what we do we do really well and that will be taking an application, making it easy to build and deploy on Akamai and then to have the world's best.

[noise] performance scalability global reach and security and you know, that's where Akamai excels and that's the goal in making this acquisition is really to complete that story to be able to have the end to end capability to to handle their applications.

Yeah, just let me just read.

Yeah go ahead I'm just gonna.

This doesn't take away from our investment in security in another way to think about it is you've now got two very exciting fast growing businesses inside of Akamai led by two different leaders in the company and the scale that we can bring turn the question around and think about if you're 100 plus million dollar company trying to scale to a billion what would you need you need an.

Ms Salesforce you'd need a global private network you would want to have a low cost deployment model you'd want to have access to customers and channel and we bring all that so this to me. It was a very natural adjacency for us and I look at ourselves and what we're spending a third party cloud and looking at bringing that in house driving some additional synergies in savings there. It's just a.

Natural extension of what we're doing and entering a really really big exciting market and again it doesn't take away from our ability to invest in security as you saw we did two very large acquisitions one in security one here in cloud and we're very fortunate with our profitability in our cash flow generation to be able to do that.

So is the angle to be able to provide to me is cloud computing functions on.

Yourself that would that the large file a complaint with white label or are you going to be providing aspects that they just can't do themselves and their larger and larger a server farm appointment.

I think both there's things that we do today at a level that the Hyperscalers don't do I mean, they have competing services, but in many cases of hyperscalers use us and use our services for their own properties, even though we compete with them I do expect us to be partnering with will certainly many of the <unk>.

World's major carriers and white labeling our services of course are the carriers are major channel partners with us today, and I think that'll increase through the acquisition of Leno, because they've had an interest in being able to offer that kind of capability and now it comes hand in hand with well the whole solution all put together.

Okay. Thank you very much.

Our next question comes from Rudy Kissinger with da Davidson.

Great. Thanks for taking my questions guys. One of the the two things here uhm, starting off going back to the day customers that are going to have the repricing. You said basically decline first half of them are kind of growth in the second half for the year and 22 over 21, what's your expectation for that group, but they can be slightly down or about breakeven.

On a growth business.

Yeah, a good question, so I would expect those customers to be <unk>.

Slightly up year over year.

So you you decline the first three quarters you start growing the backup now there's also a significant upside with the lienau products as well you can imagine these guys have to spend tons of money in this area. So you know.

There's a potential there do you could continue to grow that base of customers. So not expecting that this year, but it's possible that we could start to tap into that I'm, just gonna have to build a pipeline get uhm customers lined up but that's obviously, a certainly a very target rich group of customers.

Got it and then secondly, I'm going back to dark horse pretty substantial outperformance. Thus far can you said 10 million and a quarter and the initial expectations you pull the six to seven and then obviously 50 to 55 expected in 22 versus 30 to 35, originally just what's really driving it upside what what's really resonated well with this product.

Both of the new customers and those that you're crosstown.

Well, obviously ransomware is a big problem and we believe the guard a car has the best solution.

You know it is easier to use and competing solutions and micro segmentation has a reputation for being really hard to implement an inflexible. It gives you great visibility in terms of what's going on in your network customers really appreciated that it's really important with security and they.

Have a solution that works with legacy systems that the competition doesn't have you know they have built their own custom firewall and the competing services you know have to rely on the existing firewalls and whatever operating systems being used by a particular application in some cases doesn't even exist and so they can't cover it.

So it is it's the best solution.

And to a big problem, that's that's rapidly growing and so we've seen very strong interest in our customer base and of course, we have a very large enterprise salesforce that now can you know bring guard decor into you know the large banks and the large enterprises and the initial reception has been very strong.

So yeah, I'm I'm very excited by their performance this year and I'm looking forward to substantial growth in the future.

Great. Thanks for taking my questions.

I had operated we'd probably have time for one more question. Thank you.

This question comes from Jeff and me with Craig Hallum.

Just under the wire. So two quick ones for me first I guess on the cross sell back into your base, although an old product you know how critical is it to win over the developers in in your base I mean, obviously, you've got the relationship maybe you can come in and try to make the crossrail, but there's a lot of power sitting in those developers what is it about these tools that the developers will see as.

Their best option and how do you win them over.

Adam why don't you take that one.

Sure I mean, that's one of the most attractive things to the Windows platform is that their developer centric tools make it really easy for customers, who use their Cooper nates engine use their managed <unk>. It's just very simple to configure onboard it comes with a ton of documentation makes it very simple for somebody to.

Learn how to use them in onboard themselves and try their application very quickly on their platform. We heard from developers inside of our own company as well as developers inside of our customers that they love to use the little tool, they're simple easy and and that's really why we think we went over the developers using that type of class.

For him something that's simple easy to use it has great documentation yep.

Yep and you may have missed it mentioned it if I missed it apologies, but in terms of the customer base, how many customers. What's an average spend per year for you know for the little base in in any particular concentrations in the base from vertical or other segmentation that matters.

So the the <unk> customer bases around 150000 customers, we don't break them down like that at least not yet, but we can tell you I think I'd mentioned this earlier on the call to be larger segment of their customer base is growing much faster than the very very small developers, but we don't give out the arco yet our customer base.

Yeah, just just add there's no customer concentration risk in terms of any significant customers, making up a large percentage of the revenue and earlier was Adam who mentioned that from a go to market perspective, they didn't focus on selling into large enterprises, that's where we can bring in that center do so I would expect that over time that customer base.

Change and look a lot more like our customer base and obviously that small developer base will just continue to grow as we continue to market and that sort of thing, but it also opens up opportunities and you know some of our underserved verticals that you think about the spend in certain places that may not have large websites or web presence with what they're spending an awful lot in this area.

So I do expect that customer base to change when we get to analysts day will try to break that down a little bit for Ya I'll give you some views in terms of where how we're thinking about growth in the future and then as we get some months under our belt of operating the company, who is <unk> come up with new metrics that we think are helpful. Obviously bring up the table and disclosed.

For you Okay.

Okay. Good got it thanks so.

Okay, well, thank you everyone and clothing, we will be presenting at <unk>, several investor conferences and road shows throughout the rest of the first quarter details of these can be found in the Investor Relations section of Akamai Dot com.

Thank you for joining us and all of US here at Akamai wish you continued good health and we wish you a happy evening. Thank you.

This concludes today's conference call. Thank you for participating you may now disconnect.

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