Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Akamai Technologies adds 7%, following strong Q1 earnings

Published 10/05/2023, 16:24
Updated 10/05/2023, 16:24
© Reuters.

© Reuters.

Akamai Technologies (NASDAQ:AKAM) shares jumped Wednesday morning after topping earnings, revenue, and guidance consensus estimates.

The cybersecurity and cloud service company reported first quarter earnings of $1.40 per share, $0.08 better than the analyst estimate of $1.32, while revenue for the quarter came in at $916 million versus the consensus estimate of $910.51M.

AKAM shares are currently up more than 7% at $84.59 per share.

The company has been boosted by a rise in security revenue, and for the first time in its history, the segment became AKAM's largest revenue stream, rising 6% YoY to $406M. Delivery revenue came in at $394M, increasing 11% YoY, while compute revenue was $116M, up 49%.

The firm's international revenue increased 5% to $442M compared to last year, but US revenue fell 1% to $474M.

"Akamai had a strong start to 2023, with both revenue and earnings above our expectations," said Dr. Tom Leighton, Chief Executive Officer.

Looking ahead, Akamai sees second quarter earnings between $1.38 and $1.42 per share versus the consensus of $1.35, with revenue for the period expected to come in from $923M to $937M versus the consensus of $919M.

Full-year earnings are expected to be between $5.69 and $5.84 per share versus the consensus of $5.48, with revenue between $3.74 billion and $3.785B versus the consensus of $3.73B.

Reacting to the report, Evercore ISI analysts raised the firm's price target on the stock to $105 from $100 per share, maintaining an Outperform rating on the stock.

"We think AKAM is managing well through a tough macro environment (some signs of longer sales cycles, increased difficulty adding new customers, pricing pressure, etc.) with solid execution on both topline and margin performance. The focus will be on their ability to maintain their high 20% EBIT margins and eventually expanding them in CY24 and beyond while scaling growth in compute and security," wrote the analysts.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.