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Akamai Technologies adds 7%, following strong Q1 earnings
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Published May 10, 2023 16:24
© 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.
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