- Akamai anticipates Q3 revenue and profit to exceed market estimates due to robust cybersecurity demand amidst rising cyber threats.
- The company has revised its 2024 sales forecast, maintaining the midpoint estimate, and reported a 5% rise in second-quarter revenue, surpassing expectations.
OUR TAKE
Cybersecurity has become a global concern. Akamai Technologies, a leading provider of cybersecurity services based in Cambridge, Massachusetts, USA, has released its third-quarter financial forecast, reflecting a surge in demand for cybersecurity services as organisations face increasingly sophisticated cyberthreats. The forecast shows that the company’s revenue and profit are expected to exceed market expectations.
–Elodie Qian, BTW reporter
What happened
Akamai Technologies, a cybersecurity firm based in Cambridge, Massachusetts, has projected an increase in its third-quarter revenue and profit, surpassing market expectations.
This is due to the robust demand for its cybersecurity services, as businesses continue to invest heavily in securing their systems against the growing threat of cyber attacks.
The company’s shares experienced a 4% rise during after-hours trading following the announcement. Akamai has set its revenue expectations for the third quarter between $988 million and $1.01 billion, slightly above the analysts’ consensus of $996.7 million, as per data from LSEG.
In addition to refining its 2024 total sales forecast, Akamai has adjusted the range to $3.97 billion to $4.01 billion, a slight modification from the previous forecast of $3.95 billion to $4.02 billion. The midpoint of the forecast remains at $3.99 billion, aligning with market estimates.
The rise of generative artificial intelligence has been identified as a factor that facilitates the launch of malware and ransomware attacks, thereby boosting the demand for Akamai’s services, as noted by TD Cowen analysts in a research note from May.
Akamai also forecasts an adjusted net income for the quarter between $1.56 and $1.62 per share, which is higher than the market’s expectation of $1.54 per share.
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Why it’s important
The company’s offerings include cloud platforms and content delivery services that accelerate the delivery of web content. Its clientele comprises major names such as Adobe, eBay, and Electronic Arts, as well as government entities like the U.S. Defense and Labor departments.
For the second quarter, Akamai reported a 5% increase in revenue, amounting to $980 million, which exceeded the expected $977.2 million.
Akamai has continued to grow over the past few years. in the first quarter of 2022, Akamai’s security revenues reached $382 million, a 23 per cent increase year-over-year.
Additionally, in the fourth quarter of 2023, Akamai’s revenues were $2.617 billion, with the security technology and cloud computing businesses performing particularly well, accounting for 60 per cent of total revenues.
Akamai’s investments and innovations in security have also significantly boosted its business. The company has enhanced its security capabilities through acquisitions of cybersecurity companies such as Guardicore, and plans to reach 50 percent of security revenue by 2026.
