Akamai Technologies (AKAM) adds 7% following strong Q1 earnings
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 $910.51 million.
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 $406 million. Delivery revenue came in at $394 million, increasing 11% YoY, while compute revenue was $116 million, up 49%.
The firm's international revenue increased 5% to $442 million compared to last year, but US revenue fell 1% to $474 million.
"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, versus the consensus of $1.35, with revenue for the period expected to come in from $923 to 937 million, versus the consensus of $919 million.
Full-year earnings are expected to be between $5.69 and $5.84, versus the consensus of $5.48, with revenue at between $3.74 billion and 3.785 billion, versus the consensus of $3.73 billion.
Reacting to the report, Evercore ISI analyst Amit Daryanani 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 Daryanani.
By Sam Boughedda