This tech company beat earnings estimates by $0.07 last quarter. And 20 analysts have increased their EPS estimates for the company in the past 30 days.
Akamai Technologies, Inc. (AKAM)
From The Buyback Letter
Akamai Technologies, Inc. (AKAM) provides cloud services for delivering, optimizing and securing content and business applications over the Internet in the U.S. and internationally. It has more than 240,000 servers in over 130 countries, for uninterrupted customer experiences, the intelligence to optimize devices, and a capacity to move huge volumes of data and content, broadcasting to the largest audiences or personalizing for each individual user. What does that all mean? Here’s a specific example that helps us understand: Earlier this year India’s largest premium streaming platform used Akamai Tech’s intelligent edge platform to live stream the VIVO IPL cricket tournament final to 18.6 million concurrent viewers, breaking records for concurrency.
It’s all about the IoT (Internet of Things). By 2025, some 22 billion connected devices will be sending data across the Internet. In addition, billions of application instances will be sending trillions of messages, and these endpoints are both huge opportunities and challenges for businesses to harness, distribute and protect the data. Every industry is affected, from car makers to hotel operators. Nearly every industry is incorporating endpoints in the form of connected devices and applications into their business strategies to capitalize on the ubiquity of Internet access. But building and managing the infrastructure required to support, scale and secure these experiences can be incredibly time-, cost- and resource-intensive for organizations and not a part of their core competency.
That’s where Akamai comes in. “Akamai is investing to extend its network capabilities with the goal of meeting the unique needs of the growing IoT device and application messaging markets,” said Craig Adams, senior VP. “Delivering massive amounts of data across the globe securely is in Akamai’s DNA. We are focused on developing technology designed to scale, simplify and secure the way IoT and application data is delivered to endpoints.”
AKAM beat Wall Street’s Q1 earnings expectations and raised its full year guidance. Net income rose $107.1 million (65 cents a share), up from $53.71 million (31 cents a share), a year ago. Adjusted income came to $1.10 a share, beating analysts’ forecasts of $1.02. Revenue increased 5.7% to $706.5 million, ahead of a projection of $698.3 million. Web division revenue rose 7% to $376 million. Media and carrier division revenue was up 5% to $330 million. Cloud Security Solutions revenue was up 27% to $190 million.
U.S. revenue was down 1%, but international revenue rose 17% to $288 million.
Akamai said it expects Q2 revenue between $688-$702 million, while analysts are expecting $693.3 million.
For the fiscal year ending December 2019, AKAM is expected to earn $4.17 per share, a change of 15.2% from the year-ago reported number.
The CEO attributes this outperformance to the continued strong growth of their security business, strong traffic growth from the media business and the company’s ability to improve efficiency while continuing to invest for future growth.
The company is based in Cambridge, Mass. and has a market cap of $13.6 billion. Shares outstanding have been reduced by 3.829% in the last 12 months.
David R. Fried, The Buyback Letter, www.buybackletter.com, 888-289-2225, July 19, 2019