Akamai Technologies is a leading provider of content delivery network (CDN) services and cloud security solutions, aimed at enhancing online experiences and protecting digital assets
The company helps businesses deliver their websites, applications, and other digital content efficiently and securely to users across the globe, optimizing load times and improving performance. Akamai’s comprehensive suite of services includes web performance optimization, application security, and internet of things (IoT) solutions, making it an essential partner for organizations looking to thrive in an increasingly digital world while safeguarding their data against cyber threats.
As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the content delivery industry, including Akamai (NASDAQAKAM) and its peers.
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Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let’s have a look at F5 (NASDAQFFIV) and its peers.
Shares of web content delivery and security company Akamai (NASDAQAKAM)
fell 20.3% in the afternoon session after the company reported weak fourth-quarter 2024 results, with next year's revenue guidance signaling a sharp deceleration in demand and falling short of Wall Street's estimates. Revenue grew just 3% year on year with security and compute solutions delivering double-digit growth, but these gains were overshadowed by an 18% drop in delivery revenue, the segment that historically generated a substantial portion of Akamai's business.
Despite this, it wasn't all bad as adjusted operating profits and earnings beat expectations, and next-quarter EBITDA guidance also came in ahead of forecasts. It seems AKAM is shifting focus to profit growth as top-line expansion slows. Notably, the full-year outlook isn't great, implying 2.7% revenue growth at the midpoint, down from 4.8% in 2024.
Overall, this was a weaker quarter, as revenue struggles overshadowed strong profit growth.
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Piper Sandler noted that Akamai’s guidance was even lower than anticipated and flagged concerns over slowing growth, declining margins, increased capital expenditures, and revenue substitution risks.
Akamai underscored that one of its largest customers is facing political headwinds, which could impact the company's top line by 1% to 2% over the next few years.
Web content delivery and security company Akamai (NASDAQAKAM) met Wall Street’s revenue expectations in Q4 CY2024, with sales up 2.5% year on year to $1.02 billion. On the other hand, next quarter’s revenue guidance of $1.01 billion was less impressive, coming in 3.1% below analysts’ estimates. Its non-GAAP profit of $1.66 per share was 9% above analysts’ consensus estimates.
Akamai’s recent record shows that the content delivery network and cybersecurity provider’s earnings have beaten estimates in the previous four quarters, while revenue surpassed expectations in only two.
