By Akamai recently released its financial results for the fourth quarter, showcasing a combination of positive and negative trends. While the company experienced impressive growth in its cloud computing and security software divisions, its legacy content-delivery-network business faced a continued contraction.
Q4 Revenue Surges to 5 Million
In the fourth quarter, Akamai’s revenue rose by 7% to reach $995 million, falling within the range of $985 million to $1.005 billion previously communicated to investors. However, this figure fell slightly short of the consensus forecast of $999 million among Wall Street analysts tracked by FactSet.
Adjusted Earnings Exceed Expectations
On an adjusted basis, Akamai reported earnings of $1.69 per share – surpassing its guidance range of $1.57 to $1.62 per share as well as the Street consensus estimate of $1.59 per share. Under generally accepted accounting principles, the company’s earnings amounted to $1.03 per share.
Strong Performance in Cloud Computing and Security Software
Akamai’s security revenue for the quarter reached $471 million, representing an 18% increase. Although slightly below the Street consensus forecast of $475 million, this growth demonstrates the company’s commitment to fortifying its security offerings. Conversely, the content-delivery segment experienced a 6% decline in revenue, amounting to $389 million, slightly lower than Wall Street’s expectations of $392 million. However, Akamai’s cloud computing business, Compute, saw remarkable growth with revenue of $135 million – an impressive 20% increase and exceeding the consensus forecast of $132 million.
Outlook for Q1 and Full-Year 2022
Looking ahead to the first quarter, Akamai expects quarterly revenue between $980 million and $1 billion – falling slightly short of the consensus expectation of $993 million. Additionally, the company foresees an adjusted profit of $1.59 to $1.64 per share, aligning with Wall Street’s consensus call of $1.59.
For the full year, Akamai anticipates revenue growth ranging from 6% to 8%, implying revenue of around $4.08 billion – slightly lower than the consensus forecast of $4.11 billion. Management also projects adjusted per-share profit growth between 7% and 11% for the full year, suggesting a result of approximately $6.76 per share, surpassing the consensus estimate by a few pennies.
Akamai continues to prioritize its cloud computing and security software divisions, aiming to drive further growth and maintain its position as a leader in the industry.
Akamai Expands Cloud Computing Capabilities to Edge Network
Akamai, a leading provider of cloud services and security software, has announced plans to enhance its edge computing network by incorporating cloud-computing capabilities. CEO Tom Leighton emphasizes that these two areas contribute significantly to the company’s overall revenue, accounting for 60% of it.
The move aligns with Akamai’s strategy to compete with major cloud providers like Amazon.com, Microsoft, Google, and Oracle. By leveraging its content-delivery network, which optimizes access times by storing copies of media and e-commerce content across the web, Akamai aims to bring cloud computing closer to end-users. Already, the company has begun deploying these new capabilities in various sectors such as AI inference, multiplayer gaming, social media, and content streaming.
Akamai anticipates expanding its offerings into data analytics, spatial computing, and other domains related to the consumer and industrial internet of things. Referred to as Gecko or Generalized Edge Compute, this new service has been rolled out in several cities worldwide, including Hong Kong, Kuala Lumpur, Johannesburg, Queretaro (Mexico), Bogotá, Denver, Houston, Hamburg, and Marseille.
Comments