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A Successfull Prediction - Akamai ($AKAM) Surges 8.47% on Strong Q2 2023 Earnings Driven by Security Software Growth
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Few days ago, before Akamai Q2 2023 earning call, we predicted the stock will be over $99/share by 2023-08-09. Guess what? We we're right:

Here's our summary of the earning call. Please let us know what are your thoughts on the stock!

Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects
life online, posted a total revenue of $936 million, up 4% YoY, surpassing Wall Street consensus forecast of $930 million.

The company's stock rose 8.47% following the better-than-expected results for the June quarter, driven by strong performance in security software. Akamai shares were 4.7% higher at $99.45 in late trading Tuesday.

Akamai, founded in 1998, has evolved from being best known as a content delivery network to having security software as its largest business. The company serves major players like Apple, Facebook, and Microsoft, and is also making strides into API security and cloud computing.

Financial Highlights:
  • Akamai reported a total revenue of $936 million, a 4% YoY increase, beating Wall Street's consensus.
  • Security revenue was $433 million, up 14% YoY, ahead of consensus at $420 million.
  • Delivery segment revenue was $380 million, down 9% YoY, below the Wall Street consensus of $386 million.
  • Compute revenue, including Akamai's cloud computing business, was $123 million, up 16% YoY.
  • GAAP diluted EPS of $0.84 and non-GAAP diluted EPS of $1.49, up 10% YoY, nine cents above estimates.
  • The company sees Q3 revenue of $937 million to $952 million, and full-year revenue of $3.765 billion to $3.795 billion.
  • Akamai bought back $137 million of stock in the quarter.

Operational Insights:
  • Security software demonstrated robust growth, with consecutive quarters of strong bookings.
  • CEO Tom Leighton expressed optimism about Akamai's entry into API security, viewing it as a growing vulnerability and a new opportunity.
  • The company's push into cloud computing aims to compete with giants like Amazon, Microsoft, and Google, targeting video, gaming, and e-commerce companies.

Stock Reaction:
  • Akamai's shares have added about 13.1% since the beginning of the year versus the S&P 500's gain of 17.7%.
  • In late trading Tuesday, the stock was 4.7% higher at $99.45.
  • The favorable earnings revisions trend translates into a Zacks Rank #2 (Buy) for the stock, indicating expected outperformance in the near future.

With a strong quarter driven by performance in security software and optimistic guidance for the rest of the year, Akamai is positioning itself as a competitive force in the industry.

The company's commitment to innovation and adaptability sets the stage for continued growth and investor confidence.
Would you like reading a deep-dive into the Akamai business?

8 VotesPoll ended on: 8/11/2023

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