AKAM shares falter as Akamai records top views, but IT security misses estimates


Akamai Technologies (AKAM) reported second-quarter results on Tuesday that fell from a year earlier but beat Wall Street targets. AKAM stock faltered in Akamai’s earnings report as IT security revenue lagged views.




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The Cambridge, Mass.-based company said June quarter earnings fell 5% to $1.35 per adjusted share. Akamai revenue increased 6% to $903 million.

Analysts had expected Akamai to earn $1.31 per share on revenue of $899 million for the period ending June 30. A year earlier, Akamai had earned $1.42 per share on sales of $853 million.

Akamai was to provide forward guidance on the earnings call with Wall Street analysts.

Akamai stock fell 1.1% to 94.06 in extended trading. Shares fell 1.4% to close at 95.08 in the stock market’s regular session today. AKAM shares had fallen 18% in 2022.

AKAM action: Lack of security revenue

Meanwhile, the company said earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 1% to $388 million from estimates of $386 million.

Additionally, the company said security product revenue, including acquisitions, rose 17% to $381 million from estimates of $391 million.

Heading into Akamai’s earnings report, the stock had a relative strength rating of 47 out of a possible 99, according to IBD Stock Check.

Largest CDN Service Provider

Akamai is the largest provider of content delivery network services that also accelerate the speed of e-commerce transactions and enterprise software downloads.

Additionally, Akamai has expanded into cybersecurity services.

Continuing a wave of acquisitions, Akamai in February acquired Linode for $900 million. Linode is an enterprise cloud computing infrastructure provider. The deal better positions Akamai relative to Cloudy (REPORT). Cloudflare stock jumped on its second quarter earnings report.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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