Published on 8 May 2024 on Zacks via Yahoo Finance
Will Healthy Revenue Growth Boost Akamai's (AKAM) Q1 Earnings?
Akamai Technologies, Inc. AKAM is scheduled to release first-quarter 2024 results on May 9, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 6.29%. It pulled off a trailing four-quarter earnings surprise of 6.49%, on average. The company is expected to report higher revenues year over year, backed by healthy demand in security and compute verticals. Management’s focus on expanding its portfolio to cater to advanced use cases is a tailwind.
Factors at Play
During the quarter, Akamai teamed up with Neural Magic to create high-powered deep-learning AI software tailored for Akamai’s distributed computing infrastructure. The development of a high-performing platform capable of efficiently running deep learning AI on CPU-based servers is the primary objective of this strategic collaboration.Scaleflex, a visual experience platform that specializes in providing solutions for managing and optimizing digital media assets, inked a deal to become an integral part of the Akamai Qualified Computing Partner Program. The venture aims to aid businesses seeking to increase their online presence among targeted customers. The integration of Scaleflex’s expertise in Digital Asset Management, Dynamic Media Optimization and Visual AI will expand Akamai’s technology portfolio and strengthen its content delivery network business. These developments are likely to have supported the top line during the quarter.In the quarter under review, Akamai has strengthened its security portfolio with innovative additions to its flagship Akamai App & API (Application Programming Interface) Protector product. The company also extended its industry-leading segmentation solution, Akamai Guardicore Segmentation, to hybrid cloud environments. The solution is released on Microsoft Azure Marketplace for public cloud customers. These initiatives are likely to have improved its top-line performance.Our estimate for revenues from the security segment is pegged at $460.8 million, suggesting 13.6% year-over-year growth. Our revenue estimate for the compute vertical is pegged at $140.2 million, indicating a 21.1% improvement year over year. Revenues from the delivery segment are projected at $387.7 million.For the first quarter of 2024, the Zacks Consensus Estimate for revenues is pegged at $991 million, indicating year-over-year growth from $916 million. The consensus estimate for adjusted earnings per share stands at $1.61, suggesting growth from $1.40 reported a year ago.