Factors Setting The Tone For Akamai's (AKAM) Q1 Earnings
Zacks Investment Research | Apr 25, 2019 11:03PM ET
Akamai Technologies (NASDAQ:AKAM) is set to release first-quarter 2019 results on Apr 30.
Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 9.5%.
In the last reported quarter, Akamai Akamai Technologies, Inc. Quote
The Zacks Consensus Estimate for revenues currently stands at $698.4 million, indicating growth of 4.4% from the year-ago quarter’s reported figure. Moreover, the consensus mark for earnings has remained steady at $1.02 over the past 30 days, implying growth of 29.1% from the figure reported in the year-ago period.
Let’s see how things are shaping up for this announcement.
Factors to Watch
Solid demand for Kona Site Defender, Nominum services, Bot Manager and Prolexic Solutions are anticipated to drive Cloud Security Solutions revenues in the to-be-reported quarter.
Notably, Akamai exited the fourth quarter at a run rate of around $750 million for the security business.
Synergies from the Nominum acquisition (completed in Nov, 2017) are enabling the company to enhance the Enterprise Threat Protector solution, and expand presence among carrier and enterprise customers. Growing influence of the company’s security solutions among media customers is also noteworthy.
Additionally, the company’s solutions are winning awards and industry-wide recognition is improving its brand reputation. Kona Site Defender secured “Best Web Application Solution” award at SC Media's 23rd annual SC Awards ceremony, held at RSA Conference in San Francisco during the quarter.
These aforesaid factors are helping Akamai win new customers. Moreover, expansion of the security solutions portfolio is anticipated to not only lower dependence on media delivery solutions but also offset loss of large customers in the CDN space.
Further, completion of the Janrain acquisition in the last reported quarter strengthened Akamai’s security solutions portfolio. The integration of Janrain’s Identity Cloud with Intelligent Edge Platform now enables Akamai to provide enhanced secure services to its CIAM customers, in turn bolstering engagement. This is expected to drive top-line growth in the first quarter.
Additionally, robust over-the-top (OTT) content viewing, increasing adoption of mobile data/apps and growing mobile data traffic bode well for Akamai.
Strong growth in demand for High Definition video over the Internet is driving bandwidth requirements, thereby accelerating demand for the company’s solutions and driving revenues. However, increasing total bandwidth costs are a headwind for Akamai.
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