Akamai Technologies Gets Boosted by Security and Cloud Demand

Key conclusions

Akamai Technologies beat second-quarter profit and sales estimates on strong demand for its security and cloud computing products.
Security services revenue increased by 15% and computing services revenue increased by 23%.
The company raised its full-year adjusted earnings per share forecast.

Akamai Technologies (AKAM) shares soared Friday, a day after the tech company reported better-than-expected second-quarter results and raised its profit forecast on increased demand for its security and cloud computing products.

Akamai reported adjusted earnings per share (EPS) of $1.58 on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $408.9 million. Revenue increased 5% year over year to $979.6 million. All three results beat the estimates of analysts surveyed by Visible Alpha.

Security revenue rose 15% to $498.7 million, and computing revenue rose 23% to $151.5 million. However, delivery revenue fell 13% to $329.4 million.

CEO Saya Akamai ‘achieved multiple significant wins in Q2’

Chief Executive Officer (CEO) Tom Leighton explained that the company saw strong customer engagement with its security solutions and “had a number of significant wins in Q2.” He also pointed to the success of the launch of its new cloud offering last quarter and that “the strong initial momentum we had in Q1 continued into Q2.”

Akamai now forecasts full-year adjusted earnings per share of $6.34 to $6.47, up from its previous forecast of $6.20 to $6.40.

Akamai Technologies led the S&P 500, with shares gaining 10% to $100.94 at noon ET on Friday. Even so, they are down about 15% this year.