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Akamai Technologies Inc AKAM

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Security Continues to Shine for Akamai in Q2; CDN Business Returning to Reality Against Tough Comps

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Akamai had a good second quarter, as it was no surprise that the its core content delivery network, or CDN, business would look sluggish relative to the great quarter a year ago that was boosted by lockdowns and the resulting spike in streaming traffic. The firm’s security business continues to outperform even our lofty expectations and is showing no signs of materially slowing. It continues to drive the company’s performance and now makes up almost 40% of total revenue. We are not making any changes to our long-term forecast, and we are increasing our fair value estimate to $78 from $76 after incorporating the quarter’s results.

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Company Profile

Business Description

Akamai operates a content delivery network, or CDN, which entails locating servers at the edges of networks so its customers, which store content on Akamai servers, can reach their own customers faster, more securely, and with better quality. Akamai has over 325,000 servers distributed over 4,000 points of presence in more than 1,000 cities worldwide. Its customers generally include media companies, which stream video content or make video games available for download, and other enterprises that run interactive or high-traffic websites, such as e-commerce firms and financial institutions. Akamai also has a significant security business, which is integrated with its core web and media businesses to protect its customers from cyber threats.

145 Broadway
Cambridge, MA, 02142
T +1 617 444-3000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 8,368