Source: TradingView.com Key Takeaways Oracle shares soared more than 30% in premarket trading Wednesday after the computing giant raised its outlook for cloud infrastructure sales and said it added several large new customers amid booming AI demand. The stock looks set to break out from a flag pattern to a fresh record high on Wednesday, laying the groundwork for a continuation of the longer-term uptrend. The measured move technique projects an upside target of $384. Investors should also watch criti ...

Core Insights - Akamai Technologies, Inc. (AKAM) reported strong second-quarter 2025 results, with both revenue and net income exceeding the Zacks Consensus Estimate [1][2] Financial Performance - GAAP net income decreased to $103.6 million or 71 cents per share from $131.7 million or 86 cents per share year-over-year, impacted by high operating expenses [2] - Non-GAAP net income increased to $251.4 million or $1.73 per share compared to $242.6 million or $1.58 per share a year ago, beating the Zacks Consensus Estimate by 18 cents [2] - Quarterly net sales reached $1.04 billion, a 7% increase from $979.6 million in the prior year, driven by strong momentum in the Security and Compute verticals, surpassing the Zacks Consensus Estimate of $1.02 billion [3] Revenue Breakdown - Security Technology Group revenues were $551.9 million, up 11% from $498.7 million year-over-year, primarily due to demand for Guardicore Segmentation Solution and API security solutions [4] - Delivery segment revenues fell to $320 million from $329.4 million year-over-year, but exceeded the estimate of $301.6 million [5] - Compute segment revenues increased to $171.4 million from $151.5 million in the prior year, driven by demand for cloud infrastructure services, beating the estimate of $165.7 million [5] Regional Performance - Net sales from the United States were $527.6 million, a 4% year-over-year increase, while international revenues totaled $515.9 million, up from $470.8 million in the previous year [6] Operating Expenses and Margins - Total operating expenses rose to $892 million from $831.6 million year-over-year, while non-GAAP income from operations improved to $308.6 million from $281.5 million, with margins of 30% and 29% respectively [7] - Adjusted EBITDA increased to $444.4 million from $408.9 million in the prior year [7] Cash Flow and Share Repurchase - Akamai generated $459.1 million in cash from operating activities compared to $430.9 million in the prior year [8] - As of June 30, 2025, the company had $850.3 million in cash and cash equivalents and repurchased approximately 3.9 million shares for around $300 million [9] Future Outlook - For Q3 2025, Akamai expects revenues between $1.03 billion and $1.05 billion, with a non-GAAP operating margin projected at 28% [10] - For the full year 2025, revenues are expected to be in the range of $4.135 billion to $4.2 billion, with non-GAAP earnings projected between $6.60 and $6.80 per share [11]

Core Insights - Akamai Technologies is a significant player in the content delivery network (CDN) and cloud infrastructure services market, valued at $11.5 billion [1] - The company aims to enhance content delivery over the Internet, addressing issues like traffic congestion and bandwidth constraints, particularly in high-definition video streaming [2] Financial Performance - Akamai reported a 3% year-over-year revenue increase, reaching $1.02 billion, driven by strong demand in Security and Compute verticals [6] - GAAP net income decreased to $123.2 million or $0.82 per share, down from $175.4 million or $1.11 per share in the previous year, primarily due to high operating expenses [4] - Non-GAAP net income slightly increased to $256.1 million or $1.70 per share, surpassing the Zacks Consensus Estimate by $0.12 [5] Revenue Breakdown - Security Technology Group revenues grew by 8% year-over-year to $530.7 million, supported by demand for Guardicore Segmentation Solution and API security solutions [7] - The Delivery segment's revenues fell to $319 million from $351.8 million in the previous year, while the Compute segment saw an increase to $165.5 million from $144.5 million [8] Management Outlook - For Q2 2025, Akamai anticipates revenues between $1.012 billion and $1.032 billion, with a projected non-GAAP operating margin of 28% [10] - For the full year 2025, the revenue forecast is between $4.050 billion and $4.2 billion, with non-GAAP earnings projected at $6.10 to $6.40 per share [12] Market Position and Future Potential - Despite current growth challenges, Akamai may have opportunities in the emerging AI economy if it can develop new growth drivers [13]

Core Viewpoint - Akamai Technologies, Inc. reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding expectations, driven by robust demand across various markets, particularly for its Guardicore platform and cloud services [1] Financial Performance - GAAP net income decreased to $123.2 million or $0.82 per share from $175.4 million or $1.11 per share year-over-year, impacted by high operating expenses [2] - Non-GAAP net income was $256.1 million or $1.70 per share, slightly up from $255.5 million or $1.64 per share a year ago, beating the Zacks Consensus Estimate by $0.12 [2] - Quarterly net sales reached $1.02 billion, a 3% increase from $987 million in the previous year, surpassing the Zacks Consensus Estimate of $1 billion [2] Revenue Breakdown - Security Technology Group revenues were $530.7 million, an 8% increase from $490.7 million year-over-year, driven by demand for Guardicore Segmentation Solution and API security solutions [3] - Delivery segment revenues declined to $319 million from $351.8 million year-over-year but exceeded estimates [4] - Compute segment revenues increased to $165.5 million from $144.5 million in the prior year, supported by enterprise customer traction and deal wins [5] Geographic Performance - U.S. net sales were $528.7 million, up 3% year-over-year, while international revenues totaled $486.4 million, an increase from $474.6 million in the previous year [6] Operating Expenses and Margins - Total operating expenses rose to $860.6 million from $820.2 million year-over-year, while non-GAAP income from operations improved to $307 million with a margin of 30% [7] - Adjusted EBITDA increased to $441.3 million from $417.2 million in the previous year [7] Cash Flow and Share Repurchase - Akamai generated $251.2 million in cash from operating activities, down from $351.9 million in the prior year [8] - The company had $1.09 billion in cash and cash equivalents as of March 31, 2025, and repurchased approximately 6.2 million shares for around $500 million during the quarter [8] Future Outlook - For Q2 2025, Akamai expects revenues between $1.012 billion and $1.032 billion, with a non-GAAP operating margin projected at 28% [10] - Non-GAAP earnings are forecasted to be between $1.52 and $1.58 per share, with capital expenditure expected to be around 22% to 23% of projected total revenues [11] - For the full year 2025, revenues are anticipated to be between $4.050 billion and $4.2 billion, with non-GAAP earnings projected at $6.10 to $6.40 per share [12]

Financial Data and Key Metrics Changes - Akamai reported total revenue of $1.02 billion for Q4 2024, representing a 3% year-over-year increase [45] - Non-GAAP earnings per share (EPS) was $1.66, exceeding guidance and down 2% year-over-year [50] - Security revenue reached $535 million, growing 14% year-over-year, while compute revenue grew to $167 million, a 24% year-over-year increase [46][48] Business Line Data and Key Metrics Changes - Security became the majority revenue contributor for the first time, surpassing $2 billion in annual revenue and growing 16% year-over-year [10] - Cloud computing revenue was $630 million, growing 25% over 2023, with cloud infrastructure services contributing $230 million, up 32% [10] - Combined revenue from security and compute accounted for 69% of total revenue in Q4 [48] Market Data and Key Metrics Changes - International revenue was $490 million, up 2% year-over-year, representing 48% of total revenue [49] - The company anticipates a decline in delivery revenue to shrink to about 10% year-over-year in 2025, with signs of improvement in the delivery marketplace [36] Company Strategy and Development Direction - Akamai is transforming from a CDN pioneer to a cybersecurity and cloud computing company, focusing on expanding its security offerings and cloud infrastructure services [9][12] - The company aims to achieve a compounded annual growth rate (CAGR) of about 10% for security products over the next three to five years, targeting over $3 billion in security revenue by the end of the decade [16][17] - Akamai plans to focus more on compute investments, expecting cloud infrastructure services ARR to grow by 40% to 45% in 2025 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong demand for security solutions and cloud infrastructure services [41] - The company expects to see revenue growth acceleration in 2025, driven by improvements in product mix and operational efficiency [40] - Management acknowledged challenges from foreign exchange fluctuations and the impact of a major customer pursuing a DIY strategy [37][59] Other Important Information - Akamai's capital expenditures (CapEx) for Q4 were $193 million, representing 19% of revenue, with plans to continue share buybacks [51][52] - The company expects to generate approximately $85 million to $105 million in revenue from the Edgio transaction in 2025 [53] Q&A Session Summary Question: Can you expand on the large cloud deal and the competitive environment? - Management indicated that the customer is increasing usage of Akamai's cloud infrastructure services and that a data center is being built in Scandinavia to meet specific needs [81][82] Question: Is the $100 million compute deal the same as the five-year deal with the largest delivery customer? - Management confirmed that they are the same customer [86] Question: Can you elaborate on the $60 million headwind from the largest customer? - The headwind is primarily due to the customer's DIY build-out, which will reduce reliance on Akamai's services [92] Question: What is the outlook for retaining Edgio contracts? - Management expressed confidence in retaining the Edgio customer base, with no significant churn anticipated [120] Question: What steps are being taken to minimize disruption from changes in the go-to-market strategy? - Management is in the early stages of a two-year process to transform the sales force and improve account segmentation and pricing strategies [105][106]