Can Higher Revenues Benefit Akamai This Earnings Season?

Akamai Technologies, Inc. AKAM is scheduled to release second-quarter 2025 results on Aug. 7, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 7.6%. It pulled off a trailing four-quarter earnings surprise of 4.8%, on average. The company is expected to report higher revenues year over year, backed by healthy demand in security and compute verticals across multiple end markets. Management’s focus on expanding its product portfolio to cater to advanced use cases is a tailwind.Factors at PlayDuring the quarter, Akamai announced that Devsisters Inc. has opted to deploy its state-of-the-art cloud computing platform, Akamai Cloud, to bolster the latter’s global game services infrastructure. Through this deployment, the leading Korea-based game developer anticipates a smoother deployment and scaling process for new game releases, large-scale updates and in-game events, ensuring high-quality experiences for its growing global audience. In the second quarter, Akamai forged a strategic partnership with Cloudinary to bring Cloudinary’s AI-powered video solution to Akamai Video Manager customers. This will make video management and delivery easier by alleviating common video challenges, including performance optimization and time-intensive post-production work. Akamai also collaborated with global IT services leader FPT to help customers build, deploy and optimize distributed cloud applications on Akamai Cloud. This will empower businesses to run modern, cloud-native applications on a platform built for performance and scale, regardless of the customer’s stage in their cloud journey. These are likely to have generated incremental revenues in the quarter.During the second quarter, Akamai launched Firewall for AI, a new solution that provides multilayered protection for AI applications against unauthorized queries, adversarial inputs and large-scale data-scraping attempts. It introduced App & API Protector Hybrid that safeguards applications, APIs, microservices and workloads against a range of sophisticated threats while delivering resilience, scalability and simplified security management. In addition, the company enhanced Akamai API Security features to help customers stay ahead of evolving threats to APIs. The quarter also marked the launch of Akamai DNS Posture Management, an industry-first solution that offers unified, multi-cloud visibility over all DNS assets. The solution provides real-time monitoring and guided remediation across all major DNS providers, enabling security personnel to detect and respond to DNS-based attacks, certificate security risks, vulnerabilities and misconfigurations that weaken an organization’s security posture. Such innovative product launches and upgrades are likely to be reflected in the upcoming quarterly results.Overall ExpectationsOur estimate for revenues from the security segment is pegged at $553 million, suggesting 10.9% year-over-year growth. Our revenue estimate for the compute vertical is $165.7 million, indicating a 9.4% improvement year over year. Revenues from the delivery segment are projected to be $301.6 million, implying an 8.4% decline. For the second quarter of 2025, the Zacks Consensus Estimate for revenues is pegged at $1.02 billion, indicating year-over-year growth from $980 million. The consensus estimate for adjusted earnings per share stands at $1.55, suggesting a decline from $1.58 reported a year ago.Akamai Technologies, Inc. Price and EPS Surprise Akamai Technologies, Inc. price-eps-surprise | Akamai Technologies, Inc. QuoteEarnings WhispersOur proven model does not predict an earnings beat for Akamai in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: Akamai carries a Zacks Rank #4 (Sell).Stocks to ConsiderHere are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:CommScope Holding Company, Inc. COMM is set to release quarterly numbers on Aug. 7. It has an Earnings ESP of +19.18% and sports a Zacks Rank #1. The Earnings ESP for Plug Power Inc. PLUG is +2.44% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Aug. 14.The Earnings ESP for Genpact Limited G is +0.78% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Aug. 7.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Akamai Technologies, Inc. (AKAM): Free Stock Analysis Report Genpact Limited (G): Free Stock Analysis Report Plug Power, Inc. (PLUG): Free Stock Analysis Report CommScope Holding Company, Inc. (COMM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks