Nov 6 (Reuters) - Akamai Technologies ( AKAM ) forecasts
fourth-quarter revenue above Wall Street estimates on Thursday,
buoyed by strong demand for its content delivery network
offerings and AI-cloud infrastructure services.
Shares of the company were up nearly 6% in extended trade.
Companies are investing heavily to secure applications and
web infrastructure amid accelerating adoption of cloud
technologies, benefiting Akamai's ( AKAM ) security and compute units.
The cybersecurity company expects fourth-quarter revenue
between $1.07 billion and $1.09 billion with the midpoint above
analysts' average estimate of $1.07 billion, according to LSEG
data.
"AI is a tailwind for us, pretty much across the board," CEO
Tom Leighton told Reuters.
Its cloud-computing revenue grew 8% to $180 million in
the third quarter.
While the company raised the midpoint of its annual revenue
forecast, it lowered its upper limit. It now expects 2025 sales
between $4.18 billion and $ 4.20 billion, compared with its
earlier outlook of $4.14 billion to $4.21 billion.
"As we have better visibility into the full year, and we
have another quarter now, we narrowed the range," CEO Leighton
said.
Akamai's ( AKAM ) customers include Adobe, eBay ( EBAY ) and
Electronic Arts ( EA ), as well as the U.S. Defense and Labor
departments.
The company provides content delivery network services to
optimize web performance and reduce bandwidth congestion.
However, it is facing mounting pressure as tech giants such
as Netflix ( NFLX ) and Apple ( AAPL ) continue to build out
their own content delivery networks, posing a threat to Akamai's ( AKAM )
traditional CDN business.
Delivery revenue was down 4% to $306 million in the third
quarter.
It posted third-quarter revenue of $1.06 billion, beating
analysts' consensus estimate of $1.04 billion.
Adjusted earnings of $1.86 per share also beat estimates.