Akamai forecasts quarterly revenue above estimates on cybersecurity demand

(Reuters) - Akamai Technologies forecast third-quarter revenue and profit above estimates on Thursday, betting on strong demand for its cybersecurity services as businesses spend heavily on safeguarding their systems against rising threats from hackers.

Shares of the Cambridge, Massachusetts-based company rose 4% in extended trading.

Akamai expects third-quarter revenue in the range of $988 million to $1.01 billion, compared with analysts' average estimate of $996.7 million, according to LSEG data.

Akamai also narrowed its expected range for 2024 total sales to between $3.97 billion and $4.01 billion, compared with its previous forecast of between $3.95 billion and $4.02 billion. The midpoint remains unchanged at $3.99 billion, in line with estimates.

The company has also noted that the rise of generative artificial intelligence has made it easier for attackers to launch malware and ransomware, helping demand for its services, TD Cowen analysts wrote in a research note published in May.

Akamai forecast quarterly adjusted net income of between $1.56 to $1.62 per share, above estimates of $1.54 per share.

The company also provides cloud platforms and content delivery services which help speed up the delivery of web content. Its customers include Adobe, eBay and Electronic Arts, as well as the U.S. Defense and Labor departments.

Akamai's second-quarter revenue rose 5% to $980 million, beating estimates of $977.2 million.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D'Silva)

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