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Akamai Reports Strong Top-Line Growth in 4Q17

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Reasons for revenue growth

Akamai Technologies (AKAM) posted 4Q17 financial results on February 6, 2018. Its top line increased 7.7% YoY (year-over-year) to nearly $663.5 million. 

However, on a constant currency basis, Akamai’s top line grew nearly 6.0% YoY to $616.0 million. In fiscal 2017, the company’s top line came in at $2.5 billion, up 7.5% YoY. On a constant currency basis, it increased 7.0% on an annualized basis.

In the graph above, we can see the total revenue growth in the last five quarters for Akamai. During this period, its revenues grew at a CAGR[1. compound annual growth rate] of 3.8%.

The company has easily outpaced its top-line guidance for the reported quarter. This was mainly attributable to strong demand for the security service coupled with the double-digit YoY growth of the Web segment during the holiday season.

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Analyst estimates and outlook

According to Yahoo Finance, of 26 analysts covering Akamai (AKAM) stock, four gave a “strong buy” recommendation and seven provided a “buy” rating. The remaining two analysts gave a “sell” rating on the stock. The average revenue estimate provided by these analysts for 1Q18 is $654.0 million.

The company projects its 1Q18 revenues to be $647.0 million–$659.0 million. For fiscal 2018, it expects revenues of $2.67 billion–$2.71 billion.

In January 2018, large IT players Microsoft (MSFT) and International Business Machines (IBM) also reported their financial results. Their revenues grew YoY 11.0% and 1.0%, respectively, on a constant currency basis.

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