(Reuters) – Akamai Technologies forecast third-quarter revenue and profit above Wall Street estimates on Tuesday, helped by strong demand for its cloud security services amid growing risks of cyber threats, sending shares up nearly 7% in extended trading.
The Cambridge, Massachusetts-based company forecasts revenue to be between $937 million and $952 million for the quarter ending Sept. 30, compared with analysts’ average estimate of $931 million, according to Refinitiv data.
The company expects adjusted profit per share for the third quarter to be between $1.48 and $1.52, while analysts estimated $1.41.
A rise in cyber attacks amid the rapid digital transformation taking place across industries has lifted the demand for cybersecurity software.
Akamai also raised its full-year revenue forecast to between $3.77 billion and $3.80 billion, compared with its prior projection of $3.74 billion to $3.79 billion.
It expects full-year profit per share between $5.87 and $5.95, compared with market estimate of $5.75.
“The big surprise is seeing security accelerate, which was the main investor concern heading into the print,” said Rishi Jaluria, managing director, software, at RBC Capital Markets.
“Waiting to hear more color from management on compute, as well as why delivery was a little light, in spite of what should be a better pricing environment,” Jaluria added.
Akamai counts the U.S. Department of Labor, the Census Bureau and the Department of Defense among its customers, besides private players such as Adobe, eBay, and Electronic Arts.
Its second-quarter revenue rose about 4% to $935.7 million, beating Wall Street estimate of $929.7 million.
Security and compute revenue, which formed 59% of the company’s total revenue in the quarter, grew 14% over the year earlier, the company said.
Excluding items, the company’s profit per share was $1.49, compared with analysts’ expectations of $1.41.
(Reporting by Zaheer Kachwala and Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)
