Internet bandwidth pioneer Akamai Technologies this afternoon reported Q3 revenue and profit that both topped analysts' expectations, and said it increased its stock buyback authorization by $1.8 billion, but missed Wall Street's expectations with its forecast for this quarter.
The report initially sent Akamai shares up 3% in late trading, but the stock later gave up gains and traded down fractionally.
CEO Dr. Tom Leighton called the results "another excellent quarter," noting the company's "continued very strong growth of our security business, which now accounts for nearly 40% of our overall revenue."
Added Leighton, "We're particularly excited about our recent acquisition of Guardicore, a market leader in helping enterprises stop the spread of ransomware."
Revenue in the three months ended in September rose 9%, year over year, to $860 million, yielding a net profit of $1.45 a share, excluding some costs.
Analysts had been modeling $852 million and $1.39 per share.
Akamai's revenue in its Security Technology Group rose 26%, year over year, to $335 million. Revenue in its Edge Technology Group was flat with the prior-year period, at $526. Edge revenue would have been down 1% if not for currency effects, the company said.
Akamai said it it expanded its share repurchase authorization,
The Company also announces today that its Board of Directors has authorized a new, $1.8 billion share repurchase program, effective from January 1, 2022 through December 31, 2024. The new authorization is in addition to the Company's remaining stock purchase authorization of $321 million (as of September 30, 2021), which expires at the end of 2021. The Company's goals for the share repurchase program are to offset the dilution created by its employee equity compensation programs over time and provide the flexibility to return capital to shareholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities.
Akamai will host a conference call at 4:30 pm this afternoon, Eastern time, during which it is expected the company will forecast its results for the December quarter. You can listen in to the conference call via the company's investor relations Web site.
For the current quarter, Wall Street is projecting for $897 million in revenue and a $1.43 profit per share.
Update: During the conference call with analysts, CFO Edward McGowan projected revenue this quarter of $883 to $908 million. At the mid-point, $895.5 million, that is below the average estimate on Wall Street for $899 million.
The profit forecast this quarter is also lower, at $1.37 to $1.44 per share versus the average estimate for $1.44.