Wrapping up Q1 earnings, we look at the numbers and key takeaways for the content delivery stocks, including Akamai (NASDAQ: AKAM) and its peers.
The amount of content on the internet is exploding, whether it is music, movies and or e-commerce stores. Consumer demand for this content creates network congestion, much like a digital traffic jam which drives demand for specialized content delivery networks (CDN) services that alleviate potential network bottlenecks.
The 4 content delivery stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
Luckily, content delivery stocks have performed well with share prices up 18.1% on average since the latest earnings results.
Akamai (NASDAQ: AKAM)
Founded in 1999 by two engineers from MIT, Akamai (NASDAQ: AKAM) provides software for organizations to efficiently deliver web content to their customers.
Akamai reported revenues of $1.02 billion, up 2.9% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and EPS guidance for next quarter topping analysts’ expectations.
"Akamai delivered a solid start to the year with our results meeting or exceeding expectations," said Dr. Tom Leighton, Akamai's Chief Executive Officer.
Akamai achieved the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.2% since reporting and currently trades at $80.22.
Is now the time to buy Akamai? Access our full analysis of the earnings results here, it’s free.
Best Q1: Fastly (NYSE: FSLY)
Founded in 2011, Fastly (NYSE: FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.
Fastly reported revenues of $144.5 million, up 8.2% year on year, outperforming analysts’ expectations by 4.8%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Fastly scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $6.97.
Is now the time to buy Fastly? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: F5 (NASDAQ: FFIV)
Initially started as a hardware appliances company in the late 1990s, F5 (NASDAQ: FFIV) makes software that helps large enterprises ensure their web applications are always available by distributing network traffic and protecting them from cyberattacks.
F5 reported revenues of $731.1 million, up 7.3% year on year, exceeding analysts’ expectations by 1.7%. Still, it was a mixed quarter as it posted EPS guidance for next quarter missing analysts’ expectations.
Interestingly, the stock is up 12.8% since the results and currently trades at $298.88.
Read our full analysis of F5’s results here.
Cloudflare (NYSE: NET)
Founded by two grad students of Harvard Business School, Cloudflare (NYSE: NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.
Cloudflare reported revenues of $479.1 million, up 26.5% year on year. This print surpassed analysts’ expectations by 2.1%. Taking a step back, it was a mixed quarter as it also logged a solid beat of analysts’ billings estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
Cloudflare scored the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 49.8% since reporting and currently trades at $186.50.
Read our full, actionable report on Cloudflare here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
