Akamai Earnings Preview: Loss Of Customers To Weigh On Results

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Akamai is scheduled to release its Q3 fiscal 2016 results on October 25th and going by the prevalent trend, it appears that the company won’t be able to report promising results. Revenues from Akamai’s top technology clients such as Apple and Facebook are declining as these companies are investing in their own network delivery infrastructure. Revenue from Akamai’s six biggest technology companies accounted for just 11% of its net sales in Q2 2016, down from 18% in the year ago period. This factor is expected to have had significantly influenced Akamai’s revenues for the third quarter, as well. However, Akamai’s CEO believes that the worst may be behind them. While the decline in prices from some customers can impair the company’s margins in the near term, it expects to see some improvement next year. Nevertheless, near term results would be suppressed due to a permanent shift in several customers’ approach, partially offset by increased web traffic due to the recently concluded Olympic games.

akamai Q3 earnings preview

 

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