Even when the news is good, the future is behind a veil. That is the message I get from Akamai's quarterly earnings yesterday.
Revenues in Q1 were $764M, up 8% over last year, with cloud security in particular up 26% over the same period. Total US revenue was up 3%, while international revenue surged 16%. Non-GAAP earnings per share checked in at $1.20. Those were solidly above forecasts, and Q2 projections were within the expected range.
Those results were with less than one month of the global COVID-19 lockdowns that have led to soaring internet usage. With another full month under our belt and more clearly to come, the impending recession isn't hurting Akamai yet. But as of this morning the company's stock is trading down 4% or so anyway in the pre-market.
Investors were looking for more than that, especially for Q2. And for the full year, they got nothing, as rather than updating its guidance the company withdrew it, citing uncertainty. I'm a bit surprised that the markets didn't expect a cautious outlook. I mean, who in their right minds out there isn't a bit cautious in predicting things right now.
Hence, while the telecom and internet infrastructure sector is poised to be mostly undamaged by the impending recession or whatever it turns out to be, I think we will see a whole lot more caution coming out of the executive suites this earnings season. Nobody wants to be wrong, and even if the trends turn out strong nobody will really want to celebrate either. Solid, compassionate, and careful -- that's what we will see this earnings season.
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