Analyst Note
| Matthew Dolgin, CFA |Akamai’s third quarter followed a similar script to most recent quarters and was consistent with the performance we expect long-term. Security continues growing at a rapid pace and has shown little sign of slowing down, even as it now makes up 40% of total revenue and will have more than $1.3 billion in sales in 2021, more than all but a handful of cybersecurity firms. The content delivery network, or CDN, business, which Akamai rebranded earlier this year as its Edge Technology Group, struggles to grow and is one where we see little opportunity for a competitive advantage, hence our no-moat rating on the company. Still, Akamai’s execution remains stellar, judged by its continually expanding margins and seamless integration of numerous security acquisitions. We are slightly boosting our long-term forecast for security revenue growth and raising our fair value estimate by $2, to $80.