McAfee, Akamai Q1 reports top expectations on security technology growth

Security legend McAfee, which is shedding its enterprise business, and bandwidth provider Akamai Technologies, which is transitioning to being more of an enterprise security company, both this afternoon reported Q1 results  that topped analysts’ expectations.

Akamai said its sales of its security software and services rose by 29%, year over year, to $310 million. The company raised its outlook for security sales growth this year.

McAfee said its consumer security business, which excludes revenue from the enterprise business that McAfee is selling off, rose by 25%, year over year. McAfee’s consumer products include the anti-virus software McAfee Total Protection.

McAfee and Akamai shares were both unchanged in late trading.  

Akamai CEO Tom Leighton said that the company was “pleased with our excellent start in 2021,” noting that “revenue, margins and earnings all [exceeded] expectations.”

Added Leighton, “We continued to capitalize on the substantial opportunities for our business, as demonstrated by the very strong growth of our security and edge applications solutions and strong traffic growth on the Akamai Intelligent Edge Platform.”

Akamai’s total revenue in the three months ended in March rose 10%, year over year, to $843 million, yielding a net profit of $1.38 a share.

Analysts had been modeling $830 million and $1.30 per share.

Akamai did not offer a forecast.

McAfee’s total revenue in the three months ended in March rose 13%, year over year, to $773 million, yielding a net profit of 44 cents a share.

Analysts had been modeling $732 million and 36 cents per share.

McAfee announced March 8th it would sell its enterprise security business to private equity firm Symphony Technology Group for $4 billion in cash. The enterprise business is categorized as “discontinued operations” within the quarterly results, while the remaining consumer business is continuing operations. 

For the current quarter, McAfee sees revenue from its remaining business, excluding enterprise, of $430 million to $434 million. For the full year, the company sees revenue from continuing operations in a range of $1.77 billion to $1.79 billion.

On a conference call Tuesday evening to discuss its report, Akamai management forecast revenue this quarter in a range of $839 million to $853 million, higher than consensus for $841 million. 

Akamai also raised its outlook for revenue this year to a range of $3.4 billion to $3.435 billion, up from a prior range offered in February of $3.37 billion to $3.42 billion. The company is projecting higher security revenue growth than it said previously. It expects security product growth this year in the “low 20s” as a percentage, which is better than the 18% to 20% the company had offered back in February.