WEBVTT - Akamai CEO Tom Leighton Talks Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Keep an eye on

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<v Speaker 1>Akamai shares today, somewhat volatile after posting second quarter results

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<v Speaker 1>that across the board in general beat estimates. But you

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<v Speaker 1>have to read between the lines as to where there

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<v Speaker 1>was perhaps a bit of a pullback or a miss

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<v Speaker 1>when it came to compute, for example, but there fully

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<v Speaker 1>forecast that was raised. Tom Layton, Akami CEO, joins us

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<v Speaker 1>now to demiss the five for us, Tom, because it's interesting.

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<v Speaker 1>You have Paybisana here really talking about lots of moving

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<v Speaker 1>parts and ultimately they see fairly cloudy still of what

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<v Speaker 1>the ultimate positioning is of the business. Can you tell

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<v Speaker 1>it you're really going in on well, cloud infrastructure here,

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<v Speaker 1>not just content delivery, not just security.

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<v Speaker 2>Oh yeah, security majority of our revenue cloud infrastructure services.

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<v Speaker 2>My goodness. We were up thirty percent year every year,

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<v Speaker 2>and we think that's going to accelerate. So by the

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<v Speaker 2>end of this year will be up forty percent plus

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<v Speaker 2>year over year. Tremendous market opportunity there, strong tailwinds of

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<v Speaker 2>course from jen Ai. So I think very exciting results

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<v Speaker 2>for Akamai. You know, a strong beat on the quarter,

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<v Speaker 2>very profitable earnings, per share up nine percent and a

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<v Speaker 2>dollar and seventy three cents, and I think a very

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<v Speaker 2>good outlook, raising guidance for the year.

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<v Speaker 1>So maybe just a little bit of a pause for investors.

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<v Speaker 1>I mean, the shads are still down over the year

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<v Speaker 1>or twelve months. Tom, I'm sort of interested therefore, on

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<v Speaker 1>what they're not getting. What is it about the opportunity

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<v Speaker 1>in for example, cloud infrastructure. Why take on the hyperscals.

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<v Speaker 2>Well, it's a tremendous market opportunity. Our customers have asked

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<v Speaker 2>us to do that. You know, we with our distributed platform,

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<v Speaker 2>which is unique in the marketplace. We're in seven hundred

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<v Speaker 2>and fifty cities. With our points of presence, we can

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<v Speaker 2>get enterprise computer instances. They're containers closer to the end users,

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<v Speaker 2>and that gives you lower latency and better performance and

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<v Speaker 2>for a lot of applications that matters. Also we could

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<v Speaker 2>do it at a lower price point. In fact, one

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<v Speaker 2>of the hyperscalers is an early adopter of our new

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<v Speaker 2>managed container service. They want to have their compute instances

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<v Speaker 2>and hundreds of cities around the world, which is something

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<v Speaker 2>Allly Akamai can do.

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<v Speaker 1>Interesting. I mean, maybe people are looking at what drove

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<v Speaker 1>some of the revenue beat and they're looking at FX,

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<v Speaker 1>but they're also looking at TikTok inclusion. Have you decided

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<v Speaker 1>that the risk of being band is just off the

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<v Speaker 1>table and you're going to really be starting talking about

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<v Speaker 1>this client once again?

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<v Speaker 2>Oh, there's always risk, though it seems that from what

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<v Speaker 2>we're hearing from public sources that you know, a deal

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<v Speaker 2>has basically been structured, and you know, there's obviously caught

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<v Speaker 2>up in trade negotiations, but at this point it seems

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<v Speaker 2>like the ban has been postponed several times and so

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<v Speaker 2>we're not seeing anything that suggests that that's going to

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<v Speaker 2>change in the near future.

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<v Speaker 1>You do that content delivery for them. It's interesting that

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<v Speaker 1>security is where a lot of your growth and as

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<v Speaker 1>you say, the most part of your revenue has been

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<v Speaker 1>coming from. What insecurity is driving that growth? Where are

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<v Speaker 1>people coming to you?

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<v Speaker 2>Yeah, we have the market leading solutions for web apt firewall,

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<v Speaker 2>for bought management, for API security, for stopping ransomware with segmentation,

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<v Speaker 2>and of course the attack rates have been going way up,

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<v Speaker 2>the penetrations have been going way up, and we have

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<v Speaker 2>the solution. It stops the damage caused by those attacks.

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<v Speaker 2>So if the ransomware gets in, we identify it quickly,

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<v Speaker 2>we don't let it spread, and that protects our customers

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<v Speaker 2>so they don't have these huge costs associated with being

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<v Speaker 2>shut down by ransomware.

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<v Speaker 1>Of course, Jeneral to AI in many ways, making the

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<v Speaker 1>field of security ever more evolving and nimble is what's crucial. Tom.

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<v Speaker 1>What I'm also so interested in is the way in

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<v Speaker 1>which you're thinking about education here in the United States,

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<v Speaker 1>skills in particular and upskilling. This is something that the

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<v Speaker 1>US government is calling for a lot, and I'm particularly

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<v Speaker 1>in the era of Generator Ai. How are you seeing

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<v Speaker 1>the skill set and the pool of talent? Is it

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<v Speaker 1>good enough for you?

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<v Speaker 2>It's going to change with Jenai. We're seeing tremendous efficiencies

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<v Speaker 2>across most job types at Akamai, so that our employees

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<v Speaker 2>can do more in the same amount of time by

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<v Speaker 2>leveraging Genai. And I think you'll see training. We're doing

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<v Speaker 2>training ourselves so that employees will change maybe how they

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<v Speaker 2>do certain things, and they'll be more efficient by learning

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<v Speaker 2>how to use the Genai tools. I think it's really

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<v Speaker 2>very exciting and it probably is going to be a

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<v Speaker 2>sea change over time and education.

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<v Speaker 1>Tom Layton a Akamai is always great to have you

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<v Speaker 1>on after your numbers. Thank you very much for joining

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<v Speaker 1>the show.