Speaker 1: Ak am I currently falling. Now. This is after forecasts
Speaker 1: for revenue and unjusted earnings per Cheer came in well
Speaker 1: less than the market it wanted to see it here
Speaker 1: to walk us through some of the numbers and the
Speaker 1: content distribution part in particular, that seems to be the weakness.
Speaker 1: As a CEO, Tom Layton, and security revenue was good,
Speaker 1: up twenty one percent, Compute revenue good up twenty five percent.
Speaker 1: But it's a delivery revenue that isn't under pressure. Is
Speaker 1: that what's really hitting the revenue forecasts?
Speaker 2: Yes, exactly right. You know, Internet traffic always increases, but
Speaker 2: it's not in a straight line, and we have the
Speaker 2: world's largest content delivery network and so when there are dips,
Speaker 2: we feel it. The good news is that we really
Speaker 2: diversified our business beyond delivery to the point where now
Speaker 2: two thirds of our revenue is security and compute, and
Speaker 2: as you noted, both of those businesses are very strong,
Speaker 2: great growth and great potential. And I think over time,
Speaker 2: as we have more and more of our rebels from
Speaker 2: security and compute, you know the dips you get from
Speaker 2: time to time and Internet traffic we won't see as
Speaker 2: noticeably on our overall performance.
Speaker 1: Interesting diversification key what's took me my interest was a
Speaker 1: large social media customer optimizing its costs. As what was
Speaker 1: put forward as to why you've downgraded some of the outlooks.
Speaker 1: Who is the social media player? Are we seeing that
Speaker 1: more broadly.
Speaker 2: Or is it just one Well, we do have a
Speaker 2: very large social media company and they are cutting back
Speaker 2: as best they can on costs, you know, facing some
Speaker 2: geopolitical pressures, I would say more broadly. You know, we've
Speaker 2: seen sort of a week past couple of months in
Speaker 2: the gaming vertical and in video, and there's been a
Speaker 2: lot of reports out there talking about you know, subscriber numbers,
Speaker 2: you know, and traffic as a whole. And so we
Speaker 2: feel that because you know, we carried most of all
Speaker 2: the video out there and a very big for the
Speaker 2: gaming companies, and so that creates a little bit of
Speaker 2: a dip in our outlook for the year. That said,
Speaker 2: we raised our outlook on security and compute, both of
Speaker 2: those business is very strong.
Speaker 1: Tom, You're the perfect person to therefore ask, because I'm
Speaker 1: reading between the lines here, a geopolitically affected social media
Speaker 1: company has got to be TikTok, and I know that
Speaker 1: you have expertise when it comes to security, and we're
Speaker 1: broadly an exposure at the moment that we're seeing of
Speaker 1: US companies to China. How much you seeing geo politics
Speaker 1: weighing on your business and the business of your clients.
Speaker 2: Well, there is some concern there, and you know we
Speaker 2: made a disclosure that in particular, if the law does
Speaker 2: take effect banning TikTok, that could impact about a percent
Speaker 2: and a half of our revenue next year. You know,
Speaker 2: it shouldn't have a direct impact this year, and it
Speaker 2: remains to be seen if the law will go into effect.
Speaker 1: Are you trying to diversify out of exposure to China
Speaker 1: more more time?
Speaker 2: Well, we want to diversify our company as a whole.
Speaker 2: Today we have seven customers at one percent of revenue,
Speaker 2: and you know the goal is to have a broader
Speaker 2: and broader base, and I think we've done a really
Speaker 2: good job of that, both within the customer base and
Speaker 2: also across product lines and geographies, so that you know,
Speaker 2: you won't see much of an impact. You know, as
Speaker 2: we go forward, when you know particular things happen on
Speaker 2: the political stage, or you get a dip in traffic.
Speaker 1: And I mean with the wealth of patterns that you
Speaker 1: have and the focus on security. Where are we in
Speaker 1: the cybersecurity landscape? How much are you seeing in particularly
Speaker 1: the age of artificial intelligence, it becomes harder and harder
Speaker 1: to ensure that we are protected in some way from
Speaker 1: our data.
Speaker 2: Yeah, things are in a very challenged state with cybersecurity,
Speaker 2: particularly with the advances in gen ai, which as of
Speaker 2: now are very helpful to the attacker. It's much easier
Speaker 2: for them to generate very malicious male where we're seeing
Speaker 2: a lot more breaches and I think the key now
Speaker 2: really is to develop the internal layer of defense for
Speaker 2: an enterprise because probably you're going to get breached, and
Speaker 2: the key is to identify it quickly and to proactively
Speaker 2: block it spread. And there we have the market leading
Speaker 2: solution with guardacor to stop the spread of ransomware and
Speaker 2: data exfiltration malware. And that's a very rapidly growing segment
Speaker 1: For US and a key acquisition made Tom Lighton, thank
Speaker 1: you so much spending time with us, Yakama and CEO