Akamai Technologies Buys Lumen's Select Customer Contracts, Sees FY24 EPS & Revenue Accretion

Akamai Technologies Inc AKAM acquired select Content Delivery Network (CDN) contracts from Lumen Technologies Inc LUMN. The financial terms were not disclosed.

With the acquisition, AKAM plans to extend its offerings and support to Lumen customers looking for an enterprise solution to their content delivery needs.

The company expects the buyout to add around revenue of $40 million–$50 million and be accretive to adjusted adjusted EPS by $0.08–$0.12 for FY24. 

Both companies will operate under a transition services agreement for the first 90 days, after which Lumen plans to wind down its content delivery services. 

AKAM expects no material impact of the acquisition on FY23 results and will provide further updates during the Q3 FY23 earnings call on November 7, 2023.

"As these new customers come on to Akamai Connected Cloud, they will not only have a reliable, best-in-class delivery solution for their ongoing needs, they will also have the opportunity to tap into the full portfolio of Akamai solutions to help them power and protect their businesses into the future," said Adam Karon, chief operating officer and general manager of the Cloud Technology Group.

As of June 30, 2023, AKAM's cash, cash equivalents, and marketable securities stood at $1.0 billion.

Also Read: Akamai Technologies Raises $1.08B Via Debt

Price Action: AKAM shares are trading higher by 1.79% at $107.62 and LUMN shares by 6.49% at $1.3950 on the last check Tuesday.