Akamai Jumps On Better Than Expected Results

Akamai’s stock was up almost 10% in after-hours trading following its better than expected Q3 earnings. The company’s CEO had stated during the last quarterly earnings call that the worst was behind them. He claimed that while a decline in prices from some customers can impair the company’s margins in the near term, it expects to see some improvement next year. And the company was able to report good results in the third quarter itself, with business other than Internet platform holding strong.

Revenues from Akamai’s six big technology clients: Amazon, Apple, Google, Facebook, Microsoft, and Netflix, has been declining at a rapid pace because these companies have been investing in their own content delivery networks. Excluding these clients, Akamai’s revenues were up 15% year-over-year driven by Cloud Security Solutions, Performance and Security Solutions, and Services and Support Solutions.

Media Delivery Solutions is a cause of concern for the company for the aforementioned reasons, as its revenues were down 14% year-over-year. Akamai was banking on a significant improvement in traditional media companies’ video business, in tandem with the Euro Cup and Olympic Games, to provide a push to its business. However, things did not turn out as expected on that front.

Have more questions about Akamai? See the links below:

• What’s Akamai’s Revenue & Earnings Breakdown Based On Expected 2016 Results?
• What’s Akamai’s Fundamental Value Based On Expected 2016 Results?
• How Has Akamai’s Revenue Composition Changed In The Last Five Years?
• What Has Led To A ~100% Increase In Akamai’s Revenues & EBITDA In The Last Five Years?
• By What Percentage Can Akamai’s Revenues Grow Over the Next Five Years?
• How Are Akamai’s Revenue & EBITDA Composition Expected To Change By 2020?

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