Paul Sagan, who has been Akamai Technologies' (Nasdaq: AKAM) chief executive since 2005, and under who's watch the content distribution network has seen revenues increase more than four fold, is stepping down from his post by the end of the year.
The Cambridge, Mass.-based company said Sagan, who began as president there in 1999, will continue to lead the company until Akamai, which has begun a broad search to replace its 53-year-old CEO, names his replacement.
"Starting a search now means the board and I can take the time we need to find the right person to elevate the company to the next level and achieve the $5 billion revenue goal I set for us by the end of this decade," Sagan said on a conference call. "I intend to vigorously lead the company until my successor has been named."
Over the past several years, as CDN service increasingly has become commoditized, Sagan has looked for new ways to add to the company's value proposition. Akamai has increasingly become more of an end-to-end provider of services, especially in the fast-growing online video industry.
"They're positioning themselves as a cloud-computing applications-services provider, while their competitors just sell core CDN," B. Riley & Co. analyst Sameet Sinha said. "Paul has been around a long time in a tough industry."
Sagan's departure isn't likely to result in a major change in how Akamai does business, said analyst Donna Jaegers, at D.A. Davidson & Co. And, she said, the change in management also means that Akamai will, for the moment, move off the radar of firms looking for solid acquisitions.
The company also Wednesday reported first quarter earnings of $43.2 million, or 24 cents a share, down from $50.6 million, or 26 cents a share, a year ago. Normalized net income was $75.2 million, or 41 cents per share, compared to $72.2 million, or 38 cents per share, in the previous year. The results beat Wall Street expectatioins of 38 cents per share.
Revenue was $319 million, up 16 percent, from $276 million a year ago; analysts had expected revenue of $310.7 million.
Akamai was down nearly 6 percent in pre-market trading to $36.58. Its seen a 52-week range of $18.25 to $41.25.
- see the earnings results
- see this Bloomberg article
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