Akamai posts strong Q1 on better-than-expected traffic growth

finance earnings
Akamai’s total revenue was $669 million for the quarter, an 11% increase over first quarter of 2017. (Pixabay)

Akamai’s strong first-quarter results, highlighted by an 11% increase in overall revenues, earned the company the praise of multiple industry analysts.

Cowen Equity Research analyst Colby Synesael said Akamai’s quarterly results and increased 2018 guidance were driven by higher traffic volume relative to expectations with traffic growth accelerating for the third quarter in a row.

“Traffic growth remains above the Y/Y market growth rate of 24% and mgmt. added was meaningfully higher than last quarter. Akamai saw robust growth from gaming as well as OTT video while also benefiting from a number of sporting events (i.e. Winter Olympics) during the quarter,” Synesael wrote in a research note.

Oppenheimer analyst Timothy Horan said Akamai beat its estimates for both EBITDA and earnings per share.

“Overall volume growth accelerated, driven by OTT, which is in early stages on stable price trends. The company has cut expenses and guided for a 200bps improvement in margins this year, helped by a strong revenue guide. AKAM looks inexpensive at 9x '19E EBITDA with the potential to grow FCF/share to the $5 range by 2021, helped by stock buybacks,” Horan wrote in a research note.

RELATED: Akamai, Limelight report varying second-quarter traffic patterns

Akamai’s total revenue was $669 million for the quarter, an 11% increase over first quarter of 2017. Media and Carrier Division revenue was $316 million, up 6% year over year. However, GAAP net income was $54 million, down 28% year over year and non-GAAP net income was $136 million, down 19% year over year.

"We are very pleased with the results of our first quarter performance, which featured continued outstanding growth in our security business, substantial improvement in our media business, margin expansion and accelerated revenue growth overall," said Akamai CEO Dr. Tom Leighton in a statement.

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