Akamai's lower prices lead to Q2 CDN revenue growth

finance earnings
Akamai’s revenues got a big boost from global customers. (Pixabay)

Akamai’s second-quarter earnings were marked by overall revenues totaling $663 million, up 9% year over year.

"We are very pleased with our second-quarter performance, highlighted by outstanding growth in our security portfolio, further improvement in our Media and Carrier Division, overall margin expansion and very strong non-GAAP earnings growth of 34% year over year," said Akamai CEO Tom Leighton in a statement.

Broken down by business segment, Akamai’s web division revenue was $351 million, up 11% year over year, and its media and carrier division revenue was $312 million, up 8% year over year. And the company’s cloud security solutions revenue jumped 33% to $155 million.

Oppenheimer analyst Timothy Horan said that Akamai’s strong security results were helped along by the company’s recently completed acquisition of Nominum. He said that several factors should contribute to continued growth for Akamai’s CDN business.

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“Over the last 18 months, AKAM has slashed CDN prices to maintain share, traffic has accelerated and better revenue growth should follow. This is helped by OTT video and gaming (World Cup and Fortnite), both of which are in the early days of adoption,” Horan wrote in a research note.

Akamai’s revenues got a big boost from global customers. U.S. revenue was $413 million, up 3% year over year, and international revenue was $250 million, up 21% year over year.

The company said its GAAP net income was $43 million, down 24% from the second quarter of 2017, which the company said was impacted by the Akamai Foundation endowment.