Akamai Revenue, Profit Up10 Feb, 2011 By: Chris Tribbey
2010 marked the first year of $1 billion in revenue for cloud content technology company Akamai, the company said Feb. 9.
The Cambridge, Mass.-based company reported fourth-quarter revenue of $284.7 million, a 12% jump from the same quarter in 2009. Full-year revenue was up 19% to $1.02 billion.
But lower-than-expected guidance for the first quarter of 2010 saw shares in the company dip by more than 15% to under $41. Akamai is expecting first-quarter revenue of $265 million to $275 million, up 10% to 15% from the first quarter of 2010, and earnings per share to be flat to up 2 cents at 35 cents to 37 cents.
“We've closed some significant long-term renewals with top customers, particularly in media and entertainment,” said J.D. Sherman, Akamai’s chief financial officer, during a conference call with investors. “Over the past three to four months, we renewed long-term deals with eight of our top 10 media customers, including Netflix. We expect these contracts to drive significant growth later in the year, but they will represent a step down in revenue for [the first quarter] due to normal renewal price adjustments.”
Akamai recently signed a multi-year agreement to support Netflix’s streaming needs.
Fourth-quarter profit for the company stood at $76.5 million, up 22% year over year, with full-year profit at $271.7 million, up 19% from 2009.
“With strength across cloud computing and online digital media solutions, Akamai completed its first $1 billion-revenue year in 2010,” company CEO Paul Sagan said. “With our unique, distributed network and growing portfolio of solutions, we believe we are well positioned to help our customers grow as use of cloud computing, online commerce, software as a service and online media continue to proliferate around the world.”
MTV, Epix, Starz and Fox Interactive are among Akamai’s customers. The company says it’s responsible for delivery of 15% to 30% of all Web traffic, and also delivers mobile content and applications.