Akamai followed up a weak fourth quarter with a stronger than expected first quarter performance. The cloud CDN provider checked in with revenues substantially above both guidance and estimates, and matched their forecast for non-GAAP earnings per share while the street was just looking for $0.46. Here are their numbers in some context:
| $ in millions | Q1/12 | Q2/12 | Q3/12 | Q4/12 | Q1/13 | Q2/13
(guidance) |
|---|---|---|---|---|---|---|
| Revenue | 319.4 | 331.3 | 345.3 | 377.9 | 368.0 | 368-378 |
| COS | 102.6 | 107.5 | 110.0 | 111.9 | 120.4 | |
| SG&A+R&D | 140.4 | 139.4 | 149.7 | 164.4 | 140.0 | |
| Gross Margin % | 67.8% | 67.6% | 68.1% | 70.4% | 67.2% | |
| Adj. EPS | 0.41 | 0.43 | 0.43 | 0.54 | 0.51 | 0.44-0.46 |
Guidance for the second quarter was also higher than expected on the top line. Some of the extra revenue apparently comes from the delayed winding down of a large video customer. Akamai last quarter said that some of its social media video traffic wasn’t economical and it would wind that down, and the market did not respond well. The effects have been more muted, however, and thus the stock price is recovering what it lost after hours.
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Any idea who the large video customer was and where their business went?
Or should I say will go as it is still unwinding…
Netflix. They are building their own cdn.