Akamai beats estimates, posts record revenues

Akamai surprised analysts who predicted the company's fourth-quarter results would disappoint, as the company reported record revenue of $212.6 million for the quarter, up 16 percent from 2007's results and 8 percent from its Q32008 performance. Akamai had net income for the quarter of $82.2 million or $0.44 per diluted share. Revenue for 2008 climbed to $791 million, up 24 percent from 2007.

Akamai CEO Paul Sagan was obviously pleased with the results, as reports earlier this week suggested these earnings results may have been weakened by slowdowns in the marketplace.

"Even if the external environment became more challenging, we were able to grow revenue and earnings throughout the year," Sagan said on the earnings call. "At the same time we continued to make strategic investments that we believe will enhance our product portfolio and increase our ability to make the Internet work better for our customers."

Akamai reported that its eCommerce sector experienced the greatest growth among its verticals, with revenue from the group up 23 percent over 2007. It also reported strong growth in its international operations, seeing the revenue from this part of the business growth a healthy 25 percent year over year and 5 percent over Q3.

The leading content delivery network also reported revenue of $7 million from Acerno, a targeted ad company Akamai acquired in Nov. 2008.

Analysts had pointed to Apple's decision to move from Akamai-only content delivery, to using Limelight Networks and Akamai in a hybrid delivery model as a cause for concern, and they also thought macroeconomic pressure would have driven down revenues, as Akamai had to shed 7 percent of its workforce in November as well.

But Akamai bucked the trend of missing guidance plaguing much of the rest of the IT industry, and grew in almost every category: ARPU was up 4 percent for the year and 2 percent over Q3; North American sales grew 9 percent, excluding Acerno revenues; EBITDA was $100.3 million, the first quarter Akamai has generated EBITDA exceeding $100 million; and, the company finished the year with $772 million in cash and marketable securities.

Akamai continues to be cautious with future guidance, however, estimating revenues of $205 million to $212 million for Q1, which would be a slight sequential decline, but an 11 percent increase from Q12008.

For more:
- see the full earnings transcript at SeekingAlpha.com here 

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