Akamai Technologies (NASDAQ: AKAM) reported Q4 2019 earnings that beat analyst expectations as the focus of the company continues to move towards cloud security solutions.
The cloud service and security provider posted revenues of $772 million which was above Wall Street’s expectations for the firm of $749 million. Total sales were up 8% compared to the same quarter last year and the company saw good growth from its Cloud Security Solutions segment which grew 29% year over year.
On the bottom line, Akamai reported earnings of $1.23 per share which beat consensus estimates of $1.13.
Competition in the types of web speed and security solutions that Akamai offers has been increasing especially as several competitors such as Cloudflare (NYSE: NET) , ZScaler (NASDAQ: ZS) and Fastly (NYSE: FSLY) have entered public markets in the last 2 years.
While Akamai is the established name with large enterprise clients such as Amazon, Apple, Facebook, Google, Microsoft, and Netflix, the others have been steadily growing revenues 30%-60%. The market is clearly pricing in the revenue growth for the upstarts much more than the consistency of Akamai’s large customers.
Source: YCharts
But the important thing for investors to remember is that among these peers, Akamai is the only one making money on the bottom line and growing EPS at 15% year over year.
Akamai’s stock has had a good run recently even though competition in the space has intensified. The stock grew 41% over 2019 and is up nearly another 11% in 2020 thus far. Immediately after releasing earnings the stock was up over 2% in after market trading at the time of publishing.
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