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.
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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