Shares of Akamai Technologies (AKAM) gained about 2% Tuesday after the cloud services provider reported stronger than expected earnings and revenues for the December quarter, reflecting broad-based demand growth led by the cloud security solutions segment.
During the quarter, revenue moved up 8% to a record high of $713 million, reflecting a 36% growth in the Cloud Security Solutions unit. Analysts had forecast slower growth. Contributing to the impressive top-line performance, Web Division revenue grew 9%, while the Media and Carrier Division registered an 8% gain. Meanwhile, revenues from Internet Platform Customers dropped 14%, continuing the recent trend.
Adjusted earnings climbed 51% to $1.07 per share and surpassed Wall Street estimates. Reported profit was $94.02 million or $0.57 per share, compared to $27.52 million or $0.16 per share in the fourth quarter of 2017. The results also came in above the management’s outlook.
Contributing to the impressive top-line performance, Web Division revenue grew 9%, while the Media and Carrier Division registered an 8% gain
“We achieved our fifth consecutive quarter of non-GAAP operating margin improvement, and we are well on our way to achieving our 30% margin goal in 2020, while continuing to invest in innovation and new products to drive future growth,” said CEO Tom Leighton.
During the three-month period, the management repurchased around 1.9 million shares at an average price of $67.05 per share, spending a total of $124 million.
Akamai also announced the appointment of Ed McGowan as its new chief financial officer and executive vice-president, to succeed Jim Benson who will be retiring later this year. McGowan will assume his new responsibilities on March 1, 2019.
In a separate report, the Cambridge, Massachusetts-based company said it entered into a partnership with Mitsubishi UFJ Financial Group (MUFG) to set up a joint venture that will offer a new blockchain-based online payment network enabling next-generation transaction security and scale.
Akamai shares closed Tuesday’s regular session higher and moved up further in the after-hours trading following the earnings report. The stock has gained more than 19% so far this year.