Why Akamai Technologies, Inc. Jumped 16% Today
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What happened
Shares of Akamai Technologies (NASDAQ: AKAM) jumped as much as 15.7% higher on Wednesday morning, boosted by a strong third-quarter earnings report(downloads PDF).
So what
Analysts had expected the content delivery network operator to report earnings of $0.61 per share on sales of almost $572 million. Instead, revenue rose 6% to $584 million. On the bottom line, earnings increased by 10% and landed at $0.68 per share.
The gains were driven by 19% year-over-year sales growth in the performance and security segment, including 46% higher revenue in the cloud security part of that division.
Now what
Akamai's business model is not the performance-focused service it used to be, as the security aspects of distributed content delivery networks have started taking the upper hand.
"As the cyber-attacks from last week demonstrate, enterprises need solutions capable of defending against massive botnets that are exploiting millions of online devices," said CEO Tom Leighton in a prepared statement. "This is an area where Akamai's unique architecture and ongoing investments in global scale and security innovation continue to make a critical difference."
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