Content delivery network (CDN) provider Akamai (NSDQ: AKAM) reported Q4 revenue of $183.2 million, up 14 percent year-on-year from $161.2 million. Net income grew 73.7 percent to $35.8 million ($.20 per share) from $20.6 million ($.12 per share). On a sequential basis, net income grew 47 percent. The number of customers under long-term contracts stands at 2645, up 13 percent year-over-year. Akamai shares have come under a lot of pressure on concerns about slowing growth and price competition from its numerous competitors in the CDN space, but these numbers are solid. Revenue came in comfortably ahead of estimates of $174.6 million and its shares are trading up over 5 percent after hours.
Conference call: Akamai provides its services for a range of industries, but judging by analyst questions, digital media is the big point of interest. Akamai CEO Paul Sagan obliged, saying the company is “as optimistic as ever about rich media and online applications” and that the media and entertainment business is performing “beyond expectations.” The iTunes movie store was one of the few end users of its services that it identified directly on the call.
— Ad serving: On rumors that the company is interested in getting directly into the ad-serving space, the response was a resolute ‘no’. “We partner with our customers, we make ad delivery better… we have no plans to become an ad server per se and compete with any of our customers.”
— HD: At this point, HD video isn’t really a factor for the company, but 3-5 years out it’s expected to have an impact. Fatter pipes will be key.
— Writer’s strike: Not seeing any impact, in terms of how it would affect online media consumption patterns.
— Gaming: The video game market showed very strong growth, and was identified as a key driver in the quarter. Console and other online games were big.
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