Akamai Dips Initially, But No Guidance Yet

Akamai Technologies (AKAM-NASDAQ): $0.27 EPS & Revenues $125.7 million versus estimates of $0.26 & $121+ million.  GAAP EPS were only $0.12. 

Akamai’s Q4 include 18 days of activity from Nine Systems Corporation following the closing of Akamai’s acquisition of Nine Systems on December 13, which contributed approximately $800,000 of revenue during Q4 2006.  Akamai added 78 net new customers under long-term services contracts during the fourth quarter, plus 125 recurring revenue customers from the Nine Systems acquisition, bringing Akamai’s total year-end number of customers under long-term services contracts to 2,347.  Sales through resellers and sales outside the United States accounted for 20 percent and 22 percent, respectively, of revenue for full-year 2006.

This is all we have as far as a quote for the guidance from Paul Sagan, CEO: "With these fourth quarter results, we reached a run rate of more than half a billion dollars on the top line, a milestone on the way to our billion dollar goal, while we continued to expand profitability."

Next quarter street estimates are $0.27 & $128.9 million, although the company did not give guidance before the conference call.  This stock got a bit of a Super Bowl bump from all the online watching of many Super Bowl ads and this was already close to its year highs of $58.45.  Shares ran over 3% to $56.95 in regular trading and are now down about 4% after-hours to just under $55.00. 

As a reminder, the guidance will likely create the ‘real move’ in the stock and they didn’t offer guidance in the release.  Cisco did the same thing yesterday, so who knows how to call this ‘looking forward’ on the immediate reaction.

Jon C. Ogg
February 7, 2007