Motley Fool Rule Breakers recommendation Akamai Technologies
Accordingly, investors -- doused yesterday by news of a $130 million funding deal for rival Limelight Networks -- have regained their enthusiasm: Akamai's shares are up a breathtaking 15% in early trading. And no wonder; sales growth just keeps accelerating.
|
Quarter |
Revenue |
Y-O-Y Growth |
|---|---|---|
|
Q3 2005 |
$75.7 mil |
42.1% |
|
Q4 2005 |
$82.7 mil |
43.6% |
|
Q1 2006 |
$90.8 mil |
51.1% |
|
Q2 2006 |
$100.6 mil |
55.7% |
In a statement, CEO Paul Sagan attributed the gains to increasing adoption of broadband, which, in turn, fuels demand for streaming media and downloads. The massive growth of Apple's
That may be why Akamai sees no end to its own growth. For the third consecutive quarter, the company raised guidance. This time, Akamai expects full-year sales to be at least $415 million (up from $380 million) and full-year normalized per-share earnings to be at least $0.83 (up from $0.73). All told, Akamai looks to grow by roughly 47% during 2006.
And even more growth could be on the way. Akamai ended the quarter with $367 million in the bank, all of which is available to fund a deal. Management would certainly entertain the right one, Chief Financial Officer J.D. Sherman said in an interview.
By the "right one," Sherman is referring to something like the deal that made Speedera a part of Akamai. That deal has fueled massive growth while retiring nagging litigation between the two firms. With a new suit targeting Limelight, it's worth asking whether Akamai's latest rival, which has gathered roughly $145 million in funding to date, could be a target.
Of course, that's merely speculation regarding what's to come. The more immediate reality is that Akamai's business has never been stronger than it is right now. This Fool plans to ride the wave as far as it'll take him. Cowabunga, baby.
Catch a wave of related Foolishness:
- You've got the analysis; now, get the numbers.
- Rival CDN Limelight Networks is in the spotlight.
- Akamai is good! No, it's bad! You decide.
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Despite the bearish doldrums, Fool contributor Tim Beyers remains a happy Akamai shareholder. You can find out what else is in his portfolio by checking Tim's Fool profile . The Motley Fool has an ironclad disclosure policy .
