What happened
Shares of Limelight Networks (EGIO -9.23%) sank on Thursday after the provider of edge cloud services reported its second-quarter results. Limelight missed analyst estimates across the board, reported a steep decline in revenue, and reduced its guidance for the full year. The stock was down about 11.8% at 11:20 a.m. EDT.
So what
Limelight reported second-quarter revenue of $45.9 million, down 9% year over year and $0.5 million below the average analyst estimate. Changes in currency exchange rates knocked down revenue by $0.3 million.
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Non-GAAP (adjusted) earnings per share came in at a loss of $0.03, down from a profit of $0.04 in the prior-year period and $0.01 shy of analyst expectations. Adjusted earnings before interest, taxes, depreciation, and amortization was $1.4 million, down from $9.2 million in the second quarter of 2018.
CEO Bob Lento discussed the groundwork laid this year: "During the first half of the year, we have achieved significant increases in capacity through software enhancements and investments in our infrastructure, which leaves us well positioned to take advantage of the massive growth in demand for digital video services that most industry analysts are predicting for the near future."
Now what
While Limelight expects solid growth in 2020, it's lowering its outlook for 2019 to reflect timing issues on certain major customer and partner-driven initiatives. The company now expects to produce revenue between $200 million and $210 million, along with non-GAAP earnings per share near breakeven.
Previously, the company had expected 2019 revenue between $215 million and $225 million, along with non-GAAP EPS between $0.10 and $0.20.
With Limelight missing estimates and cutting its full-year guidance, positive talk about future growth wasn't enough to stop the market from punishing the stock.
