What happened

Shares of Akamai Technology (AKAM -0.49%) have tanked today, down by 9% as of 2:50 p.m. EDT, after the company reported third-quarter earnings. The results beat expectations, but the broader market is selling off due to macroeconomic fears caused by rising COVID-19 cases.

So what

Revenue in the third quarter increased 12% to $793 million, comfortably ahead of the $775.2 million in sales that analysts were modeling for. That resulted in adjusted net income of $216 million, or $1.31 per share. Wall Street was looking for just $1.23 per share in adjusted profits. The content delivery network (CDN) technology specialist said cloud security revenue jumped 23%.

Akamai logo

Image source: Akamai Technology.

"Our excellent third quarter results were driven by the continued strong performance of our security products and sustained high traffic levels on the Akamai Edge platform," CEO Dr. Tom Leighton said in a statement. "We're proud of how Akamai continued to deliver fast, intelligent and secure online experiences for billions of users around the world as we support our customers during these unprecedented times."

Now what

Akamai finished Q3 with $2.6 billion in cash. The company also repurchased 100,000 shares for $13 million during the quarter.

Guidance for Q4 calls for revenue of $812 million to $837 million, with the midpoint of that range being slightly above the $822.7 million in sales that analysts are expecting. Adjusted earnings per share are forecast at $1.28 to $1.32, while the consensus estimate calls for $1.29 per share. Akamai expects to report an adjusted EBITDA margin of 43% next quarter.