Limelight Networks (Nasdaq: LLNW) brought some sunshine into an otherwise gloomy market day with a terrific fourth-quarter report.
A non-GAAP profit of $0.01 per share on $55.2 million in revenue beat analyst targets on both counts. The content delivery specialist saw its biggest gains in the delivery of mobile data traffic. The much-vaunted video delivery deal with Netflix (Nasdaq: NFLX), where Limelight shares the account with rivals Level 3 Communications (Nasdaq: LVLT) and Akamai Networks (Nasdaq: AKAM), surely helped a bit, but that division merely doubled its sales year-over-year while the mobile segment tripled in size.
Obviously cheered by these results, investors reacted strongly; Limelight's shares jumped as much as 32.5% in intraday trading. Level 3 and Akamai followed suit on a smaller scale, signaling market confidence in the future of content delivery providers.
The way Limelight is beating Street expectations senseless while Akamai disappointed analysts last week may be signs of a shift in the content delivery market. Fellow Fool Tim Beyers has seen this pattern before and still believes that Akamai will make him rich, and I largely agree.
The market is big enough for several cowboys. Cisco Systems (Nasdaq: CSCO) predicts exponential bandwidth growth over at least the next five years, and these companies are an important part of the solution to the threat of a bandwidth crunch.
If surprisingly strong results weren't enough, Limelight also has a squeaky-clean balance sheet with no debt and $57 million of cash equivalents. Limelight will be one of the survivors in the long run.
Add Limelight to your Foolish watchlist. While you're at it, why not throw in Akamai, too?
Fool contributor Anders Bylund owns shares of Netflix but holds no other position in any of the companies discussed here. Akamai Technologies is a Motley Fool Rule Breakers recommendation. Netflix is a Motley Fool Stock Advisorselection. The Fool has created a bull call spread position on Cisco Systems. Motley Fool Alpha owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.
