Investors will tell you that Akamai
If the stock gets within spitting distance of $24 today, it'll be because of last night's report. Akamai blew away estimates in generating $206.5 million in third-quarter revenue and $0.38 in non-GAAP diluted per-share earnings. Analysts had been calling for $0.35 per share on $199.4 million in revenue.
Skeptics will rightly argue that Akamai has seen slowing growth. Revenue was up just 5% over last year's Q3, equal to last quarter's growth rate. Non-GAAP earnings were down $0.02 year over year.
So what's the good news? Margins. GAAP gross margin fell a percentage point over last year, but that's a good number when you consider how competitive the high-volume file delivery business has become. Limelight Networks
That's an issue, but it would be a bigger issue if not for Akamai's other higher-margin services. CEO Paul Sagan told me in an interview that his company's growing network -- now 56,000 servers strong -- is increasingly delivering data essential for cloud computing.
His most high-profile example: Force.com, a platform for creating Web-based software developed by salesforce.com
That's good to hear. These are the sorts of deals we need to see more. Video and static file delivery is always going to be necessary, and Akamai will always play a role. But it isn't the future. High-performance, dynamic, browser-based cloud computing is the future. We need Akamai to deliver it.