Akamai Technologies’ cloud security business boosts revenue
April 28, 2016 10:22 AM
Higher demand for its cloud security business helped boost first quarter sales and profit for Akamai Technologies.
Revenue from Akamai’s software that fights attacks against websites and the computers and servers on which they run rose 46.7% in the period ended March 31, to $80.7 million from $55.0 million in the prior year.
CEO Tom Leighton said Tuesday on a conference call with analysts that the content delivery network and web security firm stands to reap more gains because businesses are increasingly turning to cloud-based security and moving their enterprise applications to the cloud. Akamai’s cloud runs on more than 200,000 servers worldwide.
The cloud security business is part of Akamai’s web division, which makes websites run faster and helps ensure quick, secure e-commerce transactions.
Revenue for the web division grew 17.6% year over year to $263.7 million from $224.2 million, the company reported. Leighton said the web division stands to benefit from strong customer reaction to Akamai’s new Bot Manager, introduced Feb. 17, that lets retailers identify a good or bad bot and take action to monitor it, block it, fool it or let it through rather than just detect and block it.
Akamai also reported the following for Q1:
- Revenue rose 7.3% to $567.7 million from $526.5 million in the year-ago period.
- U.S. revenue increased 2% to $397.3 million from $389.0 million.
- International revenue jumped 24%, to $170.4 million from $137.6 million.
- Media division revenue decreased 0.7% to $291.9 million from $294.0 million. StreamingMedia analyst Dan Rayburn said earlier this year that the unit’s sales are slowing because Apple, Microsoft and Facebook are moving a larger percentage of their web traffic to in-house delivery networks.
- Revenue in performance and security, its largest division, increased 16.1% to $315.9 million from $272.0 million.
- Revenue for the enterprise division was $12.0 million, up 45% year-over-year from $8.3 million.
- Revenue in services and support, its smallest unit, increased 15.6 % to $45.9 million from $39.7 million.
- Net income fell 3.7% to $74.9 million from $77.7 million.