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Mon, Jan. 11, 2:55 PM
- KeyBanc has cut its Akamai (NASDAQ:AKAM) target by $11 to $75, while reiterating an Overweight rating.
- Like others on the sell-side, KeyBanc is worried about slumping media delivery revenue (responsible for Akamai's light Q4 guidance). "While e-commerce [traffic] improved quarter over quarter [in Q4] and produced solid year over year growth, the media traffic rate continued to weaken," Efforts by media delivery clients such as Apple and Microsoft to move more traffic to in-house CDNs is generally considered responsible for the decline.
- Shares have made new 52-week lows. They trade for 17x a 2016 EPS consensus of $2.66. Q4 results arrive on Feb. 9.
Nov. 23, 2015, 10:00 AM
- Limelight (LLNW -2.4%) will ask the Supreme Court to review a recent appeals court (CAFC) ruling declaring the company guilty of directly infringing a CDN patent owned by bigger rival Akamai (NASDAQ:AKAM).
- The S.C., which only hears a tiny % of appealed cases, previously ruled (in a decision applauded by many tech companies) Limelight couldn't be held liable for inducing infringement of the Akamai patent by its users. However, the CAFC later ruled Limelight's control over its users makes it guilty of direct infringement.
- CEO Bob Lento: "We strongly disagree with the unduly broad standard for direct infringement created by the August 13, 2015 en banc opinion by the Federal Circuit. We are hopeful that the Supreme Court will address this erroneous decision." Limelight is down 50% from the Aug. 12 close, and 20% since the CAFC rejected an appeal of its decision on Nov. 16.
Nov. 20, 2015, 8:10 AM
- Goldman has downgraded Akamai (NASDAQ:AKAM) to Sell, and cut its target by $10 to $52.
- The move comes less than a month after shares nosedived due to the soft Q4 guidance (blamed on weakness at large media accounts) provided with a Q3 beat. SA author/streaming analyst Dan Rayburn thinks the guidance is due to Apple, Microsoft, and Facebook moving more of their CDN traffic to in-house networks.
- Shares have fallen to $57.73 premarket. The 52-week low (set in February) is $56.85.
- Yesterday: Akamai strikes cloud CDN interconnect deal with Google
- Update (10:39AM ET): More details here. Goldman's Heather Bellini: "We view Street forecasts for 2016 as too high, as media delivery revenues take longer to materially snap back due to (1) large customers slowly bringing CDN in-house, (2) re emergence of more aggressive competition and (3) a focus on reducing software download sizes. As such, we see these headwinds persisting for longer than consensus is expecting." Akamai is now down 5.6%.
Nov. 16, 2015, 1:21 PM
- A federal appeals court (the CAFC) has denied Limelight's (NASDAQ:LLNW) request for an appeal of an August decision reinstating a $45M infringement verdict granted to Akamai (AKAM +0.4%) in its infringement suit against Limelight.
- Limelight plans to review its options, including a possible appeal to the Supreme Court, which only hears a small portion of appealed cases. The S.C. ruled last year Limelight couldn't be held responsible for inducing infringement by its users. However, the CAFC countered by declaring Limelight's control over its users' actions made it responsible for direct infringement.
- Limelight has fallen to within $0.10 of a 52-week low of $1.78.
Oct. 28, 2015, 12:49 PM
Oct. 28, 2015, 9:12 AM
Oct. 27, 2015, 5:41 PM
Oct. 27, 2015, 5:15 PM
- Though Akamai (NASDAQ:AKAM) beat Q3 estimates (moreso on EPS than revenue), it guided on its earnings call for Q4 revenue of $557M-$577M and EPS of $0.60-$0.64, below a consensus of $596.7M and $0.65. The company notes revenue from large media accounts is expected to drop in Q4 - Apple and Netflix, which have been building their own CDNs, are potential culprits.
- Top-line performance: Media delivery revenue (lower-margin) rose 5% Y/Y in Q3 to $245M. Performance/security revenue rose 15% to $263M, cloud security 39% to $65M, and service/support 19% to $43M. U.S. revenue rose 10% to $401M, and international 12% (27% exc. forex) to $150M. Forex had a 4% impact on total revenue growth (11% to 15%).
- Financials: GAAP costs/expenses rose 15% Y/Y to $435.3M. $76M was spent to buy back 1.1M shares at an average price of $72.02. Akamai ended Q3 with $1.5B in cash and $619M in convertible debt.
- Shares have tumbled to $64.95 after hours.
- Q3 results, PR
Aug. 13, 2015, 12:11 PM
- A federal appeals court (the CAFC) has reinstated a $45M infringement verdict against Limelight (NASDAQ:LLNW) in a suit filed by larger rival Akamai (AKAM +0.1%) over the alleged infringement of a patent related to media content delivery.
- The ruling vacates a May decision from the CAFC declaring Limelight didn't directly infringe Akamai's patent. The Supreme Court ruled in 2014 Limelight couldn't be held responsible for inducing infringement by users. However, the CAFC states today Limelight's control over its users makes it responsible for any infringement that occurs.
- Many tech companies have backed Limelight, arguing an Akamai win could open the door to numerous frivolous suits from patent trolls alleging induced infringement. Limelight has tumbled below $3.
Update (12:39PM ET): Limelight is now down 18.6%.
Jul. 29, 2015, 9:13 AM
Jul. 28, 2015, 5:35 PM
Jul. 28, 2015, 5:06 PM
- While its Q2 revenue was in-line and EPS missed by just a penny, Akamai (NASDAQ:AKAM) has guided on its earnings call for Q3 revenue of $543M-$555M and EPS of $0.56-$0.58, below a consensus of $565.1M and $0.62.
- Forex had a 4% impact on Q2 sales growth. U.S. revenue +16% Y/Y to $399M; international +7% to $142M (+22% exc. forex). Media Delivery revenue +12% to $244M; performance/security solutions (higher-margin) +15% to $256M; service/support +14% to $41M. $63M was spent on buybacks.
- Shares have tumbled to $66.00 in AH trading.
- Q2 results, PR
Jun. 9, 2015, 12:11 PM
- Following a lack of Apple streaming TV service announcements at the company's WWDC conference, Macquarie's Kevin Smithen has downgraded Akamai (NASDAQ:AKAM) to Neutral.
- Smithen: "We believe that investor expectations regarding the second half, 2015 revenue benefit to AKAM from an Apple streaming ramp have been rising in recent weeks and we are now expecting that this will be more of a 2016 opportunity for AKAM and the CDN industry, with an emphasis on second half, 2016 ... We do believe that AKAM will carry most of Apple's streaming traffic and that it will see media revenue reacceleration and margin expansion in 2016..."
- He also expects a weak Q2 for the CDN market in general due to "an absence of notable gaming and software launches, tough World Cup soccer comparison, and currency exchange rates." Akamai rival Limelight (LLNW -1%) is off moderately.
- Ahead of WWDC, Re/code reported Apple is holding off on officially announcing its TV service until it can finalize content deals. Meanwhile, Bloomberg reported yesterday Apple is building a fiber network to connect its data centers, and thereby strengthen its internal CDN. Apple has been known for a while to be building a proprietary CDN to handle some of its content delivery; Akamai nonetheless continues to handle a large portion of it.
Apr. 29, 2015, 3:39 PM
- Down sharply in AH trading yesterday after providing soft Q2 guidance to go with in-line Q1 results, Akamai (AKAM -1%) has erased most of its losses with the help of an upgrade to Buy from Deutsche. The firm has hiked its target by $6 to $79.
- Deutsche: "[W]e see the nearterm capitulation in the stock as an attractive entry point into secular growth drivers in FY16+ in Cloud Security and Media Delivery ... FY16+ growth drivers for AKAM's Media Delivery business in Internet HD and 4K Video Streaming, Multi-Player Gaming, etc. 2016 is also like to see meaningful spikes in Internet Web and Video traffic from the Summer Olympics, etc."
- On its CC (transcript), Akamai estimated a strong dollar will have a $3M impact on Q2 sales relative to Q1, and a $22M impact relative to Q2 2014. The company also noted it spent $67M in Q1 to buy back ~900K shares at an average price of "just over $67."
Apr. 28, 2015, 5:03 PM
- Akamai (NASDAQ:AKAM) has guided on its Q1 CC for Q2 revenue of $532M-$547M and EPS of $0.55-$0.59. The former is below a $544.8M consensus at the midpoint; the latter is entirely below a $0.63 consensus.
- As is the case for many other tech companies, a strong dollar has taken a heavy toll on the CDN leader: Q1 revenue growth was 20% Y/Y in constant currency, and 16% in actual dollars. International revenue rose 21% in constant currency, and 7% in actual dollars to $137.6M. U.S. revenue rose 20% to $389M.
- Media delivery revenue (lower-margin, affected by Apple's CDN buildout) rose 12% to $241.8M; performance/security solutions (higher-margin) rose 21% to $245M, and service/support solutions 12% to $39.7M.
- Shares have fallen to $71.00 AH. They went into earnings just $1.24 away from a high of $77.31.
- Q1 results, PR
Feb. 12, 2015, 3:04 PM
- On a day the Nasdaq is up 1% (thanks in part to Cisco), notable tech gainers include wireless broadband/Wi-Fi hardware provider Ubiquiti (UBNT +5.5%), M2M hardware/service provider Sierra Wireless (SWIR +6.2%), fiber access equipment vendor Zhone (ZHNE +3.3%), CDN leader Akamai (AKAM +5.8%), 3D printing plays Voxeljet (VJET +12.5%) and Materialise (MTLS +4.4%), satellite services/hardware vendor ViaSat (VSAT +4.4%), capacitor maker Kemet (KEM +5.8%), Chinese online real estate play Leju (LEJU +5.7%), and microcap solar installer RGS Energy (RGSE +24.3%).
- With markets trading higher, the list of notable decliners is smaller. It includes fixed wireless broadband provider Towerstream (TWER -8.9%), local services marketplace Angie's List (ANGI -5%), Chinese social networking/IM platform YY (YY -4.5%), and chip packaging IP provider Tessera (TSRA -6.1%).
- Sierra, Ubiquiti, and Zhone have joined the list of telecom/networking equipment firms rallying on account of Cisco's numbers. Akamai and ViaSat are adding to the gains they saw yesterday thanks to market-pleasing earnings (I, II), and Tessera is reversing the Wednesday gains it saw on account of a Q4 beat. Voxeljet also rose sharply yesterday.
- Previously covered: Baidu, TripAdvisor, Nvidia, FireEye, Zillow/Trulia, enterprise tech stocks
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