Akamai tops Q4 expectations, announces reorganization and new CTO

The company said it was reorganizing its business groups with a greater focus on its security division.
Written by Natalie Gagliordi, Contributor

Akamai reported better-than-expected fourth quarter financial results after the bell on Tuesday. The cloud services provider delivered fourth quarter net income of $113 million, or 68 cents a share, on revenue of $846 million, up 10% from a year ago. Non-GAAP earnings for the quarter came to $1.33 a share. 

Wall Street was looking for fourth quarter non-GAAP earnings of $1.31 a share on revenue of $829 million. Akamai's non-GAAP EPS for fiscal 2020 came to $5.22 on revenue of $3.2 billion, which comes in slightly above expectations. 

Akamai saw mild growth it its Web division, with revenue up 5% from a year ago to $438 million. The media division, Akamai's unit that speeds up webpages, saw first quarter revenue rise 15% to $408 million. The company's cloud security unit had revenue of $296 million, up 24% from a year ago, and its revenue from internet platform customers was $58 million, up 11% year over year.

In terms of guidance, analysts expect Akamai to deliver first quarter earnings of $1.29 a share on revenue of $818.7 million. Akamai didn't immediately provide guidance for its fiscal first quarter. Shares of Akamai were down more than 6% after hours.

Akamai also announced today that it was reorganizing its business groups with a greater focus on its security division. Effective March 1, Akamai will be anchored by the newly created Security Technology and Edge Technology groups, both of which will be supported by a single global sales team. 

The company also said it has re-established the role of chief technology officer, with Robert Blumofe, the current EVP of platform and GM of Akamai's enterprise division, set to take on the job.

"In 2020, it became quite clear how critical the internet is to work, commerce, education, entertainment and government," said Akamai CEO Tom Leighton. "In 2021 and beyond, we believe our collective reliance on the internet will increase further as more businesses move online, more employees work remotely over the long term, and cyberattacks continue to increase in volume, frequency and sophistication. With Akamai's new organizational structure, I am confident we will be able to more nimbly support the dynamic needs of our customers and partners, and more effectively capitalize on emerging growth opportunities." 

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