Retailers shift their ad spending from TV, radio and print ads to digital ads.
This marks the third consecutive quarter with accelerating growth, the company reports.
Content delivery network operator Akamai Technologies Inc. says that its second quarter revenue reached $331.3 million this year, up 19.6% from $277.0 million in Q2 2011. This is the company’s third consecutive quarter of accelerating year-over-year growth, president and CEO Paul Sagan told investors in an earnings call yesterday. In the first quarter of 2012, Akamai’s revenue increased 16% year over year; in Q4 2011, the year-over-year increase was 13%.
Net income decreased 7.7% in Q2, to $44.2 million from $47.9 million. Additionally, the company’s revenue from its commerce sector grew 21% over Q2 last year, said chief financial officer James Benson, though it declined 1% compared to the first quarter “in what is typically a slower seasonal quarter for e-commerce.”
Day-to-day operations accounted for 45% of the second quarter’s revenue, totaling $150 million. The rest of the revenue came from sales of Akamai products and services, including its web-hosted infrastructure, sales of which were up 22% in the quarter compared with Q2 2011. The company also sells security and site acceleration services; the latter refers to dynamically loading content to improve page load times. 21% of total revenue in Q2 came from sales through resellers and 27% from sales outside the United States, the company says.
“We continue to see strong demand across all of our key verticals and markets, importantly with more applications and transactions moving to the Internet,” Sagan said. “Revenue, profit and cash flow performance in the first six months of the year all set records for Akamai.”
The company says four major trends are fueling its growth, he continued: cloud computing, increased web access by mobile devices, online video and a need for stronger Internet security.
154 merchants in The Top 500 Guide, including the top eight retailers from Amazon.com Inc. (No. 1) to Sears Holdings Corp. (No. 8), report using Akamai’s content delivery services.