Content delivery networking challenger Limelight Networks (NASDAQ:LLNW, news, filings) reported its fourth quarter numbers after the bell. Overall, revenues of $33.6M were roughly inline with expectations or perhaps a touch above, which extended their sequential growth following revenue pressure during the height of last year’s fiscal crisis. EBITDA of $3.3M and adjusted EPS of -$0.04 were a bit light due to higher costs. Higher cost of service came from network expansion activities, while there were also one time costs for their M&A activity and some extra bad debt expense.
For the first quarter of 2010, revenues are projected to be in the range $33-34.6M, or mostly flat with the usually seasonally stronger Q4 and perhaps a bit stronger than expected. Overall, it was a steady performance, though one wonders when we will see more aggressive growth numbers again. One can hardly tell from these numbers that Akamai (NASDAQ:AKAM, news, filings) stirred things up on the pricing front in the fall, and turned in a big Q4. While Limelight didn’t fall back, they didn’t keep the pace either and so Akamai clearly picked up some market share at the end of 2009. But then, we knew that – the question is where things go from here.
2010 looks to be a year of growth in the CDN business, they will need to kick things back into a higher gear to keep up. For its part, Limelight’s pending acquisition of EyeWonder will bring the company into a new, more diverse phase of existence. Whether it will give them a leg up on Akamai or simply let them compete on more equal footing remains to be seen.
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How are you feeling about their level of “litigation expenses” past and present, while an important appeal still lurks in the back ground?
I think that of course there is litigation risk and expense with limelight, but this year it is overall definitely lower than last year.