Akamai’s Q3 Fine, But Q4 Looks Rough

The third quarter came out fine for Akamai, but the company’s stock is taking a beating in the premarket because fourth quarter guidance wasn’t what anyone was hoping for.  Revenues of $551 were slightly above expectations, while adjusted earnings per share of $0.62 was four pennies ahead.  

However, Q4 guidance of $557-577M in revenue was well shy of the $597 analysts had on their notepads, with earnings per share of $0.60-0.64 giving back most of the four pennies.  Akamai has been spending on its core CDN network capacity and reach in anticipation of a big jump in OTT services.  However, as with most things in tech, the revenues tend to lag the hype and general optimism no matter how hard one tries to estimate conservatively.  Nevertheless, the stock is down over 15% in the premarket given its lofty valuation these days.

Meanwhile, Akamai warned of three new reflection DDOS attacks on the horizon.  NetBIOS name server reflection, RPC portmap reflection, and Sentinel reflection have all been seen in the wild, as this new type of attack vector gains steam.  Basically, instead of simply attacking from zombie machines, attackers bounce spoofed requests off of innocent servers that magnify their effect.  Just great…

 

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