Akamai continued its impressive streak of growth in Q1 2016, especially in their fastest growing segment – Cloud Security. Cloud Security revenues has grown to $81M in Q1 2016. The Media Delivery business was down 4% to $206M compared to the same time last year. During the call, Akamai stated that its two biggest customers (likely Apple and Facebook) shifted more of their traffic volume to internal DIY CDN, which impacted overall revenue for the media division. Two takeaways: 1) Cloud Security can be a $400M+ business in a few quarters and 2) video streaming is a hard core commodity business. During the call, an analyst asked the question if Google CDN poses a competitive threat to Akamai’s and their response was no. Although Google CDN poses no threat this year, next year is another question, and it will depend on whether Google and Amazon go to war on pricing.

Q1 2016 Highlights

• Total Revenue: $527M – increase of 8% over Q1 2015
• Cloud Security Solutions Revenue: $81M – increase of 46% over Q1 2015
• Media Delivery Solutions Revenue: $206M – down 4% over Q1 2015
• Service and Support Solutions: $46M – up 16% over Q1 2015
• Cash + Cash Equivalent: $1.5B
• Akamai has 1,000 Ion Customers
• New Division Structure Created
  • Media Division
  • Web Division
  • Enterprise and Carrier Division