Akamai Technologies Inc. (AKAM – Free Report) reported non-GAAP earnings of 69 cents per share for fourth-quarter 2017, down 4.2% year over year (up 1% adjusted for foreign exchange and the dilutive effect of the SOASTA and Nominum acquisitions). Nevertheless, it surpassed the Zacks Consensus Estimate of 63 cents per share and increased 11.3% on sequentially.

Revenues of $663 million beat the Zacks Consensus Estimate of $647 million and increased 8% from the year-ago quarter and almost 6.8% from the previous quarter. Notably, both the top and the bottom line came ahead of management’s expectations in the fourth quarter. Strong media division traffic and growing adoption of cloud-based security solutions were the major tailwinds.

Excluding Internet Platform Customers, revenues increased 9% year over year (up 6% when adjusted for foreign exchange). Revenues from Internet Platform Customers were $50 million, down 15% year over year and 1.9% sequentially. The year-over-year plunge was primarily attributed to declining revenues from large customers, namely Amazon (AMZN – Free Report), Apple (AAPL – Free Report), Facebook (FB – Free Report), Google, Microsoft and Netflix due to their do-it-yourself (DIY) initiatives.

Akamai stock has inched up 0.2% over a year, underperforming the 18.7% rally of the industry it belongs to.

Revenues Details

Akamai currently reports its business under three main divisions — Media, Web and Enterprise and Carrier. It started this practice effective second-quarter 2016, marking a shift to a customer-focused structure.

Media Division — Revenues decreased 3% year over year (down 1% when the impact of large Internet platform customers was excluded) to $284 million.

Web Division — Revenues increased 17% year over year (up 15% when adjusted for foreign exchange) to $355 million. It contributed 54% of fourth-quarter revenues. The year over year increase was driven by better-than-expected uptake in holiday commerce traffic, new products adoption, and Security Solutions.