After blowing out Q4 sales and profits in February, Akamai CEO Paul Sagan told us the company hasn’t felt any pain from the slowing economy. But Jefferies analyst Katherine Egbert has tracked down a few data points that paint a less rosy picture for Akamai (AKAM). The company “is not completely immune to current macro headwinds,” she says in a note today.
- Egbert’s checks indicate that Akamai missed its Q1 booking targets. She estimates that 25% of the company’s quarterly sales come from “in-period activity” from “new or not previously committed” customers.
- She’s heard that some large media customers may have been given rebates. She’s not sure why, but supposes it could be because of the “abnormally light new content season due to the Hollywood writers strike.” We’ve heard that before from rival Limelight Networks, but we’re sceptical. And Akamai CFO J.D. Sherman said in late February that the company hasn’t seen any “huge impact” from the strike.
- Akamai’s Web software application acceleration system was down for “a significant amount of time” during Q1. She wouldn’t be surprised if customers are compensated for the problems. Update: Industry analyst Dan Rayburn got in touch with Akamai, which said the system wasn’t down at all during Q1. So not entirely sure what Egbert is talking about.
- Enterprise customers are being cheap and aren’t buying add-on products as fast as anticipated. “Deals appear to have slipped as customers are becoming more frugal with their budgets.”
We’ve heard mixed results from enterprise-heavy companies this quarter. Cisco (CSCO) said January, in particular, was “very challenging” and hasn’t issued any encouraging news since then. But Research In Motion (RIMM) said earlier this month that enterprise sales have been solid despite the economy.
So it’s hard to predict where Akamai will fall. And Egbert stopped short of whacking Akamai estimates for either Q1 or 2008. But either way, the company “appears to lack immunity,” Egbert says.