Limelight Networks Q4 Strong, Guidance Soft


A good fourth quarter for content delivery network Limelight Networks: The company beat the Street’s revenue projections and posted an in-line loss. But Q1 guidance is a bit below expectations.

On the company’s earnings call, Limelight (LLNW) CEO Jeff Lunsford acknowledged the weak economy as a reason for conservative forecasts. And he said that slower revenue growth in Q1 would come as the company extends agreements with its customers on different business terms. This sounds like pricing reductions to us.

Lunsford also said as of last Nov. 1, the company is no longer stashing money aside for potential patent infringement payments to larger rival Akamai (AKAM). This suggests Limelight has finished its technology workaround, which no longer infringes on Akamai controlled patents. The case is still not finished.

For Q4, Limelight posted a record $35.9 million in sales, beating the Street’s $33.6 million consensus. Non-GAAP EPS came in at -$0.03, in line with expectations.

For Q1, Limelight expects revenues between $32-33 million, below the Street’s $33.6 million consensus. That’s not the best sign, but many Web companies have offered very conservative guidance for Q1, so investors may let it fly.