Shares in Akamai Technologies Inc. dropped slightly in after-hours trading today despite the content delivery network provider reporting an earnings beat in its latest quarterly report.

For the third quarter ended Sept. 30, Akamai reported a profit before costs such as stock compensation of $1.26 a share, down 13% from the third quarter of 2021. Revenue rose 3%, to $882 million. Analysts had been expecting earnings of $1.22 a share on revenue of $875.83 million.

The breakdown of Akamai’s revenue figures is all over the place. Security revenue rose 13% year-over-year, to $380 million, delivery revenue fell 15%, to $393 million, and compute revenue jumped 72%, to $109 million. Akamai’s revenue in the U.S. was up 3% year-over-year to $461 million, while its international revenue inched up 2%, to $421 million.

Net income plunged 40% from a year ago, to $243 million, while adjusted income fell 16%, to $200 million. Adjusted earnings before interest, taxes, depreciation and amortization fell 7%, to $368 million.

Akamai also spent $163 million in its third quarter to repurchase 1.8 million shares of its common stock at $90.93 per share. As of the end of September, the company had 158 million shares outstanding.

Highlights in the quarter included Akamai releasing research that found that 20% of all new domain names registered, some 79 million, were registered for malicious purposes. On a typical day, Akamai’s researchers observed about 12 million newly observed domain names in total, of which a little over 2 million were successfully resolved. Over the first six months of 2022, 79 million resolved domain names were flagged as malicious.

“Akamai delivered another quarter of solid results despite global macroeconomic challenges, including foreign exchange headwinds,” Dr. Tom Leighton, Akamai’s chief executive officer, said in a statement. “Our performance continued to be led by the strong growth of our security and compute product groups, which collectively grew 23% year-over-year and 28% when adjusted for foreign exchange, comprising 55% of our overall revenue.”

In a separate guidance statement, Akamai said that it expects adjusted net income per diluted share of $1.23 to $1.30 on revenue of $890 million to $915 million. For the full year, earnings are expected to be $5.23 to $5.30 a share on revenue of $3.58 billion to $3.6 billion.

Shares in Akamai were down about 1% after-hours.

Image: Akamai