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Akamai Technologies Management Discusses Q2 2012 Results - Earnings Call Transcript

I'll be back in a few minutes to talk about how our solutions are helping our customers adapt to the biggest trends driving IT. But first, let me turn the call over to Jim for details on Q2. Jim?

James Benson

Thank you, Paul. As Paul just highlighted, we had a great quarter. We saw continued strong performance in our content delivery solutions and accelerated revenue growth in our cloud infrastructure solutions.

At the same time, we began to realize significant benefits from improvements we are making to scale our network operations, resulting in higher-than-expected gross margins in EBITDA for the quarter. We did all of this while continuing to make key investments back into the business to better enable customers to move more and more of their mission-critical business to the Akamai cloud securely and efficiently.

Since the beginning of the year, we have released 7 new products, entered into several important new partnerships, accelerated key go-to-market initiatives and successfully completed 2 acquisitions, while at the same time, maintaining strong profit margins.

Diving into the details of our second quarter results, our revenue was $331 million, coming in above our guidance. This was up 20% year-over-year and up 4% sequentially. As Paul noted, this represents the third consecutive quarter of accelerating revenue growth, with revenue growth accelerating in every vertical and every geography during the second quarter, exceeding our expectations.

Cloud infrastructure solutions growth, accelerated to 22% year-over-year, made up 58% of our total revenue. And in terms of brand-new customers to Akamai, over 75% purchased a cloud infrastructure solution.

Turning to our verticals, Media & Entertainment delivered healthy growth in the quarter, with revenue growing 19% over Q2 of last year and 4% sequentially. We continued to see strong traffic growth, building on the trend that began last fall. Our commerce vertical grew 21% over Q2 of last year and declined 1% sequentially in what is typically a slower seasonal quarter for eCommerce.

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