Edgio stuns Wall Street with earnings, posits itself as security-focused company

Edgio, the content delivery provider formerly known as Limelight Networks, stunned Wall Street analysts this week with higher-than-expected quarterly revenue, sending its stock price up in after-hours trading.

On Monday, the company said it earned $74.3 million in the three-month period ending June 30, beating Wall Street forecasts of around $61.4 million per share. Earnings adjusted for costs and stock options was reported at 7 cents per share, topping Wall Street expectations of 3 cents per share.

Of its revenue, Edgio raked in $61.5 million from its legacy Limelight services product, an increase of 27% year over year, the company said in a press release. Edgecast, which was acquired by Limelight earlier this year, generated $12.8 million.

The news helped spur interest in Edgio's stock late Monday afternoon, with after-market trading boosting its price to $3.11 per share, up 10% from its close price of $2.81.

On a conference call with investors, Edgio's Chief Executive Officer Bob Lyons said the company's stunning growth was no longer contingent upon market trends in the streaming video industry, but rather the company's "ability to capture market share."

On Monday, Lyons revealed that Edgio had helped successfully thwart a large cyberattack on behalf of an unnamed client, with his comments strongly suggesting that the company was looking to market itself as a bigger cybersecurity player in the media space. Last month, the company appointed Darrin Reynolds to the position of Chief Information Security Officer to oversee Edgio's security initiatives.

"Delivering a secure brand is the only way to meet consumer expectations and continues to help differentiate Edgio across our app ops, delivery and streaming solutions," Lyons told investors on Monday.

When asked if a potential upcoming recession could shake Edgio's money tree, Lyons said he was confident that the company was in a position to offer its clients more services for their buck.

"We actually believe that there's an opportunity for us to come in and provide a better answer where people can trim their budget still move their companies forward with better security, better performance and better productivity," Lyons said.

Some of this has already been experienced at Edgio since it combined Limelight with Edgecast in June: On Monday's conference call, Edgio's Chief Financial Officer Dan Boncel recounted how one unnamed customer that was served by both former companies expressed an interest in doing more business with the company post-merger.

"They weren't a big client on either side, and actually liked the stability of Edgio better, so we're expanding that client meaningfully," Boncel said. "The sentiment is, Edgio is a much-more stable company than the two individual ones were, so they're willing to lean in more."

In addition to its cloud security and development businesses, Edgio operates one of the most-robust streaming platforms services in the industry. Lyons said its content delivery services product moves 230 terabits per second of data to hundreds of destinations, making it the second-largest edge delivery platform in the world.

The company says it expects to power over 30,000 live video events by the end of the year and will increase its capacity in the coming quarters, so it can successfully deliver content on behalf of media partners. In its earnings release on Monday, Edgio specifically singled out support for Thursday Night Football games; this year, the exclusive domestic broadcast rights to those games are held by Amazon Prime Video after the company streamed the games last year in partnership with NFL Network and Fox.