Limelight Networks, Inc. (LLNW)

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Limelight Networks (LLNW)

Q1 2013 Earnings Call

May 09, 2013 4:30 pm ET


Gillian Reckler

Robert A. Lento - Chief Executive Officer, President and Director

Douglas S. Lindroth - Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Treasurer


David M. Hilal - FBR Capital Markets & Co., Research Division

Aaron Schwartz - Jefferies & Company, Inc., Research Division

James Wesman



Good day, ladies and gentlemen. Welcome to the Limelight Networks First Quarter 2013 Financial Results Conference Call. [Operator Instructions] I will now turn the call over to Gillian Reckler, Limelight's Director of Investor Relations. Ms. Reckler, you may begin.

Gillian Reckler

Good afternoon and thank you for joining the Limelight Networks First Quarter 2013 Financial Results Conference Call. This call is being recorded on May 9, 2013, and will be archived in our website for approximately 10 days. If you are online we have updated our investor presentation and you can find it in PDF format within the Investor section of our website.

Some portions of this conference call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are all statements that are not strictly statements of historical fact, such as statements regarding future events or future financial performance including, but not limited to, statements relating to Limelight Networks' market opportunity and future business prospects, guidance on financial results, statements concerning anticipated future growth and profitability, as well as management's plans, goals, strategies, expectations, hopes and beliefs, and statements concerning the anticipated effects of pending or completed business combinations or other strategic transactions.

These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those contained, projected or implied in the forward-looking statements including the inherent risks associated with litigation, particularly intellectual property based litigation. Reported results should not be considered an indication of future performance. Factors that could cause actual results to differ are included in the company's periodic filings with the Securities and Exchange Commission.

I would now like to introduce Bob Lento, Limelight's Chief Executive Officer.

Robert A. Lento

Thanks, Gillian. I've just completed my first full quarter as CEO of Limelight Networks. Before I jump into the quarter's results, let me take a few minutes to tell you what I've learned about our products, our people, the markets that we serve and the steps we've taken to implement the roadmap for 2013 that I laid out for you a few months ago.

This quarter, I continued to bridge the learning gap and identify and assess the existing strengths and areas of improvement that we have at Limelight. I continued to work closely with the board and met many of our employees and current customers. I also met with prospective customers and industry analysts covering individual products within our Orchestrate suite of services. And of course, I got a chance to speak with many of you, our financial analysts and shareholders, who are now on the call.

What continues to impress me as I learn more about Limelight is the great potential of our markets and our service offerings to those markets. This was exemplified by the recognition that we received from Forrester, who named our Orchestrate Video solution as a Strong Performer in their Wave report on online video platforms. This acknowledgment followed closely on the heels of the recognition that we received at the end of 2012 from Gartner for our web content management solution.

We are pleased with the many new customers that we've added during the quarter. However, as we indicated last quarter, customer churn has been higher than we would like and is an area of focus for us. While the rate is not significant, at less than 1% per month for the quarter, we still think it is too high and led to a net customer loss during the quarter. We serve over 1,400 customers, and our year-over-year revenue increase showed that our average annual revenue per customer continued to increase.

I also appreciate the hard work and dedication of our employees. Their focus makes a difference every day. One example of our many employee contributions this quarter was the team effort that went into launching our thought leadership book, Digital Presence for Dummies, which was published by Wiley and is the industry's first guide to digital presence. Demand for the book is strong, and within just a few weeks of hitting the digital airwaves, the book won a Killer Content Award from DemandGen Report, the publication of record for B2B marketing professionals.

Last fall, we enhanced Limelight's digital presence using the same processes and technologies we offer our customers. Since then, traffic to our limelight.com website has increased over 1,000%, and online engagement with our customer and prospect audience has increased just as significantly. This month, the International Academy of Digital Arts & Sciences named Limelight a 2013 Webby Award Honoree for these improvements to our own digital presence.

What I've reiterated on the calls I've had with our customers, industry analysts and our shareholder base is that our strategy is solid. Our mission quite simply is to help our customers better engage digital audiences. We offer a suite of cloud-based services that aid in creating, managing and delivering exceptional digital experiences. And because we own and operate one of the world's largest content delivery networks, our customer know that their digital content will be superbly delivered on any device anywhere. We believe this is a unique and powerful value proposition and business strategy.

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