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Limelight Networks, Inc. (LLNW)
F1Q09 Earnings Call Transcript
May 06, 2009 at 4:30 pm ET
Jeff Lunsford - Chairman and Chief Executive Officer
Doug Lindroth - Chief Financial Officer
Paul Alfieri - Senior Director, Corporate Communications
Derek Bingham - Goldman Sachs
Michael Turits - Raymond James
Colby Synesael - Kaufman Brothers, LP
Srinivas Anantha - Oppenheimer & Co.
Kerry Rice - Wedbush Morgan Securities, Inc.
Analyst for Katherine Egbert - Jefferies & Co.
Previous Statements by LLNW
» Limelight Networks, Inc. Q3 2009 Earnings Call Transcript
» Limelight Networks, Inc. Q2 2009 Earnings Call Transcript
» Limelight Networks, Inc. Q4 2008 Earnings Call Transcript
I would now like to turn the call over to Paul Alfieri, Senior Director of Corporate Communications. Go ahead, Paul.
Good afternoon and thank you for joining the Limelight Networks’ first quarter 2009 financial results conference call. Speaking today will be Jeff Lunsford, Chairman and Chief Executive Officer, and Doug Lindroth, Chief Financial Officer.
This conference call is being recorded on May 6, 2009, and will be archived on our website for approximately one week. 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 facts, such as statements regarding future events or future financial performance, including, but not limited to, statements related 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.
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 base 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 Jeff Lunsford.
Thanks Paul. Thank you all for joining us. Today, Limelight Networks reported $33.2 million in revenue for the first quarter of 2009 representing 10% year-over-year growth over Q1 of 2008. Adjusted EBITDA before stock-based compensation, litigation cost and reversal of the damage accrual was approximately $4.7 million. Bookings were slightly higher than Q4 of 2008. We are pleased with these results and excited about investments we are making in scaling our platform and expanding our suite of cloud-base services.
We are also pleased that the court in Boston recently ruled that we do not infringe Akamai’s patent which allowed us to repurpose approximately $66 million in capital we had set aside at the end of 2007. Even with solid revenue, adjusted EBITDA and other operating highlights, we are still taking a cautious view on near-term results as it is difficult to determine if business conditions have bottomed. You will hear in Doug's comment that we are still managing through some of the short-term factors brought on by tough economy such as higher than usual bad debt and higher than normal DSOs.
When thinking over the long term, however, we have never been more excited about the prospects for this business. Limelight today operates at the intersection of two incredibly powerful and undeniable long term trends. The first is the ongoing migration of consumer and business activity to the online world whether for entertainment, commerce or general purposes and whether through a computer, mobile device, internet-connected television or set up box. The second trend is the steady and deliberate migration of computing activity out of enterprises and into outsourced computing, networking and telecommunications resources commonly referred to in text circles as the cloud.
To capitalize on this first trend, we continue to scale our content-delivery platform and to extend our capabilities with new solutions such as Limelight site and our mobile platform. When combining our existing services with these new services and factoring in our global scale and eight years of operating history as a leading pure play content delivery company, we believe we are distancing ourselves from a shrinking group of competitors.
To capitalize on the second trend, we are investing to extend our standard delivery and storage capabilities into other cloud-based application service areas that are synergistic with our core business such as transcoding and mobile device detection and delivery optimization and we are continuing to scale our platform which has quietly become one of the largest distributed computing platforms and operation.
These two trends provide great wind in our sales as we grow our business and we feel fortunate to be operating in this market.
Regarding our customer base, during the quarter, we added over 35 net new customers, average annualized revenue per customer in Q1 was $97,000 which was roughly flat from $98,000 in the last year's first quarter. At the end of the first quarter, we had approximately 1,365 active customers. In the media and entertainment market segment, we continue to be a platform of choice for leading content and internet brands as we added customers such as HBO, Public Broadcasting and Japan's Gaitame.com. We also partnered with MobiTV to deliver the NCAA men's college basketball tournament. We also continue to build our channels and professional services businesses in the quarter signing a multiyear reseller partnership with Global Crossing and seeing good traction with our ask-based partnership where our platform is an enabling component of their most of the cloud computing offering.