Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now
Limelight Networks, Inc. (LLNW)
Q2 2009 Earnings Call Transcript
August 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
Analyst for Derek Bingham - Goldman Sachs
David Hilal - FBR Capital Markets
Srinivas Anantha - Oppenheimer & Co.
Donna Jaegers - D.A. Davidson
[Michael Burtist] - Raymond James
Colby Synesael - Kaufman Brothers, LP
Unidentified Analyst - JP Morgan Securities
Previous Statements by LLNW
» Limelight Networks, Inc. Q3 2009 Earnings Call Transcript
» Limelight Networks, Inc. F1Q09 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’ second 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 August 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.
Thank you all for joining us. Today, Limelight Networks reported $32.3 million in revenue for the second quarter of 2009, representing 7% year-over-year growth over Q2 of 2008.
Bottom line performances well ahead of our expectations despite revenue that was at the low end of our guidance going into the quarter, we are able to maintain gross margins, expand adjusted EBITDA and generate over $7 million in cash from operations as a result of disciplined execution as we navigate during economic downturn combined with market dynamics that involved aggressive pricing activity.
We are selectively focusing our investments in areas that we believe will create sustainable long term value by differentiating Limelight from our competition and building repeatable cash earnings overtime. We believe Q2 represented a trough of the tough business environment.
Looking forward, today, we reaffirmed our view. We will see a return to sequential growth in the second half of 2009. The downturn in pricing environment I just mentioned is leading the content delivery markets to consolidate around two or three global market leaders.
Underlying this market growth prospect is a strong demand driver, an excess of 60% annual growth and internet traffic for the next few years if you read the industry reports. We believe Limelight Networks is positioning itself by building our network with the capacity and scalability and features and services to delivery this growing traffic volume and by expanding our solution set with the value added solutions that will solve complex problems like mobile content delivery and optimization.
During the quarter, our customer base remained relatively flat, ending at approximately 1368 excluding customers to the former Kiptronic. We continued to sign up substantial numbers of new customers over 100 in the quarter but also eliminated many customers as we focused on quality.
We worked our DSOs down approximately 20 days and drove aggressive collection activity. We have become more diligent with upfront customer qualification and with how we address customers at the credit risk, which is the right thing to do in this business environment.
Average annualized revenue per customer in Q2 was approximately $95,000 a year which is about level with last year’s second quarter. Bookings were down slightly from Q1 as a few large deals delayed in the Q3 but most those have since closed and our pipeline is growing. So we believe we will see a return of bookings growth which is our best leading indicator in Q3.
In the media entertainment market segment, we continued to be a platform choice for leading content internet brands. One highlight for this quarter was our work delivering US Open Golf Tournament for MSNBC.
Another highlight which demonstrates the value of a robust and scalable CDN partner was a recent experience of our customer TMZ.com. TMZ is a Hollywood celebrity news site and was the first organization to break the news of Michael Jackson’s passing. As soon as the news was posted at the TMZ website, millions of other global news stories, personal portals and blogpost referenced to TMZ’s report via hyperlink.
The result was a surge of traffic unlike anything they had ever seen. Limelight’s global infrastructure absorbed this incredible traffic spike which is what is designed to do and kept TMZ opened for business in reporting the news, even as other sites and other CDN choked on the sudden uptick of traffic.