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Limelight Networks, Inc. (LLNW)
Q3 2009 Earnings Call
November 04, 2009 4:30 pm ET
Jeffrey Lunsford - Chairman and Chief Executive Officer
Douglas Lindroth - Chief Financial Officer
Paul Alfieri - Senior Director, Corporate Communications
David Hilal - FBR Capital Markets
Michael Olson - Piper Jaffray
Kerry Rice - Wedbush Morgan Securities, Inc.
Derek Bingham - Goldman Sachs
Chad Bartley - Pacific Crest Securities
Donna Jaegers - D.A. Davidson
Srinivas Anantha - Oppenheimer & Co.
Michael Turits - Raymond James
Sameet Sinha - JMP Securities
Previous Statements by LLNW
» Limelight Networks, Inc. Q2 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.
Thank you for joining the Limelight Networks’ third quarter 2009 financial results conference call. Speaking today will be Jeff Lunsford, Chairman and Chief Executive Officer, and Douglas Lindroth, Chief Financial Officer.
This conference call is being recorded on 4 November, 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 $32.5 million in revenue for the third quarter of 2009. During the quarter gross margins expanded by 1 percentage point and adjusted EBITDA remains steady. Operating highlights in the quarter included the launch of Limelight’s next generation XD platform with the depth of intelligence which provides advance levels of performance, an increase insight into real-time internet and delivery conditions. And the launch of the LimelightREACH and LimelightADS, two new services that provide [current] capabilities for customizing and monetizing media delivery on mobile and other connected devices.
The internet continues to transform, advance the way people live, work and play around the world. Tomorrow’s internet will involve more real-time dataflow and content consumption across a growing mix of computers, laptops, netbooks, game consoles, televisions, set-top boxes, and mobile devices, the combination of which will allow consumers to enjoy content, access information and conduct transactions at any time from any place.
With our XD platform and mobility monetization solutions we are positioning Limelight Networks to be a core provider of club-based services within this transformed world. Helping forward-thinking media, entertainment, enterprise and government organizations leverage the next generation internet capabilities to differentiate from their competitors and better serve their constituents.
The $1.4 billion CDN market is healthy and continuous to grow. This market operates in two distinct segments. First the large object segment where media and technology companies use CDNs to deliver large video, music and software files. Second, small object segments, where all types of companies use CDNs to deliver their entire websites including small files like GIFs and JPEGS and to accelerate and enter transactions that involve dynamic data.
In addition to these two markets, the CDN is an attractive supporting platform for many value-added services that can be delivered over the internet otherwise known as cloud-based services. Limelight’s strategy is to 1) to continue to build and distinguish ourselves as the most capable high-performance CDNs in the large objects space which is our traditional area of strength, 2) Expand capabilities with Limelight’s XD and future services that [Inaudible] penetrate the small object enterprise markets, and 3) launch higher margin value-added services such as LimelightREACH and LimelightADS that leverage our high-performance CDN platform.
At present our business was gaining traction along all three of these growth factors. At the end of Q3, our customer count was approximately 1,307 which include mobility and monetization solutions customers. We signed contract with over a hundred of new customers in the quarter but also continue to attrite less attractive ones. The value of our customer relationships increased slightly in the quarter as average, annualized revenue per customer grew to $95,000 in the quarter. We are pleased with our overall bookings performance which is an increase over Q2.
While the large object market is characterized by higher volumes and greater price pressure, this segment continues to be important as it is where we get our scale. It is also the segment where we forged new ground of innovative customers utilizing new, advanced consumer-oriented technologies. During the quarter we added our expanded relationship with customers in this segment such as Nintendo in the gaming sector, AVG and Checkpoint in the software sector, [Puver] and Jango in the digital music sector.