- Q4 Revenue of $42.7 million
- GAAP EPS of $(0.04), Non-GAAP EPS
break-even
- $73.0 million of cash, cash equivalents
and marketable securities, up $3.0 million from Q3 2015
- 2016 revenue expected to be between
$180 and $195 million
Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a global
leader in digital content delivery, today reported revenue of $42.7
million for the fourth quarter of 2015, up 5 percent, compared to
$40.7 million in the fourth quarter of 2014, and up six percent
when adjusting for the impact of foreign currency fluctuations.
GAAP gross margins were 41.0% in the fourth quarter of 2015, an
increase of 140 basis points from 39.6% in the fourth quarter of
2014, and up 320 basis points from 37.8% in the third quarter of
2015.
On a GAAP basis, Limelight reported a loss from continuing
operations of $4.1 million, or $0.04 per basic share, for the
fourth quarter of 2015, compared to a loss from continuing
operations of $5.0 million, or $0.05 per basic share in the fourth
quarter of 2014. Non-GAAP net loss was $0.4 million, or break-even
per basic share for the fourth quarter of 2015, compared to a
non-GAAP net loss of $2.1 million, or $0.02 per basic share in the
fourth quarter of 2014.
EBITDA from continuing operations was $2.1 million for the
fourth quarter of 2015, compared to negative $1.2 million for the
fourth quarter of 2014. Adjusted EBITDA was $5.3 million for the
fourth quarter of 2015 compared to $1.5 million for the fourth
quarter of 2014.
For the full year ended December 31, 2015, Limelight reported
revenue of $170.9 million compared to $162.3 million for the year
ended December 31, 2014. Revenue in 2014 included $11.3 million of
revenue from Netflix. Currency fluctuations negatively impacted
full year 2015 results by $3.3 million.
GAAP gross margins were 39.9% for the year ended December 31,
2015, compared to 39.1% for the year ended December 31, 2014.
On a GAAP basis, Limelight reported a loss from continuing
operations of $24.0 million, or $0.24 per basic share, for the year
ended December 31, 2015, compared to a loss from continuing
operations of $24.9 million, or $0.25 per basic share, in 2014.
Non-GAAP net loss was $11.2 million, or $0.11 per basic share,
for the year ended December 31, 2015, compared to a non-GAAP net
loss of $12.3 million, or $0.13 per basic share, in the same period
of 2014.
EBITDA from continuing operations was negative $4.8 million for
the year ended December 31, 2015, compared to negative $6.5 million
for the year ended December 31, 2014. Adjusted EBITDA was $6.9
million for the year ended December 31, 2015, compared to $4.8
million for the year ended December 31, 2014.
Limelight ended the fourth quarter with 509 employees and
employee equivalents, down from 556 at the end of the third quarter
of 2015, and down from 520 at the end of 2014.
Commenting on the fourth quarter and full year results, Chief
Executive Officer, Robert Lento said, “In 2015 we achieved
strong operational and financial improvements. Customer Net
Promoter Score, customer attrition, network performance, and
voluntary employee turnover all saw material improvements. We grew
at the top end of the industry ranges, improved our gross margin,
and exited the year with a strong quarter. We expect to build on
this performance throughout 2016. Our position in the industry
remains strong and is improving.”
"We believe that years of an intensive, anti-competitive legal
battle, has adversely affected our equity value, but we also
believe it is our responsibility to defend the interests of
our company, our talented employees, and our valued customers
against predatory tactics. We will continue to vigorously pursue
avenues to eliminate or reduce the potential damages in our
longstanding patent fight, while remaining focused on driving
business performance that will lead to
better alignment between our share price and our
view of the company's equity value."
Based on current conditions, Limelight is providing revenue
guidance of between $180 million and $195 million for 2016. GAAP
gross margin is expected to improve by 200 basis points over 2015
results. Non-GAAP net loss is expected to be between $(0.05) and
$0.05 per share for 2016. Capital expenditures are expected to be
approximately $20 million dollars.
Financial Tables
LIMELIGHT NETWORKS,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In
thousands, except per share data) December 31,
December 31, 2015 2014
(Unaudited) ASSETS Current assets: Cash and
cash equivalents $ 44,680 $ 57,767 Marketable securities 28,322
35,317 Accounts receivable, net 26,795 22,622 Income taxes
receivable 170 237 Deferred income taxes 89 78 Prepaid expenses and
other current assets 9,578 9,625 Total
current assets 109,634 125,646 Property and equipment, net 36,143
32,636 Marketable securities, less current portion 40 40 Deferred
income taxes, less current portion 1,252 1,364 Goodwill 76,143
76,133 Other intangible assets, net 15 1,071 Other assets
2,400 4,451 Total assets $ 225,627 $
241,341
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 9,137 $ 7,065 Deferred
revenue 2,890 3,509 Capital lease obligations 466 223 Income taxes
payable 204 248 Other current liabilities 10,857
14,383 Total current liabilities 23,554 25,428
Capital lease obligations, less current portion 1,436 135 Deferred
income taxes 137 170 Deferred revenue, less current portion 92 405
Other long-term liabilities 2,311 3,040
Total liabilities 27,530 29,178 Commitments and contingencies
Stockholders' equity: Convertible preferred stock, $0.001 par
value; 7,500 shares authorized; no shares issued and outstanding -
- Common stock, $0.001 par value; 300,000 shares authorized;
102,299 and 98,409 shares issued and outstanding at December 31,
2015 and December 31, 2014, respectively 102 98 Additional paid-in
capital 477,202 464,294 Accumulated other comprehensive loss
(10,812 ) (7,786 ) Accumulated deficit (268,395 )
(244,443 ) Total stockholders' equity 198,097
212,163 Total liabilities and stockholders' equity $ 225,627
$ 241,341
LIMELIGHT
NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited) Three Months Ended
Twelve Months Ended December 31, September
30, Percent December 31, Percent
December 31, December 31, Percent
2015 2015 Change
2014 Change 2015
2014 Change Revenues $ 42,739 $
42,049 2 % $ 40,727 5 % $ 170,912 $ 162,259
5 % Cost of revenue: Cost of services (1) 20,388 21,502 -5 %
20,613 -1 % 84,818 82,176 3 % Depreciation - network 4,811
4,636 4 % 3,985 21 %
17,975 16,673 8 % Total cost of revenue
25,199 26,138 -4 % 24,598 2 %
102,793 98,849 4 % Gross profit 17,540
15,911 10 % 16,129 9 % 68,119 63,410 7 % Gross profit percentage
41.0 % 37.8 % 39.6 % 39.9 % 39.1 % Operating expenses: General and
administrative (1) 5,509 6,586 -16 % 6,210 -11 % 25,027 28,176 -11
% Sales and marketing (1) 8,101 9,489 -15 % 9,103 -11 % 37,868
37,458 1 % Research & development (1) 6,678 7,429 -10 % 6,014
11 % 28,016 20,965 34 % Depreciation and amortization 1,005
648 55 % 661 52 % 2,929
3,529 -17 % Total operating expenses
21,293 24,152 -12 % 21,988 -3 %
93,840 90,128 4 % Operating loss
(3,753 ) (8,241 ) -54 % (5,859 ) -36 % (25,721 ) (26,718 ) -4 %
Other income (expense): Interest expense (25 ) - 100 % (6 )
317 % (29 ) (32 ) -9 % Interest income 86 82 5 % 73 18 % 317 276 15
% Other, net (407 ) 473 -186 % 807
-150 % 1,748 1,821 -4 % Total
other income (expense) (346 ) 555 -162 %
874 -140 % 2,036 2,065 -1
% Loss from continuing operations before income taxes (4,099
) (7,686 ) -47 % (4,985 ) -18 % (23,685 ) (24,653 ) -4 % Income tax
expense 46 76 -39 % 22
109 % 267 203 32 % Loss from
continuing operations (4,145 ) (7,762 ) -47 % (5,007 ) -17 %
(23,952 ) (24,856 ) -4 % Discontinued operations: Income
from discontinued operations, net of income taxes -
- NA - NA - 265
NA Net loss $ (4,145 ) $ (7,762 ) -47 % $ (5,007 )
-17 % $ (23,952 ) $ (24,591 ) -3 % Net loss per share: Basic
and diluted Continuing operations $ (0.04 ) $ (0.08 ) $ (0.05 ) $
(0.24 ) $ (0.25 ) Discontinued operations - -
- - 0.00 Total $
(0.04 ) $ (0.08 ) $ (0.05 ) $ (0.24 ) $ (0.25 ) Weighted
average shares used in per share calculation: Basic and diluted
101,391 100,552 98,637 100,105 98,365 (1)
Includes share-based compensation (see supplemental table for
figures)
LIMELIGHT NETWORKS, INC.SUPPLEMENTAL
FINANCIAL DATA(In thousands)(Unaudited)
Three Months Ended Twelve Months Ended
December 31, September 30, December 31,
December 31, December 31, 2015
2015 2014 2015
2014 Share-based
compensation: Cost of services $ 563 $ 400 $ 490 $ 2,047
$ 1,956 General and administrative 1,002 1,513 1,202 5,398 4,741
Sales and marketing 716 643 624 2,657 2,317 Research and
development 582 568 375
2,236 1,477 Total share-based
compensation $ 2,863 $ 3,124 $ 2,691 $ 12,338
$ 10,491
Depreciation and amortization:
Network-related depreciation $ 4,811 $ 4,636 $ 3,985 $ 17,975 $
16,673 Other depreciation and amortization 544 445 457 1,866 2,391
Amortization of intangible assets 461 203
204 1,063 1,138
Total depreciation and amortization $ 5,816 $ 5,284 $ 4,646
$ 20,904 $ 20,202 Net increase
(decrease) in cash, cash equivalents and marketable securities: $
3,427 $ (5,342 ) $ (8,172 ) $ (20,082 ) $ (25,384 )
End of period statistics: Approximate number of
active customers 963 981 1,095 963 1,095
Number of employees and employee
equivalents
509
556 520
509
520
LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)
Three Months Ended Twelve Months
Ended December 31, September 30,
December 31, December 31, December 31,
2015 2015 2014
2015 2014
Operating activities Net loss $ (4,145 ) $ (7,762 ) $ (5,007
) $ (23,952 ) $ (24,591 ) Income from discontinued operations
- - - -
265 Net loss from continuing operations (4,145 )
(7,762 ) (5,007 ) (23,952 ) (24,856 ) Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities of continuing operations: Depreciation and amortization
5,816 5,284 4,646 20,904 20,202 Share-based compensation 2,863
3,124 2,691 12,338 10,491 Foreign currency remeasurement loss
(gain) 492 (488 ) (1,100 ) (1,591 ) (2,167 ) Deferred income taxes
67 94 (174 ) 46 (359 ) Accounts receivable charges 299 268 (75 )
1,037 408 Amortization of premium on marketable securities 42 46 85
194 459 Non cash tax benefit associated with income from
discontinued operations - - - - (59 ) Changes in operating assets
and liabilities: Accounts receivable 57 4,025 (104 ) (5,210 )
(1,600 ) Prepaid expenses and other current assets (490 ) 498 (747
) (194 ) (1,792 ) Income taxes receivable 9 24 95 44 150 Other
assets 1,477 578 616 3,064 1,607 Accounts payable and other current
liabilities (425 ) (1,156 ) (977 ) 85 122 Deferred revenue (681 )
(568 ) (216 ) (932 ) (1,109 ) Income taxes payable (2 ) (78 ) (19 )
(80 ) (233 ) Other long term liabilities 1,358
(225 ) (251 ) 688 (796 ) Net cash
provided by (used in) operating activities of continuing operations
6,737 3,664 (537 ) 6,441
468
Investing activities
Purchases of marketable securities - (4,899 ) (7,813 ) (16,821 )
(25,482 ) Maturities of marketable securities 5,700 5,160 6,600
22,620 22,150 Purchases of property and equipment (3,960 ) (8,693 )
(4,597 ) (24,714 ) (18,581 ) Proceeds from sale of discontinued
operations - - - -
414 Net cash provided by (used in) investing
activities of continuing operations 1,740
(8,432 ) (5,810 ) (18,915 ) (21,499 )
Financing activities Payments on capital lease obligations
(95 ) - (54 ) (453 ) (466 ) Payment of employee tax withholdings
related to restricted stock vesting (348 ) (335 ) (340 ) (2,627 )
(1,795 ) Cash paid for purchase of common stock - - (2,042 ) (957 )
(4,542 ) Proceeds from line of credit - - - - - Proceeds from
employee stock plans 1,287 212
414 4,018 1,381 Net cash
provided by (used in) financing activities of continuing operations
844 (123 ) (2,022 ) (19 )
(5,422 ) Effect of exchange rate changes on cash and cash
equivalents (93 ) (159 ) (892 ) (594 )
(1,732 )
Discontinued operations Cash used in
operating activities of discontinued operations -
- - - (4 )
Net
increase (decrease) in cash and cash equivalents 9,228 (5,050 )
(9,261 ) (13,087 ) (28,189 )
Cash and cash equivalents,
beginning of period 35,452 40,502
67,028 57,767 85,956
Cash and cash equivalents, end of period $ 44,680 $
35,452 $ 57,767 $ 44,680 $ 57,767
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use non-generally
accepted accounting principles (Non-GAAP) net loss, EBITDA from
continuing operations and Adjusted EBITDA as supplemental measures
of operating performance. These measures include the same
adjustments that management takes into account when it reviews and
assesses operating performance on a period-to-period basis. We
consider Non-GAAP net loss to be an important indicator of overall
business performance. We define Non-GAAP net loss to be U.S. GAAP
net loss, adjusted to exclude share-based compensation, litigation
expenses, amortization of intangible assets, the gain (loss) on
sale of our web content management (WCM) business and discontinued
operations. We believe that EBITDA from continuing operations
provides a useful metric to investors to compare us with other
companies within our industry and across industries. We define
EBITDA from continuing operations as U.S. GAAP net loss adjusted to
exclude interest and other (income) expense, interest expense,
income tax expense, depreciation and amortization, discontinued
operations and gain (loss) on sale of WCM. We define Adjusted
EBITDA as EBITDA from continuing operations adjusted to exclude
share-based compensation and litigation expenses. We use Adjusted
EBITDA as a supplemental measure to review and assess operating
performance. We also believe use of Adjusted EBITDA facilitates
investors’ use of operating performance comparisons from
period-to-period, as well as across companies.
The terms Non-GAAP net loss, EBITDA from continuing operations
and Adjusted EBITDA are not defined under U.S. GAAP, and are not
measures of operating income, operating performance or liquidity
presented in accordance with U.S. GAAP. Our Non-GAAP net loss,
EBITDA from continuing operations and Adjusted EBITDA have
limitations as analytical tools, and when assessing our operating
performance, Non-GAAP net loss, EBITDA from continuing operations
and Adjusted EBITDA should not be considered in isolation, or as a
substitute for net loss or other consolidated income statement data
prepared in accordance with U.S. GAAP. Some of these limitations
include, but are not limited to:
- EBITDA from continuing operations and
Adjusted EBITDA do not reflect our cash expenditures or future
requirements for capital expenditures or contractual
commitments;
- these measures do not reflect changes
in, or cash requirements for, our working capital needs;
- these measures do not reflect the cash
requirements necessary for litigation costs;
- these measures do not reflect the
interest expense, or the cash requirements necessary to service
interest or principal payments, on our debt that we may incur;
- these measures do not reflect income
taxes or the cash requirements for any tax payments;
- although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized
will be replaced sometime in the future, and EBITDA from continuing
operations and Adjusted EBITDA do not reflect any cash requirements
for such replacements;
- while share-based compensation is a
component of operating expense, the impact on our financial
statements compared to other companies can vary significantly due
to such factors as the assumed life of the options and the assumed
volatility of our common stock; and
- other companies may calculate EBITDA
from continuing operations and Adjusted EBITDA differently than we
do, limiting their usefulness as comparative measures.
We compensate for these limitations by relying primarily on our
U.S. GAAP results and using Non-GAAP net income (loss), EBITDA from
continuing operations, and Adjusted EBITDA only as supplemental
support for management's analysis of business performance. Non-GAAP
net income (loss), EBITDA from continuing operations and Adjusted
EBITDA are calculated as follows for the periods presented in
thousands:
Reconciliation of Non-GAAP Financial Measures
Limelight is presenting the most directly comparable U.S. GAAP
financial measures and reconciling the non-GAAP financial metrics
to the comparable U.S. GAAP measures. Per share amounts may not
foot due to rounding.
LIMELIGHT NETWORKS, INC.Reconciliation of U.S.
GAAP Net Loss to Non-GAAP Net Loss(In
thousands)(Unaudited) Three Months
Ended Twelve Months Ended December 31,
2015 September 30, 2015 December 31, 2014
December 31, 2015 December 31, 2014 Amount
Per Share Amount Per Share Amount
Per Share Amount Per Share Amount
Per Share U.S. GAAP net loss $ (4,145 ) $ (0.04 ) $
(7,762 ) $ (0.08 ) $ (5,007 ) $ (0.05 ) $ (23,952 ) $ (0.24 ) $
(24,591 ) $ (0.25 ) Share-based compensation 2,863 0.03
3,124 0.03 2,691 0.03 12,338 0.12 10,491 0.11 Litigation expenses
402 0.00 140 0.00 (3 ) (0.00 ) (613 ) (0.01 ) 817 0.01 Amortization
of intangible assets 461 0.00 203 0.00 204 0.00 1,063 0.01 1,138
0.01 Loss on sale of the Web Content Management business - - - - -
- - - 62 0.00 (Loss) income from discontinued operations -
- - - -
- - - (265
) (0.00 ) Non-GAAP net loss $ (419 ) $ (0.00 ) $
(4,295 ) $ (0.04 ) $ (2,115 ) $ (0.02 ) $ (11,164 ) $ (0.11 ) $
(12,348 ) $ (0.13 ) Weighted average shares used in
per share calculation 101,391 100,552 98,637 100,105 98,365
LIMELIGHT NETWORKS,
INC.Reconciliation of U.S. GAAP Net Loss to EBITDA to
Adjusted EBITDA(In thousands)(Unaudited)
Three Months Ended Twelve Months Ended
December 31, September 30, December 31,
December 31, December 31, 2015
2015 2014
2015 2014 U.S. GAAP net
loss $ (4,145 ) $ (7,762 ) $ (5,007 ) $ (23,952 ) $ (24,591 )
Depreciation and amortization 5,816 5,284 4,646 20,904
20,202 Interest expense 25 - 6 29 32 Loss on sale of the Web
Content Management business - - - - 62 Interest and other expense
(income) 321 (555 ) (880 ) (2,065 ) (2,159 ) Income tax expense 46
76 22 267 203 (Loss) income from discontinued operations -
- - - (265
) EBITDA from continuing operations $ 2,063 $ (2,957 ) $
(1,213 ) $ (4,817 ) $ (6,516 ) Share-based compensation
2,863 3,124 2,691 12,338 10,491 Litigation expenses 402
140 (3 ) (613 ) 817
Adjusted EBITDA $ 5,328 $ 307 $ 1,475
$ 6,908 $ 4,792
Conference Call
At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management
will host a quarterly conference call for investors. Investors can
access this call toll-free at 877-388-8480 within the United States
or +1 678-809-1592 outside of the U.S. The conference call will
also be audiocast live from http://www.limelight.com and a replay
will be available following the call from the Limelight
website.
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties. These statements include, among
others, statements regarding our strategic focus; our expectations
regarding revenues for the full year 2016; gross margin, non-GAAP
net income (loss) and capital expenditures for the full year 2016;
the growth of our business; the performance of our services; our
expectations regarding the Akamai litigation; our future prospects;
and our position in our industry. Our expectations and beliefs
regarding these matters may not materialize. The potential risks
and uncertainties that could cause actual results or outcomes to
differ materially from the results or outcomes predicted include,
among other things, reduction of demand for our services from new
or existing customers, unforeseen changes in our hiring patterns,
adverse outcomes in litigation, and experiencing expenses that
exceed our expectations. A detailed discussion of these factors and
other risks that affect our business is contained in our SEC
filings, including our most recent reports on Forms 10-K and 10-Q,
particularly under the heading “Risk Factors.” Copies of these
filings are available online on our investor relations website at
investors.limelightnetworks.com and on the SEC website at
www.SEC.gov. All information provided in this release and in the
attachments is as of February 9, 2016, and we undertake no duty to
update this information in light of new information or future
events, unless required by law.
About Limelight
Limelight Networks (NASDAQ: LLNW), a global leader in digital
content delivery, empowers customers to better engage online
audiences by enabling them to securely manage and
globally deliver digital content, on any device. The company’s
award winning Limelight Orchestrate™ platform includes an
integrated suite of content delivery technology and services that
helps organizations secure digital content, deliver exceptional
multi-screen experiences, improve brand awareness, drive revenue,
and enhance customer relationships — all while reducing costs. For
more information, please visit www.limelight.com, read
our blog, follow us
on Twitter, Facebook and LinkedIn and be
sure to visit Limelight Connect.”
Copyright (C) 2015 Limelight Networks, Inc. All rights reserved.
All product or service names are the property of their respective
owners.
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version on businesswire.com: http://www.businesswire.com/news/home/20160209006503/en/
Limelight Networks, Inc.Sajid Malhotra,
602-850-5778ir@llnw.com
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