- Q4 Revenue of $43.8 million, up 2
percent, year over year and up 11 percent sequentially
- Q4 Gross Margin of 44.9%, up 390 basis
points, year over year
- Q4 GAAP EPS of $(0.04) and Non-GAAP EPS
of $0.02
- Cash and marketable securities of $66.2
million
Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a global
leader in digital content delivery, today reported revenue of $43.8
million for the fourth quarter of 2016, up 2 percent, compared to
$42.7 million in the fourth quarter of 2015, and up 11 percent,
compared to $39.5 million in the third quarter of 2016. Currency
headwinds negatively impacted year-over-year comparison by $0.3
million and sequential comparison by $0.5 million.
Gross margin was 44.9% in the fourth quarter of 2016, an
increase of 390 basis points from 41.0% in the fourth quarter of
2015, and up 380 basis points from 41.1% in the third quarter of
2016.
Limelight reported a net loss of $3.9 million, or $0.04 per
basic share for the fourth quarter of 2016, compared to a net loss
of $4.1 million, or $0.04 per basic share in the fourth quarter of
2015.
Non-GAAP net income was $1.8 million or $0.02 per basic share
for the fourth quarter of 2016, compared to a non-GAAP net loss of
$0.4 million, or break-even per basic share in the fourth quarter
of 2015.
EBITDA was $1.9 million for the fourth quarter of 2016, compared
to $2.1 million for the fourth quarter of 2015. Adjusted EBITDA was
$7.5 million for the fourth quarter of 2016 compared to $5.3
million for the fourth quarter of 2015.
For the full year ended December 31, 2016, Limelight reported
revenue of $168.2 million, a decrease of 2% compared to $170.9
million for the year ended December 31, 2015. Currency negatively
impacted full year revenue by $0.8 million.
Gross margin was 42.4% for the year ended December 31, 2016, an
increase of 250 basis points compared to 39.9% for the year ended
December 31, 2015.
Limelight reported a net loss of $73.9 million, or $0.71 per
basic share, for the year ended December 31, 2016, compared to a
net loss of $24.0 million, or $0.24 per basic share, in 2015. The
full year 2016 net loss includes a $54.0 million provision for
litigation related to the settlement and license agreement with
Akamai.
Non-GAAP net income was $0.8 million, or $0.01 per basic share,
for the year ended December 31, 2016, compared to a non-GAAP net
loss of $11.2 million, or $0.11 per basic share, in the same period
of 2015.
EBITDA was negative $51.9 million for the year ended December
31, 2016, compared to negative $4.8 million for the year ended
December 31, 2015. Adjusted EBITDA was $22.8 million for the year
ended December 31, 2016, compared to $6.9 million for the year
ended December 31, 2015.
Limelight ended the fourth quarter with 510 employees and
employee equivalents, up from 502 at the end of the third quarter
of 2016, and up slightly from 509 at the end of 2015.
Commenting on the fourth quarter and full year results, Chief
Executive Officer, Robert Lento said, “The fourth quarter was
our strongest of the year, and 2016 was our best year ever across a
number of operational and financial metrics. These results help
solidify our belief that the transition to profitable growth is
underway and gaining momentum.”
"We operate in an attractive industry and our position is
improving significantly. We’ve set aggressive goals for 2017 and we
are pleased with the business trends as we begin the year. We
believe our disciplined approach to drive better business
performance is the best way to build a stronger company that
delivers superior solutions for our customers and incremental value
for our shareholders."
Based on current conditions, Limelight is confirming the
following guidance for 2017:
- Revenue between $175 million and $180
million,
- GAAP gross margin expansion greater
than 150 basis points over 2016,
- Non-GAAP earnings per share between
$0.02 and $0.06 per share,
- Adjusted EBITDA is expected to be
between $22 million and $27 million, and
- Capital expenditures at approximately
$20 million dollars.
Financial Tables
LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except per share data)
December 31, September 30, December
31, 2016 2016 2015 (Unaudited)
(Unaudited) ASSETS Current assets: Cash and cash
equivalents $ 21,734 $ 74,400 $ 44,680 Marketable securities 44,453
- 28,322 Accounts receivable, net 27,418 22,859 26,795 Income taxes
receivable 125 117 170 Deferred income taxes 88 85 89 Prepaid
expenses and other current assets 4,865 5,347
9,578 Total current assets 98,683 102,808
109,634 Property and equipment, net 30,352 29,643 36,143 Marketable
securities, less current portion 40 40 40 Deferred income taxes,
less current portion 1,017 1,317 1,252 Goodwill 76,243 76,437
76,143 Other assets 1,794 1,848
2,415 Total assets $ 208,129 $ 212,093 $
225,627
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 8,790 $ 9,922 $ 9,137
Deferred revenue 2,138 1,400 2,890 Capital lease obligations - -
466 Income taxes payable 188 141 204 Provision for litigation
18,000 18,000 - Other current liabilities 12,836
10,828 10,857 Total current liabilities
41,952 40,291 23,554 Capital lease obligations, less current
portion - - 1,436 Deferred income taxes 152 148 137 Deferred
revenue, less current portion 22 30 92 Provision for litigation,
less current portion 27,000 31,500 - Other long-term liabilities
1,435 1,747 2,311 Total
liabilities 70,561 73,716 27,530 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;
107,059, 105,218 and 102,299 shares issued and outstanding at
December 31, 2016, September 30, 2016 and December 31, 2015,
respectively 107 105 102 Additional paid-in capital 490,819 486,574
477,202 Accumulated other comprehensive loss (11,038 ) (9,901 )
(10,812 ) Accumulated deficit (342,320 ) (338,401 )
(268,395 ) Total stockholders' equity 137,568
138,377 198,097 Total liabilities and
stockholders' equity $ 208,129 $ 212,093 $ 225,627
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 2016 2016
Change 2015 Change 2016 2015
Change Revenues $ 43,778 $ 39,473 11% $ 42,739 2% $
168,234 $ 170,912 -2% Cost of revenue: Cost of services (1) 19,642
18,834 4% 20,388 -4% 78,857 84,818 -7% Depreciation - network 4,474
4,401 2% 4,811 -7% 18,032 17,975 0% Total cost of revenue 24,116
23,235 4% 25,199 -4% 96,889 102,793 -6% Gross profit 19,662 16,238
21% 17,540 12% 71,345 68,119 5% Gross profit percentage 44.9% 41.1%
41.0% 42.4% 39.9% Operating expenses: General and administrative
(1) 7,960 8,033 -1% 5,509 44% 30,042 25,027 20% Sales and marketing
(1) 8,215 7,711 7% 8,101 1% 32,945 37,868 -13% Research &
development (1) 6,094 5,626 8% 6,678 -9% 24,335 28,016 -13%
Depreciation and amortization 590 613 -4% 1,005 -41% 2,452 2,929
-16% Provision for litigation - - NA - NA 54,000 - NM Total
operating expenses 22,859 21,983 4% 21,293 7% 143,774 93,840 53%
Operating loss (3,197) (5,745) -44% (3,753) -15% (72,429)
(25,721) 182% Other income (expense): Interest expense (54)
(406) -87% (25) 116% (918) (29) NM Interest income 101 8 NM 86 17%
123 317 -61% Other, net (570) 151 -477% (407) 40% (98) 1,748 -106%
Total other income (expense) (523) (247) 112% (346) 51% (893) 2,036
-144% Loss before income taxes (3,720) (5,992) -38% (4,099)
-9% (73,322) (23,685) 210% Income tax expense 199 130 53% 46 333%
603 267 126% Net loss (3,919) (6,122) -36% (4,145) -5%
(73,925) (23,952) 209% Net loss per share: Basic and diluted
$ (0.04) $ (0.06) $ (0.04) $ (0.71) $ (0.24) Weighted
average shares used in per share calculation: Basic and diluted
105,942 104,860 101,391 104,350 100,105
(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,
2016 2016 2015 2016 2015
Share-based compensation: Cost of services $ 375 $
209 $ 563 $ 1,493 $ 2,047 General and administrative 1,951 1,616
1,002 7,070 5,398 Sales and marketing 776 641 716 2,792 2,657
Research and development 581 521 582
2,104 2,236 Total share-based
compensation $ 3,683 $ 2,987 $ 2,863 $ 13,459 $
12,338
Depreciation and amortization:
Network-related depreciation $ 4,474 $ 4,401 $ 4,811 $ 18,032 $
17,975 Other depreciation and amortization 590 611 544 2,438 1,866
Amortization of intangible assets - 2
461 14 1,063 Total depreciation
and amortization $ 5,064 $ 5,014 $ 5,816 $ 20,484 $
20,904 Net increase (decrease) in cash, cash
equivalents and marketable securities: $ (8,213 ) $ 43,515 $ 3,427
$ (6,815 ) $ (20,082 )
End of period
statistics: Approximate number of active customers 851
875 963 851 963 Number of employees and employee equivalents
510 502 509 510 509
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended Twelve Months Ended
December 31,2016
September 30,2016
December 31,2015
December 31,2016
December 31,2015
Operating activities Net loss $ (3,919) $ (6,122) $
(4,145) $ (73,925) $ (23,952)
Adjustments to reconcile net loss to net
cash provided by (used in)operating activities:
Depreciation and amortization 5,064 5,014 5,816 20,484 20,904
Share-based compensation 3,683 2,987 2,863 13,459 12,338 Accrual of
provision for litigation - - - 54,000 - Foreign currency
remeasurement loss (gain) 76 343 492 585 (1,591) Deferred income
taxes 195 (39) 67 170 46 Gain on sale of property and equipment
(218) (162) - (514) - Accounts receivable charges 101 69 299 137
1,037 Amortization of premium on marketable securities 48 - 42 67
194 Realized loss on sale of marketable securities - - - 32 -
Changes in operating assets and liabilities: Accounts receivable
(4,661) 1,944 57 (760) (5,210) Prepaid expenses and other current
assets 315 941 (490) 4,648 (194) Income taxes receivable (15) 16 9
39 44 Other assets 22 50 1,477 580 3,064 Accounts payable and other
current liabilities (1,087) 1,769 (425) (1,757) 85 Deferred revenue
730 (1,091) (681) (822) (932) Income taxes payable 68 (21) (2) (8)
(80) Payments for provision for litigation (4,500) (4,500) -
(9,000) - Other long term liabilities (307) (213) 1,358 (857) 688
Net cash provided by (used in) operating activities (4,405) 985
6,737 6,558 6,441
Investing activities Purchases of
marketable securities (45,629) - - (45,629) (16,821) Sale and
maturities of marketable securities 1,000 - 5,700 29,315 22,620
Change in restricted cash - 62,790 - - - Purchases of property and
equipment (4,897) (2,986) (3,960) (9,563) (24,714) Proceeds from
sale of property and equipment 504 - - 504 - Net cash provided by
(used in) investing activities (49,022) 59,804 1,740 (25,373)
(18,915)
Financing activities Principal payments on
capital lease obligations - (4,207) (95) (4,685) (453) Payment of
employee tax withholdings related to restricted stock vesting (676)
(362) (348) (1,982) (2,627) Cash paid for purchase of common stock
- - - - (957) Proceeds from line of credit - (12,790) - - -
Proceeds from employee stock plans 1,839 48 1,287 2,743 4,018 Net
cash provided by (used in) financing activities 1,163 (17,311) 844
(3,924) (19) Effect of exchange rate changes on cash and cash
equivalents (402) 37 (93) (207) (594)
Net increase (decrease) in
cash and cash equivalents (52,666) 43,515 9,228 (22,946)
(13,087)
Cash and cash equivalents, beginning of period
74,400 30,885 35,452 44,680 57,767
Cash and cash equivalents,
end of period $ 21,734 $ 74,400 $ 44,680 $ 21,734 $ 44,680
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use non-generally
accepted accounting principles (Non-GAAP) net income (loss), EBITDA
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 income (loss) to be an important indicator of overall
business performance. We define Non-GAAP net income (loss) to be
U.S. GAAP net income (loss) adjusted to exclude provision for
litigation, share-based compensation, litigation expenses and
amortization of intangible assets. We believe that EBITDA provides
a useful metric to investors to compare us with other companies
within our industry and across industries. We define EBITDA as U.S.
GAAP net income (loss) adjusted to exclude depreciation and
amortization, interest expense, interest and other (income)
expense, and income tax expense. We define Adjusted EBITDA as
EBITDA adjusted to exclude provision for litigation, share-based
compensation and litigation expenses. We use Adjusted EBITDA as a
supplemental measure to review and assess operating performance.
Our management uses these Non-GAAP financial measures because,
collectively, they provide valuable information on the performance
of our on-going operations, excluding non-cash charges, taxes and
non-core activities (including interest payments related to
financing activities). These measures also enable our management to
compare the results of our on-going operations from period to
period, and allow management to review the performance of our
on-going operations against our peer companies and against other
companies in our industry and adjacent industries. We believe these
measures also provide similar insights to investors, and enable
investors to review our results of operations “through the eyes of
management.”
Furthermore, our management uses these Non-GAAP financial
measures to assist them in making decisions regarding our strategic
priorities and areas for future investment and focus.
The terms Non-GAAP net income (loss), EBITDA 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 income (loss), EBITDA and Adjusted
EBITDA have limitations as analytical tools, and when assessing our
operating performance, Non-GAAP net income (loss), EBITDA and
Adjusted EBITDA should not be considered in isolation, or as a
substitute for net income (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 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;
- Non-GAAP net income (loss) and Adjusted
EBITDA do not reflect the cash requirements necessary for
litigation costs, including provision for litigation and litigation
expenses;
- 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 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 Non-GAAP
net income (loss), EBITDA 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, and
Adjusted EBITDA only as supplemental support for management's
analysis of business performance. Non-GAAP net income (loss),
EBITDA 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 Income (Loss) (In
thousands) (Unaudited)
Three Months Ended Twelve Months Ended
December 31, 2016 September 30, 2016 December 31,
2015 December 31, 2016 December 31, 2015
Amount Per Share Amount Per Share
Amount Per Share Amount Per
Share Amount Per Share U.S. GAAP net loss
$ (3,919 ) $ (0.04 ) $ (6,122 ) $ (0.06 ) $ (4,145 ) $ (0.04 ) $
(73,925 ) $ (0.71 ) $ (23,952 ) $ (0.24 ) Provision for
litigation - - - - - - 54,000 0.52 - - Share-based compensation
3,683 0.03 2,987 0.03 2,863 0.03 13,459 0.13 12,338 0.12 Litigation
expenses 1,998 0.02 2,837 0.03 402 0.00 7,284 0.07 (613 ) (0.01 )
Amortization of intangible assets - -
2 0.00 461 0.00
14 0.00 1,063
0.01 Non-GAAP net income (loss) $ 1,762
$ 0.02 $ (296 ) $ (0.00 ) $ (419 ) $ (0.00 ) $ 832 $
0.01 $ (11,164 ) $ (0.11 ) Weighted average
shares used in per share calculation 105,942 104,860 101,391
104,350 100,105
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, 2016 2016 2015 2016
2015
U.S. GAAP net loss
$ (3,919 ) $ (6,122 ) $ (4,145 ) $ (73,925 ) $ (23,952 )
Depreciation and amortization 5,064 5,014 5,816 20,484 20,904
Interest expense 54 406 25 918 29 Interest and other (income)
expense 469 (159 ) 321 (25 ) (2,065 ) Income tax expense 199
130 46 603
267
EBITDA
$ 1,867 $ (731 ) $ 2,063 $ (51,945 ) $ (4,817 ) Provision
for litigation - - - 54,000 - Share-based compensation 3,683 2,987
2,863 13,459 12,338 Litigation expenses 1,998
2,837 402 7,284 (613 )
Adjusted EBITDA
$ 7,548 $ 5,093 $ 5,328 $ 22,798 $
6,908
For future periods, we are unable to provide a reconciliation of
EBITDA and Adjusted EBITDA to net loss as a result of the
uncertainty regarding, and the potential variability of, the
amounts of depreciation and amortization, interest expense,
interest and other (income) expense and income tax expense, that
may be incurred in the future.
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 audio cast 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 expectations regarding revenue,
gross margin, non-GAAP net income, capital expenditures,
litigation, and our future prospects. 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 8, 2017, 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) 2017 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/20170208005820/en/
Limelight Networks, Inc.Sajid Malhotra,
602-850-5778ir@llnw.com
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