- Record revenue of $60.1 million, up 37 percent year over year,
up 17% sequentially
- GAAP basic EPS of $0.02 and Non-GAAP EPS of $0.05
- EBITDA of $8.1 million and Adjusted EBITDA of $11.4
million
- Delivered record traffic, exceeding previous record by over
25%
Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a leading
provider of edge cloud services, today reported record revenue of
$60.1 million for the fourth quarter of 2019, up 37% compared to
$44.0 million in the fourth quarter of 2018.
Limelight reported GAAP net income of $2.5 million, or $0.02 per
basic share for the fourth quarter of 2019, compared to a net loss
of $5.2 million, or $0.05 per basic share, in the fourth quarter of
2018.
Non-GAAP net income was $5.8 million, or $0.05 per basic share,
for the fourth quarter of 2019, compared to non-GAAP net income of
$0.3 million, or break even per basic share, in the fourth quarter
of 2018.
EBITDA was $8.1 million for the fourth quarter of 2019, compared
to a loss of $0.9 million for the fourth quarter of 2018. Adjusted
EBITDA was $11.4 million for the fourth quarter of 2019, compared
to $4.6 million for the fourth quarter of 2018.
For the full year ended December 31, 2019, Limelight reported
revenue of $200.6 million, an increase of 3% compared to $195.7
million for the year ended December 31, 2018.
Limelight reported GAAP net loss of $16.0 million, or $0.14 per
basic share, for the year ended December 31, 2019, compared to net
income of $9.8 million, or $0.09 per basic share, in 2018. Net
income for the full year of 2018 includes $14.9 million, or $0.12
per basic share, of non-operating income related to the settlement
and patent license agreement.
Non-GAAP net loss was $2.3 million, or $0.02 per basic share,
for the year ended December 31, 2019, compared to non-GAAP net
income of $13.7 million, or $0.12 per basic share, in 2018.
EBITDA was $4.3 million for the year ended December 31, 2019,
compared to $28.7 million for the year ended December 31, 2018.
Adjusted EBITDA was $18.1 million for the year ended December 31,
2019, compared to $32.5 million for the year ended December 31,
2018.
Limelight ended the fourth quarter with 610 employees and
employee equivalents, up from 609 at the end of the third quarter
of 2019, and up from 563 in the year ago period.
“The fourth quarter was our best ever performance across
multiple financial and non-financial measures as we continued to
execute our strategy of focusing on edge services and high-quality
video delivery. The business momentum accelerated during the fourth
quarter, primarily due to our significant participation in multiple
live and on-demand OTT launches by some of the largest media
companies in the world. Those companies looked to us as a trusted
partner in these launches based on the superior performance of our
network, global scale, and strong value proposition, said Bob
Lento, Chief Executive Officer at Limelight.
“We are excited about the current and projected industry trends.
We believe that we are poised to deliver a record year of volume,
revenue and growth on a number of metrics, as our 2020 guidance
reflects. OTT launches and demand for low latency-based edge
services are predicted to expand globally in 2020 and beyond. We
believe that we have unique assets to meet the computational and
connectivity challenges of emerging business, both securely and
globally. We are grateful for our customers, partners and employees
who have helped build this business and position it for continued
success,” Mr. Lento added.
Based on current conditions, and compared to 2019, our 2020
guidance implies double digit revenue growth, higher GAAP and
Non-GAAP earnings, higher adjusted EBITDA, and lower capital
expenditures.
Limelight Networks, Inc. 2020 Guidance
Actual January 2020 December 2019
2019
Revenue $223 to $235 million $220 to $235 million $200.6 million
GAAP Basic EPS $(0.10) to Break-even $(0.10) to Break-even
($0.14)
Non-GAAP EPS Break-even to $0.10 Break-even to $0.10
($0.02)
Adjusted EBITDA $25 to $35 million $25 to $35 million $18.1
million Capital expenditures $25 to $30 million $25 to $30
million $34.7 million
Financial Tables
LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except per share data)
December 31, September 30, December 31,
2019
2019
2018
(Unaudited) (Unaudited) ASSETS Current assets:
Cash and cash equivalents
$
18,335
$
14,832
$
25,383
Marketable securities
-
3,218
25,083
Accounts receivable, net
34,476
35,818
26,041
Income taxes receivable
82
77
122
Prepaid expenses and other current assets
9,920
9,522
14,789
Total current assets
62,813
63,467
91,418
Property and equipment, net
46,136
46,304
27,378
Operating lease right of use assets
12,842
12,667
-
Marketable securities, less current portion
40
40
40
Deferred income taxes
1,319
1,474
1,462
Goodwill
77,102
77,051
76,407
Other assets
9,117
7,394
2,220
Total assets
$
209,369
$
208,397
$
198,925
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
12,020
$
20,641
$
9,216
Deferred revenue
976
1,205
1,883
Operating lease liability obligations
2,056
1,870
-
Income taxes payable
178
325
124
Provision for litigation
-
-
9,000
Other current liabilities
13,398
12,516
12,922
Total current liabilities
28,628
36,557
33,145
Operating lease liability obligations, less current portion
13,488
13,331
-
Deferred income taxes
239
123
152
Deferred revenue, less current portion
161
162
42
Other long-term liabilities
316
300
435
Total liabilities
42,832
50,473
33,774
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; 118,368,
116,513 and 114,246 shares issued and outstanding at December 31,
2019, September 30, 2019 and December 31, 2018, respectively
118
117
114
Additional paid-in capital
530,285
524,758
513,682
Accumulated other comprehensive loss
(9,210)
(9,837)
(10,033)
Accumulated deficit
(354,656)
(357,114)
(338,612)
Total stockholders' equity
166,537
157,924
165,151
Total liabilities and stockholders' equity
$
209,369
$
208,397
$
198,925
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
2019
2019
Change
2018
Change
2019
2018
Change Revenue
$
60,129
$
51,321
17%
$
43,992
37%
$
200,634
$
195,670
3%
Cost of revenue:
Cost of services (1)
28,586
25,602
12%
22,141
29%
99,897
85,920
16%
Depreciation - network
5,288
4,961
7%
3,941
34%
19,193
16,277
18%
Total cost of revenue
33,874
30,563
11%
26,082
30%
119,090
102,197
17%
Gross profit
26,255
20,758
26%
17,910
47%
81,544
93,473
-13%
Gross profit percentage
43.7%
40.4%
40.7%
40.6%
47.8%
Operating expenses:
General and administrative (1)
7,554
7,356
3%
7,482
1%
30,785
32,372
-5%
Sales and marketing (1)
10,399
10,713
-3%
9,484
10%
43,078
39,553
9%
Research & development (1)
5,459
5,160
6%
5,781
-6%
22,534
24,075
-6%
Depreciation and amortization
328
172
91%
476
-31%
872
2,313
-62%
Total operating expenses
23,740
23,401
1%
23,223
2%
97,269
98,313
-1%
Operating income (loss)
2,515
(2,643)
NM
(5,313)
NM
(15,725)
(4,840)
NM
Other income (expense):
Interest expense
(45)
(10)
NM
(10)
NM
(76)
(86)
NM
Interest income
25
81
NM
230
NM
427
670
NM
Settlement and patent license income
-
-
NM
-
NM
-
14,900
NM
Other, net
169
(13)
NM
90
NM
80
(264)
NM
Total other income (expense)
149
58
NM
310
NM
431
15,220
NM
Income (loss) before income taxes
2,664
(2,585)
NM
(5,003)
NM
(15,294)
10,380
NM
Income tax expense
206
166
NM
190
NM
750
538
NM
Net income (loss)
2,458
(2,751)
NM
(5,193)
NM
(16,044)
9,842
NM
Net income (loss) per share: Basic
$
0.02
$
(0.02)
$
(0.05)
$
(0.14)
$
0.09
Diluted
$
0.02
$
(0.02)
$
(0.05)
$
(0.14)
$
0.08
Weighted average shares used in per share calculation: Basic
117,603
116,270
113,578
115,890
112,114
Diluted
123,801
116,270
113,578
115,890
120,010
(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,
2019
2019
2018
2019
2018
Share-based compensation: Cost of
services
$
376
$
331
$
756
$
1,495
$
1,815
General and administrative
1,858
2,006
2,792
8,098
8,458
Sales and marketing
597
584
963
2,263
2,837
Research and development
484
437
974
1,922
2,720
Total share-based compensation
$
3,315
$
3,358
$
5,485
$
13,778
$
15,830
Depreciation and amortization: Network-related
depreciation
$
5,288
$
4,961
$
3,941
$
19,193
$
16,277
Other depreciation and amortization
328
172
476
872
2,313
Total depreciation and amortization
$
5,616
$
5,133
$
4,417
$
20,065
$
18,590
Net increase (decrease) in cash, cash equivalents and
marketable securities:
$
285
$
(10,872)
$
(2,169)
$
(32,131)
$
1,150
End of period statistics: Approximate
number of active customers
599
609
649
599
649
Number of employees and employee equivalents
610
609
563
610
563
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,
2019
2019
2018
2019
2018
Operating activities Net income (loss)
$
2,458
$
(2,751)
$
(5,193)
$
(16,044)
$
9,842
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: Depreciation and amortization
5,616
5,133
4,417
20,065
18,590
Share-based compensation
3,315
3,358
5,485
13,778
15,830
Settlement and patent license income
-
-
-
-
(14,900)
Foreign currency remeasurement (gain) loss
79
21
(65)
(25)
(162)
Deferred income taxes
300
(61)
103
270
17
(Gain) loss on sale of property and equipment
-
(5)
(6)
(56)
(137)
Accounts receivable charges
519
580
449
1,793
902
Amortization of premium on marketable securities
1
9
33
30
115
Realized loss on marketable securities
9
-
-
9
-
Changes in operating assets and liabilities: Accounts receivable
823
(5,300)
(343)
(10,228)
5,438
Prepaid expenses and other current assets
(324)
(885)
64
(1,101)
(2,466)
Income taxes receivable
(3)
45
25
40
(31)
Other assets
(1,547)
781
201
(4,188)
(558)
Accounts payable and other current liabilities
(2,383)
(2,798)
(1,807)
1,292
(4,333)
Deferred revenue
(232)
(112)
1,004
(789)
1,089
Income taxes payable
(143)
61
17
61
(333)
Payments related to litigation, net
-
-
(1,520)
(3,040)
(9,060)
Other long term liabilities
15
16
51
(121)
(121)
Net cash provided by (used in) operating activities
8,503
(1,908)
2,915
1,746
19,722
Investing activities Purchases of marketable
securities
-
-
(4,669)
(10,279)
(20,631)
Sale and maturities of marketable securities
3,211
1,000
3,500
35,364
23,865
Purchases of property and equipment
(10,480)
(7,750)
(5,618)
(34,704)
(16,113)
Proceeds from sale of property and equipment
-
5
4
51
135
Net cash used in investing activities
(7,269)
(6,745)
(6,783)
(9,568)
(12,744)
Financing activities Payment of employee tax
withholdings related to restricted stock vesting
(1,079)
(1,015)
(985)
(3,607)
(4,793)
Cash paid for the purchase of common stock
-
-
-
-
(3,800)
Proceeds from employee stock plans
3,290
13
1,374
4,406
6,173
Net cash provided by (used in) financing activities
2,211
(1,002)
389
799
(2,420)
Effect of exchange rate changes on cash and cash equivalents
58
(211)
184
(25)
(87)
Net increase (decrease) in cash and cash equivalents
3,503
(9,866)
(3,295)
(7,048)
4,471
Cash and cash equivalents, beginning of period
14,832
24,698
28,678
25,383
20,912
Cash and cash equivalents, end of period
$
18,335
$
14,832
$
25,383
$
18,335
$
25,383
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 the settlement and
patent license income, share-based compensation and litigation
expenses. 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
the settlement and patent license income, 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
Income (Loss) to Non-GAAP Net Income (In thousands)
(Unaudited) Three Months Ended
Twelve Months Ended December 31, 2019
September 30, 2019 December 31, 2018 December 31,
2019 December 31, 2018 Amount Per Share
Amount Per Share Amount Per Share
Amount Per Share Amount Per Share
U.S. GAAP net income (loss)
$
2,458
$
0.02
$
(2,751)
$
(0.02)
$
(5,193)
$
(0.05)
$
(16,044)
$
(0.14)
$
9,842
$
0.09
Settlement and patent license income
-
-
-
-
-
-
-
-
(14,900)
(0.13)
Share-based compensation
3,315
0.03
3,358
0.03
5,485
0.05
13,778
0.12
15,830
0.14
Litigation expenses
-
-
-
-
3
0.00
-
-
2,907
0.03
Non-GAAP net income
$
5,773
$
0.05
$
607
$
0.01
$
295
$
0.00
$
(2,266)
$
(0.02)
$
13,679
$
0.12
Weighted average shares used in per share calculation
117,603
116,270
113,578
115,890
112,114
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,
2019
2019
2018
2019
2018
U.S. GAAP net income (loss)
$
2,458
$
(2,751)
$
(5,193)
$
(16,044)
$
9,842
Depreciation and amortization
5,616
5,133
4,417
20,065
18,590
Interest expense
45
10
10
76
86
Interest and other (income) expense
(194)
(68)
(320)
(507)
(406)
Income tax expense
206
166
190
750
538
EBITDA
$
8,131
$
2,490
$
(896)
$
4,340
$
28,650
Settlement and patent license income
-
-
-
-
(14,900)
Share-based compensation
3,315
3,358
5,485
13,778
15,830
Litigation expenses
-
-
3
-
2,907
Adjusted EBITDA
$
11,446
$
5,848
$
4,592
$
18,118
$
32,487
For future periods, we are unable to provide a reconciliation of
EBITDA and Adjusted EBITDA to net income (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 877-296-5190 within the United States
or +1 412-317-5233 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, 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 January 29, 2020, 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 Inc., (NASDAQ: LLNW), a leading provider of
digital content delivery, video, cloud security, and edge computing
services, empowers customers to provide exceptional digital
experiences. Limelight’s edge services platform includes a unique
combination of global private infrastructure, intelligent software,
and expert support services that enable current and future
workflows. For more information, visit www.limelight.com, follow us
on Twitter, Facebook, and LinkedIn.
Copyright (C) 2019 Limelight Networks, Inc. All rights reserved.
All product or service names are the property of their respective
owners.
Source: Limelight Networks
Ticker Slug:
Ticker: LLNW Exchange: NASDAQ
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Limelight Networks, Inc. Sajid Malhotra, 602-850-5778
ir@llnw.com
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