- Revenue of $58.5 million, up 28% year over year
- GAAP basic EPS of $(0.01) and Non-GAAP EPS of $0.03
- Adjusted EBITDA of $9.7 million
- Increased full year revenue guidance
Limelight Networks, Inc. (Nasdaq: LLNW) (Limelight), a leading
provider of video delivery and edge cloud services, today reported
revenue of $58.5 million for the second quarter of 2020, up 28
percent, compared to $45.9 million in the second quarter of 2019.
Year-over-year currency impact was negative by approximately $0.1
million.
Limelight reported a GAAP net loss of $1.7 million, or $(0.01)
per basic share for the second quarter of 2020, compared to net
loss of $7.2 million, or $(0.06) per basic share in the second
quarter of 2019.
Non-GAAP net income was $3.5 million or $0.03 per basic share
for the second quarter of 2020, compared to a non-GAAP net loss of
$3.5 million, or $(0.03) per basic share in the second quarter of
2019.
EBITDA was $4.5 million for the second quarter of 2020, compared
to negative $2.2 million for the second quarter of 2019. Adjusted
EBITDA was $9.7 million for the second quarter of 2020 compared to
$1.4 million for the second quarter of 2019.
Limelight ended the second quarter with 627 employees and
employee equivalents, up from 616 at the end of the first quarter
of 2020, and up from 594 at the end of the second quarter of
2019.
“This is our best ever second quarter financial performance. Our
growth, including the over 400 basis point sequential improvement
in gross margin, is due to strong execution of our 2020 strategy.
Through our relentless focus on expanding capacity, optimizing
proactive management of our network, placing more control in the
hands of our customers and driving innovation, we are seeing
strength across our business and are raising our revenue guidance
for 2020,” said Robert Lento, Chief Executive Officer.
As the world continues to navigate through these uncertain
times, we play an important role in connecting people to
information and entertainment. COVID-19 has created an increased
global reliance on the Internet and content delivery, and we expect
to emerge larger and financially stronger when the pandemic ends.
The remarkable dedication of our people adapting to the challenging
times, and the commitment to meeting increased demand with
uncompromised quality for our customers is particularly noteworthy.
We recognize many face challenges during these times and will
continue our efforts to provide value and help overcome the
consequential impact of the pandemic on our communities,” Lento
added.
Based on current conditions, our full-year 2020 guidance is
updated as follows:
Limelight Networks, Inc. 2020 Guidance
July 2020 April 2020 December 2019 Actual
2019 Revenue
$230 to $240 million $225 to $235 million
$220 to $235 million $200.6 million GAAP Basic EPS $(0.10)
to break-even $(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
Break-even to $0.10
$(0.02)
Adjusted EBITDA
$28 to $35 million $25 to $35 million
$25 to $35 million $18.1 million Capital expenditures $25 to
$30 million $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)
June 30,
March 31,
December 31,
2020
2020
2019
(Unaudited) (Unaudited) ASSETS Current assets:
Cash and cash equivalents
$
18,200
$
21,421
$
18,335
Accounts receivable, net
45,246
34,603
34,476
Income taxes receivable
68
76
82
Prepaid expenses and other current assets
10,241
11,205
9,920
Total current assets
73,755
67,305
62,813
Property and equipment, net
48,908
46,636
46,136
Operating lease right of use assets
11,449
12,084
12,842
Marketable securities, less current portion
40
40
40
Deferred income taxes
1,328
1,361
1,319
Goodwill
77,113
76,867
77,102
Other assets
7,915
8,721
9,117
Total assets
$
220,508
$
213,014
$
209,369
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
17,004
$
14,297
$
12,020
Deferred revenue
934
726
976
Operating lease liability obligations
2,390
2,046
2,056
Income taxes payable
169
170
178
Other current liabilities
17,028
18,188
13,398
Total current liabilities
37,525
35,427
28,628
Operating lease liability obligations, less current portions
12,316
12,983
13,488
Deferred income taxes
283
262
239
Deferred revenue, less current portion
265
161
161
Other long-term liabilities
304
318
316
Total liabilities
50,693
49,151
42,832
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; 121,692,
119,642 and 118,368 shares issued and outstanding at June 30, 2020,
March 31, 2020 and December 31, 2019, respectively
122
120
118
Additional paid-in capital
541,363
534,205
530,285
Accumulated other comprehensive loss
(10,031
)
(10,549
)
(9,210
)
Accumulated deficit
(361,639
)
(359,913
)
(354,656
)
Total stockholders' equity
169,815
163,863
166,537
Total liabilities and stockholders' equity
$
220,508
$
213,014
$
209,369
LIMELIGHT NETWORKS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, March 31,
Percent
June 30, Percent June 30, June 30,
Percent
2020
2020
Change
2019
Change
2020
2019
Change
Revenue
$
58,546
$
57,012
3
%
$
45,904
28
%
$
115,558
$
89,184
30
%
Cost of revenue:
Cost of services (1)
29,389
31,113
-6
%
22,769
29
%
60,502
45,710
32
%
Depreciation - network
5,360
5,150
4
%
4,628
16
%
10,510
8,944
18
%
Total cost of revenue
34,749
36,263
-4
%
27,397
27
%
71,012
54,654
30
%
Gross profit
23,797
20,749
15
%
18,507
29
%
44,546
34,530
29
%
Gross profit percentage
40.6
%
36.4
%
40.3
%
38.5
%
38.7
%
Operating expenses:
General and administrative (1)
8,187
7,882
4
%
8,340
-2
%
16,069
15,875
1
%
Sales and marketing (1)
10,929
11,894
-8
%
10,994
-1
%
22,823
21,966
4
%
Research & development (1)
5,572
5,618
-1
%
6,013
-7
%
11,189
11,915
-6
%
Depreciation and amortization
323
341
-5
%
127
154
%
665
372
79
%
Total operating expenses
25,011
25,735
-3
%
25,474
-2
%
50,746
50,128
1
%
Operating loss
(1,214
)
(4,986
)
NM
(6,967
)
NM
(6,200
)
(15,598
)
NM
Other income (expense):
Interest expense
(71
)
(10
)
NM
(10
)
NM
(82
)
(20
)
NM
Interest income
6
25
NM
110
NM
31
321
NM
Other, net
(312
)
(110
)
NM
(70
)
NM
(421
)
(76
)
NM
Total other (expense) income
(377
)
(95
)
NM
30
NM
(472
)
225
NM
Loss before income taxes
(1,591
)
(5,081
)
NM
(6,937
)
NM
(6,672
)
(15,373
)
NM
Income tax expense
136
176
NM
255
NM
311
378
NM
Net loss
$
(1,727
)
$
(5,257
)
NM
$
(7,192
)
NM
$
(6,983
)
$
(15,751
)
NM
Net loss per share:
Basic
$
(0.01
)
$
(0.04
)
$
(0.06
)
$
(0.06
)
$
(0.14
)
Diluted
$
(0.01
)
$
(0.04
)
$
(0.06
)
$
(0.06
)
$
(0.14
)
Weighted average shares used in per share calculation:
Basic
120,230
118,964
115,275
119,597
114,843
Diluted
120,230
118,964
115,275
119,597
114,843
(1) Includes share-based
compensation (see supplemental table for figures)
LIMELIGHT NETWORKS, INC. SUPPLEMENTAL FINANCIAL DATA
(In thousands) (Unaudited) Three
Months Ended Six Months Ended June 30,
March 31, June 30, June 30, June 30,
2020
2020
2019
2020
2019
Share-based compensation: Cost of services
$
792
$
763
$
377
$
1,555
$
788
General and administrative
2,257
2,241
2,140
4,498
4,234
Sales and marketing
1,322
1,228
598
2,550
1,082
Research and development
880
832
534
1,712
1,001
Total share-based compensation
$
5,251
$
5,064
$
3,649
$
10,315
$
7,105
Depreciation and amortization: Network-related
depreciation
$
5,360
$
5,150
$
4,628
$
10,510
$
8,944
Other depreciation and amortization
323
341
127
665
372
Total depreciation and amortization
$
5,683
$
5,491
$
4,755
$
11,175
$
9,316
Net increase (decrease) in cash, cash equivalents and
marketable securities:
$
(3,221
)
$
3,086
$
(9,719
)
$
(135
)
$
(21,544
)
End of period statistics: Approximate
number of active customers
560
573
621
560
621
Number of employees and employee equivalents
627
616
594
627
594
LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, March 31,
June 30, June 30, June 30,
2020
2020
2019
2020
2019
Operating
activities Net loss
$
(1,727
)
$
(5,257
)
$
(7,192
)
$
(6,983
)
$
(15,751
)
Adjustments to reconcile
net income (loss) to net cash provided by (used in) operating
activities: Depreciation and
amortization
5,683
5,491
4,755
11,175
9,316
Share-based compensation
5,251
5,064
3,649
10,315
7,105
Foreign currency remeasurement loss (gain)
257
(397
)
(135
)
(140
)
(125
)
Deferred income taxes
59
(44
)
82
15
31
Gain on sale of property and equipment
-
-
(21
)
-
(51
)
Accounts receivable charges
155
158
437
313
694
Amortization of premium on marketable securities
-
-
8
-
20
Changes in operating assets and liabilities:
Accounts receivable
(10,798
)
(285
)
(2,031
)
(11,083
)
(5,751
)
Prepaid expenses and other current assets
986
(1,433
)
582
(447
)
108
Income taxes receivable
10
3
-
13
(2
)
Other assets
1,121
626
(1,685
)
1,747
(3,422
)
Accounts payable and other current liabilities
1,045
5,892
4,230
6,937
6,473
Deferred revenue
313
(250
)
(148
)
63
(445
)
Income taxes payable
-
2
81
2
143
Payments related to litigation, net
-
-
(1,520
)
-
(3,040
)
Other long term liabilities
(15
)
6
22
(11
)
(152
)
Net cash provided by (used in) operating activities
2,340
9,576
1,114
11,916
(4,849
)
Investing
activities Purchases of
marketable securities
-
-
(1,013
)
-
(10,279
)
Sale and maturities of marketable securities
-
-
18,929
-
31,153
Purchases of property and equipment
(8,085
)
(6,863
)
(11,456
)
(14,948
)
(16,474
)
Proceeds from sale of property and equipment
-
-
17
-
46
Net cash provided by (used in) investing activities
(8,085
)
(6,863
)
6,477
(14,948
)
4,446
Financing
activities Payment of
employee tax withholdings related to restricted stock vesting
(1,430
)
(1,515
)
(619
)
(2,945
)
(1,513
)
Proceeds from employee stock plans
3,954
2,138
1,095
6,092
1,103
Net cash provided by (used in) financing activities
2,524
623
476
3,147
(410
)
Effect of exchange rate changes on cash and cash equivalents
-
(250
)
132
(250
)
128
Net increase (decrease) in cash and cash equivalents
(3,221
)
3,086
8,199
(135
)
(685
)
Cash and cash equivalents, beginning of period
21,421
18,335
16,499
18,335
25,383
Cash and cash equivalents, end of period
$
18,200
$
21,421
$
24,698
$
18,200
$
24,698
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 share-based
compensation. 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
share-based compensation. 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
In accordance with the requirements of Item 10(e) of Regulation
S-K, we are presenting the most directly comparable U.S. GAAP
financial measures and reconciling the unaudited 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 Six
Months Ended June 30, 2020 March 31, 2020
June 30, 2019 June 30, 2020 June 30, 2019
Amount Per Share Amount Per Share
Amount Per Share Amount Per Share
Amount Per Share U.S. GAAP net loss
$
(1,727
)
$
(0.01
)
$
(5,257
)
$
(0.04
)
$
(7,192
)
$
(0.06
)
$
(6,983
)
$
(0.06
)
$
(15,751
)
$
(0.14
)
Share-based compensation
5,251
0.04
5,064
0.04
3,649
0.03
10,315
0.09
7,105
0.06
Non-GAAP net income (loss)
$
3,524
$
0.03
$
(193
)
$
(0.00
)
$
(3,543
)
$
(0.03
)
$
3,332
$
0.03
$
(8,646
)
$
(0.08
)
Weighted average basic shares used in per share
calculation
120,230
118,964
115,275
119,597
114,843
LIMELIGHT NETWORKS, INC. Reconciliation of U.S.
GAAP Net Loss to EBITDA to Adjusted EBITDA (In
thousands) (Unaudited) Three Months
Ended Six Months Ended June 30, March
31, June 30, June 30, June 30,
2020
2020
2019
2020
2019
U.S. GAAP net loss
$
(1,727
)
$
(5,257
)
$
(7,192
)
$
(6,983
)
$
(15,751
)
Depreciation and amortization
5,683
5,491
4,755
11,175
9,316
Interest expense
71
10
10
82
20
Interest and other (income) expense
306
85
(40
)
390
(245
)
Income tax expense
136
176
255
311
378
EBITDA
$
4,469
$
505
$
(2,212
)
$
4,975
$
(6,282
)
Share-based compensation
5,251
5,064
3,649
10,315
7,105
Adjusted EBITDA
$
9,720
$
5,569
$
1,437
$
15,290
$
823
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. EDT (1:30 p.m. PDT) 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 (loss), 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 July 20, 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, and
follow us on Twitter, Facebook and LinkedIn.
Copyright (C) 2020 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: https://www.businesswire.com/news/home/20200720005618/en/
Limelight Networks, Inc. Sajid Malhotra, 602-850-5778
ir@llnw.com
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