- Record annual revenue of $230.2 million increases 15% from
2019
- 2020 GAAP net loss of $(19.3) million versus $(16.0) million in
2019
- Full-year Adjusted EBITDA of $24.5 million rises 35% from
2019
- Bob Lyons named new President and Chief Executive Officer
Limelight Networks, Inc. (Nasdaq: LLNW) (Limelight), a leading
provider of video delivery and edge cloud services, today reported
results for its fourth quarter and year ended December 31,
2020.
Fourth-quarter Results
For the 2020 fourth quarter, the company generated revenue of
$55.4 million, compared to $60.1 million in the fourth quarter of
2019.
GAAP net loss was $(8.3) million, or $(0.07) per basic share for
the 2020 fourth quarter, compared to net income of $2.5 million, or
$0.02 per basic share in the 2019 period. GAAP net loss included
$2.2 million of interest expense related to Limelight’s senior
convertible notes issued during the 2020 third quarter.
Non-GAAP net loss was $(3.8) million or $(0.03) per basic share
for the 2020 fourth quarter, versus non-GAAP net income of $5.8
million, or $0.05 per basic share in 2019. The non-GAAP net loss
excluded $1.0 million of interest expense related to the company’s
convertible notes noted above.
Fourth-quarter adjusted EBITDA was $3.6 million, versus $11.4
million for the fourth quarter of 2019.
“I am excited to join Limelight, a company with an impressive
list of blue-chip customers, in a large and growing market with a
unique set of capabilities and solid foundation to build on,” said
Bob Lyons, President and Chief Executive Officer. “Our global
network and connectivity to billions of people, combined with the
digital transformation creates enormous opportunity for us in edge
content delivery, computing and cybersecurity.”
“Our immediate focus is the challenges we faced in the fourth
quarter, specifically top-line growth and the resulting pressure on
margins. Quite frankly, performance in these areas is not where it
should be. I believe in our ability to close the gaps and position
Limelight as a leader delivering edge-based solutions. While there
is no doubt much has been accomplished, I know that our best days
are ahead of us. I am confident in the direction we are headed, in
our ability to better execute on a refined strategy and pursue
rule-of-40 performance,” said Lyons.
Full-year Results
For the full year ended December 31, 2020, Limelight reported
revenue of $230.2 million, a 15% increase from $200.6 million in
2019.
The company’s 2020 GAAP net loss was $(19.3) million, or $(0.16)
per basic share, versus a net loss of $(16.0) million, or $(0.14)
per basic share, in 2019. The 2020 GAAP net loss included $3.8
million of interest expense related to Limelight’s senior
convertible notes noted above.
Non-GAAP net loss was $(1.6) million, or $(0.01) per basic
share, for the year ended December 31, 2020, compared to non-GAAP
net loss of $(2.3) million, or $(0.02) per basic share, in
2019.
Limelight reported adjusted EBITDA of $24.5 million for 2020,
compared to $18.1 million in 2019.
The company does not plan to issue guidance for 2021 at this
time. With new leadership and active efforts underway to evaluate
all aspects of the business strategy and cost structure, the focus
is on immediate and long-term steps to position the company as a
leader delivering edge-based solutions. Additional details will be
provided as the company formalizes these plans.
Said Lyons, “Limelight delivered a successful year on multiple
fronts – but we have work to do. Our industry is on an upward
trajectory – and we enter 2021 laser-focused on building a platform
for profitable growth.”
Financial Tables
LIMELIGHT NETWORKS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, except per share data)
December 31,
September 30,
December 31,
2020
2020
2019
(Unaudited)
(Unaudited)
ASSETS Current assets: Cash and cash equivalents
$
46,795
$
75,169
$
18,335
Marketable securities
76,928
49,623
-
Accounts receivable, net
31,675
42,222
34,476
Income taxes receivable
68
81
82
Prepaid expenses and other current assets
15,588
12,561
9,920
Total current assets
171,054
179,656
62,813
Property and equipment, net
46,418
47,493
46,136
Operating lease right of use assets
10,150
10,844
12,842
Marketable securities, less current portion
40
40
40
Deferred income taxes
1,530
1,428
1,319
Goodwill
77,753
77,126
77,102
Other assets
7,233
7,459
9,117
Total assets
$
314,178
$
324,046
$
209,369
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
4,587
$
12,437
$
12,020
Deferred revenue
933
797
976
Operating lease liability obligations
2,465
2,654
2,056
Income taxes payable
253
153
178
Other current liabilities
17,560
17,584
13,398
Total current liabilities
25,798
33,625
28,628
Convertible senior notes, net
100,945
99,937
-
Operating lease liability obligations, less current portions
11,265
11,745
13,488
Deferred income taxes
279
251
239
Deferred revenue, less current portion
220
230
161
Other long-term liabilities
479
579
316
Total liabilities
138,986
146,367
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; 123,653,
122,824 and 118,368 shares issued and outstanding at December 31,
2020, September 30, 2020 and December 31, 2019, respectively
124
123
118
Additional paid-in capital
556,512
552,559
530,285
Accumulated other comprehensive loss
(7,511
)
(9,379
)
(9,210
)
Accumulated deficit
(373,933
)
(365,624
)
(354,656
)
Total stockholders' equity
175,192
177,679
166,537
Total liabilities and stockholders' equity
$
314,178
$
324,046
$
209,369
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
2020
2020
Change
2019
Change
2020
2019
Change
Revenue
$
55,394
$
59,243
-6%
$
60,129
-8%
$
230,194
$
200,634
15%
Cost of revenue:
Cost of services (1)
33,103
31,905
4%
28,586
16%
125,509
99,897
26%
Depreciation - network
5,468
5,602
-2%
5,288
3%
21,579
19,193
12%
Total cost of revenue
38,571
37,507
3%
33,874
14%
147,088
119,090
24%
Gross profit
16,823
21,736
-23%
26,255
-36%
83,106
81,544
2%
Gross profit percentage
30.4
%
36.7
%
43.7
%
36.1
%
40.6
%
Operating expenses:
General and administrative (1)
7,464
7,751
-4%
7,554
-1%
31,284
30,785
2%
Sales and marketing (1)
9,666
10,456
-8%
10,399
-7%
42,945
43,078
0%
Research & development (1)
5,066
5,425
-7%
5,459
-7%
21,680
22,534
-4%
Depreciation and amortization
542
384
41%
328
65%
1,591
872
82%
Total operating expenses
22,738
24,016
-5%
23,740
-4%
97,500
97,269
0%
Operating (loss) income
(5,915
)
(2,280
)
NM
2,515
NM
(14,394
)
(15,725
)
NM
Other income (expense):
Interest expense
(2,183
)
(1,674
)
NM
(45
)
NM
(3,939
)
(76
)
NM
Interest income
29
10
NM
25
NM
69
427
NM
Other, net
28
25
NM
169
NM
(368
)
80
NM
Total other (expense) income
(2,126
)
(1,639
)
NM
149
NM
(4,238
)
431
NM
(Loss) income before income taxes
(8,041
)
(3,919
)
NM
2,664
NM
(18,632
)
(15,294
)
NM
Income tax expense
268
66
NM
206
NM
645
750
NM
Net (loss) income
(8,309
)
(3,985
)
NM
2,458
NM
(19,277
)
(16,044
)
NM
Net (loss) income per share: Basic
$
(0.07
)
$
(0.03
)
$
0.02
$
(0.16
)
$
(0.14
)
Diluted
$
(0.07
)
$
(0.03
)
$
0.02
$
(0.16
)
$
(0.14
)
Weighted average shares used in per share calculation: Basic
123,225
122,363
117,603
121,196
115,890
Diluted
123,225
122,363
123,801
121,196
115,890
(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,
2020
2020
2019
2020
2019
Share-based compensation: Cost of
services
$
313
$
130
$
376
$
1,998
$
1,495
General and administrative
1,840
1,272
1,858
7,611
8,098
Sales and marketing
764
206
597
3,519
2,263
Research and development
562
315
484
2,589
1,922
Total share-based compensation
$
3,479
$
1,923
$
3,315
$
15,717
$
13,778
Depreciation and amortization: Network-related
depreciation
$
5,468
$
5,602
$
5,288
$
21,579
$
19,193
Other depreciation and amortization
542
384
328
1,591
872
Total depreciation and amortization
$
6,010
$
5,986
$
5,616
$
23,170
$
20,065
Net increase (decrease) in cash, cash equivalents and
marketable securities:
$
(1,069
)
$
106,592
$
285
$
105,388
$
(32,131
)
End of period statistics: Approximate
number of active customers
527
534
599
527
599
Number of employees and employee equivalents
618
620
610
618
610
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,
2020
2020
2019
2020
2019
Operating activities Net income (loss)
$
(8,309
)
$
(3,985
)
$
2,458
$
(19,277
)
$
(16,044
)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: Depreciation and
amortization
6,010
5,986
5,616
23,170
20,065
Share-based compensation
3,479
1,923
3,315
15,717
13,778
Foreign currency remeasurement (gain) loss
327
27
79
214
(25
)
Deferred income taxes
(14
)
(95
)
300
(94
)
270
Loss (gain) on sale of property and equipment
7
(1
)
-
6
(56
)
Accounts receivable charges
325
163
519
801
1,793
Amortization of premium on marketable securities
519
87
1
606
30
Realized loss on marketable securities
(3
)
-
9
(3
)
9
Noncash interest expense
1,070
868
-
1,938
-
Changes in operating assets and liabilities: Accounts receivable
10,221
2,862
823
2,000
(10,228
)
Prepaid expenses and other current assets
(3,038
)
(2,232
)
(324
)
(5,717
)
(1,101
)
Income taxes receivable
16
(10
)
(3
)
19
40
Other assets
258
757
(1,547
)
2,762
(4,188
)
Accounts payable and other current liabilities
(9,228
)
1,222
(2,383
)
(1,069
)
1,292
Deferred revenue
126
(172
)
(232
)
17
(789
)
Income taxes payable
86
(17
)
(143
)
71
61
Payments related to litigation, net
-
-
-
-
(3,040
)
Other long term liabilities
(99
)
276
15
167
(121
)
Net cash provided by operating activities
1,753
7,659
8,503
21,328
1,746
Investing activities Purchases of marketable
securities
(36,064
)
(52,690
)
-
(88,754
)
(10,279
)
Sale and maturities of marketable securities
8,272
2,900
3,211
11,172
35,364
Purchases of property and equipment
(2,957
)
(7,180
)
(10,480
)
(25,085
)
(34,704
)
Proceeds from sale of property and equipment
1
1
-
2
51
Net cash used in investing activities
(30,748
)
(56,969
)
(7,269
)
(102,665
)
(9,568
)
Financing activities Proceeds from issuance of debt,
net
-
121,600
-
121,600
-
Purchase of capped calls
-
(16,413
)
-
(16,413
)
-
Payment of debt issuance costs
(75
)
(784
)
-
(859
)
-
Payment of employee tax withholdings related to restricted stock
vesting
(891
)
(1,041
)
(1,079
)
(4,878
)
(3,607
)
Proceeds from employee stock plans
1,377
2,598
3,290
10,068
4,406
Net cash provided by financing activities
411
105,960
2,211
109,518
799
Effect of exchange rate changes on cash and cash equivalents
210
319
58
279
(25
)
Net increase (decrease) in cash and cash equivalents
(28,374
)
56,969
3,503
28,460
(7,048
)
Cash and cash equivalents, beginning of period
75,169
18,200
14,832
18,335
25,383
Cash and cash equivalents, end of period
$
46,795
$
75,169
$
18,335
$
46,795
$
18,335
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 and non-cash interest expense. 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 Income (Loss) to Non-GAAP Net Income (Loss) (In
thousands) (Unaudited) Three Months
Ended Twelve Months Ended December 31,
2020 September 30, 2020 December 31, 2019
December 31, 2020 December 31, 2019 Amount
Per Share Amount Per Share Amount
Per Share Amount Per Share Amount
Per Share U.S. GAAP net (loss) income
$
(8,309
)
$
(0.07
)
$
(3,985
)
$
(0.03
)
$
2,458
$
0.02
$
(19,277
)
$
(0.16
)
$
(16,044
)
$
(0.14
)
Share-based compensation
3,479
0.03
1,923
0.02
3,315
0.03
15,717
0.13
13,778
0.12
Noncash interest expense
1,070
0.01
868
0.01
-
-
1,938
0.02
-
-
Non-GAAP net (loss) income
$
(3,760
)
$
(0.03
)
$
(1,194
)
$
(0.01
)
$
5,773
$
0.05
$
(1,622
)
$
(0.01
)
$
(2,266
)
$
(0.02
)
Weighted average shares used in per share calculation
123,225
122,363
117,603
121,196
115,890
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,
2020
2020
2019
2020
2019
U.S. GAAP net (loss) income
$
(8,309
)
$
(3,985
)
$
2,458
$
(19,277
)
$
(16,044
)
Depreciation and amortization
6,010
5,986
5,616
23,170
20,065
Interest expense
2,183
1,674
45
3,939
76
Interest and other (income) expense
(57
)
(35
)
(194
)
299
(507
)
Income tax expense
268
66
206
645
750
EBITDA
$
95
$
3,706
$
8,131
$
8,776
$
4,340
Share-based compensation
3,479
1,923
3,315
15,717
13,778
Adjusted EBITDA
$
3,574
$
5,629
$
11,446
$
24,493
$
18,118
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 (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 February 11, 2021, 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) 2021 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/20210211005703/en/
Limelight Networks, Inc. Dan Boncel, 602 850 4810
ir@llnw.com
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