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Limelight Networks(R) Reports Financial Results for the Third Quarter of 2019

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--

  • Revenue of $51.3 million, up 4 percent year over year, up 12% sequentially
  • GAAP basic EPS of $(0.02) and Non-GAAP EPS of $0.01
  • Confirming accelerated growth in revenue, profitability and free cash flow for Q4 2019
  • Delivered record traffic, exceeding previous record by approximately 20%

Limelight Networks, Inc. (LLNW) (Limelight), a leading provider of edge cloud services, today reported revenue of $51.3 million for the third quarter of 2019, up 4% compared to $49.3 million in the third quarter of 2018. Currency negatively impacted year-over-year comparison by $0.2 million.

Limelight reported a net loss of $2.8 million, or $(0.02) per basic share for the third quarter of 2019, compared to a net loss of $0.3 million, or break-even per basic share, in the third quarter of 2018.

Non-GAAP net income was $0.6 million, or $0.01 per basic share, for the third quarter of 2019, compared to non-GAAP net income of $3.2 million, or $0.03 per basic share, in the third quarter of 2018.

EBITDA was $2.5 million for the third quarter of 2019, compared to $4.3 million for the third quarter of 2018. Adjusted EBITDA was $5.8 million for the third quarter of 2019, compared to $7.7 million for the third quarter of 2018.

Limelight ended the third quarter with 609 employees and employee equivalents, up from 594 at the end of the second quarter of 2019, and up from 551 in the year ago period.

“We are extremely pleased with our third quarter results. Our revenue was the highest third quarter revenue ever and our second highest revenue in any quarter. We also set a new record for traffic in the quarter, continuing the rapid growth that we have demonstrated throughout the year. We achieved these results by accelerating investments in infrastructure and significantly growing capacity, while still maintaining fiscal discipline by controlling expenses,” said Bob Lento, Chief Executive Officer at Limelight.

“We believe the fourth quarter will see year-over-year acceleration in revenue growth and meaningful improvements in gross margin and overall profitability. Even at the low end of our guidance, fourth quarter growth rates exceed 35% year-over-year and in excess of 15% sequentially. These healthy trends validate our strategy to focus on video-based edge services. We believe this positions us for a strong 2020 and beyond and will lead to the creation of tremendous shareholder value,” Mr. Lento added.

Based on current conditions, we expect 2019 revenue to be between $200 and $210 million dollars. GAAP net loss is expected to be approximately $0.10 per share and Non-GAAP earnings per share should be near breakeven. Capital expenditures should be approximately $30 million dollars.

Financial Tables

LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 

September 30,

June 30,

December 31,

 

2019

 

 

 

2019

 

 

 

2018

 

(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents

$

14,832

 

$

24,698

 

$

25,383

 

Marketable securities

 

3,218

 

 

4,224

 

 

25,083

 

Accounts receivable, net

 

35,818

 

 

31,098

 

 

26,041

 

Income taxes receivable

 

77

 

 

125

 

 

122

 

Prepaid expenses and other current assets

 

9,522

 

 

8,739

 

 

14,789

 

Total current assets

 

63,467

 

 

68,884

 

 

91,418

 

Property and equipment, net

 

46,304

 

 

35,531

 

 

27,378

 

Operating lease right of use assets

 

12,667

 

 

2,701

 

 

-

 

Marketable securities, less current portion

 

40

 

 

40

 

 

40

 

Deferred income taxes

 

1,474

 

 

1,443

 

 

1,462

 

Goodwill

 

77,051

 

 

76,848

 

 

76,407

 

Other assets

 

7,394

 

 

5,848

 

 

2,220

 

Total assets

$

208,397

 

$

191,295

 

$

198,925

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

20,641

 

$

14,346

 

$

9,216

 

Deferred revenue

 

1,205

 

 

1,331

 

 

1,883

 

Operating lease liability obligations

 

1,870

 

 

1,579

 

 

-

 

Income taxes payable

 

325

 

 

270

 

 

124

 

Provision for litigation

 

-

 

 

-

 

 

9,000

 

Other current liabilities

 

12,516

 

 

15,227

 

 

12,922

 

Total current liabilities

 

36,557

 

 

32,753

 

 

33,145

 

Operating lease liability obligations, less current portions

 

13,331

 

 

1,325

 

 

-

 

Deferred income taxes

 

123

 

 

140

 

 

152

 

Deferred revenue, less current portion

 

162

 

 

149

 

 

42

 

Other long-term liabilities

 

300

 

 

283

 

 

435

 

Total liabilities

 

50,473

 

 

34,650

 

 

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; 116,513, 115,760 and 114,246 shares issued and
outstanding at September 30, 2019, June 30, 2019 and December 31, 2018, respectively

 

117

 

 

116

 

 

114

 

Additional paid-in capital

 

524,758

 

 

520,375

 

 

513,682

 

Accumulated other comprehensive loss

 

(9,837

)

 

(9,483

)

 

(10,033

)

Accumulated deficit

 

(357,114

)

 

(354,363

)

 

(338,612

)

Total stockholders' equity

 

157,924

 

 

156,645

 

 

165,151

 

Total liabilities and stockholders' equity

$

208,397

 

$

191,295

 

$

198,925

 

 
LIMELIGHT NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended Nine Months Ended
 
September 30, June 30, Percent September 30, Percent September 30, September 30, Percent

 

2019

 

 

2019

 

Change

 

2018

 

Change

 

2019

 

 

2018

 

Change

 
Revenue

$

51,321

 

$

45,904

 

12

%

$

49,315

 

4

%

$

140,505

 

$

151,678

 

-7

%

Cost of revenue:
Cost of services (1)

 

25,602

 

 

22,769

 

12

%

 

21,519

 

19

%

 

71,311

 

 

63,779

 

12

%

Depreciation - network

 

4,961

 

 

4,628

 

7

%

 

3,761

 

32

%

 

13,905

 

 

12,337

 

13

%

Total cost of revenue

 

30,563

 

 

27,397

 

12

%

 

25,280

 

21

%

 

85,216

 

 

76,116

 

12

%

Gross profit

 

20,758

 

 

18,507

 

12

%

 

24,035

 

-14

%

 

55,289

 

 

75,562

 

-27

%

Gross profit percentage

 

40.4

%

 

40.3

%

 

48.7

%

 

39.4

%

 

49.8

%

Operating expenses:
General and administrative (1)

 

7,356

 

 

8,340

 

-12

%

 

7,851

 

-6

%

 

23,231

 

 

24,890

 

-7

%

Sales and marketing (1)

 

10,713

 

 

10,994

 

-3

%

 

9,766

 

10

%

 

32,679

 

 

30,068

 

9

%

Research & development (1)

 

5,160

 

 

6,013

 

-14

%

 

5,882

 

-12

%

 

17,075

 

 

18,294

 

-7

%

Depreciation and amortization

 

172

 

 

127

 

35

%

 

616

 

-72

%

 

545

 

 

1,837

 

-70

%

Total operating expenses

 

23,401

 

 

25,474

 

-8

%

 

24,115

 

-3

%

 

73,530

 

 

75,089

 

-2

%

 
Operating (loss) income

 

(2,643

)

 

(6,967

)

NM

 

 

(80

)

NM

 

 

(18,241

)

 

473

 

NM

 

 
Other income (expense):
Interest expense

 

(10

)

 

(10

)

NM

 

 

(10

)

NM

 

 

(30

)

 

(76

)

NM

 

Interest income

 

81

 

 

110

 

NM

 

 

177

 

NM

 

 

402

 

 

440

 

NM

 

Settlement and patent license income

 

-

 

 

-

 

NM

 

 

-

 

NM

 

 

-

 

 

14,900

 

NM

 

Other, net

 

(13

)

 

(70

)

NM

 

 

(246

)

NM

 

 

(89

)

 

(355

)

NM

 

Total other income (expense)

 

58

 

 

30

 

NM

 

 

(79

)

NM

 

 

283

 

 

14,909

 

NM

 

 
(Loss) income before income taxes

 

(2,585

)

 

(6,937

)

NM

 

 

(159

)

NM

 

 

(17,958

)

 

15,382

 

NM

 

Income tax expense

 

166

 

 

255

 

NM

 

 

113

 

NM

 

 

544

 

 

347

 

NM

 

 
Net (loss) income

$

(2,751

)

$

(7,192

)

NM

 

$

(272

)

NM

 

$

(18,502

)

$

15,035

 

NM

 

 
Net (loss) income per share:
Basic

$

(0.02

)

$

(0.06

)

$

(0.00

)

$

(0.16

)

$

0.13

 

Diluted

$

(0.02

)

$

(0.06

)

$

(0.00

)

$

(0.16

)

$

0.13

 

 
Weighted average shares used in per share calculation:
Basic

 

116,270

 

 

115,275

 

 

112,760

 

 

115,318

 

 

111,626

 

Diluted

 

116,270

 

 

115,275

 

 

112,760

 

 

115,318

 

 

120,025

 

 
(1) Includes share-based compensation (see supplemental table for figures)
 
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LIMELIGHT NETWORKS, INC.
SUPPLEMENTAL FINANCIAL DATA
(In thousands)
(Unaudited)
 
 
Three Months Ended Nine Months Ended
 
September 30, June 30, September 30, September 30, September 30,

 

2019

 

 

2019

 

 

2018

 

2019

 

 

2018

 
 
Share-based compensation:
 
Cost of services

$

331

 

$

377

 

$

352

$

1,119

 

$

1,059

General and administrative

 

2,006

 

 

2,140

 

 

1,887

 

6,240

 

 

5,666

Sales and marketing

 

584

 

 

598

 

 

638

 

1,666

 

 

1,874

Research and development

 

437

 

 

534

 

 

544

 

1,438

 

 

1,746

 
Total share-based compensation

$

3,358

 

$

3,649

 

$

3,421

$

10,463

 

$

10,345

 
Depreciation and amortization:
 
Network-related depreciation

$

4,961

 

$

4,628

 

$

3,761

$

13,905

 

$

12,337

Other depreciation and amortization

 

172

 

 

127

 

 

616

 

545

 

 

1,837

 
Total depreciation and amortization

$

5,133

 

$