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Limelight Networks(R) Reports Strong Financial Results for the Fourth Quarter and Full Year 2019

  • 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 2020December 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 $0.10Break-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 EndedTwelve Months Ended
 
December 31,September 30,PercentDecember 31,PercentDecember 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 EndedTwelve 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