Limelight Networks(R) Reports Third Quarter 2011 Results

TEMPE, Ariz., Nov. 7, 2011 (GLOBE NEWSWIRE) — Limelight Networks, Inc. (Nasdaq:LLNW) (“Limelight”) today reported third quarter 2011 financial results.

“We were pleased with our progress in scaling Limelight Networks’ globally distributed, high-performance content delivery, storage and compute platform in the quarter. This platform serves as a great foundation for our core growth initiative — the launch of high-value, integrated software-as-a-service and platform-as-a-service offerings, which are differentiated from those of point solution providers. Revenue from these value-added services excluding EyeWonder and chors grew 73% year-over-year,” said Jeff Lunsford, chairman and chief executive officer. “In the quarter, we saw many instances of customer success, as Limelight solutions enabled our customers to increase competitiveness, enhance user experience and operate more nimbly and efficiently in today’s hyper-connected world.”

Specific highlights for the third quarter included:

• Revenue of $47.3 million, including $42.4 million from continuing operations
• Value added services revenue growth of 73% year-over year after backing out EyeWonder and chors
• Value added services comprised 29% of revenue:

• Mobile internet and tablet computing revenue grew in excess of 150% year-over-year

• Online video platform revenue grew in excess of 180% year-over-year

• Site and application acceleration services revenue grew in excess of 50% year-over-year

• Enterprise cloud storage revenue grew in excess of 35% year-over-year

• Repurchased approximately 3.8 million shares of common stock at an average price of $2.42 per share during the third quarter.  As of November 4, 2011, we have re-purchased 7.5 million shares of common stock at an average price of $2.50 per share.

Financial Highlights

For the third quarter of 2011, the Company reported revenue of $42.4 million from continuing operations, adjusted EBITDA of $3.6 million and non-GAAP net loss, before share-based compensation, litigation expenses, amortization of intangible assets, acquisition-related expenses, and discontinued operations of $2.2 million or 2 cents per basic share. GAAP net loss from continuing operations was $6.4 million, or 6 cents per basic share. Total net income, which includes the gain from discontinued operations of approximately $11.4 million, was $5.0 million or 4 cents per basic share.

Capital investments were $7.5 million in the quarter. The Company ended the quarter with no bank debt and approximately $158 million in cash and short-term marketable securities.

2011 Outlook

The Company anticipates fourth quarter revenue to be in the range of $44-$46 million.

Financial Tables

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use Non-GAAP net income (loss) and Adjusted EBITDA as a supplemental measure 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 because it allows us to illustrate the impact of the effects of share-based compensation, litigation expenses, amortization of intangibles, acquisition related expenses and discontinued operations. We define EBITDA as GAAP net income (loss) before interest income, interest expense, other income and expense, provision for income taxes, depreciation and amortization, and discontinued operations. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define Adjusted EBITDA as EBITDA adjusted for operational expenses that we do not consider reflective of our ongoing operations. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period. In addition, it should be noted that our performance-based executive officer bonus structure is tied closely to our performance as measured in part by certain non-GAAP financial measures.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under United States generally accepted accounting principles, or United States GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with United States 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 United States 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;
• they do not reflect changes in, or cash requirements for, our working capital needs;
• they do not reflect the cash requirements necessary for litigation costs;
• they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
• they 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 EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP net income (loss) 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 Regulation G issued by the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures.

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 877-388-8480 within the United States or +1 678-809-1592 outside of the U.S. The conference call will also be audiocast live from http://www.limelight.com and a replay will be available following the call from the Company’s website.

Safe-Harbor Statement

This press release contains forward-looking statements concerning, among other things, the outlook for the Company’s revenues, net loss and stock-based compensation expenses, customer growth, market growth, pricing pressures, expansion into additional market segments, product and services improvements, the integration of acquired businesses and litigation and acquisition related expenses. Forward-looking statements represent the current judgment and expectations of Limelight Networks and are not guarantees and are subject to a number of risks and uncertainties that could cause actual results to differ materially including, but not limited to, risks and uncertainties discussed in the Company’s Annual Report on Form 10K and other filings with the Securities and Exchange Commission and the final review of the results and amendments and preparation of quarterly financial statements, including consultation with our outside auditors. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements. The Company assumes no duty or obligation to update or revise any forward-looking statements for any reason.

About Limelight Networks, Inc.

Limelight Networks, Inc. (Nasdaq:LLNW) provides solutions that enable business and technology decision makers to profit from the shift of content and advertising to the online world, the explosive growth of mobile and connected devices, and the migration of IT applications and services into the cloud. Our worldwide customers use Limelight’s massively scalable software services to engage audiences, enhance brand presence, analyze viewer preferences, optimize advertising, manage and monetize digital assets, and ultimately build stronger customer relationships. For more information, please visit http://www.limelight.com or follow us on Twitter at www.twitter.com/llnw.

Copyright (C) 2011 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

CONTACT: Heather Miller

         215-867-8600 ext. 239

         media@llnw.com

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