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Press Release -- October 29th, 2014
Source: Akamai
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Akamai Reports Third Quarter 2014 Financial Results

CAMBRIDGE, Mass., Oct. 29, 2014 /PRNewswire/ --

  • Third quarter revenue of $498 million, up 26% year-over-year
  • Third quarter GAAP net income of $91 million, or $0.50 per diluted share, up 14% year-over-year
  • Third quarter non-GAAP net income* of $111 million, up 23% year-over-year, or $0.62 per diluted share, up 24% year-over-year

Akamai Technologies, Inc. (AKAM), the leading provider of cloud services for delivering, optimizing and securing online content and business applications, today reported financial results for the third quarter ended September 30, 2014.  Revenue for the third quarter of 2014 was $498 million, a 26% increase over third quarter 2013 revenue of $396 million.

"Akamai delivered very strong third quarter financial results across every product and geography, with Media driving the top and bottom line performance above our guidance range," said Dr. Tom Leighton, Chief Executive Officer.  "We continued to invest across our business to develop unique, innovative solutions designed to help our customers drive business online in an increasingly complex, hyper-connected world."

GAAP net income for the third quarter of 2014 was $91 million, or $0.50 per diluted share, an increase from the prior quarter's GAAP net income of $73 million, and a 14% increase over third quarter 2013 GAAP net income of $80 million, or $0.44 per diluted share.

Non-GAAP net income* for the third quarter of 2014 was $111 million, or $0.62 per diluted share, an increase from the prior quarter's non-GAAP net income of $106 million, and a 23% increase over third quarter 2013 non-GAAP net income of $90 million, or $0.50 per diluted share.

Adjusted EBITDA* for the third quarter of 2014 was $213 million, an increase from the prior quarter's Adjusted EBITDA of $204 million, and up from $173 million in the third quarter of 2013.  Adjusted EBITDA margin* for the third quarter of 2014 was 43%, consistent with the prior quarter and down a point from the same period last year.

GAAP income from operations for the third quarter of 2014 was $120 million, an increase from the prior quarter's GAAP income from operations of $112 million, and up from $100 million in the third quarter of 2013.  GAAP operating margin for the third quarter of 2014 was 24%, consistent with the prior quarter and down one percentage point from the same period last year.

Non-GAAP income from operations* for the third quarter of 2014 was $158 million, an increase from the prior quarter's non-GAAP income from operations of $156 million, and up from $132 million in the third quarter of 2013.  Non-GAAP operating margin* for the third quarter of 2014 was 32%, down one percentage point from the prior quarter and the same period last year.

Cash from operations for the third quarter of 2014 was $173 million, or 35% of revenue. The Company had $1.6 billion of cash, cash equivalents and marketable securities as of September 30, 2014.

During the third quarter of 2014, under the share repurchase program authorized by the Board of Directors in October 2013, the Company spent approximately $39 million to repurchase 0.6 million shares of its common stock, at an average price of $60.12 per share. The Company had approximately 178 million shares of common stock outstanding as of September 30, 2014.

*See Use of Non-GAAP Financial Measures below for definitions.

Quarterly Conference Call
Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-866-318-8617 (or 1-617-399-5136 for international calls) and using passcode No. 21832022.  A live Webcast of the call may be accessed at www.akamai.com in the Investor section.  In addition, a replay of the call will be available for one week following the conference through the Akamai Website or by calling 1-888-286-8010 (or 1-617-801-6888 for international calls) and using passcode No. 18079767.

About Akamai
Akamai® is the leading provider of cloud services for delivering, optimizing and securing online content and business applications.  At the core of the Company's solutions is the Akamai Intelligent Platform™ providing extensive reach, coupled with unmatched reliability, security, visibility and expertise.  Akamai removes the complexities of connecting the increasingly mobile world, supporting 24/7 consumer demand, and enabling enterprises to securely leverage the cloud.  To learn more about how Akamai is accelerating the pace of innovation in a hyperconnected world, please visitwww.akamai.com or blogs.akamai.com, and follow @Akamai on Twitter.

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30,
2014

December 31,
2013

ASSETS

Cash and cash equivalents

$

214,339

$

333,891

Marketable securities

496,573

340,005

Accounts receivable, net

326,747

271,988

Prepaid expenses and other current assets

90,173

62,096

Deferred income tax assets

24,844

21,734

Current assets

1,152,676

1,029,714

Property and equipment, net

559,194

450,287

Marketable securities

850,847

573,026

Goodwill and acquired intangible assets, net

1,189,862

834,797

Deferred income tax assets

2,530

2,325

Other assets

99,182

67,536

Total assets

$

3,854,291

$

2,957,685

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses

$

248,786

$

224,095

Other current liabilities

52,815

39,071

Current liabilities

301,601

263,166

Convertible senior notes

600,098

Other liabilities

104,212

65,088

Total liabilities

1,005,911

328,254

Stockholders' equity

2,848,380

2,629,431

Total liabilities and stockholders' equity

$

3,854,291

$

2,957,685

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

(in thousands, except
per share data)

September
30, 2014

June 30,
2014

September
30, 2013

September
30, 2014

September
30, 2013

Revenue

$

498,042

$

476,035

$

395,790

$

1,427,579

$

1,141,942

Costs and operating expenses:

Cost of revenue (1) (2)

158,812

149,318

132,039

447,742

377,136

Research and development (1)

32,583

32,052

24,857

92,869

67,359

Sales and marketing (1)

96,215

91,462

67,811

268,742

198,326

General and administrative (1) (2)

81,905

81,880

66,634

239,946

183,365

Amortization of acquired intangible assets

8,403

8,403

4,859

23,654

16,653

Restructuring (benefits) charges

(115)

569

69

1,189

891

Total costs and operating expenses

377,803

363,684

296,269

1,074,142

843,730

Income from operations

120,239

112,351

99,521

353,437

298,212

Interest income

2,010

1,740

1,458

5,389

4,543

Interest expense

(4,482)

(4,516)

(10,939)

Other expense, net

(188)

(899)

(305)

(1,968)

(96)

Income before provision for income taxes

117,579

108,676

100,674

345,919

302,659

Provision for income taxes

26,424

35,790

20,918

109,078

89,521

Net income

$

91,155

$

72,886

$

79,756

$

236,841

$

213,138

Net income per share:

Basic

$

0.51

$

0.41

$

0.45

$

1.33

$

1.20

Diluted

$

0.50

$

0.40

$

0.44

$

1.31

$

1.17

Shares used in per share calculations:

Basic

178,186

178,081

178,235

178,324

178,008

Diluted

180,955

180,841

181,922

181,278

181,623

(1) Includes stock-based compensation (see supplemental table for figures)

(2) Includes depreciation and amortization (see supplemental table for figures)

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Nine Months Ended

(in thousands)

September
30, 2014

June 30,
2014

September
30, 2013

September
30, 2014

September
30, 2013

Cash flows from operating activities:

Net income

$

91,155

$

72,886

$

79,756

$

236,841

$

213,138

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

67,415

58,712

47,954

179,643

134,455

Stock-based compensation

28,008

31,678

24,479

84,800

72,211

Provision (benefit) for doubtful accounts

1,053

377

(310)

1,517

889

Excess tax benefits from stock-based compensation

(4,297)

(4,483)

(8,530)

(23,958)

(18,152)

(Benefit) provision for deferred income taxes

(11,218)

20,180

10,622

Amortization of debt discount and issuance costs

4,482

4,516

10,939

Loss (gain) on disposal of property and equipment

287

(177)

(324)

325

(15)

(Gain) and other activity related to divestiture of a business

1,093

(1,188)

Loss on investments

393

393

Change in fair value of contingent consideration

300

300

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

Accounts receivable

(8,959)

(23,117)

(16,118)

(50,213)

(51,321)

Prepaid expenses and other current assets

(9,348)

7,963

6,941

(22,346)

(9,266)

Accounts payable and accrued expenses

15,417

43,970

20,035

36,876

43,730

Deferred revenue

2,938

(409)

4,379

7,688

10,991

Other current liabilities

(2,122)

132

255

(703)

32

Other non-current assets and liabilities

(1,529)

(12,697)

(1,722)

(10,195)

(3,328)

Net cash provided by operating activities

173,282

200,224

157,888

462,529

392,176

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

Three Months Ended

Nine Months Ended

(in thousands)

September
30, 2014

June 30,
2014

September
30, 2013

September
30, 2014

September
30, 2013

Cash flows from investing activities:

Cash received (paid) for acquired businesses, net of cash acquired

115

(27,500)

(386,532)

(27,420)

Purchases of property and equipment and capitalization of internal-use software development costs

(71,782)

(70,519)

(60,388)

(226,307)

(197,738)

Purchases of short- and long-term marketable securities

(204,607)

(204,648)

(93,681)

(1,068,198)

(403,556)

Proceeds from sales and maturities of short- and long-term marketable securities

93,300

138,152

57,509

631,422

344,702

Proceeds from the sale of property and equipment

218

418

335

802

761

Other non-current assets and liabilities

4,976

2,442

(2,959)

6,420

(3,320)

Net cash used in investing activities

(177,895)

(134,040)

(126,684)

(1,042,393)

(286,571)

Cash flows from financing activities:

Proceeds from the issuance of convertible senior notes, net of issuance costs

(868)

678,735

Proceeds from the issuance of warrants related to convertible senior notes

77,970

Purchase of note hedge related to convertible senior notes

(101,292)

Repayment of acquired debt and capital leases

(17,862)

Payment of contingent consideration related to acquired business

(1,575)

(1,575)

Proceeds from the issuance of common stock under stock plans

17,362

13,670

26,157

75,361

54,418

Excess tax benefits from stock-based compensation

4,297

4,483

8,530

23,958

18,152

Employee taxes paid related to net share settlement of stock-based awards

(8,957)

(7,977)

(7,434)

(43,205)

(28,559)

Repurchases of common stock

(39,022)

(71,344)

(29,626)

(226,513)

(112,408)

Net cash (used in) provided by financing activities

(27,895)

(62,036)

(2,373)

465,577

(68,397)

Effects of exchange rate changes on cash and cash equivalents

(7,318)

1,291

1,319

(5,265)

(4,182)

Net (decrease) increase in cash and cash equivalents

(39,826)

5,439

30,150

(119,552)

33,026

Cash and cash equivalents at beginning of period

254,165

248,726

204,865

333,891

201,989

Cash and cash equivalents at end of period

$

214,339

$

254,165

$

235,015

$

214,339

$

235,015

AKAMAI TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND ADJUSTED EBITDA

Three Months Ended

Nine Months Ended

(in thousands, except
per share data)

September
30, 2014

June 30,
2014

September
30, 2013

September
30, 2014

September
30, 2013

Income from operations

$

120,239

$

112,351

$

99,521

$

353,437

$

298,212

Amortization of acquired intangible assets

8,403

8,403

4,859

23,654

16,653

Stock-based compensation

28,008

31,678

24,479

84,800

72,211

Amortization of capitalized stock-based compensation

3,556

2,016

2,224

7,500

6,103

Amortization of capitalized interest expense

45

18

63

Acquisition-related costs

270

792

219

4,454

587

Restructuring (benefits) charges

(115)

569

69

1,189

891

Benefit from adoption of software development activities

(2,670)

(2,670)

Gain and other activity related to divestiture of a business

1,093

(1,188)

Operating adjustments

37,497

43,476

32,943

118,990

95,257

Non-GAAP income from operations

$

157,736

$

155,827

$

132,464

$

472,427

$

393,469

Non-GAAP operating margin

32

%

33

%

33

%

33

%

34

%

Net income

$

91,155

$

72,886

$

79,756

$

236,841

$

213,138

Operating adjustments (from above)

37,497

43,476

32,943

118,990

95,257

Amortization of debt discount and issuance costs

4,482

4,516

10,939

Loss on investments

393

393

Income tax-effect of above non-GAAP adjustments and certain discrete tax items

(21,771)

(15,721)

(22,439)

(45,333)

(40,891)

Non-GAAP net income

111,363

105,550

90,260

321,830

267,504

Depreciation and amortization

55,411

48,275

40,871

148,426

111,699

Interest income

(2,010)

(1,740)

(1,458)

(5,389)

(4,543)

Other expense

188

506

305

1,575

96

Provision for GAAP income taxes

26,424

35,790

20,918

109,078

89,521

Income tax-effect of above non-GAAP adjustments and certain discrete tax items

21,771

15,721

22,439

45,333

40,891

Adjusted EBITDA

$

213,147

$

204,102

$

173,335

$

620,853

$

505,168

Adjusted EBITDA margin

43

%

43

%

44

%

43

%

44

%

Non-GAAP net income per share:

Basic

$

0.62

$

0.59

$

0.51

$

1.80

$

1.50

Diluted

$

0.62

$

0.58

$

0.50

$

1.78

$

1.47

Shares used in non-GAAP per share calculations:

Basic

178,186

178,081

178,235

178,324

178,008

Diluted

180,955

180,841

181,922

181,278

181,623

AKAMAI TECHNOLOGIES, INC.

SUPPLEMENTAL FINANCIAL DATA

Three Months Ended

Nine Months Ended

(in thousands, except
end of period statistics)

September
30, 2014

June 30,
2014

September
30, 2013

September
30, 2014

September
30, 2013

Revenue by solution category:

Media Delivery Solutions

$

230,576

$

216,174

$

189,066

$

661,583

$

549,672

Performance and Security Solutions

224,169

217,415

173,864

639,561

498,387

Service and Support Solutions

43,297

42,446

32,860

126,435

91,754

Advertising Decision Solutions and Other

2,129

Total revenue

$

498,042

$

476,035

$

395,790

$

1,427,579

$

1,141,942

Stock-based compensation:

Cost of revenue

$

3,030

$

3,076

$

2,885

$

8,901

$

8,230

Research and development

4,979

5,061

4,583

14,517

12,819

Sales and marketing

12,110

12,796

10,048

35,438

29,278

General and administrative

7,889

10,745

6,963

25,944

21,884

Total stock-based compensation

$

28,008

$

31,678

$

24,479

$

84,800

$

72,211

Depreciation and amortization:

Network-related depreciation

$

44,617

$

38,496

$

33,909

$

119,778

$

93,128

Other depreciation and amortization

10,794

9,779

6,962

28,648

18,571

Depreciation of property and equipment

55,411

48,275

40,871

148,426

111,699

Capitalized stock-based compensation amortization

3,556

2,016

2,224

7,500

6,103

Capitalized interest expense amortization

45

18

63

Amortization of acquired intangible assets

8,403

8,403

4,859

23,654

16,653

Total depreciation and amortization

$

67,415

$

58,712

$

47,954

$

179,643

$

134,455

Capital expenditures:

Purchases of property and equipment

$

47,034

$

50,963

$

42,058

$

157,280

$

142,258

Capitalized internal-use software development costs

31,466

28,265

20,044

84,432

55,171

Capitalized stock-based compensation

3,850

3,943

3,069

11,577

9,252

Capitalized interest expense

679

597

1,513

Total capital expenditures*

$

83,029

$

83,768

$

65,171

$

254,802

$

206,681

Net increase in cash, cash equivalents and marketable securities

$

69,357

$

73,001

$

68,107

$

314,837

$

91,279

End of period statistics:

Number of employees

4,858

4,588

3,769

Number of deployed servers

161,273

154,079

141,353

* See Use of Non-GAAP Financial Measures below for a definition

Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate Akamai's financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, Adjusted EBITDA, Adjusted EBITDA margin and capital expenditures, as discussed below.

Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in its business, as they exclude expenses and gains that may be infrequent, unusual in nature and not reflective of Akamai's ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating Akamai's operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial results and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP.  Akamai has provided a reconciliation of each non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure.  This reconciliation captioned "Reconciliation of GAAP to Non-GAAP Financial Measures" can be found on the Investor Relations section of Akamai's website.

The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below:

  • Amortization of acquired intangible assets – Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions Akamai has made.  The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and are unique to each acquisition; therefore, Akamai excludes amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
  • Stock-based compensation and amortization of capitalized stock-based compensation – Although stock-based compensation is an important aspect of the compensation paid to Akamai's employees and executives, the expense varies with changes in the stock price and market conditions at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types.  This makes the comparison of Akamai's current financial results to previous and future periods difficult to interpret; therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation in order to better understand the performance of Akamai's core business performance and to be consistent with the way investors evaluate its performance and comparison of its operating results to peer companies.
  • Acquisition-related costs – Acquisition-related costs include transaction fees, due diligence costs and other one-time direct costs associated with strategic activities. In addition, subsequent adjustments to Akamai's initial estimated amount of contingent consideration associated with specific acquisitions are included within acquisition-related costs. These amounts are impacted by the timing and size of the acquisitions. Akamai excludes acquisition-related costs from non-GAAP financial measures to provide a useful comparison of Akamai's operating results to prior periods and to its peer companies because such amounts vary significantly based on the magnitude of its acquisition transactions.
  • Restructuring (benefits) charges – Akamai has incurred restructuring (benefits) charges that are included in its GAAP financial statements, primarily related to workforce reductions and estimated costs of exiting facility lease commitments.  Akamai excludes these items from non-GAAP financial measures when evaluating its continuing business performance as such items are not consistently recurring and do not reflect expected future operating expense, nor provide meaningful insight into the fundamentals of current or past operations of its business.
  • Benefit from adoption of software development activities – Akamai recognized a benefit to non-income-related tax expense associated with the adoption of software development activities.  Akamai excluded this item from its non-GAAP financial measures because transactions of this nature occur infrequently and are not considered part of Akamai's core business operations.
  • Gains and other activity related to divestiture of a business – Akamai recognized a gain and other activity related to the divestiture of its Advertising Decision Solutions business. Akamai excludes gains and other activity related to divestiture of a business from non-GAAP financial measures because transactions of this nature occur infrequently and are not considered part of Akamai's core business operations.
  • Amortization of debt discount and issuance costs and amortization of capitalized interest expense – Akamai issued $690 million of convertible senior notes due 2019 with a coupon interest rate of 0%.  The imputed interest rate of the convertible senior notes was approximately 3.2%.  This is a result of the debt discount recorded for the conversion feature that is required to be separately accounted for as equity, thereby reducing the carrying value of the convertible debt instrument.  The debt discount is amortized as interest expense together with the issuance costs of the debt which are recorded as an asset in the consolidated balance sheet.  All of Akamai's interest expense is comprised of these non-cash components and is excluded from management's assessment of the company's operating performance because management believes the non-cash expense is not indicative of ongoing operating performance.
  • Loss on investments – Akamai has incurred losses from the impairment of certain investments. Akamai believes excluding these amounts from non-GAAP financial measures is useful to investors as they occur infrequently, are not representative of Akamai's core business operations or meaningful in evaluating Akamai's business results.
  • Income tax-effect of non-GAAP adjustments and certain discrete tax items – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as recording or release of valuation allowances), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows Akamai to more properly reflect the income attributable to its core operations.

Akamai's definitions of its non-GAAP financial measures are outlined below:

Non-GAAP income from operations – GAAP income from operations adjusted for the following items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; amortization of capitalized interest expense; restructuring (benefits) charges; acquisition-related costs; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; gains and losses on legal settlements and other non-recurring or unusual items that may arise from time to time.

Non-GAAP operating margin – Non-GAAP income from operations stated as a percentage of revenue.

Non-GAAP net income – GAAP net income adjusted for the following tax-effected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; restructuring (benefits) charges; acquisition-related costs; certain gains and losses on investments; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; gains and losses on legal settlements and other non-recurring or unusual items that may arise from time to time.

Non-GAAP net income per share – Non-GAAP net income divided by basic weighted average or diluted common shares outstanding.  Basic weighted average shares outstanding are those used in GAAP net income per share calculations.  Diluted weighted average shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to Akamai pursuant to the note hedge transaction entered into in connection with the issuance of $690 million of convertible senior notes due 2019.  Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully diluted share calculation until they are delivered.  However, the company would receive a benefit from the note hedge transaction and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of net income per share. Until Akamai's weighted average stock price is greater than $89.56, the initial conversion price, there will be no difference between GAAP and non-GAAP diluted weighted average common shares outstanding.

Adjusted EBITDA – GAAP net income excluding the following items: interest income; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; restructuring (benefits) charges; acquisition-related costs; certain gains and losses on investments; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; foreign exchange gains and losses; loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; gains and losses on legal settlements and other non-recurring or unusual items that may arise from time to time.

Adjusted EBITDA margin – Adjusted EBITDA stated as a percentage of revenue.

Capital expenditures – Purchases of property and equipment, capitalization of internal-use software development costs, capitalization of stock-based compensation and capitalization of interest expense.

Akamai Statement Under the Private Securities Litigation Reform Act
This release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including statements about future business plans and opportunities. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, effects of increased competition including potential failure to maintain the prices we charge for our services and loss of significant customers; failure of the markets we address or plan to address to develop as we expect or at all; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; a failure of Akamai's services or network infrastructure; delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities or failure of such solutions to operate as expected, and other factors that are discussed in the Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC.

In addition, the statements in this press release represent Akamai's expectations and beliefs as of the date of this press release.  Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change.  However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so.  These forward-looking statements should not be relied upon as representing Akamai's expectations or beliefs as of any date subsequent to the date of this press release.

Contacts:

Jeff Young

Tom Barth

Media Relations

Investor Relations

Akamai Technologies

Akamai Technologies

617-444-3913

617-274-7130

jyoung@akamai.com

tbarth@akamai.com

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