Limelight Networks. Profitable Growth. Investor Presentation Q1 2017

Transcription

1 Limelight Networks Profitable Growth Investor Presentation Q1 2017

2 Safe Harbor Statement Certain statements in this presentation relate to future results that are forward-looking statements as defined in the Private Securities Litigation Reform Act of This presentation contains statements involving risks and uncertainties, including statements relating to Limelight Networks market opportunity and future business prospects. Actual results may differ materially and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ are included in the Limelight Networks Annual Report on Form 10K and our periodic reports on Form 10Q.

3 Limelight Overview What We Do On-demand & Live Video Software Download Web Content Our Mission: To securely manage and globally deliver digital content, building customer satisfaction through exceptional reliability and performance. Limelight Confidential

4 Limelight Overview Undeniable Industry Trends Cloud Mobile Media Scale Security Migration of applications, data, and IT services to the cloud Explosive growth of devices, applications, and content consumption Rich media proliferating across multiple distribution channels Audiences are becoming increasingly geographically dispersed Increased concern over privacy and data protection

5 Limelight Overview Our Network: Global, Fast, Available, Secure 21+ Tbps Egress Capacity 40+ Global Metro Locations 80+ Delivery Locations 5 Limelight Confidential

6 Limelight Overview Unique, Impressive Scale and Capabilities 21+ TBPS >800 >98% SSL PURGE One of the largest CDNs in the world Directly connected unique networks Industry leading cache hit efficiency One of the largest SSL CDNs in the world Global purge in seconds 4 of 5 TOP MEDIA COMPANIES 5 of 8 TOP TECHNOLOGY COMPANIES 3 of 5 TOP GAMING COMPANIES 6 Limelight Confidential

7 Limelight Overview Top Reasons for Customers to Choose Limelight Industry Leading Performance and Throughput One of the highest cache hit ratios in the industry and one of the top performers in major markets globally Award Winning Software at Scale High performance services, globally distributed (e.g. SmartPurge) Integrated Suite of Security and Video Solutions Massive SSL footprint, DDoS, WAF and content security; rich online video feature set Unrestricted Access to Live 24/7 Support Fast, friendly, professional technical support with in-region capability for key languages Limelight Confidential Highest Performing Origin Storage Reliable, high performance origin storage, numerous locations, extensive policy features

8 Limelight Overview Key Strategic Priorities Past, Present and Future Customers for Life Growing Profitable Revenue Employer of Choice Increase NPS Reduce churn Grow existing business Achieve double digit growth Increase gross margin Drive new business Generate cash Attract talent Reduce turnover Increase productivity 8 Limelight Confidential

9 Limelight Investment Thesis 1 Net Customer Satisfaction is Better Promoter Score keeps increasing Operational Metrics are Better Multiple metrics providing proof points Employee Engagement is Better Employees more engaged, more satisfied, lower turnover Legal Position is Better 703 Lawsuit settled On the Offense in VA Financial Performance is Better Sustained margin improvement and cash generation Shareholder Opportunities are Better Good position in a growing market

10 1 Net Promoter Score keeps increasing Customer Satisfaction is Better Net Promoter Score FALL FALL FALL FALL SPRING SPRING Limelight Confidential SPRING points since 2013

11 2 Network Performance Improvement Operational Metrics are Better RESPONSE TIME THROUGHPUT CLOUD STORAGE 5% 11% 0% 28% 31% 31% 56% 36% 100% Top 5 Top 10 Top 20 >Top 20 Top 5 Top 10 Top 20 >Top 20 Top 5 11 Top 5 in 19/62 countries Top 10 in 41/62 countries Top 5 in 34/62 countries Top 10 in 53/62 countries Limelight Confidential Top in 49/59 countries Source: Cedexis

12 2 Operational Metrics are Better Efficiency Improvements Gbps of Edge Server Capacity Server capacity increases 518% in 2 years Our network & servers are about 10x more efficient than market leader Our entire CDN infrastructure is newer and greener Our CDN pushes more bytes per server 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Limelight Confidential

13 2 Multiple metrics providing proof points Operational Metrics are Better Traffic Tickets even as total traffic increases by >60% >45% drop in service tickets Q Q Q Q Q Q Q Q Q Q Q Q Limelight Confidential 13

14 3 Employees more engaged, lower turnover Employee Engagement is Better Promotions Training Mentoring Engagement Longevity Leadership Hiring Recruiting Onboarding Employer of Choice Increased Productivity Attracting More Talent 14 Limelight Confidential

15 4 Legal Position Is Better 703 Lawsuit settled On the Offense in VA Long-running 703 patent infringement lawsuit settled by converting $51M judgment into a $54M license agreement to be paid quarterly over three years We made first license payment during Q Seeking relief from future payments due to Akamai s breach of settlement agreement On the offense now and believe we are net plaintiffs in VA VA trial date set for May 2017 Confident in our position Limelight Confidential

16 5 4Q2016 Highlights Solid Momentum Financial Performance is Better 11 percent sequential revenue growth (highest in 24 quarters) 390 basis point GAAP gross margin expansion (highest in 9 quarters) GAAP gross margin at 44.9 percent (highest ever) Cash gross margin of 56 percent (highest in 20 quarters) Adjusted EBITDA of $7.5 million dollars (highest ever) Non-GAAP earnings per share of positive two cents (highest since 2007) Positive non-gaap EPS for the year (first time ever) Limelight Confidential

17 5 Gross Profit and Margin $25 Financial Performance is Better 50.0% $20 $16.13 $16.52 $18.15 $15.91 $17.54 $16.64 $ % $16.24 $ % 45.0% $ % 41.0% $ % 39.0% 37.8% 40.2% 41.1% 40.0% $5 35.0% $0 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 Gross Profit Gross Margin $ millions Limelight Confidential %

18 5 Adjusted EBITDA Profile Financial Performance is Better $8 Adjusted EBITDA $7 $7.55 $6 $6.21 $5 $5.33 $5.09 $4 $3 $3.95 $2 $1 $0 $1.48 $0.37 $0.90 $0.31 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 $ millions Limelight Confidential

19 2017 Guidance 6 Returns more measurable and visible Shareholder Opportunity is Better Revenue between $175 and $180 million GAAP gross margin improvement of greater than 150 basis points 2X to 3X improvement in non-gaap EPS of between $0.02 and $0.06 Adjusted EBITDA between $22 and 27 million; Capex around $20 million Limelight Confidential

20 Limelight Investment Thesis 1 Net Customer Satisfaction is Better Promoter Score keeps increasing Operational Metrics are Better Multiple metrics providing proof points Employee Engagement is Better Employees more engaged, more satisfied, lower turnover Legal Position is Better 703 Lawsuit settled On the Offense in VA Financial Performance is Better Sustained margin improvement and cash generation Shareholder Opportunities are Better Good position in a growing market

21 Appendix: Non-GAAP Financial Measures

22 Non-GAAP Net Income (Loss) $ thousands, except per share data Three Months Ended Dec 31, 2016 Sep 30, 2016 Dec 31, 2015 Amount Per Share Amount Per Share Amount Per Share U.S. GAAP net loss $(3,919) $(0.04) $(6,122) $(0.06) $ (4,145) $(0.04) Share-based compensation 3, , , Litigation expenses 1, , Amortization of intangible assets Non-GAAP net income (loss) Weighted average shares used in per share calculation $ 1,762 $ 0.02 $ (296) $ (0.00) $ (419) $(0.00) 105, , ,391 22

23 EBITDA and Adjusted EBITDA $ thousands Three Months Ended Dec 31, 2016 Sep 30, 2016 Dec 31, 2015 U.S. GAAP net loss $ (3,919) $ (6,122) $ (4,145) Depreciation and amortization 5,064 5,014 5,816 Interest expense Interest and other (income) expense 469 (159) 321 Income tax expense EBITDA $1,867 $(731) $2,063 Share-based compensation 3,683 2,987 2,863 Litigation expenses 1,998 2, Adjusted EBITDA $ 7,548 $ 5,093 $ 5,328 23

24 THANK YOU

25 Disclaimer 2017 Limelight Networks, Inc. All rights reserved. No part of this document may be reproduced, or transmitted by any means (electronic, mechanical, photocopying, recording, or otherwise) without the express written permission of Limelight Networks, Inc. Limelight Orchestrate is a trademark owned by Limelight Networks, Inc. All rights reserved. All other trademarks referred to herein are the property of their respective owners.