Limelight Networks. Investor Overview. February 2016

Transcription

1 Limelight Networks Investor Overview February 2016

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 About Limelight Our Mission and Vision: To securely manage and globally deliver digital content, building customer satisfaction through exceptional reliability and performance. 3

4 Limelight At A Glance 2001 Founded IPO 2007 (LLNW) 44 % of Revenue is International 960+ Customers 500+ Headcount Globally 20+ Worldwide Locations 4

5 Limelight Today Limelight operates one of the Largest CDNs in the world Largest SSL CDNs in the world Largest private global backbone for a CDN in the world Broadest CDN cloud storage deployment in the world Limelight customers Experience industry-leading service and support Deliver billions of objects every day over the Limelight CDN Include some of the most recognizable brands in the world 4 of the top 5 Media companies 5 of the top 8 Technology companies 3 of top 5 Gaming companies Limelight s network Has over 15Tb/s of egress capacity Is directly connected to 800 unique networks Is one of the top CDNs in >25 countries Has a backbone that wraps around the globe Possesses an industry-leading cache-hit ratio of >97% Offers unique real-time purging capabilities Delivered 51% more traffic with 31% fewer support tickets in 2015 vs Reduced its carbon footprint by 25% in

6 Limelight Responds to Market Need

7 Increasing Market Demands Instant Access Superior Quality At Global Scale Everywhere On All Devices Securely Every Time A great digital experience is no longer a nice-to-have; it s a make-or-break point for your business. Forrester *SOURCE: FORBES 7

8 Built For Where The Internet Is Going Video Mobility Globalization Security Growing percentage of overall traffic Explosive growth in networked devices Increasing prominence of emerging markets Increase in attack frequency and size 8

9 The Limelight Difference The world s largest private CDN. Backed by industry experts. Delivers digital experiences quickly, reliably, and securely every time.

10 Platform Value Proposition Orchestrate Delivery Orchestrate Storage Orchestrate Performance Orchestrate Security Orchestrate Video Global private network with industry leading cache-hit ratio Digital delivery of content to any device, anywhere Powerful architecture with specific solutions for industries Automated workflows and policy intelligence Designed for 100% availability and 5 9s durability Leading ingest/egress capacity; 80+ locations and 19 countries Personalized, complex sites/apps on any device, anywhere Industry leading delivery speed and availability Lower page load times = more $ Robust offering protects content investment at scale Proactive DDoS monitoring and attack mitigation SSL delivery, content protection, access controls Simple, customizable online publishing workflow Multi-Device Media Delivery (Live/OD) Integrated high performance delivery 10

11 Limelight Strategy and Focus Areas

12 Corporate Goals and Priorities EMPLOYER OF CHOICE CUSTOMERS FOR LIFE REVENUE / PROFIT GROWTH Attract talent Reduce turnover Increase productivity Increase NPS Reduce churn Grow existing business Achieve double digit growth Increase gross margin Drive new business Generate cash 1 2 Improve reliability, performance and capacity Deliver differentiated solutions within target use cases 3 Strengthen the customer relationship 12

13 Improving Network Performance Threaded EP Production Test Lower Latency and Faster Before After High and variable latency Low and consistent latency 63% increase in throughput 13

14 Improving Capacity / Efficiency with Savings Selected Colocation-related Projects % Reduction Project by Location Racks Servers Annual Savings (Approx) Capacity Impact Chicago shutdown (one of several locations) -100% -63% $345k No change Washingto DC consolidation -48% -30% $360k No change Amsterdam consolidation -47% -62% $840k No change Frankfurt consolidation -100% -50% $460k > 40% increase Tokyo consolidation -48% -49% $1,600k > 50% increase London consolidation (one of several locations) -78% -65% $580k > 200% increase New York consolidation -64% -51% $460k No change Los Angeles consolidation -47% -35% $290k No change Dallas consolidation -50% -54% $325k No change San Jose consolidation -40% -39% $345k > 30% increase 14

15 Improving Customer Relationship and Differentiated Solutions Net Promoter Score Progress 12.1 points Fall points 10.6 points 11.9 points Spring points Fall 2014 Spring points Fall 2013 Spring

16 Financials

17 Financial Highlights Robust recurring revenue model with improving customer churn characteristics Return to demonstrable top-line growth Significant margin opportunity Disciplined capital investment strategy Moving from cash utilization to cash generation Capped litigation exposure 17

18 Core Revenue Is Returning To Growth $ millions $50 Clickability Netflix $45 $40 $35 $4.20 $4.50 $3.30 $2.90 $4.90 $5.40 $1.20 $30 $25 $20 $15 $35.20 $34.80 $36.00 $35.70 $37.50 $40.73 $42.30 $43.80 $42.05 $42.74 $10 $5 $0 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 18

19 Gross Profit and Margin $20 $ millions $18 $16 $15.24 $15.28 $15.27 $15.87 $16.14 $16.13 $16.52 $18.15 $15.91 $ % 50.0% $14 $ % 36.2% 37.1% 38.4% 41.4% 39.6% 39.0% 41.4% 37.8% 41.0% 40.0% $ % $8 $6 20.0% $4 10.0% $2 $0 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q % Gross Profit Gross Margin 19

20 Improving Operating Income Trends $ millions $0 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 -$2 -$4 -$3.75 -$6 -$6.22 -$5.86 -$6.22 -$8 -$7.66 -$6.98 -$7.51 -$8.24 -$10 -$ $9.20 -$12 20

21 EBITDA Profile $ millions $3 $2 $2.06 $1 $0 -$1 -$1.19 -$1.21 -$1.21 -$2 -$2.26 -$1.86 -$3 -$2.86 -$2.72 -$2.96 -$4 -$3.51 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 21

22 4Q2015 Highlights Reported revenue of $42.7 million, up 5% year over year Gross Margin of 41.0%, up 140 basis points year over year Non GAAP EPS break-even Generated $3.0 million of cash in Q ,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Trading Volume LLNW Price 22

23 2016 Guidance $250 Revenue ($ millions) GAAP Gross Margin $200 $150 $180 - $195 $ $ % $ $0 $20.17 $11.27 Guidance $0 $0 $0 39.1% 39.9% +41.9% $100 $ $ Netflix Non-Netflix $0 $0 Guidance $0 $50 $0 $0 $0 2013A 2014A 2015A 2016E $0 2013A 2014A 2015A 2016E Additional guidance: Non-GAAP EPS between $(0.05) and $0.05 Operating Expenses (ex Litigation) flat to 2015 $20M Capex (cash paid and financed) vs $26.7M in

24 Long-term Corporate Financial Goals Drivers Increase existing customer revenue growth Lower new customer acquisition costs Improve server efficiency and infrastructure utilization Consistent G&A and R&D dollar spend as revenue grows Targets 10-15% annual revenue growth 16-20% adjusted EBITDA as % of revenue 10-14% Capex as % of revenue 24

25 Investment Thesis: Attractive Market Returning to top line growth Improving earnings and generating cash Aligning cost structure to revenue streams Growth Drivers Multiple expansion Impact Higher shareholder value Increased strategic flexibility 25

26 Appendix: Non-GAAP Financial Measures

27 Non-GAAP Net Loss Three Months Ended Twelve Months Ended Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2015 Dec 31, 2014 U.S. GAAP net loss $(4,145) $ (7,762) $ (6,362) $ (5,683) $ (23,952) $ (24,591) Share-based compensation 2,863 3,124 3,280 3,069 12,338 10,491 Litigation expenses (1,174) 19 (613) 817 Amortization of intangible assets (Gain) loss on sale of WCM business Loss (income) from discontinued operations ,063 1, (265) Non-GAAP net loss $ (419) $ (4,295) $ (4,055) $ (2,398) $ (11,164) $ (12,348) 27

28 EBITDA and Adjusted EBITDA Three Months Ended Twelve Months Ended Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2015 Dec 31, 2014 U.S. GAAP net loss $ (4,145) $ (7,762) $ (6,362) $ (5,683) $ (23,952) $ (24,591) Depreciation and amortization 5,816 5,284 5,011 4,793 20,904 20,202 Interest expense (Gain) loss on sale of WCM business Interest and other (income) expense (321) (555) 56 (1,886) (2,065) (2,159) Income tax provision Loss (income) from discontinued operations (265) EBITDA from continuing operations 2,063 (2,957) (1,205) (2,717) (4,817) (6,516) Share-based compensation 2,863 3,124 3,280 3,069 12,338 10,491 Litigation expenses (1,174) 19 (613) 817 Adjusted EBITDA $ 5,328 $ 307 $ 901 $ 371 $ 6,908 $ 4,792 28

29 THANK YOU

30 Disclaimer 2016 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.