Investor Presentation

Transcription

1 Limelight Networks Investor Presentation Transforming the digital experience to advance the way we live, work and play

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 Network s 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 Limelight Network s Registration Statement on Form S-1 and Forms 10Q.

3 Jeff Lunsford Chief Executive Officer Matt Hale Chief Financial Officer

4 Limelight Networks: The Leading CDN for Digital Media

5 Enabling Many High Profile Successes Video Digital Music / Social Media Video Digital Music / Social Media Video Games / Rich Media Applications Software Delivery

6 Investment Highlights High Traffic Growth / High Funding Growth The Ascendant CDN, Winning Market Share Strong Growth Plan Financial Performance / Target Model

7 Rapid and Predictable Internet Traffic Growth Average Internet Traffic Up 538% Gbps Source: TeleGeography research

8 Traffic Growth Drivers The Consumer-Driven Pull of Massive Files Future File Size: 100K 5G 36GB HD Broadband Connectivity: 0.1MM 250.0MM+ All Devices, All The Time Behavior: All Content, On-Demand

9 Growth Evident on a Daily Basis in Large Events Movie trailers spike to 50+ Gbps Software download events exceed 200 Gbps for sustained periods Mainstream television generating traffic as high as 5X a year ago from higher encode rates, larger audiences and faster connection speeds. 1 rating point 1,000 Gigabits/Second

10 Monetization Trends Internet Ad Revenues by Advertising Format $5 Billion Revenue in 2Q07 Source: IAB Internet Advertising Report (by PWC) Oct 2007

11 Monetization Trends Ultimate Funding Source: $20 Billion annualized run rate in potential revenue Growing at 26% per year Still less than 10% of overall marketing budget so room to grow

12 The Ascendant CDN, Taking Share in a High Growth Market Close Global network in top-tier markets Logically close Over 60% of traffic delivered in direct partnership with lastmile providers. Dense 60+ POPs, 19 regions, with 6,000+ highperformance servers Entire content libraries Massive storage Intelligent Proprietary software Multiple media formats and delivery modes Connected Edge-connected directly to 790 broadband networks Operate our own backbone Metro fiber to span multiple physical sites

13 The Impact of Library Size - unbox 10 s s of thousands titles available on line, 100 s s thousands titles total Popularity The Long Tail Meets Internet Distribution Titles

14 Content Delivery Networks Avoid the Problems of the Public Internet Public Internet Content Owner ISP Packet Loss Cache Misses ISP Latency End User Content Delivery Network Content Owner 50%+ of traffic avoids the public Internet ISP High Fidelity

15 Customer and Traffic Growth Customers vs. Gbps Sold Targeting Top 10,000 Websites Customers 15

16 Barriers to Entry Economies Of Scale Large Customer Base Superior Network Performance Attractive Peering Partner Backroom Network Effect Scale Massive Traffic Volume Proprietary Software and IP Global Network Backbone

17 Growth Plan Consulting Ad Insertion Ad Network Storage Computing/Application Hosting Digital Rights Mgmt. Encoding / Trans-coding Network Advancements Sales and Marketing Expansion CDN Co-location IP Transit New Geographies New Verticals Network Expansion New Products

18 Ecosystem of Key Partners

19 Financial Overview

20 Historical Trends $120 $100 $80 $60 $40 $20 $0 $105 34% $65 22% 17% 20% $21 $ FCST 40% 35% 30% 25% 20% 15% 10% 5% 0% Revenue Adj EBITDA

21 Customer and AARPC Growth Cumulative Customers $95 $78 $66 $57 $51 $50 $47 $48 $ $128 $128 $140 $114 $112 $114 $120 $ Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 $100 $80 $60 $40 $20 $0 Annualized Revenue Per Customer ($000)

22 Strong Quarterly Momentum Revenue vs. Adj. EBITDA Margin Adj. EBITDA Margin (%) Revenue ($MM)

23 Margin Trends Investment Impact Gross Margin vs. Network Depreciation as a % of revenue

24 Typical Contract Structure Average term 1 year Average size $100,000+ (see ARPC chart) Payment terms Minimums invoiced at beginning of month along with volume over minimums from prior months Pricing based upon: 95/5 bandwidth peak approx. 40% of contracts Total data transferred within month other approx. 60% Same unit cost for volumes over minimum so negotiating incentive is to buy down the unit cost up front by committing to larger volumes DSOs running days, on an LTM basis

25 Well-Diversified Customer Base Customer Mix 2007 Revenue Customer Concentration 2007 Revenue Games 15% Other 8% Video/Music 45% Remaining Customers 24% Top % Top % Social Media 32%

26 Attractive Business Model Year Ended Dec. 31, 2006 Quarter Ended Sep 30, 2007 Target Model Revenue ($MM) $64.3 $28.0 Gross Margin 44% 39% 50 +% S&M 11% 27% 10 15% R&D 5% 3% 5 10% G&A 28% 28% 10 15% Op. Margin NM NM 20+% Adj. EBITDA Margin 33% 18% 40+%

27 Guidance Q4 Sequential Growth Scenarios Q1 07 Q2 07 Q3 07 Lo Q4 07 Mid Q4 07 Hi Q4 07 Revenue $ 23.4 $ 24.9 $ 28.0 $ 28.0 $ 29.0 $ 30.0 MS PSO * $ $ 0.8 $ 1.5 $ $ $ Non PSO Revenue ** $ 23.4 $ 24.1 $ 26.5 $ 28.0 $ 29.0 $ 30.0 Seq Growth w/o PSO 5.6% 3.2% 9.9% 5.7% 9.4% 13.2% MS PSO non-gaap professional services from Microsoft ** Non PSO Revenue revenue from our core CDN business

28 Investment Highlights High Traffic Growth / High Funding Growth The Ascendant CDN, Winning Market Share Strong Growth Plan Financial Performance / Target Model

29 Thank You Transforming the digital experience to advance the way we live, work and play