CAMBRIDGE, Mass., July 28, 2015 /PRNewswire/ --

  • Revenue of $541 million, up 14% year-over-year and up 18% adjusted for foreign exchange*
  • GAAP EPS of $0.37 per diluted share, down 8% year-over-year and down 2% adjusted for foreign exchange*
  • Non-GAAP EPS of $0.57 per diluted share, down 2% year-over-year and up 3% adjusted for foreign exchange*

Akamai Technologies, Inc. (NASDAQ: AKAM), the global leader in Content Delivery Network (CDN) services, today reported financial results for the second quarter ended June 30, 2015.

Akamai Technologies logo

"Akamai delivered a solid second quarter with strong revenue growth across every geography and solution category, with particularly strong growth in our Cloud Security Solutions," said Dr. Tom Leighton, Chief Executive Officer.  "We are continuing to make major investments in innovation and the expansion of our platform to develop new products and to accommodate the potential for substantially increased OTT traffic in 2016."

Akamai delivered the following results for the second quarter ended June 30, 2015:

Revenue: Revenue was $541 million, a 14% increase over second quarter 2014 revenue of $476 million and an 18% increase when adjusted for foreign exchange*.

Revenue by Solution Category:

  • Media Delivery Solutions revenue was $244 million, up 12% year-over-year and up 17% when adjusted for foreign exchange*
  • Performance and Security Solutions revenue was $256 million, up 15% year-over-year and up 19% when adjusted for foreign exchange*, which includes Cloud Security Solutions revenue of $61 million, up 39% year-over-year and up 44% when adjusted for foreign exchange*
  • Service and Support Solutions revenue was $41 million, up 14% year-over-year and up 18% when adjusted for foreign exchange*

Revenue by Geography:

  • U.S. revenue was $399 million, a 16% increase over second quarter 2014
  • International revenue was $142 million, a 7% increase over second quarter 2014 and a 22% increase when adjusted for foreign exchange*

Income from operations: GAAP income from operations was $106 million, a decrease over second quarter 2014 GAAP income from operations of $112 million. GAAP operating margin for the second quarter of 2015 was 20%, down four percentage points from the same period last year.

Non-GAAP income from operations* was $150 million, a decrease from $156 million in the second quarter 2014. Non-GAAP operating margin* for the second quarter of 2015 was 28%, down five percentage points from the same period last year.

Net income: GAAP net income was $67 million, an 8% decrease over second quarter 2014 GAAP net income of $73 million. Non-GAAP net income* was $102 million, a 3% decrease over second quarter 2014 non-GAAP net income of $106 million.

EPS: GAAP EPS was $0.37 per diluted share, an 8% decrease over second quarter 2014 GAAP EPS of $0.40, and down 2% when adjusted for foreign exchange*.

Non-GAAP EPS was $0.57 per diluted share, a 2% decrease over second quarter 2014 non-GAAP EPS of $0.58 and up 3% when adjusted for foreign exchange*.

Adjusted EBITDA*: Adjusted EBITDA was $214 million, up from $204 million in the second quarter of 2014. Adjusted EBITDA margin* for the second quarter of 2015 was 40%, down three percentage points from the same period last year.

Other second quarter 2015 results included:

  • Cash from operations was $264 million, or 49% of revenue
  • Cash, cash equivalents and marketable securities as of June 30, 2015 was $1.5 billion
  • The Company spent $63 million to repurchase 0.9 million shares of its common stock at an average price of $74.12 per share
  • The Company had approximately 179 million shares of common stock outstanding as of June 30, 2015

*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 1-877-703-6102 (or 1-857-244-7301 for international calls) and using passcode No. 86468839. 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. 51036774.

About Akamai

As the global leader in Content Delivery Network (CDN) services, Akamai makes the Internet fast, reliable and secure for its customers. The company's advanced web performance, mobile performance, cloud security and media delivery solutions are revolutionizing how businesses optimize consumer, enterprise and entertainment experiences for any device, anywhere. To learn how Akamai solutions and its team of Internet experts are helping businesses move faster forward, please visit www.akamai.com or blogs.akamai.com, and follow @Akamai on Twitter.

 

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands)

June 30,
 2015


December
31, 2014

ASSETS




Cash and cash equivalents

$

257,448



$

238,650


Marketable securities

386,055



519,642


Accounts receivable, net

342,930



329,578


Prepaid expenses and other current assets

119,365



128,981


Deferred income tax assets

45,678



45,704


Current assets

1,151,476



1,262,555


Property and equipment, net

704,571



601,591


Marketable securities

881,452



869,992


Goodwill and acquired intangible assets, net

1,301,677



1,183,706


Deferred income tax assets

1,890



1,955


Other assets

90,039



81,747


Total assets

$

4,131,105



$

4,001,546


LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable and accrued expenses

$

290,684



$

282,098


Other current liabilities

57,558



51,913


Current liabilities

348,242



334,011


Deferred income tax liabilities

38,833



39,299


Convertible senior notes

614,484



604,851


Other liabilities

84,234



78,050


Total liabilities

1,085,793



1,056,211


Stockholders' equity

3,045,312



2,945,335


Total liabilities and stockholders' equity

$

4,131,105



$

4,001,546


 

 

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME



Three Months Ended


Six Months Ended

(in thousands, except per share data)

June 30,
 2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Revenue

$

540,723



$

526,536



$

476,035



$

1,067,259



$

929,537


Costs and operating expenses:










Cost of revenue (1) (2)

179,910



169,294



149,318



349,204



288,930


Research and development (1)

36,693



35,828



32,052



72,521



60,286


Sales and marketing (1)

111,501



103,479



91,462



214,980



172,527


General and administrative (1) (2)

99,152



89,592



81,880



188,744



158,041


Amortization of acquired intangible assets

6,752



6,780



8,403



13,532



15,251


Restructuring charges

455



42



569



497



1,304


Total costs and operating expenses

434,463



405,015



363,684



839,478



696,339


Income from operations

106,260



121,521



112,351



227,781



233,198


Interest income

2,541



3,001



1,740



5,542



3,379


Interest expense

(4,678)



(4,576)



(4,516)



(9,254)



(6,457)


Other expense, net

(1,605)



(301)



(899)



(1,906)



(1,780)


Income before provision for income taxes

102,518



119,645



108,676



222,163



228,340


Provision for income taxes

35,318



41,899



35,790



77,217



82,654


Net income

$

67,200



$

77,746



$

72,886



$

144,946



$

145,686












Net income per share:










Basic

$

0.38



$

0.44



$

0.41



$

0.81



$

0.82


Diluted

$

0.37



$

0.43



$

0.40



$

0.80



$

0.80












Shares used in per share calculations:










Basic

178,682



178,545



178,081



178,614



178,393


Diluted

180,738



180,825



180,841



180,782



181,439



(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


Six Months Ended

(in thousands)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Cash flows from operating activities:










Net income

$

67,200



$

77,746



$

72,886



$

144,946



$

145,686


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










Depreciation and amortization

73,989



70,460



58,712



144,449



112,228


Stock-based compensation

32,251



29,669



31,678



61,920



56,792


Excess tax benefits from stock-based
compensation

(9,609)



(13,128)



(4,483)



(22,737)



(19,661)


(Benefit) provision for deferred income
taxes

(24,580)



8,305



20,180



(16,275)



21,840


Amortization of debt discount and issuance costs

4,677



4,576



4,516



9,253



6,457


Other non-cash reconciling items, net

703



443



893



1,146



1,195


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










Accounts receivable

18,260



(32,552)



(23,117)



(14,292)



(41,254)


Prepaid expenses and other current assets

13,839



(1,817)



7,963



12,022



(12,998)


Accounts payable and accrued expenses

84,376



(52,703)



43,970



31,673



21,459


Deferred revenue

76



6,947



(409)



7,023



4,750


Other current liabilities

157



42



132



199



1,419


Other non-current assets and liabilities

2,684



1,741



(12,697)



4,425



(8,666)


Net cash provided by operating activities

264,023



99,729



200,224



363,752



289,247


Cash flows from investing activities:










Cash paid for acquired businesses, net of cash acquired

(106,883)



(16,062)



115



(122,945)



(386,532)


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

(96,013)



(137,069)



(70,519)



(233,082)



(154,525)


Purchases of short- and long-term marketable securities

(308,685)



(97,304)



(204,648)



(405,989)



(863,591)


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

222,030



307,655



138,152



529,685



538,122


Other non-current assets and liabilities

(1,827)



(82)



2,860



(1,909)



2,028


Net cash (used in) provided by investing activities

(291,378)



57,138



(134,040)



(234,240)



(864,498)


 

 

AKAMAI TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued






Three Months Ended


Six Months Ended

(in thousands)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Cash flows from financing activities:










Proceeds from the issuance of convertible
senior notes, net

—



—



(868)



—



678,735


Proceeds from the issuance of warrants

—



—



—



—



77,970


Payment for bond hedge

—



—



—



—



(101,292)


Repayment of acquired debt and capital leases

—



—



—



—



(17,862)


Proceeds from the issuance of common stock under stock plans

12,072



24,440



13,670



36,512



57,999


Excess tax benefits from stock-based compensation

9,609



13,128



4,483



22,737



19,661


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

(8,253)



(31,101)



(7,977)



(39,354)



(34,248)


Repurchases of common stock

(63,388)



(62,680)



(71,344)



(126,068)



(187,491)


Other non-current assets and liabilities

(1,250)



—



—



(1,250)



—


Net cash (used in) provided by financing activities

(51,210)



(56,213)



(62,036)



(107,423)



493,472


Effects of exchange rate changes on cash and cash equivalents

3,456



(6,747)



1,291



(3,291)



2,053


Net (decrease) increase in cash and cash equivalents

(75,109)



93,907



5,439



18,798



(79,726)


Cash and cash equivalents at beginning of period

332,557



238,650



248,726



238,650



333,891


Cash and cash equivalents at end of period

$

257,448



$

332,557



$

254,165



$

257,448



$

254,165






















 

 

AKAMAI TECHNOLOGIES, INC.

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






Three Months Ended


Six Months Ended

(in thousands, except per share data)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Income from operations

$

106,260



$

121,521



$

112,351



$

227,781



$

233,198


GAAP operating margin

20

%


23

%


24

%





Amortization of acquired intangible assets

6,752



6,780



8,403



13,532



15,251


Stock-based compensation

32,251



29,669



31,678



61,920



56,792


Amortization of capitalized stock-based
compensation and capitalized interest expense

3,636



3,108



2,034



6,744



3,962


Other operating expenses(1)

1,439



1,709



1,361



3,148



5,488


Operating adjustments

44,078



41,266



43,476



85,344



81,493


Non-GAAP income from operations

$

150,338



$

162,787



$

155,827



$

313,125



$

314,691


Non-GAAP operating margin

28

%


31

%


33

%


29

%


34

%











Net income

$

67,200



$

77,746



$

72,886



$

144,946



$

145,686


Operating adjustments (from above)

44,078



41,266



43,476



85,344



81,493


Amortization of debt discount and issuance costs

4,678



4,576



4,516



9,254



6,457


Loss on investments

—



25



393



25



393


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

(13,788)



(12,437)



(15,721)



(26,225)



(23,562)


Non-GAAP net income

102,168



111,176



105,550



213,344



210,467












Depreciation and amortization

63,601



60,572



48,275



124,173



93,015


Interest income

(2,541)



(3,001)



(1,740)



(5,542)



(3,379)


Other expense, net

1,605



276



506



1,881



1,387


Provision for GAAP income taxes

35,318



41,899



35,790



77,217



82,654


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

13,788



12,437



15,721



26,225



23,562


Adjusted EBITDA

$

213,939



$

223,359



$

204,102



$

437,298



$

407,706


Adjusted EBITDA margin

40

%


42

%


43

%


41

%


44

%











Non-GAAP net income per share:










Basic

$

0.57



$

0.62



$

0.59



$

1.19



$

1.18


Diluted

$

0.57



$

0.61



$

0.58



$

1.18



$

1.16












Shares used in non-GAAP per share calculations:










Basic

178,682



178,545



178,081



178,614



178,393


Diluted

180,738



180,825



180,841



180,782



181,439

















(1)  Other operating expenses excluded from non-GAAP results include: acquisition-related costs, restructuring charges and certain legal matter costs.  See the non-GAAP adjustment definitions below for additional information.

 

 

AKAMAI TECHNOLOGIES, INC.

SUPPLEMENTAL REVENUE DATA BY SOLUTION CATEGORY






Three Months Ended


Six Months Ended

(in thousands)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Revenue by solution category










Media Delivery Solutions

$

243,503



$

241,842



$

217,600



$

485,345



$

433,489


Performance and Security Solutions

256,039



244,982



222,162



501,021



424,341


Service and Support Solutions

41,181



39,712



36,273



80,893



71,707


Total revenue

$

540,723



$

526,536



$

476,035



$

1,067,259



$

929,537


Cloud Security Solutions revenue

$

60,973



$

55,040



$

43,724



$

116,013



$

73,887












Revenue growth rates year-over-year(1):










Media Delivery Solutions

12

%


12

%


21

%


12

%


20

%

Performance and Security Solutions

15



21



31



18



30


Service and Support Solutions

14



12



24



13



30


Total revenue

14

%


16

%


26

%


15

%


25

%

Cloud Security Solutions revenue growth rates

39

%


82

%




57

%













Revenue growth rates year-over-year, adjusted
for the impact of foreign exchange rates(1)(2):










Media Delivery Solutions

17

%


16

%


20

%


16

%


20

%

Performance and Security Solutions

19



25



30



22



30


Service and Support Solutions

18



16



24



17



30


Total revenue

18

%


20

%


25

%


19

%


24

%

Cloud Security Solutions revenue growth rates(2)

44

%


87

%




62

%



 

 

AKAMAI TECHNOLOGIES, INC.

SUPPLEMENTAL REVENUE DATA BY GEOGRAPHY



Three Months Ended


Six Months Ended

(in thousands)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Revenue by geography










U.S.

$

399,103



$

388,973



$

343,228



$

788,076



$

668,412


International

141,620



137,563



132,807



279,183



261,125


Total revenue

$

540,723



$

526,536



$

476,035



$

1,067,259



$

929,537












Revenue growth rates year-over-year(1):










U.S.

16

%


20

%


25

%


18

%


24

%

International

7



7



27



7



26


Total revenue

14

%


16

%


26

%


15

%


25

%











Revenue growth rates year-over-year, adjusted
for the impact of foreign exchange rates(1)(2):










U.S.

16

%


20

%


25

%


18

%


24

%

International

22



21



24



21



25


Total revenue

18

%


20

%


25

%


19

%


24

%
















(1)  Growth rates for the six months ended June 30, 2014 exclude the impact of revenue from the Advertising Decision Solutions (ADS) business that was
       divested during the three months ended March 31, 2013

(2)  See Use of Non-GAAP Financial Measures below for a definition

 

 

AKAMAI TECHNOLOGIES, INC.

OTHER SUPPLEMENTAL FINANCIAL DATA



Three Months Ended


Six Months Ended

(in thousands, except end of period statistics)

June 30,
2015


March 31,
2015


June 30,
2014


June 30,
2015


June 30,
2014

Stock-based compensation:










Cost of revenue

$

3,502



$

3,163



$

3,076



$

6,665



$

5,871


Research and development

6,009



5,366



5,061



11,375



9,538


Sales and marketing

12,847



12,983



12,796



25,830



23,328


General and administrative

9,893



8,157



10,745



18,050



18,055


Total stock-based compensation

$

32,251



$

29,669



$

31,678



$

61,920



$

56,792












Depreciation and amortization:










Network-related depreciation

$

50,145



$

48,988



$

38,496



$

99,133



$

75,161


Other depreciation and amortization

13,456



11,584



9,779



25,040



17,854


Depreciation of property and equipment

63,601



60,572



48,275



124,173



93,015


Capitalized stock-based compensation amortization

3,435



2,952



2,016



6,387



3,944


Capitalized interest expense amortization

201



156



18



357



18


Amortization of acquired intangible assets

6,752



6,780



8,403



13,532



15,251


Total depreciation and amortization

$

73,989



$

70,460



$

58,712



$

144,449



$

112,228












Capital expenditures(1):










Purchases of property and equipment

$

76,492



$

89,129



$

50,963



$

165,621



$

110,246


Capitalized internal-use software development costs

30,835



33,983



28,265



64,818



52,966


Capitalized stock-based compensation

4,471



4,144



3,943



8,615



7,727


Capitalized interest expense

619



675



597



1,294



834


Total capital expenditures

$

112,417



$

127,931



$

83,768



$

240,348



$

171,773












Net increase (decrease) in cash, cash equivalents and marketable securities

$

9,816



$

(113,145)



$

73,001



$

(103,329)



$

245,480












End of period statistics:










Number of employees

5,733



5,409



4,558






Number of deployed servers

189,136



175,094



154,079



















(1)  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, capital expenditures, revenue adjusted for ADS divestiture and impact of foreign currency exchange rates, 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 or not reflective of Akamai's ongoing operating results. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may also facilitate 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 from its non-GAAP financial measures 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 â€“ Although stock-based compensation is an important aspect of the compensation paid to Akamai's employees and executives, the grant date fair value varies based on the stock price 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 from its non-GAAP financial measures in order to highlight the performance of Akamai's core business and to be consistent with the way investors evaluate its performance and compare its operating results to peer companies.
  • Acquisition-related costs – Acquisition-related costs include transaction fees, due diligence costs and other direct costs associated with strategic activities. In addition, subsequent adjustments to Akamai's initial estimated amounts of contingent consideration and indemnification 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 its 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 the acquisition transactions.
  • Restructuring charges – Akamai has incurred restructuring 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 its 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.
  • Amortization of debt discount and issuance costs and amortization of capitalized interest expense – In February 2014, 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 and legal matters – Akamai has incurred losses from the impairment of certain investments and the settlement of legal matters. In addition, Akamai has incurred costs with respect to its internal investigation relating to sales practices in a country outside the U.S. Akamai believes excluding these amounts from its non-GAAP financial measures is useful to investors as the types of events giving rise to them occur infrequently and are not representative of Akamai's core business operations.
  • 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 highlight 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; other operating expenses (comprised of acquisition-related costs; restructuring charges; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; gains and losses on legal settlements; and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S); 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-affected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; other operating expenses (comprised of acquisition-related costs, restructuring charges, benefit from adoption of software development activities, gains and other activity related to divestiture of a business, gains and losses on legal settlements, and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S.);  loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; certain gains and losses on investments; 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; other operating expenses (comprised of acquisition-related costs; restructuring charges; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; gains and losses on legal settlements;  and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S.); foreign exchange gains and losses; loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; certain gains and losses on investments; 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.

Revenue, adjusted for ADS divestiture – Revenue excluding the impact of Akamai's Advertising Decision Solutions (ADS) divestiture.

Impact of Foreign Currency Exchange Rates – Revenue and earnings from international operations have historically been an important contributor to Akamai's financial results.  Consequently, Akamai's financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates.  For example, when the local currencies of Akamai's foreign subsidiaries weaken, consolidated results stated in U.S. dollars are negatively impacted.

Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of financial results and evaluation of performance in comparison to prior periods. The information presented is calculated by translating current period results using the same average foreign currency exchange rates per month from the comparative period.

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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SOURCE Akamai Technologies, Inc.

Copyright 2015 PR Newswire

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