AKAM ($8-$9-$8) 4 Cent Narrower Loss, New Customers, New Products.
Wednesday July 18, 4:06 pm Eastern Time
Press Release
Akamai Reports Second Quarter 2001 Results
- Second quarter revenue of $43.1 million, up over 137% from same period last year
CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 18, 2001-- - EBITDA loss continues to narrow to $26.5 million from $36.5
million in previous quarter
Capital expenditures continue to decline to $18.2 million from $24.5 million in previous quarter
Network reaches new milestone, growing to over 11,600 servers inside more than 820 networks in 62 countries
Akamai Technologies, Inc. (NASDAQ:AKAM - news), the leading provider of distributed application and content delivery services, today reported financial results for the second quarter ended June 30, 2001. Revenue for the quarter was $43.1 million, compared to revenue of $40.2 million for the previous quarter, and represents a 137.8% increase compared to revenue of $18.1 million for the second quarter of 2000.
``Akamai recorded another quarter of solid growth and progress toward reaching our goal of being EBITDA positive by the second quarter of next year,'' said George Conrades, chairman and CEO of Akamai. ``As we continue to build revenue and manage our costs, Akamai is demonstrating that our recurring revenue and low capital expenditure business model works and supports our fully-funded business plan.''
Second quarter earnings before interest, taxes, depreciation, amortization and other one-time and non-cash charges (EBITDA) was a loss of $26.5 million, lower than the first quarter 2001 EBITDA loss of $36.5 million.
Normalized net loss for second quarter 2001, before amortization and other one-time and non-cash charges, totaled $46.8 million, or $0.46 per share, compared to First Call's consensus summary net loss of $0.50 per share. First quarter 2001 normalized net loss was $52.5 million, or $0.53 per share.
Net loss, in accordance with GAAP, for second quarter 2001 was $92.6 million, or $0.91 per share. This includes a restructuring charge of $26.2 million related to a workforce reduction and excess real estate, equity-related compensation of $11.0 million, and other non-cash charges of $8.6 million.
Second Quarter 2001 In Review:
Financials. ``We delivered the numbers in a challenging macro environment. Revenue and gross profit are up, and operating expenses and capital expenditures have continued to drop as a percentage of revenue,'' said Timothy Weller, CFO of Akamai. ``Our fully-funded business plan is now a strategic weapon in the marketplace, as enterprise customers seek long-term partnerships with us. Our DSO of 52 days testifies to the quality of that customer base.''
At June 30, 2001, the Company had $267.1 million of cash, cash equivalents, and short-term and long-term marketable securities as compared to $313.1 million at March 31, 2001. Capital expenditures, principally made in connection with network deployment, facilities and information systems, for the quarter were $18.2 million, down from $24.5 million in the previous quarter. At June 30, 2001, the Company had 115.1 million shares of common stock outstanding. At June 30, 2001, common stock outstanding and unexercised stock options and warrants totaled 125.5 million shares.
Customers. At the end of the second quarter of 2001, Akamai's customer base under recurring contract totaled 1,333. Customer highlights included strong sales of Akamai's EdgeSuite(SM) service to such businesses as Novartis, a world leader in healthcare, BestBuy.com, a consumer goods retailer, and Victoria's Secret, a leading clothing retailer, to name a few. Akamai ended the quarter with over 50 EdgeSuite customers under long-term contracts, and many more undergoing technical trials, compared to 17 EdgeSuite customers at the end of the previous quarter.
``Our customers are realizing that Akamai's EdgeSuite service not only reduces the costs associated with running a mission-critical Website, but it also offers a uniform architecture on which enterprises can produce Web-based applications that perform with improved reliability, lower overall costs, and higher revenues,'' Conrades said. Akamai's EdgeSuite service is an integrated set of functionalities designed to reduce Internet infrastructure costs and complexities by extending the performance, scalability, and reliability benefits of content delivery across an entire Web site.
Akamai added several new EdgeSuite resellers including EDS, IBM, Inflow and XO Communications. Other resellers of Akamai's services announced during the quarter include Depicta, Digital Wave, and ReleaseNow, as well as streaming provider ON24. Akamai's indirect channels contributed 22% of second quarter revenue.
Network. Akamai achieved an important milestone in the quarter by surpassing the 10,000-server mark, extending the company's distributed network to include 11,689 servers, up from 9,743 in the first quarter. Akamai's servers are now deployed within more than 820 networks in 62 countries, including Internet backbone providers, ISPs, cable and DSL providers, and other telecommunications facilities.
Technology. Akamai extended its global platform with several key technology milestones in the second quarter, including the development and delivery of Edge Side Includes (ESI), an open specification for dynamic assembly of Web pages at the edge of the Internet. As part of the first technology relationship based on ESI, Akamai announced interoperability between the Oracle9i Application Server and Akamai's EdgeSuite service to enable companies to develop and deploy dynamic Web sites and applications. ESI, co-authored by Akamai, also received widespread industry recognition by leaders in the application server, content infrastructure, content management system, and content delivery network (CDN) space. With ESI, companies can reduce the complexity and infrastructure requirements of developing, deploying and maintaining highly scalable and reliable Web sites and Web-based applications.
Akamai's EdgeScape(SM) service, enabling content customization through geo-location and bandwidth characterization, gained significant traction during the quarter, including adoption by Yahoo! to enhance the Web portal's customized ad targeting capabilities.
Akamai introduced SiteWise, a new service that provides real-time Web reporting and analysis for business decision makers, including marketing executives, Internet business managers, Web developers, and IT professionals, to maximize the effectiveness of their Web campaigns and measure the results of their e-business efforts.
Quarterly Conference Call
Akamai will host a conference call to discuss second quarter 2001 results today at 4:30 PM Eastern Time. A live Webcast of Akamai's conference call can be accessed at www.akamai.com. In addition, a replay of the call will be available for 48 hours following the conference call and can be accessed through the Akamai Website or by calling 800-274-4379 (or 1+706-634-7028 for international calls) and using conference ID No. 12495. |
