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Limelight Networks Inc$5.21$.203.99%

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 Limelight Networks Reports Financial Results for the First Quarter of 2017
   Monday, April 24, 2017 4:02:00 PM ET

--Q1 GAAP gross margin of 47.3%, up 710 basis points, year over year

--Q1 GAAP EPS of $(0.03) and Non-GAAP EPS of $0.02

--Cash and marketable securities of $60.9 million

--Raising 2017 revenue, gross margin, Non-GAAP earnings per share, and Adjusted EBITDA guidance

Limelight Networks, Inc. (LLNW ) (Limelight), a global leader in digital content delivery, today reported revenue of $44.7 million for the first quarter of 2017, up 8 percent, compared to $41.4 million in the first quarter of 2016, and up 2% compared to $43.8 million in the fourth quarter of 2016. Currency headwinds negatively impacted year-over-year comparison by $0.3 million and the sequential comparison by $0.1 million.

GAAP gross margin was 47.3% in the first quarter of 2017, an increase of 710 basis points from 40.2% in the first quarter of 2016.

Limelight reported a net loss of $3.3 million, or $0.03 per basic share, for the first quarter of 2017, compared to a net loss of $5.9 million, or $0.06 per basic share, for the first quarter of 2016.

Non-GAAP net income was $1.6 million, or $0.02 per basic share, for the first quarter of 2017, compared to a non-GAAP net loss of $1.3 million, or $0.01 per basic share, for the first quarter of 2016.

EBITDA was $1.7 million for the first quarter of 2017, compared to negative $0.7 million for the first quarter of 2016. Adjusted EBITDA was $6.7 million for the first quarter of 2017 compared to $4.0 million for the first quarter of 2016.

Limelight ended the first quarter with 528 employees and employee equivalents, up from 510 at the end of the fourth quarter of 2016, and up from 501 at the end of the first quarter of 2016.

"Our first quarter results were strong, and ahead of expectations. We have a clear strategy to deliver against aggressive targets for 2017. Strong execution in the first quarter demonstrates our ability to successfully navigate through continuous changes in a healthy industry. Our customers are trusting us with more of their business, our employee turnover is at the lowest level in years, our financial performance is improving across multiple dimensions, and overall our competitive position is stronger than ever," said Bob Lento, Chief Executive Officer at Limelight.

"We are all very proud of the many operational achievements that Limelight’s talented staff are driving, which are manifesting in improving financial results, accelerating business growth, and increasing market share. Pricing discipline is evident in our robust gross margin improvement, and increasingly, we are winning business based on service quality and capabilities, rather than purely on pricing. Based on the strong foundation we have laid, and the strength of our first quarter, we are raising the full year guidance across multiple measures," Mr. Lento added.

Based on current conditions, for the full-year 2017, we are providing the following updates to our previously announced guidance for 2017:

 
                                                        Limelight Networks, Inc.
                                                              2017 Guidance
                                                    
                                                                                               2017 Guidance
                                                                  -----------------------------------------------------------------------
                                                                      April 24, 2017                               February 8, 2017
                                                                  ----------------------                      --------------------------
Revenue                                                            $177 to $181 million                          $175 to $180 million
                                                                                                               
Gross margin percentage                                           Expansion of 200 basis                      Expansion of more than 150
                                                                     points over 2016                           basis points over 2016
                                                                                                               
Non-GAAP EPS                                                          $0.03 to $0.06                                $0.02 to $0.06
                                                                                                               
Adjusted EBITDA                                                     $23 to $27 million                            $22 to $26 million
                                                                                                               
Capital expenditures                                                Approx. $20 million                           Approx. $20 million
                                                                                                               

Financial Tables

 
                                                                                                         LIMELIGHT NETWORKS, INC.
                                                                                                          CONDENSED CONSOLIDATED
                                                                                                              BALANCE SHEETS
                                                                                                   (In thousands, except per share data)
                                                                                                                              
                                                                                                                                     March 31,                                                             December 31,
                                                                                                                                       2017                                                                    2016
                                                                                                                ------------------------------------------------                        ------------------------------------------------
                                                                                                                                    (Unaudited)
                                ASSETS
Current assets:
  Cash and cash equivalents                                                                                                        $   19,152                                                              $   21,734
  Marketable securities                                                                                                                41,676                                                                  44,453
  Accounts receivable, net                                                                                                             26,191                                                                  27,418
  Income taxes receivable                                                                                                                  99                                                                     125
  Prepaid expenses and other current assets                                                                          3,989                             4,865  
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total current assets                                                                                                                   91,107                                                                  98,595
Property and equipment, net                                                                                                            30,204                                                                  30,352
Marketable securities, less current portion                                                                                                40                                                                      40
Deferred income taxes                                                                                                                   1,193                                                                   1,105
Goodwill                                                                                                                               76,702                                                                  76,243
Other assets                                                                                                         1,806                             1,794  
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total assets                                                                                                                       $  201,052                                           $  208,129  
                                                                                                                ==================== ======== ====================                      ==================== ======== ====================
                                                                                                                                                                                         
                 LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                                                                                                 $    8,558                                                              $    8,790
  Deferred revenue                                                                                                                      1,845                                                                   2,138
  Income taxes payable                                                                                                                    193                                                                     188
  Provision for litigation                                                                                                             18,000                                                                  18,000
  Other current liabilities                                                                                         10,600                            12,836  
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total current liabilities                                                                                                              39,196                                                                  41,952
Deferred income taxes                                                                                                                     154                                                                     152
Deferred revenue, less current portion                                                                                                     13                                                                      22
Provision for litigation, less current portion                                                                                         22,500                                                                  27,000
Other long-term liabilities                                                                                          1,238                             1,435  
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total liabilities                                                                                                                      63,101                                                                  70,561
Commitments and contingencies
Stockholders’ equity:
  Convertible preferred stock, $0.001 par value; 7,500 shares                                                                               -                                                                       -
  authorized; no shares issued and outstanding
  Common stock, $0.001 par value; 300,000 shares authorized; 107,979
  and 107,059 shares issued and
    outstanding at March 31, 2017 and December 31, 2016, respectively                                                                     108                                                                     107
  Additional paid-in capital                                                                                                          493,567                                                                 490,819
  Accumulated other comprehensive loss                                                                                                (10,067 )                                                               (11,038 )
  Accumulated deficit                                                                                             (345,657 )                                           (342,320 )
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total stockholders’ equity                                                                                         137,951                           137,568  
                                                                                                                -------------------- -------- --------------------                      -------------------- -------- --------------------
Total liabilities and stockholders’ equity                                                                                         $  201,052                                           $  208,129  
                                                                                                                ==================== ======== ====================                      ==================== ======== ====================
                                                                                                                                                                                                                       
 
                                                                                                                                                                        LIMELIGHT NETWORKS, INC.
                                                                                                                                                                         CONDENSED CONSOLIDATED
                                                                                                                                                                        STATEMENTS OF OPERATIONS
                                                                                                                                                                     (In thousands, except per share
                                                                                                                                                                                  data)
                                                                                                                                                                               (Unaudited)
                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                            Three Months Ended
                                                                                                 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                      March 31,                                                            December 31,                                         Percent                                           March 31,                                                Percent
                                                                                                                        2017                                                                   2016                                             Change                                              2016                                                   Change
                                                                                                 -----------------------------------------------                        -----------------------------------------------                        -------                       -----------------------------------------------                        -------------------
                                                                                                                                                                                                                                                                                                                                                     
Revenues                                                                                                            $  44,735                                           $  43,778                           2 %                                           $  41,422                                 8 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
Cost of revenue:
  Cost of services (1)                                                                                                 19,007                                                                 19,642                                             -3 %                                              20,110                                                   -5 %
  Depreciation - network                                                                             4,557                            4,474                           2 %                            4,668                                -2 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
Total cost of revenue                                                                               23,564                           24,116                          -2 %                           24,778                                -5 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
Gross profit                                                                                                           21,171                                                                 19,662                                              8 %                                              16,644                                                   27 %
Gross profit percentage                                                                                                  47.3 %                                                                 44.9 %                                                                                               40.2 %
Operating expenses:
  General and administrative (1)                                                                                        8,514                                                                  7,960                                              7 %                                               6,808                                                   25 %
  Sales and marketing (1)                                                                                               9,267                                                                  8,215                                             13 %                                               8,903                                                    4 %
  Research & development (1)                                                                                            6,220                                                                  6,094                                              2 %                                               6,325                                                   -2 %
  Depreciation and amortization                                                                        589                              590                           0 %                              623                                -5 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
Total operating expenses                                                                            24,590                           22,859                           8 %                           22,659                                 9 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                     
Operating loss                                                                                                         (3,419 )                                                               (3,197 )                                            7 %                                              (6,015 )                                                -43 %
                                                                                                                                                                                                                                                                                                                                                     
Other income (expense):
  Interest expense                                                                                                        (14 )                                                                  (54 )                                          -74 %                                                (179 )                                                -92 %
  Interest income                                                                                                         117                                                                    101                                             16 %                                                   6                                                 1850 %
  Other, net                                                                                            87                             (570 )                                         -115 %                              400                               -78 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
Total other income (expense)                                                                           190                             (523 )                                         -136 %                              227                               -16 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                     
Loss before income taxes                                                                                               (3,229 )                                                               (3,720 )                                          -13 %                                              (5,788 )                                                -44 %
Income tax expense                                                                                     108                              199                         -46 %                              158                               -32 %
                                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------                                                    -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                     
Net loss                                                                                                            $  (3,337 )                                                            $  (3,919 )                                          -15 %                                           $  (5,946 )                                                -44 %
                                                                                                 ==================== ======= ====================                      ==================== ======= ====================                                                    ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                     
Net loss per share:
    Basic and diluted                                                                                               $   (0.03 )                                                            $   (0.04 )                                                                                          $   (0.06 )
                                                                                                 ==================== ======= ====================                      ==================== ======= ====================                                                    ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                     
Weighted average shares used in per share calculation:
  Basic and diluted                                                                                                   107,363                                                                105,942                                                                                              102,693
                                                                                                                                                                                                                                                                                                                                                     

(1) Includes share-based compensation (see supplemental table for figures)

 
                                                                                                                                         LIMELIGHT NETWORKS, INC.
                                                                                                                                        SUPPLEMENTAL FINANCIAL DATA
                                                                                                                                                    (In
                                                                                                                                                thousands)
                                                                                                                                                (Unaudited)
                                                                                                                                                                           
                                                                                                                                                                                                                                                         
                                                                                                                                                                                                  Three Months Ended
                                                                                                            ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                         
                                                                                                                                March 31,                                                           December 31,                                                             March 31,
                                                                                                                                  2017                                                                  2016                                                                   2016
                                                                                                            ----------------------------------------------                        ----------------------------------------------                        -----------------------------------------------
                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                         
Share-based compensation:
                                                                                                                                                                                                                                                         
Cost of services                                                                                                               $    359                                                              $    375                                                              $     473
General and administrative                                                                                                        1,534                                                                 1,951                                                                  1,826
Sales and marketing                                                                                                                 620                                                                   776                                                                    737
Research and development                                                                                         562                             581                              460  
                                                                                                            -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                         
Total share-based compensation                                                                                                 $  3,075                                           $  3,683                                           $   3,496  
                                                                                                            ==================== ====== ====================                      ==================== ====== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                         
Depreciation and amortization:
                                                                                                                                                                                                                                                         
Network-related depreciation                                                                                                   $  4,557                                                              $  4,474                                                              $   4,668
Other depreciation and amortization                                                                                                 589                                                                   590                                                                    617
Amortization of intangible assets                                                                                  -                               -                                6  
                                                                                                            -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                         
Total depreciation and amortization                                                                                            $  5,146                                           $  5,064                                           $   5,291  
                                                                                                            ==================== ====== ====================                      ==================== ====== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                         
Net decrease in cash, cash equivalents and marketable securities:                                                              $ (5,359 )                                                            $ (8,213 )                                                            $ (48,861 )
                                                                                                            ==================== ====== ====================                      ==================== ====== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                         
End of period statistics:
                                                                                                                                                                                                                                                         
Approximate number of active customers                                                                                              813                                                                   851                                                                    926
                                                                                                                                                                                                                                                         
Number of employees and employee equivalents                                                                                        528                                                                   510                                                                    501
                                                                                                                                                                                                                                                         
 
                                                                                                                                             LIMELIGHT NETWORKS, INC.
                                                                                                                                              CONDENSED CONSOLIDATED
                                                                                                                                             STATEMENTS OF CASH FLOWS
                                                                                                                                                  (In thousands)
                                                                                                                                                    (Unaudited)
                                                                                                                                                                                    
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                          Three Months Ended
                                                                                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                  
                                                                                                                                        March 31,                                                            December 31,                                                             March 31,
                                                                                                                                          2017                                                                   2016                                                                   2016
                                                                                                                    ----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------
                                                                                                                                                                                                                                                                  
Operating activities
    Net loss                                                                                                                           $ (3,337 )                                                            $  (3,919 )                                                            $  (5,946 )
                                                                                                                                                                                                                                                                  
    Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities:
         Depreciation and amortization                                                                                                    5,146                                                                  5,064                                                                  5,291
         Share-based compensation                                                                                                         3,075                                                                  3,683                                                                  3,496
         Foreign currency remeasurement loss (gain)                                                                                         289                                                                     76                                                                   (301 )
         Deferred income taxes                                                                                                              (50 )                                                                  195                                                                     82
         Gain on sale of property and equipment                                                                                             (75 )                                                                 (218 )                                                                    -
         Accounts receivable charges (recoveries)                                                                                           249                                                                    101                                                                   (116 )
         Amortization of premium on marketable securities                                                                                    83                                                                     48                                                                     19
         Realized loss on sale of marketable securities                                                                                       -                                                                      -                                                                     32
         Changes in operating assets and liabilities:
           Accounts receivable                                                                                                              978                                                                 (4,661 )                                                                 (540 )
           Prepaid expenses and other current assets                                                                                        914                                                                    315                                                                  3,583
           Income taxes receivable                                                                                                           29                                                                    (15 )                                                                  (13 )
           Other assets                                                                                                                      (3 )                                                                   22                                                                    342
           Accounts payable and other current liabilities                                                                                (1,160 )                                                               (1,087 )                                                               (4,005 )
           Deferred revenue                                                                                                                (302 )                                                                  730                                                                    473
           Income taxes payable                                                                                                              (4 )                                                                   68                                                                   (127 )
           Payments for provision for litigation                                                                                         (4,500 )                                                               (4,500 )                                                                    -
           Other long term liabilities                                                                                  (197 )                                              (307 )                                               900  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
    Net cash provided by (used in) operating activities                                                                1,135                           (4,405 )                                             3,170  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                  
Investing activities
         Purchases of marketable securities                                                                                              (4,526 )                                                              (45,629 )                                                                    -
         Sale and maturities of marketable securities                                                                                     7,250                                                                  1,000                                                                 28,315
         Change in restricted cash                                                                                                            -                                                                      -                                                                (62,790 )
         Purchases of property and equipment                                                                                             (5,745 )                                                               (4,897 )                                                               (1,421 )
         Proceeds from sale of property and equipment                                                                     58                              504                                -  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
    Net cash used in investing activities                                                                             (2,963 )                                           (49,022 )                                           (35,896 )
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                  
Financing activities
         Principal payments on capital lease obligations                                                                                      -                                                                      -                                                                   (159 )
         Payment of employee tax withholdings related to restricted stock                                                                (1,036 )                                                                 (676 )                                                                 (646 )
         vesting
         Proceeds from line of credit                                                                                                         -                                                                      -                                                                 12,790
         Proceeds from employee stock plans                                                                              111                            1,839                               43  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
    Net cash (used in) provided by financing activities                                                                 (925 )                                             1,163                           12,028  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
    Effect of exchange rate changes on cash and cash equivalents                                                         171                             (402 )                                               159  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Net decrease in cash and cash equivalents                                                                                                (2,582 )                                                              (52,666 )                                                              (20,539 )
Cash and cash equivalents, beginning of period                                                                        21,734                           74,400                           44,680  
                                                                                                                    -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Cash and cash equivalents, end of period                                                                                               $ 19,152                                           $  21,734                                           $  24,141  
                                                                                                                    ==================== ====== ====================                      ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                  

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use non-generally accepted accounting principles (Non-GAAP) net income (loss), EBITDA and Adjusted EBITDA as supplemental measures of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance. We define Non-GAAP net income (loss) to be U.S. GAAP net income (loss) adjusted to exclude share-based compensation, litigation expenses and amortization of intangible assets. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA as U.S. GAAP net income (loss) adjusted to exclude depreciation and amortization, interest expense, interest and other (income) expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based compensation and litigation expenses. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. Our management uses these Non-GAAP financial measures because, collectively, they provide valuable information on the performance of our on-going operations, excluding non-cash charges, taxes and non-core activities (including interest payments related to financing activities). These measures also enable our management to compare the results of our on-going operations from period to period, and allow management to review the performance of our on-going operations against our peer companies and against other companies in our industry and adjacent industries. We believe these measures also provide similar insights to investors, and enable investors to review our results of operations "through the eyes of management."

Furthermore, our management uses these Non-GAAP financial measures to assist them in making decisions regarding our strategic priorities and areas for future investment and focus.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

-- EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

-- these measures do not reflect changes in, or cash requirements for, our working capital needs;

-- Non-GAAP net income (loss) and Adjusted EBITDA do not reflect the cash requirements necessary for litigation costs, including provision for litigation and litigation expenses;

-- these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;

-- these measures do not reflect income taxes or the cash requirements for any tax payments;

-- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

-- while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and

-- other companies may calculate Non-GAAP net income (loss), EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income (loss), EBITDA, and Adjusted EBITDA only as supplemental support for management’s analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

Limelight is presenting the most directly comparable U.S. GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.

                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                     LIMELIGHT NETWORKS, INC.
                                                                                                                                                                                                                                     Reconciliation of U.S. GAAP
                                                                                                                                                                                                                                     Net Loss to Non-GAAP Net Income (Loss)
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                Three Months Ended
                                                                                                ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                     March 31, 2017                                                                                                                              December 31, 2016                                                                                                                             March 31, 2016
                                                                                                ------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Amount                                                                Per Share                                                              Amount                                                                Per Share                                                              Amount                                                                Per Share
                                                                                                -------------------------------------------------                     --------------------------------------------------                     -------------------------------------------------                     --------------------------------------------------                     -------------------------------------------------                     --------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
U.S. GAAP net loss                                                                                                 $ (3,337 )                                                            $   (0.03 )                                                            $ (3,919 )                                                            $   (0.04 )                                                            $ (5,946 )                                                            $   (0.06 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Share-based compensation                                                                                              3,075                                                                   0.03                                                                 3,683                                                                   0.03                                                                 3,496                                                                   0.03
Litigation expenses                                                                                                   1,909                                                                   0.02                                                                 1,998                                                                   0.02                                                                 1,178                                                                   0.01
Amortization of intangible assets                                                                      -                                -                               -                                -                               6                             0.00  
                                                                                                -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Non-GAAP net income (loss)                                                                                         $  1,647                                           $    0.02                                           $  1,762                                           $    0.02                                           $ (1,266 )                                                            $   (0.01 )
                                                                                                ==================== ====== ====================                      ==================== ======= ====================                      ==================== ====== ====================                      ==================== ======= ====================                      ==================== ====== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Weighted average shares used in per share calculation                                                                                                                                      107,363                                                                                                                                      105,942                                                                                                                                      102,693
                                                                                                                                                 
                                                                                                                           LIMELIGHT NETWORKS, INC.
                                                                                                                          Reconciliation of U.S. GAAP
                                                                                                                     Net Loss to EBITDA to Adjusted EBITDA
                                                                                                                                (In thousands)
                                                                                                                                  (Unaudited)
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
                                                                                                                                                                       Three Months Ended
                                                                                  ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                               
                                                                                                      March 31,                                                           December 31,                                                            March 31,
                                                                                                        2017                                                                  2016                                                                  2016
                                                                                  ----------------------------------------------                        ----------------------------------------------                        ----------------------------------------------
                                                                                                                                                                                                                               
U.S. GAAP net loss                                                                                   $ (3,337 )                                                            $ (3,919 )                                                            $ (5,946 )
                                                                                                                                                                                                                               
    Depreciation and amortization                                                                       5,146                                                                 5,064                                                                 5,291
    Interest expense                                                                                       14                                                                    54                                                                   179
    Interest and other (income) expense                                                                  (204 )                                                                 469                                                                  (406 )
    Income tax expense                                                                 108                             199                             158  
                                                                                  -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                               
EBITDA                                                                                               $  1,727                                                              $  1,867                                                              $   (724 )
                                                                                                                                                                                                                               
    Share-based compensation                                                                            3,075                                                                 3,683                                                                 3,496
    Litigation expenses                                                              1,909                           1,998                           1,178  
                                                                                  -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                               
Adjusted EBITDA                                                                                      $  6,711                                           $  7,548                                           $  3,950  
                                                                                  ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                               

For future periods, we are unable to provide a reconciliation of EBITDA and Adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, the amounts of depreciation and amortization, interest expense, interest and other (income) expense and income tax expense, that may be incurred in the future.

Conference Call

At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management will host a quarterly conference call for investors. Investors can access this call toll-free at 888-317-6016 within the United States or +1 412-317-6016 outside of the U.S. The conference call will also be audio cast live from http://www.limelight.com and a replay will be available following the call from the Limelight website.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These statements include, among others, statements regarding our expectations regarding revenue, gross margin, non-GAAP net income, capital expenditures, litigation, and our future prospects. Our expectations and beliefs regarding these matters may not materialize. The potential risks and uncertainties that could cause actual results or outcomes to differ materially from the results or outcomes predicted include, among other things, reduction of demand for our services from new or existing customers, unforeseen changes in our hiring patterns, adverse outcomes in litigation, and experiencing expenses that exceed our expectations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online on our investor relations website at investors.limelightnetworks.com and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of April 24, 2017, and we undertake no duty to update this information in light of new information or future events, unless required by law.

About Limelight

Limelight Networks (LLNW ), a global leader in digital content delivery, empowers customers to better engage online audiences by enabling them to securely manage and globally deliver digital content, on any device. The Company’s award winning Limelight Orchestrate(TM) platform includes an integrated suite of content delivery technology and services that helps organizations secure digital content, deliver exceptional multi-screen experiences, improve brand awareness, drive revenue, and enhance customer relationships -- all while reducing costs. For more information, please visit www.limelight.com, read our blog, follow us on Twitter, Facebook and LinkedIn and be sure to visit Limelight Connect.

Copyright (C) 2017 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170424006365r1&sid=cmtx6&distro=nx&lang=en

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SOURCE: Limelight Networks

Limelight Networks, Inc. 
Sajid Malhotra, 602-850-5778 
ir@llnw.com


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