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Limelight Networks Inc$3.53($.03)(.84%)

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 Limelight Networks(R) Reports Record Financial Results for the Third Quarter of 2017
   Wednesday, October 18, 2017 4:01:00 PM ET

--Revenue of $46.1 million, up 17 percent year over year

--GAAP gross margin of 48.4%, up 730 basis points, year over year

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

--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 $46.1 million for the third quarter of 2017, up 17% compared to $39.5 million in the third quarter of 2016, and up two percent compared to $45.4 million in the second quarter of 2017. Currency exchange negatively impacted year-over-year comparison by $0.2 million, or less than one percent.



Gross margin was 48.4% in the third quarter of 2017, an increase of 730 basis points from 41.1% in the third quarter of 2016.

On a GAAP basis, Limelight reported a net loss of $1.8 million, or $0.02 per basic share, for the third quarter of 2017, compared to a net loss of $6.1 million, or $0.06 per basic share, in the third quarter of 2016.

Non-GAAP net income was $2.2 million, or $0.02 per basic share, for the third quarter of 2017, compared to non-GAAP net loss of $0.3 million, or break-even per basic share, in the third quarter of 2016.

EBITDA was $3.4 million for the third quarter of 2017, compared to negative $0.7 million for the third quarter of 2016. Adjusted EBITDA was $7.4 million for the third quarter of 2017, compared to $5.1 million for the third quarter of 2016.

Limelight ended the third quarter with 535 employees and employee equivalents, up from 533 employees at the end of the second quarter of 2017, and up from 502 employees in the year ago period.

"We are pleased with Limelight’s third quarter results that showed sequential improvements even in a seasonally weak quarter, and marked record achievements across multiple key financial and non-financial metrics. Customers continue to reward Limelight’s performance gains by sending us more business, and we believe we are continuing to take market share. Pricing discipline and operational efficiencies are driving massive gains in gross margin, and the significant and continuing improvement in our Net Promoter Score confirms our customer’s growing satisfaction with the value they obtain from Limelight," said Bob Lento, Chief Executive Officer at Limelight.

"In light of the strength of our results, we are again raising guidance for Limelight’s full year revenue, gross margin, non-GAAP earnings per share, and Adjusted EBITDA. We foresee Limelight’s 2017 operating performance to be our best ever, and we plan on improving further in 2018. As we’ve said before, we operate in a healthy and growing industry, we are proud to serve our customers, we are a good partner for our vendors, we are a desirable employer, and we are acutely focused on delivering exceptional shareholder returns," Mr. Lento added.

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

                                                                                                          
                                                                                                                                   Limelight Networks, Inc.
                                                                                                                                         2017 Guidance
                                                                                                                                                                                                                                                                    
                                                                    October 18, 2017                                                  July 26, 2017                                                   April 24, 2017                                                    February 8, 2017
                                                                  --------------------                                           ----------------------                                           ----------------------                                           --------------------------
Revenue                                                           $182 to $185 million                                            $180 to $182 million                                             $177 to $181 million                                               $175 to $180 million
                                                                                                                                                                                                                                                                    
Gross margin percentage                                             Expansion of more                                            Expansion of 300 basis                                           Expansion of 200 basis                                           Expansion of more than 150
                                                                     than 450 basis                                                 points over 2016                                                 points over 2016                                                basis points over 2016
                                                                    points over 2016
                                                                                                                                                                                                                                                                    
Non-GAAP EPS                                                         $0.06 to $0.08                                                  $0.05 to $0.07                                                   $0.03 to $0.06                                                     $0.02 to $0.06
                                                                                                                                                                                                                                                                    
Adjusted EBITDA                                                    $26 to $29 million                                              $24 to $28 million                                               $23 to $27 million                                                 $22 to $27 million
                                                                                                                                                                                                                                                                    
Capital expenditures                                               Approx. $20 million                                             Approx. $20 million                                              Approx. $20 million                                                Approx. $20 million
                                                                                                                                                                                                                                                                    

Financial Tables

                                                                                                                                                                                       
                                                                                                                                                                  LIMELIGHT NETWORKS, INC.
                                                                                                                                                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                                                                            (In thousands, except per share data)
                                                                                                                                                                                                                                                                                                           
                                                                                                                                   September 30,                                                                                  June 30,                                                                                   December 31,
                                                                                                                                       2017                                                                                         2017                                                                                         2016
                                                                                                                ---------------------------------------------------                                          ---------------------------------------------------                                          ---------------------------------------------------
                                                                                                                                    (Unaudited)                                                                                  (Unaudited)
                                ASSETS
Current assets:
  Cash and cash equivalents                                                                                     $                      20,744                                                                $                      22,972                                                                $                      21,734
  Marketable securities                                                                                                                36,948                                                                                       37,624                                                                                       44,453
  Accounts receivable, net                                                                                                             28,712                                                                                       28,154                                                                                       27,418
  Income taxes receivable                                                                                                                 102                                                                                          112                                                                                          125
  Prepaid expenses and other current assets                                                                          4,453                                                  4,121                                                  4,865  
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total current assets                                                                                                                   90,959                                                                                       92,983                                                                                       98,595
Property and equipment, net                                                                                                            29,835                                                                                       30,415                                                                                       30,352
Marketable securities, less current portion                                                                                                40                                                                                           40                                                                                           40
Deferred income taxes                                                                                                                   1,393                                                                                        1,307                                                                                        1,105
Goodwill                                                                                                                               76,925                                                                                       77,032                                                                                       76,243
Other assets                                                                                                         1,794                                                  1,802                                                  1,794  
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total assets                                                                                                    $                     200,946                                             $                     203,579                                             $                     208,129  
                                                                                                                ==================== ======== ====================                                           ==================== ======== ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                                                                                           
                 LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                                                                              $                       8,804                                                                $                      10,763                                                                $                       8,790
  Deferred revenue                                                                                                                      1,694                                                                                        1,741                                                                                        2,138
  Income taxes payable                                                                                                                    383                                                                                          334                                                                                          188
  Provision for litigation                                                                                                             18,000                                                                                       18,000                                                                                       18,000
  Other current liabilities                                                                                         15,665                                                 12,722                                                 12,836  
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total current liabilities                                                                                                              44,546                                                                                       43,560                                                                                       41,952
Deferred income taxes                                                                                                                     146                                                                                          147                                                                                          152
Deferred revenue, less current portion                                                                                                     15                                                                                           15                                                                                           22
Provision for litigation, less current portion                                                                                         13,500                                                                                       18,000                                                                                       27,000
Other long-term liabilities                                                                                            859                                                  1,057                                                  1,435  
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total liabilities                                                                                                                      59,066                                                                                       62,779                                                                                       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; 109,638,
  109,248 and 107,059 shares issued and
    outstanding at September 30, 2017, June 30, 2017 and December 31,                                                                     110                                                                                          109                                                                                          107
    2016, respectively
  Additional paid-in capital                                                                                                          499,487                                                                                      497,018                                                                                      490,819
  Accumulated other comprehensive loss                                                                                                 (8,679 )                                                                                     (9,045 )                                                                                    (11,038 )
  Accumulated deficit                                                                                             (349,038 )                                                                (347,282 )                                                                (342,320 )
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total stockholders’ equity                                                                                         141,880                                                140,800                                                137,568  
                                                                                                                -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------
Total liabilities and stockholders’ equity                                                                      $                     200,946                                             $                     203,579                                             $                     208,129  
                                                                                                                ==================== ======== ====================                                           ==================== ======== ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                     LIMELIGHT NETWORKS, INC.
                                                                                                                                                                                                                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                                                                                                                                     (In thousands, except per share data)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                Three Months Ended                                                                                                                                                                                                                                                                                                        Nine Months Ended
                                                                                                 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                     September 30,                                                                                   June 30,                                                                Percent                                                             September 30,                                                             Percent                                                             September 30,                                                                               September 30,                                                                   Percent
                                                                                                                         2017                                                                                          2017                                                                  Change                                                                  2016                                                                  Change                                                                  2017                                                                                        2016                                                                        Change
                                                                                                 -----------------------------------------------------                                          --------------------------------------------------                                          -------                                           --------------------------------------------------                                          -------                                           --------------------------------------------------                                          --------------------------------------------------                                          ---------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Revenues                                                                                         $                        46,069                                             $                     45,370                                                2%                                             $                     39,473                                                17%                                            $                    136,173                                             $                    124,456                                                      9%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
Cost of revenue:
  Cost of services (1)                                                                                                    19,287                                                                                      19,464                                                                   -1%                                                                  18,834                                                                   2%                                                                   57,758                                                                                      59,214                                                                         -2%
  Depreciation - network                                                                                4,506                                                 4,531                                                -1%                                                4,401                                                2%                                                13,594                                                13,558                                                      0%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
Total cost of revenue                                                                                  23,793                                                23,995                                                -1%                                               23,235                                                2%                                                71,352                                                72,772                                                      -2%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
Gross profit                                                                                                              22,276                                                                                      21,375                                                                   4%                                                                   16,238                                                                   37%                                                                  64,821                                                                                      51,684                                                                         25%
Gross profit percentage                                                                                                    48.4%                                                                    47.1%                                                                                                                      41.1%                                                                                                                      47.6%                                                                    41.5%  
Operating expenses:
  General and administrative (1)                                                                                           8,079                                                                                       6,804                                                                   19%                                                                   8,033                                                                   1%                                                                   23,397                                                                                      22,082                                                                     6     %
  Sales and marketing (1)                                                                                                  8,836                                                                                       8,997                                                                   -2%                                                                   7,711                                                                   15%                                                                  27,100                                                                                      24,730                                                                         10%
  Research & development (1)                                                                                               6,443                                                                                       6,715                                                                   -4%                                                                   5,626                                                                   15%                                                                  19,377                                                                                      18,241                                                                         6%
  Depreciation and amortization                                                                                              603                                                                                         597                                                                   1%                                                                      613                                                                   -2%                                                                   1,789                                                                                       1,862                                                                         -4%
  Provision for litigation                                                                                  -                                                     -                                                NA                                                     -                                                NA                                                     -                                                54,000                                                      NA
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
Total operating expenses                                                                               23,961                                                23,113                                                4%                                                21,983                                                9%                                                71,663                                               120,915                                                     -41%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Operating loss                                                                                                            (1,685 )                                                                                    (1,738 )                                                                 -3%                                                                  (5,745 )                                                                -71%                                                                  (6,842 )                                                                                   (69,231 )                                                                      -90%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Other income (expense):
  Interest expense                                                                                                           (18 )                                                                                       (10 )                                                                 80%                                                                    (406 )                                                                -96%                                                                     (42 )                                                                                      (865 )                                                                      -95%
  Interest income                                                                                                            127                                                                                         121                                                                   5%                                                                        8                                                                  1488%                                                                    365                                                                                          22                                                                        1559%
  Other, net                                                                                                8                                                   153                                               -95%                                                  151                                               -95%                                                  249                                                   472                                                     -47%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
Total other income (expense)                                                                              117                                                   264                                               -56%                                                 (247 )                                                                -147%                                                 572                                                  (371 )                                                                      -254%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Loss before income taxes                                                                                                  (1,568 )                                                                                    (1,474 )                                                                 6%                                                                   (5,992 )                                                                -74%                                                                  (6,270 )                                                                                   (69,602 )                                                                      -91%
Income tax expense                                                                                        188                                                   151                                                25%                                                  130                                                45%                                                  448                                                   404                                                      11%
                                                                                                 -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                                                                             -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Net loss                                                                                               (1,756 )                                                                 (1,625 )                                                                 8%                                                (6,122 )                                                                -71%                                               (6,718 )                                                                (70,006 )                                                                      -90%
                                                                                                 ==================== ========== ====================                                           ==================== ======= ====================                                                                                             ==================== ======= ====================                                                                                             ==================== ======= ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Net loss per share:
    Basic and diluted                                                                            $                         (0.02 )                                                              $                      (0.01 )                                                                                                                $                      (0.06 )                                                                                                                $                      (0.06 )                                                              $                      (0.67 )
                                                                                                 ==================== ========== ====================                                           ==================== ======= ====================                                                                                             ==================== ======= ====================                                                                                             ==================== ======= ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Weighted average shares used in per share calculation:
  Basic and diluted                                                                                                      109,342                                                                                     108,422                                                                                                                                       104,860                                                                                                                                       108,376                                                                                     103,819
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
(1) Includes share-based compensation (see supplemental table for
figures)
                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                    LIMELIGHT NETWORKS, INC.
                                                                                                                                                                                                                                   SUPPLEMENTAL FINANCIAL DATA
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                     (Unaudited)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                          Three Months Ended                                                                                                                                                                                               Nine Months Ended
                                                                                                           -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                             September 30,                                                                                June 30,                                                                      September 30,                                                                   September 30,                                                                      September 30,
                                                                                                                                 2017                                                                                       2017                                                                            2016                                                                            2017                                                                               2016
                                                                                                           -------------------------------------------------                                          ------------------------------------------------                                          ----------------------------                                          -------------------------------------------------                                          --------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Share-based compensation:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Cost of services                                                                                           $                       352                                                                $                      364                                                                $                       209                                           $                     1,075                                                                $                         1,118
General and administrative                                                                                                       1,565                                                                                     1,674                                                                                      1,616                                                                 4,773                                                                                          5,119
Sales and marketing                                                                                                                611                                                                                       617                                                                                        641                                                                 1,848                                                                                          2,016
Research and development                                                                                        584                                                 600                                                  521                                              1,746                                                    1,523
                                                                                                           -------------------- ------ --------------------                                           -------------------- ----- --------------------                                           -------------------- ------                                           -------------------- ------ --------------------                                           -------------------- ----------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Total share-based compensation                                                                             $                     3,112                                             $                    3,255                                             $                     2,987                                           $                     9,442                                             $                         9,776
                                                                                                           ==================== ====== ====================                                           ==================== ===== ====================                                           ==================== ======                                           ==================== ====== ====================                                           ==================== ==========
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Depreciation and amortization:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Network-related depreciation                                                                               $                     4,506                                                                $                    4,531                                                                $                     4,401                                           $                    13,594                                                                $                        13,558
Other depreciation and amortization                                                                                                603                                                                                       597                                                                                        611                                                                 1,789                                                                                          1,848
Amortization of intangible assets                                                                                 -                                                   -                                                    2                                                  -                                                       14
                                                                                                           -------------------- ------ --------------------                                           -------------------- ----- --------------------                                           -------------------- ------                                           -------------------- ------ --------------------                                           -------------------- ----------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Total depreciation and amortization                                                                        $                     5,109                                             $                    5,128                                             $                     5,014                                           $                    15,383                                             $                        15,420
                                                                                                           ==================== ====== ====================                                           ==================== ===== ====================                                           ==================== ======                                           ==================== ====== ====================                                           ==================== ==========
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Net increase (decrease) in cash, cash equivalents and marketable                                           $                    (2,904 )                                                              $                     (232 )                                                              $                    43,515                                           $                    (8,495 )                                                              $                         1,398
securities:
                                                                                                           ==================== ====== ====================                                           ==================== ===== ====================                                           ==================== ======                                           ==================== ====== ====================                                           ==================== ==========
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
End of period statistics:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Approximate number of active customers                                                                                             753                                                                                       779                                                                                        875                                                                   753                                                                                            875
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
Number of employees and employee equivalents                                                                                       535                                                                                       533                                                                                        502                                                                   535                                                                                            502
                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                     LIMELIGHT NETWORKS, INC.
                                                                                                                                                                                                                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                     (Unaudited)
   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                             Three Months Ended                                                                                                                                                                                                                    Nine Months Ended
                                                                                                                                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                    September 30,                                                                                June 30,                                                                                  September 30,                                                                               September 30,                                                                               September 30,
                                                                                                                                                                                        2017                                                                                       2017                                                                                        2016                                                                                        2017                                                                                        2016
                                                                                                                                                                  -------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Operating activities
                     Net loss                                                                                                                                     $                    (1,756 )                                                              $                    (1,625 )                                                              $                     (6,122 )                                                              $                     (6,718 )                                                              $                    (70,006 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                     Adjustments to reconcile net loss to net cash provided by operating
                     activities:
                                                       Depreciation and amortization                                                                                                    5,109                                                                                      5,128                                                                                       5,014                                                                                      15,383                                                                                      15,420
                                                       Share-based compensation                                                                                                         3,112                                                                                      3,255                                                                                       2,987                                                                                       9,442                                                                                       9,776
                                                       Provision for litigation                                                                                                             -                                                                                          -                                                                                           -                                                                                           -                                                                                      54,000
                                                       Foreign currency remeasurement (gain) loss                                                                                          79                                                                                        290                                                                                         343                                                                                         658                                                                                         509
                                                       Deferred income taxes                                                                                                              (73 )                                                                                      (94 )                                                                                       (39 )                                                                                      (217 )                                                                                       (25 )
                                                       Gain on sale of property and equipment                                                                                              (2 )                                                                                      (17 )                                                                                      (162 )                                                                                       (94 )                                                                                      (296 )
                                                       Accounts receivable charges                                                                                                        242                                                                                        241                                                                                          69                                                                                         732                                                                                          36
                                                       Amortization of premium on marketable securities                                                                                    65                                                                                         80                                                                                           -                                                                                         228                                                                                          19
                                                       Realized loss on sale of marketable securities                                                                                       -                                                                                          -                                                                                           -                                                                                           -                                                                                          32
                                                       Changes in operating assets and liabilities:
                                                         Accounts receivable                                                                                                             (800 )                                                                                   (2,204 )                                                                                     1,944                                                                                      (2,026 )                                                                                     3,901
                                                         Prepaid expenses and other current assets                                                                                       (322 )                                                                                      (47 )                                                                                       941                                                                                         545                                                                                       4,333
                                                         Income taxes receivable                                                                                                           13                                                                                         (8 )                                                                                        16                                                                                          34                                                                                          54
                                                         Other assets                                                                                                                      13                                                                                         11                                                                                          50                                                                                          21                                                                                         558
                                                         Accounts payable and other current liabilities                                                                                 2,048                                                                                      3,861                                                                                       1,769                                                                                       4,749                                                                                        (670 )
                                                         Deferred revenue                                                                                                                 (47 )                                                                                     (101 )                                                                                    (1,091 )                                                                                      (450 )                                                                                    (1,552 )
                                                         Income taxes payable                                                                                                              46                                                                                        138                                                                                         (21 )                                                                                       180                                                                                         (76 )
                                                         Payments for provision for litigation                                                                                         (4,500 )                                                                                   (4,500 )                                                                                    (4,500 )                                                                                   (13,500 )                                                                                    (4,500 )
                                                         Other long term liabilities                                                                                  (202 )                                                                  (185 )                                                                   (213 )                                                                   (584 )                                                                   (550 )
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                     Net cash provided by operating activities                                                                                                       3,025                                                4,223                                                   985                                                 8,383                                                10,963  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Investing activities
                                                       Purchases of marketable securities                                                                                              (2,864 )                                                                                   (2,993 )                                                                                         -                                                                                     (10,383 )                                                                                         -
                                                       Sale and maturities of marketable securities                                                                                     3,500                                                                                      6,994                                                                                           -                                                                                      17,744                                                                                      28,315
                                                       Change in restricted cash                                                                                                            -                                                                                          -                                                                                      62,790                                                                                           -                                                                                           -
                                                       Purchases of property and equipment                                                                                             (5,328 )                                                                                   (4,733 )                                                                                    (2,986 )                                                                                   (15,806 )                                                                                    (4,666 )
                                                       Proceeds from sale of property and equipment                                                                      3                                                   22                                                     -                                                    83                                                     -  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                     Net cash (used in) provided by investing activities                                                                                            (4,689 )                                                                  (710 )                                                                 59,804                                                (8,362 )                                                                 23,649  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Financing activities
                                                       Principal payments on capital lease obligations                                                                                      -                                                                                          -                                                                                      (4,207 )                                                                                         -                                                                                      (4,685 )
                                                       Payment of employee tax withholdings related to restricted stock                                                                  (655 )                                                                                     (880 )                                                                                      (362 )                                                                                    (2,571 )                                                                                    (1,306 )
                                                       vesting
                                                       Proceeds from line of credit                                                                                                         -                                                                                          -                                                                                     (12,790 )                                                                                         -                                                                                           -
                                                       Proceeds from employee stock plans                                                                               12                                                1,077                                                    48                                                 1,200                                                   904  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                     Net cash (used in) provided by financing activities                                                                                              (643 )                                                                   197                                               (17,311 )                                                                 (1,371 )                                                                 (5,087 )
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                     Effect of exchange rate changes on cash and cash equivalents                                                                                       79                                                  110                                                    37                                                   360                                                   195  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
Net increase (decrease) in cash and cash equivalents                                                                                                                                   (2,228 )                                                                                    3,820                                                                                      43,515                                                                                        (990 )                                                                                    29,720
Cash and cash equivalents, beginning of period                                                                                                                      22,972                                               19,152                                                30,885                                                21,734                                                44,680  
                                                                                                                                                                  -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
Cash and cash equivalents, end of period                                                                                                                          $                    20,744                                             $                    22,972                                             $                     74,400                                             $                     20,744                                             $                     74,400  
                                                                                                                                                                  ==================== ====== ====================                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================

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 provision for litigation, 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 provision for litigation, 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                                                                                                                                                                                                                                                                                                                                                                                                                                              Nine Months Ended
                                                                                                ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                             September 30, 2017                                                                                                                                                                        June 30, 2017                                                                                                                                                                       September 30, 2016                                                                                                                                                                     September 30, 2017                                                                                                                                                                      September 30, 2016
                                                                                                ---------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------                                          ----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Amount                                                                                     Per Share                                                                                   Amount                                                                                     Per Share                                                                                   Amount                                                                                     Per Share                                                                                   Amount                                                                                     Per Share                                                                                    Amount                                                                                     Per Share
                                                                                                -------------------------------------------------                                          --------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
U.S. GAAP net loss                                                                              $                    (1,756 )                                                              $                      (0.02 )                                                              $                    (1,625 )                                                              $                      (0.01 )                                                              $                    (6,122 )                                                              $                      (0.06 )                                                              $                    (6,718 )                                                              $                      (0.06 )                                                              $                    (70,006 )                                                              $                      (0.67 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
Provision for litigation                                                                                                  -                                                                                           -                                                                                          -                                                                                           -                                                                                          -                                                                                           -                                                                                          -                                                                                           -                                                                                      54,000                                                                                        0.52
Share-based compensation                                                                                              3,112                                                                                        0.03                                                                                      3,255                                                                                        0.03                                                                                      2,987                                                                                        0.03                                                                                      9,442                                                                                        0.09                                                                                       9,776                                                                                        0.09
Litigation expenses                                                                                                     863                                                                                        0.01                                                                                      1,276                                                                                        0.01                                                                                      2,837                                                                                        0.03                                                                                      4,048                                                                                        0.04                                                                                       5,286                                                                                        0.05
Amortization of intangible assets                                                                      -                                                     -                                                    -                                                     -                                                    2                                                  0.00                                                    -                                                     -                                                    14                                                  0.00  
                                                                                                -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
Non-GAAP net income (loss)                                                                      $                     2,219                                             $                       0.02                                             $                     2,906                                             $                       0.03                                             $                      (296 )                                                              $                       0.00                                             $                     6,772                                             $                       0.06                                             $                       (930 )                                                              $                      (0.01 )
                                                                                                ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ====== ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
Weighted average shares used in per share calculation                                                                                                                                                           109,342                                                                                                                                                                                108,422                                                                                                                                                                                104,860                                                                                                                                                                                108,376                                                                                                                                                                                 103,819
                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                     LIMELIGHT NETWORKS, INC.
                                                                                                                                                                                                                                Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA
                                                                                                                                                                                                                                     (In thousands)
                                                                                                                                                                                                                                     (Unaudited)
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                             Three Months Ended                                                                                                                                                                                                                   Nine Months Ended
                                                                                                   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                     September 30,                                                                                June 30,                                                                                 September 30,                                                                              September 30,                                                                               September 30,
                                                                                                                         2017                                                                                       2017                                                                                       2016                                                                                       2017                                                                                        2016
                                                                                                   -------------------------------------------------                                          -------------------------------------------------                                          -------------------------------------------------                                          -------------------------------------------------                                          --------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
U.S. GAAP net loss                                                                                 $                    (1,756 )                                                              $                    (1,625 )                                                              $                    (6,122 )                                                              $                    (6,718 )                                                              $                    (70,006 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                     Depreciation and amortization                                                                       5,109                                                                                      5,128                                                                                      5,014                                                                                     15,383                                                                                      15,420
                     Interest expense                                                                                       18                                                                                         10                                                                                        406                                                                                         42                                                                                         865
                     Interest and other (income) expense                                                                  (135 )                                                                                     (274 )                                                                                     (159 )                                                                                     (614 )                                                                                      (494 )
                     Income tax expense                                                                 188                                                  151                                                  130                                                  448                                                   404  
                                                                                                   -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
EBITDA                                                                                             $                     3,424                                                                $                     3,390                                                                $                      (731 )                                                              $                     8,541                                                                $                    (53,811 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                     Provision for litigation                                                                                -                                                                                          -                                                                                          -                                                                                          -                                                                                      54,000
                     Share-based compensation                                                                            3,112                                                                                      3,255                                                                                      2,987                                                                                      9,442                                                                                       9,776
                     Litigation expenses                                                                863                                                1,276                                                2,837                                                4,048                                                 5,286  
                                                                                                   -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------ --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
Adjusted EBITDA                                                                                    $                     7,399                                             $                     7,921                                             $                     5,093                                             $                    22,031                                             $                     15,251  
                                                                                                   ==================== ====== ====================                                           ==================== ====== ====================                                           ==================== ====== ====================                                           ==================== ====== ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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 October 18, 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, 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 Limelight Orchestrate Platform includes a global infrastructure with a fully-integrated suite of capabilities and services to help you address all your content delivery needs. The Orchestrate Platform solves your most important content delivery challenges so you can deliver the next great digital experience anywhere. For more information, please visit www.limelight.com and follow us on Twitter, Facebook and LinkedIn.

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=20171018006355r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20171018006355/en/

SOURCE: Limelight Networks, Inc.

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


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