Akamai Reports Fourth Quarter 1999 Results
- Fourth quarter revenue of $2.7 million, up 206% from third quarter
- Customer list grows from 44 to 227 Web properties during quarter
- Akamai network expands to over 2,000 servers spanning more than 100 telecommunications networks in over 40 countries
- EdgeAdvantage unveiled as platform for content, streaming, and applications delivery
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 27, 2000-- Akamai Technologies, Inc. (NASDAQ: AKAM), the foremost provider of global, high performance services for the delivery of Internet content, streaming media, and applications, today reported fourth quarter 1999 revenue of $2.7 million, up 206% from third quarter revenue of $0.9 million, with 227 signed customers as of year end up from 44 at the end of the third quarter.
"Akamai's significant increase in revenue for the fourth quarter is a direct result of the phenomenal pace at which Akamai has been able to acquire customers and expand our global network, while continuing to unveil new innovation and technology," said George Conrades, chairman and CEO of Akamai. "Following our successful IPO last quarter, we have seen the adoption of our services accelerate among today's leading Web properties. With well over 200 customers, Akamai has established itself as the service of choice for many of today's leading eBusinesses that are seeking high quality, fast and reliable delivery of all forms of Internet content, streaming media, and applications."
Net loss for the fourth quarter and the year ended December 31, 1999 before extraordinary loss from early extinguishment of debt and equity-related non-cash compensation charges was $23.5 million and $44.2 million, respectively, or $0.40 and $1.46 per share, respectively. The EBITDA (earnings before interest, taxes, depreciation, amortization, and other non-cash charges) loss for the fourth quarter and year ended December 31, 1999 was $23.8 million and $43.0 million, respectively. Net loss attributable to common stockholders for the fourth quarter and the year ended December 31, 1999 was $29.8 million and $59.8 million, respectively, or $0.51 and $1.98 per share, respectively.
Customers
Since going public in October of 1999, Akamai has quadrupled its customer base, and serves 227 Web properties across all business sectors as of year-end. This number includes only those customers that have signed contracts of one year or more in duration.
Some of Akamai's customers include: Apple, Britannica.com, CBS Corporation, CNN Interactive, Discovery Channel Online, iVillage.com, KBkids.com, Lycos, marthastewart.com, Monster.com, The Motley Fool, NBCi, Oxygen Media, Inc., Paramount Digital Entertainment, QUALCOMM Eudora Products, SEND.COM, Symantec, Time Inc., and Yahoo!, among others.
Network
Akamai continues to expand its network on a global scale and over the last quarter has increased its deployment of servers from 1,400 to over 2,000. Akamai has established its worldwide presence with servers in over 40 countries and across more than 100 telecommunications networks.
Akamai has built relationships with top-notch network providers and ISPs who provide the Company with the ability to expand its network globally. Each of Akamai's carrier and ISP partners also offer Akamai access to their respective user base. Every network provider that Akamai partners with becomes a key enabler in Akamai's effort to make the Internet a more enriching and interactive medium for major Web site owners and their customers.
Technology
Akamai is building upon its core technology with the introduction of EdgeAdvantage, providing eBusinesses access to a broad array of new services from the edge of the Internet. Along with Akamai's first two services - FreeFlow(SM) and FreeFlow Streaming - EdgeAdvantage extends Akamai's reach in the Internet content delivery space by allowing application vendors to use the platform as a service channel for reaching content providers. Its open and scalable approach to delivering content has been endorsed by over 60 partners.
With the recent acquisition of Network24 Communications in January 2000, Akamai extends the functionality of its high-performance streaming service to include interactive Webcast features such as audience management, broadcast management, network management and navigation and feedback. The added functionality will enable content providers to monitor and manage streamed content and use self-service features to administer events and provide detailed reporting on program registration and real-time audience feedback.
Financials
"Marketplace acceptance of the FreeFlow content, streaming media, and application services has provided us with strong financial performance right out of the gate," said Timothy Weller, CFO at Akamai. "During the fourth quarter, our customer count more than quadrupled, contract sizes and duration increased, and the sales cycle shortened versus our third quarter metrics, all while remaining within our cost and capital budget. The operating leverage from offering new services on the EdgeAdvantage platform will be even more apparent in 2000."
On October 28, 1999, the Company raised $234 million in its initial public offering (IPO). At year-end, cash, cash equivalents, and short-term investments were $270 million. A portion of the IPO proceeds was used to extinguish the $15 million of debt, which is the source of the extraordinary item reported. At December 31, 1999, the Company had 92.5 million shares of common stock outstanding and 109 million shares of fully diluted common stock.
About Akamai
Akamai Technologies is headquartered in Cambridge, Massachusetts, and has offices in San Mateo, California and Europe. Akamai provides global Internet content and applications delivery services for hundreds of customers, improving Web site speed and reliability and enabling richer, more engaging Web site content. Currently, Akamai has deployed more than 2,000 servers in 40 countries across more than 100 different telecommunications networks. Akamai (pronounced AH kuh my) is Hawaiian for intelligent, clever and cool.
The release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, the dependence on Akamai's Internet content delivery service, a failure of its network infrastructure, market acceptance of our EdgeAdvantage service, the complexity of its service and the networks on which the service is deployed, the failure to obtain access to transmission capacity and other factors that are discussed in the Company's Registration Statement on Form S-1 and other documents periodically filed with the SEC.
Akamai Technologies, Inc.
Consolidated Statement of Operations
Three-month Three-month
period ended period ended Year ended
Dec. 31, 1999 Sept. 30, 1999 Dec. 31, 1999
------------------------------------------------
Revenue $ 2,698,784 $ 883,196 $ 3,985,929
-------------- -------------- -------------
Operating expenses:
Cost of service 4,469,289 3,125,034 9,002,442
Engineering and
development 6,375,044 3,320,291 11,748,781
Sales, general and
administrative 17,592,249 6,832,710 29,667,506
Equity related
compensation 2,386,459 6,280,149 10,005,216
-------------- ------------- -------------
Total operating
expenses 30,823,041 19,558,184 60,423,945
--------------- ------------- -------------
Operating loss (28,124,257) (18,674,988) (56,438,016)
Interest income, net 2,278,981 133,392 2,268,357
Loss before extraordinary
loss from early
extinguishment of debt (25,845,276) (18,541,596) (54,169,659)
--------------- -------------- -------------
Extraordinary loss from
early extinguishment
of debt 3,389,614 - 3,389,614
--------------- -------------- -------------
Net loss (29,234,890) (18,541,596) (57,559,273)
Dividends and accretion
to preferred stock
redemption value 596,455 1,349,954 2,241,281
-------------- -------------- -------------
Net loss attributable
to common stockholders $ (29,831,345) $ (19,891,550) $ (59,800,554)
================ =============== =============
Basic and diluted
net loss per share $ (0.51) $ (0.80) $ (1.98)
Weighted average common
shares outstanding 59,033,295 24,848,784 30,177,376
Supplemental Financial Data:
Depreciation and
amortization $ 1,854,967 $ 1,008,188 $ 3,434,078
EBITDA (1) (23,882,831) (11,386,651) (42,998,722)
Capital expenditures 12,945,106 7,459,863 25,712,790
Number of signed customers 227 44 227
Number of employees 382 227 382
(1) Earnings before interest, taxes, depreciation, amortization and
other non-cash charges
Akamai Technologies, Inc.
Condensed Consolidated Balance Sheets
December 31,
1999 1998
----------- -----------
Assets
Current assets:
Cash, cash equivalents
and short-term investments $ 269,553,794 $ 6,804,789
Accounts receivable, net 1,587,918 -
Prepaid expenses and
other current assets 2,520,765 56,589
--------------- --------------
Total current assets 273,662,477 6,861,378
Property and equipment, net 23,875,492 1,522,980
Other assets 3,277,011 481,282
--------------- --------------
Total assets $ 300,814,980 $ 8,865,640
================= ================
Liabilities, convertible preferred stock
and stockholders' equity (deficit)
Current liabilities:
Accounts payable and
accrued expenses $ 14,684,160 $ 692,997
Other current liabilities 3,953,212 12,350
-------------- ----------------
Total current liabilities 18,637,372 705,347
Long-term liabilities 732,626 24,859
-------------- ----------------
Total liabilities 19,369,998 730,206
Total convertible preferred stock - 8,283,758
Total stockholders' equity (deficit) 281,444,982 (148,324)
-------------- ----------------
Total liabilities, convertible
preferred stock and
stockholders' equity $ 300,814,980 $ 8,865,640
=============== ================
CONTACT: Akamai Technologies, Cambridge
Jeff Young, 617/250-3913
jyoung@akamai.com
or
Caryn Converse, 617/250-4661
converse@akamai.com