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LIMELIGHT NETWORKS, INC. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2011 02:09PM

LIMELIGHT NETWORKS, INC. (LLNW) filed Quarterly Report for the period ended 2011-06-30. Limelight Networks Inc. has a market cap of $362.6 million; its shares were traded at around $3.3 with and P/S ratio of 2.



Highlight of Business Operations:

Historically, we have derived a portion of our revenue from outside of the United States. Our international revenue has grown recently, and we expect this trend to continue as we focus on our strategy of expanding our network and customer base internationally. For the year ended December 31, 2010 revenue derived from customers outside North America accounted for approximately 29% of our total revenue. For the year ended December 31, 2010 we derived approximately 65% of our international revenue from EMEA and approximately 35% of our international revenue from Asia Pacific. For the three month periods ended June 30, 2011 and 2010,

revenue derived from customers outside North America accounted for approximately 33% and 30%, respectively, of our total revenue. For the six month periods ended June 30, 2011 and 2010 revenue derived from customers outside North America accounted for approximately 32% and 29%, respectively, of our total revenue. For the three and six month periods ended June 30, 2011, we derived approximately 62% and 63%, respectively, of our international revenue from EMEA and approximately 38% and 37%, respectively, of our international revenue from Asia Pacific, respectively. We expect foreign revenue to continue to increase in absolute dollars in 2011. Our international business is managed as a single-geographic segment, and we report our financial results on this basis.

During any given fiscal period, a relatively small number of customers typically account for a significant percentage of our revenue. For example, in 2010, sales to our top 10 customers, in terms of revenue, accounted for approximately 30% of our total revenue and we had no customer that accounted for more than 10% of our revenue. For the three and six month periods ended June 30, 2011, sales to our top 10 customers, in terms of revenue, accounted for approximately 30% and 31%, respectively, of our total revenue. During the three and six month periods ended June 30, 2011 we had no customer that accounted for more than 10% of our revenue during the period. We anticipate customer concentration levels will remain consistent with 2010. In addition to selling to our direct customers, we maintain relationships with a number of resellers that purchase our services and charge a mark-up to their end customers. Revenue generated from sales to reseller customers accounted for approximately 5% of our total revenue for the year ended December 31, 2010. For the three and six month periods ended June 30, 2011, revenue generated from sales to reseller customers accounted for approximately 3% of our total revenue.

We make our capital investment decisions based upon careful evaluation of a number of variables, such as the amount of traffic we anticipate on our network, the cost of the physical infrastructure required to deliver that traffic, and the forecasted capacity utilization of our network. Our capital expenditures have varied over time, in particular as we purchased servers and other network equipment associated with our network build-out. For example, in 2008, 2009, and 2010 we made capital purchases of $17.4 million, $20.4 million, and $34.2 million, respectively. For the six month period ended June 30, 2011, we made capital investments of $20.0 million. We expect to have ongoing capital expenditure requirements as we continue to invest in, refresh and expand our CDN. For 2011, we currently anticipate making aggregate capital expenditures of approximately 13%-15% of total revenue for the year.

Occasionally we generated revenue from certain customers that are entities related to certain of our founders. For the year ended December 31, 2010 revenue derived from these related parties was less than 1% of our total revenue. For the three and six month periods ended June 30, 2011, revenue generated from related parties was less than 1% of our total revenue.

For the three months ended June 30, 2011 and 2010, approximately 33% and 30%, respectively, of our total revenues were derived from our operations located outside of North America. For the three months ended June 30, 2011 and 2010, we derived approximately 62% and 65%, respectively of our international revenue from EMEA and approximately 38% and 35%, respectively of our international revenue from Asia Pacific. For the six months ended June 30, 2011 and 2010, approximately 32% and 29%, respectively, of our total revenues were derived from our operations located outside of North America. For the six months ended June 30, 2011 and 2010, we derived approximately 68% and 62%, respectively of our international revenue from EMEA and approximately 32% and 38%, respectively of our international revenue from Asia Pacific. No single country outside of the United States accounted for 10% or more of revenues during these periods.

Read the The complete Report



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