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LIMELIGHT NETWORKS, INC. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2012 03:26PM

LIMELIGHT NETWORKS, INC. (LLNW) filed Quarterly Report for the period ended 2012-06-30. Limelight Networks, Inc. has a market cap of $254.4 million; its shares were traded at around $2.65 with and P/S ratio of 1.5.



Highlight of Business Operations:

Our international revenue continued to grow during the three month period ended June 30, 2012, 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, 2011, revenue derived from customers outside of North America accounted for approximately 30% of our total revenue. For the year ended December 31, 2011, we derived approximately 50% of our international revenue from EMEA and approximately 50% of our international revenue from Asia Pacific. We anticipate that our Asia Pacific revenue may continue to grow as a percentage of our total international revenue. During 2011, no single country outside of the United States accounted for 10% or more of our total revenues. For the three month periods ended June 30, 2012 and 2011, revenue derived from customers outside of North America accounted for approximately 31% and 30%, respectively, of our total revenue. For the three month periods ended June 30, 2012 and 2011, we derived approximately 48% and 51%, respectively, of our international revenue from EMEA and approximately 52% and 49%, respectively, of our international revenue from Asia Pacific. For the six months ended June 30, 2012 and 2011, approximately 31% and 30%, respectively, of our total revenues were derived from our operations located outside of North America. For the six months ended June 30, 2012 and 2011, we derived approximately 49% and 53%, respectively, of our international revenue from EMEA and approximately 51% and 47%, respectively, of our international revenue from Asia Pacific. During the three and six months ended June 30, 2012, we had two countries, Japan and the United States that accounted for 10% or more of our total revenues. No single country outside of the United States accounted for 10% or more of our total revenues during the three and six months ended June 30, 2011. We expect our foreign revenue to continue to increase in absolute dollars in 2012. Our business is managed as a single segment, and we report our financial results on this basis.

Cost of revenue decreased 3%, or $0.8 million, to $27.6 million for the three months ended June 30, 2012 as compared to $28.4 million for the three months ended June 30, 2011. This decrease was primarily due to a decrease in bandwidth and co-location fees of approximately $1.5 million, which was primarily associated with lower transit and co-location fees of approximately $2.2 million, offset by increased peering costs of approximately $0.7 million. In addition, we had a decrease in depreciation of $0.1 million. These decreases were offset by an increase in payroll and employee related costs of approximately 0.5 million, primarily due to increased salaries and bonus accrual, and an increase in other costs of approximately $0.3 million. The increase in other costs was primarily related to an increase in fees and licenses of approximately $0.2 million and an increase of $0.1 million in other costs associated with the delivery of our services.

For the six months ended June 30, 2012, cost of revenue increased $0.3 million, to $54.9 million as compared to $54.6 million for the six months ended June 30, 2011. This increase was primarily due to an increase in payroll and related employee costs of approximately $1.1 million primarily associated with increased salaries and bonus accrual, increased professional fees of approximately $0.4 million, consisting of approximately $0.3 million of consulting fees and approximately $0.1 million of recruiting fees, an increase in travel costs of approximately $0.2 million, and an increase in other costs of approximately $0.9 million. The increase in other costs was primarily due to $0.5 million of other costs associated with the delivery of our services and increased fees and licenses of approximately $0.3 million. These increases were offset by a decrease of approximately $2.0 million in bandwidth and co-location fees, which was the result of increased peering costs of approximately $1.9 million, offset by a reduction of approximately $3.9 million in transit and co-location fees.

Sales and marketing expenses increased 18%, or $1.8 million, to $11.8 million for the three month period ended June 30, 2012 compared to $9.9 million for the three month period ended June 30, 2011. The increase in sales and marketing expenses was primarily due to an increase in payroll and related employee costs of $1.1 million, primarily due to increased variable compensation costs of $0.6 million and increased salaries of $0.5 million due to increased staffing, an increase in travel and travel-related expenses of $0.4 million, an increase in professional fees and outside services of $0.1 million, an increase in marketing expenses of $0.1 million and an increase in other costs of $0.5 million. The increase in other costs was primarily due to increased facility and facility-related costs, office supplies and increased fees and licenses. These increases were offset by a decrease in share-based compensation of $0.3 million.

For the six months ended June 30, 2012, sales and marketing expenses increased 13%, or $2.7 million, to $23.4 million as compared to $20.7 million for the six months ended June 30, 2011. The increase in sales and marketing expenses for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 was primarily due to an increase in payroll and related employee costs of $2.1 million, primarily due to increased salaries of $1.2 million, and to a lesser extent increased variable compensation costs of $0.8 million, an increase in travel and travel-related expenses of $0.7 million, and an increase in other costs of $0.6 million. The increase in other costs was primarily due to increased facility and facility-related costs, office supplies and increased fees and licenses. These increases were offset by a decrease in marketing expenses of $0.2 million.

Read the The complete Report



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