LLNW - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen. Welcome to the Limelight Networks' 2017 Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen only mode. At the end of the prepared remarks, we will provide instructions for those interested in entering the queue for the question-and-answer session. Please note this event is being recorded. the to turn Chief Boncel, now Officer. Accounting will call Dan over Limelight's I ahead. go Please

Daniel Boncel

recorded and days. afternoon fourth conference is website and financial Networks' for on archived quarter results X, our being will call be This approximately Good call. you XXXX thank XX joining for February XXXX on the Limelight

on remind we will be Let me the covering that quickly Safe Harbor. forward-looking everyone statements this start by We'd call. like to making

fact, not as statements pending our those such Actual reported all from our contemplated materially historical should that strategies statements Forward-looking announcements. be beyond, litigation, our performance. feature could indication business and and and as results not are for priorities, strictly by an future and are expectations XXXX operational of our outlook plans, differ statements considered results functionality of statements our our forward-looking

refer this any factors including Form more the update date on statements our For disclaim based as required and to of we any recent today's to us, in filings, XX-K. annual by most to please except report on as on information statements call our law. forward-looking periodic forward-looking available obligation information, risk are The discussed

Officer, Chief Bob call Sajid the me Chief Joining Financial our on Lento, our Malhotra, Officer. Executive today are and

We prepared the turn call at session, remarks available I will of now be Lento. like to over during the from Sajid. end the Q&A Bob would Bob and to

Robert Lento

quarter. our financial in over only Gross was XX% ago performance. and that fourth-quarter the business for up record announced last solid full-year and improving a the XXX in an we Thanks, This second good was highest of quarter, our revenue quarterly ever. and year points, resulted up Today, margin a Dan, operating performance was our work Revenue afternoon. year quarter and high momentum basis and capping to fourth excellent results. hard quarter was was and

XXX% to quarter, year records earnings from increased non-GAAP EBITDA was up adjusted EBITDA, XX% as set earnings year-over-year and adjusted quarter. and new non-GAAP the this our Our ago

these an results, were of We to are which year. strong proud finish a extremely quarterly exceptional

XXXX, reiterated and guidance For of double-digit revenue I'm year, we of at within range last full-year the the revenue up above growth XXXX. XX% proud going the quarter. goal was well year the the our which especially an for our was and beginning into year-over-year important

working. amount. XXXX gross adjusted customer and over an EBITDA our points XX% by XXXX results that is are up improved basis was year XXX our Our These margin indication for from the XXXX excellent strategy focused prior

believe solid performance, in for business increase beyond. XX-point a We we XXXX to XXXX and XXXX, satisfaction in improve, score. financial solid have momentum evidenced to which continues future by well Customer foundation achieve the and as on progress our financial net multiple In priorities. meaningful our we promoter positions from our made us goals

a earned were XX% record incident our This XXXX, survey XXXX, more have over in were totaling score which higher to levels an improvement. by traffic contributed than in We a first tickets little XX-point customer satisfaction up NPS every improved while year down XXXX, almost impressive since XX%.

presence in with and on focused to customers in improve. to important America. part to geographic several pleased capacity Canada, expansion efforts are network and markets our more added We trust in our that our Europe XXXX. customers of expanded the continue India, us of locations continue performance in Brazil and We satisfaction North as customer We and quality traffic as our

geographic growing agreement we into South through Middle expansion through the also for This market Tencent finish additional and Africa, and quarter. access consumers customers serve believe Tencent opportunity customers will We also Chinese our global the in with access Carrying recently Southeast efforts momentum expect to these our which growth. Cloud. East, China, reach extended expansion important customers to and projects market launched our this an Asia provide we network. in into agreement rapidly to well this the XXXX, allows an our We

XXXX U.S. the the enhancements that numerous since to over doubled coming significant drive successful capacity XX% software system made new content, important our seen XX% major has in network video system XX% enhancements for operating downloads since for our One software performance a models definition throughout of the providing has which indicate enhancements. definition our of our This new fourth capacity also high is customer network, standard new we delivery. We across had for throughput higher of software with rebuffer capacity and next-generation a rebuffer this and deployed quality operating has the expansion positive its XXXX, for rates capacity and software faster operating impact content beginning by These from system. video lower quarter, on performance. network through increase included improved rollout and

due workflow Limelight been has performance. our Another traffic significantly major customer and that to multi-CD more rewarding uses global to improved video a

half where are scale the We’re effort. this makes a good us looking in critical. exploring as impact network Edge to private We potential at positive global the excited about XXXX, services application we began latency of customers second in that believe significant opportunities and of development alternative the deploy mission connectivity our Edge, for large

chose with multi-year storage generation and distributed the its completing us, for next contract. deploy first After will with platform. customers cloud pleased growing announced to who we and our I'm global scanning world our pipeline. private network Avitas continue venture, signing six-month have in a and its win inspection that We be Avitas, for very few using interest, to a this performance GE Limelight on-boarded seen automated infrastructure material our need just a a build space pilot

its large-scale platform, We is save drive unprecedented. and inspection to safety to security enabling is and Avitas of and proud customers level serve a are its which also money that

of board. five in to one now one-week the today. infringement future of Virginia the of five a to challenge and still claim against schedule According patent pending. claims the Akamai respect with other has has District as April invalidity undergone infringements Eastern injunction to of four patents. solely less in back know, Akamai law both of before This validity while and acts patents. you a resulted the permanent our its cited for dispute by of of Akamai Each by patent case, trial of with validity The challenges which Akamai's appeal Akamai's XXXX. to respect patents court any decided a infringement We statistics Akamai, patent these PTAB is challenge proceedings, invalidating future Akamai's parties two-thirds counter damages four filed patents. asserting trial patent in November After will than Virginia X, patent trial each Eastern to its ongoing claims. our of be on for once eligible remaining types result legal challenges months two these render that in begin intend litigated the of a final to of will months Akamai The series District against to decisions instituted, the PTAB of from in survives XXXX, the in by these challenges patents decision by to to trial. of Turning allowable three of the in on and coming the we is the infringement the with filed question scheduled is the a also seek a maximum

our growing strategic cash creating customers of choice. as improving will profitable revenue, be long-term continue our XXXX, at priorities generating while and ahead for employer position Looking to

everything do We at to and we capabilities and add innovative the to are satisfaction priority. of a features as also this in significant strategic heart have well-positioned be Customer and key continue added XXXX. will

top-line are important We frequent will customer satisfaction our and lead well-informed regarding focus and continue to customer between needs a focus and communicate becoming to to in video customers' The our our them. areas to focused growth us daily The provider forums communication in our regional serve employees advisory our customers we on is happens and continue for live along and with customer market satisfaction at improved keep believe scale with our customers formal delivery this annual We survey going are that more both and forward. area. efforts this on-demand growing, on will our drive expectations.

for customers' also efforts Edge our we great ability services, We given to continue potential us has believe unique address needs. in which our

our the market, which a XXXX position meaningful player should us growth this for as to year in We in prove key exit expect and proposition and value beyond.

that We to will locations continue customers. in geographic are to in footprint strategic XXXX expand our our

will in efficiencies which We drive improvements optimization, our performance. continued build also further network globally software also capacity we and better will through network expect

XXXX software that by enhancements increases in still experienced is we we come. We more are believe and to there through the encouraged capacity

spend XXXX driving particularly Our be services. and feature Edge in new software video downloads, on for customers, focused functionality in also R&D our will

further to releases software enhancements of We for we have experience. and a our XXXX, scheduled functionality expect which feature customers' number improve

our attrition. also will to employee We our of satisfaction on maintain level focus low

focused quality pricing our we will that employee revenue across margin disciplined training to costs customer expansion, Limelight another summary, managing expect as believe We employees growth our and pride work approach goal a remain we responsibilities, continued In was and invest the in delivering on I like our I thank concluding our great returns. on above to history. are XXXX one performance of discuss best highest global in that, in for the We in priorities great With I’ll well-positioned for for this and trend continue continue. year. momentum hard this and remain base. will grow. our the We turn in expect quarter, strategic all quarter's Sajid guidance would our that our to Limelight to the I to will over continue XXXX. through market to our encouraged and the fourth this industry their greater translate very detail in making force global financial and and am we into in to work years of I believe by solid call expanded

Sajid Malhotra

and quarter in in the percentage our Thanks, We on. lowest ever non-GAAP was on $XX.X our With year expenses revenue continue control, growth, of of QX, EBITDA report profitable year. in year. milestone ever. and is approximately more reported compared am of great good Revenue the I points revenue experienced non-U.S. under the profitability to quarterly from the our growth, revenue our less ever. Net I our our last up in margin to later and and revenue denominated flow XXXX, Exchange of quarter tailwinds prior XX% QX as guidance of International accounted another customers million, remaining second best operating from quarter, our quarterly Gross XXX a Foreign from fifth it adjusted revenue elements of was double-digit happy our XX.X% turnaround. Revenues ago, primarily resulted total XX% basis a quarter since move these will highest [ph] our GAAP to fourth approximately increased GAAP combination XX% consecutive quarter loss quarter X%, positive best quarter up was the growth our at cash EPS ago, XX% the that have Bob, and afternoon. we pound. than $XXX,XXX XX% due a and British to or in year dollar currencies. in for consecutive

approximately QX. XX customers top revenue Our for XX% in of total accounted

has as Our wins. revenue new existing customer growth well come as customers both from

the annual average in XXXX revenue Our year-over-year. of Cash over than positive the traffic shift have and wins an of Index monthly share, XX.X% amount in Gross June Paper revenue CDN was resulted in one the new fourth highest continue XXXX. is we XXX we customer We strong add our gross customer in of us. mix that The According per infrastructure published leading of Internet It in win the XXXX. year. $XX,XXX XX% of This Cisco in in fourth highest customer not to XX.X%, are to in our if market to quarter quarter to XXX have of customer uniquely $XX,XXX to need. XX% has feel the basis per an We industry's was move XXXX, the that is functionality by this prior from margin customer the basis the aim of points up times will traffic our Visual margin organic invest White carry belief the average XXXX. industry. positioned approximately fourth three increase to quarter, the wants enhancements feature all and from points we participate in revenue increase is growth. as

in XXXX. gross to Edge make $XXX,XXX. GAAP for operating increase of also our foreseeable by revenues year, in to the decrease currency with as $X.X share increase quarter and increased, fourth operating in quarter sheet. of of increased as as strong achieved our services per the quarter earnings to net in these record other last $XXX,XXX quarter The in to share. we performance, per in gross quarter Tax our of allowance net coming the our has which These continue as material increases a the increase We essentially XXXX valuation compared year-over-year. [ph] of and change efforts further was in across expected variable results in $X.X dollars of is liabilities net $X.XX our all captured expense operating fourth in financial $XXX,XXX fees in $XXX,XXX, other non-GAAP $XX,XXX $XXX,XXX a capacity. Total up our strong reform balance GAAP It of XXXX revenue million did increased expenses of expense marketing due foreign Our loss in Adjusted this per should the of new share help Customer have and bandwidth overall $XX.X compared income is XXXX. R&D margin is were reported $X.X remains our by NOL. traffic of streams, and the to departments. year, was G&A fourth XX% continue at XXXX. flat, been security product percentage aggregate aspect every to contributing expenses the of of the we around were mix delivered line. to incredible fourth million the years. $X.XX not primarily current partially approximately This quarter earnings consistent an future. decline up and year expenses an to XXXX. non-GAAP XX% impact quarter was improvements. efficiently mentioned by offset GAAP that in margin compared Limelight $X.XX Rack quarter a had EBITDA position the well we geographies bandwidth the of we XXXX income a we million, in of positive traffic and of expense a sales loss served from expense improvements as significant fees fourth in and net year despite Rack from and million, and given interest on year. We fluctuations. multiple on to our and $X.XX Despite in last expenses prior fourth manage last on fourth addition cost loss was expense continue in included this is the increase of With the compensation was $XX,XXX the fourth

the primary accounts securities the $X.X cash and drivers of an $XX.X a of at payable our in cash sheet and increase cash in decrease and were of marketable flow, million. $X.X The balance end we million to Moving change receivable million accounts of of in fourth quarter. had

We calendar expect the as as correct changes quarter. these coming to year-end early related

$X.X expenditures payments XXXX original DSO with end December the end the our year announced year. fourth spent we days settlement it cash of were million in their quarter XX, looks XX seven guidance. of like as XXXX, the some the capital than $X.X and totaled Akamai, with Capital million at higher was sixth managing our line customers as of from $XX.X million expenditure the for made of on also in previously quarter. We the of days, the

at drawn to in credit We the in expect the it to-date. We revolving borrowing DSO we first in quarter of under be our although historical be have the mid-XXs capacity on our more maintain line $XX to averages million not XXXX. agreement and

Earlier SEC remaining their Goldman sold or shares our held [ph] further roughly from Sachs, shelf the becomes a registration Goldman, During until million of the XX statement prevent subject with we filed securities register position. the largest statement commenting applicable laws half registration to the on quarter, the today, effective. shareholder fourth us by shares

personnel. end Total increase and December of XXst, shares last headcount year. outstanding. is the additional at of of was the million quarter and As from support XXX, end the marketing up to related had XXX sales approximately operational XX The we

XXXX, be expect $XXX revenue and million. guidance million Moving we to for to $XXX our between

than We and XXXX by and expected between to to be more expect between EBITDA $XX are to and $XX $X.XX between points be non-GAAP is $X.XX. margin basis $XX expenditures EPS XXX $XX million. million million. and gross expected increase Capital be expect over Adjusted we to million

if breakeven be Within the could four the quarters. year, close four that expect be the rolls, we in previous income even years, to for line than to at operating we quarters more the

quarter I to have has to XXXX every In increase a summary, fronts. balance metrics these but near public goal a across alluded M&A cash as it’s put These many is us many, Our etcetera. term finest before time as year buyback down any our been believe a target. company,

income, back quarters added XXXX net at did now is collectively it record analyst non-GAAP points. by gross of improved record of looked in have reported were and where achieve margin, beginning over record estimates adjusted We GAAP the and when margin revenue between to five EBITDA, XXXX revenue, Record compare XXXX. year, cash We them three-year growth. XXX basis record I gross remarkable. consecutive what EBITDA, more this revenue XXXX we our at than We and we

for were we On XXXX For our than measures, estimates profitability are On ago. ago. XXXX year where multiple views consensus the metrics, analyst XXXX a from XXXX of a is set for nearly we the ahead now than year what more achieved our example, performance. essentially year higher guidance estimates

build achievement of and look to on we this forward. moving We momentum are very proud this

requiring businesses low-latency As a confident role at ability increasingly services. about ahead, are we our play in we meaningful look to

goes addition, start, versus build but analysis. balance The risk. why? integration operational, The new a into and Let is buy carries a business me through minute immediate buy higher decision quick typically entry a spend sheet on

other and time, is carrier, so debt and starting At to as a the reputation, speed, With Edge global there the never network the an is the sheet the build with and our cost across ready. Relative come capital services incremental On see less capital so to in expansion very it But to little big inherently is almost scale, market hand, review relationships. no come risky my get balance traction have and low. and same a we with an we risk, is I decision large slow. no our adjacency, ability we direction. revise which deployment, opportunity an deployment initiatives, a existing into

Our early events the and access with Avitas advantage the to risk. compare healthier business, with high scale. marquee evidenced longer-term at with expect performance against even margins global are name is CDN A as as network, the with names announcement. we customer bring biggest connectivity our competitive storage and contracts significant, lower we secure And a low-latency flight

revenue For be to significant for could same respectable these with At we on reasons, we will time, new source margins this the believe to focused continue of years a come. stay the profitability. your for to is open growing margin, the This we'll achieving improving all Operator? up time exciting and attached an questions. managing call With that, Limelight. expenses for core, operating

Operator

now Instructions]. will We [Operator the question-and-answer session. begin

The first Mark go Please Davidson. D.A. with question Kelleher comes from ahead.

Mark Kelleher

Great. some questions and taking really good Thanks congratulations the execution there. on for

customers housekeeping in any Just first, were a couple XX% of quarter? the there

Sajid Malhotra

customer, recall customer, last Yes, there it's we is Amazon. you one had quarter, we two, this if quarter have one

Mark Kelleher

dynamics their can -- competitive are are delivery, challenges were seeing they there? And pricing what content tell you us any there for Okay. any

Robert Lento

price the through dealing we with historically and that we pressures. and competitive mean we along can I -- business of ordinary in as time to both same compression at passing our cost the every that We of try management out achieve the savings year. have terms Nothing best manage

obviously big little it's think deal, So, get a that change competitor one pretty at level don't time-to-time, and a I can from any see a level, any but crazy see macro at we steady. macro on really been I

Mark Kelleher

does bit And partnership, last that, we that Okay. ramp does or question, about a what look expect what you Tencent it when can little talk like? should from the

Robert Lento

where or help content with side have ago lots that So, into that obviously being Chinese China. and out obviously it. build network try we that's Tencent in to of same to ever that Cloud are, at of like that the we build China. large of deliver get its with of and mature customers to We high-quality partner outside one to large, content years our time to we outside content And to China inside Chinese speaking and their see lots is want China want so customers people wants not of we of speaking network, have created help people a decision made China. instead very do them population of also what to much out or Tencent through

for it's to And both be very so, going us. good I think

us are them sign larger In of customers we then least our mind terms them one and with our process keep -- starting ramping, to one inside China are ago, we've for the in two the few using using just actually in network. we of of network, two this working with actually or are and to and on Tencent ramp opportunities Tencent capabilities we a of already or at weeks use just for

So, talk provide, seeing days. behalf content traffic just China. we them starting customers network for actively what And terms of talking that. they our to our moving are to on in about and outside can like early with customers We quality about into it's of we’re of we're their

Mark Kelleher

is think impact? a should XXXX And we of this

Sajid Malhotra

the than very half Yeah, Mark, in, in percentage beyond. well into it XXXX is of I put but announcement from this quarter guidance our think for this it be from if we what could the see material year, big percentages, the a second course do But as think this -- up year, being improvement, wanted just other ramps both along of more large I it’s terms on lot spin for to the this in factored over of we the year marketing and of Avitas. meaningful us the as the

Mark Kelleher

Thanks. great. Okay,

Robert Lento

it, Thank Mark. you. Appreciate

Operator

go ahead. question next Charbonneau The Please Cowen. Jon from with comes

Jonathan Charbonneau

Great, thanks taking questions. for the

fourth Thank the change fast the traffic grows I of in continue and and between that Did quarter? software you. mix quarter OTT. acceleration any traffic, downloads. believe how terms fourth year-over-year the the in of noted OTT terms you last quarter an in In in

Robert Lento

we that's dollars seeing some we're are so and greater into where in we lot -- fact, that traffic of everything our is Yeah, a are pleased still that, going with have from of video coming R&D and more pretty percentage a our of because other really be items that first and amazing is which live live activities, types half feature other low-latency, year, great functionality out coming will within of gambling especially and around this the matters. for sports obviously that things where

In was the the traffic about fourth terms it so quarter of about XX% was numbers. and are for XX%, year of round those kind year-over-year

did So, that publicly ourselves we’re we're in only hit able to take in on fourth lower that both the pleased to and for the for revenue than we we healthy, hit still I a what the set the average did year quarter. exceed and quarter, without but mean the having but still we expectations pleased - fourth XX% that especially not

Sajid Malhotra

business job price add just attracts that is discipline opposed a et that And may we you do think that, compression indiscriminate you in on around about terms of cetera, the pricing. our then aggressive the good pricing really hear around quality our and and and quarter marketplace the to year against for would managing fixing better performances this revenue, or as that, Jon, in map whatever did the I focusing of and pricing that one of growth I if in traffic and probably our so to price or the the math

Jonathan Charbonneau

Great, thank you.

Robert Lento

Thanks Jon.

Operator

question Please with James. next Michael comes from The Raymond go ahead. Turits

Michael Turits

on XX% two XX% ago, and XX%, Hey than quarters Sajid, wanted behind follow-up that, what so quarters traffic ago just throughout than to XX% two XX%. was slowing

slowing with the aggressive do and top more claim customers? So why it with anything have that getting was are to Akamai they that does their

Robert Lento

lower aside to delivery, call is a and we that frankly less bulk the fourth what download is what obviously the of No, of in quarter we in choose confused their doing, Akamai quite can’t the their handle to you what know call chose traffic. with carries by conscious the than the of time, focused on that And software very, us a than expect the decision much traffic the bit wouldn’t traffic, the video little higher same XX% ASP so to growth a for we year would in the traffic higher and this average, I made be average slowdown and on the that, from year, software traffic I to a on into which yesterday decisions not numbers. would at read standpoint. it - we’re we've a area kinds terms was and not traffic, it's number some be mail or very download speak QX aggressive fact than of was But

get So be the to the our after to meeting some reach made bulk goals where going about decisions were video financial we to able having how business expectations of QX that low-price without to really we of in go and our able lucky the enough financial terms to in we were go traffic. enough be to

Sajid Malhotra

that, would the I revenue add to evidenced just Mike, that And in acceleration. is

the fourth first half ramped the third and the at first versus look our up. and or you of second if quarter So, revenue quarter, the year

if evidenced for want the they not but not that's about price do, less growth some that's of all pursue had going business for in we just compression. the traffic that's really revenue we really, at stopped that they're available somebody up find in to at it's don't that traffic, after high it's it's pricing So, talking chasing We them, good attractive. - is us. it, Others and showing good

Robert Lento

in down rates. traffic I was traffic increase X% XX% they excess part. said had growing a XX% with properly, the in notes that or in X% we confusing we revenue in increase that's And but mean Akamai as were revenue of claim industry by

So, but many to inherent variables I'm that don't too how - not not I sure there that works. make are happen,

Michael Turits

large the Facebook, cloud about Apple, et What cetera. vendors Microsoft

these anyway those guys all your what you the was some guys? traffic past. on at likely in with comment of You've commented Can

Sajid Malhotra

group. Yeah. with revenue's all do we of with, with that We with in the list are don't do but business names six, up a them business of names our as that the there,

Robert Lento

good. are relationships the And

talked is a in So, XX% the quarter. Obviously, our is we've is operating they pumped that in little QX. customer about traffic big QX system bit. already they this Apple them. up The that QX, relationship had Amazon that was with our last growing fact healthy; the weren't fact that release a in still

relationship some and and customers, healthy matter. with some never those enjoy we we that of with business have customers don't of any those do for So,

Michael Turits

say The just last clear clarification positive. for of And a to net guess you in XXXX on really wanted comp you of was question, guidance was what for Sajid, did sure it I quarters. make was I your I what just income the meant? terms each

Sajid Malhotra

to able to do we able even. slow But quarterly it love through it do possible. for and year. Obviously, if four to We'd or the as be full try as the is quarters about the for revenue want get be to

Michael Turits

the in now? net Is income

Sajid Malhotra

Yeah.

Michael Turits

Okay.

So, be quarter. income you net positive should each

Sajid Malhotra

Correct.

Michael Turits

Thanks. Okay.

Operator

Greg comes question go next JMP The ahead. from McDowell with Please Securities.

Greg McDowell

on coming to active lot have And thinking you. be over XXXX down. I of help for be and that customer about leaving and Great. maybe questions. on think focus how out, number the Thanks number years about that customers been of. And Thank customer because revenue proud a A annual But you. having want should the moving number previous play taking has then us follow-ups. just forward. maybe will first to new of little I XX, that my how the guidance customers I know some wins we

Robert Lento

Yeah.

I pass will comment on it over to me Sajid. And So, it. let make then a

results cut XXXX as expense. So, on our you've XXXX, back we and we actions if And sales XXXX. affect started we to back remember but the that marketing the rebuild went in in taken XXXX, into you in

our and building marketing increasing sales force So, XXXX over XXXX. back in we and further XXXX, expense are we started spend that

than the the ones. And customers that that from participate But year. made the we've of expect will customers year did on focus enterprises. speaking been going to we in more have in. we've leaving the customers are the last the So, marquee generally the we size And that industries that really this more to we add are choose been large decision a to to after standpoint try medium smaller focus we names

and to the the record to in focus and XXXX we’ll a but for focusing close more win customers. so reducing a and that of XXXX customers reducing continuing getting new much is gap customers, largest year continue do to in aggressive job through so better go on Sajid? terms leaving still on but been we better churn, at we’ve to new between amount churn As desire and our and us we’re that of deploying in but XXXX customers a so XXXX, coming dollars the XXXX was XXXX of

Sajid Malhotra

resonate with just I’d Yeah, that.

go progress to out because publishing services after business is the said I that When it publish and driver you one I there from they’re of but with functionality see there or market is number of to continue -- is cetera. feature continue if our like quality think that a or really investors we and I bring, with and that a it, continue is progress pursue for customers one remind sometime. statistics that customers. and a Having to or any to idea think them our I’d the those meet the way that, lack been the think of ask that the we our we’ve statistic people this people can use so we it key it’s those want and to one not I that because other, et

actually a shared the very business. largely a because a story, for any we us. argue some serving of can we we customers margin has very, first had direct a And high-touch a had stream our if servicing sub-$XXX of proposition the The helped in that is revenue place and expensive idea them gross business we customer they’ve

with deal getting thousands time. who every us customers is a for are customers exchanging spending and us the better those in out So,

Greg McDowell

saying, high fear bump. the follow-up sequential Absolutely. is on but seasonality two-part million quarter-by-quarter a from would quarter, revenue or seen end four just for we of of in And you’re not guidance that and haven’t the I basis one a that a your and year by clear on took entirely Sajid, and of you, up the QX, to that the of financial first, $XXX we be QX traditional should doing my historically we sort $XX if on million divided whether see or revenue question, be for of commentary if want what more ramp

I cash two, can your in seasonality those this if A, part light better of transpired understand in in is comment just further that’s of further dynamics. So you just just on flow And flow want to revenue part what seasonality and of cash Thanks. comments QX.

Sajid Malhotra

Sure.

were lousy So, there’s quite bit without awards, the of nothing QX report mincing we we’ve dipped years, we in out proud was year and at fairly couple much about. the revenue three has QXs listen, for if strong least And you last our history, two reported stream a last look at QX of a a better.

that to you years look other is each they years performance, historically closer have to than if And year’s last think ago. than four been. was happening Now years reality that or two ago quarters ago what or closer were the I at four three

of like kind million we’re think that going that should XX but jump sudden the XX back XXX or be to up suggesting and within So, to I all just variability something or don’t right, two be from of four, $X a by $X go show divide you one so I XX. to then can then go up million won’t the am quarters not

are that even more that right, the Helpful? talking You’re quarters and XX closer to it’s XX, of XX, four XX the kind number across about quarters. XX, stuff

Greg McDowell

Thank you.

Sajid Malhotra

Okay.

flows. Second is the your around question cash

year CapEx what over a very we million model you just of flows the XX. very, we units and XX to closely as watch that’s under $XX little did cash built little -- So, last our is in XX and know

vendors and next $X.X then that those. our a use to deal in more could they quite gesture the our thought good million a so payment track to payments that so pushing cash there’s it we and some addition for more payable year the that and their normal. books as and receivables money and the runs historical And close them the know well, would their and our as I of end payables was And them been, we’ve give to down we early, quarter. reported we this days with bit about million as little be paid XX you outstanding a have around record think $X of came numbers as it quarter at accounts or our payables, days $X typically we every to In back we year-end million is two well the was bit you went made than That runs and that quarter, with been done our year we’re our aside Akamai on-time lower can to see big did. will ahead the this four return around to limit the

don’t days books customers up some On the and as to the we've seeing those big correct will of norm, XX of days the other we had I managing that is very collected on some already balances, the jump their so are think hand, both receivable are our of outstanding and normalcy quickly. back to well and over very, think return that we I

Greg McDowell

Understood, thank you.

Robert Lento

Greg. Thanks,

Operator

question comes Sinha Please B. next ahead. The Riley go with FBR. Sameet from

Sameet Sinha

that businesses even Tencent second you first. with Greg’s actually be it and following-up Yes, would have, have the some Talking you questions thank you Edge of on quarters, would between these question assume weighted. should half new that about that most very much. Couple of I

talk So, if can you that. about

the of customers, pretty substantial still revenue up many it it’s third XX by the so out X%. number, good Secondly, from highest quarters, like in went XX but about year-over-year quarter down growth the your customers leaving top outside XX% the XX, pretty top top a

were below or So, help you all guidance customers. go was did lastly, to? about that will can not, help you. implied or Thank And an OpEx business about the million, that the about software you of where you can us for about that XX decided talk in assumes that download top category to XX the us XXXX not your increases think think these you win about

Sajid Malhotra

So, the start increase in there. just OpEx let's

We security more and of anybody pretty fact people, the I the are Edge not large in were connecting if them much would in marketing, backbone, with infusion, for or et capital starting deploying the data that it position I think we investing capital, launch require does from have is been sales think have, of from world, in not else, around services all we cetera. amount scratch require the centers storage clear the it around business about

they have then So, so we that’s marketing that are market, one. need, get the relationships, from the we to have and part them the that market, with cover invest expertise to in don’t to assist but some we people that, do going some advantage, necessary establish support

trying and business, don’t think very with I a general or growth ahead are way revenue the the anything, line sure to is go tandem growth. are we at go that’s bloated a just that the and revenue I company just grows with a slower trend, has in kind healthy growth much the to think we and disciplined that that growing I and in ahead rest overall than is of resize growing, in mean rate business are make we overall it of a OpEx the in

in Sameet not I your that question I well, was year we corporate are and Your want so us, just And really healthy XX the very the continues the remind we with rate a XX we rate keeps these it list growth me. at good that’s overachieving today that, has XX needs. next question nothing the mean and top but changing, doing that revenue focused of do of fine, their is on that it am to been traffic of as XX, been around and same lot is customers, to trend, XX overall that time third growth has are customers historically our the we like very necessarily to mean that’s last grow top company or group we averages the well around, I company year before, there invest really, sorry and top a hide changes what had above clip behind because the want, the

Sameet Sinha

Yes.

second it was because customers sense forego Sajid XX. X%, or what question, you outside the customers XX outside the it that if was me actually that will my in question top get was forego, if customers, the question so a so, XX decided was question third of decline from top if about of top business to XX top my top can with was make year-over-year outside the that the forego you that you about the the that decide of XX, by So, business to

Sajid Malhotra

is after is or but business business become where be no more XXX. what our dropped particular what our -- longer of we in no is the profile the price large is around have business some there just margin we to off at where to do is of customer The capacity list, by the driven anybody It We right not that that is of type next business, is by in somebody it chosen they a the so, it resources when has business utilization what XX that the of of this last or taking really price zero and go it on. a we may it XX and they in XX, disciplined after we a bunch give elasticity. there that is grow is willing -- for any may top are XX or top have to and lot a is

ourselves course necessarily into differentiate But versus account. matters get don't go and smaller the type discriminate business customers. of I customers volume can bigger discount we of after mean where larger and I our and than take So, ourselves competition. we

Robert Lento

it XX% of on the.... it XX% the have grew versus like XXX% I thing growth but at really rest we rest do to and our look XX% so I follow-up top top look we the question the grew is versus about at pretty even, our about internally top we mean of XXX the the add, your in don't would about One rest, couple and base XX the

Sajid Malhotra

and if need ahead numbers to completely. that ties I make sure at together look those go to

Sameet Sinha

that the there full is year assume think year. should question revenues final ramping throughout the half, I is The with weighted, about more Edge cadence the and else be up, the Tencent be I'd second -- revenue considering? anything half Okay. we would second With that computing

Sajid Malhotra

quarters the am that's evenness historically business, I'm am than all or seasonality usual it more within reported here, here, and then it's uptick but so, even more when saying but to really very question, combined I look I'm good expecting even base they expecting should I are. getting Yes, the like when

So, in our renegotiation we third customers still the with the have quarter. larger occurring of some annual

that's time. plan We with able about at are revenue it and onboard same just coming the to other offset

Sameet Sinha

Got you. it, thank

Sajid Malhotra

So yes, may historically a is while is, top-line. there look more than moving it it lot of parts even underneath that

Operator

Instructions] [Operator

Robert Lento

and queue, presentations. we'd limelight.com no time With like page for With Investor their to Please upcoming for thank in the events at other questions afternoon. a everyone Okay. Relations visit the that, goodnight. this have

Sajid Malhotra

everyone. Thanks

Robert Lento

you. Thank

Operator

The now presentation. you conference today's for is concluded. attending Thank

disconnect. now may You

Edgio (EGIOQ) 7 Feb 182017 Q4 Earnings call transcript