LLNW - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Limelight Networks First Quarter 2020 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Dan Boncel. sir. ahead, go Please

Dan Boncel

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

by the call. this me remind We to safe would on start Let that forward-looking we statements harbor. like everyone will quickly covering be making

not and strictly our statements our statements and historical feature that are COVID-XX. Forward-looking our as XXXX all functionality of fact strategies, and expectations, outlook our are for business secular beyond, statements priorities, such announcements plans, product impact of operational the trends and

could and future indication results our of materially should by as contemplated forward-looking reported an Actual performance. statements from not differ those results be considered

discussed please XX-K. to periodic Annual more our risk most factors Form Report including on For the filings, in our recent refer information,

any as forward-looking to The date and forward-looking information by required on statements disclaim available to based law. on call today's of except are as obligation update us this we statements, any

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

and We end of Bob available at session the will remarks from during be prepared the Q&A Sajid.

over like to now the Lento. to would turn I Bob call

Bob Lento

Thanks, Dan, good and afternoon.

us I for discuss the current for first extremely all like Before the we with of quarter would -- remarks an start time challenging about results, us. some to environment. is This

who world essential and on thank function. the salute continues government those COVID-XX, response services I'd for you thoughts extraordinary deep the the to have Our healthcare companies many for of frontlines also my this the directly express service. including workers the the your individuals, crisis, who to you We gratitude virus by and those by to ensure impacted their and like are contracted and pandemic families. with provide during people the particularly

global population around an supporting digital under plays the operations important we isolation believe COVID-XX the As experience the in role of mandates. disrupts world, that Limelight

ever. the customers we customers to our important provide services such our and customers' As than are more

our the in high-quality of activated safety taken customers, response plan numerous while March prioritizing to maintain early pandemic workforce. have and We and health services global our for our steps

leaders monitoring have and who of company determining to senior swift dedicated developments team are actions necessary response closely our and together across the COVID-XX. resulting circumstances We effective a in from changing

to We have ensuring globe the our their around tools perform the work to have they mobilized employees right jobs effectively. remotely,

the We have services. uninterrupted ensure also taken network action our to and of availability

are and to fully operation Our staffed continue teams our manage network.

infrastructure to work and our security remotely, tools and to operate needed ensuring the have put allowing systems, in network. employees place while access We all the to

developed shifts which have extensive backup of cover identify name job functions. three backups plan, coverage We to and layers critical

Our continuity regions. also teams with in our business ensure are across to business-critical close partners contact

We remain confident data infrastructure, pandemic. XXX the network Regarding its we a our stability centers. globally in in operate distributed network during to close

fully Our regions. center is diversity redundant suppliers and through network includes and across and data within telecom extensive

customer's pain perspective have and various can are understand we We a congestion. initiated traffic points manage to their and alleviate our to unchanged. conversations also ISPs with our From better how services support

support to worldwide. continue to around-the-clock will teams Our provide our customers

experience crisis focus this whose ensured and workforce, collaboration I'm around Limelight's of grateful seamless global a As for the the efforts continues high-quality has our world, for customers.

during our these our very are our serve challenging network, times. in support customers manage We maintain and confident to ability functions

revenue first Revenue in announced results ever. first momentum building million, the our the first quarter, quarter today. business and is $XX year-over-year operational performance the was great in to a up This highest was XXXX. strong strengthening turning quarter XX% financial Now and on quarter and

year XX our over of the than our the the times improved XXXX. Adjusted was balance quarter first ago GAAP remains non-GAAP prior year loss and EBITDA strong. net quarter over more sheet and loss net by amount higher XX% improved than by XX%

are and focus steady of for execution reflects our this customers. our which We proud results, quarter's

volumes as the March, quarter mandates. strong in first was isolation and much accelerated population of Traffic in came the under global

lost events other partially sporting resulting However, such in from offset Madness this canceled and live March traffic by as events. March increase was

duration our There isolation from expect screens. beyond. traffic it as is we XXXX much mandates, are outside pulls the to when to uncertainty momentum on mandates about of lifted, in well levels and impact warmer and workers weather return confident uncertainties, these Despite continue business the people the and their underlying the as in isolation in jobs are away their

network XXXX to To aggressive our PoPs are actively PoPs can growth includes building we that customers. for capacity and ensure capacity we meet the plan important geographies increasing new existing of in that online pursuing traffic, are expansion new our expected in

plan We quarter. the continue make first on progress this to in

We in these growth from issues our drive believe We and have COVID-XX, and travel expected customers operational strong from us resulting times will adapted revenue and efforts and supply the restrictions chain lead the longer well to requiring serve demand capacity expansion. future. to position

I'm a we the was acquisition in logos high-quality all regions existing particularly across exited subsequent expected and deal and demand the both quarter growing in a new pushed signed services and Customer some first numerous first size our customers. strong from quarters pleased for despite new terms a that revenue We of up into pandemic. in the quarter, result as were with was Even slowdown XX% pipeline opportunities March average solid and the this of with headwind, year-over-year.

to companies due were the strong the geographies scale our partner offering. in launches these offerings we in demand first Peacock to quarter in experienced world. in of the NBC's launch look performance some was support us largest based new as OTT as as on-demand new These network our on of by in participation well trusted launches value global a companies recent proposition. to quarter of strong in the the media partially We continued pleased The the and

and the our pleased to during employees new Even with the about pandemic, quarter continue I'm our progress. our hard on initiatives work product

and Live we egress providers up content which allows Limelight the the live live of first CDN. to their service costs finalized Ingest, streaming servers. our Push of Push the for workflows, helps distribution worry push Limelight without meet content our origin largest scale quarter, customers to events overloading the During streaming Live their a video simplify reduce called to from new video needs across

We locations platform began their on functions the network about customer at and application trials to its expect beta in is This amount very tremendous demand. third deploy also our general our for later capabilities, Its generating use run this will EdgeFunctions. new quarter a to as customers our them aimed functions and will it quarter. supporting delivery own known into of have this availability edge customers offering and compute the provide serverless offering launch of a interest. cases We're excited video specifically our requirements customer for

to launched and software technical targeting also place within a base. great our development customers' API questions. answers recently the to We code developers samples, source their kits It's a portal rich documents obtain of

very planning the While navigating positioning these COVID-XX, future. we for are extreme focused to still on conditions and related we're

executing our on in expanding year driving on of includes, this our are control network, for hands of the strategic imperatives four proactive customers the and We more innovation. which management placing expanding capacity,

disruptions every we on challenges day these the Our employees initiatives hard are and now working face. despite

a company. we the emerge We ends, are as trying ensure to pandemic stronger that when

governments We disruptions. immense businesses is essential during that challenges these our industry fortunate healthy providing and services are and and to individuals

made will Officer, Chief the our Sajid the announced Corporate transitioning improved role Relations. to today to Investor responsibilities assuming five be and has into Strategy, also that from Strategy I'm contribution Sajid the he We performance. years tremendous ago for CFO and stepped operating and for financial CFO M&A grateful

year, a He been President leader Chief deep Dan Boncel will knowledge as at and his a of has many candidate Officer. relationships transition. providing as assume will strong Officer. position. July his him the X seven of Dan's effective of These position the existing of years management and Chief capabilities with ample for time for Limelight Limelight made be Financial for of Accounting smooth this changes Finance you ideal finance this Vice

operated for a In an strong well quarter extremely challenging in Limelight was as we very this summary, environment.

in position like employees of uncertainties, global we global I to health I'd more the to our focus take the customers remain proud the rest of our strength hard at solid dedication and meet this XXXX. resiliency I together. ability there confident their thank look results. deliver I face and as of work, while for XXXX, team never and for our our and forward been momentum at of workforce drive are Limelight our to As our have the the our pandemic for our goals financial business, in I ongoing many in industry,

and call discuss greater With Sajid to that, guidance in financial I'll over quarter our the performance first the detail XXXX. for turn to

Sajid Malhotra

afternoon. Thanks, Bob good and

Many ones. face to like COVID-XX. started, jobs lost Before of acknowledge people their loved have the I also tremendous Many impact have get people and I hardships. lost would

live perhaps our dramatically us everyday we has forever. of all For changed lives the way and

we our the for operations with for development for sales departments in general running escalated when workforce our are I would manner; adapting can I'm keeping has next in most marketing proud levels; and the continuously do what by functions our each are like teams thanking to on global even staying a remotely remotely. see to of disruptive our at change been maintaining their and running office day. other and global reassuring customers; as to team products; we achieving. their new professional smoothly what least administrative a expeditious network complex and and very in teams and not begin team our focus to and we the contact every research It

I'm of reported beyond. and quarter remainder With very for backdrop, XXXX the pleased just we the prospects that the with and

quarter of our revenue me first is highest by first revenue revenue XX% it highest the and increased our previous Let review almost our in reported Year-over-year $X quarter exceeded details. QX million history. million. $XX

in currencies. year International of to XX% quarter first dollar-denominated total in compared a XX% QX customers of revenue Approximately ago. non-U.S. revenue was XX% accounted our for

at Foreign quarter and is customer due believe in the entire highest exchange our our per pound. approximately primarily entire divided approximately customer headwinds fluctuation in industry. revenue Average the remained average $XXX,XXX, This to revenue by amounted in our customer base is revenue we the to $XXX,XXX. the per

We in a weeks two traffic levels and April, largely are result of that over-the-top last March continued the has into seeing streaming video trend usage. of record

who have many flip customers as the also broadcasting betting been events of industries adversely and side, sporting On such sites, in live impacted. or travel have we

this with work to all get to continue will through help customers them together. We

Moving down P&L. the

During a ramp-up expand in in online coming and OTT the to significant capacity from as well as new XXXX continued wins. offerings our clearing in traffic anticipation arrangements first quarter, we continued of customer

Some into a this in offerings multiyear increased $X.X are trend. is variable the of million, to new primarily and Operating approximately geographies increase due expenses still expense. these expanding compensation

compared were We in of non-GAAP a to year. compared quarter million XXXX cash inflow GAAP the $X totaled to the We million per last first loss end breakeven $X.XX million end $X.XX $XX.X a quarter $X.X year standpoint a cash of to or loss the $X.X strong was share from quarter, QX $X.X net a million. and $X.XX the from of year. operating cash had equivalents EBITDA of Adjusted first Capital negative compared We expenditures on last loss share last basic up first per basic at $X.X for of reported last year. the $XXX,XXX the in quarter million. million

year end of year, the to of down in March XX of the end compared last range XX to XX XX be March We the days XX and days. target to DSO the to at December. end At days was DSO this of at

is performance overall macroeconomic result are strong many there difficulties from our a customers global significant of Despite in of pandemic. experiencing We the earlier perspective. as uncertainty first quarter mentioned financial our a the

course customers best the with are We action working of determine us these them. and for to

of shape deferral may a that the take levels. For committed some of traffic

For terms. some extended maybe payment

work to through are SVB balance set the and line quarter previously of in as our have fourth extended flexibility cash to October That credit vendors. challenging our fund to growth position this operational in we these through flows, expire year. stay the also believe of needs We $XX in our We times. sheet this working our is was XXXX. sufficient current to Due with million timing we uncertainty with

outstanding. at count end employee six up As XXX.X from of the of had March XXX, million XXst, quarter. Total shares end we the approximately of quarter the was last

latter how uncertainties pandemic With out. lower same when not feel raise or returns we interval the are the giving. is the bringing ends, the guidance raised more, life the all to chosen know what on. do have to quickly when midpoint and even million. the reaction guidance keep guidance again our I about the and the had I confident normal choices; have it the of $XXX We on the two ends, and more confidence We the end

feeling raising environment, this the one confident the midpoint starting In of strong. our year revenue companies about and we of the guidance, more few are

more days. We XX say will in this to and have revisit

confident one and up In by or any guidance. and history. ago. in $XX a net actually summary To it even recap I'm a minority environment, the is has net the million year Non-GAAP business the in our invest debt adjusted that small XX% expect be the times to is balance will year very generated flow. companies The and Limelight raised difficult what of was beaten XX%. of by element growth met the loss expectations quarter, GAAP XX%. improved remains loss better revenue operating almost of is EBITDA in of continue free We positive cash sheet as we XX highest

estimates. also make Street an I'd to post-XXXX regarding observation like

shared to After in us and have less digits organic at until of dropping this making now, That double believe, million what revenues day. post-COVID year an the estimates the some choices believe not outcome. the and I $XXX ahead basis. expectations. I XXXX. the looks every midpoint us very be grow we $XXX growth long-term in mark to goals, mark the appear year business like a that relevant than you're be attain every have also do Street to we in revenues and on do a XX% until very disappointing say not estimates can XXXX. reaching decisions basis analyst conservative. have a investment estimates sustained we on year, XX% While Current able the should full million there getting current is important I the because revenues would

your up with And that, to the call open I'll questions.

Operator

you. Thank

the now with first begin Krowl We ahead. B. [Operator our Please session. Instructions] go Riley. from will question-and-answer question Lee come And will

Lee Krowl

of Dan congrats Sajid. service questions, specifically for my a Dan taking and promotion for years for dutiful quarter. Thanks both and as great Sajid CFO. congrats the And Great. on to many

to want seasonality start for also gross QX with seen of the relates takes to the puts some perhaps in gross on it just margin building as with record and scale, As streaming questions, impacts off you've expectations margin? traffic in I and solid how and results services, baked just the maybe that

Bob Lento

is just we especially a little statement going this answers, everybody call Lee, want to Bob. before Sajid make a into have answer that but this question. for actual that I'm for I get to is conference But us. the unusual

coordinated different three We’re locations, mandates actually we so government to stay can. try home and to going following in we're to as be as

with the But to cadence we'll our just and and these our know act all like separate three unlike one where here. we're calls we're do coordinated that in room, we're same in room locations totally usual in best actually

gross with Sajid margin that if So address want said, the question. you being to

Sajid Malhotra

this would also any time, Yeah, at happen household. can I And sure. say any in sound

that, So something luckily like far moving but on. barked we the dog or hasn't so keep

much here. and appreciate listen very that So kind first does all so for your of I Lee words. thanks everybody

how which we mean, gross on is sustainability operated one right, items first of thing strong cash important about kind we then knowing that. bottom you the of and of companies the and business, want other in the pick profitability. the the start the and the of the the and numbers, geography, to business the in talk that is question, cash generation, absence knowing healthy right? all flow this the think the me Many then geography of and generation line. all, know total about most focused cash We we've total care I margin with I profitability that

it the the does I I that has more think room when today. margin get the to yes, gross of numbers, Now, than geography

coming think rate the when we revenue lower million I adding shows the drops in what so for to that $XX the down. at anticipate margin from that, than QX it being run we same in is number and more the unused absorption some the that gross And are up even time, on. of

a occurring. that's a So kind you of two have action double --

the And weeks that two the vendors other charged weeks, margin get to our like I only would the a expenses for gross cost get last March. to X.X in bandwidth in you that side, it's hit item variable the The is COVID nuance, the -- by the point way just for charged peak. the we traffic occur but

establish you So on to and any pretty that outcome. ordinary month month, peak much the throughout get you a you sell under a good and

Here was a what happened peak. was very peak we got it late the month in and to steep

course the under-absorption the result, you have month. As a throughout of

So are I would number I think gross the margins to there liked of have higher. stories a be Obviously here.

But in I'm see gross I the at in we while am improvement with that the happy margins. leverage I'm I margin the the think really continue line, the profitability with gross to should particularly overall. expense and -- not lines pleased

Lee Krowl

on then And it. streaming specifically Got launches. the

you Just less as similar some internationally? kind or expect kind of of curious of go guys would or more these traffic live services share

Bob Lento

really coming good and don't -- be don't share going up the customer some We international. launches data by are aren't of on that market we have to

NBC's Peacock pretty Max HBO U.S. example like for Disney pretty across marching only For Others only will much. is globe. be pretty sure rapidly much. the are U.S.

obviously the to talking the growth those or there's have is whether and we which table. countries. total don't know which best What then a depends the seat that's on launch companies. we And what kept we at you're international usually by percent So of pretty not know about close

Lee Krowl

then to count. you the The question, new in around of comments active constructive kind number but And quarter, spoke some just very of customers. double-digits customer it. down last raw Got on ticked the kind guys

count. customer kind So Thanks. commentary customers puts maybe the active and the versus takes of new between the just of

Sajid Malhotra

very again, a and very as of is revenue relatively been of like this our our still to at most customer traffic base with in our average replaced is who And the have customers qualifies so said it happening those to have have kind where minor. of We the of business count the XXX on and Yes. the business and size in I top the -- that small decline total get for kind business again in account customers impact of worth category much is more bottom player that that XX standpoint. one

there's and low because focus about. very the profitability, at unique sometimes is occurring. So our using the of but they're not grow. I'm add or that, a this that at to to And is troubled and feature think and sometimes general top, proud that should the I'm software customer that our And expect out cleanup a because I count or think I of begin functionality I of kind end flatten to of third-party then even particularly business ability by the do

kind the of point we've think low of I numbers. reached those

Lee Krowl

Got questions for it. taking guys. my Thanks

Bob Lento

Yeah. you Thank Lee.

Operator

question Majek of come Robert Please go James. next will Our Raymond from ahead.

Michael Turits

Hi. Turits Michael guys. It's Hey, on.

Bob Lento

Hi, Michael.

Michael Turits

levels of just little couple Can questions. on a wanted drill So traffic A clear. to the down bit? be we I

in an it you how March levels And and April. peak assume that completely You I the increase? April? said of traffic that what exactly had increase at -- levels. that sustain in that did was the of that traffic And continued beginning end in

Bob Lento

I'll to Well, Sajid. over I'll start then answering it that pass and

quarter's because the quarter, affect any of add it's stream one zero. Super talked material. a you So Bowl as as basis the up shut isn't live traffic one we a obviously enough started two a events daily in when results. any we -- almost in we've even One go large the saw pretty live to on somewhere to event down things. those the throughout to as world world material But live past And one while really string events

that So to zero. went

would traffic. up we same was way. a material interesting went the thing the And saw in side I At one steadier say, pretty a the Michael time video-on-demand

peak the I traffic. Sort meaning, think peak that of as about if a was it average decreased, it average, sustained more

Sajid's saw underneath more normally we you we up, would. was more hours peak than see. in So saw that but off-peak traffic peak But to than the would normally you still point

got today's you blending to seeing I Now in date we're today. used as But dynamic levels into schools that together at here of back tell we're and all what started sitting home is, will some to people those still go traffic working they're whatever April changed. elevated session continue XXrd, through

doesn't "normal" sports when because offset -- effect Peacock, really discussed back their is, end the launches, is part as will for do that July. until life more us is has That as is of question back, May. the some when some The on happens. on by new do subscribers people to we've launched a of when come while Comcast start devices and to NBC discussed it's the be HBO going uncertainty what officially launch traffic some

time. have same from of on additional going So sort anything a bunch different you Sajid, the of you? things at

Sajid Malhotra

No.

I think covered it. Thanks. you've

Michael Turits

They their I Akamai I was guess, first said month-over-month. well, traffic up XX% levels what -- content all, So, trying were to peak of had made.

wondering was confirm could much that into April. that of March levels end you were I So peak how quantify at your up if maintained traffic the level same

sports then And traffic not like amount what happening we're including live, downloaded, but your total pay look be. really traffic might in levels, we the just looking but when those what's at

So I'm or been amount to know that in whether the you sustained I'd that And there? was higher like to on trend that get levels? what's addition paid not -- downloaded total trying

Sajid Malhotra

Sure.

may in an have on dates The sooner maybe and higher been a the earlier think are. sports, releases what a frequency have few think few franchisees of the the dates a I there launch launch pulled may update. So are I and

like peak you're XX%. number is for if about overall The talking not a very dissimilar us

a ZIP everybody the but in in kind thing. think it's and primarily little of same little it the good serving lower maybe a are We way for a range, that in space -- bit is that is bit that same the code is higher, video that I

even hit available. where a business, and household up bit is business suddenly mind, school this living that a content low mostly think again. apartment Now should of of points which seasonality, living flow-through be you which we right, QX, QX slight keep guidance our some then lot why are or factor people In and I picks whether see This different there of there's kind business. some homebound are it's little into and in in has the is will we our year say

the question that then happened and right? very playbook followed what strict of crisis the guidelines But have an management don't see to I opens planning done happens to crisis operating we the what up? we when do last state all are standpoint. time, is a what and supposed from We've

what But the I global I don't when tell the a happened the a basis pandemic when and can but shut hit, hurricane time occurred when last down. hit, -- was last a you there a flood world have what happened when on

the what end. see at we'll is back So, the reaction

fact good with and We're we history position very confidence. are. of a feeling in, we think can guidance about in growth industry higher degree that We're where are the the about our revenue we for highest the we gave in we that feeling industry, our fortunate achieve that

that I feel what this just I tell unambiguous more to Until want back. way this you to happening. there just see -- a I I data is should in we're like just I be need really I get know able to

Michael Turits

Sajid, if can more squeeze in. one I

I'm trying So, to understand. just

And CapEx build-out build-out in what So, decreasing it? are to for or COVID? you this was can't recall year? I other In increasing your response you changed expectation words, your your have

Sajid Malhotra

No.

$X somewhere stay So, in million and quarter going that this we to $XX said guidance. we would was almost it million. did million will year, do million our within and to the $XX CapEx close be last and front-end loaded. first $XX were year we We between And

deliver in with COVID-XX, we have for higher the think traffic, even even think about. and part the I So, the right what most ahead with we to go geographies talked we capacity

Michael Turits

Great. Thanks.

Bob Lento

exact a Michael And that my year-over-year top asked mentioned don't I head, we traffic growth or you the traffic direct about standpoint that but of on you the from basis. number a a then at thing growth. just to had off clarify question XX% because one know pretty are above

Michael Turits

Thanks Bob Sajid. and

Bob Lento

Thanks Michael.

Operator

Our of Please go next come from Cowen. will ahead. question Colby Synesael

Colby Synesael

first higher you in questions. previously curious you quarter you. just I down and Thank to the would think XXXX, then I is in it the expect that be Great. revenue expected quarter each a still sequentially said quarter. if I'm you guess But thereafter before be few One in than had that.

follow away the question. And guess up that the then on going last or sporting things I'm because upside events went versus you of the in terms was able live was? of to quantify I what to COVID-XX downside like effectively what Are

raised explicitly the just as low guidance. is and seeing really that the it? of really really throughout Is COVID-XX? because just driving end two that's was And your the of I you better quarter traffic guess it what's in OTT that that weeks part Or last the were of you not

we've to Thanks. quarter, actually in words traffic time weeks the of guidance In if period on specific other the COVID-XX you when spike that's COVID-XX. that longer seen -- could in in second would more a actually to last sustain two was see the we raising be guess I

Sajid Malhotra

the for Colby. Thanks questions Sure.

traffic. them some COVID what is no action But between answer tied place specific of and direct I our was make and I stay-at-home. bid mean took the let correlation So, absolutely order. all me to with when that sure there happened

move and more overall order we of as and stay-at-home more can So, of began kind traffic deployed. yes, that say got to traffic up look at

price our by very when kind planning traffic we account-by-account do month of by annual We ahead by specific of and go type plans put together.

So, detail. we have

from Here's some what price their the in with might whatever the is. or customers growth we what and us plans expectation with customers I have MLB are is And expect we it from growth March cases. or normal what And Madness share what be. know

saw. five go it's what into I that of this over not say there, we to but detail of put because factored because want that. up out exists the But something ahead and here that and So, it's and down is three

and your then And point COVID-related. the about improvement the sequential

improvement revenue, sequential yes, there, of yes, to we in because clear when QX million a for totality pandemic. guidance it of QX. I QX kind So, of step had four gave said benefited quarters the a we to the initially dollars QX increases saw and right? where path settled big from of I saw because few going the -- the guidance, was in quarter And

into those I Now, the and with quarter, together. in four where the we if take be million the $XXX tied you first finished guidance quarters will think for midpoint account closely more

to in sequentially come plan up don't it want -- I if but one four sequential to quarters it so still have show is And in to quarter, of improvement. not is and our apologize,

Colby Synesael

you. Thank Great.

Operator

from Jaluria ahead. Our will D.A. next come Davidson. go Rishi of Please question

Rishi Jaluria

for like congrats more which guys. wanted and my thing roles. questions of bit taking start Dan is both you're I conservative from first on to sounds into clearly down the being commentary drilling do. your right Maybe Hey and Thanks a the to you by I little the think new Sajid It just guidance. to

was of the I'm One there's live year, made getting more. commentaries of some pushed March cancellation sure next in season. events, NBA Madness QX, right? Olympics to sporting the

Maybe kind first directionally revenue us a events from for sort to can types big disappearing as that expecting follow-up. quantify now got you And you And XXXX? of were guidance those how of the set you of what going I've then help is chunk that out initial be? is

Sajid Malhotra

Sure. Yes.

So, there are two things.

think prudent confidence. And an we'll think I conservatism of XX more option months is given have think some what we've that me all, versus I guidance I more, got are given even we where of said, and had behind I that having do. raise of I've -- ahead a like higher level I to achieving guidance the I four degree and have but the me that's at First here now and now. I

beyond that sit few let beat. clear mean year we a be guidance thought a a more and there actually to quarters we we've aggressive. little want for I go few this or estimates for sit there also getting that years I'm bit could I

on be basis. that And So, right? for aggressiveness least may growth feel a sustainable Street is recognize XXXX get there can the you to we want But on yes too fact front. about double-digit is better conservative, on our that. suggesting XXXX, just at we I to XXXX, part what the an that

talk dollar in dollar particular value then a of a value, about no, customer event terms And the we such. or total from particular don't as

won't seven we say the in it past, the now. in haven't suffice these to do are figures. that We events But

game after network across push the baseball that for amounts. activity When go the game seven-digit month you or to a or through basketball football equates that of bids and over you for

that of not the just So that, up seeing but hurts. exceeded yes, absence else it's results. everything actually and we are showing offset In to that in seems that from our benefit though totality, the only

Rishi Jaluria

again. enough. Thanks Fair

Bob Lento

because the yes as it reminder his live just remarks, really quarter within the So Sajid in a and quarter. sound -- weeks you're And by talking about it increase right? the offset three quarter, of affected those reminder, XX-week two just for OTT didn't or a like whole for a a earlier two three said events of weeks as XX-week it or loss in

Rishi Jaluria

Sounds right.

right. Sounds

gross Okay. helpful. Sajid, wanted moving back margin obviously I on that lot then, pieces there's to go the side. of That's figure. appreciate And to I a

entire as a growth I step year? for for sustained there is XXXX, you're taking to XXXX back, we year double-digit margins the gross look mean, gross on of we at any basis year-over-year versus reason that full now think a revenue expect I margins now state a given meaningfully shouldn't in improve

Sajid Malhotra

we'll to margin we Well continues think improvement when up clear our that to But very I and to the there I sustained we push gross we us. there. yes, up mean, move hard reported get have gross to satisfied to finally with year-over-year. we number What XX% not know get plan. that. We that That It's lands in QX are be, be show from number here. margin

Rishi Jaluria

Got it.

sustainable remarks, more thinking some prepared one OTT obviously which last both something the do you're is we If of probably some I thinking traffic then you're there, a talked -- hop. that. companies wanted gaming getting out And the really about how But to you're of of from some lot you've How maybe the go to about that you I'll gaming that benefiting commentary spikes to right of and spikes? from Okay. of philosophical about consumption, the about which they here. listen a little the are back and these bit in sustainability think

that traditional understand Maybe philosophically, more are consuming some kind that are relaxed Is just there's starts permanent going a just always to there then the of that distancing concept? be baseline of you? when thinking video measures benefit that how versus that help cable now you're this you we're certain are this of me some improvement OTT with Thanks. to now, something about people you're contemplating at as being getting that's looking disappear? Or as social and a through

Bob Lento

Yes.

when an about that then what be comes to know learned we back because being assume we would get add philosophical be will And you going the like. should look things to services? and And me think streaming But back are We will so faster can don't It's as be you home well. it that thing devices, there once -- bars? start. to that's Internet-enabled be stadiums there when Let traffic really about levels is, to Sajid, on think what on. going interesting will to sports and question, behaviors normal's normal right? easy back whatever to so like really shifting go was people watching crowded look new Or that

like it's will every to of interesting an think -- look day. turned gets things that question on. sports of when it's that we part the we're adds So the And what back uncertainty in about thinking future, what

or the already start like with going but discussions without to European fans. they're going the football in PGA that heard on Europe going -- other soccer. some There's You've tour, that stuff announced any

interesting an that at any your this are we about have comments. it day. additional know thinking don't because to you point it's we philosophical if Sajid, point just every don't I So And is know. question

Sajid Malhotra

Rishi. do think do to industry to ask What where you think the this Like going was I you're you you everybody happens? talking in and Well happens?

Rishi Jaluria

least lot is interesting. guess probably more in as insight at I but that behavior, got you've My it's good yours. figure a as

Bob Lento

learning we'll as go. think be we I

Sajid Malhotra

Yes.

we that point view what talk I the what and we'll a early customers think as that develop to we'll learn happens and more and and is. days more share in see of reaction the

Rishi Jaluria

Okay. enough. Got All guys, right. helpful. really you. Fair you Thank

Sajid Malhotra

Thanks, Rishi.

Operator

Breen question Please Blair. next from ahead. come will of go William James Our

James Breen

you taking the capacity. expanding comments, for question. In talked Thanks about the

about pick expanding to or the geographically wondering, in existing network of terms Thanks. your Just your customers? you capacity in how that think up more for hotspots

Bob Lento

Yes.

lot we have to XXXX that a to a very us have which that on QX, in had were we that added in with aggressive XXXX. in additions of into we the with luckily, XXXX And build-out aggressive So plan came a are customers your your and But want margins to hotspots. capacity it. that QX. There behind enough we some were point in in places we downside lucky most hits capacity

locations better we certain areas. those the world growth think So can planning to we in opportunity are we underserved in that out this in there's build serve year, so the that

impact has tell that chain. an on I supply you corona will had

example in in plant for time we shutting why we hard was whole Came and this a QX, We that get hard told SSD find wasn't a servers. didn't So fire originally really get giant until out some started that's had China. that use there getting month. the drives our down fact China were and in in in to them QX drives those later story. the that necessarily that had didn't we in

So -- the stories various and throughout there are supply chain.

our are in large location, to what other telling this are got for to us customers news than good aggressive plan very we represent an in back are us especially working demand the do we believe growth respect and XXXX, of that opportunities the that. for And hard fill some were every half Limelight normal We've geographies based So year. in on with that pretty is, there the we year. the aggressive

James Breen

the Great. markets? happening traffic of that any that capacity risk using Thanks. what's all the in, in capacity given given you've the then built there and network that just And the you've I up seen guess is across

Bob Lento

It the location. depends on

we have enough in as based we're to growth that talked that okay. We which have growth our most confidence the continue is important that are to some XXXX in But the of you caught hotspot. it But going we plan. we in our with build adding keep short I capacity been places, we've locations, version that been on capacity seeing and

James Breen

Thank Great. you.

Operator

Our from Van Jeff next question of Craig-Hallum. Rhee Please ahead. come go will

Jeff Van Rhee

couple Great. Thanks my for question. taking for A guys. me

margin but the gross guide gross want expectations. your on don't the I like to to know I don't mouth were margins just you for below put quarter. to I side. sounds your you that. in words know don't First – want revisit I them it

I'm come other a bit just the in so a referenced headwinds. coming of talk you spend linearity order rank having second You were revenue traffic Like the margin with there about some one, would certainly or It events could surprises two linearity assuming just of the in the terms late how like and rank attractive there. Maybe a incremental three? a headwinds side. I or say margins. should the you But live on those I of role. quarter bit were the sounds a mismatch. ordering the cost things what about know the played gross in maybe

Sajid Malhotra

Sure.

this drive of So let do give you will my and this. me try I'll to view what

First of all just is QX QX. the between difference and

in infrastructure lower fixed have place. an on you're agreements, have going bandwidth that lower to place, You margin, get contracts one. revenue you gross number colo And Right? in have all you of to if expenses all cost

up even from and revenue QX. to what because you're QX in two, QX and lower you go ultimately you busy business expecting higher to your see as Number number was have a expanding the estimate

so expanding gross of kind have you so margin you're you're and So though that the hurts more that more. even investing some

last in new and hit of get the vendors peaks, they quarter the of even week, because your peaks. paying so with higher month half last established a have you end week more you'll up you Then and distributed the for

paying so And bit according end peak so paying you'll little a more there. you're to up

or business more moving price customers the volume. more there's volumes higher cetera getting advantages tiers as into And that they you're are get levels from et or where up some

of about So all these happening of same you've the got mishmash time. things a

I gross I a XX-something for was I into needed higher? was to knew in expectation and QX think dip just I because absorb at yes, the looking QX that gross revenue a expecting some to somewhere. XX-something I margin level margin going from my but from cost Was

a items except those surprised talked I that wasn't for I couple of particularly So about.

Jeff Van Rhee

That's helpful. Sajid. Thanks,

to don't QX? And QX as margins for are about we gross So I I watching from think know key should think number you're gross QX you've but you about we how what you guide to specific margins experienced as want guess to a trend QX that the factors that now very then closely?

Sajid Malhotra

So hotspots. still we Like expanding. Bob about I am have talked

We capacity there. putting in are

We've revenue costs. But to that that – where of And to on focused the is I have going increments I'm this. line we some profile are we'll revenue, allow to with go this we up, – costs and have geographies have. specifically I it's everywhere absence the XXX in move expect So got will some up. stories. in and go to across manage I the very stranded the revenue ahead margin gross match and

to wait don't up factored going know would we'll just points I tell number love into out. to or or things that and because it's all XXX of what that lot is that have get you a I that of basis move Now XXX. to XXX

Jeff Van Rhee

Yes.

gears I guess Sounds had like the to I sounds room. framed good. the It then And it as shifting think revenue you outlook. you

potentially You end taken higher. could the have range high the of

You chose to. not

in build wanted to little a conservatism. You more

of would drive the that revenue a range? level, the high are what it the now, I at stands above what high as Given the that scenarios end range guided scenarios – guess are the

Sajid Malhotra

mover couple for big share outcome look traffic outcomes a is like. what that still our might are of there launches of for and the well coming that launches So, a and of range big those on needle

an Let's just picks there back. they kind but than revenue come in of live sports more everybody are some anticipating. up we stadium front pick audiences is and of If in from insatiable that watch watching think events desire happen just home I when is live don't to – and maybe there's

sales customers existing on and so a of those We with effectiveness that has all big course, to of to always are working couple kind teams plans And sales progress looking on bring bearing. expansion kinds your how and go of customers. they a you're have of

in have play. we many things So

the XX at to needle To move on originally business of your low really you with go of progress or enough project top range. outside the end your range, doesn't to begin kind XX higher bringing top for customers many the go customers than the a of one this rate the much of you envisioned. Now XX at what customers outside or of year

along with new like than around typically the you share kind outcomes. we of customers I've range and yet get number. the number with us And we know all been we megas for. aggressive conservative more estimates guidance profile launches what the customers you And give some you to build you the of for from gives of And a try saying when

stuck be capacity a give they take to traffic have and want more had in. situation don't in to didn't where You to you

Jeff Van Rhee

pipeline, you Very Maybe just type in in number yields color could the progress helpful. two. there. I points Last the terms it last data to then commented for quarter relates changed or I me in or one made of there. just in Maybe the a as the you've you've know of just and anecdotes talk that's about pipeline – a what how snapshots composition little of more

You maybe gave one more in data point but a the what's pipe? bit on there

Bob Lento

I But deals of for tends expected the a things in but a I March reason third saw typically quarter from from strongest got weekly a on look we to close pipeline. be pipeline stated decision-making that the we that. review We the earlier. at as healthy closing month standpoint of as Sales know down quarter saw in at – whatever perspective. daily little deals Head with And slowed March, into new I remains some do the looks to So we him a bit. of a Tom, we that the

of deal fit size customer, very deals. most What deals meaning I'm the of our with and they're quality in both encouraged of by focus, of strategic video-focused is the terms size

believe customers got that that opportunities in we this the And few example for a with exciting in quarter. will so for close and pilot now we've those are us us very

very the pipeline focus. And so our with quality size even more and with of with Hopefully both helpful. from fit the deal strategic the so of but pleased we're that's size

Jeff Van Rhee

That's helpful. Thanks so much, guys.

Bob Lento

Jeff. Thanks, Okay.

Operator

ahead. question go next Tim of Oppenheimer. Horan will Please Our from come

Tim Horan

a meaningful material to they Thanks you guys. MVPDS guys? Do with people can replace virtual the virtual have linear MVPD customers? guys impact are And if that

Bob Lento

in with being streaming XX% we talking put few we data, the the probably is that, for right yet. with to will bigger in video-on-demand. it invested it linear there. it the So to When in serve mean, right? be grow. believe live to but live just at still Not XX%, there's a won't companies but doing streaming. customers the we're next video-on-demand, year volume be business and events. live do in many We've projected to was our that yes, tremendous probably heavily in that to not over opportunities, and typically us. live have with, able pure this tended at linear talking I push a But I at and to sense the made you service, XX% video XX% general years. many us But that big for That been grow live live will streaming look And has Internet believe be. live we're linear opportunity – real-time

Tim Horan

And I then market talking I and around? for large that have guess. to network it know, a turn can not to them that you're prepared share you Is it's hope you would what do that business it the just get? you less Or very now?

Bob Lento

on say, – I than just now that in it. pipeline get. that hope We are – share opportunities would we there the meaningful we much to market in we less really area. And focused are several we have hadn't

Tim Horan

for the probably. overall I same you price? And capacity happy the to Great. they performance customers do industry kind the of industry's your CDN the And thing that guys? this Not are enough on think during you feel and guess you, you with has them And rely here do competitors for your just industry crisis?

Bob Lento

I that and an have being from job. say competitors the have Limelight question. done from some a its Limelight, Yeah. said, That's and there That what I around only customers good problems Limelight interesting not hear would really been world.

several bit for standard lower. Prime in Netflix of deliver to so HD others Amazon not XK, rate, European the scale and to people governments down may down definition to read the or Europe that to and have asked go but You have and like Disney and example

we so the there with And are congestion. ISPs help which can ways in their

So of doesn't. having and the as people course like of to capacity Internet think it unlimited

issues in some well during the would that say, some Given been industry And have has really this areas. there time. I performed

on side. them been Some have CDN of

time in crisis. been been should very there's corrective alleviate competitors Some actions put side. this about stepped that. during of feel fellow And I'd to place them say, the good its of that Limelight on But have we've the help ISP overall, way have and up

Tim Horan

Great.

last on five much the could you next your can can percentage be? you've And visibility to from it of few product. for years give thinking a color one you're edge the revenues on and years? now incremental Sajid, so revenues gotten – more over just us set you're intelligence what how getting Just more of Sajid. some lot and Or contribute data

Just hard for mean. to this can from outside really us the what understand

Sajid Malhotra

Sure.

TAM much the than think that edge the larger TAM. is CDN I

let's overall on market So agree just the share. first

it last our is the CDN has But is I think deployed because backbone. competitors that our bring a are pervasive connectivity, rather mile marketplace because private than to unique, around connected the world infrastructure think I we business. we more how of secure with global what of and the

to point we mean that's I then base be now we kind growth and rates small have numbers should the Of are the that something. they an up the unique. what the know, in I from at missed you what we equal rather this But five, this think if that's have is and setting us of three, business $XXX would not some business – years for situation be that are high So leg early is opportunity is. million very years. four, to

Tim Horan

Great. follow-up. got Thank you. but Well, questions more I dozens will of

Sajid Malhotra

see give few you with for just follow-up Thanks. more later. I'll We'll Yeah. room here. we a that

Operator

go from next ahead. will come Mike Our Markets. Capital question Please Latimore with Northland

Mike Latimore

Thanks.

start some to You Would start or turn revenue delay some the talked would into the – could revenue close turn that seeing potentially on potential – about long quarter. in then? Or you how pilots that? into customers and be seeing

Bob Lento

sure unless not a configurations probably you into on customers just the you in for most that to tweak can But to slam the typically, we QX, the when usually way content level popular from they're Meaningful with they side – we migrating mix measured delivery. into build with a have sides, revenue launch. of the on it's the would that our highest another one so of health until occur various make right, most lot TV a or large opportunity ensure traffic cash the performance both do adding of because and fairly the of that don't

a it's usually, after is pilot done. And the so steady ramp fairly

sure that three go pilots into And so months will QX. And is my whatever will you as QX be that. into in rate meaningful for the QX the expectation in QX after be have and with achieved customers doing probably then that'll run we're revenue

Mike Latimore

of Got of percent it. your And top XX kind it. did from customer? customer missed then, I you the top might revenue give have

Sajid Malhotra

did We not.

Mike Latimore

on Okay. Do do you have XX-Q it? that? we until wait the Or

Sajid Malhotra

I the think, you read can we you can meantime. Dan have question we do handy? I Dan that take to hang next it maybe before that looks just for the I'll – up here while back in and

Mike Latimore

All right.

one. last Just

did gaming traffic video You kind and about spike the really – it stuff? was contribute end of online the talked Did that? now OTT through and of margin much Or in April. to

Sajid Malhotra

time consumption. or video. or comes is traffic for of version's sustained new comes game some released from short online traffic sees video but game Fortnite most released, other spikes a OTT a The is release, sustained period if is gaming when from when released, The the a a of

Mike Latimore

it. Got

Dan Boncel

The answer was XX%. to that question

Mike Latimore

Thank Okay. you.

Bob Lento

All right. you, Mike. Thank

Operator

from Please Our go of next will ahead. Hadag AIGH question Partners. come Investment [ph] Lee

Unidentified Analyst

-- the features that's capacity Live the to CDN always ahead in world. of taking thank wonderful -- Ingest. recently excited most and the see very the gentlemen wanted really announcements always the call. really I'm in for introducing keeping Hi, Limelight Really, how of Limelight I for when you latencies new ask I Push my is business stuff

Limelight don't else a was aspect up, make in be I about being private leg seem that security. tow about is which hoo-ha a something And doesn't it a of part lot tremendous The the to understand the network I everyone but something any sort or of security state -- implementing in hear mentioned to would in is the measures Limelight about of great confusion that's that. of It cetera? what's going world now sort of on be et that highlighted the of hear terms

Bob Lento

with security made that or our instead appreciate comment. is we years the products to own security decision we the important buying the Radware few would who's important services and to us. companies. lots a best-in-class partner we did both building here to in with and on Israel ensure Neustar we very based of Limelight We a products that based had that of U.S., and ago in Obviously company At partners

a for is to customers. our The important security us. growing business business It's

quarter of QX one deals with was largest signed existing last the in customers. we of for that security one fact our In

So partner that leveraging a was partner's nice do that. expansion it of relationship and our property our intellectual to

important it's we on It's for Neustar both our for that as and I customers. relationship appreciate said, have us. And value with So really the Radware and front. important we with

Sajid Malhotra

question, lets One that more so and… take

Operator

Cowen. Our next of come from question will Synesael Colby

Colby Synesael

extend you having think back or might I remarks terms Sorry mentioned or But lodging. for -- had payment were in travel some verticals potentially you hospitality it's prepared that have mentioned on. some you your mentioned jumping to considering customers as for in and having you trouble whether

potential you this these with Or And us bad becoming what what as would quarter? it you already Thank debt relates -- in you can the do the a risk to expectations any things? And bigger the started second first second you happened anticipate Have about to talk can talk to us you. quarter? to quarter? in

Sajid Malhotra

with I I odd the think And we in and Colby have some question. industry names really we're very those of customers. Yes. we fortunate this think that's when XXX some customers a good say,

payment customers in of with who and don't bad space has like the the customers I credibility revenue XX% with for other secure we and don't consider of the Our I reads or have accounting debt list any their and liquidity. where issue company think an their a who's which the terms XX

So in that fortunate I very, regard. we very are think

think that. to pay I in going neck all the you to would I sort customers are just on says, the or if commit be do hey have other I a really have you I not over small the while small. this level pain of But go that's, And that XX%, don't a hand, really, world right. that from through around this? I'm we XX% somebody had to listen

than in that more us the us. helps term think it hurts long I

and And days for I I We'll not to XX to think we'll should to don't it my XX sheet. add more target balance continue AR it hurt receivables. think continue that. against should my execute to

call happens, large and kind something of ahead if out. we'll Now that obviously go

first that And good goes of changed will far We able quarter, the as now, but in out feel very to not But can at level, be is it that are still do extent small the collect in we it to and demand, it's right in high lay it I is our want AR. about out right? ways, quality as the that be. there. we nothing to helpful our and And

Colby Synesael

Great.

you you of So quarter material you nothing as guess you've call April be as second would as seen the what again to that consider it terms of out that in from would stands for I nonpayment? XX today

Sajid Malhotra

Yes. Or our for Bob. except inability manage that ahead to go through

Bob Lento

we us we fortunate at with the business momentum Yes. out program be ago. best and many we has it just Saj under a program position I to be come Dan to say, was in good for whether financial closely qualify feel that you we PPP to because quickly and very decision because felt interesting question a days very as very and to analyze for solid that could facing. loan would pass with the going uncertainty made a moved given Colby know government was that a And really it's look that and

a there's coming of seeing from lot administration you're guidance now out the that and small that And giving business companies have back. taken now it other

based we but for So feel technically that pass customers. our deep program qualified that really confidence made though you on the even it that asked confident into opportunity really us question, in -- determination and that our would we do we about to we on our how and the dig and forced business

Colby Synesael

Okay. Thank you.

Operator

session presentation. This as as concludes today's for attending you well call today. our for question-and-answer our conference Thank

You disconnect. may now

Sajid Malhotra

everyone. Thank you

Bob Lento

Thanks everyone.

Edgio (EGIOQ) 23 Apr 202020 Q1 Earnings call transcript