Akamai Reports Fourth Quarter 2001 and Full-Year 2001 Financial Results
Contacts:
Felicia Spagnoli
Media Relations
Akamai Technologies
(617) 444 - 2525
spagnoli@akamai.com
Steven J. Wolfe
Investor Relations
Akamai Technologies
(617) 444 - 4724
swolfe@akamai.com
Fourth quarter revenue of $37.1 million
Annual revenue of $163.2 million, up 82% from prior year
Total EdgeSuiteSM customers increased to 152
Fourth quarter EBITDA loss narrows to $14.3 million
Cash and marketable securities of $210.5 million at year-end
CAMBRIDGE, Mass. - January 23, 2002 - Akamai Technologies, Inc. (NASDAQ: AKAM), a leading provider of secure, outsourced e-business infrastructure services and software, today reported financial results for the fourth quarter and full-year ended December 31, 2001. Revenue for the fourth quarter 2001 was $37.1 million. Total revenue for 2001 was $163.2 million, representing an 82% increase over revenue of $89.8 million for 2000.
"Our positive fourth quarter results capped a year marked by strong performance that allowed us to maintain our healthy balance sheet," said George Conrades, chairman and CEO of Akamai. "Revenue of over $37 million, above our $34-36 million forecast, was led by excellent growth in our EdgeSuite service, which accounted for approximately 20% of revenue for the fourth quarter, up from zero just one year earlier."
Fourth quarter 2001 earnings before interest, taxes, depreciation, amortization and other one-time and non-cash charges (EBITDA) were a loss of $14.3 million, lower than the third quarter 2001 EBITDA loss of $16.6 million, and down almost 70% from the fourth quarter 2000 EBITDA loss of $45.1 million.
Conrades continued, "On the revenue side, due in large part to the recurring nature of most of our business, we believe that we will grow revenue sequentially every quarter in 2002. Our plan for this year reflects measured growth despite today`s still uncertain macroeconomic environment."
Normalized net loss for fourth quarter 2001, which is net loss in accordance with GAAP before amortization and other one-time and non-cash charges, totaled $37.8 million, or $0.35 per share, compared to First Call`s consensus summary net loss of $0.39 per share. Third quarter 2001 normalized net loss was $38.2 million, or $0.37 per share. Normalized net loss for full-year 2001 totaled $175.3 million, or $1.70 per share, compared to First Call`s consensus summary net loss of $1.73 per share.
Net loss, in accordance with GAAP, for fourth quarter 2001 was $64.8 million, or $0.60 per share. Net loss, in accordance with GAAP, for full-year 2001 was $2.4 billion or $23.59 per share, including amortization and other one-time and non-cash charges of $2.26 billion, or $21.89 per share.
Fourth Quarter 2001 and Year in Review:
Customers
At the end of the fourth quarter of 2001, Akamai had 152 EdgeSuite customers under recurring contract, compared to 100 at the end of the previous quarter. New EdgeSuite customers in the fourth quarter included All Nippon Airways (ANA), Amtrak, The Centers for Disease Control and Prevention (CDC), Cognos, Corel Corp., Houghton Mifflin, Lowe`s Companies, Inc., and Whirlpool Corp., among others. Resellers accounted for approximately 25% of fourth quarter revenue, up from approximately 16% in the third quarter.
Conrades continued, "With EdgeSuite continuing to grow each quarter as a larger portion of our business, we believe our customer base will be even stronger by the end of the year. That means our number one opportunity is accelerating enterprise adoption of EdgeSuite, which we are doing by improving direct sales efforts and continuing to leverage our increasingly productive channel partners, including many of the major hosting companies and system integrators."
Akamai`s customer base has evolved to include today`s leading enterprises, with dozens of the Fortune 500 companies now using Akamai services, including Apple, Barnes & Noble, Best Buy, Federal Express, General Motors, Target, and Xerox.
Akamai`s visibility grew in the government market by carrying sites for the CDC, the U.S. Geological Survey`s Earthquake Hazards Program (USGS EHP), the U.S. Government Printing Office, and other key agencies.
Akamai also continued its international expansion during the past year, launching Akamai Technologies Japan K.K. through a joint venture with SOFTBANK. The combination of Akamai`s wholly owned European operations plus the efforts of Akamai Technologies Japan K.K. contributed over 10% of revenue in the fourth quarter.
Network
In the fourth quarter, Akamai extended its globally distributed platform to include 13,522 servers. Akamai`s servers are now deployed within 1,036 networks in 66 countries including Internet backbone providers, ISPs, cable and DSL providers, and other telecommunications facilities.
Technology
During the quarter, Akamai continued to enhance its current EdgeSuite offering through the introduction of new solutions for specific verticals and enterprise decision makers. Akamai introduced EdgeSuite for Business Continuity with new features for site protection, Denial of Service (DoS) mitigation, and 100% uptime. The EdgeSuite solution bundles include EdgeSuite for Site Delivery, addressing a CIO`s demands for simplified Web infrastructure, dynamic scalability of infrastructure capacity, and guaranteed performance; and EdgeSuite for Integrated Marketing, providing a foundation for Web marketing initiatives while speeding time to market, improving the customer experience and increasing business insight.
Financials
"Our fourth quarter recurring free cash flow, which we define as EBITDA minus net interest expense minus capital expenditures, was a loss of $24.8 million, an improvement over the $33.5 million loss in the third quarter, and down almost 70% from a $77.4 million quarterly loss a year earlier," said Timothy Weller, chief financial officer at Akamai. "More than any other metric, we believe this performance testifies to the progress we`ve made in cutting operating and capital expenditures, while not increasing debt load, as we drive to produce free cash flow."
In the fourth quarter and full-year 2001, Akamai recorded restructuring charges of $14.3 million and $40.5 million, respectively, in conjunction with headcount reductions and related office space consolidations.
At December 31, 2001, the Company had approximately $210.5 million of cash, cash equivalents, and short-term and long-term marketable securities as compared to $239.6 million at September 30, 2001. Capital expenditures, principally made in connection with network deployment, facilities and information systems, for the quarter were $7.2 million, down from $14.7 million in the third quarter.
At December 31, 2001, the Company had 115.1 million shares of common stock outstanding. At December 31, 2001, common stock outstanding and unexercised stock options and warrants totaled 128.9 million shares.
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