http://www.morningstar.com/earnings/14007220-akamai-technologies-inc-akam-q1-2010.aspx

Akamai Technologies Inc AKAM
Q1 2010 Earnings Call Transcript

Transcript Call Date 04/28/2010

Operator: Good day, ladies and gentlemen, and welcome to the First Quarter 2010 Akamai Technologies, Incorporated Earnings Conference Call. My name is Alisha, and I’ll be your coordinator for today. At this time, all participants are in listen-only mode. We will be conducting a question-and-answer session towards the end of this conference. (Operator Instruction). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the call over to Noelle Faris, Director of Investor Relations.

Noelle Faris - Director, IR: Good afternoon, and thank you for joining Akamai’s investor conference call to discuss our first quarter 2010 financial results. Speaking today will be Paul Sagan, Akamai’s President and Chief Executive Officer; and J.D. Sherman, Akamai’s Chief Financial Officer.

Before we get started, please note that today’s comments include forward-looking statements including statements regarding revenue and earnings guidance. These forward-looking statements are subject to risks and uncertainties, and involve a number of factors that could cause actual results to differ materially from those expressed or implied by such statements. Additional information concerning these factors is contained in Akamai’s filings with the SEC including our annual report on Form 10-K, and quarterly reports on Form 10-Q. The forward-looking statements included in this call represent the Company’s view on April 28, 2010. Akamai disclaims any obligation to update these statements to reflect future events or circumstances.

As a reminder, we will be referring to some non-GAAP financial metrics during today’s call. A detailed reconciliation of GAAP and non-GAAP metrics can be found under the news and events portion of the Investor Relation’s section of our website.

Now let me turn the call over to Paul.

Paul Sagan - President and CEO: Thanks, Noelle, and thank you all for joining us today. Akamai performed extremely well in Q1, top line growth accelerated year-over-year as we posted record revenue of $240 million, up 14% from the same period last year. Gross margins improved year-over-year and we achieved our highest adjusted EBITDA margins ever, while generating fully taxed normalized net income of $66 million or $0.35 per diluted share, up 14% from Q1 of last year.

These results came from strong demand for our services in all verticals. Our cash flow generation was also strong, with $88 million of cash from operations in the quarter. And so we’re pleased to announce that our Board has authorized a $150 million extension of the share buyback program we started a year ago.

I’ll be back in a few minutes to talk about some of the key trends we’re seeing in the market, but first let me turn the call over to J.D. for details on Q1. JD?

J.D. Sherman - CFO: Thanks, Paul. As Paul just highlighted our business performed extremely well in the first quarter, and we grew revenue $2 million sequentially and 14% year-over-year to $240 million, coming in above the upper end of our expected range for the quarter.

During the quarter, we saw an acceleration in traffic growth, particularly in media and entertainment, as well as continued solid growth in our value added solutions. We’re particularly pleased with the sequential growth of our business coming off a very strong fourth quarter. E-commerce continued to be our fastest growing vertical increasing 19% over Q1 of last year, but declining 5% compared to Q4 due to normal seasonality primarily in our Advertising Decision Solutions. Excluding Advertising Decision Solutions, e-commerce actually grew modestly from Q4 with growth coming from both Dynamic Site and Application Performance Solutions. These cloud-based solutions continued to gain traction in the marketplace.

Read our Earnings Call Transcript disclaimer.
Add a Comment
E-mail me new replies.