Akamai Technologies Inc AKAM
Q2 2010 Earnings Call Transcript

Transcript Call Date 07/28/2010

Operator: Good day, ladies and gentlemen, and welcome to the Second Quarter 2010 Akamai Technologies Incorporated Earnings Conference Call. My name is Regina and I will be your operator for today. At this time all participants are in listen-only mode. Later we will conduct the question-and-answer session. As a reminder today's conference is being recorded for replay purposes.

I'd now like to turn the conference over to your host for today, Noelle Faris, Director of Investor Relations. You may proceed.

Noelle Faris - Director, IR: Good afternoon and thank you for joining Akamai's investor conference call to discuss our second 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 involving 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 July 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 Relations 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 very well in Q2 (indiscernible) record revenue of $245 million. We continue to see strong demand for our services across all vertical. The top line growth accelerated for the third consecutive quarter, up 20% from the same period last year.

We generated fully normalized net income of $65 million or $0.34 per diluted share. That was up 18% from Q2 of last year. We have seen continued signs of traction in all of our key markets, especially increasing need for cloud computing optimization services for enterprise clients.

Growing traction in digital video being delivered in high quality at a massive scale over the Akamai HD Network and expanded interest for mobile content delivery solutions in a rapid growing market for smartphones, in area where we made an important acquisition in Q2.

We're also very excited to announce today that David Kenny will be joining our management team as President. I'll be back in a few minutes to talk more about David's appointment as well as other important trends in the business.

First, let me turn the call over to J. D. for the detail on Q2. J.D.?

J.D. Sherman - CFO: As Paul just highlighted, our business performed very well in the second quarter. We grew revenue $5 million sequentially and 20% year-over-year to $245.3 million, coming into the upper end of our expected range for the quarter with solid growth in every vertical.

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