Akamai Technologies Inc AKAM
Q4 2010 Earnings Call Transcript

Transcript Call Date 02/09/2011

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

I would now like to turn the conference over to host for today's call Ms. Natalie Temple, Investor Relations. Please proceed, ma'am.

Natalie Temple - IR: Good afternoon and thank you for joining Akamai's investor conference call to discuss our fourth quarter and full year 2010 financial results. Speaking today will be Paul Sagan, Akamai's 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 February 9, 2011. 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 section of our website.

Now, let me turn the call over to Paul.

Paul Sagan - President and CEO: Thanks, Natellie, and thank you all for joining us today. Akamai performed very well in Q4 posting another record quarter. We also achieved our goal, our top line goal of more than $1 billion in annual revenue, major milestone for the Company. Financial highlights for the fourth quarter include revenue of $285 million, 19% year-over-year increase and 12% increase over the third quarter of 2010.

Fully taxed normalized net income was $77 million or $0.40 per diluted share. That's up 22% from Q4 of last year and up 19% sequentially. For the full year, we grew revenue 19% year-over-year to $1.024 billion, generated fully taxed normalized net income of $272 million or $1.43 per diluted share. That's an increase of 19% in 2009.

We continue to have strong cash flow generation. Full year cash from operation is coming in at just over $400 million. I'll be back in a few minutes to talk more about the trends we're seeing in the marketplace, but first, let me turn the call over to JD to review our results in detail. JD?

J.D. Sherman - CFO: As Paul just highlighted, our business performed very well in the fourth quarter. We grew revenue 19% year-over-year and 12% sequentially to $284.7 million. Coming in at the top end of our guidance for the quarter, all of our key verticals saw solid growth. As a reminder, we have begun to breakout our revenue in the five verticals with commerce now split into commerce B2C and enterprise B2B.

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