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Press Release

Limelight Networks(TM) Reports Third Quarter 2009 Results

Company Release - 11/4/2009 4:00 PM ET

TEMPE, AZ -- (MARKET WIRE) -- 11/04/09 -- Limelight Networks, Inc. (NASDAQ: LLNW) today reported third quarter 2009 financial results.

--  Revenue of $32.5 million

--  Launch of next-generation XD Platform, with Adaptive Intelligence, to
    provide advanced levels of performance and increased insight into real-time
    Internet and delivery conditions

--  Launch of LimelightREACH and LimelightADS, two new services that
    provide turnkey capabilities for customizing and monetizing media delivery
    on mobile and other connected devices
    

"The Internet continues to transform and advance the way people live, work and play around the world. Tomorrow's Internet will involve more real-time data flow and content consumption across a growing mix of computers, laptops, netbooks, game consoles, televisions, set-top boxes, and mobile devices, the combination of which will allow consumers to enjoy content, access information and conduct transactions anytime, anywhere. With our recently announced XD Platform and the mobility and monetization solutions we released during the quarter, we are positioning Limelight Networks to be a core provider of cloud-based services within this transformed world, helping forward-thinking media, entertainment, enterprise and government organizations leverage the next-generation Internet's capabilities to differentiate from their competitors and better serve their constituents," said Jeff Lunsford, CEO of Limelight Networks.

Financial Highlights

For the third quarter of 2009, the company reported revenue of $32.5 million, up 1 percent from $32.3 million in the second quarter of 2009, and EBITDA, adjusted for share-based compensation and litigation costs, of $5.8 million.

Non-GAAP net loss, before stock based compensation and litigation costs, was $.6 million or 1 cent per basic share. GAAP net loss was $5.2 million, or 6 cents per basic share.

Capital investments were $10.6 million. The Company ended the quarter with no bank debt and approximately $153 million in cash and short-term marketable securities. A reconciliation of GAAP to non-GAAP net income is included in the attached tables.

Fourth-Quarter Outlook

Limelight Networks anticipates fourth quarter revenue to be in the range of $32.5 million to $34 million.

Financial Tables

                         LIMELIGHT NETWORKS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except per share data)

                                              September 30,  December 31,
                                                  2009           2008
                                              -------------  -------------
                                               (Unaudited)
                           ASSETS
Current Assets:
  Cash and cash equivalents                   $     102,447  $     138,180
  Marketable securities                              50,367         36,463
  Accounts receivable, net of reserves of
   $9,149 and $7,565 at September 30, 2009
   and December 31, 2008, respectively               27,692         33,482
  Income taxes receivable                               184              7
  Prepaid expenses and other current assets           9,206          7,834
                                              -------------  -------------
Total current assets                                189,896        215,966
Property and equipment, net                          39,653         40,185
Marketable securities, less current portion              16             13
Goodwill                                                619              -
Other intangible assets, net                            404              -
Other assets                                          9,048            628
                                              -------------  -------------
Total assets                                  $     239,636  $     256,792
                                              =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                            $       7,180  $       8,920
  Deferred revenue, current portion                  12,077          9,865
  Provision for litigation                                -         65,645
  Other current liabilities                           8,905         14,928
                                              -------------  -------------
Total current liabilities                            28,162         99,358
Deferred revenue, less current portion                3,006          7,303
                                              -------------  -------------
Total liabilities                                    31,168        106,661
Commitments and contingencies                             -              -
Stockholders' equity:
  Convertible preferred stock, $0.001 par
   value; 7,500 shares authorized; 0 shares
   issued and outstanding                                 -              -
  Common stock, $0.001 par value; 150,000
   shares authorized; 84,667 and 83,405
   shares issued and outstanding at
   September 30, 2009 and
   December 31, 2008, respectively                       85             83
  Additional paid-in capital                        304,466        290,593
  Accumulated other comprehensive income                105            260
  Accumulated deficit                               (96,188)      (140,805)
                                              -------------  -------------
Total stockholders' equity                          208,468        150,131
                                              -------------  -------------
Total liabilities and stockholders' equity    $     239,636  $     256,792
                                              =============  =============



                         LIMELIGHT NETWORKS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                (Unaudited)


                          Three Months Ended            Nine Months Ended
                --------------------------------------  ------------------
                September           September           September September
                   30,    June 30,     30,    June 30,     30,       30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------
Revenue         $ 32,530  $ 32,333  $ 33,116  $ 30,314  $ 98,038  $ 93,632
Costs and
 operating
 expenses
  Cost of
   revenue * †    20,907    21,078    21,557    19,751    63,456    61,980
  General and
   administrative
   * †             7,032     6,937    15,455     9,463    26,413    38,247
  Sales and
   marketing *     8,060     7,716     8,577     8,965    23,915    25,684
  Research &
   development *   2,024     1,944     2,008     1,694     5,878     5,293
  Provision for
   litigation          -         -     2,343     6,743   (65,645)   16,220
                --------  --------  --------  --------  --------  --------
Total costs and
 operating
 expenses         38,023    37,675    49,940    46,616    54,017   147,424

Operating
 income (loss)    (5,493)   (5,342)  (16,824)  (16,302)   44,021   (53,792)

Interest
 expense             (11)      (11)      (11)      (11)      (33)      (43)
Interest income      330       337     1,203     1,334     1,050     4,428
Other income
 (expense)            15      (111)      410      (377)      131       203
                --------  --------  --------  --------  --------  --------
Income (loss)
 before taxes     (5,159)   (5,127)  (15,222)  (15,356)   45,169   (49,204)
Income tax
 expense
 (benefit)            61       171       130       (25)      552       (78)
                --------  --------  --------  --------  --------  --------
Net income
 (loss)         $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617  $(49,126)
                ========  ========  ========  ========  ========  ========

Net income
 (loss) per
 share:
  Basic         $  (0.06) $  (0.06) $  (0.18) $  (0.18) $   0.53  $  (0.59)
  Diluted       $  (0.06) $  (0.06) $  (0.18) $  (0.18) $   0.51  $  (0.59)

Shares used in
 per share
 calculations:
  Basic           84,489    84,033    83,022    82,889    84,012    82,845
  Diluted         84,489    84,033    83,022    82,889    87,708    82,845


*  Includes share-based compensation (see supplemental table for figures)

†  Includes depreciation (see supplemental table for figures)



                         LIMELIGHT NETWORKS, INC.
                        SUPPLEMENTAL FINANCIAL DATA
                              (In thousands)
                                (Unaudited)


                          Three Months Ended            Nine Months Ended
                --------------------------------------  ------------------
                September           September           September September
                   30,    June 30,     30,    June 30,     30,       30,
                  2009      2009      2008      2008      2009      2008
                --------  --------- --------  --------  --------  --------
Supplemental
 financial data
 (in
 thousands):
Share-based
 compensation:
Cost of
 revenues       $    638  $     582 $    594  $    558  $  1,772  $  1,658
General and
 administrative    1,805      1,820    1,669     1,698     5,755     5,031
Sales and
 marketing         1,293      1,253    1,400     1,431     3,734     4,137
Research and
 development         633        626      642       598     1,876     1,723
                --------  --------- --------  --------  --------  --------
Total
 share-based
 compensation   $  4,369  $   4,281 $  4,305  $  4,285  $ 13,137  $ 12,549
                ========  ========= ========  ========  ========  ========

Depreciation
 and amortization:
Network-related
 depreciation   $  6,018  $   6,133 $  6,607  $  6,192  $ 18,699  $ 18,812
Other
 depreciation        627        532      343       311     1,699       901
                --------  --------- --------  --------  --------  --------
Total
 depreciation
 and
 amortization   $  6,645  $   6,665 $  6,950  $  6,503  $ 20,398  $ 19,713
                ========  ========= ========  ========  ========  ========

Capital
 expenditures:
Capital
 expenditures
  (cash and
  accrual)      $ 11,070  $   4,113 $  6,803  $  5,013  $ 19,755  $ 14,911
                ========  ========= ========  ========  ========  ========

Net (decrease)
 increase in
 cash, cash
 equivalents
 and marketable
 securities     $(11,497) $   2,331 $ (7,844) $(10,194) $(21,826) $(20,513)
                ========  ========= ========  ========  ========  ========

End of period
 statistics:
Approximate
 number of
 active
 customers         1,370      1,370    1,304     1,291     1,370     1,304
Number of
 employees           321        301      285       250       321       285



                         LIMELIGHT NETWORKS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)


                          Three Months Ended            Nine Months Ended
                --------------------------------------  ------------------
                September           September           September September
                   30,    June 30,     30,    June 30,     30,       30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------
Cash flows from
 operating
 activities:
  Net income
   (loss)       $ (5,220) $ (5,298) $(15,353) $(15,331) $ 44,617  $(49,126)
  Adjustments
   to reconcile
   net income
   (loss) to
   net cash
   (used in)
    provided
    by operating
    activities:
     Depreciation
      and
      amortization 6,645     6,665     6,950     6,503    20,398    19,713
     Share-based
      compensation 4,369     4,281     4,305     4,285    13,137    12,549
     Deferred
      income
      tax (benefit)
      expense          -         -       129        23         -       (82)
     Provision
      for
      litigation       -         -     2,343     6,743   (65,645)   16,220
      (Income)
       loss on
       foreign
       currency
       exchange        7       205       (30)       12       181       (18)
     Accounts
      receivable
      charges        329       622     1,802     1,925     4,239     5,289
     Accretion
      of marketable
      securities    (298)     (157)       11        21      (455)     (421)
     Loss on
      marketable
      securities       -         -         -        16         -        71
     Changes in
      operating
      assets and
      liabilities:
       Accounts
        receivable(1,648)    7,281   (11,006)   (1,880)    1,793   (15,157)
       Prepaid
        expenses
        and other
        current
        assets    (1,475)      721       417    (4,452)   (1,347)   (3,948)
       Income
        taxes
        receivable  (159)      140         8      (129)     (176)      473
       Other
        assets    (4,152)      149       153        67    (8,314)      784
       Accounts
        payable      244    (4,219)    2,348       (73)   (5,198)   (2,359)
       Accounts
        payable,
        related
        parties        -         -         -      (150)        -      (230)
       Deferred
        revenue     (291)     (972)    4,799      (774)   (2,085)    4,326
       Other
        current
        liabilities  358    (1,918)    3,555    (3,859)   (6,704)    4,733
       Other
        long term
        liabilities    -         -       (64)       64         -         -
                --------  --------  --------  --------  --------  --------
   Net cash
    provided by
    (used in)
    operating
    activities    (1,291)    7,500       367    (6,989)   (5,559)   (7,183)
                --------  --------  --------  --------  --------  --------

Cash flows from
 investing
 activities:
     Purchases
      of
      property
      and
      equipment  (10,586)   (5,308)   (7,870)   (4,231)  (16,648)  (14,536)
     Purchase of
      marketable
      securities (32,905)  (12,830)        -   (30,400)  (45,735)  (65,125)
     Sale of
      marketable
      securities   2,000     9,100    16,000    34,825    32,400    95,025
     Cash
      acquired in
      business
      acquisition      -        22         -         -        22         -
                --------  --------  --------  --------  --------  --------
  Net cash
   provided by
   (used in)
   investing
   activities    (41,491)   (9,016)    8,130       194   (29,961)   15,364
                --------  --------  --------  --------  --------  --------

Cash flows from
 financing
 activities:
     Escrow
      funds
      returned
      from
      share
      repurchase       -         -         -     1,070         -     1,070
     Proceeds
      from
      exercise
      of stock
      options
      and
      warrants        72        92        31        53       240       191
                --------  --------  --------  --------  --------  --------
  Net cash
   provided by
   financing
   activities         72        92        31     1,123       240     1,261
                --------  --------  --------  --------  --------  --------
  Effect of
   exchange
   rate
   changes on
   cash and
   cash
   equivalents        (5)     (205)     (223)      259      (453)     (120)
                --------  --------  --------  --------  --------  --------
Net increase
 (decrease) in
 cash and cash
 equivalents     (42,715)   (1,629)    8,305    (5,413)  (35,733)    9,322
Cash and cash
 equivalents,
 beginning of
 period          145,162   146,791   114,841   120,254   138,180   113,824
                --------  --------  --------  --------  --------  --------
Cash and cash
 equivalents,
 end of period  $102,447  $145,162  $123,146  $114,841  $102,447  $123,146
                ========  ========  ========  ========  ========  ========

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use Non-GAAP net income (loss) and EBITDA adjusted for share-based compensation and litigation and damage costs as a supplemental measure of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance because it allows us to illustrate the impact of the effects of share-based compensation, litigation expenses and provision for litigation. We define EBITDA as GAAP net income (loss) before interest income, interest expense, other income and expense, provision for income taxes, depreciation and amortization. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA adjusted for share-based compensation and litigation and damage costs as EBITDA plus expenses that we do not consider reflective of our ongoing operations. We use EBITDA adjusted for share-based compensation and litigation and damage costs as a supplemental measure to review and assess operating performance. We also believe use of EBITDA adjusted for share-based compensation and litigation and damage costs facilitates investors' use of operating performance comparisons from period to period. In addition, it should be noted that our performance-based executive officer bonus structure is tied closely to our performance as measured in part by certain non-GAAP financial measures.

The terms Non-GAAP net income (loss), EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net income (loss), EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

--  EBITDA and EBITDA adjusted for share-based compensation and litigation
    and damage costs do not reflect our cash expenditures or future
    requirements for capital expenditures or contractual commitments;

--  they do not reflect changes in, or cash requirements for, our working
    capital needs;

--  they do not reflect the cash requirements necessary for litigation
    costs;

--  they do not reflect income taxes or the cash requirements for any tax
    payments;

--  although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will be replaced sometime in the
    future, and EBITDA and EBITDA adjusted for share-based compensation and
    litigation and damage costs do not reflect any cash requirements for such
    replacements;

--  while share-based compensation is a component of operating expense,
    the impact on our financial statements compared to other companies can vary
    significantly due to such factors as the assumed life of the options and
    the assumed volatility of our common stock; and

--  other companies may calculate EBITDA and EBITDA adjusted for share-
    based compensation and litigation and damage costs differently than we do,
    limiting their usefulness as comparative measures.
    

We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP Net Income (loss) and EBITDA adjusted for share-based compensation and litigation and damage costs only as supplemental support for management's analysis of business performance. Non-GAAP Net Income (loss), EBITDA and EBITDA adjusted for share-based compensation and litigation and damage costs are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures.

                         LIMELIGHT NETWORKS, INC.
  Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
                              (In thousands)
                                (Unaudited)

                          Three Months Ended            Nine Months Ended
                --------------------------------------  ------------------
                September           September          September  September
                   30,    June 30,     30,    June 30,     30,       30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------
GAAP net income
 (loss)         $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617  $(49,126)

Provision for
 litigation            -         -     2,343     6,743   (65,645)   16,220
Share-based
 compensation      4,369     4,281     4,305     4,285    13,137    12,549
Litigation
 defense
 expenses            273       367     8,189     2,667     4,585    16,222
                --------  --------  --------  --------  --------  --------

Non-GAAP net
 loss           $   (578) $   (650) $   (515) $ (1,636) $ (3,306) $ (4,135)
                ========  ========  ========  ========  ========  ========



                        LIMELIGHT NETWORKS, INC.
       Reconciliation of GAAP Net Income (Loss) to EBITDA to EBITDA
  Adjusted for Share-Based Compensation and Litigation and Damage Costs
                              (In thousands)
                                (Unaudited)

                          Three Months Ended            Nine Months Ended
                --------------------------------------  ------------------
                September           September           September September
                   30,    June 30,     30,    June 30,     30,       30,
                  2009      2009      2008      2008      2009      2008
                --------  --------  --------  --------  --------  --------
GAAP net income
 (loss)         $ (5,220) $ (5,298) $(15,352) $(15,331) $ 44,617  $(49,126)

  Add:
   depreciation
   and
   amortization    6,645     6,665     6,950     6,503    20,398    19,713
  Add:
   interest
   expense            11        11        11        11        33        43
  Less:
   interest
   and other
   income           (346)     (226)   (1,613)     (957)   (1,181)   (4,631)
  Plus income
   tax (benefit)
   expense            61       171       130       (25)      552       (78)
                --------  --------  --------  --------  --------  --------
EBITDA             1,151     1,323    (9,874)   (9,799)   64,419   (34,079)

  Add:
   provision
   for
   litigation          -         -     2,343     6,743   (65,645)   16,220
  Add:
   share-based
   compensation    4,369     4,281     4,305     4,285    13,137    12,549
  Add:
   litigation
   defense
   expenses          273       367     8,189     2,667     4,585    16,222
                --------  --------  --------  --------  --------  --------

EBITDA adjusted
 for share-based
 compensation,
 litigation and
 damage costs   $  5,793  $  5,971  $  4,963  $  3,896  $ 16,496  $ 10,912
                ========  ========  ========  ========  ========  ========

Conference Call

At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management will host a quarterly conference call for investors. Access to the call will be provided by both telephone dial-in and via live Internet broadcast.

To access this conference call by telephone dial 1-866-831-6234 within the United States or 1-617-213-8854 outside of the U.S. using passcode 80947579. To access the live Internet broadcast, visit http://www.llnw.com. A replay of the call will also be available from http://www.llnw.com for one week following the conclusion of the event.

Safe-Harbor Statement

This press release contains forward-looking statements concerning, among other things, the outlook for the Company's revenues, net loss and stock-based compensation expenses, customer growth, market growth, pricing pressures, expansion into additional market segments, product and services improvements and litigation and related expenses. Forward-looking statements are not guarantees and are subject to a number of risks and uncertainties that could cause actual results to differ materially including, but not limited to, risks and uncertainties discussed in the Company's Annual Report on Form 10K and other filings with the Securities and Exchange Commission and the final review of the results and amendments and preparation of quarterly financial statements, including consultation with our outside auditors. Accordingly, readers are cautioned not to place undue reliance on any forward-looking statements. The Company assumes no duty or obligation to update or revise any forward-looking statements for any reason.

About Limelight Networks, Inc.

Limelight Networks, Inc. (NASDAQ: LLNW) is trusted by the world's most innovative enterprise, entertainment, technology, and software brands to improve the performance and profitability of web sites and end-user experiences. Our scalable, on-demand managed infrastructure solutions provide global reach and consistently high availability, by routing traffic over a private fiber-optic backbone rather than through the often-congested, unpredictable public Internet. For more information, visit our web site (http://www.limelightnetworks.com), read our blog (http://blog.llnw.com), or follow @llnw (http://www.twitter.com/llnw) on Twitter.

Copyright © 2009 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners

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CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-917-297-4241
Email Contact

Media Contacts

Steve Milmore
smilmore@llnw.com
or
Deborah Hohler
dhohler@llnw.com

Investor Contact

ir@llnw.com

Limelight Networks, Inc.

222 S. Mill Ave.
Tempe AZ 85281
602-850-5000
limelight.com

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