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Press Release

Limelight Networks(R) Reports Second Quarter 2010 Results

Company Release - 8/5/2010 4:01 PM ET

TEMPE, AZ -- (MARKET WIRE) -- 08/05/10 -- Limelight Networks, Inc. (NASDAQ: LLNW) today reported second quarter 2010 financial results. Highlights included:

--  Record revenue of $42.2 million

--  Continued expansion of value-added services, now 28% of revenue:

    -- Mobile revenue growth exceeded 40% sequentially

    -- Enterprise web site acceleration revenue growth exceeded 50%
       sequentially

    -- Professional services growth exceeded 75% year-over-year

--  Expanded solution set to include rich media advertising solutions with
    the completion of EyeWonder Inc. acquisition.

--  Continued strategic expansion of solution set to include cloud-based
    video publishing and analytics services, with acquisition of Delve
    Networks after close of quarter.

--  GAAP gross margin of 44% and cash gross margin of 58%

"We are pleased with Limelight Networks' second quarter results. We have designed and deployed a globally distributed, high-performance computing platform which supports an exciting and growing content delivery business. We have built and acquired, and are now offering innovative solutions that run on this platform and address multiple complementary growth sectors. These solutions position Limelight Networks to benefit from three undeniable macro trends that we believe will fuel our growth for the foreseeable future -- the shift of content consumption and advertising dollars online, explosive growth of mobile devices and mobile content consumption, and the shift of software applications and other IT services into the cloud," said Jeff Lunsford, chairman and chief executive officer.

Financial Highlights

For the second quarter of 2010, the company reported revenue of $42.2 million, up 31 percent from second quarter 2009 and up 17 percent sequentially. The company also reported EBITDA, adjusted for share-based compensation, litigation expenses, and acquisition-related expenses, of $5.6 million and a non-GAAP net income, before share-based compensation, litigation expenses, amortization of intangible assets, and acquisition-related expenses, of $4.9 million or 5 cents per share on a fully diluted basis. GAAP net loss was $2.3 million, or 2 cents per basic share.

Capital investments were $9.5 million. The Company ended the quarter with no bank debt and approximately $83 million in cash and short-term marketable securities. A reconciliation of GAAP to non-GAAP net income is included in the below tables.

Third Quarter 2010 Outlook

Limelight Networks anticipates third quarter revenue to be in the range of $46.5 million to $48.5 million.

Financial Tables


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


                                                  June 30,    December 31,
                                                    2010          2009
                                                ------------  ------------
                                                (Unaudited)
                      ASSETS
Current Assets:
  Cash and cash equivalents                     $     60,771  $     89,509
  Marketable securities                               22,073        64,870
  Accounts receivable, net of reserves of
   $8,699 and $9,226 at June 30, 2010 and
   December 31, 2009                                  34,479        26,363
  Income taxes receivable                                787           617
  Prepaid expenses and other current assets            9,721         9,654
                                                ------------  ------------
Total current assets                                 127,831       191,013
Property and equipment, net                           44,651        35,524
Marketable securities                                    996            12
Goodwill                                              94,835           619
Other intangible assets, net                          19,331           370
Other assets                                           7,646         8,132
                                                ------------  ------------
Total assets                                    $    295,290  $    235,670
                                                ============  ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                              $     11,380  $      5,144
  Deferred revenue, current portion                   11,462        12,199
  Capital lease obligation, current portion              115             -
  Other current liabilities                           18,258        14,140
                                                ------------  ------------
Total current liabilities                             41,215        31,483
Deferred revenue, less current portion                     -         1,377
Capital lease obligation, less current portion           168             -
Deferred income tax, less current portion                668            10
                                                ------------  ------------
Total liabilities                                     42,051        32,870
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; 98,315 and 85,011 shares
   issued and outstanding at June 30, 2010 and
   December 31, 2009, respectively                        98            85
  Additional paid-in capital                         368,293       308,537
  Accumulated other comprehensive (loss) income       (1,188)           93
  Accumulated deficit                               (113,964)     (105,915)
                                                ------------  ------------
Total stockholders' equity                           253,239       202,800
                                                ------------  ------------
Total liabilities and stockholders' equity      $    295,290  $    235,670
                                                ============  ============


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



                          Three Months Ended             Six Months Ended
                --------------------------------------  ------------------
                June 30,  March 31, June 30,  March 31,  June 30,  June 30,
                  2010      2010      2009      2009      2010      2009
                --------  --------  --------  --------  --------  --------
Revenue         $ 42,195  $ 36,087  $ 32,333  $ 33,175  $ 78,281  $ 65,508
Costs and
 operating
 expenses
  Cost of
   revenue * †    23,825    20,983    21,078    21,471    44,807    42,549
  General and
   administrat-
   ive * †        11,212     8,893     6,937    12,444    20,105    19,381
  Sales and
   marketing *    11,319     9,387     7,716     8,139    20,706    15,855
  Research &
   development *   3,478     2,645     1,944     1,910     6,122     3,854
  Provision for
   litigation          -         -         -   (65,645)        -   (65,645)
                --------  --------  --------  --------  --------  --------
Total costs and
 operating
 expenses         49,834    41,908    37,675   (21,681)   91,740    15,994

Operating
 (loss) income    (7,639)   (5,821)   (5,342)   54,856   (13,459)   49,514

Interest
 expense              (7)       (1)      (11)      (11)       (8)      (22)
Interest income      255       302       337       383       557       720
Other income
 (expense)            28       (25)     (111)      227         3       116
                --------  --------  --------  --------  --------  --------
(Loss) income
 before taxes     (7,363)   (5,545)   (5,127)   55,455   (12,907)   50,328
Income tax
 (benefit)
 expense          (5,098)      240       171       320    (4,857)      492
                --------  --------  --------  --------  --------  --------
Net (loss)
 income         $ (2,265) $ (5,785) $ (5,298) $ 55,135  $ (8,050) $ 49,836
                ========  ========  ========  ========  ========  ========

Net (loss)
 income per
 share:
  Basic         $  (0.02) $  (0.07) $  (0.06) $   0.66  $  (0.09) $   0.60
  Diluted       $  (0.02) $  (0.07) $  (0.06) $   0.64  $  (0.09) $   0.57

Shares used in
 per share
 calculations:
  Basic           93,889    85,119    84,033    83,515    89,504    83,774
  Diluted         93,889    85,119    84,033    85,968    89,504    87,249



* 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              Six Months Ended
              --------------------------------------  --------------------
              June 30,   March 31, June 30, March 31,  June 30,   June 30,
                2010       2010     2009     2009       2010       2009
              ---------  --------  ------- ---------  ---------  ---------
Supplemental
 financial
 data (in
 thousands):

Share-based
 compensation:

Cost of
 revenues     $     583  $    598  $   582 $     551  $   1,181  $   1,134
General and
 administrat-
 ive              1,577     1,835    1,820     2,131      3,412      3,950
Sales and
 marketing        1,272     1,206    1,253     1,189      2,478      2,442
Research and
 development        728       704      626       616      1,432      1,242
              ---------  --------  ------- ---------  ---------  ---------
Total
 share-based
 compensation $   4,160  $  4,343  $ 4,281 $   4,487  $   8,503  $   8,768
              =========  ========  ======= =========  =========  =========

Depreciation
 and
 amortization:
Network-
 related
 depreciation $   5,324  $  4,778  $ 6,133 $   6,548  $  10,102  $  12,681
Other
 depreciation     1,603       766      532       540      2,370      1,072
              ---------  --------  ------- ---------  ---------  ---------
Total
 depreciation
 and
 amortization $   6,927  $  5,544  $ 6,665 $   7,088  $  12,472  $  13,753
              =========  ========  ======= =========  =========  =========

Net
 (decrease)
 increase in
 cash, cash
 equivalents
 and
 marketable
 securities   $ (64,954) $ (5,531) $ 2,331 $ (12,660) $ (70,485) $ (10,329)
              =========  ========  ======= =========  =========  =========

End of period
 statistics:
Approximate
 number of
 active
 customers        1,655     1,370    1,370     1,365      1,655      1,370
Number of
 employees          609       342      301       296        609        301


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



                                            Three Months Ended
                                ------------------------------------------
                                June 30,   March 31,  June 30,   March 31,
                                  2010       2010       2009       2009
                                ---------  ---------  ---------  ---------


Cash flows from operating
 activities:
  Net (loss) income             $  (2,265) $  (5,785) $  (5,298) $  55,135
  Adjustments to reconcile net
   (loss) income to net cash
    provided by (used
    in) operating activities:
     Depreciation and
      amortization                  6,927      5,544      6,665      7,088
     Share-based compensation       4,160      4,343      4,281      4,487
     Deferred income taxes           (119)         -          -          -
     Income tax benefit
      related to business
      acquisition                  (5,768)         -          -          -
     Provision for litigation           -          -          -    (65,645)
     (Gain) loss on foreign
      currency transactions          (213)        49        205        (31)
     Loss on sale of property
      and equipment                     5         89          -          -
     Accounts receivable
      charges                         588      1,169        622      3,288
     Accretion of marketable
      securities                      300         24       (157)         -
     Changes in operating
      assets and liabilities:
       Accounts receivable           (112)      (305)     7,281     (3,840)
       Prepaid expenses and
        other current assets          (86)       685        721       (593)
       Income taxes receivable        280        (53)       140       (157)
       Other assets                 1,111       (167)       149     (4,311)
       Accounts payable            (1,223)       264     (4,219)    (1,223)
       Deferred revenue               728     (3,105)      (972)      (822)
       Other current
        liabilities                 1,192     (2,081)    (1,918)    (5,144)
       Other long term
        liabilities                   (19)         -          -          -
                                ---------  ---------  ---------  ---------
  Net cash provided by (used
   in) operating activities         5,486        671      7,500    (11,768)
                                ---------  ---------  ---------  ---------

Cash flows from investing
 activities:
    Purchases of property and
     equipment                     (9,480)    (4,250)    (5,308)      (754)
    Purchase of marketable
     securities                    (2,000)   (16,755)   (12,830)         -
    Sale of marketable
     securities                    33,180     28,000      9,100     21,300
    Acquisition of
     businesses, net of cash
     acquired                     (61,903)    (2,004)        22          -
                                ---------  ---------  ---------  ---------
  Net cash (used in) provided
   by investing activities        (40,203)     4,991     (9,016)    20,546
                                 ---------  ---------  ---------  ---------

Cash flows from financing
 activities:
    Proceeds from exercise of
     stock options                    100         27         92         76
                                ---------  ---------  ---------  ---------
  Net cash provided by (used
   in) financing activities           100         27         92         76
                                ---------  ---------  ---------  ---------
  Effect of exchange rate
   changes on cash                     92         97       (205)      (243)
                                ---------  ---------  ---------  ---------
Net (decrease) increase in cash
 and cash equivalents             (34,525)     5,786     (1,629)     8,611
Cash and cash equivalents,
 beginning of period               95,296     89,509    146,791    138,180
                                ---------  ---------  ---------  ---------
Cash and cash equivalents, end
 of period                      $  60,771  $  95,295  $ 145,162  $ 146,791
                                =========  =========  =========  =========



                                  Six Months Ended
                                --------------------
                                June 30,   June 30,
                                  2010       2009
                                ---------  ---------


Cash flows from operating
 activities:
  Net (loss) income             $  (8,050) $  49,836
  Adjustments to reconcile net
   (loss) income to net cash
   provided by (used
   in) operating activities:
    Depreciation and
     amortization                  12,472     13,753
    Share-based compensation        8,503      8,768
    Deferred income taxes            (119)         -
    Income tax benefit
     related to business
     acquisition                   (5,768)         -
    Provision for litigation            -    (65,645)
    (Gain) loss on foreign
     currency transactions           (164)       174
    Loss on sale of property
     and equipment                     94          -
    Accounts receivable
     charges                        1,757      3,910
    Accretion of marketable
     securities                       324       (157)
    Changes in operating
     assets and liabilities:
      Accounts receivable            (417)     3,441
      Prepaid expenses and
       other current assets           599        128
      Income taxes receivable         227        (17)
      Other assets                    944     (4,162)
      Accounts payable               (959)    (5,442)
      Deferred revenue             (2,377)    (1,794)
      Other current
       liabilities                   (889)    (7,061)
      Other long term
       liabilities                    (19)         -
                                ---------  ---------
  Net cash provided by (used
   in) operating activities         6,158     (4,268)
                                ---------  ---------

Cash flows from investing
 activities:
    Purchases of property and
     equipment                    (13,730)    (6,062)
    Purchase of marketable
     securities                   (18,755)   (12,830)
    Sale of marketable
     securities                    61,180     30,400
    Acquisition of
     businesses, net of cash
     acquired                     (63,907)        22
                                ---------  ---------
  Net cash (used in) provided
   by investing activities        (35,212)    11,530
                                ---------  ---------

Cash flows from financing
 activities:
    Proceeds from exercise of
     stock options                    127        168
                                ---------  ---------
  Net cash provided by (used
   in) financing activities           127        168
                                ---------  ---------
  Effect of exchange rate
   changes on cash                    189       (448)
                                ---------  ---------
Net (decrease) increase in cash
 and cash equivalents             (28,738)     6,982
Cash and cash equivalents,
 beginning of period               89,509    138,180
                                ---------  ---------
Cash and cash equivalents, end
 of period                      $  60,771  $ 145,162
                                =========  =========

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, litigation and damage costs and acquisition related expenses 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, provision for litigation, amortization of intangible assets, and acquisition related expenses. 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, litigation and damage costs and acquisition related expenses as EBITDA plus expenses that we do not consider reflective of our ongoing operations. We use EBITDA adjusted for share-based compensation, litigation and damage costs and acquisition related expenses as a supplemental measure to review and assess operating performance. We also believe use of EBITDA adjusted for share-based compensation, litigation and damage costs and acquisition related expenses 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, litigation and damage costs and acquisition related expenses 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, litigation and damage costs and acquisition related expenses have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and EBITDA adjusted for share-based compensation, litigation and damage costs and acquisition related expenses 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, litigation
    costs and acquisition related expenses 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,
    litigation and damage costs and acquisition related expenses 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, litigation and damage costs and acquisition
    related expenses 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, litigation and damage costs and acquisition related expenses only as supplemental support for management's analysis of business performance. Non-GAAP Net Income (loss), EBITDA and EBITDA adjusted for share-based compensation, litigation and damage costs and acquisition related expenses 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             Six Months Ended
                --------------------------------------  ------------------
                June 30,  March 31, June 30,  March 31, June 30,  June 30,
                  2010      2010      2009      2009      2010      2009
                --------  --------  --------  --------  --------  --------

GAAP net (loss)
 income         $ (2,265) $ (5,785) $ (5,298) $ 55,135  $ (8,050) $ 49,836

Provision for
 litigation            -         -         -   (65,645)        -   (65,645)
Share-based
 compensation      4,160     4,343     4,281     4,487     8,503     8,768
Litigation
 defense
 expenses          1,726       392       367     3,945     2,118     4,312
Acquisition
 related
 expenses            409       604         -         -     1,013         -
Amortization of
 intangible
 assets              915       171         -         -     1,087         -
                --------  --------  --------  --------  --------  --------

Non-GAAP net
 income (loss)  $  4,945  $   (275) $   (650) $ (2,078) $  4,671  $ (2,729)
                ========  ========  ========  ========  ========  ========




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



                          Three Months Ended             Six Months Ended
                --------------------------------------  ------------------

                June 30,  March 31, June 30,  March 31, June 30,  June 30,
                  2010      2010      2009      2009      2010      2009
                --------  --------  --------  --------  --------  --------

GAAP net (loss)
 income         $ (2,265) $ (5,785) $ (5,298) $ 55,135  $ (8,050) $ 49,836

   Depreciation
    and
    amortization   6,927     5,544     6,665     7,088    12,472    13,753
   Interest
    expense            7         1        11        11         8        22
   Interest and
    other
    income
    (expense)       (283)     (277)     (226)     (610)     (560)     (836)
   Income tax
    (benefit)
    expense       (5,098)      240       171       320    (4,857)      492
                --------  --------  --------  --------  --------  --------
EBITDA              (712)     (277)    1,323    61,944      (987)   63,267

   Provision
    for
    litigation         -         -         -   (65,645)        -   (65,645)
   Share-based
    compensation   4,160     4,343     4,281     4,487     8,503     8,768
   Litigation
    defense
    expenses       1,726       392       367     3,945     2,118     4,312
   Acquisition
    related
    expenses         409       604         -         -     1,013         -
                --------  --------  --------  --------  --------  --------

EBITDA adjusted
 for share-based
 compensation,
 litigation
 expenses,
 provision for
 litigation,
 and acquisition
 expenses       $  5,583  $  5,062  $  5,971  $  4,731  $ 10,647  $ 10,702
                ========  ========  ========  ========  ========  ========

Conference Call

At approximately 4:30 p.m. EDT (1:30 p.m. PDT), management will host a quarterly conference call for investors. Investors can access this call toll-free at 1-866-578-5747 within the United States or 1-617-213-8054 outside of the U.S. using Participant Passcode 73516687. The conference call will also be audiocast live from http://www.llnw.com and a replay will be available for one week.

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, the integration of acquired businesses and litigation and acquisition related expenses. Forward-looking statements represent the current judgment and expectations of Limelight Networks and 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) provides on-demand software, platform, and infrastructure services that help global businesses reach and engage audiences online or on any mobile or connected device, enabling them to enhance their brand presence, build stronger customer relationships, analyze viewer preferences, optimize their advertising, and manage and monetize their digital assets. For more information, please visit http://www.limelightnetworks.com or follow us on Twitter at www.twitter.com/llnw.

Copyright © 2010 Limelight Networks, Inc. All rights reserved. EyeWonder is a trademark of Limelight Networks, Inc. All product or service names are the property of their respective owners.

CONTACT:
Paul Alfieri
Limelight Networks, Inc.
+1-646-875-8835
palfieri@llnw.com

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

Transfer Agent

American Stock Transfer and Trust Company
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Plaza Level
New York, NY 10038
Phone: (800) 937-5449
Fax: (718) 236-4588
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