March 11, 2013 Akamai Reaffirms First Quarter 2013 Guidance in Conjunction With Annual Investor Summit
Contacts
Jeff Young
Media Relations
617-444-3913
jyoung@akamai.com
or Natalie Temple
Investor Relations
617-444-3635
ntemple@akamai.com
Company Announces New Cost Classifications and Non-GAAP Reporting Terminology and Methodology
CAMBRIDGE, MA March 11, 2013 Akamai Technologies, Inc. (NASDAQ: AKAM), the leading cloud platform for helping enterprises provide secure, high-performing user experiences on any device, anywhere, is today reaffirming its previously-issued first quarter 2013 financial guidance. In conjunction with its annual Investor Summit being held today, the Company is also announcing the adoption of new reporting methodologies for classifying certain costs in the statements of operations and for calculating normalized net income, which will be referred to as non-GAAP net income going forward. These new reporting methodologies will be reflected beginning in the Companys first quarter 2013 results, and have no impact on the Companys operational performance, financial position or cash flows.
First Quarter 2013 Guidance
The Company is announcing today that it continues to expect first quarter revenue in the range of $352 million to $362 million, adjusted EBITDA margins in the range of 42 to 43 percent and normalized net income per diluted share in the range of $0.50 to $0.52. Under the new methodology described below, the Company expects non-GAAP net income per diluted share in the range of $0.45 to $0.47.
New Reporting Methodologies
Starting in the first quarter 2013, the Company will classify both the cost of services and support and the cost of network expansion and support as costs of revenues in its statements of operations on a historic and prospective basis. The Company previously classified the cost of services and support in the sales and marketing line of the statements of operations and the cost of network expansion and support in the general and administrative line of the statements of operations. The effect of these reclassifications is to increase cost of revenues and decrease operating expenses. The changes do not impact adjusted EBITDA, GAAP and non-GAAP net income or operational free cash flow.
In addition, the Company previously calculated normalized net income by adding the following items on a non-tax-effected basis to net income calculated in accordance with GAAP:
Amortization of other acquired intangible assets;
Stock-based compensation expense, including amortization of capitalised internal-use software;
Restructuring charges and benefits;
Acquisition-related costs and benefits;
Certain gains and losses on investments;
Loss on early extinguishment of debt;
Gains and losses on legal settlements; and
Other non-recurring or unusual items that may arise from time to time.
Starting in the first quarter 2013, the Company will tax effect the items listed above to calculate non-GAAP net income. The Company believes this revised methodology will help investors more easily and consistently evaluate the Companys performance.
Our goal is to align our reporting methodology with the evolution of our business, said Tom Leighton, CEO of Akamai. As we look to the next phase of Akamais growth, it is important that we help investors better understand the dynamics of our core and emerging businesses. These additional disclosures will provide increased granularity to enable measurement of Akamais growth over the long Replacement.
The following table provides an overview of the Companys first quarter 2013 guidance before and after these new reporting methodologies. Additional materials, including historical pro forma schedules for full-year 2010, 2011 and 2012 and quarterly for 2011 and 2012 are available on the Companys Investor Relations website. These schedules represent comparisons of non-GAAP financial measures with the most comparable GAAP financial measures for the related period.
About Akamai
Akamai is the leading cloud platform for helping enterprises provide secure, high-performing user experiences on any device, anywhere. At the core of the Companys solutions is the Akamai Intelligent Platform providing extensive reach, coupled with unmatched reliability, security, visibility and expertise. Akamai removes the complexities of connecting the increasingly mobile world, supporting 24/7 consumer demand, and enabling enterprises to securely leverage the cloud. To learn more about how Akamai is accelerating the pace of innovation in a hyperconnected world, please visit www.akamai.com or blogs.akamai.com, and follow @Akamai on Twitter.
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). We believe that making available non-GAAP financial measures may be helpful to investors as they examine our past performance and future prospects, especially when comparing such results to previous periods. Our management uses non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods. Some of these financial measures are also used by management in its financial and operational decision-making. There are limitations associated with reliance on these non-GAAP financial metrics because they are specific to our operations and financial performance, which may make comparisons with other companies financial results more challenging. These non-GAAP financial measures should only be used as a supplement to results presented in accordance with GAAP.
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March 11, 2013 Akamai Reaffirms First Quarter 2013 Guidance in Conjunction With Annual Investor Summit
