Akamai Reports Third Quarter 2017 Financial Results

Akamai Reports Third Quarter 2017 Financial Results Company exceeds guidance on top and bottom line with revenue of $621 million, GAAP EPS of $0.35 per diluted share and non-GAAP EPS of $0.62 per diluted share

Cambridge, MA | October 24, 2017

Akamai Technologies, Inc. (NASDAQ: AKAM), the worlds largest and most trusted cloud delivery platform, today reported financial results for the third quarter ended September 30, 2017.

Akamai delivered another strong quarter of top and bottom line performance, said Dr. Tom Leighton, CEO of Akamai. Revenue achievement in the quarter was driven by continued strong growth of our Cloud Security Solutions and an acceleration of traffic growth in our Media business.

Akamai delivered the following financial results for the third quarter ended September 30, 2017:

Revenue: Revenue was $621 million, a 6% increase over third quarter 2016 revenue of $584 million and a 6% increase when adjusted for foreign exchange.*

Customer Revenue by Division(1):

Web Division revenue was $328 million, up 14% year-over-year and when adjusted for foreign exchange*

Media Division revenue was $273 million, down 1% year-over-year and when adjusted for foreign exchange*

Enterprise and Carrier Division revenue was $20 million, up 2% year-over-year and up 1% when adjusted for foreign exchange*

Revenue by Solution Category(2):

Performance and Security Solutions revenue was $381 million, up 11% year-over-year and up 10% when adjusted for foreign exchange*

Cloud Security Solutions revenue, a component of Performance and Security, was $121 million, up 27% year-over-year and when adjusted for foreign exchange*

Media Delivery Solutions revenue was $183 million, down 3% year-over-year and when adjusted for foreign exchange*

Services and Support Solutions revenue was $57 million, up 12% year-over-year and when adjusted for foreign exchange*

Revenue by Solution Geography

U.S. revenue was $409 million, up 1% year-over-year

International revenue was $213 million, up 18% year-over-year and when adjusted for foreign exchange*

Revenue from Internet Platform Customers(3):

Revenue from Internet Platform Customers was $51 million, down 13% year-over-year and when adjusted for foreign exchange*

Revenue excluding Internet Platform Customers was $571 million, up 9% year-over-year and up 8% when adjusted for foreign exchange*

Income from operations: GAAP income from operations was $86 million, a 23% decrease from third quarter 2016. GAAP operating margin for the third quarter was 14%, down 5 percentage points from the same period last year.

Non-GAAP income from operations* was $142 million, a 13% decrease from third quarter 2016. Non-GAAP operating margin* for the third quarter was 23%, down 5 percentage points from the same period last year.

Net income: GAAP net income was $61 million, a 20% decrease from third quarter 2016. Non-GAAP net income* was $107 million, an 11% decrease from third quarter 2016.

EPS: GAAP EPS was $0.35 per diluted share, a 19% decrease from third quarter 2016 and a 17% decrease when adjusted for foreign exchange.* The year-over-year GAAP EPS growth rate, when adjusted for both foreign exchange* and the dilutive impact of the Companys acquisition of Soasta, Inc.,* was a decrease of 10%.

Non-GAAP EPS was $0.62 per diluted share, a 9% decrease from third quarter 2016 and an 8% decrease when adjusted for foreign exchange.* The year-over-year non-GAAP EPS growth rate, when adjusted for both foreign exchange* and the dilutive impact of the Companys acquisition of Soasta, Inc.,* was a decrease of 5%.

Adjusted EBITDA*: Adjusted EBITDA was $226 million, a 5% decrease from third quarter 2016. Adjusted EBITDA margin* was 36%, down 5 percentage points from the third quarter of 2016.

Other third quarter 2017 results:

Cash from operations was $236 million, or 38% of revenue

Cash, cash equivalents and marketable securities as of September 30, 2017 was $1.4 billion

The Company spent $129 million to repurchase 2.7 million shares of its common stock at an average price of $47.75 per share

The Company had approximately 170 million shares of common stock outstanding as of September 30, 2017

* See Use of Non-GAAP Financial Measures below for definitions

(1) Customer revenue by division - A customer-focused reporting view that reflects revenue from customers that are managed by the division. During the first quarter of 2017, the divisional categorization of certain customers was adjusted based on how those customer categorizations are currently being managed. The historical presentation of divisional revenue was revised in order to reflect the most recent categorization and to provide a comparable view for all periods presented.

(2) Revenue by solution category - A product-focused reporting view that reflects revenue by solution purchased

(3) Internet Platform Customers - Six customers that are large Internet platform companies: Amazon, Apple, Facebook, Google, Microsoft and Netflix

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-844-578-9671 (or 1-508-637-5655 for international calls) and using passcode 89360127. A live webcast of the call may be accessed at www.akamai.com in the Investor section. In addition, a replay of the call will be available for two weeks following the conference by calling 1-855-859-2056 (or 1-404-537-3406 for international calls) and using passcode 89360127. The archived webcast of this event may be accessed through the Akamai website.

About Akamai As the world's largest and most trusted cloud delivery platform, Akamai makes it easier for its customers to provide the best and most secure digital experiences on any device, anytime, anywhere. Akamai's massively distributed platform is unparalleled in scale with over 200,000 servers ac

LINK:	https://www.akamai.com/uk/en/about/news/press/2017-press/akamai-report...
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