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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
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20-1677033
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value
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NASDAQ Global Select Market
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Large accelerated filer
o
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Accelerated filer
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Non-accelerated filer
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Smaller Reporting Company
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Emerging Growth Company
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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Form 10-K Summary
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our beliefs regarding delivery traffic growth trends and demands for digital content and edge services;
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our expectations regarding revenue, costs, expenses, gross margin, non-GAAP earnings per share, Adjusted EBITDA and capital expenditures;
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our plans regarding investing in our content delivery network, as well as other products and technologies;
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our beliefs regarding the growth of, and competition within, the content delivery industry;
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our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
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our expectations regarding headcount;
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the impact of certain new accounting standards and guidance as well as the time and cost of continued compliance with existing rules and standards;
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our plans with respect to investments in marketable securities;
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our expectations and strategies regarding acquisitions;
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our expectations regarding litigation and other pending or potential disputes;
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our estimations regarding taxes and belief regarding our tax reserves;
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our beliefs regarding the use of Non-GAAP financial measures;
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our approach to identifying, attracting and keeping new and existing customers, as well as our expectations regarding customer turnover;
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the sufficiency of our sources of funding;
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our belief regarding our interest rate risk;
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our beliefs regarding inflation risks;
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our beliefs regarding expense and productivity of and competition for our sales force; and
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our beliefs regarding the significance of our large customers.
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Shift to over the top (OTT) consumption for online video.
Onl
ine video viewership continues to grow, as does the range of devices being used to consume that content. OTT distribution is typically included in major content rights offerings and the range of content available is increasing to incorporate additional and complementary content for distribution online. In our September 2018
State of Online Video
consumer report, we found that global consumers watch approximately 6 hours and 45 minutes of online video per week on average, with Millennials far exceeding 8 hours. Viewing habits are shifting as well. There is an increasing use of a multitude of devices to watch online video both inside and outside the home, ranging from computers and tablets to smartphones and streaming devices, and specific video content is now being produced for these devices. Many top-tier content owners have either
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Broadcast Quality Online Video.
Online video is rapidly growing towards becoming a primary method by which users consume video content, whether it’s via their personal computers, smartphones, tablets, smart televisions, or other connected devices. Yet, consumers continue to expect the same quality experience online as they would have in viewing broadcast television. This puts a significant burden on publishers to produce not just compelling content, but also to deliver it in a way that meets changing consumer expectations. To keep up, organizations have been forced to increase quality to provide a “broadcast-like” experience. For example, several large-scale online video providers are already streaming video in 4K resolution. In most cases, this requires four times the bandwidth of a traditional high definition stream. We believe that as more content is made available in 4K resolution (coupled with increasing sales of 4K-ready devices like televisions and computer monitors), more consumers will want to consume the higher-quality content, resulting in increased strain on internet architecture and infrastructure.
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Growth of digital downloads.
Consumers are becoming more accustomed to making purchases of movies, music, games, and applications digitally from a variety of retailers with the growing availability of higher bandwidth connections to connected devices. As a result, consumers accept larger download sizes. For example, releases of popular games have topped 50 gigabytes (GBs) in size. As digital purchases of massive files increase, we believe this will cause more strain on the internet’s infrastructure. We believe this will result in additional pressure on organizations and service providers to take steps to avoid congestion, latency, lengthening download times, and increasingly interrupted downloads, all of which we believe would undermine an organization’s ability to deliver the best possible digital experience.
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Applications and Websites.
Organizations are responding to consumer demand for their services to be available online and on their mobile devices by building more interactive and engaging digital experiences. While striving to retain consumers and increase share of wallet through modern design and user experience paradigms, the underlying complexity and range of back-end services modern applications and websites rely on is increasing along with their reliance on imagery and multimedia content to engage consumers. We believe that maintaining application and website performance will be critical for organizations, and that their success and longevity will depend on their ability to deliver the level of performance that users expect. This high performance delivery will become harder as demand for services increases and drives up bandwidth consumption in mobile and fixed networks.
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The Internet of Things.
Connected devices communicate with each other and with server-based resources via the internet. Although it is unclear as to how much bandwidth this “background communication” will consume, as more devices become connected and begin communicating with each other and other resources, this traffic will compete with other internet traffic such as streaming video and digital downloads. We believe IoT may complicate an organization’s ability to utilize the internet to deliver high quality digital experiences.
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The continued growth of online video.
Consumers are demanding and consuming video, music, and other forms of rich media over the internet. According to Cisco's
Visual Networking Index
annual report, internet video will account for 82% of consumer internet traffic by 2022. Based on this trend, we expect broadcasters and OTT content distributors will continue to expand their online programming to meet this growing demand and businesses will continue to incorporate video into their digital marketing efforts as a way to further differentiate their message from competitors and generate new opportunities for engagement.
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Mobile First.
We believe that mobile will continue to be increasingly important as a primary method users employ to interact with online content. Mobile devices enable consumers to remain connected and engaged with an organization’s content when they are away from their primary computers or TVs and it’s clear that consumers are employing these devices more often to do so. However, in order for those consumers to remain engaged, the
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The continued migration of information technology (IT) services into the cloud.
Enterprises may seek to decrease infrastructure expenditures by moving to a “cloud-based” model in which application delivery and storage are available on-demand and paid for on an as-needed basis. We anticipate that the core cloud computing market will continue to grow at a rapid pace as the cloud increasingly becomes a mainstream IT strategy embraced by corporate enterprises and government agencies. The core cloud market includes platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) offerings such as content delivery networks (CDN), as well as the cloud-delivered software used to build and manage a cloud environment.
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Increasing use of Edge Computing.
While traditional cloud computing architectures offer the ability to centralize the aggregation and processing of data for applications, this centralization introduces latencies that can be problematic for real-time applications that require instant response. To address these limitations, edge computing is being increasingly utilized to process real-time data for applications such as online gaming, safety and security, and IoT inspection and monitoring to solve these issues in a scalable manner. We expect to see continued interest in the creation of platforms that enable applications to be distributed, managed and scaled as so-called “micro-services” and further split down into individual functional elements that are then scaled on demand within edge services platforms.
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Increasing user expectations for digital experience performance.
Applications and websites are becoming increasingly complex, while user expectations of performance are becoming more demanding. We anticipate that these demanding consumer expectations will drive a continued need for website and web application acceleration and security services. The combination of performance expectation coupled with multi-device delivery creates a considerable challenge for most organizations.
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Increasing need for scalable storage.
The amount of data created each year has grown rapidly, and we believe this rapid growth in data production will create demand for flexible and scalable storage mechanisms to support growing libraries of digital content. We anticipate the need for cloud storage to increase because of the growing demand for video and other types of digital content.
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Global broadband speed increase.
With each passing year, the average broadband connection speed is increasing around the world. The continued increase in speed is illustrative of consumer desire to access multimedia content (e.g. online video, game downloads, interactive web applications) through the internet and how integral rich, digital experiences have become the way people conduct their lives on a daily basis.
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Ability to scale capacity to handle rapidly accelerating demand.
Online businesses must scale delivery of their web presence smoothly as the quantity of their site visitors or audience increases to avoid delays for users. When a large number of users simultaneously access a particular digital content asset such as a video, the operator must be able to meet that surge in demand without making users wait. Rapidly accelerating demand can be related to a single event such as a breaking news story or seasonal shopping or can be spread across an entire library of content, such as when a social media website surges in popularity. The continued increase in video and other rich media consumption and the growing size of digital content objects contributes to concerns that internet bandwidth may be supply constrained in the future.
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Security.
Maintaining effective security is a challenge for any enterprise that operates online. Denial of service attacks, data breaches, viruses, piracy, and other threats can impact companies in many ways, including compromising personal and sensitive information, loss of customer trust and loyalty, loss of revenue, and negative publicity and brand reputation. Businesses require services that employ a number of software and network features to mitigate the risk of unauthorized access to content and network-related attacks against web properties, digital content, and applications. There continues to be an increasing number of high-profile security incidents that raise the awareness and strategic importance of online security.
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Conditional access to content.
Consumers increasingly expect the ability to consume any form of media content online. To meet this expectation, traditional media companies are making their enormous libraries of content, such
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Ability to easily publish and deliver online video.
As consumer demand for online video grows, businesses and organizations are adopting video into their marketing messages. However, there are a host of complexities involved in developing and implementing a “video publishing workflow.” Businesses require intuitive tools that enable them to manage their video portfolio and quickly and efficiently publish and deliver their video content at scale with quality performance. Additionally, many businesses require video content to be converted automatically for playback on any mobile device with the opportunity to integrate advertisements.
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Multi-device delivery.
With the increasing popularity of smartphones and tablets, businesses and organizations must ensure that their content, whether dynamic web pages or video, can display properly in mobile formats. However, adding this requirement to existing content publishing workflows can greatly complicate internal processes that may result in delays for making content available to end-users. Additionally, because many mobile devices have separate requirements, businesses will require features for automatically delivering correctly formatted content.
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Reliability and Consistency.
Throughout the path data must traverse to reach a user, problems with the underlying infrastructure supporting the internet can occur. For example, servers can crash or network connections can fail. Network, data center, or service provider outages can mean frustrated users, lost audiences, and missed revenue opportunities. Businesses require a massively redundant network they can depend on to ensure the reliable and consistent delivery of their digital experiences.
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Content delivery.
Limelight operates one of the world’s largest private networks with the capacity, coverage, and performance to deliver websites, mobile applications, videos, music, software, games, and APIs quickly, reliably, and securely. We have developed and optimized our own software stack to deliver maximum performance over any connection type with a fully integrated suite of software services.
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Video delivery.
Limelight's live, on-demand video delivery services and online video platform help organizations manage, publish, syndicate, analyze, and monetize video content. Limelight simplifies the process of delivering video to any devices and makes it easy to integrate advertising into online video content.
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Cloud security.
Limelight's cloud security services offer a layered defense against malicious app and website attacks and unauthorized content access. DDoS attack protection defends against denial of service attacks, and Web Application Firewall protection guards against attacks that are intended to compromise the back-end services of applications and web sites, in order to deface, disable or steal data. TLS/SSL capabilities encrypt data so it cannot be intercepted in transit, and multiple content security methods are available so only authorized users have access to content.
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Edge Cloud.
Limelight’s edge cloud provides a fast, scalable, and secure infrastructure for low-latency IoT and edge compute applications. It reduces latencies and enables real time and highly interactive applications by moving processing power from a central point to the network edge.
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Origin Storage.
Limelight offers scalable, redundant, geographically diverse cloud storage with the flexibility and automation to support any content delivery workflow. Limelight simplifies and automates the process of ingesting and managing content while delivering fast performance and high availability.
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Densely configured, high-capacity.
Our global private network includes a fiber backbone that connects our delivery Points-of-Presence (PoPs) and enables content to bypass the congested public internet as it is distributed to the end-user. Each Limelight PoP has a high density of fast servers that enable high cache-hit efficiency, providing faster delivery performance.
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Global Scalability.
Limelight's global network infrastructure includes PoPs in more than 40 metropolitan locations in every region of the world. This allows us to cache and deliver content from locations close to where it is being requested. Limelight's network is also directly interconnected with more than 900 major ISPs and last-mile network providers, shortening the distance and number of hops that content needs to take.
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Intelligent software to manage the network.
We have developed proprietary software that manages our global network. This software manages, among other things, the delivery of digital content, the retrieval of dynamic content, storage and retrieval of objects, activity logging, and information reporting.
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slowing demand for our services;
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increasing competition and competitive pricing pressures;
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any inability to provide our services in a cost-effective manner;
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the incurrence of unforeseen expenses, difficulties, complications and delays; and
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other risks described in this report.
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continued price declines arising from significant competition;
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increasing settlement fees for certain peering relationships;
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failure to increase sales of our services;
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increases in electricity, bandwidth and rack space costs or other operating expenses, and failure to achieve decreases in these costs and expenses relative to decreases in the prices we can charge for our services and products;
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failure of our current and planned services and software to operate as expected;
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loss of any significant customers or loss of existing customers at a rate greater than our increase in new customers or our sales to existing customers;
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failure to increase sales of our services to current customers as a result of their ability to reduce their monthly usage of our services to their minimum monthly contractual commitment;
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failure of a significant number of customers to pay our fees on a timely basis or at all or to continue to purchase our services in accordance with their contractual commitments; and
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inability to attract high quality customers to purchase and implement our current and planned services.
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their satisfaction or dissatisfaction with our services;
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the quality and reliability of our content delivery network;
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the prices of our services;
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the prices of services offered by our competitors;
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discontinuation by our customers of their internet or web-based content distribution business;
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mergers and acquisitions affecting our customer base; and
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reductions in our customers’ spending levels.
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cease selling, incorporating or using products or services that incorporate the challenged intellectual property;
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pay substantial damages;
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obtain a license from the holder of the infringed intellectual property right, which license may or may not be available on reasonable terms or at all; or
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redesign products or services.
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our ability to increase sales to existing customers and attract new customers to our content delivery and other services;
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the addition or loss of large customers, or significant variation in their use of our content delivery and other services;
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costs associated with current or future intellectual property lawsuits and other lawsuits;
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service outages or third party security breaches to our platform or to one or more of our customers’ platforms;
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the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure and the adequacy of available funds to meet those requirements;
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the timing and success of new product and service introductions by us or our competitors;
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the occurrence of significant events in a particular period that result in an increase in the use of our content delivery and other services, such as a major media event or a customer’s online release of a new or updated video game or operating system;
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changes in our pricing policies or those of our competitors;
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the timing of recognizing revenue;
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limitations of the capacity of our global network and related systems;
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the timing of costs related to the development or acquisition of technologies, services or businesses;
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the potential write-down or write-off of intangible or other long-lived assets;
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general economic, industry and market conditions (such as fluctuations experienced in the stock and credit markets during times of deteriorated global economic conditions) and those conditions specific to internet usage;
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limitations on usage imposed by our customers in order to limit their online expenses; and
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war, threat of war or terrorist actions, including cyber terrorism targeted at us, our customers, or both, and inadequate cybersecurity.
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a general decline in internet usage;
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third party restrictions on on-line content (including copyright restrictions, digital rights management and restrictions in certain geographic regions);
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system impairments or outages, including those caused by hacking or cyberattacks; and
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a significant increase in the quality or fidelity of off-line media content beyond that available online to the point where users prefer the off-line experience.
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increased expenses associated with sales and marketing, deploying services and maintaining our infrastructure in foreign countries;
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competition from local content delivery service providers, many of which are very well positioned within their local markets;
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challenges caused by distance, language and cultural differences;
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unexpected changes in regulatory requirements preventing or limiting us from operating our global network or resulting in unanticipated costs and delays;
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interpretations of laws or regulations that would subject us to regulatory supervision or, in the alternative, require us to exit a country, which could have a negative impact on the quality of our services or our results of operations;
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longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
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corporate and personal liability for violations of local laws and regulations;
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currency exchange rate fluctuations and repatriation of funds;
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potentially adverse tax consequences;
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credit risk and higher levels of payment fraud; and
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foreign exchange controls that might prevent us from repatriating cash earned in countries outside the United States.
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the difficulty of integrating the operations, services, solutions and personnel of the acquired companies;
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the potential disruption of our ongoing business;
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the potential distraction of management;
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the possibility that our business culture and the business culture of the acquired companies will not be compatible;
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the difficulty of incorporating or integrating acquired technology and rights with or into our other services and solutions;
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expenses related to the acquisition and to the integration of the acquired companies;
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the impairment of relationships with employees and customers as a result of any integration of new personnel;
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employee turnover from the acquired companies or from our current operations as we integrate businesses;
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risks related to the businesses of acquired companies that may continue to impact the businesses following the merger; and
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potential unknown liabilities associated with acquired companies.
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implementing customer orders for services;
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delivering these services; and
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timely and accurate billing for these services.
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announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;
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commencement or resolution of, our involvement in and uncertainties arising from litigation;
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changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock;
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if we or our stockholders sell substantial amounts of our common stock (including shares issued upon the exercise of options and warrants);
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establish that members of the board of directors may be removed only for cause upon the affirmative vote of stockholders owning a majority of our capital stock;
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authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;
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limit who may call special meetings of stockholders;
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prohibit stockholder action by written consent, thereby requiring stockholder actions to be taken at a meeting of the stockholders;
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establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings;
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provide for a board of directors with staggered terms; and
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provide that the authorized number of directors may be changed only by a resolution of our board of directors.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Limelight Networks, Inc.
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Year Ended December 31,
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2018
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2017
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2016
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2015
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2014
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Revenue
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$
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195,670
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$
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184,360
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$
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168,234
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$
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170,912
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|
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$
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162,259
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Cost of revenue:
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||||||||||
Cost of services (1)
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85,920
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|
78,423
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|
78,857
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|
84,818
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|
|
82,176
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|
|||||
Depreciation — network
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16,277
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|
|
18,138
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|
|
18,032
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|
|
17,975
|
|
|
16,673
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|
|||||
Total cost of revenue
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102,197
|
|
|
96,561
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|
96,889
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|
102,793
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|
|
98,849
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|
|||||
Gross profit
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93,473
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|
|
87,799
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|
|
71,345
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|
|
68,119
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|
|
63,410
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|
|||||
Operating expenses:
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|
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|
|
|
|
|
|
|
||||||||||
General and administrative (1)
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32,372
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|
|
32,053
|
|
|
30,042
|
|
|
25,027
|
|
|
28,176
|
|
|||||
Sales and marketing (1)
|
39,553
|
|
|
36,098
|
|
|
32,945
|
|
|
37,868
|
|
|
37,458
|
|
|||||
Research and development (1)
|
24,075
|
|
|
25,342
|
|
|
24,335
|
|
|
28,016
|
|
|
20,965
|
|
|||||
Depreciation and amortization
|
2,313
|
|
|
2,376
|
|
|
2,452
|
|
|
2,929
|
|
|
3,529
|
|
|||||
Provision for litigation
|
—
|
|
|
—
|
|
|
54,000
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|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
98,313
|
|
|
95,869
|
|
|
143,774
|
|
|
93,840
|
|
|
90,128
|
|
|||||
Operating loss
|
(4,840
|
)
|
|
(8,070
|
)
|
|
(72,429
|
)
|
|
(25,721
|
)
|
|
(26,718
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(86
|
)
|
|
(80
|
)
|
|
(918
|
)
|
|
(29
|
)
|
|
(32
|
)
|
|||||
Interest income
|
670
|
|
|
494
|
|
|
123
|
|
|
317
|
|
|
276
|
|
|||||
Settlement and patent license income
|
14,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
(264
|
)
|
|
452
|
|
|
(98
|
)
|
|
1,748
|
|
|
1,821
|
|
|||||
Total other income (expense)
|
15,220
|
|
|
866
|
|
|
(893
|
)
|
|
2,036
|
|
|
2,065
|
|
|||||
Income (loss) from continuing operations before
income taxes
|
10,380
|
|
|
(7,204
|
)
|
|
(73,322
|
)
|
|
(23,685
|
)
|
|
(24,653
|
)
|
|||||
Income tax expense
|
538
|
|
|
426
|
|
|
603
|
|
|
267
|
|
|
203
|
|
|||||
Income (loss) from continuing operations
|
9,842
|
|
|
(7,630
|
)
|
|
(73,925
|
)
|
|
(23,952
|
)
|
|
(24,856
|
)
|
|||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
265
|
|
|||||
Net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
|
$
|
(23,952
|
)
|
|
$
|
(24,591
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.25
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.25
|
)
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.08
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.25
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
0.08
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.25
|
)
|
Weighted average shares used in per share
calculation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
112,114
|
|
|
108,814
|
|
|
104,350
|
|
|
100,105
|
|
|
98,365
|
|
|||||
Diluted
|
120,010
|
|
|
108,814
|
|
|
104,350
|
|
|
100,105
|
|
|
98,365
|
|
|
Limelight Networks, Inc.
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Cost of services
|
$
|
1,815
|
|
|
$
|
1,450
|
|
|
$
|
1,493
|
|
|
$
|
2,047
|
|
|
$
|
1,956
|
|
General and administrative
|
8,458
|
|
|
6,502
|
|
|
7,070
|
|
|
5,398
|
|
|
4,741
|
|
|||||
Sales and marketing
|
2,837
|
|
|
2,470
|
|
|
2,792
|
|
|
2,657
|
|
|
2,317
|
|
|||||
Research and development
|
2,720
|
|
|
2,322
|
|
|
2,104
|
|
|
2,236
|
|
|
1,477
|
|
|||||
Total
|
$
|
15,830
|
|
|
$
|
12,744
|
|
|
$
|
13,459
|
|
|
$
|
12,338
|
|
|
$
|
10,491
|
|
|
Limelight Networks, Inc.
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and marketable
securities, current
|
$
|
50,466
|
|
|
$
|
49,316
|
|
|
$
|
66,187
|
|
|
$
|
73,002
|
|
|
$
|
93,084
|
|
Non-current marketable securities
|
40
|
|
|
40
|
|
|
40
|
|
|
40
|
|
|
40
|
|
|||||
Working capital
|
58,273
|
|
|
44,607
|
|
|
56,643
|
|
|
86,080
|
|
|
100,218
|
|
|||||
Property and equipment, net
|
27,378
|
|
|
28,991
|
|
|
30,352
|
|
|
36,143
|
|
|
32,636
|
|
|||||
Total assets
|
198,925
|
|
|
196,448
|
|
|
208,129
|
|
|
225,627
|
|
|
241,341
|
|
|||||
Provision for litigation
|
9,000
|
|
|
18,000
|
|
|
18,000
|
|
|
—
|
|
|
—
|
|
|||||
Provision for litigation, less current portion
|
—
|
|
|
9,000
|
|
|
27,000
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt, less current portion
|
—
|
|
|
—
|
|
|
—
|
|
|
1,436
|
|
|
135
|
|
|||||
Total stockholders’ equity
|
165,151
|
|
|
144,145
|
|
|
137,568
|
|
|
198,097
|
|
|
212,163
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Revenue
|
$
|
195,670
|
|
|
100.0
|
%
|
|
$
|
184,360
|
|
|
100.0
|
%
|
|
$
|
168,234
|
|
|
100.0
|
%
|
Cost of revenue
|
102,197
|
|
|
52.2
|
%
|
|
96,561
|
|
|
52.4
|
%
|
|
96,889
|
|
|
57.6
|
%
|
|||
Gross profit
|
93,473
|
|
|
47.8
|
%
|
|
87,799
|
|
|
47.6
|
%
|
|
71,345
|
|
|
42.4
|
%
|
|||
Operating expenses
|
98,313
|
|
|
50.2
|
%
|
|
95,869
|
|
|
52.0
|
%
|
|
89,774
|
|
|
53.4
|
%
|
|||
Provision for litigation
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
54,000
|
|
|
32.1
|
%
|
|||
Operating loss
|
(4,840
|
)
|
|
(2.5
|
)%
|
|
(8,070
|
)
|
|
(4.4
|
)%
|
|
(72,429
|
)
|
|
(43.1
|
)%
|
|||
Settlement and patent license income
|
14,900
|
|
|
7.6
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total other income (expense)
|
320
|
|
|
0.2
|
%
|
|
866
|
|
|
0.5
|
%
|
|
(893
|
)
|
|
(0.5
|
)%
|
|||
Income (loss) before income taxes
|
10,380
|
|
|
5.3
|
%
|
|
(7,204
|
)
|
|
(3.9
|
)%
|
|
(73,322
|
)
|
|
(43.6
|
)%
|
|||
Income tax expense
|
538
|
|
|
0.3
|
%
|
|
426
|
|
|
0.2
|
%
|
|
603
|
|
|
0.4
|
%
|
|||
Net income (loss)
|
$
|
9,842
|
|
|
5.0
|
%
|
|
$
|
(7,630
|
)
|
|
(4.1
|
)%
|
|
$
|
(73,925
|
)
|
|
(43.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
these measures do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Non-GAAP net income (loss) and Adjusted EBITDA do not reflect the cash requirements necessary for litigation costs, including provision for litigation and litigation expenses;
|
•
|
these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
|
•
|
these measures 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 Adjusted EBITDA 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 Non-GAAP net income (loss), EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. GAAP net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Settlement and patent license income
|
(14,900
|
)
|
|
—
|
|
|
—
|
|
|||
Provision for litigation
|
—
|
|
|
—
|
|
|
54,000
|
|
|||
Share-based compensation
|
15,830
|
|
|
12,744
|
|
|
13,459
|
|
|||
Litigation expenses
|
2,907
|
|
|
5,518
|
|
|
7,284
|
|
|||
Amortization of intangible assets
|
—
|
|
|
—
|
|
|
14
|
|
|||
Non-GAAP net income
|
$
|
13,679
|
|
|
$
|
10,632
|
|
|
$
|
832
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. GAAP net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Depreciation and amortization
|
18,590
|
|
|
20,514
|
|
|
20,484
|
|
|||
Interest expense
|
86
|
|
|
80
|
|
|
918
|
|
|||
Interest and other (income) expense
|
(406
|
)
|
|
(946
|
)
|
|
(25
|
)
|
|||
Income tax expense
|
538
|
|
|
426
|
|
|
603
|
|
|||
EBITDA
|
$
|
28,650
|
|
|
$
|
12,444
|
|
|
$
|
(51,945
|
)
|
Settlement and patent license income
|
(14,900
|
)
|
|
—
|
|
|
—
|
|
|||
Provision for litigation
|
—
|
|
|
—
|
|
|
54,000
|
|
|||
Share-based compensation
|
15,830
|
|
|
12,744
|
|
|
13,459
|
|
|||
Litigation expenses
|
2,907
|
|
|
5,518
|
|
|
7,284
|
|
|||
Adjusted EBITDA
|
$
|
32,487
|
|
|
$
|
30,706
|
|
|
$
|
22,798
|
|
•
|
sustained decline in our stock price due to a decline in our financial performance due to the loss of key customers, loss of key personnel, emergence of new technologies or new competitors and/or unfavorable outcomes of intellectual property disputes;
|
•
|
decline in overall market or economic conditions leading to a decline in our stock price; and
|
•
|
decline in observed control premiums paid in business combinations involving comparable companies.
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
Bandwidth and co-location fees
|
$
|
57,118
|
|
|
29.2
|
%
|
|
$
|
54,033
|
|
|
29.3
|
%
|
Depreciation - network
|
16,277
|
|
|
8.3
|
%
|
|
18,138
|
|
|
9.8
|
%
|
||
Payroll and related employee costs
|
15,532
|
|
|
7.9
|
%
|
|
16,651
|
|
|
9.0
|
%
|
||
Share-based compensation
|
1,815
|
|
|
0.9
|
%
|
|
1,450
|
|
|
0.8
|
%
|
||
Other costs
|
11,455
|
|
|
5.9
|
%
|
|
6,289
|
|
|
3.4
|
%
|
||
Total cost of revenue
|
$
|
102,197
|
|
|
52.2
|
%
|
|
$
|
96,561
|
|
|
52.4
|
%
|
•
|
Bandwidth expenses, in aggregate dollars, increased due to higher transit costs resulting from increased traffic volumes on our network and expansion into new geographies. As a percentage of total revenue, our bandwidth expenses remained consistent versus the comparable 2017 period due to renegotiated lower rates with our vendors. Our co-location costs remained consistent in aggregate dollars, but slightly decreased as a percentage of total revenue versus the comparable 2017 period due to improved server and operational efficiencies, resulting in additional revenue without corresponding proportional co-location costs.
|
•
|
Depreciation - network decreased due to the lower levels of capital expenditures over the last several years.
|
•
|
Payroll and related employee costs decreased due to lower variable compensation.
|
•
|
Other costs increased primarily due to an increase in international re-seller costs.
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
Payroll and related employee costs
|
$
|
10,614
|
|
|
5.4
|
%
|
|
$
|
12,521
|
|
|
6.8
|
%
|
Professional fees and outside services
|
4,145
|
|
|
2.1
|
%
|
|
3,213
|
|
|
1.7
|
%
|
||
Share-based compensation
|
8,458
|
|
|
4.3
|
%
|
|
6,502
|
|
|
3.5
|
%
|
||
Litigation expenses
|
2,907
|
|
|
1.5
|
%
|
|
5,518
|
|
|
3.0
|
%
|
||
Other costs
|
6,248
|
|
|
3.2
|
%
|
|
4,299
|
|
|
2.3
|
%
|
||
Total general and administrative
|
$
|
32,372
|
|
|
16.5
|
%
|
|
$
|
32,053
|
|
|
17.4
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
Payroll and related employee costs
|
$
|
27,717
|
|
|
14.2
|
%
|
|
$
|
25,064
|
|
|
13.6
|
%
|
Share-based compensation
|
2,837
|
|
|
1.4
|
%
|
|
2,470
|
|
|
1.3
|
%
|
||
Marketing programs
|
2,169
|
|
|
1.1
|
%
|
|
2,002
|
|
|
1.1
|
%
|
||
Other costs
|
6,830
|
|
|
3.5
|
%
|
|
6,562
|
|
|
3.6
|
%
|
||
Total sales and marketing
|
$
|
39,553
|
|
|
20.2
|
%
|
|
$
|
36,098
|
|
|
19.6
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
Payroll and related employee costs
|
$
|
16,710
|
|
|
8.5
|
%
|
|
$
|
18,647
|
|
|
10.1
|
%
|
Share-based compensation
|
2,720
|
|
|
1.4
|
%
|
|
2,322
|
|
|
1.3
|
%
|
||
Other costs
|
4,645
|
|
|
2.4
|
%
|
|
4,373
|
|
|
2.4
|
%
|
||
Total research and development
|
$
|
24,075
|
|
|
12.3
|
%
|
|
$
|
25,342
|
|
|
13.7
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Bandwidth and co-location fees
|
$
|
54,033
|
|
|
29.3
|
%
|
|
$
|
56,596
|
|
|
33.6
|
%
|
Depreciation - network
|
18,138
|
|
|
9.8
|
%
|
|
18,032
|
|
|
10.7
|
%
|
||
Payroll and related employee costs
|
16,651
|
|
|
9.0
|
%
|
|
15,061
|
|
|
9.0
|
%
|
||
Share-based compensation
|
1,450
|
|
|
0.8
|
%
|
|
1,493
|
|
|
0.9
|
%
|
||
Other costs
|
6,289
|
|
|
3.4
|
%
|
|
5,707
|
|
|
3.4
|
%
|
||
Total cost of revenue
|
$
|
96,561
|
|
|
52.4
|
%
|
|
$
|
96,889
|
|
|
57.6
|
%
|
•
|
Bandwidth and co-location fees decreased primarily due to decreased peering and co-location costs reflecting our continued co-location consolidation efforts and contract negotiations with our vendors. Our peering and co-location costs decreased in both aggregate dollars and as a percentage of total revenue due to improved server and operational efficiencies resulting in additional revenue without corresponding proportional costs.
|
•
|
Payroll and related employee costs due to increased operations personnel and higher annual variable compensation; and
|
•
|
Increased other costs primarily due to other cost of sales, travel, fees and licenses and outside labor costs.
|
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Payroll and related employee costs
|
$
|
12,521
|
|
|
6.8
|
%
|
|
$
|
7,845
|
|
|
4.7
|
%
|
Professional fees and outside services
|
3,213
|
|
|
1.7
|
%
|
|
3,289
|
|
|
2.0
|
%
|
||
Share-based compensation
|
6,502
|
|
|
3.5
|
%
|
|
7,070
|
|
|
4.2
|
%
|
||
Litigation expenses
|
5,518
|
|
|
3.0
|
%
|
|
7,284
|
|
|
4.3
|
%
|
||
Other costs
|
4,299
|
|
|
2.3
|
%
|
|
4,554
|
|
|
2.7
|
%
|
||
Total general and administrative
|
$
|
32,053
|
|
|
17.4
|
%
|
|
$
|
30,042
|
|
|
17.9
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Payroll and related employee costs
|
$
|
25,064
|
|
|
13.6
|
%
|
|
$
|
22,379
|
|
|
13.3
|
%
|
Share-based compensation
|
2,470
|
|
|
1.3
|
%
|
|
2,792
|
|
|
1.7
|
%
|
||
Marketing programs
|
2,002
|
|
|
1.1
|
%
|
|
1,416
|
|
|
0.8
|
%
|
||
Other costs
|
6,562
|
|
|
3.6
|
%
|
|
6,358
|
|
|
3.8
|
%
|
||
Total sales and marketing
|
$
|
36,098
|
|
|
19.6
|
%
|
|
$
|
32,945
|
|
|
19.6
|
%
|
•
|
increased payroll and related employee costs due to increased headcount and higher variable compensation;
|
•
|
increased marketing spending related to public relations, advertising and trade shows; and
|
•
|
increased other costs which related to our annual sales meeting, off-set by lower fees and licenses.
|
|
Year Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
Payroll and related employee costs
|
$
|
18,647
|
|
|
10.1
|
%
|
|
$
|
18,270
|
|
|
10.9
|
%
|
Share-based compensation
|
2,322
|
|
|
1.3
|
%
|
|
2,104
|
|
|
1.3
|
%
|
||
Other costs
|
4,373
|
|
|
2.4
|
%
|
|
3,961
|
|
|
2.4
|
%
|
||
Total research and development
|
$
|
25,342
|
|
|
13.7
|
%
|
|
$
|
24,335
|
|
|
14.5
|
%
|
•
|
accounts receivable decreased $5,438 during the year ended December 31, 2018 as a result of timing of collections as compared to a $5,912 increase in the comparable 2017 period;
|
•
|
prepaid expenses and other current assets increased $2,466 during the year ended December 31, 2018, due to an increase in customer acquisition costs off-set by the amortization of prepaid bandwidth expenses and other prepaid expenses, compared to a $342 increase in the comparable 2017 period;
|
•
|
accounts payable and other current liabilities decreased $4,333 during the year ended December 31, 2018, versus a increase of $4,019 for the comparable 2017 period due to timing of vendor payments and the payment of 2017 variable compensation accruals; and
|
•
|
net payments for provision for litigation decreased by $8,940 as a result of the payments received from Akamai under the settlement and patent license agreement.
|
•
|
provision for litigation decreased by $18,000 as a result of our settlement agreement payments made to Akamai;
|
•
|
accounts receivable increased $5,912 during the year ended December 31, 2017 as a result of timing of collections as compared to a $760 increase in the comparable 2016 period;
|
•
|
prepaid expenses and other current assets increased $342 during the year ended December 31, 2017, due to an increase in prepaid bandwidth expenses and VAT receivables, compared to a $4,648 decrease in the comparable 2016 period; and
|
•
|
accounts payable and other current liabilities increased $4,019 during the year ended December 31, 2017, versus a decrease of $1,757 for the comparable 2016 period due to increased variable compensation accruals and the timing of vendor payments.
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
|
Less than
|
|
|
|
|
|
More than
|
||||||||||
|
|
Total
|
|
1 year
|
|
1-3 years
|
|
3-5 years
|
|
5 years
|
||||||||||
Operating Agreements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bandwidth
|
|
$
|
19,492
|
|
|
$
|
16,367
|
|
|
$
|
3,123
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Co-location
|
|
7,419
|
|
|
5,711
|
|
|
1,466
|
|
|
242
|
|
|
—
|
|
|||||
Real estate leases
|
|
4,360
|
|
|
2,266
|
|
|
2,039
|
|
|
55
|
|
|
—
|
|
|||||
Total operating agreements
|
|
31,271
|
|
|
24,344
|
|
|
6,628
|
|
|
299
|
|
|
—
|
|
|||||
Settlement agreement
|
|
9,000
|
|
|
9,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total commitments
|
|
$
|
40,271
|
|
|
$
|
33,344
|
|
|
$
|
6,628
|
|
|
$
|
299
|
|
|
$
|
—
|
|
|
Page
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
25,383
|
|
|
$
|
20,912
|
|
Marketable securities
|
25,083
|
|
|
28,404
|
|
||
Accounts receivable, net
|
26,041
|
|
|
32,381
|
|
||
Income taxes receivable
|
122
|
|
|
98
|
|
||
Prepaid expenses and other current assets
|
14,789
|
|
|
5,397
|
|
||
Total current assets
|
91,418
|
|
|
87,192
|
|
||
Property and equipment, net
|
27,378
|
|
|
28,991
|
|
||
Marketable securities, less current portion
|
40
|
|
|
40
|
|
||
Deferred income taxes
|
1,462
|
|
|
1,506
|
|
||
Goodwill
|
76,407
|
|
|
77,054
|
|
||
Other assets
|
2,220
|
|
|
1,665
|
|
||
Total assets
|
$
|
198,925
|
|
|
$
|
196,448
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
9,216
|
|
|
$
|
4,439
|
|
Deferred revenue
|
1,883
|
|
|
1,187
|
|
||
Income taxes payable
|
124
|
|
|
452
|
|
||
Provision for litigation
|
9,000
|
|
|
18,000
|
|
||
Other current liabilities
|
12,922
|
|
|
18,507
|
|
||
Total current liabilities
|
33,145
|
|
|
42,585
|
|
||
Deferred income taxes
|
152
|
|
|
144
|
|
||
Deferred revenue, less current portion
|
42
|
|
|
16
|
|
||
Provision for litigation, less current portion
|
—
|
|
|
9,000
|
|
||
Other long-term liabilities
|
435
|
|
|
558
|
|
||
Total liabilities
|
33,774
|
|
|
52,303
|
|
||
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; 300,000 shares authorized; 114,246
and 110,824 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
114
|
|
|
111
|
|
||
Additional paid-in capital
|
513,682
|
|
|
502,312
|
|
||
Accumulated other comprehensive loss
|
(10,033
|
)
|
|
(8,328
|
)
|
||
Accumulated deficit
|
(338,612
|
)
|
|
(349,950
|
)
|
||
Total stockholders’ equity
|
165,151
|
|
|
144,145
|
|
||
Total liabilities and stockholders’ equity
|
$
|
198,925
|
|
|
$
|
196,448
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
195,670
|
|
|
$
|
184,360
|
|
|
$
|
168,234
|
|
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of services (1)
|
85,920
|
|
|
78,423
|
|
|
78,857
|
|
|||
Depreciation — network
|
16,277
|
|
|
18,138
|
|
|
18,032
|
|
|||
Total cost of revenue
|
102,197
|
|
|
96,561
|
|
|
96,889
|
|
|||
Gross profit
|
93,473
|
|
|
87,799
|
|
|
71,345
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
General and administrative
|
32,372
|
|
|
32,053
|
|
|
30,042
|
|
|||
Sales and marketing
|
39,553
|
|
|
36,098
|
|
|
32,945
|
|
|||
Research and development
|
24,075
|
|
|
25,342
|
|
|
24,335
|
|
|||
Depreciation and amortization
|
2,313
|
|
|
2,376
|
|
|
2,452
|
|
|||
Provision for litigation
|
—
|
|
|
—
|
|
|
54,000
|
|
|||
Total operating expenses
|
98,313
|
|
|
95,869
|
|
|
143,774
|
|
|||
Operating loss
|
(4,840
|
)
|
|
(8,070
|
)
|
|
(72,429
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(86
|
)
|
|
(80
|
)
|
|
(918
|
)
|
|||
Interest income
|
670
|
|
|
494
|
|
|
123
|
|
|||
Settlement and patent license income
|
14,900
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(264
|
)
|
|
452
|
|
|
(98
|
)
|
|||
Total other income (expense)
|
15,220
|
|
|
866
|
|
|
(893
|
)
|
|||
Income (loss) before income taxes
|
10,380
|
|
|
(7,204
|
)
|
|
(73,322
|
)
|
|||
Income tax expense
|
538
|
|
|
426
|
|
|
603
|
|
|||
Net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
Diluted
|
$
|
0.08
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
Weighted average shares used in per share calculation:
|
|
|
|
|
|
||||||
Basic
|
112,114
|
|
|
108,814
|
|
|
104,350
|
|
|||
Diluted
|
120,010
|
|
|
108,814
|
|
|
104,350
|
|
(1)
|
Cost of services excludes amortization related to intangibles, including existing technologies, customer relationships, and trade names and trademarks, which are included in depreciation and amortization
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments
|
28
|
|
|
59
|
|
|
(84
|
)
|
|||
Foreign exchange translation (loss) gain
|
(1,733
|
)
|
|
2,651
|
|
|
(142
|
)
|
|||
Other comprehensive (loss) gain, net of tax
|
(1,705
|
)
|
|
2,710
|
|
|
(226
|
)
|
|||
Comprehensive income (loss)
|
$
|
8,137
|
|
|
$
|
(4,920
|
)
|
|
$
|
(74,151
|
)
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2015
|
102,299
|
|
|
$
|
102
|
|
|
$
|
477,202
|
|
|
$
|
(10,812
|
)
|
|
$
|
(268,395
|
)
|
|
$
|
198,097
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,925
|
)
|
|
(73,925
|
)
|
|||||
Change in unrealized loss on
available-for-sale
investments, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|||||
Foreign currency translation adjustment, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
(142
|
)
|
|||||
Exercise of common stock options
|
850
|
|
|
—
|
|
|
1,243
|
|
|
—
|
|
|
—
|
|
|
1,243
|
|
|||||
Vesting of restricted stock units
|
3,753
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock units
surrendered in lieu of
withholding taxes
|
(1,167
|
)
|
|
—
|
|
|
(1,979
|
)
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|||||
Issuance of common stock
under employee stock
purchase plan
|
1,324
|
|
|
1
|
|
|
1,497
|
|
|
—
|
|
|
—
|
|
|
1,498
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
12,860
|
|
|
—
|
|
|
—
|
|
|
12,860
|
|
|||||
Balance at December 31, 2016
|
107,059
|
|
|
$
|
107
|
|
|
490,819
|
|
|
(11,038
|
)
|
|
(342,320
|
)
|
|
137,568
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,630
|
)
|
|
(7,630
|
)
|
|||||
Change in unrealized
loss on available-for-sale
investments, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
|||||
Foreign currency translation
adjustment, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
2,651
|
|
|
—
|
|
|
2,651
|
|
|||||
Exercise of common stock
options
|
384
|
|
|
—
|
|
|
1,074
|
|
|
—
|
|
|
—
|
|
|
1,074
|
|
|||||
Vesting of restricted stock units
|
4,004
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock units
surrendered in lieu of
withholding taxes
|
(1,310
|
)
|
|
(1
|
)
|
|
(4,496
|
)
|
|
—
|
|
|
—
|
|
|
(4,497
|
)
|
|||||
Issuance of common stock
under employee stock
purchase plan
|
687
|
|
|
1
|
|
|
1,573
|
|
|
—
|
|
|
—
|
|
|
1,574
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
13,346
|
|
|
—
|
|
|
—
|
|
|
13,346
|
|
|||||
Balance at December 31, 2017
|
110,824
|
|
|
$
|
111
|
|
|
502,312
|
|
|
(8,328
|
)
|
|
(349,950
|
)
|
|
144,145
|
|
||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,496
|
|
|
1,496
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,842
|
|
|
9,842
|
|
|||||
Change in unrealized
loss on available-for-sale
investments, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|||||
Foreign currency translation
adjustment, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,733
|
)
|
|
—
|
|
|
(1,733
|
)
|
|||||
Exercise of common stock
options
|
1,479
|
|
|
1
|
|
|
4,021
|
|
|
—
|
|
|
—
|
|
|
4,022
|
|
|||||
Vesting of restricted stock units
|
3,501
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock units
surrendered in lieu of
withholding taxes
|
(1,154
|
)
|
|
(1
|
)
|
|
(4,792
|
)
|
|
—
|
|
|
—
|
|
|
(4,793
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
18,590
|
|
|
20,514
|
|
|
20,484
|
|
|||
Share-based compensation
|
15,830
|
|
|
12,744
|
|
|
13,459
|
|
|||
Settlement and patent license income
|
(14,900
|
)
|
|
—
|
|
|
—
|
|
|||
Accrual of provision for litigation
|
—
|
|
|
—
|
|
|
54,000
|
|
|||
Foreign currency remeasurement (gain) loss
|
(162
|
)
|
|
798
|
|
|
585
|
|
|||
Deferred income taxes
|
17
|
|
|
(325
|
)
|
|
170
|
|
|||
Gain on sale of property and equipment
|
(137
|
)
|
|
(410
|
)
|
|
(514
|
)
|
|||
Accounts receivable charges
|
902
|
|
|
949
|
|
|
137
|
|
|||
Amortization of premium on marketable securities
|
115
|
|
|
283
|
|
|
67
|
|
|||
Realized loss on sale of marketable securities
|
—
|
|
|
—
|
|
|
32
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
5,438
|
|
|
(5,912
|
)
|
|
(760
|
)
|
|||
Prepaid expenses and other current assets
|
(2,466
|
)
|
|
(342
|
)
|
|
4,648
|
|
|||
Income taxes receivable
|
(31
|
)
|
|
38
|
|
|
39
|
|
|||
Other assets
|
(558
|
)
|
|
270
|
|
|
580
|
|
|||
Accounts payable and other current liabilities
|
(4,333
|
)
|
|
4,019
|
|
|
(1,757
|
)
|
|||
Deferred revenue
|
1,089
|
|
|
(957
|
)
|
|
(822
|
)
|
|||
Income taxes payable
|
(333
|
)
|
|
249
|
|
|
(8
|
)
|
|||
Payments related to litigation, net
|
(9,060
|
)
|
|
(18,000
|
)
|
|
(9,000
|
)
|
|||
Other long term liabilities
|
(121
|
)
|
|
(790
|
)
|
|
(857
|
)
|
|||
Net cash provided by operating activities
|
19,722
|
|
|
5,498
|
|
|
6,558
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of marketable securities
|
(20,631
|
)
|
|
(14,930
|
)
|
|
(45,629
|
)
|
|||
Sale and maturities of marketable securities
|
23,865
|
|
|
30,756
|
|
|
29,315
|
|
|||
Purchases of property and equipment
|
(16,113
|
)
|
|
(20,725
|
)
|
|
(9,563
|
)
|
|||
Proceeds from sale of property and equipment
|
135
|
|
|
97
|
|
|
504
|
|
|||
Net cash used in investing activities
|
(12,744
|
)
|
|
(4,802
|
)
|
|
(25,373
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Principal payments on capital lease obligations
|
—
|
|
|
—
|
|
|
(4,685
|
)
|
|||
Payment of employee tax withholdings related to restricted stock vesting
|
(4,793
|
)
|
|
(4,496
|
)
|
|
(1,982
|
)
|
|||
Cash paid for purchase of common stock
|
(3,800
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from employee stock plans
|
6,173
|
|
|
2,648
|
|
|
2,743
|
|
|||
Net cash used in financing activities
|
(2,420
|
)
|
|
(1,848
|
)
|
|
(3,924
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(87
|
)
|
|
330
|
|
|
(207
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
4,471
|
|
|
(822
|
)
|
|
(22,946
|
)
|
|||
Cash and cash equivalents, beginning of year
|
20,912
|
|
|
21,734
|
|
|
44,680
|
|
|||
Cash and cash equivalents, end of year
|
$
|
25,383
|
|
|
$
|
20,912
|
|
|
$
|
21,734
|
|
Supplement disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
87
|
|
|
$
|
44
|
|
|
$
|
720
|
|
Cash paid during the year for income taxes, net of refunds
|
$
|
892
|
|
|
$
|
486
|
|
|
$
|
542
|
|
Property and equipment acquired through capital leases
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,659
|
|
Network equipment
|
3 years
|
Computer equipment and software
|
3 years
|
Furniture and fixtures
|
3-5 years
|
Other equipment
|
3-5 years
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Certificate of deposit
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Corporate notes and bonds
|
25,115
|
|
|
—
|
|
|
32
|
|
|
25,083
|
|
||||
Total marketable securities
|
$
|
25,155
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
25,123
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
25,115
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
25,083
|
|
Due after one year and through five years
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
|
$
|
25,155
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
25,123
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Certificate of deposit
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Corporate notes and bonds
|
28,472
|
|
|
—
|
|
|
68
|
|
|
28,404
|
|
||||
Total marketable securities
|
$
|
28,512
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
28,444
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
23,924
|
|
|
$
|
—
|
|
|
$
|
62
|
|
|
$
|
23,862
|
|
Due after one year and through five years
|
4,588
|
|
|
—
|
|
|
6
|
|
|
4,582
|
|
||||
|
$
|
28,512
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
28,444
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accounts receivable
|
$
|
27,040
|
|
|
$
|
33,519
|
|
Less: credit allowance
|
(250
|
)
|
|
(240
|
)
|
||
Less: allowance for doubtful accounts
|
(749
|
)
|
|
(898
|
)
|
||
Total accounts receivable, net
|
$
|
26,041
|
|
|
$
|
32,381
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Settlement and patent license receivable
|
$
|
5,960
|
|
|
$
|
—
|
|
Prepaid bandwidth and backbone
|
1,395
|
|
|
1,487
|
|
||
VAT receivable
|
2,022
|
|
|
1,454
|
|
||
Prepaid expenses and insurance
|
1,816
|
|
|
1,870
|
|
||
Vendor deposits and other
|
3,596
|
|
|
586
|
|
||
Total prepaid expenses and other current assets
|
$
|
14,789
|
|
|
$
|
5,397
|
|
Balance, December 31, 2016
|
$
|
76,243
|
|
Foreign currency translation adjustment
|
811
|
|
|
Balance, December 31, 2017
|
77,054
|
|
|
Foreign currency translation adjustment
|
(647
|
)
|
|
Balance, December 31, 2018
|
$
|
76,407
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Network equipment
|
$
|
105,760
|
|
|
$
|
107,916
|
|
Computer equipment and software
|
8,711
|
|
|
9,801
|
|
||
Furniture and fixtures
|
703
|
|
|
2,432
|
|
||
Leasehold improvements
|
4,587
|
|
|
3,969
|
|
||
Other equipment
|
156
|
|
|
183
|
|
||
|
119,917
|
|
|
124,301
|
|
||
Less: accumulated depreciation
|
(92,539
|
)
|
|
(95,310
|
)
|
||
Total property and equipment, net
|
$
|
27,378
|
|
|
$
|
28,991
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accrued compensation and benefits
|
$
|
7,528
|
|
|
$
|
12,181
|
|
Accrued cost of revenue
|
2,361
|
|
|
3,170
|
|
||
Accrued legal fees
|
22
|
|
|
383
|
|
||
Deferred rent
|
145
|
|
|
434
|
|
||
Other accrued expenses
|
2,866
|
|
|
2,339
|
|
||
Total other current liabilities
|
$
|
12,922
|
|
|
$
|
18,507
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
9,842
|
|
|
$
|
(7,630
|
)
|
|
$
|
(73,925
|
)
|
Basic weighted average outstanding shares of common stock
|
112,114
|
|
|
108,814
|
|
|
104,350
|
|
|||
Basic weighted average outstanding shares of common stock
|
112,114
|
|
|
108,814
|
|
|
104,350
|
|
|||
Dilutive effect of stock options, restricted stock units, and other equity incentive plans
|
7,896
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average outstanding shares of common stock
|
120,010
|
|
|
108,814
|
|
|
104,350
|
|
|||
Basic net income (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
Diluted net income (loss) per share
|
$
|
0.08
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.71
|
)
|
|
Years Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Employee stock purchase plan
|
—
|
|
|
80
|
|
|
114
|
|
Stock options
|
3,288
|
|
|
2,643
|
|
|
71
|
|
Restricted stock units
|
451
|
|
|
3,332
|
|
|
1,122
|
|
|
3,739
|
|
|
6,055
|
|
|
1,307
|
|
|
|
|
Unrealized
|
|
|
||||||
|
|
|
Gains (Losses) on
|
|
|
||||||
|
Foreign
|
|
Available for
|
|
|
||||||
|
Currency
|
|
Sale Securities
|
|
Total
|
||||||
Balance, December 31, 2017
|
$
|
(8,259
|
)
|
|
$
|
(69
|
)
|
|
$
|
(8,328
|
)
|
Other comprehensive gain (loss) before reclassifications
|
(1,733
|
)
|
|
28
|
|
|
(1,705
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current period other comprehensive gain (loss)
|
(1,733
|
)
|
|
28
|
|
|
(1,705
|
)
|
|||
Balance, December 31, 2018
|
$
|
(9,992
|
)
|
|
$
|
(41
|
)
|
|
$
|
(10,033
|
)
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|||
|
(In thousands)
|
|
|
|||
Balance at December 31, 2015
|
14,667
|
|
|
$
|
3.33
|
|
Granted
|
3,589
|
|
|
2.22
|
|
|
Exercised
|
(850
|
)
|
|
1.46
|
|
|
Cancelled/Forfeitures
|
(1,389
|
)
|
|
3.38
|
|
|
Balance at December 31, 2016
|
16,017
|
|
|
3.18
|
|
|
Granted
|
2,082
|
|
|
4.56
|
|
|
Exercised
|
(384
|
)
|
|
2.79
|
|
|
Cancelled/Forfeitures
|
(752
|
)
|
|
11.04
|
|
|
Balance at December 31, 2017
|
16,963
|
|
|
2.99
|
|
|
Granted
|
2,126
|
|
|
3.50
|
|
|
Exercised
|
(1,479
|
)
|
|
2.72
|
|
|
Cancelled/Forfeitures
|
(667
|
)
|
|
5.23
|
|
|
Balance at December 31, 2018
|
16,943
|
|
|
2.99
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||||||||||
Exercise Price
|
|
Number of
Options
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|
Weighted
Average
Exercise
Price
|
|
Number of
Options
Exercisable
|
|
Weighted
Average
Exercise
Price
|
|||||||
|
|
(In thousands)
|
|
|
|
|
|
(In thousands)
|
|
|
|||||||
$ 0.00 — $ 1.50
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
$ 1.51 — $ 3.00
|
|
11,142
|
|
|
5.7
|
|
|
2.26
|
|
|
9,977
|
|
|
2.26
|
|
||
$ 3.01 — $ 4.50
|
|
3,379
|
|
|
7.6
|
|
|
3.59
|
|
|
1,268
|
|
|
3.77
|
|
||
$ 4.51 — $ 6.00
|
|
2,209
|
|
|
5.7
|
|
|
5.32
|
|
|
1,324
|
|
|
5.25
|
|
||
$ 6.01 — $ 7.50
|
|
28
|
|
|
1.8
|
|
|
6.24
|
|
|
28
|
|
|
6.24
|
|
||
$ 7.51 — $ 15.00
|
|
185
|
|
|
2.1
|
|
|
8.05
|
|
|
185
|
|
|
8.05
|
|
||
|
|
16,943
|
|
|
|
|
|
|
12,782
|
|
|
|
|
Years Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
RSUs with service-based vesting conditions
|
4,248
|
|
|
5,809
|
|
|
6,673
|
|
|
Number of
Units
|
|
Weighted
Average
Fair Value
|
|||
|
(In thousands)
|
|
|
|||
Balance at December 31, 2015
|
6,265
|
|
|
$
|
2.70
|
|
Granted
|
5,024
|
|
|
1.76
|
|
|
Vested
|
(3,753
|
)
|
|
2.49
|
|
|
Forfeitures
|
(863
|
)
|
|
2.29
|
|
|
Balance at December 31, 2016
|
6,673
|
|
|
2.16
|
|
|
Granted
|
3,435
|
|
|
3.05
|
|
|
Vested
|
(4,004
|
)
|
|
2.16
|
|
|
Forfeitures
|
(295
|
)
|
|
2.23
|
|
|
Balance at December 31, 2017
|
5,809
|
|
|
2.68
|
|
|
Granted
|
2,475
|
|
|
3.88
|
|
|
Vested
|
(3,501
|
)
|
|
2.49
|
|
|
Forfeitures
|
(535
|
)
|
|
3.39
|
|
|
Balance at December 31, 2018
|
4,248
|
|
|
3.45
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Share-based compensation expense by type:
|
|
|
|
|
|
||||||
Stock options
|
$
|
4,238
|
|
|
$
|
3,813
|
|
|
$
|
3,742
|
|
Restricted stock units
|
10,753
|
|
|
8,402
|
|
|
9,121
|
|
|||
ESPP
|
839
|
|
|
529
|
|
|
596
|
|
|||
Total share-based compensation expense
|
$
|
15,830
|
|
|
$
|
12,744
|
|
|
$
|
13,459
|
|
Share-based compensation expense included in the consolidated statements of operations:
|
|||||||||||
Cost of services
|
$
|
1,815
|
|
|
$
|
1,450
|
|
|
$
|
1,493
|
|
General and administrative expense
|
8,458
|
|
|
6,502
|
|
|
7,070
|
|
|||
Sales and marketing expense
|
2,837
|
|
|
2,470
|
|
|
2,792
|
|
|||
Research and development expense
|
2,720
|
|
|
2,322
|
|
|
2,104
|
|
|||
Total share-based compensation expense
|
$
|
15,830
|
|
|
$
|
12,744
|
|
|
$
|
13,459
|
|
2019
|
$
|
2,266
|
|
2020
|
1,309
|
|
|
2021
|
730
|
|
|
2022
|
55
|
|
|
2023
|
—
|
|
|
Thereafter
|
—
|
|
|
Total minimum payments
|
$
|
4,360
|
|
2019
|
$
|
22,078
|
|
2020
|
3,685
|
|
|
2021
|
904
|
|
|
2022
|
244
|
|
|
2023
|
—
|
|
|
Thereafter
|
—
|
|
|
Total minimum payments
|
$
|
26,911
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
8,648
|
|
|
$
|
(8,963
|
)
|
|
$
|
(74,130
|
)
|
Foreign
|
1,732
|
|
|
1,759
|
|
|
808
|
|
|||
|
$
|
10,380
|
|
|
$
|
(7,204
|
)
|
|
$
|
(73,322
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Share-based compensation
|
$
|
6,552
|
|
|
$
|
6,047
|
|
Net operating loss and tax credit carry-forwards
|
46,569
|
|
|
43,543
|
|
||
Legal settlement
|
2,281
|
|
|
6,738
|
|
||
Deferred revenue
|
418
|
|
|
1,084
|
|
||
Accounts receivable reserves
|
188
|
|
|
224
|
|
||
Fixed assets
|
2,687
|
|
|
2,222
|
|
||
Other
|
177
|
|
|
311
|
|
||
Total deferred tax assets
|
58,872
|
|
|
60,169
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Prepaid expenses
|
(306
|
)
|
|
(81
|
)
|
||
Other
|
(107
|
)
|
|
(8
|
)
|
||
Total deferred tax liabilities
|
(413
|
)
|
|
(89
|
)
|
||
Valuation allowance
|
(57,149
|
)
|
|
(58,718
|
)
|
||
Net deferred tax assets
|
$
|
1,310
|
|
|
$
|
1,362
|
|
|
Unrecognized
Tax Benefits
|
||
Balance at January 1, 2017
|
$
|
1,830
|
|
Additions for tax positions related to current year
|
—
|
|
|
Additions for tax positions related to prior years
|
26
|
|
|
Settlements
|
—
|
|
|
Adjustment related to foreign currency translation
|
3
|
|
|
Reductions related to the lapse of applicable statute of limitations
|
(42
|
)
|
|
Reduction for tax positions of prior years
|
—
|
|
|
Balance at December 31, 2017
|
1,817
|
|
|
Additions for tax positions related to current year
|
—
|
|
|
Additions for tax positions related to prior years
|
20
|
|
|
Settlements
|
(34
|
)
|
|
Adjustment related to foreign currency translation
|
—
|
|
|
Reductions related to the lapse of applicable statute of limitations
|
(3
|
)
|
|
Reduction for tax positions of prior years
|
—
|
|
|
Balance at December 31, 2018
|
$
|
1,800
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Americas
|
$
|
118,462
|
|
61
|
%
|
|
$
|
116,112
|
|
63
|
%
|
|
$
|
100,421
|
|
60
|
%
|
EMEA
|
38,015
|
|
19
|
%
|
|
37,212
|
|
20
|
%
|
|
31,326
|
|
18
|
%
|
|||
Asia Pacific
|
39,193
|
|
20
|
%
|
|
31,036
|
|
17
|
%
|
|
36,487
|
|
22
|
%
|
|||
Total revenue
|
$
|
195,670
|
|
100
|
%
|
|
$
|
184,360
|
|
100
|
%
|
|
$
|
168,234
|
|
100
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Country / Region
|
|
|
|
|
|
||||||
United States / Americas
|
$
|
113,102
|
|
|
$
|
112,166
|
|
|
$
|
94,105
|
|
United Kingdom / EMEA
|
$
|
26,672
|
|
|
$
|
22,456
|
|
|
$
|
15,290
|
|
Japan / Asia Pacific
|
$
|
20,452
|
|
|
$
|
18,585
|
|
|
$
|
19,967
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Long-lived Assets
|
|
|
|
|
|
||||||
Americas
|
$
|
18,349
|
|
|
$
|
17,119
|
|
|
$
|
18,665
|
|
International
|
9,029
|
|
|
11,872
|
|
|
11,687
|
|
|||
Total long-lived assets
|
$
|
27,378
|
|
|
$
|
28,991
|
|
|
$
|
30,352
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
Total
|
|
Quoted Prices In Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (2)
|
$
|
752
|
|
|
$
|
752
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificate of deposit (1)
|
40
|
|
|
—
|
|
|
40
|
|
|
—
|
|
||||
Corporate notes and bonds (1)
|
25,083
|
|
|
—
|
|
|
25,083
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
25,875
|
|
|
$
|
752
|
|
|
$
|
25,123
|
|
|
$
|
—
|
|
(1)
|
Classified in marketable securities
|
(2)
|
Classified in cash and cash equivalents
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
Total
|
|
Quoted Prices In Active Markets for Identical Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (2)
|
$
|
6,789
|
|
|
$
|
6,789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificate of deposit (1)
|
40
|
|
|
—
|
|
|
40
|
|
|
—
|
|
||||
Corporate notes and bonds (1)
|
28,404
|
|
|
—
|
|
|
28,404
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
35,233
|
|
|
$
|
6,789
|
|
|
$
|
28,444
|
|
|
$
|
—
|
|
(1)
|
Classified in marketable securities
|
(2)
|
Classified in cash and cash equivalents
|
|
For the Three Months Ended
|
||||||||||||||
|
March 31,
2018
|
|
June 30,
2018 (a)
|
|
Sept. 30,
2018
|
|
Dec. 31,
2018
|
||||||||
Revenue
|
$
|
52,114
|
|
|
$
|
50,249
|
|
|
$
|
49,315
|
|
|
$
|
43,992
|
|
Gross profit
|
$
|
26,680
|
|
|
$
|
24,847
|
|
|
$
|
24,035
|
|
|
$
|
17,910
|
|
Net income (loss)
|
$
|
149
|
|
|
$
|
15,159
|
|
|
$
|
(272
|
)
|
|
$
|
(5,193
|
)
|
Basic net income (loss) per share
|
$
|
—
|
|
|
$
|
0.14
|
|
|
$
|
—
|
|
|
$
|
(0.05
|
)
|
Diluted net income (loss) per share
|
$
|
—
|
|
|
$
|
0.13
|
|
|
$
|
—
|
|
|
$
|
(0.05
|
)
|
Basic weighted average common shares outstanding
|
110,761
|
|
|
111,356
|
|
|
112,760
|
|
|
113,578
|
|
||||
Diluted weighted average common shares outstanding
|
118,909
|
|
|
120,033
|
|
|
112,760
|
|
|
113,578
|
|
|
For the Three Months Ended
|
||||||||||||||
|
March 31,
2017
|
|
June 30,
2017
|
|
Sept. 30,
2017
|
|
Dec. 31,
2017
|
||||||||
Revenue
|
$
|
44,735
|
|
|
$
|
45,370
|
|
|
$
|
46,069
|
|
|
$
|
48,186
|
|
Gross profit
|
$
|
21,171
|
|
|
$
|
21,375
|
|
|
$
|
22,276
|
|
|
$
|
22,977
|
|
Net loss
|
$
|
(3,337
|
)
|
|
$
|
(1,625
|
)
|
|
$
|
(1,756
|
)
|
|
$
|
(912
|
)
|
Basic and diluted net loss per share
|
$
|
(0.03
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
Basic and diluted weighted average common shares
outstanding
|
107,363
|
|
|
108,422
|
|
|
109,342
|
|
|
110,128
|
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
|
|
Weighted-average exercise price of outstanding options, warrants and rights (b)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
|
||||
Equity compensation plans approved by security holders
|
16,943
|
|
|
$
|
2.99
|
|
|
8,336
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
16,943
|
|
|
$
|
2.99
|
|
|
8,336
|
|
(a)
|
Documents included in this annual report on Form 10-K.
|
(1)
|
Financial Statements.
See Item 8 — Financial Statements and Supplementary Data included in this annual report on Form 10-K.
|
(2)
|
Financial Schedules.
The schedule listed below is filed as part of this annual report on Form 10-K:
|
|
Page
|
Schedule II — Valuation and Qualifying Accounts
|
(b)
|
Exhibits.
The exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits and are incorporated herein.
|
Exhibit
Number
|
|
Exhibit Title
|
|
|
|
3.1(1)
|
|
|
|
|
|
3.2(2)
|
|
|
|
|
|
4.1(3)
|
|
|
|
|
|
10.1(3)
|
|
|
|
|
|
10.2(3)
|
|
|
|
|
|
10.3(3)
|
|
|
|
|
|
10.3.01(4)
|
|
|
|
|
|
10.4(5)
|
|
|
|
|
|
10.5(6)
|
|
|
|
|
|
10.6(7)
|
|
|
|
|
|
10.7(8)
|
|
|
|
|
|
10.8(9)
|
|
|
|
|
|
10.10(10)
|
|
|
|
|
|
10.10.01(11)
|
|
|
|
|
|
10.11(12)
|
|
|
|
|
|
10.11.01(13)
|
|
|
|
|
|
10.11.02(14)
|
|
|
|
|
|
10.11.03(15)
|
|
|
|
|
|
10.12(16)
|
|
|
|
|
|
10.14(17)
|
|
|
|
|
|
10.14.01(18)
|
|
|
|
|
|
10.14.02(19)
|
|
|
|
|
|
10.15(20)
|
|
|
|
|
|
10.15.01(21)
|
|
|
|
|
|
10.16(22)
|
|
|
|
|
|
10.16.01(23)
|
|
|
|
|
|
10.16.02(24)
|
|
|
|
|
|
10.16.03(25)
|
|
|
|
|
10.17(26)
|
|
|
|
|
|
10.17.01(27)
|
|
|
|
|
|
10.18(28)
|
|
|
|
|
|
10.19(29)
|
|
|
|
|
|
10.16(30)
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
24.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS
|
|
XBRL INSTANCE DOCUMENT.
|
|
|
|
101.SCH
|
|
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT.
|
|
|
|
101.CAL
|
|
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT.
|
|
|
|
101.DEF
|
|
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT.
|
|
|
|
101.LAB
|
|
XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT.
|
|
|
|
101.PRE
|
|
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT.
|
(1)
|
Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on June 14, 2011.
|
(2)
|
Incorporated by reference to Exhibit 3.2 of the Registrant's Form 8-K filed on February 19, 2013.
|
(3)
|
Incorporated by reference to the same number exhibit of the Registrant’s Form S-1 Registration Statement (Registration No. 333-141516), declared effective by the Securities and Exchange Commission on June 7, 2007.
|
(4)
|
Incorporated by reference to Exhibit 10.3.01 of the Registrant’s Quarterly Report on Form 10-Q filed on October 27, 2016.
|
(5)
|
Incorporated by reference to Exhibit 10.12 of the Registrant’s Form S-1 Registration Statement (Registration No. 333-141516), declared effective by the Securities and Exchange Commission on June 7, 2007.
|
(6)
|
Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K filed on May 19, 2009.
|
(7)
|
Incorporated by reference to Exhibit (a)(1)(I) of the Registrant’s Schedule TO filed on May 15, 2008.
|
(8)
|
Incorporated by reference to Exhibit (a)(1)(J) of the Registrant’s Schedule TO filed on May 15, 2008.
|
(9)
|
Incorporated by reference to Exhibit 10.32 of the Registrant’s Quarterly Report on Form 10-Q filed on November 5, 2010.
|
(10)
|
Incorporated by reference to Exhibit 10.21 of the Registrant’s Annual Report on Form 10-K filed on March 1, 2013.
|
(11)
|
Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(12)
|
Incorporated by reference to Exhibit 10.22 of the Registrant's Annual Report on Form 10-K filed on March 1, 2013.
|
(13)
|
Incorporated by reference to Exhibit 10.3 of the Registrant's Form 8-K filed on June 19, 2015.
|
(14)
|
Incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(15)
|
Filed herewith.
|
(16)
|
Incorporated by reference to Exhibit 10.23 of the Registrant's Quarterly Report on Form 10-Q filed on August 8, 2013.
|
(17)
|
Incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed on February 17, 2015.
|
(18)
|
Incorporated by reference to Exhibit 10.2 of the Registrant's Form 8-K filed on June 19, 2015.
|
(19)
|
Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(20)
|
Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed on May 1, 2015.
|
(21)
|
Incorporated by reference to Exhibit 10.5 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(22)
|
Incorporated by reference to Exhibit 10.1 of the Registrant's Form 8-K filed on November 3, 2015.
|
(23)
|
Incorporated by reference to Exhibit 10.19.01 of the Registrant’s Quarterly Report on Form 10-Q filed on October 27, 2016.
|
(24)
|
Incorporated by reference to Exhibit 10.16 of the Registrant’s Annual Report on Form 10-K filed on February 8, 2018.
|
(25)
|
Incorporated by reference to Exhibit 10.01 of the Registrant’s Quarterly Report on Form 10-Q filed on April 20, 2018.
|
(26)
|
Incorporated by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form 10-K filed on February 17, 2017.
|
(27)
|
Incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(28)
|
Incorporated by reference to Exhibit 10.6 of the Registrant’s Quarterly Report on Form 10-Q filed on April 28, 2016.
|
(29)
|
Incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed on August 1, 2016.
|
(30)
|
Filed herewith.
|
*
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
†
|
Confidential treatment has been requested or granted for portions of this exhibit by the Securities and Exchange Commission.
|
|
|
LIMELIGHT NETWORKS, INC.
|
|
|
|
|
|
Date:
|
January 31, 2019
|
By:
|
/
S
/ S
AJID
M
ALHOTRA
|
|
|
|
Sajid Malhotra
Chief Financial Officer
(Principal Financial Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ R
OBERT
A. L
ENTO
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
January 31, 2019
|
Robert A. Lento
|
|
|
|
|
|
|
|
|
|
/
S
/ S
AJID
M
ALHOTRA
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
January 31, 2019
|
Sajid Malhotra
|
|
|
|
|
|
|
|
|
|
/
S
/ D
ANIEL
R. B
ONCEL
|
|
Vice President, Finance (Principal Accounting Officer)
|
|
January 31, 2019
|
Daniel R. Boncel
|
|
|
|
|
|
|
|
|
|
/
S
/ W
ALTER
D. A
MARAL
|
|
Non-Executive Chairman of the Board and Director
|
|
January 31, 2019
|
Walter D. Amaral
|
|
|
|
|
|
|
|
|
|
/
S
/ D
OUG
B
EWSHER
|
|
Director
|
|
January 31, 2019
|
Doug Bewsher
|
|
|
|
|
|
|
|
|
|
/
S
/ M
ARC
D
E
B
EVOISE
|
|
Director
|
|
January 31, 2019
|
Marc DeBevoise
|
|
|
|
|
|
|
|
|
|
/
S
/ J
EFFREY
T. F
ISHER
|
|
Director
|
|
January 31, 2019
|
Jeffrey T. Fisher
|
|
|
|
|
|
|
|
|
|
/
S
/ S
COTT
G
ENEREUX
|
|
Director
|
|
January 31, 2019
|
Scott Genereux
|
|
|
|
|
|
|
|
|
|
/
S
/ P
ATRICIA
P
ARRA
H
ADDEN
|
|
Director
|
|
January 31, 2019
|
Patricia Parra Hadden
|
|
|
|
|
|
|
|
|
|
/
S
/ D
AVID
C. P
ETERSCHMIDT
|
|
Director
|
|
January 31, 2019
|
David C. Peterschmidt
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
Deductions
|
|
|
|||||||||
Description
|
Balance at
Beginning of Period |
|
Charged to
Costs and Expenses |
|
Charged
Against Revenue |
|
Write-Offs
Net of Recoveries |
|
Balance at
End of Period |
|||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|||||||
Reserves for accounts receivable
|
$
|
1,804
|
|
|
137
|
|
|
(234
|
)
|
|
864
|
|
|
$
|
843
|
|
Deferred tax asset valuation allowance
|
$
|
59,241
|
|
|
24,985
|
|
|
—
|
|
|
—
|
|
|
$
|
84,226
|
|
Year ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|||||||
Reserves for accounts receivable
|
$
|
843
|
|
|
949
|
|
|
14
|
|
|
668
|
|
|
$
|
1,138
|
|
Deferred tax asset valuation allowance
|
$
|
84,226
|
|
|
(25,508
|
)
|
|
—
|
|
|
—
|
|
|
$
|
58,718
|
|
Year ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||||||
Allowances deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|||||||
Reserves for accounts receivable
|
$
|
1,138
|
|
|
902
|
|
|
10
|
|
|
1,051
|
|
|
$
|
999
|
|
Deferred tax asset valuation allowance
|
$
|
58,718
|
|
|
(1,569
|
)
|
|
—
|
|
|
—
|
|
|
$
|
57,149
|
|
(a)
|
he has been given a reasonable opportunity to consider and review this TAR and that he has read this TAR;
|
(b)
|
he has been represented in the preparation, negotiation, and execution of this TAR by legal counsel of his own choice or has elected not to retain legal counsel;
|
(c)
|
he understands the terms and consequences of this TAR and of the releases it contains; and
|
(1)
|
Registration Statement Form S-3 (File No. 333-170609) of Limelight Networks, Inc.
|
(2)
|
Registration Statement (Form S-8 No. 333-147830) pertaining to the Amended and Restated 2003 Incentive Compensation Plan and the 2007 Equity Incentive Plan
|
(3)
|
Registration Statement (Form S-8 No. 333-159132) pertaining to the 2007 Equity Incentive Plan
|
(4)
|
Registration Statement (Form S-8 No. 333-165436) pertaining to the 2007 Equity Incentive Plan
|
(5)
|
Registration Statement (Form S-8 No. 333-176760) pertaining to the 2007 Equity Incentive Plan
|
(6)
|
Registration Statement (Form S-8 No. 333-181280) pertaining to the 2007 Equity Incentive Plan
|
(7)
|
Registration Statement (Form S-8 No. 333-187052) pertaining to the 2007 Equity Incentive Plan
|
(8)
|
Registration Statement (Form S-8 No. 333-190572) pertaining to the 2013 Employee Stock Purchase Plan
|
(9)
|
Registration Statement (Form S-8 No. 333-194143) pertaining to the 2007 Equity Incentive Plan
|
(10)
|
Registration Statement (Form S-8 No. 333-202144) pertaining to the 2007 Equity Incentive Plan
|
(11)
|
Registration Statement (Form S-8 No. 333-209537) pertaining to the 2007 Equity Incentive Plan
|
(12)
|
Registration Statement (Form S-8 No. 333-216142) pertaining to the Amended and Restated 2007 Equity Incentive Plan
|
(13)
|
Registration Statement Form S-3 (File No. 333-222900) of Limelight Networks, Inc.
|
(14)
|
Registration Statement (Form S-8 No. 333-222942) pertaining to the Amended and Restated 2007 Equity Incentive Plan;
|
1.
|
I have reviewed this annual report on Form 10-K of Limelight Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 31, 2019
|
By:
|
/s/ R
OBERT
A. L
ENTO
|
|
|
Name:
|
Robert A. Lento
|
|
|
Title:
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Limelight Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 31, 2019
|
By:
|
/s/ S
AJID
M
ALHOTRA
|
|
|
Name:
|
Sajid Malhotra
|
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|
Date:
|
January 31, 2019
|
By:
|
/s/ R
OBERT
A. L
ENTO
|
|
|
Name:
|
Robert A. Lento
|
|
|
Title:
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
Date:
|
January 31, 2019
|
By:
|
/s/ S
AJID
M
ALHTRA
|
|
|
Name:
|
Sajid Malhotra
|
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|