Akamai Technologies, Inc. (AKAM)

[eastunder]

Akamai Reports Second Quarter 2011 Financial Results

Wednesday, July 27, 2011 16:01ET



CAMBRIDGE, Mass., July 27, 2011 /PRNewswire/ --


-- Revenue of $277.0 million, up 13 percent year-over-year
-- GAAP net income of $47.9 million, or $0.25 per diluted share, up 26
percent year-over-year
-- Normalized net income* of $65.8 million, or $0.35 per diluted share, up
1 percent year-over-year


Akamai Technologies, Inc. (NASDAQ: AKAM), the leading provider of cloud optimization services, today reported financial results for the second quarter ended June 30, 2011. Revenue for second quarter 2011 was $277.0 million, a 13 percent increase over second quarter 2010 revenue of $245.3 million, and slightly above first quarter 2011 revenue of $276.0 million.


Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the second quarter of 2011 was $47.9 million, or $0.25 per diluted share, a 26 percent increase from second quarter 2010 GAAP net income of $38.1 million, or $0.20 per diluted share, and a 5 percent decrease from first quarter 2011 GAAP net income of $50.6 million, or $0.26 per diluted share.


The Company generated normalized net income* of $65.8 million, or $0.35 per diluted share, in the second quarter of 2011, a 1 percent improvement over second quarter 2010 normalized net income of $65.0 million, or $0.34 per diluted share, and down 9 percent from first quarter 2011 normalized net income of $72.2 million, or $0.38 per diluted share. (*See Use of Non-GAAP Financial Measures below for definitions.)


Included in these results for the second quarter of 2011 is a tax charge of $28.3 million, based on a full-year GAAP tax rate of 35 percent. This tax rate is higher than the previous forecast of 32 to 33 percent, due to increased costs attributable to investment in the Company's network outside of North America. The impact of the higher tax rate on net income in the second quarter of 2011 was approximately $5.0 million, or $0.03 per diluted share.


"Trends in cloud computing, Internet security, mobile connectivity, and the proliferation of online video have continued to drive our customers' online initiatives and our business success," said Paul Sagan, CEO of Akamai. "With the scale, data and software underlying the Akamai intelligent platform, combined with our deep industry expertise, we believe Akamai is uniquely capable of enabling our customers' online businesses to grow revenues and reduce costs. We continue to position Akamai to lead the next evolution of cloud computing by investing in the business to build new and innovative solutions that leverage the Company's core competencies."


Adjusted EBITDA* for the second quarter of 2011 was $126.2 million, up 13 percent from $112.1 million in the second quarter of 2010 and down about 2 percent from $129.2 million in the prior quarter. Adjusted EBITDA margin* for the second quarter of 2011 was 46 percent, consistent with the same period last year. (*See Use of Non-GAAP Financial Measures below for definitions.)


Cash from operations was $111.8 million in the second quarter of 2011 or 40 percent of revenue. At the end of the second quarter of 2011, the Company had approximately $1.3 billion in cash, cash equivalents and marketable securities.


Sales through resellers and sales outside the United States accounted for 19 percent and 30 percent, respectively, of revenue for the second quarter 2011.


During the second quarter of 2011, under a share repurchase program that was approved by the Board of Directors in April 2009 and extended in April 2011, the Company repurchased approximately 1.5 million shares of common stock for $50.5 million at an average price of $32.90 per share. As of June 30, 2011, the Company had repurchased 8.3 million shares of common stock for $251.5 million at an average price of $30.15 per share.


As of June 30, 2011, the Company had approximately 186.0 million shares of common stock outstanding.


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