Business Wire | Feb 11, 2021 04:01PM EST

Limelight Networks Reports Fourth-Quarter and Full-Year 2020 Results

Feb. 11, 2021

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Feb. 11, 2021--Limelight Networks, Inc. (Nasdaq: LLNW) (Limelight), a leading provider of video delivery and edge cloud services, today reported results for its fourth quarter and year ended December 31, 2020.

Fourth-quarter Results

For the 2020 fourth quarter, the company generated revenue of $55.4 million, compared to $60.1 million in the fourth quarter of 2019.

GAAP net loss was $(8.3) million, or $(0.07) per basic share for the 2020 fourth quarter, compared to net income of $2.5 million, or $0.02 per basic share in the 2019 period. GAAP net loss included $2.2 million of interest expense related to Limelight's senior convertible notes issued during the 2020 third quarter.

Non-GAAP net loss was $(3.8) million or $(0.03) per basic share for the 2020 fourth quarter, versus non-GAAP net income of $5.8 million, or $0.05 per basic share in 2019. The non-GAAP net loss excluded $1.0 million of interest expense related to the company's convertible notes noted above.

Fourth-quarter adjusted EBITDA was $3.6 million, versus $11.4 million for the fourth quarter of 2019.

"I am excited to join Limelight, a company with an impressive list of blue-chip customers, in a large and growing market with a unique set of capabilities and solid foundation to build on," said Bob Lyons, President and Chief Executive Officer. "Our global network and connectivity to billions of people, combined with the digital transformation creates enormous opportunity for us in edge content delivery, computing and cybersecurity."

"Our immediate focus is the challenges we faced in the fourth quarter, specifically top-line growth and the resulting pressure on margins. Quite frankly, performance in these areas is not where it should be. I believe in our ability to close the gaps and position Limelight as a leader delivering edge-based solutions. While there is no doubt much has been accomplished, I know that our best days are ahead of us. I am confident in the direction we are headed, in our ability to better execute on a refined strategy and pursue rule-of-40 performance," said Lyons.

Full-year Results

For the full year ended December 31, 2020, Limelight reported revenue of $230.2 million, a 15% increase from $200.6 million in 2019.

The company's 2020 GAAP net loss was $(19.3) million, or $(0.16) per basic share, versus a net loss of $(16.0) million, or $(0.14) per basic share, in 2019. The 2020 GAAP net loss included $3.8 million of interest expense related to Limelight's senior convertible notes noted above.

Non-GAAP net loss was $(1.6) million, or $(0.01) per basic share, for the year ended December 31, 2020, compared to non-GAAP net loss of $(2.3) million, or $(0.02) per basic share, in 2019.

Limelight reported adjusted EBITDA of $24.5 million for 2020, compared to $18.1 million in 2019.

The company does not plan to issue guidance for 2021 at this time. With new leadership and active efforts underway to evaluate all aspects of the business strategy and cost structure, the focus is on immediate and long-term steps to position the company as a leader delivering edge-based solutions. Additional details will be provided as the company formalizes these plans.

Said Lyons, "Limelight delivered a successful year on multiple fronts - but we have work to do. Our industry is on an upward trajectory - and we enter 2021 laser-focused on building a platform for profitable growth."

Financial Tables

LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data) December 31, September December 31, 30,

2020 2020 2019

(Unaudited) (Unaudited)

ASSETSCurrent assets:Cash and cash equivalents $ 46,795 $ 75,169 $ 18,335

Marketable securities 76,928 49,623 -

Accounts receivable, net 31,675 42,222 34,476

Income taxes receivable 68 81 82

Prepaid expenses and other current 15,588 12,561 9,920 assetsTotal current assets 171,054 179,656 62,813

Property and equipment, net 46,418 47,493 46,136

Operating lease right of use assets 10,150 10,844 12,842

Marketable securities, less current 40 40 40 portionDeferred income taxes 1,530 1,428 1,319

Goodwill 77,753 77,126 77,102

Other assets 7,233 7,459 9,117

Total assets $ 314,178 $ 324,046 $ 209,369

LIABILITIES AND STOCKHOLDERS'EQUITYCurrent liabilities:Accounts payable $ 4,587 $ 12,437 $ 12,020

Deferred revenue 933 797 976

Operating lease liability 2,465 2,654 2,056 obligationsIncome taxes payable 253 153 178

Other current liabilities 17,560 17,584 13,398

Total current liabilities 25,798 33,625 28,628

Convertible senior notes, net 100,945 99,937 -

Operating lease liability 11,265 11,745 13,488 obligations, less current portionsDeferred income taxes 279 251 239

Deferred revenue, less current 220 230 161 portionOther long-term liabilities 479 579 316

Total liabilities 138,986 146,367 42,832

Commitments and contingenciesStockholders' equity:Convertible preferred stock, $0.001 - - - par value; 7,500 shares authorized;no shares issued and outstandingCommon stock, $0.001 par value;300,000 shares authorized; 123,653,122,824 and 118,368 shares issuedandoutstanding at December 31, 2020, 124 123 118 September 30, 2020 and December 31,2019, respectivelyAdditional paid-in capital 556,512 552,559 530,285

Accumulated other comprehensive (7,511 ) (9,379 ) (9,210 )lossAccumulated deficit (373,933 ) (365,624 ) (354,656 )

Total stockholders' equity 175,192 177,679 166,537

Total liabilities and stockholders' $ 314,178 $ 324,046 $ 209,369 equityLIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)Three Months Ended

Twelve Months Ended

December 31,

September 30,

Percent

December 31,

Percent

December 31,

December 31,

Percent

2020

2020

Change

2019

Change

2020

2019

Change

Revenue$

55,394

$

59,243

-6%

$

60,129

-8%

$

230,194

$

200,634

15%

Cost of revenue:Cost of services (1)33,103

31,905

4%

28,586

16%

125,509

99,897

26%

Depreciation - network5,468

5,602

-2%

5,288

3%

21,579

19,193

12%

Total cost of revenue38,571

37,507

3%

33,874

14%

147,088

119,090

24%

Gross profit16,823

21,736

-23%

26,255

-36%

83,106

81,544

2%

Gross profit percentage30.4

%

36.7

%

43.7

%

36.1

%

40.6

%

Operating expenses:General and administrative (1)7,464

7,751

-4%

7,554

-1%

31,284

30,785

2%

Sales and marketing (1)9,666

10,456

-8%

10,399

-7%

42,945

43,078

0%

Research & development (1)5,066

5,425

-7%

5,459

-7%

21,680

22,534

-4%

Depreciation and amortization542

384

41%

328

65%

1,591

872

82%

Total operating expenses22,738

24,016

-5%

23,740

-4%

97,500

97,269

0%

Operating (loss) income(5,915

)

(2,280

)

NM

2,515

NM

(14,394

)

(15,725

)

NM

Other income (expense):Interest expense(2,183

)

(1,674

)

NM

(45

)

NM

(3,939

)

(76

)

NM

Interest income29

10

NM

25

NM

69

427

NM

Other, net28

25

NM

169

NM

(368

)

80

NM

Total other (expense) income(2,126

)

(1,639

)

NM

149

NM

(4,238

)

431

NM

(Loss) income before income taxes(8,041

)

(3,919

)

NM

2,664

NM

(18,632

)

(15,294

)

NM

Income tax expense268

66

NM

206

NM

645

750

NM

Net (loss) income(8,309

)

(3,985

)

NM

2,458

NM

(19,277

)

(16,044

)

NM

Net (loss) income per share:Basic$

(0.07

)

$

(0.03

)

$

0.02

$

(0.16

)

$

(0.14

)

Diluted$

(0.07

)

$

(0.03

)

$

0.02

$

(0.16

)

$

(0.14

)

Weighted average shares used in per share calculation:Basic123,225

122,363

117,603

121,196

115,890

Diluted123,225

122,363

123,801

121,196

115,890

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



December September Percent December Percent December December Percent 31, 30, 31, 31, 31,

2020 2020 Change 2019 Change 2020 2019 Change

Revenue $ 55,394 $ 59,243 -6% $ 60,129 -8% $ 230,194 $ 200,634 15%

Cost of revenue:Cost of 33,103 31,905 4% 28,586 16% 125,509 99,897 26%services (1)Depreciation - 5,468 5,602 -2% 5,288 3% 21,579 19,193 12%networkTotal cost of 38,571 37,507 3% 33,874 14% 147,088 119,090 24%revenueGross profit 16,823 21,736 -23% 26,255 -36% 83,106 81,544 2%

Gross profit 30.4 % 36.7 % 43.7 % 36.1 % 40.6 % percentageOperating expenses:General and 7,464 7,751 -4% 7,554 -1% 31,284 30,785 2%administrative(1)Sales and 9,666 10,456 -8% 10,399 -7% 42,945 43,078 0%marketing (1)Research & 5,066 5,425 -7% 5,459 -7% 21,680 22,534 -4%development(1)Depreciation 542 384 41% 328 65% 1,591 872 82%andamortizationTotal 22,738 24,016 -5% 23,740 -4% 97,500 97,269 0%operatingexpenses

Operating (5,915 ) (2,280 ) NM 2,515 NM (14,394 ) (15,725 ) NM(loss) income

Other income (expense):Interest (2,183 ) (1,674 ) NM (45 ) NM (3,939 ) (76 ) NMexpenseInterest 29 10 NM 25 NM 69 427 NMincomeOther, net 28 25 NM 169 NM (368 ) 80 NM

Total other (2,126 ) (1,639 ) NM 149 NM (4,238 ) 431 NM(expense)income

(Loss) income (8,041 ) (3,919 ) NM 2,664 NM (18,632 ) (15,294 ) NMbefore incometaxesIncome tax 268 66 NM 206 NM 645 750 NMexpense

Net (loss) (8,309 ) (3,985 ) NM 2,458 NM (19,277 ) (16,044 ) NMincome Net (loss)income pershare:Basic $ (0.07 ) $ (0.03 ) $ 0.02 $ (0.16 ) $ (0.14 )

Diluted $ (0.07 ) $ (0.03 ) $ 0.02 $ (0.16 ) $ (0.14 )

Weightedaverage sharesused in persharecalculation:Basic 123,225 122,363 117,603 121,196 115,890

Diluted 123,225 122,363 123,801 121,196 115,890

(1) Includes share-based compensation (see supplemental table for figures)(1) Includes share-based compensation (see supplemental table for figures)LIMELIGHT NETWORKS, INC.SUPPLEMENTAL FINANCIAL DATA(In thousands)(Unaudited)Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2020

2020

2019

2020

2019

Share-based compensation:Cost of services$

313

$

130

$

376

$

1,998

$

1,495

General and administrative1,840

1,272

1,858

7,611

8,098

Sales and marketing764

206

597

3,519

2,263

Research and development562

315

484

2,589

1,922

Total share-based compensation$

3,479

$

1,923

$

3,315

$

15,717

$

13,778

Depreciation and amortization:Network-related depreciation$

5,468

$

5,602

$

5,288

$

21,579

$

19,193

Other depreciation and amortization542

384

328

1,591

872

Total depreciation and amortization$

6,010

$

5,986

$

5,616

$

23,170

$

20,065

Net increase (decrease) in cash, cash equivalents and marketable securities:$

(1,069

)

$

106,592

$

285

$

105,388

$

(32,131

)

End of period statistics:Approximate number of active customers527

534

599

527

599

Number of employees and employee equivalents618

620

610

618

610

LIMELIGHT NETWORKS, INC.SUPPLEMENTAL FINANCIAL DATA(In thousands)(Unaudited) Three Months Ended Twelve Months Ended



December September December December December 31, 30, 31, 31, 31,

2020 2020 2019 2020 2019

Share-basedcompensation: Cost of services $ 313 $ 130 $ 376 $ 1,998 $ 1,495

General and 1,840 1,272 1,858 7,611 8,098 administrativeSales and 764 206 597 3,519 2,263 marketingResearch and 562 315 484 2,589 1,922 development Total share-based $ 3,479 $ 1,923 $ 3,315 $ 15,717 $ 13,778 compensation Depreciation andamortization: Network-related $ 5,468 $ 5,602 $ 5,288 $ 21,579 $ 19,193 depreciationOther depreciation 542 384 328 1,591 872 and amortization Total depreciation $ 6,010 $ 5,986 $ 5,616 $ 23,170 $ 20,065 and amortization Net increase(decrease) incash, cash $ (1,069 ) $ 106,592 $ 285 $ 105,388 $ (32,131 )equivalents andmarketablesecurities: End of periodstatistics: Approximate number 527 534 599 527 599 of activecustomers Number ofemployees and 618 620 610 618 610 employeeequivalentsLIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2020

2020

2019

2020

2019

Operating activitiesNet income (loss)$

(8,309

)

$

(3,985

)

$

2,458

$

(19,277

)

$

(16,044

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation and amortization6,010

5,986

5,616

23,170

20,065

Share-based compensation3,479

1,923

3,315

15,717

13,778

Foreign currency remeasurement (gain) loss327

27

79

214

(25

)

Deferred income taxes(14

)

(95

)

300

(94

)

270

Loss (gain) on sale of property and equipment7

(1

)

-

6

(56

)

Accounts receivable charges325

163

519

801

1,793

Amortization of premium on marketable securities519

87

1

606

30

Realized loss on marketable securities(3

)

-

9

(3

)

9

Noncash interest expense1,070

868

-

1,938

-

Changes in operating assets and liabilities:Accounts receivable10,221

2,862

823

2,000

(10,228

)

Prepaid expenses and other current assets(3,038

)

(2,232

)

(324

)

(5,717

)

(1,101

)

Income taxes receivable16

(10

)

(3

)

19

40

Other assets258

757

(1,547

)

2,762

(4,188

)

Accounts payable and other current liabilities(9,228

)

1,222

(2,383

)

(1,069

)

1,292

Deferred revenue126

(172

)

(232

)

17

(789

)

Income taxes payable86

(17

)

(143

)

71

61

Payments related to litigation, net-

-

-

-

(3,040

)

Other long term liabilities(99

)

276

15

167

(121

)

Net cash provided by operating activities1,753

7,659

8,503

21,328

1,746

Investing activitiesPurchases of marketable securities(36,064

)

(52,690

)

-

(88,754

)

(10,279

)

Sale and maturities of marketable securities8,272

2,900

3,211

11,172

35,364

Purchases of property and equipment(2,957

)

(7,180

)

(10,480

)

(25,085

)

(34,704

)

Proceeds from sale of property and equipment1

1

-

2

51

Net cash used in investing activities(30,748

)

(56,969

)

(7,269

)

(102,665

)

(9,568

)

Financing activitiesProceeds from issuance of debt, net-

121,600

-

121,600

-

Purchase of capped calls-

(16,413

)

-

(16,413

)

-

Payment of debt issuance costs(75

)

(784

)

-

(859

)

-

Payment of employee tax withholdings related to restricted stock vesting(891

)

(1,041

)

(1,079

)

(4,878

)

(3,607

)

Proceeds from employee stock plans1,377

2,598

3,290

10,068

4,406

Net cash provided by financing activities411

105,960

2,211

109,518

799

Effect of exchange rate changes on cash and cash equivalents210

319

58

279

(25

)

Net increase (decrease) in cash and cash equivalents(28,374

)

56,969

3,503

28,460

(7,048

)

Cash and cash equivalents, beginning of period75,169

18,200

14,832

18,335

25,383

Cash and cash equivalents, end of period$

46,795

$

75,169

$

18,335

$

46,795

$

18,335

Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use non-generally accepted accounting principles (Non-GAAP) net income (loss), EBITDA and Adjusted EBITDA as supplemental measures of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance. We define Non-GAAP net income (loss) to be U.S. GAAP net income (loss) adjusted to exclude share-based compensation and non-cash interest expense. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA as U.S. GAAP net income (loss) adjusted to exclude depreciation and amortization, interest expense, interest and other (income) expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based compensation. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. Our management uses these Non-GAAP financial measures because, collectively, they provide valuable information on the performance of our on-going operations, excluding non-cash charges, taxes and non-core activities (including interest payments related to financing activities). These measures also enable our management to compare the results of our on-going operations from period to period and allow management to review the performance of our on-going operations against our peer companies and against other companies in our industry and adjacent industries. We believe these measures also provide similar insights to investors, and enable investors to review our results of operations "through the eyes of management."

Furthermore, our management uses these Non-GAAP financial measures to assist them in making decisions regarding our strategic priorities and areas for future investment and focus.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

* EBITDA and 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.

We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income (loss), EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Item 10(e) of Regulation S-K, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.

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



December September December December 31, December 31, 30, 31, 31,

2020 2020 2019 2020 2019

OperatingactivitiesNet income $ (8,309 ) $ (3,985 ) $ 2,458 $ (19,277 ) $ (16,044 )(loss) Adjustmentsto reconcilenet income(loss) to netcash providedby (used in)operatingactivities:Depreciation 6,010 5,986 5,616 23,170 20,065 andamortizationShare-based 3,479 1,923 3,315 15,717 13,778 compensationForeigncurrency 327 27 79 214 (25 )remeasurement(gain) lossDeferred (14 ) (95 ) 300 (94 ) 270 income taxesLoss (gain)on sale of 7 (1 ) - 6 (56 )property andequipmentAccounts 325 163 519 801 1,793 receivablechargesAmortizationof premium on 519 87 1 606 30 marketablesecuritiesRealized loss (3 ) - 9 (3 ) 9 on marketablesecuritiesNoncash 1,070 868 - 1,938 - interestexpenseChanges inoperatingassets andliabilities:Accounts 10,221 2,862 823 2,000 (10,228 )receivablePrepaidexpenses and (3,038 ) (2,232 ) (324 ) (5,717 ) (1,101 )other currentassetsIncome taxes 16 (10 ) (3 ) 19 40 receivableOther assets 258 757 (1,547 ) 2,762 (4,188 )

Accountspayable and (9,228 ) 1,222 (2,383 ) (1,069 ) 1,292 other currentliabilitiesDeferred 126 (172 ) (232 ) 17 (789 )revenueIncome taxes 86 (17 ) (143 ) 71 61 payablePaymentsrelated to - - - - (3,040 )litigation,netOther long (99 ) 276 15 167 (121 )termliabilitiesNet cashprovided by 1,753 7,659 8,503 21,328 1,746 operatingactivities InvestingactivitiesPurchases of (36,064 ) (52,690 ) - (88,754 ) (10,279 )marketablesecuritiesSale andmaturities of 8,272 2,900 3,211 11,172 35,364 marketablesecuritiesPurchases of (2,957 ) (7,180 ) (10,480 ) (25,085 ) (34,704 )property andequipmentProceeds fromsale of 1 1 - 2 51 property andequipmentNet cash used (30,748 ) (56,969 ) (7,269 ) (102,665 ) (9,568 )in investingactivities FinancingactivitiesProceeds from - 121,600 - 121,600 - issuance ofdebt, netPurchase of - (16,413 ) - (16,413 ) - capped callsPayment of (75 ) (784 ) - (859 ) - debt issuancecostsPayment ofemployee taxwithholdings (891 ) (1,041 ) (1,079 ) (4,878 ) (3,607 )related torestrictedstock vestingProceeds from 1,377 2,598 3,290 10,068 4,406 employeestock plansNet cashprovided by 411 105,960 2,211 109,518 799 financingactivitiesEffect ofexchange rate 210 319 58 279 (25 )changes oncash and cashequivalentsNet increase(decrease) in (28,374 ) 56,969 3,503 28,460 (7,048 )cash and cashequivalentsCash and cashequivalents, 75,169 18,200 14,832 18,335 25,383 beginning ofperiodCash and cash $ 46,795 $ 75,169 $ 18,335 $ 46,795 $ 18,335 equivalents,end of period Use of Non-GAAP Financial Measures

To evaluate our business, we consider and use non-generally accepted accounting principles (Non-GAAP) net income (loss), EBITDA and Adjusted EBITDA as supplemental measures of operating performance. These measures include the same adjustments that management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net income (loss) to be an important indicator of overall business performance. We define Non-GAAP net income (loss) to be U.S. GAAP net income (loss) adjusted to exclude share-based compensation and non-cash interest expense. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA as U.S. GAAP net income (loss) adjusted to exclude depreciation and amortization, interest expense, interest and other (income) expense, and income tax expense. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based compensation. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. Our management uses these Non-GAAP financial measures because, collectively, they provide valuable information on the performance of our on-going operations, excluding non-cash charges, taxes and non-core activities (including interest payments related to financing activities). These measures also enable our management to compare the results of our on-going operations from period to period and allow management to review the performance of our on-going operations against our peer companies and against other companies in our industry and adjacent industries. We believe these measures also provide similar insights to investors, and enable investors to review our results of operations "through the eyes of management."

Furthermore, our management uses these Non-GAAP financial measures to assist them in making decisions regarding our strategic priorities and areas for future investment and focus.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

* EBITDA and 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.

We compensate for these limitations by relying primarily on our U.S. GAAP results and using Non-GAAP net income (loss), EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Item 10(e) of Regulation S-K, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.

LIMELIGHT NETWORKS, INC.Reconciliation of U.S. GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)(In thousands)(Unaudited) Three Months Ended Twelve Months Ended December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Amount Per Share Amount Per Share Amount Per Share Amount Per Share Amount Per Share U.S. GAAP $ (8,309 ) $ (0.07 ) $ (3,985 ) $ (0.03 ) $ 2,458 $ 0.02 $ (19,277 ) $ (0.16 ) $ (16,044 ) $ (0.14 )net (loss)income Share-based 3,479 0.03 1,923 0.02 3,315 0.03 15,717 0.13 13,778 0.12 compensationNoncash 1,070 0.01 868 0.01 - - 1,938 0.02 - - interestexpense Non-GAAP net $ (3,760 ) $ (0.03 ) $ (1,194 ) $ (0.01 ) $ 5,773 $ 0.05 $ (1,622 ) $ (0.01 ) $ (2,266 ) $ (0.02 )(loss)income Weightedaverage 123,225 122,363 117,603 121,196 115,890 shares usedin per sharecalculationLIMELIGHT NETWORKS, INC.Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA(In thousands)(Unaudited)Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2020

2020

2019

2020

2019

U.S. GAAP net (loss) income$

(8,309

)

$

(3,985

)

$

2,458

$

(19,277

)

$

(16,044

)

Depreciation and amortization6,010

5,986

5,616

23,170

20,065

Interest expense2,183

1,674

45

3,939

76

Interest and other (income) expense(57

)

(35

)

(194

)

299

(507

)

Income tax expense268

66

206

645

750

EBITDA$

95

$

3,706

$

8,131

$

8,776

$

4,340

Share-based compensation3,479

1,923

3,315

15,717

13,778

Adjusted EBITDA$

3,574

$

5,629

$

11,446

$

24,493

$

18,118

For future periods, we are unable to provide a reconciliation of EBITDA and Adjusted EBITDA to net income (loss) as a result of the uncertainty regarding, and the potential variability of, the amounts of depreciation and amortization, interest expense, interest and other (income) expense and income tax expense, that may be incurred in the future.

Conference Call

At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management will host a quarterly conference call for investors. Investors can access this call toll-free at 877 296 5190 within the United States or +1 412 317 5233 outside of the U.S. The conference call will also be audio cast live from http://www.limelight.com and a replay will be available following the call from the Limelight website.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These statements include, among others, statements regarding our expectations regarding revenue, gross margin, non-GAAP net income (loss), capital expenditures, and our future prospects. Our expectations and beliefs regarding these matters may not materialize. The potential risks and uncertainties that could cause actual results or outcomes to differ materially from the results or outcomes predicted include, among other things, reduction of demand for our services from new or existing customers, unforeseen changes in our hiring patterns, adverse outcomes in litigation, and experiencing expenses that exceed our expectations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online on our investor relations website at investors.limelightnetworks.com and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of February 11, 2021, and we undertake no duty to update this information in light of new information or future events, unless required by law.

About Limelight

Limelight Networks, Inc. (NASDAQ: LLNW), a leading provider of digital content delivery, video, cloud security, and edge computing services, empowers customers to provide exceptional digital experiences. Limelight's edge services platform includes a unique combination of global private infrastructure, intelligent software, and expert support services that enable current and future workflows. For more information, visit www.limelight.com, and follow us on Twitter, Facebook and LinkedIn.

Copyright (C) 2021 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

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CONTACT: Limelight Networks, Inc. Dan Boncel, 602 850 4810 ir@llnw.com