Business Wire | Oct 22, 2020 04:01PM EDT

Limelight Networks Reports Financial Results for the Third Quarter of 2020

Oct. 22, 2020

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Oct. 22, 2020--Limelight Networks, Inc. (Nasdaq: LLNW) (Limelight), a leading provider of video delivery and edge cloud services, today reported record revenue of $59.2 million for the third quarter of 2020, up 15 percent, compared to $51.3 million in the third quarter of 2019.

Limelight reported a GAAP net loss of $4.0 million, or $(0.03) per basic share for the third quarter of 2020, compared to a net loss of $2.8 million, or $(0.02) per basic share in the third quarter of 2019. GAAP net loss included $1.7 million of interest expense related to our convertible notes issued during the third quarter of 2020.

Non-GAAP net loss was $1.2 million or $(0.01) per basic share for the third quarter of 2020, compared to non-GAAP net income of $0.6 million, or $0.01 per basic share in the third quarter of 2019. Non-GAAP net loss excluded $0.9 million of interest expense related to our convertible notes issued during the third quarter of 2020.

EBITDA was $3.7 million for the third quarter of 2020, compared to $2.5 million for the third quarter of 2019. Adjusted EBITDA was $5.6 million for the third quarter of 2020 compared to $5.8 million for the third quarter of 2019.

Limelight ended the third quarter with 620 employees and employee equivalents, down from 627 at the end of the second quarter of 2020, and up from 609 at the end of the third quarter of 2019.

"Q3 was a very strong quarter for us on a number of fronts as we experienced our second highest quarter of revenue ever and made material progress across our strategic imperatives. Most notable in the quarter was the expansion of our edge capabilities with the launch of Edge Functions and gains in our automated traffic engineering efforts to optimize network performance and customer experience. As we have consistently done all year, we continue to make investments in the business to support our strategy of doubling down on edge innovation with focus on video, media and gaming customers. We are on track to deliver record revenue and revenue growth for 2020, along with meaningful increases across multiple financial and operational metrics. We are well-positioned to continue delivering value for our customers and growth for our shareholders." said Robert Lento, Chief Executive Officer.

We are leaving our full-year 2020 guidance unchanged, except for the impact of the convertible debt offering interest expense on GAAP and Non-GAAP EPS. The ranges for GAAP and Non-GAAP EPS have been adjusted by $0.03 and $0.02, respectively.

Limelight Networks, Inc.

2020 Guidance





Current Guidance Previous Guidance Actual 2019

Revenue $230 to $240 million $230 to $240 million $200.6 million



$(0.13) to $(0.03) $(0.10) to $(0.14)GAAP Basic EPS break-even



Non-GAAP EPS $(0.02) to $0.08 Break-even to $0.10 $(0.02)



Adjusted EBITDA $28 to $35 million $28 to $35 million $18.1 million



Capital expenditures $25 to $30 million $25 to $30 million $34.7 million



Financial Tables

LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data) September June 30, December 31, 30, 2020 2020 2019

(Unaudited) (Unaudited)ASSETSCurrent assets:Cash and cash equivalents $ 75,169 $ 18,200 $ 18,335

Marketable securities 49,623 - -

Accounts receivable, net 42,222 45,246 34,476

Income taxes receivable 81 68 82

Prepaid expenses and other current 12,561 10,241 9,920 assetsTotal current assets 179,656 73,755 62,813

Property and equipment, net 47,493 48,908 46,136

Operating lease right of use assets 10,844 11,449 12,842

Marketable securities, less current 40 40 40 portionDeferred income taxes 1,428 1,328 1,319

Goodwill 77,126 77,113 77,102

Other assets 7,459 7,915 9,117

Total assets $ 324,046 $ 220,508 $ 209,369

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 12,437 $ 17,004 $ 12,020

Deferred revenue 797 934 976

Operating lease liability obligations 2,654 2,390 2,056

Income taxes payable 153 169 178

Other current liabilities 17,584 17,028 13,398

Total current liabilities 33,625 37,525 28,628

Convertible senior notes, net 99,937 - -

Operating lease liability 11,745 12,316 13,488 obligations, less current portionsDeferred income taxes 251 283 239

Deferred revenue, less current 230 265 161 portionOther long-term liabilities 579 304 316

Total liabilities 146,367 50,693 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; 122,824,121,692 and 118,368 shares issued andoutstanding at September 30, 2020, 123 122 118 June 30, 2020 and December 31, 2019,respectivelyAdditional paid-in capital 552,559 541,363 530,285

Accumulated other comprehensive loss (9,379 ) (10,031 ) (9,210 )

Accumulated deficit (365,624 ) (361,639 ) (354,656 )

Total stockholders' equity 177,679 169,815 166,537

Total liabilities and stockholders' $ 324,046 $ 220,508 $ 209,369 equityLIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)Three Months EndedNine Months EndedSeptember 30,

June 30,PercentChangeSeptember 30,

PercentChangeSeptember 30,

September 30,

PercentChange2020

2020

2019

2020

2019

Revenue$

59,243

$

58,546

1

%

$

51,321

15

%

$

174,801

$

140,505

24

%

Cost of revenue:Cost of services (1)31,905

29,389

9

%

25,602

25

%

92,406

71,311

30

%

Depreciation - network5,602

5,360

5

%

4,961

13

%

16,112

13,905

16

%

Total cost of revenue37,507

34,749

8

%

30,563

23

%

108,518

85,216

27

%

Gross profit21,736

23,797

-9

%

20,758

5

%

66,283

55,289

20

%

Gross profit percentage36.7

%

40.6

%

40.4

%

37.9

%

39.4

%

Operating expenses:General and administrative (1)7,751

8,187

-5

%

7,356

5

%

23,820

23,231

3

%

Sales and marketing (1)10,456

10,929

-4

%

10,713

-2

%

33,279

32,679

2

%

Research & development (1)5,425

5,572

-3

%

5,160

5

%

16,614

17,075

-3

%

Depreciation and amortization384

323

19

%

172

123

%

1,049

545

92

%

Total operating expenses24,016

25,011

-4

%

23,401

3

%

74,762

73,530

2

%

Operating loss(2,280

)

(1,214

)

NM

(2,643

)

NM

(8,479

)

(18,241

)

NM

Other income (expense):Interest expense(1,674

)

(71

)

NM

(10

)

NM

(1,756

)

(30

)

NM

Interest income10

6

NM

81

NM

40

402

NM

Other, net25

(312

)

NM

(13

)

NM

(396

)

(89

)

NM

Total other (expense) income(1,639

)

(377

)

NM

58

NM

(2,112

)

283

NM

Loss before income taxes(3,919

)

(1,591

)

NM

(2,585

)

NM

(10,591

)

(17,958

)

NM

Income tax expense66

136

NM

166

NM

377

544

NM

Net loss$

(3,985

)

$

(1,727

)

NM

$

(2,751

)

NM

$

(10,968

)

$

(18,502

)

NM

Net loss per share:Basic$

(0.03

)

$

(0.01

)

$

(0.02

)

$

(0.09

)

$

(0.16

)

Diluted$

(0.03

)

$

(0.01

)

$

(0.02

)

$

(0.09

)

$

(0.16

)

Weighted average shares used in per share calculation:Basic122,363

120,230

116,270

120,519

115,318

Diluted122,363

120,230

116,270

120,519

115,318

(1) Includes share-based compensation (see supplemental table for figures)LIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited) Three Months Ended Nine Months Ended September September September September 30, June 30, Percent 30, Percent 30, 30, Percent Change Change Change 2020 2020 2019 2020 2019

Revenue $ 59,243 $ 58,546 1 % $ 51,321 15 % $ 174,801 $ 140,505 24 %

Cost ofrevenue:Cost of 31,905 29,389 9 % 25,602 25 % 92,406 71,311 30 %services (1)Depreciation - 5,602 5,360 5 % 4,961 13 % 16,112 13,905 16 %networkTotal cost of 37,507 34,749 8 % 30,563 23 % 108,518 85,216 27 %revenueGross profit 21,736 23,797 -9 % 20,758 5 % 66,283 55,289 20 %

Gross profit 36.7 % 40.6 % 40.4 % 37.9 % 39.4 %percentageOperatingexpenses:General and 7,751 8,187 -5 % 7,356 5 % 23,820 23,231 3 %administrative(1)Sales and 10,456 10,929 -4 % 10,713 -2 % 33,279 32,679 2 %marketing (1)Research & 5,425 5,572 -3 % 5,160 5 % 16,614 17,075 -3 %development (1)Depreciation 384 323 19 % 172 123 % 1,049 545 92 %andamortizationTotal operating 24,016 25,011 -4 % 23,401 3 % 74,762 73,530 2 %expenses Operating loss (2,280 ) (1,214 ) NM (2,643 ) NM (8,479 ) (18,241 ) NM

Other income(expense):Interest (1,674 ) (71 ) NM (10 ) NM (1,756 ) (30 ) NM expenseInterest income 10 6 NM 81 NM 40 402 NM

Other, net 25 (312 ) NM (13 ) NM (396 ) (89 ) NM

Total other (1,639 ) (377 ) NM 58 NM (2,112 ) 283 NM (expense)income Loss before (3,919 ) (1,591 ) NM (2,585 ) NM (10,591 ) (17,958 ) NM income taxesIncome tax 66 136 NM 166 NM 377 544 NM expense Net loss $ (3,985 ) $ (1,727 ) NM $ (2,751 ) NM $ (10,968 ) $ (18,502 ) NM

Net loss pershare:Basic $ (0.03 ) $ (0.01 ) $ (0.02 ) $ (0.09 ) $ (0.16 )

Diluted $ (0.03 ) $ (0.01 ) $ (0.02 ) $ (0.09 ) $ (0.16 )

Weightedaverage sharesused in persharecalculation:Basic 122,363 120,230 116,270 120,519 115,318

Diluted 122,363 120,230 116,270 120,519 115,318

(1) Includes share-based compensation (see supplemental table for figures)LIMELIGHT NETWORKS, INC.SUPPLEMENTAL FINANCIAL DATA(In thousands)(Unaudited)Three Months EndedNine Months EndedSeptember 30,June 30,September 30,September 30,September 30,2020

2020

2019

2020

2019

Share-based compensation:Cost of services$

130

$

792

$

331

$

1,685

$

1,119

General and administrative1,272

2,257

2,006

5,770

6,240

Sales and marketing206

1,322

584

2,756

1,666

Research and development315

880

437

2,027

1,438

Total share-based compensation$

1,923

$

5,251

$

3,358

$

12,238

$

10,463

Depreciation and amortization:Network-related depreciation$

5,602

$

5,360

$

4,961

$

16,112

$

13,905

Other depreciation and amortization384

323

172

1,049

545

Total depreciation and amortization$

5,986

$

5,683

$

5,133

$

17,161

$

14,450

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

106,592

$

(3,221

)

$

(10,872

)

$

106,457

$

(32,416

)

End of period statistics:Approximate number of active customers534

560

609

534

609

Number of employees and employee equivalents620

627

609

620

609

LIMELIGHT NETWORKS, INC.SUPPLEMENTAL FINANCIAL DATA(In thousands)(Unaudited) Three Months Ended Nine Months Ended September June 30, September September September 30, 30, 30, 30, 2020 2020 2019 2020 2019

Share-basedcompensation: Cost of services $ 130 $ 792 $ 331 $ 1,685 $ 1,119

General and 1,272 2,257 2,006 5,770 6,240 administrativeSales and marketing 206 1,322 584 2,756 1,666

Research and 315 880 437 2,027 1,438 development Total share-based $ 1,923 $ 5,251 $ 3,358 $ 12,238 $ 10,463 compensation Depreciation andamortization: Network-related $ 5,602 $ 5,360 $ 4,961 $ 16,112 $ 13,905 depreciationOther depreciation 384 323 172 1,049 545 and amortization Total depreciation $ 5,986 $ 5,683 $ 5,133 $ 17,161 $ 14,450 and amortization Net increase(decrease) in cash, $ 106,592 $ (3,221 ) $ (10,872 ) $ 106,457 $ (32,416 )cash equivalents andmarketablesecurities: End of periodstatistics: Approximate number 534 560 609 534 609 of active customers Number of employees 620 627 609 620 609 and employeeequivalentsLIMELIGHT NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)Three Months EndedNine Months EndedSeptember 30,June 30,September 30,September 30,September 30,2020

2020

2019

2020

2019

Operating activitiesNet loss$

(3,985

)

$

(1,727

)

$

(2,751

)

$

(10,968

)

$

(18,502

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:Depreciation and amortization5,986

5,683

5,133

17,161

14,450

Share-based compensation1,923

5,251

3,358

12,238

10,463

Foreign currency remeasurement loss (gain)27

257

21

(113

)

(104

)

Deferred income taxes(95

)

59

(61

)

(80

)

(30

)

Gain on sale of property and equipment(1

)

-

(5

)

(1

)

(56

)

Accounts receivable charges163

155

580

476

1,274

Amortization of premium on marketable securities87

-

9

87

29

Noncash interest expense868

-

-

868

-

Changes in operating assets and liabilities:Accounts receivable2,862

(10,798

)

(5,300

)

(8,221

)

(11,051

)

Prepaid expenses and other current assets(2,232

)

986

(885

)

(2,679

)

(777

)

Income taxes receivable(10

)

10

45

3

43

Other assets757

1,121

781

2,504

(2,641

)

Accounts payable and other current liabilities1,222

1,045

(2,798

)

8,159

3,675

Deferred revenue(172

)

313

(112

)

(109

)

(557

)

Income taxes payable(17

)

-

61

(15

)

204

Payments related to litigation, net-

-

-

-

(3,040

)

Other long term liabilities276

(15

)

16

265

(137

)

Net cash provided by (used in) operating activities7,659

2,340

(1,908

)

19,575

(6,757

)

Investing activitiesPurchases of marketable securities(52,690

)

-

-

(52,690

)

(10,279

)

Sale and maturities of marketable securities2,900

-

1,000

2,900

32,153

Purchases of property and equipment(7,180

)

(8,085

)

(7,750

)

(22,128

)

(24,224

)

Proceeds from sale of property and equipment1

-

5

1

51

Net cash provided by (used in) investing activities(56,969

)

(8,085

)

(6,745

)

(71,917

)

(2,299

)

Financing activitiesProceeds from issuance of debt, net121,600

-

-

121,600

-

Purchase of capped calls(16,413

)

-

-

(16,413

)

-

Payment of debt issuance costs(784

)

-

-

(784

)

-

Payment of employee tax withholdings related to restricted stock vesting(1,041

)

(1,430

)

(1,015

)

(3,987

)

(2,528

)

Proceeds from employee stock plans2,598

3,954

13

8,691

1,116

Net cash provided by (used in) financing activities105,960

2,524

(1,002

)

109,107

(1,412

)

Effect of exchange rate changes on cash and cash equivalents319

-

(211

)

69

(83

)

Net increase (decrease) in cash and cash equivalents56,969

(3,221

)

(9,866

)

56,834

(10,551

)

Cash and cash equivalents, beginning of period18,200

21,421

24,698

18,335

25,383

Cash and cash equivalents, end of period$

75,169

$

18,200

$

14,832

$

75,169

$

14,832

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 Nine Months Ended September June 30, September September September 30, 30, 30, 30, 2020 2020 2019 2020 2019

Operatingactivities Net loss $ (3,985 ) $ (1,727 ) $ (2,751 ) $ (10,968 ) $ (18,502 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 5,986 5,683 5,133 17,161 14,450 and amortization Share-based 1,923 5,251 3,358 12,238 10,463 compensation Foreign currency 27 257 21 (113 ) (104 ) remeasurement loss (gain) Deferred income (95 ) 59 (61 ) (80 ) (30 ) taxes Gain on sale of (1 ) - (5 ) (1 ) (56 ) property and equipment Accounts 163 155 580 476 1,274 receivable charges Amortization of premium on 87 - 9 87 29 marketable securities Noncash 868 - - 868 - interest expense Changes in operating assets and liabilities: Accounts 2,862 (10,798 ) (5,300 ) (8,221 ) (11,051 ) receivable Prepaid expenses and (2,232 ) 986 (885 ) (2,679 ) (777 ) other current assets Income taxes (10 ) 10 45 3 43 receivable Other assets 757 1,121 781 2,504 (2,641 )

Accounts payable and 1,222 1,045 (2,798 ) 8,159 3,675 other current liabilities Deferred (172 ) 313 (112 ) (109 ) (557 ) revenue Income taxes (17 ) - 61 (15 ) 204 payable Payments - - - - (3,040 ) related to litigation, net Other long term 276 (15 ) 16 265 (137 ) liabilities Net cash provided by 7,659 2,340 (1,908 ) 19,575 (6,757 ) (used in) operating activities Investingactivities Purchases of (52,690 ) - - (52,690 ) (10,279 ) marketable securities Sale and maturities of 2,900 - 1,000 2,900 32,153 marketable securities Purchases of (7,180 ) (8,085 ) (7,750 ) (22,128 ) (24,224 ) property and equipment Proceeds from sale of 1 - 5 1 51 property and equipment Net cash provided by (56,969 ) (8,085 ) (6,745 ) (71,917 ) (2,299 ) (used in) investing activities Financingactivities Proceeds from 121,600 - - 121,600 - issuance of debt, net Purchase of (16,413 ) - - (16,413 ) - capped calls Payment of debt (784 ) - - (784 ) - issuance costs Payment of employee tax withholdings (1,041 ) (1,430 ) (1,015 ) (3,987 ) (2,528 ) related to restricted stock vesting Proceeds from 2,598 3,954 13 8,691 1,116 employee stock plans Net cash provided by 105,960 2,524 (1,002 ) 109,107 (1,412 ) (used in) financing activities Effect of exchange rate 319 - (211 ) 69 (83 ) changes on cash and cash equivalentsNet increase(decrease) in 56,969 (3,221 ) (9,866 ) 56,834 (10,551 )cash and cashequivalentsCash and cashequivalents, 18,200 21,421 24,698 18,335 25,383 beginning ofperiodCash and cash $ 75,169 $ 18,200 $ 14,832 $ 75,169 $ 14,832 equivalents, endof 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 Loss to Non-GAAP Net Income (Loss)(In thousands)(Unaudited) Three Months Ended Nine Months Ended September 30, 2020 June 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Amount Per Share Amount Per Share Amount Per Share Amount Per Share Amount Per Share U.S. GAAP $ (3,985 ) $ (0.03 ) $ (1,727 ) $ (0.01 ) $ (2,751 ) $ (0.02 ) $ (10,968 ) $ (0.09 ) $ (18,502 ) $ (0.16 )net loss Share-based 1,923 0.02 5,251 0.04 3,358 0.03 12,238 0.10 10,463 0.09 compensationNon-cash 868 0.01 - - - - 868 0.01 - - interestexpense Non-GAAP net $ (1,194 ) $ (0.01 ) $ 3,524 $ 0.03 $ 607 $ 0.01 $ 2,138 $ 0.02 $ (8,039 ) $ (0.07 )(loss)income Weightedaveragebasic shares 122,363 120,230 116,270 120,519 115,318 used in persharecalculationLIMELIGHT NETWORKS, INC.Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA(In thousands)(Unaudited)Three Months EndedNine Months EndedSeptember 30,June 30,September 30,September 30,

September 30,2020

2020

2019

2020

2019

U.S. GAAP net loss$

(3,985

)

$

(1,727

)

$

(2,751

)

$

(10,968

)

$

(18,502

)

Depreciation and amortization5,986

5,683

5,133

17,161

14,450

Interest expense1,674

71

10

1,756

30

Interest and other (income) expense(35

)

306

(68

)

356

(313

)

Income tax expense66

136

166

377

544

EBITDA$

3,706

$

4,469

$

2,490

$

8,682

$

(3,791

)

Share-based compensation1,923

5,251

3,358

12,238

10,463

Adjusted EBITDA$

5,629

$

9,720

$

5,848

$

20,920

$

6,672

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. EDT (1:30 p.m. PDT) 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 October 22, 2020, 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) 2020 Limelight Networks, Inc. All rights reserved. All product or service names are the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005946/en/

CONTACT: Limelight Networks, Inc. Sajid Malhotra, 602-850-5778 ir@llnw.com