AKAMAI REPORTS FOURTH QUARTER 2004 AND
FULL-YEAR 2004 FINANCIAL RESULTS
Record fourth quarter revenue of $57.6 million, up 8 percent quarter-over-quarter; and annual revenue of $210.0 million, up 30 percent year-over-year
Fourth quarter GAAP net income of $13.4 million, or $0.10 per diluted share, an increase of 19 percent quarter-over-quarter
Full-year GAAP net income of $34.4 million, or $0.25 per diluted share, an increase of $63.6 million year-over-year
CAMBRIDGE, Mass. – February 18, 2005 – Akamai Technologies, Inc. (NASDAQ: AKAM), the leading global service provider for accelerating content and business processes online, today reported financial results for the fourth quarter and full-year ended December 31, 2004. Revenue for the fourth quarter 2004 was $57.6 million, an 8 percent increase over the previous quarter’s revenue of $53.3 million, and a 27 percent increase over fourth quarter 2003 revenue of $45.2 million. Total revenue for 2004 was $210.0 million, a 30 percent increase over 2003 revenue of $161.3 million.
Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the fourth quarter of 2004 was $13.4 million, or $0.10 per diluted share, a 19 percent increase over previous quarter net income of $11.2 million, or $0.08 per diluted share, and a $15.5 million improvement over the 2003 fourth quarter net loss of $2.1 million, or a loss of $0.02 per share. Full-year net income for 2004 was $34.4 million, or $0.25 per diluted share, a significant improvement over the 2003 net loss of $29.3 million, or a loss of $0.25 per share.
“These quarterly and full-year financial results were the most successful in the company’s six-year history,” said George Conrades, chairman and CEO of Akamai. “In 2004, we demonstrated the power of the Akamai business model by delivering strong revenue growth, high profit margins, sustainable cash flow, and increasing profitability. The market opportunity for our on-demand platform, our growing customer base, and our demonstrated ability to innovate will continue to drive our success.”
The Company generated normalized net income* of $14.5 million, or $0.10 per diluted share, in the fourth quarter of 2004, a 19 percent increase over the prior quarter normalized net income of $12.2 million, or $0.09 per diluted share. Full year normalized net income for 2004 was $42.5 million, or $0.31 per diluted share, an improvement of $67.8 million over 2003. (*See Use of Non-GAAP Financial Measures below for definitions.)
As a result of a December 2004 accounting pronouncement (EITF 04-08) regarding the inclusion of contingent convertible debt for calculation of diluted earnings per share, the Company’s GAAP and normalized diluted earnings per share results for the fourth quarter and 2004 include 12.9 million shares that underlie the Company’s outstanding 1% Senior Convertible Notes.
Adjusted EBITDA* for the fourth quarter of 2004 was $18.6 million, up from $17.9 million in the prior quarter, and $14.1 million in the fourth quarter of 2003. Adjusted EBITDA was $69.1 million for the full year up from $39.9 million in 2003. Adjusted EBITDA margins improved to 33 percent in 2004 from 25 percent in 2003. (*See Use of Non-GAAP Financial Measures below for definitions.)
Cash from operations increased 7 percent to $15.6 million in the fourth quarter as compared to third quarter cash from operations of $14.5 million, and was more than double fourth quarter 2003 cash from operations of $7.7 million. Also during the quarter, the Company further reduced long-term debt by retiring $24.9 million in principal amount of its 5½% Convertible Subordinated Notes due in 2007 (the “5½% Notes”). As a result of the repurchase of a portion of its outstanding 5½% Notes throughout 2004, the Company has decreased annual net interest expense by almost $9 million year-over-year.
At December 31, 2004, the Company had approximately 126.8 million shares of common stock outstanding, and had approximately $108.4 million of cash, cash equivalents and marketable securities.
Total customers under long-term services contracts increased by 16 percent year-over-year to 1,310. New customers in the fourth quarter included CondeNet, Inc., European Space Agency, Golden Village, Marks & Spencer, Maven Networks, Northern Tool & Equipment Co., SKF International, and Spirent Communications, among others.
Sales through resellers and sales outside the United States accounted for 28 percent and 20 percent, respectively, of revenue for the fourth quarter of 2004.
Akamai® is the leading global service provider for accelerating content and business processes online. More than 1,300 organizations have formed trusted relationships with Akamai, improving their revenue and reducing costs by maximizing the performance of their online businesses. Leveraging the Akamai EdgePlatform, these organizations gain business advantage today, and have the foundation for the emerging Web solutions of tomorrow. Akamai is “The Trusted Choice for Online Business.” For more information, visit www.akamai.com.
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