8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report: October 24, 2007

(Date of earliest event reported)

AKAMAI TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-27275	04-3432319
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

8 Cambridge Center, Cambridge, Massachusetts 02142

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (617) 444-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On October 24, 2007, Akamai Technologies, Inc. announced its financial results for the fiscal quarter ended September 30, 2007. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1 Press Release dated October 24, 2007.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 24, 2007	AKAMAI TECHNOLOGIES, INC.
	/s/ J. Donald Sherman
	J. Donald Sherman
	Chief Financial Officer

3

Exhibit Index

99.1 Press Release dated October 24, 2007

4

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Contacts:
Jeff Young		Sandy Smith
Media Relations		Investor Relations
Akamai Technologies	–or–	Akamai Technologies
617-444-3913		617-444-2804
jyoung@akamai.com		ssmith@akamai.com

AKAMAI REPORTS THIRD QUARTER 2007 FINANCIAL RESULTS

• Revenue grew to $161.2 million, up 45 percent year-over-year and up 6 percent from the second quarter 2007

• GAAP net income was $24.3 million, or $0.13 per diluted share, up 73 percent year-over-year and up 12 percent over the second quarter 2007

• Normalized net income* was $62.4 million, or $0.34 per diluted share, up 49 percent year-over-year and up 13 percent over the second quarter 2007

CAMBRIDGE, Mass. – October 24, 2007 – Akamai Technologies, Inc. (NASDAQ: AKAM), the leading global service provider for accelerating content and applications online, today reported financial results for the third quarter ended September 30, 2007. Revenue for the third quarter 2007 was $161.2 million, a six percent increase over second quarter 2007 revenue of $152.7 million, and a 45 percent increase over third quarter 2006 revenue of $111.5 million.

Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the third quarter of 2007 was $24.3 million, or $0.13 per diluted share.

The Company generated normalized net income* of $62.4 million, or $0.34 per normalized diluted share*, in the third quarter of 2007, a 13 percent increase over second quarter 2007 normalized net income of $55.4 million, or $0.30 per diluted share, and a 49 percent improvement over 2006 third quarter normalized earnings of $41.8 million, or $0.24 per diluted share. (*See Use of Non-GAAP Financial Measures below for definitions.)

“We were very pleased with our third quarter results and the demand we saw for our services, especially as we experienced increased momentum during September,” said Paul Sagan, president and CEO of Akamai. “We saw strong growth across all of our core markets, as we continued to support our broad customer base with innovative solutions to help them realize the potential of their online businesses.”

Adjusted EBITDA* for the third quarter of 2007 was $71.9 million, up from $65.6 million in the second quarter 2007, and $46.8 million in the third quarter of 2006. Adjusted EBITDA margin for the third quarter was 45 percent, a three point improvement over the third quarter of last year. (*See Use of Non-GAAP Financial Measures below for definitions.)

Cash from operations was $77.4 million in the third quarter. On a year-to-date basis, cash from operations was $171.0 million, an increase of 56 percent over the same period last year. At the end of the third quarter, the Company had approximately $566 million in cash, cash equivalents and marketable securities.

The Company had approximately 165.7 million shares of common stock outstanding as of September 30, 2007.

Customers

The number of customers under long-term services contracts at the end of the third quarter increased by 61 to a record 2,616, a 22 percent increase year-over-year.

Sales through resellers and sales outside the United States accounted for 18 percent and 23 percent, respectively, of revenue for the third quarter 2007.

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-888-689-4521 (or 1-706-645-9202 for international calls). A live Webcast of the call may be accessed at www.akamai.com in the Investor section. In addition, a replay of the call will be available for one week following the conference through the Akamai Website or by calling 1-800-642-1687

(or 1-706-645-9291 for international calls) and using conference ID No. 18946845.

About Akamai

Akamai^® is the leading global service provider for accelerating content and applications online. Thousands of 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.

Financial Statements

Condensed Consolidated Balance Sheets

(dollar amounts in thousands)

(unaudited)

	September 30, 2007		December 31, 2006
Assets
Cash and cash equivalents	$	152,804	$	80,595
Marketable securities		283,546		188,141
Restricted marketable securities		511		1,105
Accounts receivable, net		108,205		86,232
Prepaid expenses and other current assets		25,604		18,600
Current assets		570,670		374,673
Marketable securities		125,973		161,511
Restricted marketable securities		3,102		3,102
Property and equipment, net		134,185		86,623
Goodwill and other intangible assets, net		458,243		298,263
Other assets		4,697		4,256
Deferred tax assets, net		277,750		319,504
Total assets	$	1,574,620	$	1,247,932
Liabilities and stockholders' equity
Accounts payable and accrued expenses	$	82,572	$	80,713
Other current liabilities		11,911		8,551
Current liabilities		94,483		89,264
Other liabilities		8,485		3,975
Convertible notes		199,855		200,000
Total liabilities		302,823		293,239
Stockholders' equity		1,271,797		954,693
Total liabilities and stockholders' equity	$	1,574,620	$	1,247,932

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended												Nine Months Ended
	September 30, 2007			June 30, 2007			September 30, 2006			June 30, 2006			September 30, 2007			September 30, 2006
Revenues	$	161,240		$	152,654		$	111,495		$	100,649		$	453,168		$	302,969
Costs and operating expenses:
Cost of revenues * †		43,811			39,759			24,984			21,195			118,050			65,495
Research and development *		11,408			11,663			8,862			8,373			33,675			23,961
Sales and marketing *		36,671			37,739			29,416			29,720			111,159			85,431
General and administrative * †		30,744			29,779			24,529			21,870			88,001			64,942
Amortization of other intangible assets		2,835			2,932			1,943			2,198			8,579			6,437
Restructuring benefit		—			(178	)		—			—			(178	)		—
Total costs and operating expenses		125,469			121,694			89,734			83,356			359,286			246,266
Operating income		35,771			30,960			21,761			17,293			93,882			56,703
Interest income, net		(5,913	)		(5,243	)		(3,970	)		(3,336	)		(15,888	)		(9,964	)
Loss on early extinguishment of debt		2			—			—			—			3			—
Gain on investments, net		(1	)		—			—			(2	)		(1	)		(259	)
Other (income) expense, net		(1,273	)		572			448			(475	)		(497	)		(213	)
Income before provision for income taxes		42,956			35,631			25,283			21,106			110,265			67,139
Provision for income taxes		18,692			13,985			11,264			9,842			45,176			30,361
Net income	$	24,264		$	21,646		$	14,019		$	11,264		$	65,089		$	36,778
Net income per share:
Basic	$	0.15		$	0.13		$	0.09		$	0.07		$	0.40		$	0.24
Diluted	$	0.13		$	0.12		$	0.08		$	0.07		$	0.36		$	0.22
Shares used in per share calculations:
Basic		165,474			164,798			155,739			154,702			163,947			154,753
Diluted		185,106			185,601			177,063			175,612			185,212			177,290

* Includes stock-related compensation (see supplemental table for figures)

† Includes depreciation (see supplemental table for figures)

	Three Months Ended								Nine Months Ended
	September 30, 2007		June 30, 2007		September 30, 2006		June 30, 2006		September 30, 2007		September 30, 2006
Supplemental financial data (in thousands):
Stock-related compensation:
Cost of revenues	$	896	$	847	$	517	$	533	$	2,482	$	1,323
Research and development		4,095		3,944		3,037		3,332		12,015		8,026
Sales and marketing		6,810		6,471		4,781		5,040		20,108		12,410
General and administrative		5,108		5,946		6,179		4,270		16,342		13,017
Total stock-related compensation	$	16,909	$	17,208	$	14,514	$	13,175	$	50,947	$	34,776
Depreciation and amortization:
Network-related depreciation	$	13,591	$	12,277	$	7,144	$	6,178	$	36,046	$	18,678
Capitalized stock-related compensation amortization		537		401		129		27		1,126		162
Other depreciation		2,279		1,967		1,306		1,164		5,917		3,505
Amortization of other intangible assets		2,835		2,932		1,943		2,198		8,579		6,437
Total depreciation and amortization	$	19,242	$	17,577	$	10,522	$	9,567	$	51,668	$	28,782
Capital expenditures:
Purchases of property and equipment	$	18,345	$	25,579	$	13,519	$	10,733	$	71,466	$	37,808
Capitalized internal-use software		4,981		4,113		2,932		3,494		13,095		9,044
Capitalized stock-related compensation		1,551		1,427		1,058		1,242		4,362		2,822
Total capital expenditures	$	24,877	$	31,119	$	17,509	$	15,469	$	88,923	$	49,674
Net increase in cash, cash equivalents, marketable securities and restricted marketable securities	$	62,010	$	23,895	$	48,600	$	26,059	$	131,482	$	101,953
End of period statistics:
Number of customers under recurring contract		2,616		2,555		2,144		2,060
Number of employees		1,287		1,261		917		871
Number of deployed servers		28,301		27,322		21,864		20,836

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

	Three Months Ended												Nine Months Ended
	September 30, 2007			June 30, 2007			September 30, 2006			June 30, 2006			September 30, 2007			September 30, 2006
Cash flows from operating activities:
Net income	$	24,264		$	21,646		$	14,019		$	11,264		$	65,089		$	36,778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets and deferred financing costs		19,452			17,788			10,732			9,778			52,299			29,413
Stock-related compensation		16,909			17,208			14,514			13,175			50,947			34,776
Utilization of tax NOLs/credits and changes in deferred tax assets, net		16,540			13,437			11,154			9,178			41,678			29,096
Excess tax benefits from stock-based compensation		(1,100	)		(3,009	)		(8,735	)		(5,467	)		(11,585	)		(19,601	)
(Gain) loss on sale of investments, property and equipment and foreign currency, net		(678	)		(41	)		64			(295	)		(1,167	)		(557	)
Provision for doubtful accounts		944			594			(164	)		279			2,053			433
Non-cash portion of loss on early extinguishment of debt		2			—			—			—			3			—
Non-cash portion of restructuring benefit		—			(178	)		—			—			(178	)		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net		(9,054	)		(12,156	)		(3,257	)		(7,338	)		(20,551	)		(13,998	)
Prepaid expenses and other current assets		(2,192	)		(307	)		(495	)		(1,205	)		(7,625	)		(4,814	)
Accounts payable, accrued expenses and other current liabilities		10,975			(15,797	)		12,097			(418	)		(4,128	)		18,518
Accrued restructuring		(1,049	)		(818	)		(458	)		(494	)		(2,545	)		(1,506	)
Deferred revenue		859			(1,003	)		(937	)		(602	)		3,973			1,102
Other noncurrent assets and liabilities		1,479			(35	)		(44	)		(109	)		2,695			(243	)
Net cash provided by operating activities:		77,351			37,329			48,490			27,746			170,958			109,397
Cash flows from investing activities:
Business acquisitions, net of cash acquired		—			2,440			—			—			7,875			—
Purchases of property and equipment and capitalization of internal-use software costs		(23,326	)		(29,692	)		(16,451	)		(14,227	)		(84,561	)		(46,852	)
Proceeds from sales and maturities of investments		93,335			104,414			65,501			68,966			249,418			185,233
Purchase of investments		(102,716	)		(152,831	)		(87,778	)		(86,924	)		(308,826	)		(279,707	)
Proceeds from sale of property and equipment		9			—			—			—			9			—
Decrease in restricted investments held for security deposits		723			—			—			—			723			400
Net cash used in investing activities		(31,975	)		(75,669	)		(38,728	)		(32,185	)		(135,362	)		(140,926	)
Cash flows from financing activities:
Proceeds from the issuance of common stock under stock option and employee stock purchase plans		4,835			11,059			7,186			6,822			22,586			18,651
Excess tax benefits from stock-based compensation		1,100			3,009			8,735			5,467			11,585			19,601
Payments on capital leases		—			(23	)		—			—			(23	)		—
Net cash provided by financing activities		5,935			14,045			15,921			12,289			34,148			38,252
Effects of exchange rate translation on cash and cash equivalents		1,331			212			(62	)		630			2,465			608
Net increase (decrease) in cash and cash equivalents		52,642			(24,083	)		25,621			8,480			72,209			7,331
Cash and cash equivalents, beginning of period		100,162			124,245			73,502			65,022			80,595			91,792
Cash and cash equivalents, end of period	$	152,804		$	100,162		$	99,123		$	73,502		$	152,804		$	99,123

*Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Akamai has historically provided additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). Recent legislative and regulatory changes discourage the use of and emphasis on non-GAAP financial metrics and require companies to explain why non-GAAP financial metrics are relevant to management and investors. We believe that the inclusion of these non-GAAP financial measures in this press release helps investors to gain a

meaningful understanding of our past performance and future prospects, consistent with how management measures and forecasts our performance, especially when comparing such results to previous periods or forecasts. Our management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. These measures are also used by management in its financial and operational decision-making. There are limitations associated with reliance on these non-GAAP financial metrics because they are specific to our operations and financial performance, which makes comparisons with other companies’ financial results more challenging. By providing both GAAP and non-GAAP financial measures, we believe that investors are able to compare our GAAP results to those of other companies while also gaining a better understanding of our operating performance as evaluated by management.

Akamai defines “Adjusted EBITDA” as net income, before interest, taxes, depreciation and amortization of tangible and intangible assets, stock-related compensation expense, amortization of capitalized stock-related compensation, restructuring charges and benefits, certain gains and losses on equity investments, foreign exchange gains and losses, loss on early extinguishment of debt, utilization of tax NOLs/credits and release of the deferred tax asset valuation allowance. Akamai considers Adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a good measure of the Company’s historical operating trend.

Adjusted EBITDA eliminates items that are either not part of the Company’s core operations, such as investment gains and losses, foreign exchange gains and losses, early debt extinguishment and net interest expense, or do not require a cash outlay, such as stock-related compensation. Adjusted EBITDA also excludes depreciation and amortization expense, which is based on the Company’s estimate of the useful life of tangible and intangible assets. These estimates could vary from actual performance of the asset, are based on historic cost incurred to build out the Company’s deployed network, and may not be indicative of current or future capital expenditures.

Akamai defines “Adjusted EBITDA margin” as a percentage of Adjusted EBITDA over revenue. Akamai considers Adjusted EBITDA margin to be an indicator of the Company’s operating trend and performance of its business in relation to its revenue growth.

Akamai defines “capital expenditures” or “capex” as purchases of property and equipment and capitalization of internal-use software development costs. Capital expenditures or capex are disclosed in Akamai’s condensed consolidated Statement of Cash Flows in the company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Akamai defines “normalized net income” as net income before amortization of intangible assets, stock-related compensation expense, amortization of capitalized stock-related compensation, restructuring charges and benefits, certain gains and losses on equity investments, loss on early extinguishment of debt, utilization of tax NOLs/credits and release of the deferred tax asset valuation allowance. Akamai considers normalized net income to be another important indicator of the overall performance of the Company because it eliminates the effects of events that are either not part of the Company’s core operations or are non-cash.

Akamai defines “normalized diluted shares” as diluted common shares outstanding used in GAAP net income per share calculation, excluding the effect of FAS 123R under the treasury stock method. Akamai considers normalized diluted shares to be another important indicator of overall performance of the Company because it eliminates the effect of a non-cash item.

Adjusted EBITDA and normalized net income should be considered in addition to, not as a substitute for, the Company's operating income and net income, as well as other measures of financial performance reported in accordance with GAAP.

Reconciliation of Non-GAAP Financial Measures

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the Company is presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures.

Reconciliation of GAAP net income to normalized net income

and Adjusted EBITDA

(amounts in thousands, except per share data)

	Three Months Ended												Nine Months Ended
	September 30, 2007			June 30, 2007			September 30, 2006			June 30, 2006			September 30, 2007			September 30, 2006
Net income	$	24,264		$	21,646		$	14,019		$	11,264		$	65,089		$	36,778
Amortization of intangible assets		2,835			2,932			1,943			2,198			8,579			6,437
Stock-related compensation		16,909			17,208			14,514			13,175			50,947			34,776
Amortization of capitalized stock-related compensation		537			401			129			27			1,126			162
Gain on investments, net		(1	)		—			—			(2	)		(1	)		(259	)
Utilization of tax NOLs/credits		17,833			13,437			11,154			9,178			42,971			29,096
Loss on early extinguishment of debt		2			—			—			—			3			—
Restructuring benefit		—			(178	)		—			—			(178	)		—
Total normalized net income:		62,379			55,446			41,759			35,840			168,536			106,990
Interest income, net		(5,913	)		(5,243	)		(3,970	)		(3,336	)		(15,888	)		(9,964	)
Provision for income taxes		859			548			110			664			2,205			1,265
Depreciation and amortization		15,870			14,244			8,450			7,342			41,963			22,183
Other (income) expense, net		(1,273	)		572			448			(475	)		(497	)		(213	)
Total Adjusted EBITDA:	$	71,922		$	65,567		$	46,797		$	40,035		$	196,319		$	120,261
Normalized net income per share:
Basic	$	0.38		$	0.34		$	0.27		$	0.23		$	1.03		$	0.69
Diluted	$	0.34		$	0.30		$	0.24		$	0.20		$	0.91		$	0.61
Shares used in normalized per share calculations:
Basic		165,474			164,798			155,739			154,702			163,947			154,753
Diluted		186,767			187,432			179,563			178,358			187,010			178,700

# # #

Akamai Statement Under the Private Securities Litigation Reform Act

This release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including statements concerning the expected growth and development of our business and expectations with respect to revenue. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, failure to maintain the prices we charge for our services, loss of significant customers, failure to increase our revenue and keep our expenses consistent with revenues, the effects of any attempts to intentionally disrupt our services or network by unauthorized users or others, failure to have available sufficient transmission capacity, a failure of Akamai's services or network infrastructure, inability to realize the benefits of our net operating loss carryforward, delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities, and other factors that are discussed in the Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC.

In addition, the statements in this press release represent Akamai’s expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai’s expectations or beliefs as of any date subsequent to the date of this press release.