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: July 22, 2010

(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 July 28, 2010, Akamai Technologies, Inc. (“Akamai” or the “Company”) announced its financial results for its fiscal quarter ended June 30, 2010. 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 provided under Item 2.02 of 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On July 22, 2010, Akamai’s Board of Directors elected David W. Kenny, 48, to the position of President of the Company and accepted the resignation of Paul Sagan as President, which was submitted to the Company on the same date. Mr. Sagan will remain Akamai’s Chief Executive Officer and will continue to be a member of the Board of Directors; Mr. Kenny will report to Mr. Sagan. Mr. Kenny will also continue to be a member of the Board of Directors; however, he will no longer serve on the Audit Committee or the Nominating and Corporate Governance Committee. Mr. Kenny is expected to join Akamai as President on September 7, 2010 (the actual date he joins Akamai, the “Start Date”).

Mr. Kenny has served as a director of Akamai since July 2007. From June 2008 until his resignation in June 2010, Mr. Kenny was the Managing Partner of VivaKi, which is the media and digital arm of Publicis Groupe, S.A., a global marketing services holding company. From September 1997 through May 2008, he was Chief Executive Officer of Digitas, Inc., a relationship marketing services firm that was acquired by Publicis Groupe in January 2007. Mr. Kenny was a director of Digitas between 1999 and 2007 and served on the board of directors of Publicis Groupe between January 2007 and June 2010. Mr. Kenny is also currently a member of the board of directors of The Corporate Executive Board, which provides research and analysis focusing on corporate strategy and operations. Mr. Kenny does not have any family relationships with other directors or officers of the Company nor has he engaged in any related-party transactions with Akamai.

On July 22, 2010, the Compensation Committee of the Board of Directors (the “Compensation Committee”) also approved Mr. Kenny’s compensation arrangements, which are summarized below and shall become effective as of the date on which he formally becomes President.

Mr. Kenny shall initially have a base salary of $550,000.00 and shall be eligible to participate in the Company’s executive cash bonus program. For 2010, he will be eligible to receive a pro rata bonus of up to 125% of his base salary, based on Akamai’s financial achievement and Mr. Kenny’s individual performance objectives (capped at the 100% attainment level).

The Compensation Committee approved granting Mr. Kenny stock options to purchase shares of common stock of the Company under the Akamai Technologies, Inc. 2009 Stock Incentive Plan (the “Stock Incentive Plan”). The options will be issued on the Start Date. The aggregate number of shares of common stock of the Company subject to the stock options will be determined so as to make the value of such stock options equal to $4 million determined under a Black-Scholes option pricing model. The exercise price for the stock options will be the closing sale price of Akamai’s common stock as reported

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on the Nasdaq Global Select Market on the Start Date. The options will vest in accordance with the following schedule: 25% vest on the first anniversary of the Start Date and the remaining 75% vest over the ensuing three years in equal quarterly installments of 6.25%. The options are subject to the terms of the Company’s standard form of non-statutory stock option agreement previously filed on May 26, 2009 with the Securities and Exchange Commission.

The Compensation Committee also approved a grant of restricted stock units (“RSUs”) to Mr. Kenny under the Stock Incentive Plan. The RSUs will be issued on the Start Date. The aggregate number of RSUs to be granted shall be calculated by dividing $2 million by the closing sale price of Akamai’s common stock as reported on the Nasdaq Global Select Market on the Start Date. Each RSU represents the right to receive one share of Akamai common stock upon vesting. The RSUs vest 25% on the first anniversary of the Start Date, and the remaining 75% vest over the ensuing three years in equal quarterly installments of 6.25%. The RSUs are subject to the terms of the Company’s standard form of RSU agreement previously filed on May 26, 2009 with the Securities and Exchange Commission.

As Akamai’s President, Mr. Kenny will become eligible for benefits under the terms of a Change of Control and Severance Agreement with the Company (the “Kenny Severance Agreement”) in the event his employment with the Company terminates under certain circumstances. Under the terms of the agreement, if Mr. Kenny is terminated for any reason other than “cause” (as defined in the Kenny Severance Agreement) and has signed a separation and release agreement acceptable to Akamai, would be entitled to:

• a lump sum payment equal to one year of his then-current annualized base salary;

• a lump sum payment equal to the annual incentive bonus at target that would have been payable to him under his then-current cash incentive plan, if any, in the year of the his termination had both Akamai and Mr. Kenny achieved the target bonus objectives set forth in his bonus plan during such year; and

• a lump sum payment equal to 12 times the monthly premium payable by Mr. Kenny for continued health and dental insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).

If Mr. Kenny is terminated without “cause” or resigns for “good reason” (as defined in the Kenny Severance Agreement) within 12 months following a change in control of Akamai, he would be entitled to:

• a lump sum cash payment equal to two years of his then-current annualized base salary;

• a lump sum payment equal to two times his then-applicable annual incentive cash bonus that would have been payable to him under his then-current cash incentive plan, if any, in the year of the his termination had both Akamai and Mr. Kenny achieved the target bonus objectives set forth in his bonus plan during such year;

• a lump sum cash payment equal to 12 months of the amount paid by the Executive for continued health and dental insurance coverage under COBRA; and

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• 100% vesting of all outstanding stock options and all RSUs (other than RSUs that vest only upon the achievement of performance targets based on periods greater than one year) held by the him as of the date his employment terminates.

The Compensation Committee also approved amendments to the severance benefits payable to Mr. Sagan under an updated letter agreement dated July 22, 2010 (the “2010 Sagan Agreement”). Under the terms of the employment arrangements entered into between Mr. Sagan and the Company when he was elected Chief Executive Officer in January 2005 (the “2005 Sagan Agreement”), if Mr. Sagan terminates his employment for “good reason” within 12 months following a change in control of Akamai, he will be entitled to a lump sum cash payment equal to two years of his then-current base salary and an award equal to two times his then-applicable annual incentive bonus at target. Under the terms of the 2010 Sagan Agreement, the benefits described in the prior sentence would also be payable to him if his employment is terminated by Akamai or its successor within 12 months following a change of control for any reason other than “cause.” The 2010 Sagan Agreement also now provides that if, within 12 months following a change of control of Akamai, Mr. Sagan’s employment is terminated by Akamai or its successor for any reason other than “cause” or he resigns for “good reason,” he will be entitled to 100% vesting of all RSUs (other than RSUs that vest only upon the achievement of performance targets based on periods greater than one year) held by the him as of the date his employment terminates. The 2010 Sagan Agreement also includes amended definitions of “cause” and “good reason” that apply to all circumstances in which severance benefits are payable to him.

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 July 28, 2010

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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: July 28, 2010	AKAMAI TECHNOLOGIES, INC.
	/S/    J. DONALD SHERMAN
	J. Donald Sherman
	Chief Financial Officer

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Exhibit Index

99.1 Press Release dated July 28, 2010

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:
Jeff Young		Noelle Faris
Media Relations		Investor Relations
Akamai Technologies	—or—	Akamai Technologies
617-444-3913		617-444-4676
jyoung@akamai.com		nfaris@akamai.com

AKAMAI REPORTS SECOND QUARTER 2010 FINANCIAL RESULTS

• Revenue of $245.3 million, up 20 percent year-over-year

• GAAP net income of $38.1 million, or $0.20 per diluted share, up 6 percent year-over-year

• Fully taxed normalized net income* of $65.0 million, or $0.34 per diluted share, up 18 percent year-over-year

CAMBRIDGE, Mass. – July 28, 2010 – Akamai Technologies, Inc. (NASDAQ: AKAM), the leading provider of cloud optimization services, today reported financial results for the second quarter ended June 30, 2010. Revenue for second quarter 2010 was $245.3 million, a 20 percent increase over second quarter 2009 revenue of $204.6 million, and a 2 percent increase over first quarter 2010 revenue of $240.0 million.

Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the second quarter of 2010 was $38.1 million, or $0.20 per diluted share, a 6 percent increase from second quarter 2009 GAAP net income of $36.0 million, or $0.19 per diluted share, and a 7 percent decrease from first quarter 2010 GAAP net income of $40.9 million, or $0.22 per diluted share.

The Company generated fully taxed normalized net income* of $65.0 million, or $0.34 per diluted share, in the second quarter of 2010, an 18 percent improvement over second quarter 2009 fully taxed normalized net income of $55.0 million, or $0.29 per diluted share, and down 1 percent from first quarter 2010 fully taxed normalized net income of $66.0 million, or $0.35 per diluted share. (*See Use of Non-GAAP Financial Measures below for definitions.)

“Demand for our services grew across all verticals of our business,” said Paul Sagan, president and CEO of Akamai. “We believe our strong performance in the second quarter demonstrated continued traction for our services that enable cloud computing adoption, growth in online HD video, and more effective online advertising. We were also pleased to announce the acquisition of Velocitude in June, as we continue to extend our portfolio of solutions into the mobile market.”

Adjusted EBITDA* for the second quarter of 2010 was $112.1 million, up 15 percent from $97.4 million in the second quarter of 2009 and down 5 percent from $118.1 million in the

prior quarter. Adjusted EBITDA margin* for the second quarter of 2010 was 46 percent, down 2 points from the same period last year. (*See Use of Non-GAAP Financial Measures below for definitions.)

Cash from operations was $86.4 million in the second quarter of 2010 or 35 percent of revenue. At the end of the second quarter of 2010, the Company had just over $1.1 billion in cash, cash equivalents and marketable securities.

Sales through resellers and sales outside the United States accounted for 19 percent and 28 percent, respectively, of revenue for the second quarter 2010.

During the second quarter of 2010, the Company repurchased approximately 537,000 shares of common stock for an aggregate of $20.4 million at an average price of $38.02 per share. As of June 30, 2010, the Company had repurchased a total of 4.7 million shares for an aggregate of $108.6 million at an average price of $23.12 per share under the share repurchase program that was approved by the Board of Directors in April 2009 and extended in April 2010.

As of June 30, 2010, the Company had approximately 182 million shares of common stock outstanding.

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-866-383-7989 (or 1-617-597-5328 for international calls) and using passcode No. 95298336. 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 1-888-286-8010 (or 1-617-801-6888 for international calls) and using passcode No. 79962698.

About Akamai

Akamai^® provides market-leading, cloud-based services for optimizing Web and mobile content and applications, online HD video, and secure e-commerce. Combining highly-distributed, energy-efficient computing with intelligent software, Akamai’s global platform is transforming the cloud into a more viable place to inform, entertain, advertise, transact and collaborate. To learn how the world’s leading enterprises are optimizing their business in the cloud, please visit www.akamai.com and follow @Akamai on Twitter.

Financial Statements

Condensed Consolidated Balance Sheets

(dollar amounts in thousands)

(unaudited)

	June 30, 2010		Dec. 31, 2009
Assets
Cash and cash equivalents	$	120,506	$	181,305
Marketable securities		383,080		384,834
Restricted marketable securities		602		602
Accounts receivable, net		164,574		154,269
Deferred income tax assets, current portion		35,945		8,514
Prepaid expenses and other current assets		73,460		31,649
Current assets		778,167		761,173
Marketable securities		608,060		494,707
Restricted marketable securities		27		36
Property and equipment, net		227,888		182,404
Goodwill and other intangible assets, net		523,803		517,620
Other assets		11,622		4,416
Deferred income tax assets, net		53,431		127,154
Total assets	$	2,202,998	$	2,087,510
Liabilities and stockholders’ equity
Accounts payable and accrued expenses	$	101,887	$	92,563
Other current liabilities		34,385		34,975
Convertible notes, current portion		63,562		199,755
Current liabilities		199,834		327,293
Other liabilities		30,076		21,495
Total liabilities		229,910		348,788
Stockholders’ equity		1,973,088		1,738,722
Total liabilities and stockholders’ equity	$	2,202,998	$	2,087,510

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended									Six Months Ended
	June 30, 2010			Mar. 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Revenues	$	245,318		$	240,029		$	204,600		$	485,347		$	414,968
Costs and operating expenses:
Cost of revenues * †		71,840			67,474			60,009			139,314			120,371
Research and development *		13,577			13,179			9,378			26,756			20,234
Sales and marketing *		55,203			49,668			41,437			104,871			83,707
General and administrative * †		43,707			39,550			35,144			83,257			71,212
Amortization of other intangible assets		4,152			4,108			4,238			8,260			8,477
Restructuring charge		—			—			—			—			454
Total costs and operating expenses		188,479			173,979			150,206			362,458			304,455
Operating income		56,839			66,050			54,394			122,889			110,513
Interest income, net		(2,771	)		(2,662	)		(3,454	)		(5,433	)		(7,484	)
Loss on early extinguishment of debt		294			—			—			294			—
Gain on investments, net		—			—			—			—			(455	)
Other (income) loss, net		(122	)		75			(184	)		(47	)		(1,318	)
Income before provision for income taxes		59,438			68,637			58,032			128,075			119,770
Provision for income taxes		21,315			27,759			22,025			49,074			46,682
Net income	$	38,123		$	40,878		$	36,007		$	79,001		$	73,088
Net income per share:
Basic	$	0.22		$	0.24		$	0.21		$	0.46		$	0.43
Diluted	$	0.20		$	0.22		$	0.19		$	0.42		$	0.39
Shares used in per share calculations:
Basic		173,317			171,101			172,561			172,209			171,540
Diluted		190,479			189,013			189,556			189,746			188,870

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

† Includes depreciation and amortization (see supplemental table for figures)

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

	Three Months Ended									Six Months Ended
	June 30, 2010			Mar. 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Cash flows from operating activities:
Net income	$	38,123		$	40,878		$	36,007		$	79,001		$	73,088
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets and deferred financing costs		34,858			33,170			29,888			68,028			58,776
Stock-based compensation		20,276			19,108			13,320			39,384			28,387
Provision for deferred income taxes, net		19,973			24,638			20,290			44,611			43,167
Excess tax benefits from stock-based compensation		(9,750	)		(3,173	)		(333	)		(12,923	)		(658	)
(Gain) loss on investments and disposal of property and equipment, net		(264	)		19			47			(245	)		(387	)
Gain on divesture of certain assets		—			—			(1,062	)		—			(1,062	)
Provision for doubtful accounts		292			1,153			2,363			1,445			3,521
Non-cash portion of loss on early extinguishment of debt		294			—			—			294			—
Changes in operating assets and liabilities:
Accounts receivable		(18,988	)		2,582			5,941			(16,406	)		10,660
Prepaid expenses and other current assets		(28,906	)		(11,378	)		(468	)		(40,284	)		(4,275	)
Accounts payable, accrued expenses and other current liabilities		25,198			(13,320	)		(4,022	)		11,878			(21,337	)
Accrued restructuring		(48	)		(45	)		(514	)		(93	)		(675	)
Deferred revenue		1,090			(2,409	)		840			(1,319	)		946
Other noncurrent assets and liabilities		4,232			(3,470	)		1,534			762			4,149
Net cash provided by operating activities		86,380			87,753			103,831			174,133			194,300
Cash flows from investing activities:
Cash paid for acquired business, net of cash received		(12,010	)		—			—			(12,010	)		(5,779	)
Proceeds from the divesture of certain assets		—			—			1,350			—			1,350
Purchases of property and equipment and capitalization of internal-use software costs		(66,097	)		(35,190	)		(24,653	)		(101,287	)		(47,720	)
Proceeds from sales and maturities of short- and long-term marketable securities		317,165			187,557			116,896			504,722			191,672
Purchases of short- and long-term marketable securities		(382,614	)		(232,065	)		(83,902	)		(614,679	)		(163,882	)
Proceeds from the sale of property and equipment		15			23			2			38			4
Increase in other investments		—			(500	)		—			(500	)		—
Decrease in restricted investments held for security deposits		—			8			130			8			130
Net cash (used in) provided by investing activities		(143,541	)		(80,167	)		9,823			(223,708	)		(24,225	)
Cash flows from financing activities:
Proceeds from the issuance of common stock under stock option and employee stock purchase plans		16,947			4,046			6,999			20,993			10,763
Excess tax benefits from stock-based compensation		9,750			3,173			333			12,923			658
Repurchase of common stock		(20,376	)		(22,245	)		(16,905	)		(42,621	)		(16,905	)
Net cash provided by (used in) financing activities		6,321			(15,026	)		(9,573	)		(8,705	)		(5,484	)
Effects of exchange rate changes on cash and cash equivalents		(1,878	)		(641	)		1,792			(2,519	)		418
Net (decrease) increase in cash and cash equivalents		(52,718	)		(8,081	)		105,873			(60,799	)		165,009
Cash and cash equivalents, beginning of period		173,224			181,305			215,210			181,305			156,074
Cash and cash equivalents, end of period	$	120,506		$	173,224		$	321,083		$	120,506		$	321,083

	Three Months Ended						Six Months Ended
	June 30, 2010		March 31, 2010		June 30, 2009		June 30, 2010		June 30, 2009
Supplemental financial data (in thousands):
Stock-based compensation:
Cost of revenues	$	707	$	701	$	489	$	1,408	$	1,050
Research and development		3,542		3,993		2,223		7,535		4,949
Sales and marketing		8,776		9,024		6,024		17,800		13,064
General and administrative		7,251		5,390		4,584		12,641		9,324
Total stock-based compensation	$	20,276	$	19,108	$	13,320	$	39,384	$	28,387
Depreciation and amortization:
Network-related depreciation	$	24,705	$	23,055	$	20,143	$	47,760	$	39,557
Capitalized stock-based compensation amortization		1,830		1,875		1,461		3,705		2,768
Other depreciation and amortization		3,987		3,922		3,836		7,909		7,553
Amortization of other intangible assets		4,152		4,108		4,238		8,260		8,477
Total depreciation and amortization	$	34,674	$	32,960	$	29,678	$	67,634	$	58,355
Capital expenditures:
Purchases of property and equipment	$	58,243	$	28,203	$	18,258	$	86,446	$	34,032
Capitalized internal-use software		7,854		6,987		6,395		14,841		13,688
Capitalized stock-based compensation		2,202		1,477		1,244		3,679		3,152
Total capital expenditures	$	68,299	$	36,667	$	25,897	$	104,966	$	50,872
Net increase in cash, cash equivalents, marketable securities and restricted marketable securities	$	15,894	$	34,897	$	78,299	$	50,791	$	155,151
End of period statistics:
Number of customers under recurring contract		3,342		3,254		2,979
Number of employees		1,976		1,838		1,645
Number of deployed servers		73,197		65,563		50,922

* 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). 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, income taxes, depreciation and amortization of tangible and intangible assets, stock-based compensation expense, amortization of capitalized stock-based compensation, restructuring charges and benefits, acquisition related costs, certain gains and losses on investments, foreign exchange gains and losses, loss on early extinguishment of debt and gains on legal settlements. 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 income, or do not require a cash outlay, such as stock-based 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 as a percentage of revenues. 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, capitalization of internal-use software development costs and capitalization of stock-based compensation. Capital expenditures or capex are disclosed in Akamai’s 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 “fully taxed normalized net income” as net income before amortization of other intangible assets, stock-based compensation expense, amortization of capitalized stock-based compensation, restructuring charges and benefits, acquisition related costs, certain gains and losses on investments and loss on early extinguishment of debt. Akamai considers fully taxed 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 “fully taxed normalized net income per share” as fully taxed normalized net income, plus interest add-back for diluted share calculation, divided by the basic weighted average or diluted common shares outstanding used in GAAP net income per share calculations. Akamai considers fully taxed normalized net income per share to be another important indicator of overall performance of the Company because it eliminates the effect of a non-cash item.

Adjusted EBITDA and fully taxed 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 Fully taxed normalized net income

and Adjusted EBITDA

(amounts in thousands, except per share data)

	Three Months Ended									Six Months Ended
	June 30, 2010			Mar. 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Net income	$	38,123		$	40,878		$	36,007		$	79,001		$	73,088
Amortization of other intangible assets		4,152			4,108			4,238			8,260			8,477
Stock-based compensation		20,276			19,108			13,320			39,384			28,387
Amortization of capitalized stock-based compensation		1,830			1,875			1,461			3,705			2,768
Gain on investments, net		—			—			—			—			(455	)
Utilization of tax NOLs/credits *		—			—			—			—			—
Loss on early extinguishment of debt		294			—			—			294			—
Acquisition related costs		345			—			—			345			—
Restructuring charge		—			—			—			—			454
Total fully taxed normalized net income:		65,020			65,969			55,026			130,989			112,719
Interest income, net		(2,771	)		(2,662	)		(3,454	)		(5,433	)		(7,484	)
Provision for income taxes		21,315			27,759			22,025			49,074			46,682
Depreciation and amortization		28,692			26,977			23,979			55,669			47,110
Other (income) loss, net		(122	)		75			(184	)		(47	)		(1,318	)
Total Adjusted EBITDA:	$	112,134		$	118,118		$	97,392		$	230,252		$	197,709
Fully taxed normalized net income per share:
Basic	$	0.38		$	0.39		$	0.32		$	0.76		$	0.66
Diluted	$	0.34		$	0.35		$	0.29		$	0.69		$	0.60
Shares used in fully taxed normalized per share calculations:
Basic		173,317			171,101			172,561			172,209			171,540
Diluted		190,479			189,013			189,556			189,746			188,870
* Previously reported Utilization of tax NOLs/credits	$	—		$	—		$	20,236		$	—		$	43,087

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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 benefits of the Velocitude acquisition and the anticipated growth and development of our business and the markets in which we operate. 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, inability to continue to generate positive cash flow, 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.