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 25, 2012

(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 25, 2012, Akamai Technologies, Inc. (the “Company”) announced its financial results for the quarter ended June 30, 2012. 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 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 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 25, 2012

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: July 25, 2012	AKAMAI TECHNOLOGIES, INC.
	/s/ James Benson
	James Benson
	Chief Financial Officer

3

Exhibit Index

99.1 Press Release dated July 25, 2012

4

EX-99.1

Exhibit 99.1

Contacts:
Jeff Young Media Relations Akamai Technologies 617-444-3913 jyoung@akamai.com	—or—	Natalie Temple Investor Relations Akamai Technologies 617-444-3635 ntemple@akamai.com

AKAMAI REPORTS SECOND QUARTER 2012

FINANCIAL RESULTS

• Second quarter revenue of $331 million, up 20 percent year-over-year

• GAAP net income of $44 million, down 8 percent year-over-year; or $0.24 per diluted share, down 4 percent year-over-year

• Normalized net income* of $78 million, up 18 percent year-over-year; or $0.43 per diluted share, up 23 percent year-over-year

CAMBRIDGE, Mass. – July 25, 2012 – Akamai Technologies, Inc. (NASDAQ: AKAM), the leading cloud platform for helping enterprises provide secure, high-performing user experiences on any device, anywhere, today reported financial results for the second quarter ended June 30, 2012. Revenue for the second quarter of 2012 was $331 million, a 20 percent increase over second quarter 2011 revenue of $277 million.

Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the second quarter of 2012 was $44 million, or $0.24 per diluted share, an 8 percent decrease from second quarter 2011 GAAP net income of $48 million, or $0.25 per diluted share, and a 2 percent increase from first quarter 2012 GAAP net income of $43 million, or $0.24 per diluted share.

The Company generated normalized net income* of $78 million, or $0.43 per diluted share, in the second quarter of 2012, an 18 percent increase over second quarter 2011 normalized net income of $66 million, or $0.35 per diluted share, and a 3 percent increase from the prior quarter normalized net income of $75 million, or $0.41 per diluted share. (*See Use of Non-GAAP Financial Measures below for definitions.)

“Akamai’s very strong second quarter results were driven on the top line by increased adoption of our cloud infrastructure solutions as well as continued growth of content delivery solutions,” said Paul Sagan, President and CEO of Akamai. “Our bottom line performance was the result of significant benefits we have begun to realize from improvements we are making to scale our network operations.”

Adjusted EBITDA* for the second quarter of 2012 was $143 million, up 13 percent from $126 million in the second quarter of 2011, and flat with the prior quarter. Adjusted EBITDA margin* for the second quarter was 43 percent, down 2 points from the prior quarter and down 3 points from the same period last year. (*See Use of Non-GAAP Financial Measures below for definitions.)

Cash from operations was $150 million in the second quarter of 2012, or 45 percent of revenue. At the end of the second quarter of 2012, the Company had just over $1 billion in cash, cash equivalents and marketable securities.

Sales through resellers and sales outside the United States accounted for 21 percent and 27 percent, respectively, of revenue for the second quarter of 2012.

Share Repurchase Program

During the second quarter of 2012, under a share repurchase program that was approved by the Board of Directors in April 2011 and expanded in May 2012, the Company repurchased approximately 2 million shares of its common stock for $67 million, at an average price of $30.78 per share. As of June 30, 2012, the Company had repurchased 20 million shares of its common stock for $558 million, at an average price of $27.27 per share since April 2009.

The Company had approximately 178 million shares of common stock outstanding as of June 30, 2012.

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-800-291-5365 (or 1-617-614-3922 for international calls) and using passcode No. 94771540. 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. 25706113.

About Akamai

Akamai^® is the leading cloud platform for helping enterprises provide secure, high-performing user experiences on any device, anywhere. At the core of the Company's solutions is the Akamai Intelligent Platform™ providing extensive reach, coupled with unmatched reliability, security, visibility and expertise. Akamai removes the complexities of connecting the increasingly mobile world, supporting 24/7 consumer demand, and enabling enterprises to securely leverage the cloud. To learn more about how Akamai is accelerating the pace of innovation in a hyperconnected world, please visit www.akamai.com or blogs.akamai.com, and follow @Akamai on Twitter.

Condensed Consolidated Balance Sheets

(dollar amounts in thousands)

(unaudited)

	Jun. 30, 2012		Dec. 31, 2011
Assets
Cash and cash equivalents	$	182,996	$	559,197
Marketable securities		313,564		290,029
Accounts receivable, net		206,316		210,936
Deferred income tax assets, current portion		6,444		6,444
Prepaid expenses and other current assets		47,285		55,414
Current assets		756,605		1,122,020
Marketable securities		521,885		380,729
Property and equipment, net		315,866		293,043
Goodwill and other intangible assets, net		793,724		498,300
Other assets		14,314		7,924
Deferred income tax assets, net		43,182		43,485
Total assets	$	2,445,576	$	2,345,501
Liabilities and stockholders’ equity
Accounts payable and accrued expenses	$	139,154	$	123,618
Other current liabilities		26,698		24,774
Current liabilities		165,852		148,392
Other liabilities		65,091		40,859
Total liabilities		230,943		189,251
Stockholders’ equity		2,214,633		2,156,250
Total liabilities and stockholders’ equity	$	2,445,576	$	2,345,501

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended									Six Months Ended
	Jun. 30, 2012			Mar. 31, 2012			Jun. 30, 2011			Jun. 30, 2012		Jun. 30, 2011
Revenues	$	331,306		$	319,448		$	276,989		$	650,754	$	552,942
Costs and operating expenses:
Cost of revenues * †		107,457			102,566			89,647			210,023		178,715
Research and development *		17,542			17,480			11,006			35,022		23,600
Sales and marketing *		75,882			67,290			52,837			143,172		106,202
General and administrative * †		57,997			55,706			45,975			113,703		89,876
Amortization of other intangible assets		5,463			4,767			4,292			10,230		8,569
Restructuring (benefit) charge		(46	)		60			-			14		—
Total costs and operating expenses		264,295			247,869			203,757			512,164		406,962
Operating income		67,011			71,579			73,232			138,590		145,980
Interest income, net		1,626			1,646			3,096			3,272		6,056
Other income (expense), net		1,131			(441	)		(107	)		690		(1,142	)
Income before provision for income taxes		69,768			72,784			76,221			142,552		150,894
Provision for income taxes		25,529			29,557			28,300			55,086		52,356
Net income	$	44,239		$	43,227		$	47,921		$	87,466	$	98,538
Net income per share:
Basic	$	0.25		$	0.24		$	0.26		$	0.49	$	0.53
Diluted	$	0.24		$	0.24		$	0.25		$	0.48	$	0.52
Shares used in per share calculations:
Basic		178,547			178,120			186,612			178,332		186,731
Diluted		181,817			182,342			190,179			182,080		190,781

* 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
	Jun. 30, 2012			Mar. 31, 2012			Jun. 30, 2011			Jun. 30, 2012			Jun. 30, 2011
Cash flows from operating activities:
Net income	$	44,239		$	43,227		$	47,921		$	87,466		$	98,538
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		50,112			45,634			41,333			95,746			82,467
Stock-based compensation		25,621			20,924			11,612			46,545			27,324
Excess tax benefits from stock-based compensation		(1,635	)		(13,414	)		(1,838	)		(15,049	)		(10,850	)
(Gain) loss on investments and disposal of property and equipment, net		(107	)		(97	)		(113	)		(204	)		4
Provision for doubtful accounts		(86	)		370			132			284			454
Accounts receivable		7,803			(1,416	)		(7,101	)		6,387			456
Prepaid expenses and other current assets		4,663			4,309			6,917			8,972			841
Accounts payable, accrued expenses and other current liabilities		15,939			(5,798	)		2,678			10,141			(5,713	)
Accrued restructuring		(725	)		(2,144	)		(32	)		(2,869	)		(32	)
Deferred revenue		2,667			1,474			1,271			4,141			(2,182	)
Other noncurrent assets and liabilities		1,061			(566	)		9,068			495			9,052
Net cash provided by operating activities		149,552			92,503			111,848			242,055			200,359
Cash flows from investing activities:
Cash paid for acquired businesses, net of cash received		—			(291,638	)		(375	)		(291,638	)		(550	)
Purchases of property and equipment and capitalization of internal-use software costs		(55,539	)		(43,344	)		(42,740	)		(98,883	)		(88,975	)
Proceeds from sales and maturities of short- and long-term marketable securities		134,171			117,414			263,870			251,585			511,137
Purchases of short- and long-term marketable securities		(135,845	)		(280,649	)		(302,520	)		(416,494	)		(578,135	)
Proceeds from the sale of property and equipment		2			10			63			12			88
Decrease in restricted investments held for security deposits		—			—			—			—			221
Net cash used in investing activities		(57,211	)		(498,207	)		(81,702	)		(555,418	)		(156,214	)
Cash flows from financing activities:
Proceeds from the issuance of common stock under stock option and employee stock purchase plans		15,491			7,078			8,163			22,569			12,122
Excess tax benefits from stock-based compensation		1,635			13,414			1,838			15,049			10,850
Taxes paid related to net share settlement of equity awards		(2,541	)		(21,655	)		(3,507	)		(24,196	)		(3,507	)
Repurchase of common stock		(67,213	)		(7,913	)		(48,935	)		(75,126	)		(92,613	)
Net cash used in financing activities		(52,628	)		(9,076	)		(42,441	)		(61,704	)		(73,148	)
Effects of exchange rate changes on cash and cash equivalents		(1,441	)		307			750			(1,134	)		2,766
Net increase (decrease) in cash and cash equivalents		38,272			(414,473	)		(11,545	)		(376,201	)		(26,237	)
Cash and cash equivalents, beginning of period		144,724			559,197			217,174			559,197			231,866
Cash and cash equivalents, end of period	$	182,996		$	144,724		$	205,629		$	182,996		$	205,629

	Three Months Ended							Six Months Ended
	Jun. 30, 2012		Mar. 31, 2012			Jun. 30, 2011		Jun. 30, 2012			Jun. 30, 2011
Supplemental financial data (in thousands):
Stock-based compensation:
Cost of revenues	$	884	$	683		$	590	$	1,567		$	1,145
Research and development		4,901		3,930			2,124		8,831			4,886
Sales and marketing		10,994		10,134			5,315		21,128			12,161
General and administrative		8,842		6,177			3,583		15,019			9,132
Total stock-based compensation	$	25,621	$	20,924		$	11,612	$	46,545		$	27,324
Depreciation and amortization:
Network-related depreciation	$	37,989	$	34,605		$	31,245	$	72,594		$	61,932
Capitalized stock-based compensation amortization		1,939		1,755			1,938		3,694			4,003
Other depreciation and amortization		4,721		4,507			3,858		9,228			7,963
Amortization of other intangible assets		5,463		4,767			4,292		10,230			8,569
Total depreciation and amortization	$	50,112	$	45,634		$	41,333	$	95,746		$	82,467
Capital expenditures:
Purchases of property and equipment	$	42,188	$	30,433		$	32,925	$	72,621		$	68,525
Capitalized internal-use software		13,351		12,911			9,815		26,262			20,450
Capitalized stock-based compensation		1,835		2,298			1,641		4,133			3,465
Total capital expenditures	$	57,374	$	45,642		$	44,381	$	103,016		$	92,440
Net increase (decrease) in cash, cash equivalents, marketable securities and restricted marketable securities	$	39,725	$	(251,235	)	$	28,236	$	(211,510	)	$	42,071
End of period statistics:
Number of employees		2,654		2,539			2,244
Number of deployed servers		115,008		108,507			95,811

*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 pronouncements 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 and our earnings call 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 may make 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 and benefits, certain gains and losses on investments, foreign exchange gains and losses, loss on early extinguishment of debt and gains and losses 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 that 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 the historical 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 “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 and benefits, certain gains and losses on investments, loss on early extinguishment of debt and gains and losses on legal settlements. 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 net income per share” as 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 normalized net income per share to be another important indicator of overall performance of the Company because it eliminates the effect of non-cash items. 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									Six Months Ended
	Jun. 30, 2012			Mar. 31, 2012			Jun. 30, 2011			Jun. 30, 2012			Jun. 30, 2011
Net income	$	44,239		$	43,227		$	47,921		$	87,466		$	98,538
Amortization of other intangible assets		5,463			4,767			4,292			10,230			8,569
Stock-based compensation		25,621			20,924			11,612			46,545			27,324
Amortization of capitalized stock-based compensation		1,939			1,755			1,938			3,694			4,003
Acquisition related costs (benefits)		376			4,452			—			4,828			(440	)
Restructuring (benefit) charge		(46	)		60			—			14			—
Total normalized net income:		77,592			75,185			65,763			152,777			137,994
Interest income, net		(1,626	)		(1,646	)		(3,096	)		(3,272	)		(6,056	)
Provision for income taxes		25,529			29,557			28,300			55,086			52,356
Depreciation and amortization		42,710			39,112			35,103			81,822			69,895
Other (income) expense, net		(1,131	)		441			107			(690	)		1,142
Total Adjusted EBITDA:	$	143,074		$	142,649		$	126,177		$	285,723		$	255,331
Normalized net income per share:
Basic	$	0.43		$	0.42		$	0.35		$	0.86		$	0.74
Diluted	$	0.43		$	0.41		$	0.35		$	0.84		$	0.72
Shares used in normalized per share calculations:
Basic		178,547			178,120			186,612			178,333			186,731
Diluted		181,817			182,342			190,179			182,080			190,781

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 about future revenue growth. 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, effects of increased competition including potentially failure to maintain the prices we charge for our services and loss of significant customers; failure of the markets we address or plan to address to develop as we expect or at all; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; a failure of Akamai’s services or network infrastructure; 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 or failure of such solutions to operate as expected, 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.