Delaware | 0-27275 | 04-3432319 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press Release dated February 5, 2014 |
Dated: | February 5, 2014 | AKAMAI TECHNOLOGIES, INC. | |
/s/ James Benson | |||
James Benson | |||
Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press Release dated February 5, 2014 |
Contacts: | ||
Jeff Young | Tom Barth | |
Media Relations | Investor Relations | |
Akamai Technologies | Akamai Technologies | |
617-444-3913 | 617-274-7130 | |
jyoung@akamai.com | tbarth@akamai.com |
• | Revenue of $436 million, up 15% year-over-year, or up 20% year-over-year adjusted for ADS divestiture |
• | GAAP net income of $80 million, up 18% year-over-year, or $0.44 per diluted share, up 16% year-over-year (includes $6 million, or $0.03 per diluted share, depreciation benefit) |
• | Non-GAAP net income* of $100 million, up 11% year-over-year, or $0.55 per diluted share, up 10% year-over-year (includes $6 million, or $0.03 per diluted share, depreciation benefit) |
• | Revenue of $1,578 million, up 15% year-over-year, or up 18% year-over-year adjusted for ADS divestiture |
• | GAAP net income of $293 million, up 44% year-over-year, or $1.61 per diluted share, up 44% year-over-year (includes $34 million, or $0.18 per diluted share, depreciation benefit) |
• | Non-GAAP net income* of $367 million, up 26% year-over-year, or $2.02 per diluted share, up 26% year-over-year (includes $34 million, or $0.18 per diluted share, depreciation benefit) |
(in thousands) | December 31, 2013 | December 31, 2012 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 333,891 | $ | 201,989 | |||
Marketable securities | 340,005 | 235,592 | |||||
Accounts receivable, net | 271,988 | 218,777 | |||||
Prepaid expenses and other current assets | 62,096 | 51,604 | |||||
Deferred income tax assets | 21,734 | 20,422 | |||||
Current assets | 1,029,714 | 728,384 | |||||
Property and equipment, net | 450,287 | 345,091 | |||||
Marketable securities | 573,026 | 657,659 | |||||
Goodwill and acquired intangible assets, net | 834,797 | 808,255 | |||||
Deferred income tax assets | 2,325 | 21,427 | |||||
Other assets | 67,536 | 39,811 | |||||
Total assets | $ | 2,957,685 | $ | 2,600,627 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Accounts payable and accrued expenses | $ | 224,095 | $ | 176,378 | |||
Other current liabilities | 39,071 | 26,566 | |||||
Current liabilities | 263,166 | 202,944 | |||||
Deferred income tax liabilities | 4,737 | — | |||||
Other liabilities | 60,351 | 51,929 | |||||
Total liabilities | 328,254 | 254,873 | |||||
Stockholders' equity | 2,629,431 | 2,345,754 | |||||
Total liabilities and stockholders' equity | $ | 2,957,685 | $ | 2,600,627 |
Three Months Ended | Year Ended | ||||||||||||||||||
(in thousands, except per share data) | December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Revenue | $ | 435,980 | $ | 395,790 | $ | 377,872 | $ | 1,577,922 | $ | 1,373,947 | |||||||||
Costs and operating expenses: | |||||||||||||||||||
Cost of revenue (1) (2) | 133,951 | 132,039 | 139,494 | 511,087 | 529,900 | ||||||||||||||
Research and development (1) | 26,520 | 24,857 | 20,371 | 93,879 | 74,744 | ||||||||||||||
Sales and marketing (1) | 82,054 | 67,811 | 62,667 | 280,380 | 223,348 | ||||||||||||||
General and administrative (1) (2) | 71,853 | 66,634 | 53,859 | 255,218 | 210,100 | ||||||||||||||
Amortization of acquired intangible assets | 4,894 | 4,859 | 5,351 | 21,547 | 20,962 | ||||||||||||||
Restructuring charges | 952 | 69 | 392 | 1,843 | 406 | ||||||||||||||
Total costs and operating expenses | 320,224 | 296,269 | 282,134 | 1,163,954 | 1,059,460 | ||||||||||||||
Income from operations | 115,756 | 99,521 | 95,738 | 413,968 | 314,487 | ||||||||||||||
Interest income, net | 1,534 | 1,458 | 1,590 | 6,077 | 6,455 | ||||||||||||||
Other (expense) income, net | (395 | ) | (305 | ) | 200 | (491 | ) | 649 | |||||||||||
Income before provision for income taxes | 116,895 | 100,674 | 97,528 | 419,554 | 321,591 | ||||||||||||||
Provision for income taxes | 36,546 | 20,918 | 29,236 | 126,067 | 117,602 | ||||||||||||||
Net income | $ | 80,349 | $ | 79,756 | $ | 68,292 | $ | 293,487 | $ | 203,989 | |||||||||
Net income per share: | |||||||||||||||||||
Basic | $ | 0.45 | $ | 0.45 | $ | 0.38 | $ | 1.65 | $ | 1.15 | |||||||||
Diluted | $ | 0.44 | $ | 0.44 | $ | 0.38 | $ | 1.61 | $ | 1.12 | |||||||||
Shares used in per share calculations: | |||||||||||||||||||
Basic | 178,758 | 178,235 | 177,479 | 178,196 | 177,900 | ||||||||||||||
Diluted | 182,258 | 181,922 | 181,768 | 181,783 | 181,749 |
Three Months Ended | Year Ended | ||||||||||||||||||
(in thousands) | December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net income | $ | 80,349 | $ | 79,756 | $ | 68,292 | $ | 293,487 | $ | 203,989 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||
Depreciation and amortization | 49,976 | 47,954 | 54,960 | 184,431 | 204,163 | ||||||||||||||
Stock-based compensation | 23,673 | 24,479 | 21,405 | 95,884 | 90,585 | ||||||||||||||
Provision for doubtful accounts | 280 | (310 | ) | (255 | ) | 1,169 | (316 | ) | |||||||||||
Excess tax benefits from stock-based compensation | (4,649 | ) | (8,530 | ) | (5,426 | ) | (22,801 | ) | (23,015 | ) | |||||||||
Provision for deferred income taxes | 27,343 | — | (6,645 | ) | 27,343 | (5,819 | ) | ||||||||||||
Loss (gain) on disposal of property and equipment | 429 | (324 | ) | 65 | 414 | 3 | |||||||||||||
Gain from divestiture of a business | — | 1,093 | — | (1,188 | ) | — | |||||||||||||
Noncash portion of restructuring charge | 781 | — | — | 781 | — | ||||||||||||||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||||||||||||||||||
Accounts receivable | (15,863 | ) | (16,118 | ) | 19,479 | (67,184 | ) | (2,108 | ) | ||||||||||
Prepaid expenses and other current assets | 5,424 | 6,941 | (3,653 | ) | (3,842 | ) | 6,357 | ||||||||||||
Accounts payable and accrued expenses | (3,197 | ) | 20,035 | 9,523 | 40,533 | 58,672 | |||||||||||||
Deferred revenue | 504 | 4,379 | (990 | ) | 11,495 | 4,552 | |||||||||||||
Other current liabilities | 20 | 255 | (381 | ) | 52 | (3,278 | ) | ||||||||||||
Other non-current assets and liabilities | 6,662 | (1,722 | ) | (3,661 | ) | 3,334 | (3,765 | ) | |||||||||||
Net cash provided by operating activities | 171,732 | 157,888 | 152,713 | 563,908 | 530,020 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Cash paid for acquired businesses, net of cash acquired | (3,237 | ) | (27,500 | ) | (30,650 | ) | (30,657 | ) | (336,680 | ) | |||||||||
Purchases of property and equipment and capitalization of internal-use software costs | (62,335 | ) | (60,388 | ) | (61,940 | ) | (260,073 | ) | (220,977 | ) | |||||||||
Purchases of short- and long-term marketable securities | (91,329 | ) | (93,681 | ) | (198,039 | ) | (494,885 | ) | (752,342 | ) | |||||||||
Proceeds from sales and maturities of short- and long-term marketable securities | 130,433 | 57,509 | 179,913 | 475,135 | 530,065 | ||||||||||||||
Proceeds from the sale of property and equipment | 66 | 335 | — | 827 | 12 | ||||||||||||||
Other non-current assets and liabilities | (135 | ) | (2,959 | ) | (167 | ) | (3,455 | ) | 812 | ||||||||||
Net cash used in investing activities | (26,537 | ) | (126,684 | ) | (110,883 | ) | (313,108 | ) | (779,110 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Proceeds from the issuance of common stock under stock plans | 9,289 | 26,157 | 11,354 | 63,707 | 45,114 | ||||||||||||||
Excess tax benefits from stock-based compensation | 4,649 | 8,530 | 5,426 | 22,801 | 23,015 | ||||||||||||||
Employee taxes paid related to net share settlement of stock-based awards | (12,773 | ) | (7,434 | ) | (8,124 | ) | (41,332 | ) | (34,690 | ) | |||||||||
Repurchases of common stock | (48,011 | ) | (29,626 | ) | (29,819 | ) | (160,419 | ) | (141,468 | ) | |||||||||
Net cash used in financing activities | (46,846 | ) | (2,373 | ) | (21,163 | ) | (115,243 | ) | (108,029 | ) | |||||||||
Effects of exchange rate changes on cash and cash equivalents | 527 | 1,319 | (1,328 | ) | (3,655 | ) | (89 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | 98,876 | 30,150 | 19,339 | 131,902 | (357,208 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 235,015 | 204,865 | 182,650 | 201,989 | 559,197 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 333,891 | $ | 235,015 | $ | 201,989 | $ | 333,891 | $ | 201,989 |
Three Months Ended | Year Ended | ||||||||||||||||||
(in thousands, except per share data) | December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Net income | $ | 80,349 | $ | 79,756 | $ | 68,292 | $ | 293,487 | $ | 203,989 | |||||||||
Amortization of acquired intangible assets | 4,894 | 4,859 | 5,351 | 21,547 | 20,962 | ||||||||||||||
Stock-based compensation | 23,673 | 24,479 | 21,405 | 95,884 | 90,585 | ||||||||||||||
Amortization of capitalized stock-based compensation | 1,974 | 2,224 | 1,961 | 8,077 | 7,680 | ||||||||||||||
Acquisition related costs | 1,266 | 219 | 680 | 1,853 | 5,787 | ||||||||||||||
Restructuring charges | 952 | 69 | 392 | 1,843 | 406 | ||||||||||||||
Gain and other activity related to divestiture of a business | — | 1,093 | — | (1,188 | ) | — | |||||||||||||
Income tax-effect of above non-GAAP adjustments | (13,233 | ) | (22,439 | ) | (8,054 | ) | (54,124 | ) | (38,061 | ) | |||||||||
Non-GAAP net income | 99,875 | 90,260 | 90,027 | 367,379 | 291,348 | ||||||||||||||
Interest income, net | (1,534 | ) | (1,458 | ) | (1,590 | ) | (6,077 | ) | (6,455 | ) | |||||||||
Provision for GAAP income taxes | 36,546 | 20,918 | 29,236 | 126,067 | 117,602 | ||||||||||||||
Income tax-effect of above non-GAAP adjustments | 13,233 | 22,439 | 8,054 | 54,124 | 38,061 | ||||||||||||||
Depreciation and amortization | 43,108 | 40,871 | 47,648 | 154,807 | 175,521 | ||||||||||||||
Other expense (income), net | 395 | 305 | (200 | ) | 491 | (649 | ) | ||||||||||||
Adjusted EBITDA | $ | 191,623 | $ | 173,335 | $ | 173,175 | $ | 696,791 | $ | 615,428 | |||||||||
Adjusted EBITDA margin | 44 | % | 44 | % | 46 | % | 44 | % | 45 | % | |||||||||
Non-GAAP net income per share: | |||||||||||||||||||
Basic | $ | 0.56 | $ | 0.51 | $ | 0.51 | $ | 2.06 | $ | 1.64 | |||||||||
Diluted | $ | 0.55 | $ | 0.50 | $ | 0.50 | $ | 2.02 | $ | 1.60 | |||||||||
Shares used in non-GAAP per share calculations: | |||||||||||||||||||
Basic | 178,758 | 178,235 | 177,479 | 178,196 | 177,900 | ||||||||||||||
Diluted | 182,258 | 181,922 | 181,768 | 181,783 | 181,749 |
Three Months Ended | Year Ended | ||||||||||||||||||
(in thousands) | December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Revenue | $ | 435,980 | $ | 395,790 | $ | 377,872 | $ | 1,577,922 | $ | 1,373,947 | |||||||||
Less: ADS revenue | — | — | (13,350 | ) | (2,747 | ) | (43,971 | ) | |||||||||||
Revenue, adjusted for ADS divestiture | $ | 435,980 | $ | 395,790 | $ | 364,522 | $ | 1,575,175 | $ | 1,329,976 |
Three Months Ended | Year Ended | ||||||||||||||||||
(in thousands, except end of period statistics) | December 31, 2013 | September 30, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Stock-based compensation: | |||||||||||||||||||
Cost of revenue | $ | 2,637 | $ | 2,885 | $ | 2,705 | $ | 10,867 | $ | 11,309 | |||||||||
Research and development | 4,653 | 4,583 | 4,017 | 17,472 | 17,275 | ||||||||||||||
Sales and marketing | 10,012 | 10,048 | 8,651 | 39,290 | 34,322 | ||||||||||||||
General and administrative | 6,371 | 6,963 | 6,032 | 28,255 | 27,679 | ||||||||||||||
Total stock-based compensation | $ | 23,673 | $ | 24,479 | $ | 21,405 | $ | 95,884 | $ | 90,585 | |||||||||
Depreciation and amortization: | |||||||||||||||||||
Network-related depreciation | $ | 35,066 | $ | 33,909 | $ | 42,143 | $ | 128,194 | $ | 155,759 | |||||||||
Other depreciation and amortization | 8,042 | 6,962 | 5,505 | 26,613 | 19,762 | ||||||||||||||
Depreciation of property and equipment | 43,108 | 40,871 | 47,648 | 154,807 | 175,521 | ||||||||||||||
Capitalized stock-based compensation amortization | 1,974 | 2,224 | 1,961 | 8,077 | 7,680 | ||||||||||||||
Amortization of acquired intangible assets | 4,894 | 4,859 | 5,351 | 21,547 | 20,962 | ||||||||||||||
Total depreciation and amortization | $ | 49,976 | $ | 47,954 | $ | 54,960 | $ | 184,431 | $ | 204,163 | |||||||||
Capital expenditures: | |||||||||||||||||||
Purchases of property and equipment | $ | 45,397 | $ | 40,344 | $ | 47,657 | $ | 187,964 | $ | 166,773 | |||||||||
Capitalized internal-use software | 16,938 | 20,044 | 14,283 | 72,109 | 54,204 | ||||||||||||||
Capital expenditures included in the statement of cash flows | 62,335 | 60,388 | 61,940 | 260,073 | 220,977 | ||||||||||||||
Change in purchases of property and equipment and capitalization of internal-use software costs included in accrued expenses | 534 | 1,714 | (69 | ) | 225 | (527 | ) | ||||||||||||
Capital expenditures, excluding stock-based compensation | 62,869 | 62,102 | 61,871 | 260,298 | 220,450 | ||||||||||||||
Capitalized stock-based compensation | 3,073 | 3,069 | 2,582 | 12,325 | 9,276 | ||||||||||||||
Total capital expenditures* | $ | 65,942 | $ | 65,171 | $ | 64,453 | $ | 272,623 | $ | 229,726 | |||||||||
Net increase (decrease) in cash, cash equivalents and marketable securities | $ | 60,403 | $ | 68,107 | $ | 36,906 | $ | 151,682 | $ | (134,715 | ) | ||||||||
End of period statistics: | |||||||||||||||||||
Number of employees | 3,908 | 3,769 | 3,074 | ||||||||||||||||
Number of deployed servers | 147,468 | 141,353 | 127,638 |
• | Amortization of acquired intangible assets – Akamai has incurred amortization of intangible assets, included in its GAAP financial statements, related to various acquisitions Akamai has made. The amount of an acquisition’s purchase price allocated to intangible assets and term of its related amortization can vary significantly and are unique to each acquisition; therefore, Akamai excludes amortization of acquired intangible assets to provide investors with a consistent basis for comparing pre- and post-acquisition operating results. |
• | Stock-based compensation and amortization of capitalized stock-based compensation – Although stock-based compensation is an important aspect of the compensation to Akamai’s employees and executives, the expense varies with changes in the stock price and market conditions at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of Akamai’s current financial results to previous and future periods difficult to interpret; therefore, Akamai believes it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation in order to better understand the performance of Akamai’s core business performance and to be consistent with the way the investors evaluate its performance and comparison of its operating results to peer companies. |
• | Restructuring charges – Akamai has incurred restructuring charges which are included in its GAAP financial statements, primarily related to workforce reductions and estimated costs of exiting facility lease commitments. Akamai excludes these items when evaluating its continuing business performance as such items are not consistently recurring and not do reflect expected future operating expense, nor provide meaningful evaluation of current and past operations of its business. |
• | Acquisition related costs – Acquisition related costs include transaction fees, due diligence costs and other one-time direct costs associated with strategic activities. In addition, subsequent adjustments to Akamai’s initial estimated amount of contingent consideration associated with specific acquisitions are included within acquisition related costs and benefits. These amounts are impacted by the timing and size of the acquisitions. Akamai excludes acquisition related costs and benefits to provide a useful comparison of Akamai’s operating results to prior periods and to its peer companies because such amounts vary significantly based on the magnitude of its acquisition transactions. |
• | Gain and other activity related to divestiture of a business – Akamai recognized a gain and other activity related to the divestiture of ADS. Akamai excludes gains and other activity related to divestiture of a business because sales of this nature occur infrequently and are not considered part of Akamai’s core business operations. |
• | Income tax-effect of non-GAAP adjustments – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as recording or release of valuation allowances), if any. Akamai believes that applying the non-GAAP adjustments and their related income tax effect allows Akamai to more properly reflect the income attributable to its core operations. |