Inktomi Reports Third Quarter Financial Results; Revenues Increase 212% Year over Year and 34% Quarter over Quarter - 3rd qtr 1999 - Company Financial Information

Edge: Work-Group Computing Report, July 19, 1999

Inktomi Corp. (NASDAQ: INKT) Wednesday reported financial results for the third fiscal quarter ended June 30, 1999. Revenues were $19.6 million, a 212 percent increase over revenues of $6.3 million in the same period in 1998 and a 34 percent sequential increase over the previous quarter. Excluding one-time acquisition-related charges of $1.1 million for the purchase of Impulse! Buy Network, net loss for the third quarter was $5.2 million or a loss of 10 cents per share compared to a loss of $6.3 million or a loss of 15 cents per share in the prior year. With the inclusion of one-time acquisition-related charges, the net loss was $6.3 million or a loss of 13 cents per share.

"During the quarter we continued to show top-line revenue growth, major customer design wins and strong market expansion," said David Peterschmidt, president and CEO of Inktomi. "We launched our new Directory Engine, extended the Traffic Server platform for value-added services, forged an alliance with America Online for our Search Engine, introduced new scientific innovations and completed the acquisition of Impulse! Buy Network."

Inktomi (pronounced INK-tuh-me), develops and markets scalable software designed for the world's largest Internet infrastructure and media companies. Inktomi's two areas of business are portal services, comprised of the search, directory and shopping engines; and network products comprised of the Traffic Server network cache and associated value-added services. Inktomi works with leading companies including America Online, British Telecommunications, CNN, Excite@Home, GoTo.com, Intel, NBC's Snap!, RealNetworks, Sun Microsystems and Yahoo!. The company has offices in North America, Europe, and Asia. For more information visit www.inktomi.com.

Note to Editors: Inktomi, the tri-colored cube logo, Scaling the Internet and Traffic Server are trademarks or registered trademarks of INKTOMI CORPORATION.

Inktomi Corporation
Consolidated Statements of Operations
(In thousands, except per share data)

                            For the Three            For the Nine
                             Months Ended            Months Ended
                               June 30,                June 30,
                          1999         1998         1999       1998
                     (Unaudited) (Unaudited)(Unaudited) (Unaudited)
                                  (Restated) (Restated)  (Restated)

Revenues
 Network products          $ 11,818   $ 3,062    $ 25,520  $ 3,753
 Portal services              7,794     3,233      19,477    8,419
                           --------   -------     -------  -------
   Total revenues            19,612     6,295      44,997   12,172

Operating expenses
  Cost of revenues            3,324     1,276       8,265    2,971
  Sales and marketing        13,102     6,574      34,110 13,621
  Research and development    7,679     3,682      18,890  8,697
  General and administrative  1,590   1,109       4,362    2,885
  Acquisition-related costs   1,110       -       1,110      -
                             ------    ------      ------   ------
    Total operating expenses 26,805    12,641      66,737   28,174
                             ------    ------      ------   ------

Operating loss               (7,193)   (6,346)    (21,740) (16,002)

Interest income (expense), net  870      91       2,445       (2)
                                ---        --       -----        -
Net loss                   $ (6,323) $ (6,255)   $(19,295)$(16,004)
                            =======   =======     =======  =======
Basic and diluted net
 loss per share             $ (0.13)  $ (0.15)    $ (0.39) $ (0.45)
                              =====     =====      ======   ======
Shares used in calculating
   basic and diluted net loss
   per share                 49,977    42,041      49,268   35,539
                             ======    ======      ======   ======

Inktomi Corporation
Consolidated Balance Sheets
(In thousands)
                                          June 30,    September 30,
                                            1999           1998
                                        (Unaudited)     (Restated)
Assets
Current assets
 Cash and cash equivalents                $  29,838      $  29,267
 Short-term investments                      82,645         19,690
                                          ---------      ---------
  Total cash and short-term investments     112,483         48,957
 Accounts receivable, net                    14,277          5,089
 Prepaid expenses and other
  current assets                              1,307            588
                                            -------        -------
  Total current assets                      128,067         54,634

Property and equipment, net                  27,156         17,516
Other assets                                  2,201            211
                                              -----            ---
  Total assets                            $ 157,424      $  72,361
                                            =======         ======

Liabilities and Stockholders' Equity
Current liabilities
Current portion of notes payable          $   4,635      $   3,832
   Current portion of
  capital lease obligations                   2,623          2,054
Accounts payable                              6,839          4,938
Accrued liabilities                           8,206          6,764
Deferred revenue                              5,313          1,370
                                              -----          -----
   Total current liabilities                 27,616         18,958
Notes payable                                 5,540        4,236
Capital lease obligations,
  less current portion                        2,549          4,646
                                              -----          -----
   Total liabilities                         35,705         27,840


Stockholders' equity
   Preferred stock, $0.001 par value;
    Authorized: 10,000
    authorized at September 30, 1998
    and June 30, 1999; Issued
    and outstanding:
    none at September 30, 1998 and
    June 30, 1999                                --             --
   Common stock, $0.001 par value;
    Authorized:100,000 at September 30,
    1998 and 300,000 at June 30, 1999;
    Outstanding:  47,476 at September 30,
    1998 and 50,283 at June 30, 1999             50           47
  Additional paid-in capital                181,791         86,106
  Deferred compensation and other            (2,381)        (3,186)
  Accumulated deficit                       (57,741)       (38,446)
                                            -------        -------
   Total stockholders' equity               121,719         44,521
                                            -------         ------
Total liabilities and stockholders' equity $157,424        $72,361
                                           ========        =======