Akamai Reports First Quarter Results - Company Financial Information

Edge: Work-Group Computing Report, May 1, 2000

Akamai Technologies, Inc. (NASDAQ: AKAM), the foremost provider of global, high performance services for the delivery of Internet content, streaming media, and applications, Monday reported financial results for the first quarter ended March 31, 2000. Revenues for the quarter increased 167% to $7.2 million, compared to revenues of $2.7 million for the previous quarter.

"The rapid pace at which Akamai has acquired hundreds of customers, the rate at which we continue to deploy our network, and the continued innovation of our service offerings has resulted in the extension of our category leadership," said George Conrades, chairman and CEO, Akamai. "Akamai has increased its lead in the distributed content delivery market measured by revenue, customer count, server count, number of networks connected and performance and reliability as determined by independent third party measurements. We are truly changing the way the Internet works for mission-critical Web content, streaming, and application delivery. It's a tribute to our dedicated employee team and supportive network partners as well as our loyal customers who continue to push us to innovate."

Net loss for the first quarter 2000 before equity related non-cash compensation charges was $33.2 million, or $0.44 per share, compared to fourth quarter 1999 net loss before equity related non-cash compensation charges and extraordinary loss from early extinguishment of debt of $23.5 million, or $0.40 per share. The EBITDA (earnings before interest, taxes, depreciation, amortization, and other non-cash charges) loss for the first quarter was $24.8 million compared to $23.9 million for the fourth quarter of 1999. Net loss attributable to common stockholders for the first quarter of 2000 and the fourth quarter of 1999 was $35.4 million and $29.8 million or $0.47 per share and $0.51 per share, respectively.

Customers Akamai's ability to rapidly extend its service offerings to almost 600 Web properties is a result of unsurpassed technology and unparalleled customer service. Customer benefits include improved return on investment (ROI) from better business results and reduced infrastructure and operating costs. During the quarter, Akamai more than doubled its installed customer base with 425 signed customers.

New customers in the quarter include Abercrombie & Fitch, Adobe, All Music Guide, APB-News.com, art.com, Blockbuster.com, BBC America, Boston.com, Big Words, Classroom Connect, Community Connect, Inc.com, latimes.com, Lycos, McAfee, Money.net, Omnipod, Pro Flowers, Quicken.com, Reuters, Shockwave, Sina.com, Wired, and Zing Networks.

Indirect channels are expanding to enhance growth. Akamai's resellers, including Digex, Global Center, and NaviSite contributed 6% of revenue during the quarter. IBM, the largest hosting company in the world, also became an Akamai reseller, as did CacheFlow, a leading provider of cache appliances.

Network Akamai today operates the largest globally distributed network for Internet content delivery and streaming media, and over the last quarter, increased its number of deployed servers to 2,800. Akamai has established its worldwide presence with servers in over 45 countries within over 160 Internet backbones, ISPs, cable head ends, DSL providers and satellite facilities. The importance of this large and rapidly growing deployment, located ever-closer to Internet users to minimize delay and congestion, is reflected in Akamai's measureable advantage in content delivery performance and reliability, and streaming quality.

During the quarter, Akamai announced strategic relationships with top-tier network providers, including America Online, Genuity, and PSINet, further expanding the global reach of Akamai's Internet content delivery network. These companies have chosen to partner with Akamai for its scaleable, value-added services platform that enables them to develop differentiated services for their customers. Placing an Akamai server within a particular network lowers that network's cost of Internet bandwidth and improves performance for content, streaming media, and applications delivery to the access customers of that network.

Technology Akamai's world-class R&D team, which now contains over 180 people, including more than 55 Ph.D.'s, continues to simultaneously improve the industry-leading performance and features of the FreeFlowSM content delivery service and the FreeFlowSM Streaming service while also developing new applications for the Akamai EdgeAdvantageTM platform. Furthermore, the EdgeAdvantage platform itself is continuously being improved and opened to our partners.

Streaming is a fast growing Akamai service for existing customers and for new business. In addition, following the rapid integration of Network24, Akamai extended its breadth of streaming service offerings. The acquired technologies broaden the functionality of Akamai's high-performance FreeFlow Streaming service to include interactive Webcast services, which integrate audience marketing and broadcast management capabilities, as well as real-time reporting tools. This enables customers to produce, manage, and deliver interactive media content supporting a number of innovative business models including pay-per-view, e-commerce, and direct marketing.