Akamai Reports First Quarter 2009 Financial Results, Announces Share Repurchase Program

CAMBRIDGE, Mass.--(Business Wire)--
Akamai Technologies, Inc. (NASDAQ: AKAM):

* Revenue of $210.4 million, up 12 percent year-over-year
* GAAP net income of $37.1 million, or $0.20 per diluted share
* Normalized net income* of $80.5 million, or $0.43 per diluted share, up 7
percent year-over-year
* Akamai Board of Directors authorizes $100 million share repurchase program

Akamai Technologies, Inc. (NASDAQ: AKAM), the leader in powering rich media,
dynamic transactions and enterprise applications online, today reported
financial results for the first quarter ended March 31, 2009. Revenue for the
first quarter 2009 was $210.4 million, a 12 percent increase over first quarter
2008 revenue of $187.0 million, and a one percent decrease under fourth quarter
2008 revenue of $212.6 million.

Net income in accordance with United States Generally Accepted Accounting
Principles, or GAAP, for the first quarter of 2009 was $37.1 million, or $0.20
per diluted share, a slight increase from 2008 first quarter GAAP net income of
$36.9 million, or $0.20 per diluted share, and a 9 percent decrease from fourth
quarter 2008 GAAP net income of $40.5 million, or $0.22 per diluted share.

The Company generated normalized net income* of $80.5 million, or $0.43 per
diluted share, in the first quarter of 2009, a 7 percent improvement over 2008
first quarter normalized net income of $75.6 million, or $0.41 per diluted
share, and down slightly from the fourth quarter 2008 normalized net income of
$82.2 million, or $0.44 per diluted share. (*See Use of Non-GAAP Financial
Measures below for definitions.)

"We are pleased with our strong start to the year," said Paul Sagan, president
and CEO of Akamai. "The Company`s first quarter results demonstrate the power of
Akamai`s business model, which is based on providing differentiated, value-added
solutions to our clients worldwide. Further, our scale provides us with
tremendous operating advantages that are clear in our bottom line results."

The Company also announced that its Board of Directors has authorized a $100
million share repurchase program to be funded by cash from operations. The
Company plans to use this program over the next several quarters to roughly
offset dilution created by ongoing equity compensation programs.

The timing and amount of any shares repurchased will be determined by the
Company's management based on its evaluation of market conditions and other
factors. Repurchases may also be made under a Rule 10b5-1 plan, which would
permit the Company to repurchase shares when the Company might otherwise be
precluded from doing so under insider trading laws. The Company may choose to
suspend or discontinue the repurchase program at any time.

"The Board`s authorization of a share repurchase program reflects our continued
confidence in the future of our business and our focus on providing an
attractive return on investment to our shareholders," said JD Sherman, CFO of
Akamai. "We plan to fund this program out of our operating cash flow while
maintaining flexibility to make strategic investments, which is a testament to
our belief in the strength of our business."

Cash from operations was $90.5 million in the first quarter of 2009, up 3
percent over 2008 first quarter cash from operations of $88.0 million. At the
end of the first quarter of 2009, the Company had approximately $848.5 million
in cash, cash equivalents and marketable securities.

The Company had approximately 172.7 million shares of common stock outstanding
as of March 31, 2009.

Customers

The number of customers under long-term services contracts at the end of the
first quarter increased to a record 2,950, including acerno customers, a 10
percent increase year-over-year.

Sales through resellers and sales outside the United States accounted for 17
percent and 28 percent, respectively, of revenue for the first quarter 2009.

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed
through 1-866-383-8008 (or 1-617-597-5341 for international calls) and using
passcode No. 98556092. 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. 37657932.

The Akamai Difference

Akamai® provides market-leading managed services for powering rich media,
dynamic transactions, and enterprise applications online. Having pioneered the
content delivery market one decade ago, Akamai's services have been adopted by
the world's most recognized brands across diverse industries. The alternative to
centralized Web infrastructure, Akamai's global network of tens of thousands of
distributed servers provides the scale, reliability, insight and performance for
businesses to succeed online. Akamai has transformed the Internet into a more
viable place to inform, entertain, advertise, interact, and collaborate. To
experience The Akamai Difference, visit www.akamai.com.

Financial Statements

Condensed Consolidated Balance Sheets
(dollar amounts in thousands)
(unaudited)

Mar. 31, 2009 Dec. 31, 2008
Assets
Cash and cash equivalents $ 215,210 $ 156,074
Marketable securities 235,334 171,097
Restricted marketable securities 3,460 3,460
Accounts receivable, net 149,280 139,612
Prepaid expenses and other current assets 35,212 31,666
Current assets 638,496 501,909
Marketable securities 394,322 440,843
Restricted marketable securities 153 153
Property and equipment, net 174,651 174,483
Goodwill and other intangible assets, net 530,325 534,253
Other assets 5,315 5,592
Deferred income tax assets, net 196,050 223,718
Total assets $ 1,939,312 $ 1,880,951

Liabilities and stockholders' equity
Accounts payable and accrued expenses $ 63,594 $ 87,297
Deferred revenue 25,829 11,506
Other current liabilities 1,546 1,653
Current liabilities 90,969 100,456
Other liabilities 17,146 11,870
Convertible notes 199,855 199,855
Total liabilities 307,970 312,181
Stockholders' equity 1,631,342 1,568,770
Total liabilities and stockholders' equity $ 1,939,312 $ 1,880,951

Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)

Three Months Ended
Mar. 31, Dec. 31, Mar. 31,
2009 2008 2008

Revenues $ 210,368 $ 212,554 $ 187,019

Costs and operating expenses:
Cost of revenues * † 60,362 60,688 51,575
Research and development * 10,856 10,477 9,304
Sales and marketing * 42,270 45,206 35,944
General and administrative * † 36,068 35,183 33,266
Amortization of other intangible assets 4,239 3,651 3,590
Restructuring charge 454 2,509 -
Total costs and operating expenses 154,249 157,714 133,679
Operating income 56,119 54,840 53,340

Interest income, net (4,030 ) (4,862 ) (7,331 )
(Gain) loss on investments, net (455 ) 430 (208 )
Other income, net (1,134 ) (801 ) (476 )
Income before provision for income taxes 61,738 60,073 61,355
Provision for income taxes 24,657 19,540 24,444
Net income $ 37,081 $ 40,533 $ 36,911

Net income per share:
Basic $ 0.22 $ 0.24 $ 0.22
Diluted $ 0.20 $ 0.22 $ 0.20

Shares used in per share calculations:
Basic 170,519 168,843 165,959
Diluted 188,183 186,694 185,744

* Includes stock-based compensation (see supplemental table for figures)
† Includes depreciation and amortization (see supplemental table for figures)

Three Months Ended
Mar. 31, Dec. 31, Mar. 31,
2009 2008 2008
Supplemental financial data (in thousands):

Stock-based compensation:
Cost of revenues $ 561 $ 636 $ 566
Research and development 2,726 3,213 2,448
Sales and marketing 7,040 7,271 4,949
General and administrative 4,740 4,409 3,288
Total stock-based compensation $ 15,067 $ 15,529 $ 11,251

Depreciation and amortization:
Network-related depreciation $ 19,414 $ 18,944 $ 15,399
Capitalized stock-based compensation amortization 1,307 1,219 861
Other depreciation and amortization 3,717 3,639 2,797
Amortization of other intangible assets 4,239 3,651 3,590
Total depreciation and amortization $ 28,677 $ 27,453 $ 22,647

Capital expenditures:
Purchases of property and equipment $ 15,774 $ 14,140 $ 21,911
Capitalized internal-use software 7,293 6,296 6,301
Capitalized stock-based compensation 1,908 1,978 1,671
Total capital expenditures $ 24,975 $ 22,414 $ 29,883

Net increase (decrease) in cash, cash equivalents, marketable $ 76,852 $ (17,074 ) $ 53,586
securities and restricted marketable securities

End of period statistics:
Number of customers under recurring contract 2,950 2,858 2,672
Number of employees 1,578 1,537 1,394
Number ofdeployed servers 48,865 42,669 34,551

Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)

Three Months Ended
Mar. 31, Dec. 31, Mar. 31,
2009 2008 2008

Cash flows from operating activities:
Net income $ 37,081 $ 40,533 $ 36,911

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of intangible assets and deferred financing costs 28,888 27,662 22,857
Stock-based compensation 15,067 15,529 11,251
Provision for deferred income taxes, net 22,877 14,165 23,217
Excess tax benefits from stock-based compensation (325 ) (143 ) (3,277 )
(Gain) loss on investments and disposal of property and equipment, net (434 ) 529 (271 )
Provision for doubtful accounts 1,158 1,229 353
Non-cash portion of restructuring charge (benefit) - (842 ) -
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable 4,719 (10,582 ) (2,072 )
Prepaid expenses and other current assets (3,807 ) 2,737 (2,131 )
Accounts payable, accrued expenses and other current liabilities (17,315 ) (3,148 ) (928 )
Accrued restructuring (161 ) 1,763 (164 )
Deferred revenue 106 841 2,522
Other noncurrent assets and liabilities 2,615 2,200 (259 )
Net cash provided by operating activities 90,469 92,473 88,009

Cash flows from investing activities:
Cash paid for acquired business (5,779 ) (83,719 ) -
Purchases of property and equipment and capitalization of internal-use software costs (23,067 ) (20,436 ) (28,212 )
Proceeds from sales and maturities of short- and long-term marketable securities 74,776 77,196 154,466
Purchases of short- and long-term marketable securities (79,980 ) (53,514 ) (160,182 )
Proceeds from the sale of property and equipment 2 6 67
Net cash used in investing activities (34,048 ) (80,467 ) (33,861 )

Cash flows from financing activities:
Proceeds from the issuance of common stock under stock option 3,764 2,164 4,509
and employee stock purchase plans
Excess tax benefits from stock-based compensation 325 143 3,277
Net cash provided by financing activities 4,089 2,307 7,786

Effects of exchange rate changes on cash and cash equivalents (1,374 ) (261 ) 1,483

Net increase in cash and cash equivalents 59,136 14,052 63,417
Cash and cash equivalents, beginning of period 156,074 142,022 145,078
Cash and cash equivalents, end of period $ 215,210 $ 156,074 $ 208,495

*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). Recent 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, taxes,
depreciation and amortization of tangible and intangible assets, stock-based
compensation expense, amortization of capitalized stock-based compensation,
restructuring charges and benefits, certain gains and losses on investments,
foreign exchange gains and losses, loss on early extinguishment of debt, gains
on legal settlements, utilization of tax NOLs/credits and release of the
deferred tax asset valuation allowance. 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 "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,
certain gains and losses on investments, loss on early extinguishment of debt,
utilization of tax NOLs/credits and release of the deferred tax asset valuation
allowance. 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 "diluted shares used in normalized net income per share
calculation" as diluted common shares outstanding used in GAAP net income per
share calculation, excluding the effect of FAS 123R under the treasury stock
method. Akamai considers normalized net income to be another important indicator
of overall performance of the Company because it eliminates the effect of a
non-cash item.

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
Mar. 31, Dec. 31, Mar. 31,
2009 2008 2008

Net income $ 37,081 $ 40,533 $ 36,911

Amortization of other intangible assets 4,239 3,651 3,590
Stock-based compensation 15,067 15,529 11,251
Amortization of capitalized stock-based compensation 1,307 1,219 861
(Gain) loss on investments, net (455 ) 430 (208 )
Utilization of tax NOLs/credits 22,851 18,336 23,217
Restructuring charge 454 2,509 -

Total normalized net income: 80,544 82,207 75,622

Interest income, net (4,030 ) (4,862 ) (7,331 )
Provision for income taxes 1,806 1,204 1,227
Depreciation and amortization 23,131 22,583 18,196
Other income, net (1,134 ) (801 ) (476 )

Total Adjusted EBITDA: $ 100,317 $ 100,331 $ 87,238

Normalized net income per share:
Basic $ 0.47 $ 0.49 $ 0.46
Diluted $ 0.43 $ 0.44 $ 0.41

Shares used in normalized per share calculations:
Basic 170,519 168,843 165,959
Diluted 188,183 186,489 186,826

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 growth and development of
our business, the strength of our business model, our operating advantages, and
expectations with respect to revenue and the scope of, and the availability of
operating cash flow for, the proposed repurchase program. 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.

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

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