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Limelight Networks Earnings Recap
Last week’s quarterly earnings call not only highlighted growing revenue rates across our business, but also identified key market trends guiding Limelight Networks’ future. First on the numbers front, Limelight generated $42.2 million in revenue in Q2, with revenue from value-added services jumping from 15% in Q1 to 28.8% in the second quarter. Value-added services are defined as everything from website acceleration and media transcoding, to online advertising services and content management. As CEO Jeff Lunsford explained in the call, the company has evolved from “a telco-like business model into an innovative cloud software company.” Increasingly, the value-added services in our portfolio are as core to our business as the company’s traditional CDN operations.
Regarding those value-added services, we see three trends informing our business strategy in the near term: the ongoing shift of content and advertising dollars to the online world, continued explosive growth in the mobile arena, and the migration of software applications, data, and IT services into the cloud.
The EyeWonder services are a big piece of how we are addressing the online advertising opportunity. eMarketing is forecasting growth in rich media advertising at a rate of close to 20% annually through 2012. EyeWonder is already a leader in that space, and earlier this summer we introduced AdVolve, a new tool specifically designed to help advertisers optimize their online campaigns through dynamic customization of multiple display-ad elements. From the earnings transcript: “The underlying targeting engine leverages Limelight’s cloud computing infrastructure to dynamically analyze and then automatically optimize the performance of the creative elements that make up a display advertisement.” In a short two months, we’ve already seen positive traction with the new AdVolve offering.
On the mobile side of our business, Limelight Networks’ mobile services grew faster than 40% sequentially. And we expect the customer interest we see in the mobile segment to carry over into the interactive advertising sector in 2011. Again, growth in the overall market is feeding our own strongly differentiated mobile business.
Finally, regarding cloud applications and services, we have expanded in a wide range of areas including storage, transcoding, site acceleration, and content management, among others. Singling out site acceleration, we saw increased traction in the second quarter thanks to our SITE software solution, and we plan to expand our acceleration offerings this fall. The recent acquisition of Delve Networks is also worth highlighting here, as it gives us new capabilities in content management that we have already begun integrating with the rest of our product portfolio.
If you’re interested in the full earnings report, you can listen to a replay through August 12th. There are further details on both the numbers and company strategy in the webcast.
