LIMELIGHT NETWORKS INVESTOR PRESENTATION July 2019 1
SAFE HARBOR STATEMENT Certain statements in this presentation relate to future results that are forward- looking statements as defined in the Private Securities Litigation Reform Act of 1995. This presentation contains statements involving risks and uncertainties, including statements relating to Limelight Networks’ market opportunity and future business prospects. Actual results may differ materially and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ are included in the Limelight Networks’ Annual Report on Form 10K and our periodic reports on Form 10Q. 2 COMPANY CONFIDENTIAL
We are passionate about connecting people to the world around them. We remove the barriers that stand between our customers’ end users and their entertainment, their news, their community, their educational resources. Our platform supports the highest quality user experience today and accelerates the next generation of real-time, interactive and immersive content. We position our customers’ content and applications right next to their end users at the network’s edge for the most dynamic, real-time interactions no matter where the end users live, work or play. We sweat the details, so our customers don’t have to. We are Limelight. 3 COMPANY CONFIDENTIAL
WHY LIMELIGHT? $ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 4 COMPANY CONFIDENTIAL
$ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 5 COMPANY CONFIDENTIAL
CDN, COMPUTE, STORE & SECURE = EDGE CLOUD CDN Low Latency & Compute Ubiquity EDGE CLOUD Scalable Storage Flexible Reliable Security 6 COMPANY CONFIDENTIAL
CDN MARKET – ATTRACTIVE Global CDN market size estimates by various analysts, 2022, USD billion CAGR 2017-22 29% 26% 24% 20% 11% 13% Aggressive, higher growth assumptions Analysts believe CDN market is 25 23 large and 21 Conservative, lower growth assumptions growing double digits. 12 9 8 We agree. Mar-18 1 Jul-16 1 Date of forecast Mar-18 Sep-18 May-18 May-18 7
OTT VIDEO MARKET TRENDS - COMPELLING MORE VIEWERS (1) MORE TIME (2) MORE BITS (3) MORE TRAFFIC (4) 400 400 8 100% Pay-TV -6% +37% 300 300 80% 6 29% UHD 89% Household Penetration CAGR CAGR Viewing Hours EB/Month +80% 60% EB/Month 200 200 4 40% OTT HD + UHD High Def (HD) and 100 100 2 Ultra-High Def (UHD) 20% SD Standard Def (SD) 0% 0 0 0 1 2 2014 2017 2016 2018 2017 2022 2017 2022 Sources: (1) https://www.atkearney.com/communications-media-technology/ott-streaming-in-the-limelight-four-trends-and-predictions-for-the-media-industry (2) Limelight State of Online Video research (3) and (4) Cisco VNI, https://www.cisco.com/c/m/en_us/solutions/service-provider/vni-forecast-highlights.html 8 COMPANY CONFIDENTIAL
EDGE COMPUTE OPPORTUNITY - LARGE Key drivers Why Limelight for Edge Compute? Local presence, low latency - 100+ global delivery IOT - 75bn connected devices by 2025 locations connected to 1000 ISP networks Secure, reliable connectivity via global private, 5G - 1bn 5G connected devices by 2025 high speed backbone Cloud - Latency / bandwidth critical for Scalable, flexible compute (VM/BYOD/Bare over 30 percent of workload Metal) with access to storage, network and cloud deployments, by 2021 Rapid time to deploy with instant access to Edge computing market $6.72bn by Limelight’s network, service and support 2022, 35% CAGR 9 COMPANY CONFIDENTIAL
REALTIME STREAMING OPPORTUNITY - UNIQUE Key drivers Why Limelight for Realtime Streaming? Explosive growth - live video will grow 15- Sub-second latency with 100+ global delivery fold from 2016 to 2021 locations connected to 1000 ISP networks Intolerance for delay and desire for Globally scalable solution supported on standard interactivity; >65% would stream more web browsers without the need for special plug-ins sports online if not delayed from broadcast Integrated live data , enabling more interactive Lack of low latency solution in market since live online experiences Flash reached end-of-life 10 COMPANY CONFIDENTIAL
$ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 11 COMPANY CONFIDENTIAL
GLOBAL SCALE AND REACH ~50 Tbps Egress Capacity 100+ Delivery Locations ~1000 Connected ISP Networks 12 COMPANY CONFIDENTIAL
COMPREHENSIVE PORTFOLIO OF SOLUTIONS INNOVATION Customer Enablement Sub-second live streaming Video >1bn objects purged in less than 1 Content Cloud Edge Management sec Delivery Security Cloud and Delivery Industry’s highest performing origin storage Integrated cloud-based DDoS, WAF Limelight Platform and Bot Management protection 13 COMPANY CONFIDENTIAL
DIFFERENTIATED CUSTOMER EXPERIENCE RELENTLESS FOCUS ON CUSTOMERS TRUSTED BY WORLD LEADERS Industry leading customer satisfaction Free, unrestricted access to live technical support 24/7/365 Network Operations Center Dedicated advanced service architects and service reliability engineers 14 COMPANY CONFIDENTIAL
LIMELIGHT + ERICSSON EDGE GRAVITY Expands reach Within service providers and closer to the edge Access locations that were previously hard to reach Increases network capacity via a low- capex model Faster performance with caching in the last mile Access to edge compute in the last mile Service provider revenue opportunity 15 COMPANY CONFIDENTIAL
$ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 16 COMPANY CONFIDENTIAL
OPERATIONAL PERFORMANCE YoY increase YoY increase YoY increase in 47% 108% 82% in egress in server average server capacity capacity capacity 83+ 99% point increase in Net SSD edge server capacity Promoter Score since 2013 17 COMPANY CONFIDENTIAL
FINANCIAL PERFORMANCE 2012 2018 KEY ACTIONS All $ values in millions ✓ $148 (1) Revenue $196 • Continued robust top-line growth • Long-term target: ✓ 0.9% (1) YoY Growth 6.1% - >10% annual growth ✓ Gross Margin 38.0% 47.8% • Continue to make progress with new higher margin products ✓ Adj. EBITDA Margin 5.5% 16.6% • Long-term targets: - >25% adj. EBITDA - 10% Capex ✓ FCF Margin (2) (4.7%) 8.4% ✓ YoY Revenue Growth per 11% 20% • Refined go-to-market model Active Customer (3) • Shift to large enterprise focus • Continue to focus on premium ✓ Net Promoter Score Well below Zero >55 clients and driving margins (1) Revenue excludes Clickability and Netflix. (2) FCF defined as Adj EBITDA less capex. (3) Defined as revenue over average customer count. 18 COMPANY CONFIDENTIAL
$ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 19 COMPANY CONFIDENTIAL
IMPROVING FINANCIALS & FUNDAMENTALS REVENUE PROGRESSION GROSS PROFIT/MARGIN ADJUSTED EBITDA 47.8% $ Millions $ Millions $ Millions 47.6% $195.7 $32.5 $93.5 42.4% $184.4 $30.7 $87.8 $168.2 $17.9 $44.0 $4.6 $48.2 $71.3 $23.0 $22.8 $8.7 $43.8 $7.7 $24.0 $19.7 $49.3 $46.1 $22.3 $7.5 $39.5 $7.4 $16.2 $9.2 $24.8 $50.2 $5.1 $45.4 $21.4 $43.6 $7.9 $18.8 $6.2 $11.0 $26.7 $52.1 $44.7 $21.2 $41.4 $6.7 $16.6 $4.0 2016 2017 2018 2016 2017 2018 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20 COMPANY CONFIDENTIAL
UNLEVERED AND GENERATING CASH $ Millions $ Millions $ Millions $20.7 $32.5 $30.7 $16.4 $4.6 $4.9 $16.1 $8.7 $3.5 $22.8 $13.2 $7.7 $5.6 $5.3 $2.7 $4.9 $7.5 $10.0 $7.4 $9.6 $2.1 $9.2 $3.8 $4.2 $4.7 $5.1 $4.9 $7.9 $5.9 $2.1 $8.9 $6.2 $4.3 $11.0 $3.0 $3.2 $5.7 $6.7 $2.5 $0.3 $4.0 $0.9 $2.0 $1.4 $(1.0) 2016 2017 2018 2016 2017 2018 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Adjusted EBITDA Less Capex Equals Free Cash Flow 21 COMPANY CONFIDENTIAL
2019 PERFORMANCE – TALE OF TWO HALVES $ millions, except per share data FY 2019 1H 2019 2H 2019 (Actual) Guidance (Implied) $200 – 210 Revenue $89 $111 - 121 GAAP EPS - $0.10 - $0.14 $0.04 Non-GAAP EPS Near Breakeven -$0.08 $0.08 Capital Expenditures $25 $16 $9 22 COMPANY CONFIDENTIAL
FINANCIAL PERFORMANCE 2018 LONG TERM TARGET DRIVERS • Base business at 8-9% growth • New initiatives driving remaining Revenue Growth 6.1% 15% growth • Base business remaining solid Gross Margin 47.8% 55% • Incremental margin expansion from new high-end initiatives Non GAAP Income • Strong revenue growth 7.0% >10% Margin • Disciplined increase in COGS expense • Effective management of Adj. EBITDA Margin 16.6% >25% operating expenses • Strong revenue growth Capex 8.2% ~10% • Disciplined increase in COGS expense • Effective management of Free Cash Flow Margin 8.4% >15% operating expenses 23 COMPANY CONFIDENTIAL
KEY TAKEAWAYS $ ATTRACTIVE ATTRACTIVE UNIQUE VALUE STRONG FINANCIAL OPPORTUNITY PROPOSITION PERFORMANCE MODEL 24 COMPANY CONFIDENTIAL
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