AKAM: Akamai Reports Second Quarter 2006 Results

Akamai Technologies, Inc. (NASDAQ: AKAM), the leading global service provider for accelerating content and business processes online, today reported financial results for the second quarter ended June 30, 2006. Revenue for second quarter 2006 was $100.6 million, an 11 percent increase over first quarter 2006 revenue of $90.8 million, and a 56 percent increase over second quarter 2005 revenue of $64.6 million.

Net income in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the second quarter of 2006 was $11.3 million, or $0.07 per diluted share. GAAP net income in the second quarter includes equity-related compensation charges of approximately $13.2 million, or $0.07 per diluted share, on a pre-tax basis, reflecting the Company's adoption of Financial Accounting Standard 123R on January 1, 2006. GAAP net income also reflects a book tax rate of approximately 45 percent.

The Company generated normalized net income* of $35.8 million, or $0.20 per normalized diluted share*, in the second quarter of 2006, a 22 percent increase over first quarter 2006 normalized net income of $29.4 million, or $0.17 per diluted share, and a 110 percent improvement over 2005 second quarter normalized earnings of $17.1 million, or $0.12 per diluted share. (*See Use of Non-GAAP Financial Measures below for definitions.)

"We had an exceptionally strong quarter, exceeding our growth expectations," said Paul Sagan, president and CEO of Akamai. "We experienced robust demand for our services across many verticals, with heavier than expected customer usage resulting in part from the explosion in digital media consumption and the continued proliferation of broadband around the world. Akamai is helping our customers leverage the low-cost, global reach of the Internet to optimize the performance of their content and business applications, and create more profitable online business models."

Adjusted EBITDA* for the second quarter of 2006 was $40.0 million, up 20 percent from $33.4 million in the prior quarter, and up from $22.7 million in the second quarter of 2005. Adjusted EBITDA as a percentage of revenue was 40 percent, up from 37 percent in the prior quarter and up from 35 percent a year ago. (*See Use of Non-GAAP Financial Measures below for definitions.)

Cash from operations was $27.7 million in the second quarter, as compared to $33.2 million in the first quarter 2006 and $16.9 million in the same period last year. Cash, cash equivalents and marketable securities totaled $367 million at the end of the period.

At June 30, 2006, the Company had approximately 155 million shares of common stock outstanding.

Customers
The number of customers under long-term services contracts at the end of the second quarter increased by 79 to a record 2,060, a four percent increase over first quarter 2006, and a 19 percent increase year-over-year.

Sales through resellers and sales outside the United States each accounted for 22 percent of revenue for the second quarter of 2006.