CAMBRIDGE, Mass., April 26, 2016 /PRNewswire/ --


    --  Revenue of $568 million, up 8% year-over-year and up 9% when adjusted
        for foreign exchange*
    --  GAAP EPS of $0.42 per diluted share, down 2% year-over-year
    --  Non-GAAP EPS of $0.66 per diluted share, up 8% year-over-year

Akamai Technologies, Inc. (NASDAQ: AKAM), the global leader in Content Delivery Network (CDN) services, today reported financial results for the first quarter ended March 31, 2016.

http://photos.prnewswire.com/prnvar/20100225/AKAMAILOGO

"Q1 was a very solid quarter for Akamai on both the top and bottom lines, representing a great start to 2016," said Dr. Tom Leighton, Chief Executive Officer. "We delivered earnings that exceeded our expectations and saw continued strong revenue growth from our Cloud Security Solutions, which grew 47% year-over-year in constant currency."

Akamai delivered the following results for the first quarter ended March 31, 2016:

Revenue: Revenue was $568 million, an 8% increase over first quarter 2015 revenue of $527 million and a 9% increase when adjusted for foreign exchange.*

Revenue by Solution Category**:


    --  Performance and Security Solutions revenue was $316 million, up 16%
        year-over-year and up 17% when adjusted for foreign exchange*
    --  Cloud Security Solutions revenue, a component of Performance and
        Security, was $81 million, up 46% year-over-year and up 47% when
        adjusted for foreign exchange*
    --  Media Delivery Solutions revenue was $206 million, down 4%
        year-over-year and down 4% when adjusted for foreign exchange*
    --  Services and Support Solutions revenue was $46 million, up 16%
        year-over-year and up 16% when adjusted for foreign exchange*

Revenue by Geography:


    --  U.S. revenue was $397 million, up 2% year-over-year
    --  International revenue was $170 million, up 24% year-over-year and up 27%
        when adjusted for foreign exchange*

Customer Revenue by Division***:

Effective in 2016, the Company is now managing the business in a new division structure. Revenue from the customers in the Company's three major divisions is reported below.


    --  Media Division revenue was $292 million, down 1% year-over-year and
        consistent year-over-year when adjusted for foreign exchange*
    --  Web Division revenue was $264 million, up 18% year-over-year and up 18%
        when adjusted for foreign exchange*
    --  Enterprise and Carrier Division revenue was $12 million, up 45%
        year-over-year and up 44% when adjusted for foreign exchange*

Income from operations: GAAP income from operations was $114 million, a 6% decrease from first quarter 2015. GAAP operating margin for the first quarter was 20%, down 3 percentage points from the same period last year.

Non-GAAP income from operations* was $164 million, a 1% increase from first quarter 2015. Non-GAAP operating margin* for the first quarter was 29%, down 2 percentage points from the same period last year.

Net income: GAAP net income was $75 million, a 4% decrease from first quarter 2015. Non-GAAP net income* was $118 million, a 6% increase from first quarter 2015.

EPS: GAAP EPS was $0.42 per diluted share, a 2% decrease from first quarter 2015 and a 2% decrease when adjusted for foreign exchange*. Non-GAAP EPS was $0.66 per diluted share, an 8% increase from first quarter 2015 and an 8% increase when adjusted for foreign exchange.*

Adjusted EBITDA*: Adjusted EBITDA was $234 million, a 5% increase from first quarter 2015. Adjusted EBITDA margin* was 41%, down 1 percentage point from the first quarter of 2015.

Other first quarter 2016 results included:


    --  Cash from operations was $190 million, or 34% of revenue
    --  Cash, cash equivalents and marketable securities as of March 31, 2016
        was $1.5 billion
    --  The Company spent $109 million to repurchase 2.2 million shares of its
        common stock at an average price of $48.97 per share
    --  The Company had approximately 176 million shares of common stock
        outstanding as of March 31, 2016

* See Use of Non-GAAP Financial Measures below for definitions

** Revenue by solution category - A product-focused reporting view that reflects revenue by solution purchased.

*** Customer revenue by division - A customer-focused reporting view that reflects revenue from customers that are managed by the division. Historical division revenue can be found on the Investor Relations section of Akamai.com.

Quarterly Conference Call
Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 1-877-258-4918 (or 1-480-405-6743 for international calls) and using passcode No. 81892715. 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 by calling 1-855-859-2056 (or 1-404-537-3406 for international calls) and using passcode No. 81892715. The archived webcast of this event may be accessed through the Akamai website.

About Akamai
As the global leader in Content Delivery Network (CDN) services, Akamai makes the Internet fast, reliable and secure for its customers. The company's advanced web performance, mobile performance, cloud security and media delivery solutions are revolutionizing how businesses optimize consumer, enterprise and entertainment experiences for any device, anywhere. To learn how Akamai solutions and its team of Internet experts are helping businesses move faster forward, please visit www.akamai.com or blogs.akamai.com, and follow @Akamai on Twitter.



    AKAMAI TECHNOLOGIES, INC.

    CONDENSED CONSOLIDATED BALANCE SHEETS


    (in thousands)                        March 31,            December 31,
                                               2016                       2015
                                               ----                       ----

    ASSETS

    Current assets:

    Cash and cash equivalents                         $312,912                     $289,473

    Marketable securities                   524,958                      460,088

    Accounts receivable, net                365,103                      380,399

    Prepaid expenses and other
     current assets                         127,855                      123,228


    Total current assets                  1,330,828                    1,253,188

    Property and equipment, net             770,197                      753,180

    Marketable securities                   685,362                      774,674

    Goodwill                              1,152,376                    1,150,244

    Acquired intangible assets,
     net                                    149,379                      156,095

    Deferred income tax assets                3,490                        4,700

    Other assets                             92,120                       89,603
                                             ------                       ------

    Total assets                                    $4,183,752                   $4,181,684
                                                    ==========                   ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Accounts payable                                   $63,822                      $61,982

    Accrued expenses                        197,487                      216,166

    Deferred revenue                         64,905                       54,154

    Other current liabilities                 7,019                          138
                                              -----                          ---

    Total current liabilities               333,233                      332,440

    Deferred revenue                          4,238                        4,163

    Deferred income tax
     liabilities                             11,706                       12,888

    Convertible senior notes                623,485                      618,047

    Other liabilities                        97,508                       93,268
                                             ------                       ------

    Total liabilities                     1,070,170                    1,060,806
                                          ---------                    ---------

    Total stockholders' equity            3,113,582                    3,120,878
                                          ---------                    ---------

    Total liabilities and
     stockholders' equity                           $4,183,752                   $4,181,684
                                                    ==========                   ==========



    AKAMAI TECHNOLOGIES, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF INCOME


                                                                        Three Months Ended
                                                                        ------------------

    (in thousands, except
     per share data)                           March 31,                December 31,              March 31,
                                                     2016                        2015                     2015
                                                     ----                        ----                     ----

    Revenue                                                  $567,725                                          $579,159           $526,536

    Costs and operating expenses:

    Cost of revenue (1) (2)                       194,736                                 193,212                         169,294

    Research and development
     (1)                                          40,842                                  37,674                          35,828

    Sales and marketing (1)                       102,211                                 118,582                         103,479

    General and
     administrative (1) (2)                       102,283                                  99,978                          89,592

    Amortization of acquired
     intangible assets                              6,716                                   6,783                           6,780

    Restructuring charges                           6,818                                     250                              42
                                                    -----                                     ---                             ---

    Total costs and
     operating expenses                           453,606                                 456,479                         405,015
                                                  -------                                 -------                         -------

    Income from operations                        114,119                                 122,680                         121,521

    Interest income                                 3,320                                   2,935                           3,001

    Interest expense                              (4,653)                                (4,641)                        (4,576)

    Other expense, net                              (189)                                  (499)                          (301)
                                                     ----                                    ----                            ----

    Income before provision
     for income taxes                             112,597                                 120,475                         119,645

    Provision for income
     taxes                                         37,739                                  32,055                          41,899
                                                   ------                                  ------                          ------

    Net income                                                $74,858                                           $88,420            $77,746
                                                              =======                                           =======            =======


    Net income per share:

    Basic                                                       $0.42                                             $0.50              $0.44

    Diluted                                                     $0.42                                             $0.49              $0.43


    Shares used in per share calculations:

    Basic                                         176,403                                 177,788                         178,545

    Diluted                                       177,539                                 179,732                         180,825



    (1) Includes stock-based compensation (see supplemental table for figures)

    (2) Includes depreciation and amortization (see supplemental table for figures)



    AKAMAI TECHNOLOGIES, INC.

    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                          Three Months Ended
                                                                                                          ------------------

    (in thousands)                                                                    March 31,           December 31,              March 31,
                                                                                            2016                   2015                     2015
                                                                                            ----                   ----                     ----

    Cash flows from operating activities:

    Net income                                                                                    $74,858                                         $88,420              $77,746

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

    Depreciation and amortization                                                         80,669                             80,329                            70,460

    Stock-based compensation                                                              31,741                             33,711                            29,669

    Excess tax benefits from stock-based compensation                                    (1,135)                           (4,450)                         (13,128)

    Provision for deferred income taxes                                                    1,072                             22,039                             8,305

    Amortization of debt discount and issuance costs                                       4,653                              4,641                             4,576

    Other non-cash reconciling items, net                                                  2,752                              2,533                               443

    Changes in operating assets and liabilities, net of effects of acquisitions:

    Accounts receivable                                                                   15,906                           (15,540)                         (32,552)

    Prepaid expenses and other current assets                                            (3,481)                           (8,982)                          (1,817)

    Accounts payable and accrued expenses                                               (32,377)                            25,526                          (52,703)

    Deferred revenue                                                                      10,653                            (3,684)                            6,947

    Other current liabilities                                                              6,876                              (491)                               42

    Other non-current assets and liabilities                                             (1,949)                           (6,261)                            1,741
                                                                                          ------                             ------                             -----

    Net cash provided by operating activities                                            190,238                            217,791                            99,729
                                                                                         -------                            -------                            ------

    Cash flows from investing activities:

    Cash paid for acquired businesses, net of cash acquired                                    -                          (18,702)                         (16,062)

    Purchases of property and equipment and capitalization of internal-use software
     development costs                                                                  (82,340)                          (78,837)                        (137,069)

    Purchases of short- and long-term marketable securities                             (95,843)                         (108,690)                          (97,304)

    Proceeds from sales and maturities of short- and long-term marketable securities     125,109                            118,814                           307,655

    Other non-current assets and liabilities                                             (2,354)                               543                              (82)
                                                                                          ------                                ---                               ---

    Net cash (used in) provided by investing activities                                 (55,428)                          (86,872)                           57,138
                                                                                         -------                            -------                            ------

    Cash flows from financing activities:

    Proceeds from the issuance of common stock under stock plans                          18,350                              7,503                            24,440

    Excess tax benefits from stock-based compensation                                      1,135                              4,450                            13,128

    Employee taxes paid related to net share settlement of stock-based awards           (26,496)                           (6,993)                         (31,101)

    Repurchases of common stock                                                        (108,725)                         (100,180)                          (62,680)

    Net cash used in financing activities                                              (115,736)                          (95,220)                         (56,213)
                                                                                        --------                            -------                           -------

    Effects of exchange rate changes on cash and cash equivalents                          4,365                            (2,697)                          (6,747)
                                                                                           -----                             ------                            ------

    Net increase in cash and cash equivalents                                             23,439                             33,002                            93,907

    Cash and cash equivalents at beginning of period                                     289,473                            256,471                           238,650
                                                                                         -------                            -------                           -------

    Cash and cash equivalents at end of period                                                   $312,912                                        $289,473             $332,557
                                                                                                 ========                                        ========             ========



    AKAMAI TECHNOLOGIES, INC.

    RECONCILIATION OF GAAP TO NON-GAAP INCOME FROM OPERATIONS, NET INCOME AND ADJUSTED EBITDA


                                                                             Three Months Ended
                                                                             ------------------

    (in thousands, except per
     share data)                                  March 31,                December 31,              March 31,
                                                        2016                        2015                     2015

    Income from operations                                      $114,119                                          $122,680            $121,521

    GAAP operating margin                                20%                                    21%                             23%

    Amortization of acquired
     intangible assets                                 6,716                                   6,783                            6,780

    Stock-based compensation                          31,741                                  33,711                           29,669

    Amortization of capitalized
     stock-based compensation
     and capitalized interest
     expense                                           3,608                                   3,722                            3,108

    Other operating expenses(1)                        7,528                                   1,067                            1,709

    Operating adjustments                             49,593                                  45,283                           41,266
                                                      ------                                  ------                           ------

    Non-GAAP income from
     operations                                                 $163,712                                          $167,963            $162,787
                                                                ========                                          ========            ========

    Non-GAAP operating margin                            29%                                    29%                             31%


    Net income                                                   $74,858                                           $88,420             $77,746

    Operating adjustments (from
     above)                                           49,593                                  45,283                           41,266

    Amortization of debt
     discount and issuance
     costs                                             4,653                                   4,641                            4,576

    Loss on investments                                    -                                      -                              25

    Income tax-effect of above
     non-GAAP adjustments and
     certain discrete tax items                     (11,323)                                (9,631)                        (12,437)
                                                     -------                                  ------                          -------

    Non-GAAP net income                              117,781                                 128,713                          111,176


    Depreciation and
     amortization                                     70,345                                  69,824                           60,572

    Interest income                                  (3,320)                                (2,935)                         (3,001)

    Other expense, net                                   189                                     499                              276

    Provision for GAAP income
     taxes                                            37,739                                  32,055                           41,899

    Income tax-effect of above
     non-GAAP adjustments and
     certain discrete tax items                       11,323                                   9,631                           12,437
                                                      ------                                   -----                           ------

    Adjusted EBITDA                                             $234,057                                          $237,787            $223,359
                                                                ========                                          ========            ========

    Adjusted EBITDA margin                               41%                                    41%                             42%


    Non-GAAP net income per share:

    Basic                                                          $0.67                                             $0.72               $0.62

    Diluted                                                        $0.66                                             $0.72               $0.61


    Shares used in non-GAAP per share
     calculations:

    Basic                                            176,403                                 177,788                          178,545

    Diluted                                          177,539                                 179,732                          180,825


     (1) Other operating expenses excluded from non-GAAP results include: acquisition-related costs, restructuring charges and certain legal matter costs. See the
          non-GAAP adjustment definitions below for additional information.



    AKAMAI TECHNOLOGIES, INC.

    SUPPLEMENTAL REVENUE DATA BY SOLUTION CATEGORY


                                                               Three Months Ended
                                                               ------------------

    (in thousands)                       March 31,           December 31,              March 31,
                                               2016                   2015                     2015
                                               ----                   ----                     ----

    Revenue by solution category(1):

    Performance and
     Security
     Solutions                                      $315,863                                        $314,885         $271,959

    Media Delivery
     Solutions                              205,939                            218,267                       214,865

    Services and
     Support
     Solutions                               45,923                             46,007                        39,712
                                             ------                             ------                        ------

    Total revenue                                   $567,725                                        $579,159         $526,536
                                                    ========                                        ========         ========

    Cloud Security
     Solutions
     revenue                                         $80,660                                         $72,537          $55,183


    Revenue growth rates year-over-year:

    Performance and
     Security
     Solutions                                  16%                               15%                          19%

    Media Delivery
     Solutions                                  (4)                               (3)                           13

    Services and
     Support
     Solutions                                   16                                 18                            12
                                                ---                                ---

    Total revenue                                8%                                8%                          16%
                                                ===                                ===                           ===

    Cloud Security
     Solutions
     revenue growth
     rates                                      46%                               46%                          83%


    Revenue growth rates year-over-
     year, adjusted for the impact of
     foreign exchange rates(2):

    Performance and
     Security
     Solutions                                  17%                               18%                          23%

    Media Delivery
     Solutions                                  (4)                                 -                           17

    Services and
     Support
     Solutions                                   16                                 21                            16

    Total revenue                                9%                               11%                          20%
                                                ===                                ===                           ===

    Cloud Security
     Solutions
     revenue growth
     rates(2)                                   47%                               50%                          88%


             (1)    See revenue by solution
                      category definition in
                      press release

             (2)    See Use of Non-GAAP
                      Financial Measures below
                      for a definition



    AKAMAI TECHNOLOGIES, INC.

    SUPPLEMENTAL REVENUE DATA BY DIVISION


                                                                Three Months Ended
                                                                ------------------

    (in thousands)                      March 31,             December 31,                  March 31,
                                              2016                     2015                         2015
                                              ----                     ----                         ----

    Customer revenue by division(1):

    Media Division                                   $291,933                                            $302,367         $293,966

    Web Division                           263,743                                264,897                         224,240

    Enterprise and
     Carrier
     Division                               12,049                                 11,895                           8,330
                                            ------                                 ------                           -----

    Total revenue                                    $567,725                                            $579,159         $526,536
                                                     ========                                            ========         ========


    Revenue growth rates year-over-year:

    Media Division                            (1)%                                     -  %                         14%

    Web Division                                18                                     17                              18

    Enterprise and
     Carrier
     Division                                   45                                     53                              32
                                               ---                                    ---                             ---

    Total revenue                               8%                                    8%                            16%
                                               ===                                    ===                             ===


    Revenue growth rates year-over-
     year, adjusted for the impact of
     foreign exchange rates(2):

    Media Division                               - %                                  2%                            18%

    Web Division                                18                                     20                              22

    Enterprise and
     Carrier
     Division                                   44                                     55                              33

    Total revenue                               9%                                   11%                            20%
                                               ===                                    ===                             ===



    AKAMAI TECHNOLOGIES, INC.

    SUPPLEMENTAL REVENUE DATA BY GEOGRAPHY


                                                           Three Months Ended
                                                           ------------------

    (in thousands)                      March 31,          December 31,            March 31,
                                             2016                   2015                  2015
                                             ----                   ----                  ----

    Revenue by geography:

    U.S.                                          $397,283                                     $415,835         $388,973

    International                         170,442                          163,324                      137,563
                                          -------                          -------                      -------

    Total revenue                                 $567,725                                     $579,159         $526,536
                                                  ========                                     ========         ========


    Revenue growth rates year-over-
     year:

    U.S.                                       2%                              5%                         20%

    International                              24                               17                            7
                                              ---

    Total revenue                              8%                              8%                         16%
                                              ===                              ===                          ===


    Revenue growth rates year-over-
     year, adjusted for the impact of
     foreign exchange rates(2):

    U.S.                                       2%                              5%                         20%

    International                              27                               27                           21

    Total revenue                              9%                             11%                         20%
                                              ===                              ===                          ===




             (1)    See customer revenue by
                     division definition in
                     press release

             (2)    See Use of Non-GAAP
                     Financial Measures below
                     for a definition



    AKAMAI TECHNOLOGIES, INC.

    OTHER SUPPLEMENTAL FINANCIAL DATA


                                                          Three Months Ended
                                                          ------------------

    (in thousands, except end
     of period statistics)            March 31,           December 31,              March 31,
                                            2016                   2015                     2015
                                            ----                   ----                     ----

    Stock-based compensation:

    Cost of revenue                                $3,970                                          $3,901              $3,163

    Research and development               6,438                              6,570                         5,366

    Sales and marketing                   12,352                             14,247                        12,983

    General and
     administrative                        8,981                              8,993                         8,157

    Total stock-based
     compensation                                 $31,741                                         $33,711             $29,669
                                                  =======                                         =======             =======


    Depreciation and amortization:

    Network-related
     depreciation                                 $55,174                                         $54,978             $48,988

    Other depreciation and
     amortization                         15,171                             14,846                        11,584
                                          ------                             ------                        ------

    Depreciation of property
     and equipment                        70,345                             69,824                        60,572

    Capitalized stock-based
     compensation
     amortization                          3,257                              3,414                         2,952

    Capitalized interest
     expense amortization                    351                                308                           156

    Amortization of acquired
     intangible assets                     6,716                              6,783                         6,780
                                           -----                              -----                         -----

    Total depreciation and
     amortization                                 $80,669                                         $80,329             $70,460
                                                  =======                                         =======             =======


    Capital expenditures(1)(2):

    Purchases of property and
     equipment                                    $50,067                                         $58,541             $89,129

    Capitalized internal-use
     software development
     costs                                35,172                             30,017                        33,983

    Capitalized stock-based
     compensation                          5,203                              5,199                         4,144

    Capitalized interest
     expense                                 785                                791                           675

    Total capital
     expenditures                                 $91,227                                         $94,548            $127,931
                                                  =======                                         =======            ========


    Net (decrease) increase
     in cash, cash
     equivalents and
     marketable securities                       $(1,003)                                        $19,362          $(113,145)


    End of period statistics:

    Number of employees                    6,119                              6,084                         5,409

    Number of deployed
     servers                             216,435                            210,533                       175,094




             (1)    Capital expenditures presented
                     in this table are reported on
                     an accrual basis, which differs
                     from the cash-basis
                     presentation in the statements
                     of cash flows.  The primary
                     difference between the two is
                     the change in purchases of
                     property and equipment and
                     capitalization of internal-use
                     software development costs
                     accrued for at period end.

             (2)    See Use of Non-GAAP Financial
                     Measures below for a definition

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 provides additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate Akamai's financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, Adjusted EBITDA, Adjusted EBITDA margin, capital expenditures and impact of foreign currency exchange rates, as discussed below.

Management believes that these non-GAAP financial measures reflect Akamai's ongoing business in a manner that allows for meaningful comparisons and analysis of trends in its business, as they exclude expenses and gains that may be infrequent, unusual in nature or not reflective of Akamai's ongoing operating results. Management also believes that these non-GAAP financial measures enable investors to evaluate Akamai's operating results and future prospects in the same manner as management. These non-GAAP financial measures may also facilitate comparing financial results across accounting periods and to those of peer companies.

The non-GAAP financial measures do not replace the presentation of Akamai's GAAP financial results and should only be used as a supplement to, not as a substitute for, Akamai's financial results presented in accordance with GAAP. Akamai has provided a reconciliation of each non-GAAP financial measure used in its financial reporting to the most directly comparable GAAP financial measure. This reconciliation captioned "Reconciliation of GAAP to Non-GAAP Financial Measures" can be found on the Investor Relations section of Akamai's website.

The non-GAAP adjustments, and Akamai's basis for excluding them from non-GAAP financial measures, are outlined below:


    --  Amortization of acquired intangible assets - Akamai has incurred
        amortization of intangible assets, included in its GAAP financial
        statements, related to various acquisitions Akamai has made. The amount
        of an acquisition's purchase price allocated to intangible assets and
        term of its related amortization can vary significantly and are unique
        to each acquisition; therefore, Akamai excludes amortization of acquired
        intangible assets from its non-GAAP financial measures to provide
        investors with a consistent basis for comparing pre- and
        post-acquisition operating results.
    --  Stock-based compensation and amortization of capitalized stock-based
        compensation - Although stock-based compensation is an important aspect
        of the compensation paid to Akamai's employees, the grant date fair
        value varies based on the stock price at the time of grant, varying
        valuation methodologies, subjective assumptions and the variety of award
        types. This makes the comparison of Akamai's current financial results
        to previous and future periods difficult to interpret; therefore, Akamai
        believes it is useful to exclude stock-based compensation and
        amortization of capitalized stock-based compensation from its non-GAAP
        financial measures in order to highlight the performance of Akamai's
        core business and to be consistent with the way many investors evaluate
        its performance and compare its operating results to peer companies.
    --  Acquisition-related costs - Acquisition-related costs include
        transaction fees, due diligence costs and other direct costs associated
        with strategic activities. In addition, subsequent adjustments to
        Akamai's initial estimated amounts of contingent consideration and
        indemnification associated with specific acquisitions are included
        within acquisition-related costs. These amounts are impacted by the
        timing and size of the acquisitions. Akamai excludes acquisition-related
        costs from its non-GAAP financial measures to provide a useful
        comparison of Akamai's operating results to prior periods and to its
        peer companies because such amounts vary significantly based on the
        magnitude of the acquisition transactions.
    --  Restructuring charges - Akamai has incurred restructuring charges that
        are included in its GAAP financial statements, primarily related to
        workforce reductions and estimated costs of exiting facility lease
        commitments. Akamai excludes these items from its non-GAAP financial
        measures when evaluating its continuing business performance as such
        items vary significantly based on the magnitude of the restructuring
        action and do not reflect expected future operating expenses. In
        addition, these charges do not necessarily provide meaningful insight
        into the fundamentals of current or past operations of its business.
    --  Amortization of debt discount and issuance costs and amortization of
        capitalized interest expense - In February 2014, Akamai issued $690
        million of convertible senior notes due 2019 with a coupon interest rate
        of 0%. The imputed interest rate of the convertible senior notes was
        approximately 3.2%. This is a result of the debt discount recorded for
        the conversion feature that is required to be separately accounted for
        as equity under GAAP, thereby reducing the carrying value of the
        convertible debt instrument. The debt discount is amortized as interest
        expense together with the issuance costs of the debt. All of Akamai's
        interest expense is comprised of these non-cash components and is
        excluded from management's assessment of the company's operating
        performance because management believes the non-cash expense is not
        indicative of ongoing operating performance.
    --  Loss on investments and legal matters - Akamai has incurred losses from
        the impairment of certain investments and the settlement of legal
        matters. In addition, Akamai has incurred costs with respect to its
        internal investigation relating to sales practices in a country outside
        the U.S. Akamai believes excluding these amounts from its non-GAAP
        financial measures is useful to investors as the types of events giving
        rise to them occur infrequently and are not representative of Akamai's
        core business operations.
    --  Income tax effect of non-GAAP adjustments and certain discrete tax items
        - The non-GAAP adjustments described above are reported on a pre-tax
        basis. The income tax effect of non-GAAP adjustments is the difference
        between GAAP and non-GAAP income tax expense. Non-GAAP income tax
        expense is computed on non-GAAP pre-tax income (GAAP pre-tax income
        adjusted for non-GAAP adjustments) and excludes certain discrete tax
        items (such as recording or release of valuation allowances), if any.
        Akamai believes that applying the non-GAAP adjustments and their related
        income tax effect allows Akamai to highlight income attributable to its
        core operations.

Akamai's definitions of its non-GAAP financial measures are outlined below:

Non-GAAP income from operations - GAAP income from operations adjusted for the following items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; amortization of capitalized interest expense; other operating expenses (comprised of acquisition-related costs; restructuring charges; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; gains and losses on legal settlements; and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S); and other non-recurring or unusual items that may arise from time to time.

Non-GAAP operating margin - Non-GAAP income from operations stated as a percentage of revenue.

Non-GAAP net income - GAAP net income adjusted for the following tax-affected items: amortization of acquired intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; other operating expenses (comprised of acquisition-related costs, restructuring charges, benefit from adoption of software development activities, gains and other activity related to divestiture of a business, gains and losses on legal settlements, and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S.); loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; certain gains and losses on investments; and other non-recurring or unusual items that may arise from time to time.

Non-GAAP net income per share - Non-GAAP net income divided by basic weighted average or diluted common shares outstanding. Basic weighted average shares outstanding are those used in GAAP net income per share calculations. Diluted weighted average shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to Akamai pursuant to the note hedge transaction entered into in connection with the issuance of $690 million of convertible senior notes due 2019. Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully-diluted share calculation until they are delivered. However, the company would receive a benefit from the note hedge transaction and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of net income per share. Unless and until Akamai's weighted average stock price is greater than $89.56, the initial conversion price, there will be no difference between GAAP and non-GAAP diluted weighted average common shares outstanding.

Adjusted EBITDA - GAAP net income excluding the following items: interest income; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; other operating expenses (comprised of acquisition-related costs; restructuring charges; benefit from adoption of software development activities; gains and other activity related to divestiture of a business; gains and losses on legal settlements; and costs incurred with respect to Akamai's internal investigation relating to sales practices in a country outside the U.S.); foreign exchange gains and losses; loss on early extinguishment of debt; amortization of debt discount and issuance costs; amortization of capitalized interest expense; certain gains and losses on investments; and other non-recurring or unusual items that may arise from time to time.

Adjusted EBITDA margin - Adjusted EBITDA stated as a percentage of revenue.

Capital expenditures - Purchases of property and equipment, capitalization of internal-use software development costs, capitalization of stock-based compensation and capitalization of interest expense.

Impact of Foreign Currency Exchange Rates - Revenue and earnings from international operations have historically been an important contributor to Akamai's financial results. Consequently, Akamai's financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, when the local currencies of Akamai's foreign subsidiaries weaken, consolidated results stated in U.S. dollars are negatively impacted.

Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of financial results and evaluation of performance in comparison to prior periods. The information presented is calculated by translating current period results using the same average foreign currency exchange rates per month from the comparative period.

Akamai Statement Under the Private Securities Litigation Reform Act
This release and/or our quarterly earnings conference call scheduled for later today contain 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. 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, inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; 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 or failure of such solutions to operate as expected, 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 and on such call 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.



    Contacts:

    Jeff Young          Tom Barth

    Media Relations     Investor Relations

    Akamai Technologies Akamai Technologies

    617-444-3913        617-274-7130

    jyoung@akamai.com   tbarth@akamai.com

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SOURCE Akamai Technologies, Inc.