Akamai Technologies, Inc.

Good day and thank you for standing by. Welcome to the Akamai Technologies first quarter 2021 earnings call. At this time all participants are in listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star then 1 on your telephone keypad. Please be advised that today's conference may be recorded. If you require any further assistance please press star then 0. I'd now like to hand the conference over to your host today, Mr. Tom Barth, Head of Investor Relations.

Thank you, Operator. Good afternoon, everyone, and thank you for joining Akamai's first quarter 2021 earnings conference call. Speaking today will be Tom Layton, Akamai's Chief Executive Officer, and Ed McGollum, Akamai's Chief Financial Officer. Before we get started, please note that today's comments include forward-looking statements, including statements regarding revenue and earnings guidance. These forward-looking statements are subject to risk and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied in such statements. The factors include uncertainty stemming from COVID-19 pandemic and any impact from unexpected geopolitical developments. Additional information concerning these factors is contained in Akamai's filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements included in this call represent the company's view on May 4th, 2021. Akamai disclaims any obligation to update these statements to reflect future events or circumstances. As a reminder, we will be referring to some non-GAAP financial metrics during today's call. A detailed reconciliation of GAAP and non-GAAP metrics can be found under the financial portion of the investor relations section of Akamai.com. And with that, let me turn the call over to Tom.

Thanks, Tom, and thank you all for joining us today. I'm pleased to report that Akamai delivered excellent results in the first quarter. Q1 revenue was $843 million, up 10% year-over-year and up 8% in constant currency. This strong result was driven by the continued rapid growth of our security business, accelerated growth in our edge applications business, and continued high traffic levels on our intelligent edge platform. Non-GAAP operating margin in Q1 was 31%, and Q1 non-GAAP EPS was $1.38 per diluted share, up 15% year-over-year, and up 11% in constant currency. With a strong start to 2021, we're proud that Akamai has continued to enable and to protect remote work, homeschooling, e-commerce, and online entertainment for billions of people around the world amidst very challenging circumstances. Our security solutions portfolio performed especially well in Q1, generating revenue of $310 million, up 29% year-over-year, and up 27% in constant currency. The very strong growth was experienced across most of our security products, including our new Page Integrity Manager solution. Page Integrity Manager helps enterprises defend against malware and third-party software and applications. Customers that adopted Page Integrity Manager in Q1 included Maersk, the world's largest container shipping operator, and Groupon, the global e-commerce marketplace. Maersk uses more than 4,000 scripts, half of which are third-party scripts, to drive millions of dollars of online business every hour. Managing this complex and dynamic environment had become an increasingly difficult security challenge for Maersk, and so they now use Page Integrity Manager to improve visibility into security threats and to prevent the loss of critical data. Our Bot Manager solution also continued to perform very well in Q1. Bot Manager is designed to mitigate a wide variety of automated attacks, including account stuffing attacks where credentials stolen from one website are checked for validity at thousands of other websites. When valid credentials are found, a manual attack is then often used to extract value from the compromised account. Losses from account takeovers and new account fraud are estimated at over $10 billion annually in the U.S. In order to thwart such manual attacks, we launched the beta for our new account protector solution in Q1. Account protector shields organizations from account takeover and other kinds of fraudulent human activity without increasing friction for legitimate customers. Account protector works by detecting in real time whether a user logging into an application is the legitimate account owner or an imposter in possession of stolen credentials. One of our beta customers for this new solution is a well-known restaurant franchise. It was under attack by cyber criminals who were compromising the loyalty accounts of their diners. The criminals were stealing loyalty reward points and then reselling them on the dark web. The digital theft outraged the diners whose points were stolen and angered restaurant owners who unknowingly provided meals to fraudsters. With help from Akamai, the franchise can now identify the situations where humans are impersonating valid diners and take action to stop the illicit transfer of loyalty points, thereby stopping the fraud and enabling the franchise to focus on accelerating sales. We're also excited about the success of Akamai's fastest growing security segment, Access Control, which reached an annualized revenue run rate of $100 million in Q1, up more than 170% over Q1 of 2020, and up over 60% organically. Our Access Control segment provides secure connectivity for users, applications, workloads, and IoT systems, regardless of their location. Products in this area include enterprise application access, enterprise threat protector, and our new secure mobile and secure IoT solutions that we acquired from Azevi in October. Our secure mobile and secure IoT products provide security, visibility, and control for mobile devices at the edge. These services deter malicious activity and support acceptable use policies without needing to install a client on the device. The solutions are sold to our carrier partners, such as AT&T, where it forms the basis for their Access My Land solution. These capabilities have been especially important in helping school districts secure student devices during the pandemic so that students can learn from home safely. Our security solutions also continue to gain recognition from the leading analyst firms in Q1. Our market-leading web application firewall capabilities earned Gartner Peer Insight's customer's choice distinction. And Forrester named Akamai as a leader in DDoS protection for the third time, saying large enterprise clients that want an experienced, trusted vendor to make their DDoS problem go away should look to Akamai. Turning to our CDN portfolio, Q1 marked another quarter of very strong traffic growth for Akamai. led by OTT video services and downloads of e-gaming software. On March 16th, traffic on the Akamai platform reached an all-time high of 200 terabits per second. This is 19% higher than the peak in Q1 of last year and two and a half times the traffic peak in Q1 of 2019. Daily peaks were also high in Q1, averaging 143 terabits per second. In fact, traffic on our platform exceeded 110 terabits per second pretty much around the clock in Q1. Overall, our CDN products and services generated revenue of $532 million in Q1, up 2% year-over-year and flat in constant currency. The edge application segment generated $45 million in revenue last quarter, up more than 30% over Q1 of 2020. As you may recall from the discussion at our investor summit in February, this revenue amount includes edge computing solutions such as edge workers that we build discreetly but does not include the wide array of services that use our computing capabilities at the edge. As we discussed during our recent investor summit, we believe that there's the potential for substantial future growth in the area of edge computing as we anticipate more enterprises moving their compute workloads to our edge platform for offload, improved performance, security, and global scale. A timely example of such a shift is manifested in our new vaccine edge solution, which is enabling over two dozen public health agencies and pharmacy chains around the world to deliver and secure COVID vaccine registration sites in the face of extraordinary flash crowds. In multiple instances, Akamai was called in to rescue government agencies whose websites had crashed under load, resulting in frustrated citizens who waited for long times before getting kicked out without a reservation. In some cases, these websites have been using solutions provided by competitors that were not able to handle the load. We're pleased to partner on Vaccine Edge with Salesforce.com, and we're proud that our Edge worker solution has made a real difference to the many millions of citizens trying to get the vaccine as quickly as possible. Our customers are now using Edge workers for a wide range of applications. For example, a leading theme park operator is using Edge workers to help manage demand as they plan to reopen parks. A publicly traded sports and entertainment company has implemented geofencing using our Edge KV data store together with Edge workers to ensure that users access only relevant broadcast content for their location. A nationwide home improvement retailer and a global credit card company are using A-B testing logic at the edge to deliver fast and personalized user experiences. We're enabling DevOps workflows for our global sportswear brand by managing canary releases, where only a targeted group of users can see a new experience. And we're enabling a leading global manufacturer of devices to authenticate their users at the edge, which improves performance and reduces their cloud costs. We're also proud of the progress that we're making with our sustainability efforts. In the past year, we doubled our platform capacity with no increase at all in our platform's carbon footprint. And just two weeks ago on Earth Day, we announced that by 2030, Akamai intends to power 100% of our global operations with renewable energy, improve the energy efficiency of our platform by an additional 50%, mitigate 100% of our platform emissions, and continue to recycle 100% of our electronic waste. These goals reflect Akamai's commitment to be a responsible, efficient, and forward-looking company. In summary, We're very excited about the innovative technology that we're developing, the strong demand from customers for our security and edge computing solutions, and our Q1 financial performance on both the top and bottom lines. The growth strategy and goals that we outlined to you in our investor summit on February 25th set our direction for the future, and we believe that our strong Q1 results show that we've been executing according to plan. Now I'll turn the call over to Ed to provide further details on our Q1 results and the outlook for next quarter and 2021. Ed?