Edgio, Inc.

Hello and welcome to today's Egeo Q2 2022 financial results conference call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I would now like to hand over to Sumit Simha with Egeo. The floor is yours. Please go ahead.

Good afternoon. Thank you for joining the Egeo Second Quarter 2022 Financial Results Conference Call. This call is being recorded today, August 8, 2022, and will be archived on our website for approximately 10 days. Let me start by quickly covering the safe harbor. We would like to remind everyone that we will be making forward-looking statements on this call. Forward-looking statements are all statements that are not strictly statements of historical fact, such as our priorities, our expectations, are operational plans, business strategies, secular trends, product and feature functionalities, pro forma results, acquisition activities, and contributions from acquired businesses. Actual results could differ materially from those contemplated by a forward-looking statement, and reported results should not be considered as an indication of future performance. For more information, please refer to the risk factors discussed in our periodic filings, including our most recent annual Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements on this call are based on information available to us as of today's date, and we disclaim any obligation to update any forward-looking statements except as required by law. Joining me on the call today are Bob Lyons, our President and CEO, and Dan Bonsell, EVP and CFO. Bob will start today's call with a brief discussion of the results and an update on our business and integration with Edgecast. Dan will then review financial results and guidance. Following that, Bob will use the remainder of the time to discuss aspects of our strategy and corporate initiatives going forward. I will now turn the call over to Bob.

Thank you, Samit, and welcome, everyone. It has been less than two months since we closed on the acquisition of EdgeCast and formed Egeo. We remain very excited about this transformational combination. Egeo is now a more diversified, edge-enabled solutions company and has assembled the building blocks to improve profitability and accelerate growth. In the second quarter of 2022, we continued to build on three previous scores of positive momentum with revenue of $74.3 million and improvement of 54% year-over-year. LimeLight contributed $61.5 million, demonstrating 27% organic year-over-year growth across all aspects of our core business. EdgeCast contributed an additional $12.8 million. We expanded our capacity by approximately 10% at line length, largely in support of the forecasted needs later this year. This capacity was ordered in the fall of 2021, and when combined with the acquired HCaTS capacity, we have mitigated previously highlighted supply chain concerns. We are well positioned for continued growth through this year and into next year, albeit resulting in a temporary gross margin impact for this quarter. We expect gross margins to continue improving sequentially going forward. Our pipeline also continues to grow, already up 50% this year, and heavily focused on our high-margin, high-growth app ops opportunities. In the weeks since closing, we have successfully implemented the first phase of our integration plan. Our initial diligence indicated at least $50 million in synergies, half of which would be achieved in the first two quarters after close. Post-closing, our deeper analysis has resulted in an expanded synergy opportunity of at least $50 million. Of that, We have already achieved $17.5 million well ahead of plan. All of these are planned to be net run rate savings. We have also completed the first detailed 2023 bottom-up profitability and revenue outlook for the combined companies. There is more work to be done before we can lock in our 2023 plan and provide solid guidance. However, we do feel it is important to provide some clarity on our turnout look. We expect 2023 revenue to be is somewhere between $550 and $560 million with an adjusted EBITDA that exceeds $65 million. This would imply year-over-year revenue growth of approximately 44% and adjusted EBITDA margin expansion from 4% in 2022 to 12% in 2023. Currently, this outlook does not include commercial synergies or platform utilization improvements, providing additional upside opportunity and downside risk cash. At last year's Analyst Day, we committed to taking bold steps to become a leading edge-enabled solutions provider. We outlined what we believe to be a large unmet market opportunity to provide edge-enabled solutions that simplify development for builders and meaningfully improve speed and security for operators. We have, in fact, delivered on that commitment. We currently offer three solutions, Egeo Atos, which includes security, Egeo Delivery, and Egeo Streaming. Each solution boasts best-in-class capabilities and each benefits from our massively-scaled Edge platform. AppOps, currently representing approximately 20% of revenue, is expected to support significant high-margin growth for us. This solution is made up of our App Edge, App Security, and App Platform products. Collectively, they provide the most powerful, comprehensive cloud security suite, development platform, and application CDN in the world. We believe this solution will be highly disruptive in the emerging high-growth Web 3.0 sector. We have successfully completed the first phase of our broader security strategy and have the most complete web application and API protection product in the market. Our solution includes DOS, WAF, and bot management capabilities, and we have displayed competitive solutions at Accenture, Scripps, Symantec, Verizon, and Citibank, to name a few. In mid-July, our security product afforded a 355 million packet-per-second DDoS attack, one of the largest attacks ever recorded. The client had no impact at all. Our delivery solution boasts approximately 230 terabytes per second of edge capacity delivered through more than 300 POPs across the globe, making us the second largest and most performant in the world. We have also added 10 terabytes of additional capacity this quarter and are able to offer combined limelight and edge cast capacity seamlessly to our clients. This enables us to provide clients with high performance capacity that was previously not possible and positions us well for continued organic growth going forward. Streaming may prove to be the most underrated solution in our portfolio. Representing approximately 25% of our revenue, NGO Streaming handles mission-critical applications for some of the most demanding and well-known companies. Our streaming solution can capture viewer usage and experience data wherever the viewer goes, enabling us to continuously improve viewer experience in real time. In fact, we will manage more than 30,000 live events and insert over 50 billion ads for clients this year alone. My conversations with our streaming clients indicate our solution is meeting or exceeding their evolving needs as new content and seasonal event rosters rapidly expand. We continue to work through our strategic planning process and look forward to unpacking our strategy for this compelling set of capabilities in greater detail at our analyst day. Our best-in-class solutions, powered by our massively scaled and highly performing edge platform, positions us well to benefit from sector tailwinds such as Web 3.0, security threats, cord cutting, linear streaming TV, and gaming. In short, we continue to successfully execute on our multi-year transformational plan. In the past 12 months, we have successfully completed two acquisitions, overhauled all aspects of our operating model, removed $50 million of costs, and implemented a new growth-oriented commercial team. Our solutions are demonstrating proof of value, our clients continue to do more with us, and our strategy benefits from sector tailwind. We believe all of this supports a business that will continue to capture market share and sustain growth. As we look beyond our planning period, we remain confident in our ability to be a growth-oriented technology company with a greater than 60% gross margin, 15% EBITDA, and positive free cash flow. We will continue to be unwavering in this pursuit. At our upcoming analyst day, we will go into greater detail unpacking our strategy, operating plans, and financial roadmap. We plan on announcing more details soon and are finalizing that date so you can mark your calendars. At this time, I will turn the call over to Dan to unpack second quarter finances.