Limelight Networks, Inc.

Good afternoon, and welcome to the Limelight Network's third quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Dan Bonsell, Chief Financial Officer. Please go ahead.

Good afternoon, and thank you for joining the Limelight Network's third quarter 2020 financial results conference call. This conference call is being recorded on October 22, 2020, 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 facts, such as our outlook for 2020 and beyond, our priorities, our expectations, our operational plans, business strategies, secular trends, product and feature functionality announcements, and the impact of COVID-19. Actual results could differ materially from those contemplated by our forward-looking statements, 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 report on Form 10-K. 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 is Bob Lento, our Chief Executive Officer, and Sajid Malhotra, our Chief Strategy Officer. We will be available during the Q&A session at the end of prepared remarks. I would now like to turn the call over to Bob Lento.

Thanks, Dan, and good afternoon. Q3 was another very strong quarter for us as we grew top-line revenue by 15%, announced several new-edge deals, and made significant progress across our strategic imperatives. Revenue in the third quarter was $59.2 million, up 15% year over year. It marked our highest third quarter ever and second highest in company history. We also successfully executed a $125 million convertible debt offering, which further strengthens our already strong balance sheet and allows for flexibility in accelerating our growth initiatives. There is a digital transformation underway and we've seen acceleration of this transformation in 2020 from COVID-19 and the rapid adoption of the direct to consumer content model. The increase of a remote workforce on a global scale and the dramatic increase in content consumption have created sustained demand along with new and exciting use cases for low latency delivery and edge services. Limelight is well positioned in these dynamic times to provide the scale and services our customers now demand. Our investments in extending our global capacity, deepening our video capabilities, and expanding our suite of edge services are some of the most significant accomplishments in 2020 that have not only driven our growth, but also allowed us to achieve differentiation. As a specific example, in India this year alone, we have doubled our capacity to help meet the growing demand in the region. Online education companies are scaling largely driven by COVID-19. Three of the top five leading providers in online education in India are our customers, including Baiju, a company that was recently valued in excess of $10 billion. I'll talk in a moment about specific progress in the quarter, but let me briefly revisit our strategy to set the stage. Limelight is doubling down on our focus to serve the video, media, and gaming spaces. We have a robust base of existing customers, including three of the top five global media streaming companies. According to IDC, the public CDN space is expected to experience healthy growth through 2024 with video, media, and gaming increasing most rapidly. With our robust product offerings, global private network and unmatched customer service, coupled with our execution, we are in a strong position to benefit from this trend. Now let's talk about a few of the specific highlights from Q3. As we've discussed on past earnings calls, our strategic imperatives in 2020 center around four pillars, which are extend capacity, expand control, proactive management, and enable innovation. Each imperative is designed to impact one of three areas. revenue or performance gains, drive down costs, or most importantly, deliver improved experiences for our customers. Last quarter, we announced the launch of our new developer community as part of our expand control imperative, and developer engagement has been strong. Further, our efforts to extend global capacity remain a priority with steady progress during the quarter. Advancements in the proactive management of our global network through automated traffic engineering were significant in Q3. While this is not new to us, we deployed several new capabilities to better manage the complexities and high volume of changes we see on a daily basis. We expect to see full benefits from these advancements as we move into 2021. Product innovation at Limelight in 2020 has delivered at a rapid pace. and is driven by our strategy to deepen our video capabilities and expand our edge services offering. Last quarter, we released Live Push, which is a video service that allows customers to directly push live video content to the Limelight CDN. It simplifies delivery, protects the customer's origin servers, and reduces bandwidth costs. One of our longtime customers, BBC in the U.K., is one of the first users of our live push service and reports that it is helping them meet their business goals. As we all know, edge is a very hot topic in our space and one that is early in its maturity and broad market adoption. While content being pushed to multiple edge locations is not necessarily new, the innovation in how content is delivered and what you can do with it is rapidly evolving. In Q3, we were first to market in our space with the launch of Edge Functions, our new serverless compute capability that puts flexibility and power in the hands of our customers to manage, deploy, and run their functions at our network edge. It leverages Limelight's global network and takes advantage of our direct peering connections with more than 1,000 ISPs and leading public cloud providers. With the release of Edge Functions, we now provide one of the most comprehensive suites of edge services available today for our target customers that ranges from flexible edge compute options like bare metal as a service to serverless compute and application capabilities. Several customers are actively implementing our edge functions and seeing quick benefits. One of our customers is leveraging edge functions to deliver optimized images for any device. Another is using edge functions to execute forensic watermarking algorithms embedded in high-value video content to detect piracy in record time. Further, this year we expect to almost double Edge revenue over last year. We secured several new Edge deals this quarter, including those we formally announced with Simultv and Katapi, a global OTT provider and online video platform company. Our next evolution is in development now and focuses on providing tools to manage complex workflows at the Edge. Additionally, we are weeks away from releasing the next generation of our real-time streaming service. For organizations doing live streaming that requires near real-time performance, it is a solution that provides sub-second delivery worldwide. Unlike others in the market, real-time streaming is integrated with our global CDN providing unparalleled reliability and scale. We are currently in limited availability with multiple customers moving into production across a range of industries, including live events, gaming, and sports. Organizationally, we made some changes in Q3 designed to better align with our strategy and foster additional solidarity during these challenging times. We consolidated our development and operations group into one DevOps organization and consolidated our edge services group into our product and marketing organization. We are still very much in the middle of a pandemic and our employees continue to work remotely. As a result, how we work together is evolving. With these changes, we believe we will optimize team collaboration and be even faster and better focused on delivering customer value. In closing, it was another outstanding quarter. We sit in an opportunity-filled position surrounded by multiple ways we can extend our business and add value to our customers. While all the options present opportunity, great companies know who they are, who they serve, the value they provide, and translate it through unparalleled execution. Limelight has invested heavily this year to extend our network, optimize our performance, and expand our capabilities through edge innovation and new product introductions. We are well positioned to serve the video, media, and gaming spaces and have tremendous optimism for the future. Thank you I'll now turn the call over to Dan to discuss the financial details.