Limelight Networks, Inc. F1Q09 Earnings Call Transcript

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2009-05-06 18:37:17.0

Tags: Goldman Sachs & Co., Churn, Account Management, Call Transcript, Earnings, Limelight Networks Inc., Sales Channel, Sales Force Management, Investment, Sales, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator's instruction) Your first question comes from the line of Derek Bingham - Goldman Sachs.

Derek Bingham - Goldman Sachs

I wonder if you could give us some color on the financial profile of some of the small file deals and the whole site deals in terms of their size and even their profit margin versus your historical deal profile has been so we get a sense of how that is going to contribute going forward.

Jeff Lunsford

Derek, I do not think we get into parsing margins by segments. I think we definitely are on the record stating that we believe the enterprise and e-commerce and government sectors offer a margin expansion opportunity for us. There are oftentimes more services that are higher margin services that these customers need in addition to the regular content delivery but I do not think I could actually quantify that for you. They are the deals that we see. They are higher margins.

Derek Bingham - Goldman Sachs

Internationally, it seems like that has been outgrowing the domestic business. What would you choke that up to? I mean is it more on some investments that you are making there? Is it more of the Greenfield opportunity right now or it is the economy in a different stage right now? Can you give us your thoughts on that?

Jeff Lunsford

I would say it is simply because Limelight has more market penetration opportunity or growth opportunity to establish ourselves in the international markets so we have recently expanded, brought in a new international manager out of the UK, expanded the Japan team. So, this is just bringing or beginning to generate revenue from the investments we have made in those markets and we are opening up more offices over in Mainland Europe where today, Limelight has no on-ground presence from our sales and account management standpoints. We definitely have a network presence but not the go-to-market presence.

Operator

Your next question comes from the line of Michael Turits - Raymond James.

Michael Turits - Raymond James

Can you tell me a little bit, we know that, your churn and your gross as well and then what is happening with customers at the lower end that you are seeing? Any follow up in emerging type business customers?

Jeff Lunsford

Michael, the net add number is a little over 30 or approximately 35 is the number we talked about. I would say churn, just as in Q4, churn has been higher than if you look at our five year average and that is simply because yes, many of the smaller companies out there that were in that emerging category were unable to raise their next round of financing or have decided to pull up a web initiative to save cost or whatever. But I cannot really, I would not quantify that other than we just look at the net add number which is solid in Q1.

 

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