This is a summary of the first quarter fiscal 2006 earnings call conducted by Akamai, Inc. (AKAM: chart) on April 26, 2006

Management:

- President, CEO: Paul Sagan
- Director, IR: Sandy Smith
- CFO: J.D. Sherman

Key Investor Issues:

- Average revenue per customer (ARPU) grew to $15,400 per month, up 5%.
- The company generated 17 cents per diluted share, a 12% increase over the prior year.
- Capital expenditures were $16.2 million as the firm frontloaded some of its network investments to take advantage of volume buying opportunities.

First Quarter Highlights:

Revenue was $90.8 million, a 51% increase from $60 million in the prior year as the firm experienced great demand from seasonal sporting events and related marketing sites.

- The Super Bowl, the Winter Olympics, the World Baseball Classic and March Madness generated higher than expected bursting revenue, adding about $2 million to the quarter.
- The ARPU grew to $15,400 per month up another 5% on top of the 4% sequential growth seen in the prior quarter.
- During the period the firm added 71 net new customers, bringing the total customer count to 1,981.
- International sales grew to 23% of total revenue up from 21% in the prior quarter and 20% in the same period last year.
- Resellers accounted for 23% of the total revenue compared to 24% in the fourth quarter and 25% in the same period last year. No customer accounted for 10% or more of our revenue.

Gross profit margin was 79% for the quarter, which includes network-related depreciation:

- Network-related depreciation grew by about $600,000 from the prior quarter but was about 6% of revenue.
- The margin impact from the absolute dollar increase was mitigated by a higher than expected revenue growth.
- The cash gross margin was 85% down a point from the margin in the prior quarter.

Operating expenses for the quarter were $53.9 million, up from $45.5 million in the prior quarter, primarily driven by the adoption of FAS 123R, including amortization of intangible assets related to the Speedera acquisition and depreciation.

- Cash operating expenses were $43.7 million up 7% from $40.7 million in the prior quarter driven by the annual reset of FICA payroll taxes, as well as sales training expenses.
- The firm added 50 new employees as sales organizations continue to grow and add key engineering skills.

EBITDA was $33.4 million, up 9% from the prior quarter, and EBITDA margin remained consistent quarter-over-quarter at 37%.

- Depreciation and amortization was $8.7 million up from $8 million in the prior quarter.
- These charges include $5.4 million of network-related depreciation, $1 million of G&A depreciation and $2.3 million of amortization of intangible assets.
- Net interest was positive, generating $2.7 million of net interest income.
- Net income was $11.5 million or 7 cents a share, a 55% increase from $25.8 million or 17 cents a share in 2006.

Akamai Technologies ended the quarter with $341 million of cash, cash equivalents and marketable securities, up from $314 million at the end of the prior quarter.

-The firm generated $33.2 million of cash from operations or 37% of revenue up from $27.7 million in the prior quarter.
-Capital expenditures were $16.2 million as the firm frontloaded some of its network investments to take advantage of volume buying opportunities.
- The firm also invested in network to capitalize on new opportunities being seen in the media and entertainment market, which is driving demand at high levels.
- Day sales outstanding were 54 days, up from 53 days last quarter.

Fiscal 2006 Second Quarter Outlook

- Revenue to be between $93 million and $96 million.
- Earnings per diluted share of $0.18.

¬Full Year Fiscal 2006 Outlook:

- Revenue for the year to be at least $380 million.
- EPS growth of at least 40%.
-Cash gross margins to remain roughly stable.

Some trends enabled Akamai Technologies to exceed expectations and to raise outlook for the year.

- An explosion in the use of the Internet, enabled by pervasive broadband connections at home and at work.

– Internet is displacing other forms of media for many users as their medium of choice.
- There is very strong demand in the core content delivery service business as more and more enterprises continue to move critical processes online.
- Online tie-ins to the TV ads demonstrate how significant multi-channel marketing has become and how the Internet is playing a key part in helping marketers reach their customers.
- The firm continues to develop demand for its new Web Application Acceleration Service.