This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Akamai Technologies Inc. (AKAM: chart) on February 6, 2008.
Key Investors Issues

- Revenue rose 46% to $183.2 million.
- The firm generated net income of $35.9 million, or 20 cents per diluted share, up 47.7%.
- The firm added 29 net new customers, including the Netli acquisition, bringing total customer count to 2,645.

Full Year Highlights:

- The firm grew revenue 48% to $636.4 million.
- Net income was $244.4 million, or $1.32 per diluted share, up 58%.
- Cash from operations was $235.4 million, or 37% of revenue, up 78% over the prior year.

Fourth Quarter Highlights

Revenue grew to $183.2 million, a 46% increase over $161.2 million realised in the prior year due to product expansion.

- Results were also strong for the commerce vertical with the holiday online shopping season, and significant seasonal strength in media and entertainment.
- International sales represented 23% of total revenue, consistent with third quarter levels, while resellers represented 16% of total revenue, two points lower than the prior period.
- Because of the strong customer relationships in online media and commerce, the firm benefited from seasonal strength in these markets, which translated into very strong ARPU growth in the quarter.

Consolidated ARPU, or average revenue per customer, grew 22% from the prior year to more than $275,000 per year and over 100 customers pend more than $1 million per year with the firm.

- The firm added 29 net new customers this quarter, or 298 net new customers for the year, including the Netli acquisition, bringing total customer count to 2,645.
- This is a lower net add number, partly due to some expected churn related to completing the Nine Systems and Netli customer migration.
- This is also partly due to a strategic shift in sales efforts to focus on further strengthening deep customer relationship built on differentiated solutions, quality delivery, and premium support and services.
- As the firm adds customers to the platform, it is focused on the quality of accounts rather than the customer counts.

The firm generated net income of $35.9 million, or 20 cents per diluted share, up 47.7% from $24.3 million or 13 cents a share in 2006 on strong revenue growth.

- Gross profit margin, which includes both depreciation and stock-based compensation, was 73%.
- Operating expenses were $82.8 million, up from the prior year.
- Total depreciation and amortization was $20.2 million, including $15 million of network related depreciation, $2.4 million of G&A depreciation, and $2.8 million of amortization of intangible assets.

Cash from operations was $71 million and had $634 million in cash, cash equivalents, and marketable securities on the balance sheet.

- Capital expenditures excluding equity compensation were $15.9 million, in line with the annual guidance set at the beginning of the year.
- Days sales outstanding for the quarter were 57 days, down two days from the prior period.

Accomplishments:

- The firm successfully integrated three acquisitions, nine systems, Netli and Red Swoosh.
- It introduced Stream OS into the product portfolio, expanding the rich media management tools on offer to media customers, and released the proprietary Akamai protocol to round out the portfolio of application acceleration services.
- Despite the higher level of economic uncertainty, the firm remains confident that companies will continue to expand their online operations and that quality and performance are becoming even more critical to them.

The firm has been able to maintain and even extend leadership position in this environment because it offers differentiated solutions that matter to enterprise customers.

- The company has turned the Internet in to a more viable place to inform, entertain, interact, and communicate.
- In media, the firm has innovated beyond the traditional with dynamic site solutions to help customers engage audiences with personalized content rich media, the latest web 2.0 technology.
- It has demonstrated the flexibility of proprietary software and solutions through unique technology partnerships with companies such as Apple and Starbucks.
- In commerce, customers have been helped to replicate the in-store experience online with immersive, interactive, and personalized features, all while supporting advanced credit card security scanners such as PCI.
- In the world of B-to-B, the web and IP based application acceleration solution enables companies to overcome the challenges of remote access to applications, complicated delivery protocols and expanded communities’ global users.

Fiscal 2008 Outlook:

- The firm raised the full year revenue guidance to between $800 million and $825 million, or 26% to 30% annual growth.
- Normalized net income is expected to grow in line with or slightly faster than revenue growth, or 27% to 31% on a year-over-year basis, implying normalized EPS of $1.65 to $1.70, or 25% to 29% annual growth.
- Capital investment levels, excluding equity compensation, are expected to be about 16% of revenue with most of the expense loaded to the first half of the year.

First Quarter 2008 Outlook: