Edgio Inc (EGIO) 2022 Q1 法說會逐字稿

Ladies and gentlemen, welcome to the Limelight Networks 2022 First Quarter Financial Results Conference Call. (Operator Instructions)

女士、先生們，歡迎參加 Limelight Networks 2022 年第一季財務業績電話會議。 （操作員說明）

I'll now turn the call over to Sameet Sinha, Vice President of Investor Relations and Corporate Development.

現在我將把電話轉給投資者關係和企業發展副總裁 Sameet Sinha。

Good afternoon. Thank you for joining the Limelight Networks First Quarter 2021 Financial Results Conference Call. The call is being recorded today, April 28, 2022, and will be archived on our website for approximately 10 days.

午安.感謝您參加 Limelight Networks 2021 年第一季財務表現電話會議。該通話將於今天（2022 年 4 月 28 日）進行錄音，並將在我們的網站上存檔約 10 天。

Let me start by quickly covering the safe harbor. We'd 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 priorities, our expectations, our 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 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 report Annual Form 10-K and quarterly reports 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.

讓我先快速介紹一下安全港。我們想提醒大家，我們將在這次電話會議上做出前瞻性陳述。前瞻性陳述是指並非嚴格歷史事實陳述的所有陳述，例如我們的優先事項、我們的期望、我們的營運計劃、業務策略、長期趨勢、產品和功能、預期結果、收購活動以及被收購業務的貢獻。實際結果可能與我們的前瞻性陳述中預期的結果有重大差異，報告的結果不應被視為未來績效的指標。欲了解更多信息，請參閱我們定期提交的文件中討論的風險因素，包括我們最新的年度報告 10-K 表格和季度報告 10-Q 表格。本次電話會議中的前瞻性陳述基於截至今日我們掌握的信息，除法律要求外，我們不承擔更新任何前瞻性陳述的義務。

Joining me on the call today are Bob Lyons, our President and Chief Executive Officer; and Dan Boncel, our EVP and CFO. Bob will start today's call with a brief discussion of the results and an update on our Improve, Expand and Extend initiatives. Dan will then review financial results and guidance. Following that, Bob will use the remainder of the call to discuss aspects of our strategy and corporate initiatives going forward. We will then open the call for Q&A, where Ajay Kapur, Limelight's CTO, will also be available to answer your questions.

今天和我一起參加電話會議的是我們的總裁兼執行長 Bob Lyons；以及我們的執行副總裁兼財務長 Dan Boncel。鮑勃將在今天的電話會議開始時簡要討論結果以及我們改進、擴展和擴展計劃的最新情況。然後丹將審查財務業績和指導。接下來，鮑勃將利用電話會議的剩餘時間討論我們未來策略和公司計劃的各個方面。然後，我們將開始問答環節，Limelight 技術長 Ajay Kapur 也將回答您的問題。

I will now turn the call over to Bob.

我現在將把電話轉給鮑伯。

Thank you, Sameet, and welcome, everyone. The first quarter of 2022 continued to build on our positive momentum with 3 sequential quarters of profitability improvement and 2 sequential quarters of double-digit year-over-year revenue growth. Our operational improvements and renewed client focus have driven record traffic with 17 of Limelight's top 20 highest all-time traffic days landing in the quarter. It is also important to note that the traffic improvements were broad-based in nature, spanning streaming, live events, software downloads, gaming and expand our diverse client base.

謝謝 Sameet，歡迎大家。 2022 年第一季我們持續保持正面勢頭，連續 3 個季度獲利能力改善，連續 2 個季度營收年增兩位數。我們的營運改善和重新以客戶為中心，推動了創紀錄的流量成長，Limelight 歷史上流量最高的 20 天中有 17 天出現在本季。同樣重要的是要注意，流量的改善本質上是廣泛的，涵蓋串流媒體、現場活動、軟體下載、遊戲並擴大我們多樣化的客戶群。

In Q1, our financial results were well ahead of market expectations, as well as ahead of our management plan. Revenue was $58 million, an improvement of 13% year-over-year and well ahead of plan. Our cash gross margin of 40.2% was up 420 basis points year-over-year and consistent with our plan. Adjusted EBITDA was $2 million ahead of plan for the quarter and a meaningful $5.3 million improvement year-over-year. I can comfortably say today that our business continues to strengthen, and we remain confident in our ability to continuously create meaningful value for our clients, shareholders and employees alike.

第一季度，我們的財務表現遠遠超出了市場預期，也超出了我們的管理計畫。收入為 5800 萬美元，年增 13%，遠遠超出計劃。我們的現金毛利率為 40.2%，年成長 420 個基點，與我們的計畫一致。本季調整後 EBITDA 比計畫提早 200 萬美元，年比大幅提高 530 萬美元。今天，我可以輕鬆地說，我們的業務不斷增強，我們對持續為客戶、股東和員工創造有意義的價值的能力充滿信心。

The underlying pillars of supporting this momentum are threefold: first, our unwavering commitment to operational performance. As previously reported, third-party load balancing and data analytics firm, PerfOps, continues to rate Limelight's performance as best-in-class. Last quarter, we reported that we were #1 in North America. Building on that, we have worked very hard to improve our standing in other regions as well. We have made notable progress in Latin America, a critical market for us. Our efforts have resulted in achieving the #1 rating in that region as well. As a result of almost a year of dedicated performance improvements, we can now proudly and confidently state that we consistently ranked #1 in the world. The performance of our network is critical to our success, and we will continue to be unwavering in our pursuit to consistently deliver best-in-class performance.

支持這股動能的根本支柱有三：首先，我們對營運績效的堅定承諾。如同先前所報導的，第三方負載平衡和數據分析公司 PerfOps 繼續將 Limelight 的效能評為同類最佳。上季度，我們報告說我們在北美排名第一。在此基礎上，我們也非常努力地提高我們在其他地區的地位。我們在拉丁美洲這個對我們來說至關重要的市場取得了顯著進展。我們的努力也取得了該地區排名第一的成績。經過近一年的專注性能改進，我們現在可以自豪且自信地說，我們一直排名世界第一。我們的網路效能對於我們的成功至關重要，我們將繼續堅定不移地追求始終如一地提供一流的效能。

Second, our commitment to delivering an unmatched client experience. In the many conversations I have with clients each quarter, I am briefly told that one of our towering strengths is our team and their focus on delivering great support. This is something that separates us from the pack, and we intend to continue building on that strength.

其次，我們致力於提供無與倫比的客戶體驗。在每季與客戶進行的多次對話中，我被簡短地告知，我們的巨大優勢之一是我們的團隊以及他們專注於提供強大的支援。這是我們與眾不同的地方，我們打算繼續增強這項優勢。

Third, our strategic pivot has extended our ability to deliver high-growth, high-margin, edge-enabled application and security solutions. With Layer0, we added meaningful capabilities, products and solutions to our edge platform. We now have what we believe to be the most complete AppOp solution for developers who are focused on improving performance, protection and productivity of their web applications by migrating them to an edge-enabled next-generation platform. And the market agrees. We replaced direct competitors in 9 of our new logo deals this quarter.

第三，我們的策略支點擴展了我們提供高成長、高利潤、邊緣應用和安全解決方案的能力。透過 Layer0，我們為我們的邊緣平台添加了有意義的功能、產品和解決方案。現在，我們為那些專注於透過將 Web 應用程式遷移到支援邊緣的下一代平台來提高其 Web 應用程式的效能、保護和生產力的開發人員提供了我們認為最完整的 AppOp 解決方案。市場也同意這一點。本季我們在 9 項新商標交易中取代了直接競爭對手。

Our commitment to continuously improving across these 3 pillars result in more confidence and deeper relationships with our clients. With that confidence, they are more inclined to turn their traffic down towards us and evaluate our high-margin products. That, in turn, drives more traffic to our platform, improving our utilization and creating opportunities to deliver additional SaaS-like solutions. This all translates into a company that can sustainably and continuously create additional value for our clients and shareholders. In short, our recent success in creating shareholder value has been the direct result of addressing the performance, support and app modernization needs of our clients. We will continue making them our first priority. They pay for that and should expect nothing less.

我們致力於在這三大支柱上不斷改進，從而增強我們與客戶的信心並加深關係。有了這種信心，他們更傾向於將流量轉向我們並評估我們的高利潤產品。這反過來又為我們的平台帶來了更多流量，提高了我們的利用率，並創造了提供更多類似 SaaS 的解決方案的機會。這一切都意味著公司能夠持續不斷地為我們的客戶和股東創造額外價值。簡而言之，我們最近在創造股東價值方面的成功是滿足客戶的績效、支援和應用程式現代化需求的直接結果。我們將繼續將它們作為我們的首要任務。他們為此付出了代價，並且應該期待同樣的事情。

Let me shift focus and share some detail around what we have done and plan on doing in the months and quarters ahead. I will frame my comments using our Improve, Expand and Extend framework, as I have done in previous updates. As a reminder, our Improve program is focused on network performance and operating costs. Our Expand program is focused on client experience and the expanding relationships with them. And our Extend program is focused on introducing new best-in-class edge-enabled solutions that increase network utilization, growth and gross margins.

讓我轉移焦點並分享一些關於我們已經完成的工作以及未來幾個月和幾個季度計劃要做的事情的細節。我將使用我們的改進、擴展和擴展框架來建立我的評論，就像我在先前的更新中所做的那樣。請注意，我們的改進計劃重點關注網路效能和營運成本。我們的擴展計劃專注於客戶體驗以及擴大與他們的關係。我們的擴展計劃專注於引入新的一流的邊緣支援解決方案，以提高網路利用率、成長和毛利率。

Let me highlight some of the things that we have focused on to continue building on our recent momentum. Under our Improve program, we continue to make operational and architectural improvements toward improving performance and reducing our cost footprint. Improve highlights include last quarter, we introduced an initiative to upgrade our network to a Linux-based operating system. This initiative will improve throughput, increase capacity and reduce operating costs. We are on track with this initiative and expect to see incremental improvements each quarter going forward. Further, this initiative accelerates our ability to pursue an asset-light model with ISPs and more rapidly consolidate the Edgecast and Limelight platforms as a service.

讓我強調一下我們為繼續鞏固近期勢頭而重點關注的一些事情。根據我們的改進計劃，我們繼續進行營運和架構改進，以提高效能並降低成本足跡。改進亮點包括上個季度，我們推出了一項將網路升級到基於 Linux 的作業系統的計畫。這項措施將提高吞吐量、增加產能並降低營運成本。我們正在實施這項舉措，並期望未來每季都能看到漸進式的改善。此外，這項措施加速了我們與 ISP 追求輕資產模式的能力，並更快地將 Edgecast 和 Limelight 平台整合為服務。

We began executing a plan to increase our cash capacity and bandwidth capacity by over 40%, which will meaningfully improve our performance and allow us to gain more wallet share with existing clients and earn the business of new ones. We continue to focus on network utilization by improving traffic mix and traffic management. We have maintained our improved utilization levels achieved in the fourth quarter of 2021, despite seasonality trends in Q1. As a reminder, every point of utilization results in $5 million to $9 million of adjusted EBITDA. Last, the year-over-year flow-through of revenue growth to adjusted EBITDA is approximately 77%.

我們開始執行一項計劃，將現金容量和頻寬容量增加 40% 以上，這將顯著提高我們的業績，使我們能夠在現有客戶中獲得更多的錢包份額，並贏得新客戶的業務。我們繼續透過改進流量組合和流量管理來關注網路利用率。儘管第一季存在季節性趨勢，但我們仍保持了 2021 年第四季提高的利用率水準。提醒一下，每個利用點都會帶來 500 萬至 900 萬美元的調整後 EBITDA。最後，營收成長對調整後 EBITDA 的年比流入約為 77%。

Highlights this quarter for our Expand program include, we previously discussed that 2 of our top 20 clients had not been growing and were flat in our annual plan. I am happy to report that both have delivered traffic above plan in Q1. Our largest client is starting to see the COVID-induced shortage of new content subside. In the quarter, they had a number of popular launches and anticipate many more in the second half of the year. Additionally, they continue to expand their focus on live content such as sports. Improving on the trends from previous quarters, 19 of our top 20 customers grew their revenue by more than 20% year-over-year.

本季度我們的擴展計劃的亮點包括，我們之前討論過，我們的 20 大客戶中有 2 家沒有實現成長，並且在我們的年度計劃中持平。我很高興地報告，兩家公司在第一季的流量都超出了計劃。我們最大的客戶開始看到新冠疫情導致的新內容短缺現像有所緩解。在本季度，他們推出了許多受歡迎的產品，並預計下半年將推出更多產品。此外，他們繼續擴大對體育賽事等直播內容的關注。與前幾季的趨勢相比，我們的前 20 位客戶中有 19 位的營收年增超過 20%。

Client additions continue to trend in a positive direction with a 5-quarter high achieved this quarter. In the quarter, we added 24 new logos, 15 of which were in the Americas. Of those, 60% were sourced and closed by our newly created channel team who are largely focused on AppOps. Of the new product sales, 9 replaced direct competitors in this quarter. Our pipeline continues to grow as well. In the quarter, we grew our pipeline by more than 30%, with the AppOps portion growing by triple digits. We continue to attract large media companies for content delivery, but with our AppOp solution, we are also relevant to a variety of company sizes and types that are looking for the best solution for their high stakes web applications. Layer0 contributed $3.8 million in the quarter and is tracking well towards its full year guide of at least $20 million in high gross margin revenue. We have largely completed the planned rebuild of our sales and marketing teams. The second quarter will be the first full quarter for most of our quota-carrying reps, providing ample opportunity for continued momentum in the second half of the year.

客戶增加持續呈正面趨勢，本季創下了五個季度的新高。本季度，我們新增了 24 個新徽標，其中 15 個位於美洲。其中 60% 是由我們新創建的通路團隊採購和關閉的，他們主要專注於 AppOps。本季新產品銷售中，有 9 款取代了直接競爭對手。我們的管道也在持續成長。本季度，我們的通路成長了 30% 以上，其中 AppOps 部分成長了三位數。我們繼續吸引大型媒體公司進行內容交付，但透過我們的 AppOp 解決方案，我們也與各種規模和類型的公司相關，這些公司正在為其高風險 Web 應用程式尋找最佳解決方案。 Layer0 在本季度貢獻了 380 萬美元，並且正在順利實現其全年至少 2000 萬美元高毛利率收入的目標。我們已經基本完成了銷售和行銷團隊的計劃重建。第二季度將是我們大多數配額代表的第一個完整季度，為下半年的持續發展勢頭提供了充足的機會。

Our Extend program was rich with headlines this quarter. We announced the transformational acquisition of Edgecast. Without question, we have taken another giant leap board in our strategy to become a leading edge-enabled solutions company. With Edgecast, we will be one of the largest independent edge platforms with a significant increase in scale, security, live events and video capabilities. We strengthened our security capabilities with native WAF, DDoS and basic bot detection. This coupled with our November app CDN launch enables us to lead the rapidly growing $4.4 billion web CDN and security market. With these newly added capabilities, we have increased the size of clients we can target and our reach across industries.

本季我們的擴展計劃充滿了頭條新聞。我們宣布對 Edgecast 進行轉型收購。毫無疑問，我們在成為一家領先的邊緣解決方案公司的策略中又邁出了一大步。借助 Edgecast，我們將成為最大的獨立邊緣平台之一，其規模、安全性、現場活動和視訊功能都將顯著提高。我們透過本機 WAF、DDoS 和基本機器人偵測增強了安全能力。再加上我們 11 月推出的應用程式 CDN，使我們能夠引領快速成長的 44 億美元的網路 CDN 和安全市場。憑藉這些新增加的功能，我們擴大了目標客戶的規模以及跨行業的影響力。

Our edge-enabled platform will include Edgecast enterprise-grade security solutions, the fastest edge logic in the market relative to our direct competitors, our developer and Jamstack APIs and application operational tools, all seamlessly integrated with the world's most performant global edge platform. Oh, and by the way, this comprehensive set of capabilities are already integrated with over 40 of the most popular web development frameworks.

我們的邊緣支援平台將包括Edgecast 企業級安全解決方案、市場上相對於我們的直接競爭對手最快的邊緣邏輯、我們的開發人員和Jamstack API 以及應用程式操作工具，所有這些都與世界上性能最強的全球邊緣平台無縫整合。哦，順便說一句，這套全面的功能已經與 40 多個最受歡迎的 Web 開發框架整合。

We believe that the robustness of our solution platform and holistic and integrated approach to edge and cloud services will quickly be recognized as the most complete solution in the market, especially as developers continue to govern purchase decisions in our market. The evolution from a media CDN to an edge-enabled solutions company anchored by the industry's most complete AppOps solution and powered by the world's fastest edge network has and will continue to build positive momentum in our business. The momentum and leading indicators underwrite a business that continues to strengthen. We are seeing organic revenue growth, improving gross margins and growing adjusted EBITDA. While we have made meaningful progress in the past 5 quarters and have seen 3 quarters of positive momentum, much work remains to be done.

我們相信，我們解決方案平台的穩健性以及邊緣和雲端服務的整體整合方法很快就會被公認為市場上最完整的解決方案，特別是當開發人員繼續控制我們市場的購買決策時。從媒體 CDN 發展為邊緣解決方案公司，以業界最完整的 AppOps 解決方案為基礎，並由世界上最快的邊緣網路提供支持，這已經並將繼續為我們的業務帶來積極的勢頭。勢頭和領先指標保證了業務的持續增強。我們看到有機收入成長、毛利率提高以及調整後 EBITDA 不斷增長。雖然我們在過去 5 個季度取得了有意義的進展，並看到了 3 個季度的積極勢頭，但仍有許多工作要做。

Our combination with Edgecast provides us with a great set of opportunities for improved growth and profitability. We will continue to focus on the basics, client experience, operational discipline and focusing our strategic investments into solutions where we can establish a clear right to win. Under the soon-to-be Edgio banner, we will be a growing technology solutions company with a $40 billion total addressable market, the most complete AppOp solutions, all running on the world's most performant edge platform. I don't think it's too much of a stress to say that the future of Edgio looks very bright.

我們與 Edgecast 的結合為我們提供了一系列提高成長和獲利能力的絕佳機會。我們將繼續專注於基礎知識、客戶體驗、營運紀律，並將我們的策略投資重點放在我們能夠建立明確獲勝權利的解決方案上。在即將成立的Edgio 旗幟下，我們將成為一家不斷發展的技術解決方案公司，擁有400 億美元的總目標市場、最完整的AppOp 解決方案，所有這些都運行在世界上性能最強的邊緣平台上。我認為說 Edgio 的未來看起來非常光明並不過分。

At this time, I will turn the call over to Dan to report our first quarter financials.

此時，我將把電話轉給丹，報告我們第一季的財務狀況。

Thanks, Bob. Revenue for the first quarter was $58 million, up 13% from the first quarter of 2021 and our second consecutive quarter of double-digit percentage revenue growth over the prior year. Layer0 contributed $3.8 million to our revenue, which, when excluded, implies 6% organic growth in the quarter, which is 2 consecutive quarters of single-digit organic growth. We delivered this performance despite global supply chain headwinds, which we have modeled to continue. Our top 20 clients accounted for approximately 76% of total first quarter revenue compared to 79% last year.

謝謝，鮑伯。第一季營收為 5,800 萬美元，比 2021 年第一季成長 13%，也是我們連續第二季比上年實現兩位數百分比營收成長。 Layer0 為我們的收入貢獻了 380 萬美元，如果將其排除在外，則意味著本季度有機增長 6%，這是連續 2 個季度實現個位數有機增長。儘管全球供應​​鏈面臨逆風，但我們仍取得了這樣的業績，我們已經模擬了這種情況將持續下去。我們的前 20 位客戶約佔第一季總營收的 76%，而去年為 79%。

Cash gross margins expanded to 40.2% from 36% in the first quarter of 2021, an increase of 420 basis points due to revenue growth driven by higher traffic and improvement in utilization of our network.

由於流量增加和網路利用率提高推動收入成長，現金毛利率從 2021 年第一季的 36% 擴大至 40.2%，成長了 420 個基點。

Total cash operating expenses were $27.1 million in the first quarter of 2022 or 46.8% of revenue, down from 65.1% of revenue in the first quarter of 2021. Cash operating expenses, excluding restructuring and acquisition-related expenses were $21.3 million or 36.8% of revenue, down from 42.3% last year. We continue to realize the benefits from our improved management of operating costs. As previously mentioned, we had continued to invest in sales and marketing and hired ahead of plan given our ability to attract qualified talent.

2022 年第一季現金營運支出總額為2,710 萬美元，佔營收的46.8%，低於2021 年第一季佔營收的65.1%。現金營運支出（不包括重組及收購相關費用）為2,130 萬美元，佔收入的36.8%。收入比去年的 42.3% 下降。我們不斷從改善營運成本管理中獲益。如前所述，鑑於我們有能力吸引合格人才，我們繼續在銷售和行銷方面進行投資，並提前招募。

Acquisition and legal-related charges in connection with our proposed acquisition of Edgecast were $5.1 million for the first quarter.

第一季與我們擬議收購 Edgecast 相關的收購費用和法律相關費用為 510 萬美元。

The aforementioned year-over-year revenue growth and improvements within our operating model resulted in a meaningful year-over-year increase in adjusted EBITDA. First quarter 2022 adjusted EBITDA was $2 million, up from a loss of $3.3 million last year. Improved network utilization and operating leverage in the business allowed for 77% flow-through of the revenue growth.

上述年收入成長和我們營運模式的改善導致調整後 EBITDA 年比大幅成長。 2022 年第一季調整後 EBITDA 為 200 萬美元，高於去年的虧損 330 萬美元。網路利用率和業務營運槓桿的提高使收入成長實現了 77% 的成長。

Cash and marketable securities totaled $62 million, a decrease of $17 million. We spent $5.4 million for capital expenditures. DSO at the end of the quarter was 81 days compared to 51 days at the end of December. The increase is due to the timing of client payments received. Our accounts receivable balance increased $12.8 million from the end of December. We expect DSO to be in the 50- to 60-day range and have seen improved cash collections in April.

現金和有價證券總計 6,200 萬美元，減少 1,700 萬美元。我們花了 540 萬美元用於資本支出。本季末的 DSO 為 81 天，而 12 月底為 51 天。增加的原因是收到客戶付款的時間。我們的應收帳款餘額較 12 月底增加了 1,280 萬美元。我們預計 DSO 將在 50 至 60 天的範圍內，並且 4 月份的現金收款情況有所改善。

As for guidance, given we anticipate closing of the Edgecast transaction in the next 30 to 60 days, we are maintaining our full-year guidance. We expect to begin working with the Edgecast team on a bottom-up forecast for the remainder of the year immediately after we close, and we'll provide combined guidance for the year as soon as we finish that process. We expect second quarter to be consistent with the first quarter with continued tight management of network and operating expenses, we would expect gross margin adjusted EBITDA margin to continue its methodical expansion to reiterate how we think about the combined company post integration and upon successful completion of these synergies initiatives, which will take 24 months from close, the combined company is anticipated to have a growth rate of approximately 10% to 15%, better than 50% gross margins, improving to 60%, approximately 10% to 15% adjusted EBITDA and positive free cash flow.

至於指引，鑑於我們預計 Edgecast 交易將在未來 30 至 60 天內完成，我們將維持全年指引。我們預計在交易結束後立即開始與 Edgecast 團隊合作，對今年剩餘時間進行自下而上的預測，一旦完成流程，我們將立即提供今年的全面指導。我們預計第二季將與第一季保持一致，繼續嚴格管理網路和營運費用，我們預計毛利率調整後的EBITDA 利潤率將繼續有條不紊地擴張，以重申我們對合併後公司整合後以及成功完成合併後的看法。這些協同舉措將在24 個月內完成，合併後的公司預計增長率約為10% 至15%，毛利率高於50%，提高至60%，調整後EBITDA 約為10% 至15%和正的自由現金流。

With that, I will turn the call back to Bob.

這樣，我會將電話轉回給鮑伯。

Thanks, Dan. Let me take this opportunity to outline the next phase of our transformative story that begins with a company rebrand to Edgio. On a combined basis, Edgio will have one of the largest networks in the world, delivering more than 200 terabytes per second across more than 300 global PoPs and 2021 revenues exceeding $500 million. Our scale will enable us to improve our gross margins to approximately 60% over the next 2 years, underwritten with an improved platform utilization, growing high-margin revenue and planned net operational synergies of greater than $50 million. With our new capabilities, we will be recognized as having the most complete web application platform with a 5x increase in market share to over $100 million in high-growth, high-margin application and security revenue. The addition of Edgecast industry-leading edge video platform further diversifies our revenue and the solutions that we can deliver from our Edge platform. As a result, we will reduce client concentration risk, and our largest client will be less than 13% of total revenue, the only one above 10%.

謝謝，丹。讓我藉此機會概述我們變革故事的下一階段，從公司更名為 Edgio 開始。綜合來看，Edgio 將擁有世界上最大的網路之一，在全球 300 多個 PoP 上提供每秒超過 200 TB 的資料傳輸，2021 年收入將超過 5 億美元。我們的規模將使我們能夠在未來 2 年內將毛利率提高到約 60%，這得益於平台利用率的提高、高利潤收入的增長以及計劃的淨運營協同效應超過 5000 萬美元。憑藉我們的新功能，我們將被公認為擁有最完整的 Web 應用程式平台，市場份額將增加 5 倍，高成長、高利潤的應用程式和安全收入將超過 1 億美元。 Edgecast 業界領先的邊緣視訊平台的加入進一步豐富了我們的收入以及我們可以從 Edge 平台提供的解決方案。這樣一來，我們將降低客戶集中度風險，我們最大的客戶佔總收入的比例將低於13%，唯一高於10%的客戶。

To put a fine point on the complementary nature of the businesses coming together, Limelight has significant international presence, expertise in large cloud delivery, a growing sales and marketing team with proven client success practices, a leading and high-growth AppOps platform, superior video on-demand capabilities, all delivered on the world's best-performing edge platform. With Edgecast, we add a proven channel program supported by partners such as Azure and Verizon, industry-leading live event capabilities, a multilayered edge security platform that includes scaled WAF, DDoS and Bot Management, a highly synergistic edge video platform, Linux-based CDN capabilities that will meaningfully improve automation and a team of highly skilled employees.

為了充分體現兩家公司的互補性，Limelight 擁有重要的國際影響力、大型雲端交付的專業知識、不斷成長的銷售和行銷團隊以及經過驗證的客戶成功實踐、領先且高成長的AppOps 平台、卓越的視訊按需功能，全部在世界上性能最佳的邊緣平台上提供。借助Edgecast，我們添加了由Azure 和Verizon 等合作夥伴支持的經過驗證的渠道計劃、行業領先的實時活動功能、包括大規模WAF、DDoS 和機器人管理的多層邊緣安全平台、高度協同的邊緣視頻平台、基於Linux 的CDN 功能將有意義地改善自動化和高技能員工團隊。

After close, we will have the ability to dig deeper and anticipate the ability to capture additional client and commercial synergies. Integration planning is well underway, and we expect to close this acquisition and start this exciting next phase of our transformation in the next 30 to 60 days under the Edgio brand. We thank our investors for their continued support and look forward to working together to achieve what we all know is uniquely possible for us.

交易完成後，我們將有能力進行更深入的挖掘，並預測獲得更多客戶和商業協同效應的能力。整合規劃正在順利進行中，我們預計將完成此次收購，並在未來 30 至 60 天內以 Edgio 品牌開始令人興奮的下一階段轉型。我們感謝投資者的持續支持，並期待共同努力，實現我們所知道的對我們來說獨一無二的目標。

With that, operator, please open the lines for the question-and-answer session.

那麼，接線員，請打開問答環節。

(Operator Instructions) And our first question is from Michael Elias from Cowen & Co.

（操作員說明）我們的第一個問題來自 Cowen & Co. 的 Michael Elias。

Two, if I may. So first, in your recent proxy, you provided management expectations for the combined company. And I believe the growth rates for revenue are essentially between the 9% and 11% range between 2023 and 2028. And I know you've talked about 10% to 15% revenue growth and then potentially getting to 20% to 25%. I just want to know from your perspective, like what are the levers to getting to the higher end of that range? That's my first question.

如果可以的話，兩個。首先，在您最近的委託書中，您提供了對合併後公司的管理層期望。我相信 2023 年至 2028 年間，收入成長率基本上在 9% 到 11% 之間。我知道您已經談到了 10% 到 15% 的收入成長，然後可能達到 20% 到 25%。我只是想從您的角度了解，達到該範圍高端的槓桿是什麼？這是我的第一個問題。

And then the second question would be, I believe your 2022 guidance implies that traffic with 2 of the top 20 customers, essentially flat year-over-year. And I believe earlier you were talking about how you're seeing improved progress in terms of traffic. Just wondering what you're seeing there. And then also, how we should think about the stand-alone guidance throughout the year as a result of that?

第二個問題是，我相信你們 2022 年的指引意味著前 20 位客戶中有 2 位的流量與去年同期基本持平。我相信早些時候您談到瞭如何看到流量方面的進步。只是想知道你在那裡看到了什麼。然後，我們應該如何考慮全年的獨立指導？

Michael, it's Bob. I'll start with your second question first on the traffic. The -- we obviously are seeing a lot of traffic. And as we mentioned in the call script, we had 17 of the top 20 days historically in the last quarter. And so, we're pretty excited about that. In fact, those 2 customers that you mentioned, one of those was up 20% this quarter as well. So we're seeing growth there again. Both of them grew by the way. So we're pretty excited about that. So from a standpoint of how the business is running, we're very happy with that. The challenge that we have is, in our business, you have to build capacity to be able to continue that momentum, and we're seeing a lot of supply chain disruption. It takes us 9 to 12 months to get servers. And so, we had a lot of conversation internally about, "hey, do we raise guidance? Or do we stay flat?" And I think given the fact that we're going to have a major reset of guidance in the next 90 days, let's say, with the merger with Edgecast, in addition to that, I'm continuing to watch the supply chain challenges, we just thought it's better just to kind of hold tight and come back and reset that in a short period of time. But having said all that, we're navigating those challenges, doing it very well, have done it, and we're very happy with where the business is running from a traffic standpoint.

邁克爾，是鮑伯。我先回答你的第二個問題，關於交通。我們顯然看到了大量的流量。正如我們在通話腳本中提到的，歷史上排名前 20 天的交易日中有 17 天是在上個季度。因此，我們對此感到非常興奮。事實上，您提到的 2 位客戶，其中一個本季也成長了 20%。所以我們再次看到那裡的成長。兩人都是一路成長的。所以我們對此感到非常興奮。因此，從業務運營的角度來看，我們對此非常滿意。我們面臨的挑戰是，在我們的業務中，你必須建立能力才能繼續這種勢頭，而我們看到了許多供應鏈中斷。我們需要 9 到 12 個月才能獲得伺服器。因此，我們在內部進行了很多討論，“嘿，我們是提高指引？還是保持不變？”我認為考慮到我們將在未來 90 天內對指導進行重大調整，比如說與 Edgecast 的合併，除此之外，我將繼續關注供應鏈挑戰，我們只是覺得最好還是堅持一下，然後在短時間內回來重置。但話雖如此，我們正在應對這些挑戰，做得很好，已經做到了，從流量的角度來看，我們對業務的運作情況非常滿意。

On the growth standpoint from Edgecast, that's a great conversation. The -- when you look at the business, Edgecast has been tucked into this huge Verizon company, didn't have a sales force of its own, really relied on the Verizon channel. And so, when you look at those growth rates, those growth rates are despite the fact that they really had no commercial presence for most of their products. They didn't have a great go-to-market strategy, didn't really even have a sales team per se. And so, when you take the capabilities that they have, the security, the app CDN and the video platform and you put them into the redesign model that we spent the last 12 months rebuilding, we expect to see much more growth than what they've been able to do. So it's pretty interesting. They have pretty favorable growth despite the fact really having no commercial presence or capabilities in the organization other than relying on Verizon to sell stuff for them. So that's how you get to the upper end. I think the other thing we have to continue to do is launch products in other areas like security, which will continue to push that growth rate up.

從 Edgecast 的成長角度來看，這是一場很棒的對話。 - 當你看一下業務時，Edgecast 已經融入了這家巨大的 Verizon 公司，沒有自己的銷售隊伍，實際上依賴 Verizon 管道。因此，當您查看這些成長率時，您會發現儘管事實上他們的大多數產品實際上沒有商業存在，但這些成長率仍然存在。他們沒有很好的進入市場策略，甚至沒有真正的銷售團隊本身。因此，當你採用他們擁有的功能、安全性、應用程式 CDN 和視訊平台，並將它們放入我們過去 12 個月重建的重新設計模型中時，我們預計會看到比他們更多的增長。已經能夠做到了。所以這很有趣。儘管事實上除了依靠 Verizon 為他們銷售產品之外，該組織實際上沒有任何商業存在或能力，但他們的成長相當不錯。這就是你到達高端的方法。我認為我們必須繼續做的另一件事是在安全等其他領域推出產品，這將繼續推動成長率。

Our next question is from Frank Louthan from Raymond James.

我們的下一個問題來自 Raymond James 的 Frank Louthan。

Talk to us a little bit more about Edgecast and how that's going to help with the content delivery business? How does that help support that? And then give us -- if you can give us an update on the Linux conversion and what sort of -- what challenges the Edgecast integration will bring to that as well? That would be great.

請與我們詳細談談 Edgecast 以及它將如何幫助內容交付業務？這對支持這一點有何幫助？然後告訴我們——是否可以向我們提供有關 Linux 轉換的最新資訊以及 Edgecast 整合將帶來哪些挑戰？那太好了。

Yes. So a couple of things. I think, one, when you look at our video delivery business, we're very strong in broad over-the-top video streaming. They do much more in live events. Actually, I'd argue they're probably best-in-class at live events. That's an area where we're pretty weak actually. So you put the 2 combinations together and essentially, you have the ability to span the full spectrum of live events to video on-demand. With their video platform, they also have a best-in-class ad insertion engine that will position us well for what we think is another growth area on the horizon, which is advertising-driven video-on-demand AVOD. And so, we're pretty excited about that. So from a capability standpoint, they're very complementary.

是的。有幾件事。我認為，第一，當你看看我們的視訊交付業務時，我們在廣泛的頂級視訊串流方面非常強大。他們在現場活動中做得更多。事實上，我認為他們在現場活動中可能是同類中最好的。這實際上是我們非常薄弱的​​一個領域。因此，您將這兩種組合放在一起，從本質上講，您就能夠將所有現場活動擴展到視訊點播。憑藉他們的視訊平台，他們還擁有一流的廣告插入引擎，這將使我們能夠很好地進入我們認為即將出現的另一個成長領域，即廣告驅動的視訊點播 AVOD。因此，我們對此感到非常興奮。所以從能力的角度來看，它們是非常互補的。

But the addition of that is going back to the answer I gave to Michael, capacity and throughput is something that's really important to us. We -- when you combine the networks, one of the things that we've learned, we did a pilot, we found out that when we go to Linux, we can actually improve our capacity and our throughput without having to add hardware. And so, that's one of the ways that we can actually expand our capacity without having to take the headwinds of the supply chain disruption head on. When we merged the 2 networks together and bring the companies together, they have a lot of excess capacity. They're already running on Linux as well, and so we're going to bring a lot of expertise over. We're in the early stages of our rollout of that, and we'll be able to accelerate that with the combination of their expertise, their network and our network. So, we'll be able to do that. In addition, they also are far ahead of us in automation because of that Linux platform. And so, essentially, by combining the networks will bring excess capacity to the table, we'll be able to accelerate our Linux-based transformation and also accelerate the automation, which all translates into higher revenue and higher gross margins.

但這一點又回到了我給麥可的答案，容量和吞吐量對我們來說非常重要。我們——當你結合網路時，我們學到的一件事是，我們做了一個試點，我們發現當我們使用 Linux 時，我們實際上可以提高我們的容量和吞吐量，而無需添加硬體。因此，這是我們實際上可以擴大產能而不必直面供應鏈中斷的不利因素的方法之一。當我們將兩個網路合併在一起並將公司合併在一起時，他們有很多過剩的產能。它們也已經在 Linux 上運行，因此我們將帶來大量專業知識。我們正處於推出該專案的早期階段，我們將能夠透過結合他們的專業知識、他們的網路和我們的網路來加速這一進程。所以，我們將能夠做到這一點。另外，由於Linux平台，他們在自動化方面也遠遠領先我們。因此，從本質上講，透過合併網路將帶來過剩的產能，我們將能夠加速基於 Linux 的轉型，並加速自動化，這一切都將轉化為更高的收入和更高的毛利率。

And our next question is from James Breen from William Blair.

我們的下一個問題來自威廉布萊爾的詹姆斯布林。

Just a couple on the security side. Are the products that you have now that should sort of grow from here? Or do you need to gain more technologies through acquisition or through development internally?

只有幾個安全方面的人。您現在擁有的產品是否應該從這裡開始發展？或者您需要透過收購或內部開發來獲得更多技術？

And then secondly, just can you comment on any impact you've seen just from what's going on in Ukraine relative to your business there?

其次，您能否評論一下烏克蘭發生的事情對您在那裡的業務的影響？

Yes. Sure. Let me take the Ukraine piece, and I'll start the security piece and then I actually have Ajay on the call with us today, and I'll let him talk a little bit more about our thoughts around security. So from the Ukraine piece, it's one of those stories where I feel guilty saying this, but we're actually doing really well. We have about 120 people in the Ukraine, largely focused on development and professional services. The professional services is really geared against the AppOps and Layer0 implementations. What I can tell you is that, we've, as a company, done a lot to make sure that they're safe and have all the resources that they need. They're working really well. It's really a testament to the Ukraine people. It's really been amazing. So we have not seen any disruption there. We obviously continue to monitor that and watch that and do all the things that we can. It does govern us a little bit in our growth plans and making sure that we can expand the resources. It's hard to expand in the Ukraine. So we're looking at other regions to be able to expand that -- those capabilities and that team. But as we sit today, it's been working pretty well. Obviously, day-to-day though, and so we continue to watch that.

是的。當然。讓我談談烏克蘭問題，然後我將開始安全問題，然後我今天邀請阿賈伊參加我們的電話會議，我會讓他更多地談談我們對安全的想法。因此，從烏克蘭的那篇文章來看，這是我說這句話感到內疚的故事之一，但我們實際上做得很好。我們在烏克蘭有大約 120 名員工，主要專注於開發和專業服務。專業服務確實針對 AppOps 和 Layer0 實施。我可以告訴你的是，作為一家公司，我們已經做了很多工作來確保他們的安全並擁有他們所需的所有資源。他們工作得很好。這確實是對烏克蘭人民的證明。這真的太棒了。所以我們沒有看到任何干擾。顯然，我們會繼續監控並觀察這種情況，並盡我們所能。它確實在我們的成長計劃中對我們進行了一些管理，並確保我們能夠擴大資源。在烏克蘭擴張很難。因此，我們正在尋找其他地區來擴展這些能力和團隊。但當我們今天坐下來時，它運行得很好。顯然，但我們每天都會繼續關注這一點。

On the security front, we pick up a lot of capabilities. We had a launch ourselves in January of this year. We also pick up a lot of capabilities with Edgecast. And as I've said in previous calls, we continue to be inquisitive there and have some pretty big ideas about what we can do there, but we're going to be thoughtful and patient.

在安全性方面，我們獲得了許多功能。我們自己在今年一月推出了這款產品。我們也透過 Edgecast 獲得了許多功能。正如我在之前的電話中所說，我們仍然對此充滿好奇，並對我們可以在那裡做什麼有一些相當大的想法，但我們會深思熟慮和耐心。

Let me turn it over to Ajay and he could talk about some of the stuff that we're doing with security today and then maybe I'll follow up with some of the stuff we're looking at as we look forward.

讓我把它交給 Ajay，他可以談談我們今天在安全方面所做的一些事情，然後也許我會跟進一些我們正在關注的事情。

Yes. Thanks for the question there, James. So just quickly on Ukraine, I just want to add a little bit there as one of the managers that works with the team there. They're an incredibly resilient group here who has meet and -- they met and [exceed] all of their deliverables for the first quarter, which is really incredible and really enjoy the fact that the company is supportive of what they're doing and that they then are able to be employed and pay taxes and support their defenses as a result of that. So it's just been incredible to watch their resilience in what they've been able to do.

是的。謝謝你的提問，詹姆斯。因此，關於烏克蘭，我只想補充一點，作為與那裡的團隊合作的經理之一。他們是一個非常有彈性的團隊，他們滿足了第一季所有可交付成果，並且超越了他們的所有交付成果，這真的令人難以置信，並且非常高興公司支持他們正在做的事情，並且他們因此能夠就業、納稅並支持他們的國防。因此，看到他們在所做的事情中所表現出的韌性真是令人難以置信。

On the first question of growth, I think what you asked is, "Hey, is there a need for further acquisitions to be able to get to the kind of growth rate that Bob spoke about just a second before?" And through the work of Edgecast and Layer0, we have everything that we need to support those growth rates. And -- but we will always be open to synergistic acquisitions like those, especially in the area of security and enterprise security in particular.

關於成長的第一個問題，我想你問的是，“嘿，是否需要進一步收購才能達到鮑勃剛才提到的那種成長率？”透過 Edgecast 和 Layer0 的努力，我們擁有支持這些成長率所需的一切。而且，我們將始終對此類協同收購持開放態度，特別是在安全和企業安全領域。

But coming back to kind of your original question, the markets around web and application -- web and API security are growing rapidly, double-digit growth in kind of the 20% range or north of that. Areas such as AppOps are growing much, much faster than that from a small base. And then we believe on the core business, there are things that we can do that allow us to take share from incumbents, especially as a result of increased scale and capacity that we have and through the acquisition of Edgecast, which will allow us to also grow that business at rates much faster than the market. So kind of the first answer here is that, yes, absolutely with what we have and what we can do to optimize those businesses over the next couple of years, we can achieve those growth rates. But we will always be looking for opportunities for further growth.

但回到你最初的問題，圍繞網路和應用程式的市場——網路和 API 安全正在快速成長，兩位數的成長在 20% 的範圍或更高的範圍內。 AppOps 等領域的成長速度遠遠快於從小基數開始的成長速度。然後我們相信，在核心業務上，我們可以做一些事情，讓我們能夠從現有企業手中奪取份額，特別是由於我們規模和產能的增加以及通過收購 Edgecast，這將使我們能夠以比市場快得多的速度發展該業務。因此，這裡的第一個答案是，是的，絕對憑藉我們所擁有的東西以及我們可以在未來幾年優化這些業務的能力，我們可以實現這些成長率。但我們將始終尋找進一步成長的機會。

Our next question is from Mike Latimore of Northland.

我們的下一個問題來自北國的麥克拉蒂摩爾。

Great. Yes. So on the pipeline growth you guys highlighted, would you attribute that to the sales and marketing investments you've been making? Or is it just a really healthy end mark here? I guess that would be one.

偉大的。是的。那麼，關於您們強調的通路成長，你會將其歸因於您們一直在進行的銷售和行銷投資嗎？或者這只是一個真正健康的結束標記？我想那就是其中之一。

And then, can you give a little more insight just into the core traffic patterns you're seeing kind of how did February, March, April play out relative to January [and] some traffic patterns?

然後，您能否更深入了解您所看到的核心流量模式，例如 2 月、3 月、4 月相對於 1 月[和]一些流量模式的表現如何？

Yes. So I'll take on the pipeline, and then I'll let Dan answer the traffic stuff. So we're seeing robust pipeline growth in general. I think it's probably attributable to 3 things. I think, first and foremost, having a much clear strategy and a well-articulated value proposition, when you look at what we've done over the last 12 months, we essentially put together a best-in-class application AppOps platform that includes security, best-in-class development framework running on the world's most performant network. And it's hard -- you can't find that solution anywhere else. You've got to cobble together. So that's number one. That really helps a lot.

是的。所以我會負責管道，然後我會讓 Dan 回答交通問題。因此，我們總體上看到管道的強勁增長。我認為這可能歸因於三件事。我認為，首先也是最重要的是，擁有一個非常清晰的策略和清晰的價值主張，當你看看我們在過去12 個月所做的事情時，我們基本上已經建立了一個一流的應用程式AppOps 平台，其中包括安全、一流的開發框架，運行在世界上性能最高的網路上。這很困難——你在其他地方找不到這個解決方案。你們必須拼湊起來。所以這是第一。這確實有很大幫助。

Number two, we have been ramping up the team. Q2 will be the first quarter when we have full staff of quota-carrying reps. We started in December and continued that through the first quarter. And so, obviously, the more capacity you have that's going to build pipeline as well.

第二，我們一直在加強團隊建立。第二季將是我們擁有完整的配額代表人員的第一季。我們從 12 月開始，一直持續到第一季。因此，顯然，您擁有的能力越大，也將建立管道。

And then third, I think we also redesigned our demand gen capabilities. We hired a new team around demand gen and marketing and put new programs and [redesigned] that motion from bottom up, and we're starting to see the early stages of that production as well. So, when you look at our pipeline growth, it's growing at rates that we needed to grow to support the growth rates that we've been talking about. We're seeing it grow very significantly in the areas where we want to see it grow, which is in AppOps and call it non-CDN, but we're also seeing it grow in CDN as well. And we're pretty happy with the diversity of the portfolio. It also includes both large- and medium-sized customers in different industries as well. I think the broadened security story has also helped really accelerate the pipeline growth.

第三，我認為我們也重新設計了我們的需求產生功能。我們圍繞著需求產生和行銷聘請了一個新團隊，並製定了新計劃並自下而上[重新設計]該動議，我們也開始看到該生產的早期階段。因此，當你看看我們的管道成長時，它的成長速度是我們需要成長的，以支持我們一直在談論的成長率。我們看到它在我們希望看到它成長的領域（即 AppOps 並稱之為非 CDN）顯著成長，但我們也看到它在 CDN 中也有成長。我們對產品組合的多樣性非常滿意。它還包括不同行業的大中型客戶。我認為擴大的安全故事也確實有助於加速管道的成長。

Yes. And then I'll take the traffic question. When we came out of Q4, we are guiding to roughly 10% seasonality number. And in Q1, we didn't see that dip that we are anticipating. And so, we're very happy about that. And that's not only -- that's a broad-based traffic improvement from where we had initially expected in the plan. And so, we continue to see strong off-peak traffic and demand for that continues to increase, as well as our core CDN and the streaming product that our customers are demanding in that normal traffic profile continues to be really strong, as well as new content comes up, and we expect that to continue here throughout the remainder of the year and even grow in the back half.

是的。然後我將回答交通問題。當我們結束第四季時，我們的指導目標是大約 10% 的季節性數字。在第一季度，我們沒有看到我們預期的下降。因此，我們對此感到非常高興。這不僅是——與我們最初在計劃中預期的相比，這是一個廣泛的交通改善。因此，我們繼續看到強勁的非高峰流量和需求持續增加，以及我們的核心 CDN 和我們的客戶在正常流量情況下所需的串流媒體產品仍然非常強勁，以及新的內容出現，我們預計這種情況將在今年剩餘時間內持續下去，甚至在下半年有所增長。

Our next question is from the line of Max Michaelis from Lake Street Capital.

我們的下一個問題來自 Lake Street Capital 的 Max Michaelis。

I just got 2 quick questions here. The first one is, are you guys having any large contracts up for renewal anytime recent? And then, are you seeing any pricing pressures from these customers?

我這裡有兩個簡單的問題。第一個是，你們最近有什麼需要續約的大合約嗎？然後，您是否看到這些客戶帶來任何定價壓力？

Yes, I'll take that, Michael. We always have contracts up for renewal, and we're constantly having those conversations. As we've talked about in previous quarters, we've changed our approach from waiting for that to be an event to proactively having those conversations. So we continue to do that. There's always going to be pricing compression in this industry. So that's just a way of life. We're not seeing anything that concerns us or should be a surprise to us. We're just navigating that as we expect to navigate it and pretty consistent with how we forecasted and built in our plans any pricing compression.

是的，我會接受的，麥可。我們總是有需要續約的合同，並且我們一直在進行這些對話。正如我們在前幾個季度所討論的那樣，我們已經改變了我們的方法，從等待事件發生改為主動進行這些對話。所以我們繼續這樣做。這個行業總是會出現價格壓縮。所以這只是一種生活方式。我們沒有看到任何讓我們擔心或應該讓我們感到驚訝的事情。我們只是按照我們的預期進行導航，並且與我們預測和在計劃中建立任何定價壓縮的方式非常一致。

Okay. And then just maybe a little more clarity on the profitability metrics of the adjusted EBITDA expected for Q2. I think the comments were methodical expansion. Is that from -- is that sequentially? Or is that year-over-year, I guess?

好的。然後，第二季調整後 EBITDA 預期的獲利指標可能會更加清晰。我認為這些評論是有條不紊的擴展。是從－－是按順序開始的嗎？或者我猜是逐年變化？

Yes, I'll take that. Sequentially and year-over-year. I think in Q2, we were about breakeven in terms of adjusted EBITDA. And in Q1, obviously, we were $2 million positive, which was ahead of our plan. We expect -- in the plan, we expect to continue to invest in sales and marketing and R&D as the plans are to really focus on the development of automation of the operation of our network. And so, even with those continued investments, we expect to continue to expand adjusted EBITDA margins as our revenue grows sequentially throughout the year.

是的，我會接受的。按順序和逐年進行。我認為在第二季度，我們在調整後 EBITDA 方面實現了盈虧平衡。顯然，第一季我們的利潤為 200 萬美元，這超出了我們的計劃。我們預計，在該計劃中，我們預計將繼續投資於銷售、行銷和研發，因為該計劃將真正專注於網路營運自動化的發展。因此，即使有這些持續的投資，隨著我們的收入全年連續成長，我們預計調整後的 EBITDA 利潤率將繼續擴大。

Yes. I'd also like to add to, you can imagine -- we're getting ready to close on this big transaction and more than double our revenue. So we're investing ahead of that as well to make sure that we can absorb that and manage that transaction pretty smoothly.

是的。我還想補充一點，你可以想像——我們正準備完成這筆大交易，並使我們的收入增加一倍以上。因此，我們也在提前進行投資，以確保我們能夠吸收並相當順利地管理該交易。

Our next question is from the line of Jeff Van Rhee from Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 Jeff Van Rhee。

A couple from me. I think, first, Bob, maybe as you look at the guide on the sequential basis as it relates to revenues, can you just talk through the puts and takes of the sequential Q2 being similar to Q1? I think you referenced supply chain issues. Maybe just expand a little bit more on that? Obviously, a lot of concerns around the Netflix OTT numbers in general, and you'd offset, I guess, both of those with a pretty bullish commentary about pipeline and signings thus far. So just talk a bit about the puts and takes on revenue growth from Q1 to Q2.

我的一對。我想，首先，鮑勃，也許當您按順序查看與收入相關的指南時，您能否談談與第一季度類似的連續第二季度的看跌期權和賣出期權？我認為你提到了供應鏈問題。也許只是對此進行更多擴展？顯然，人們對 Netflix OTT 數字總體存在很多擔憂，我想，到目前為止，您會抵消這兩個對管道和簽約的相當樂觀的評論。因此，只需談談從第一季到第二季的收入成長的看跌期權和承擔額。

Yes. I guess, in both transparency, I'll say that those of us from management on the call don't all agree with where we came out with guidance. I think there was a lot of really robust debate. When we have a quarter like we did in the first quarter, it would be easy to assume that, "Hey, we should lean in and guide up, and we certainly could have had that conversation." But when you take that -- one of the things I've always committed is that, we'll be transparent and we'll be asymmetric in a risk and that we will have much more upside than downside risk. And so, we really took that approach in this quarter.

是的。我想，在透明度方面，我會說，我們這些參加電話會議的管理階層並不都同意我們提出的指導意見。我認為有很多非常激烈的辯論。當我們像第一季度那樣度過一個季度時，很容易就會認為，“嘿，我們應該向前邁進並進行指導，我們當然可以進行這樣的對話。”但當你考慮到這一點時——我一直致力於的一件事是，我們將保持透明，我們的風險將是不對稱的，我們將面臨更多的上行風險，而不是下行風險。因此，我們在本季確實採取了這種方法。

When you look at what really -- we had a Q1 where we had record traffic. Q2 is working the same way, and we continue to expand on that. And so, the business is running very well, and we're very bullish on that. But at the same time, we've got a transaction that we're getting ready to do. We've got supply chain disruption that we do have a backlog in equipment. We could add capacity and actually increase traffic tomorrow, but we can't get the equipment. And so -- and that's a continually evolving conversation day by day. And so, that -- there's some uncertainty around that. You have obviously the economic factors with inflation, what that's going to do, the geopolitical issues. So there's so many issues that we're navigating that we just kind of said, "Look, you know what, given all this, and given -- we're going to come back in 60 to 90 days with a reset guidance with a completely different P&L from where we are today." Let's just make sure that everybody knows the business is running well. We're very happy with where it is. But give us 90 days and we'll come back and we'll reset and we'll have a better view of kind of all the dynamics that we're navigating. And we thought that was the more prudent thing to do. But to make sure that we double click on the fact the business is running well and we're very happy with where we are.

當你看看真正的情況時，我們在第一季的流量創下了紀錄。第二季度的工作方式相同，我們將繼續對此進行擴展。因此，業務運作得非常好，我們對此非常看好。但同時，我們已經準備好進行一項交易。我們的供應鏈中斷了，我們確實有設備積壓。我們明天可以增加容量並實際增加流量，但我們無法獲得設備。所以——這是一個日復一日不斷發展的對話。因此，這存在一些不確定性。顯然有通膨等經濟因素，以及地緣政治問題。因此，我們正在解決的問題如此之多，以至於我們只是說，「聽著，你知道嗎，考慮到這一切，考慮到——我們將在 60 到 90 天內回來，並提供重置指導和損益表與我們今天的狀況完全不同。”讓我們確保每個人都知道業務運作良好。我們對它所處的位置非常滿意。但是給我們 90 天的時間，我們會回來並重新設置，我們將對我們正在處理的所有動態有更好的了解。我們認為這是更謹慎的做法。但為了確保我們雙擊這一事實，業務運作良好，並且我們對目前的狀況感到非常滿意。

And just to expand on the OTT concerns around Netflix. I mean, can you talk to what your customers are telling you with COVID unlocks, et cetera, just concerns people consume less? What are you -- you can add some color there?

我想進一步闡述 OTT 對 Netflix 的擔憂。我的意思是，你能談談你的客戶告訴你的關於新冠疫​​情解鎖等問題，只是擔心人們消費減少嗎？你是什​​麼——你可以在那裡添加一些顏色嗎？

Yes, I appreciate that. It's interesting with Netflix. Netflix is the only big client we don't have, and they do everything themselves. And so, when they have subscribers decrease, that actually helps us. So it's interesting. We saw the market react to Netflix, but actually, my view of what's happening there is, you have inflation, people are worried about how much it cost to fill our gas tank and Netflix raised their prices. You shouldn't be surprised that people canceled. Five years ago or three years ago, the model was Netflix plus 1 in subscriptions. Now the average household has 7 subscriptions and Netflix raised their prices, and people are saying, "Look, I really don't need 7 subscriptions. I want to have less. So I'm going to pick the one that I'm going to cancel and it shouldn't be a real surprise that that happened, in my opinion." But having said that, they're still watching movies. They're still watching content. They're just watching it in different places and those different places happen to be customer of ours. So it actually works in our favor, and we're pretty happy. Perhaps that's a big part of why we're seeing record traffic, who knows.

是的，我很欣賞這一點。 Netflix 很有趣。 Netflix是我們唯一沒有的大客戶，一切都是他們自己做的。因此，當訂閱者減少時，這實際上對我們有幫助。所以這很有趣。我們看到市場對 Netflix 的反應，但實際上，我對那裡發生的事情的看法是，通貨膨脹，人們擔心加滿油箱的成本，而 Netflix 提高了價格。人們取消預訂你不應該感到驚訝。五年前或三年前，模式是Netflix加1訂閱。現在，平均家庭有 7 個訂閱，Netflix 提高了價格，人們說，「看，我真的不需要 7 個訂閱。我想要更少。所以我要選擇我要訂閱的那個取消，在我看來，發生這種情況並不令人意外。”但話雖如此，他們還是在看電影。他們仍在觀看內容。他們只是在不同的地方觀看，而這些不同的地方恰好是我們的客戶。所以它實際上對我們有利，我們很高興。也許這就是我們看到創紀錄流量的一個重要原因，誰知道呢。

The other thing I'd add to that is, a lot of our other customers that we believe Netflix subscribers are moving toward, continue to expand internationally. And with our global scale and continue to increase capacity globally with the Edgecast acquisition, we feel that as a tailwind for us as customers continue to that international expansion and reach of a global customer base.

我要補充的另一件事是，我們相信 Netflix 訂戶正在轉向的許多其他客戶繼續在國際上擴張。隨著我們的全球規模和透過收購 Edgecast 不斷增加全球產能，我們認為，隨著客戶繼續進行國際擴張和覆蓋全球客戶群，這對我們來說是一種順風。

Okay. And Bob, one other quick one for you on the sales side, obviously, a tough environment and hearing from almost everybody, they're falling short on sales hiring goals. It sounds like you met or possibly exceeded. Where did you end up in sales headcount? Where do you think you're going next 12 months?

好的。鮑勃，銷售方面的另一位快速人士，顯然，這是一個艱難的環境，而且幾乎每個人都聽到他們沒有實現銷售招聘目標。聽起來你已經達到或可能超過了。您最終的銷售人員數量是多少？您認為未來 12 個月您會去哪裡？

Yes. We're fully staffed at this point. And it's probably the first time since I've been at the company, we can say that for sure. So we're fully staffed. So Q2 will be the first quarter that we're pleased staff. We're very happy with the quality of the team that we hired as well. Some of them came from our competitors, so we're pretty happy with that. We have not had a hard time hiring, I think largely because people really like the story and like where we're going. Look, salespeople are going operative. They want to make money. They want to sell things. And so, if they believe in the product and they believe in the industry, you can attract them. And so far, they really are excited about where we're going and what we're doing and what they have to sell, and I think that soil only continue to get better. So we feel pretty good about that.

是的。目前我們人員已經齊全。這可能是我來公司以來第一次，我們可以肯定地說。所以我們人員齊全。因此，第二季將是我們對員工感到滿意的第一個季度。我們對我們僱用的團隊的品質也非常滿意。其中一些來自我們的競爭對手，所以我們對此非常滿意。我們在招募方面並沒有遇到困難，我認為這主要是因為人們真的喜歡這個故事，也喜歡我們要去的地方。看，銷售人員正在運作。他們想賺錢。他們想賣東西。因此，如果他們相信產品和產業，你就能吸引他們。到目前為止，他們真的對我們要去的地方、我們正在做的事情以及他們必須出售的東西感到興奮，我認為土壤只會繼續變得更好。所以我們對此感覺很好。

And it's not just the salespeople, too, we've also redesigned all the motions around the salespeople, the sales operations, the sales support, the demand gen. And so, we continually -- when you have a pipeline that's growing, that also helps salespeople hit their numbers. And so, all the things are coming together, we expect it to come together. We just have to stay focused and keep executing the way we are.

不僅是銷售人員，我們還重新設計了圍繞銷售人員、銷售營運、銷售支援、需求產生的所有動作。因此，當您的通路不斷成長時，我們不斷地幫助銷售人員實現目標。因此，所有的事情都在一起，我們期望它能夠在一起。我們只需要保持專注並繼續以我們的方式執行。

Yes. Sure. Ajay, I wanted to take advantage of you be on here as well. The -- as it relates to Layer0, a couple of questions. I guess, as it relates to developers and just awareness, both of your capabilities, as well as capturing the developers on the platform. I know that's front and center in what you think about. So question one, can you just talk on progress in terms of capturing developers? And the second question is related to Edgecast. How does that change your value proposition in the AppOps world as you put the 2 platforms together?

是的。當然。阿傑，我也想利用你在這裡的機會。與 Layer0 相關的是，有幾個問題。我想，因為它與開發人員和意識有關，既涉及您的能力，也涉及平台上的開發人員。我知道這是你所考慮的首要和中心問題。那麼問題一，您能談談在吸引開發者方面的進展嗎？第二個問題與Edgecast有關。當您將這兩個平台結合在一起時，這會如何改變您在 AppOps 世界中的價值主張？

Yes. Great question. We've been making great progress building awareness in developer community. And it is only underscored and accelerated the kind of the thesis we had that the buyer of the CDN is surely headed and -- with every quarter headed in the direction of shifting from kind of an operations purchaser to a developer and dev team purchaser. That's kind of a one-way trend. It's an inevitable trend and we are far and away the best product to capitalize on that trend.

是的。很好的問題。我們在提高開發者社群的意識方面取得了巨大進展。這只是強調和加速了我們的論點，即 CDN 的買家肯定會領先，並且每個季度都會朝著從營運購買者轉變為開發人員和開發團隊購買者的方向發展。這是單向趨勢。這是一個不可避免的趨勢，我們無疑是利用這一趨勢的最佳產品。

And then you could couple that with Edgecast, which brings kind of best-in-class web and API security. And we really have kind of elevated our solution set for websites and APIs to best in the industry. And it is an industry in which our market share is small relative to the size of this market. It's a minimum of $4.4 billion market, not including some of the things that we expect to happen as a result of AppOps. And we have a small, small market share there and have really far and away the best product to be able to capitalize and grow rapidly. And with the sales team coming online, they are, to Bob's point, not only did we hired a plan, but they're being trained and being made effective very rapidly. It's one of the anecdotes Bob shared earlier, there was a team that wasn't around in Q4, then in Q1 on the channel side was able to represent a significant portion of the U.S. kind of sourced and closed deals. And that's an incredible kind of ramp-up time that just speaks to kind of the way in which we're attacking the opportunity that we have here with the best-in-class product.

然後您可以將其與 Edgecast 結合起來，後者帶來了一流的 Web 和 API 安全性。我們確實將網站和 API 的解決方案集提升到了行業最佳水平。相對於這個市場的規模來說，我們的市佔率很小。這是一個至少 44 億美元的市場，還不包括我們預計 AppOps 會發生的一些事情。我們在那裡的市場份額很小，並且擁有真正能夠實現資本化和快速增長的最佳產品。在鮑伯看來，隨著銷售團隊上線，我們不僅僱用了一個計劃，而且他們正在接受培訓並非常迅速地發揮作用。這是鮑勃之前分享的軼事之一，有一個團隊在第四季度不存在，然後在第一季管道方面能夠代表美國類型的採購和完成交易的很大一部分。這是一段令人難以置信的加速時間，它說明了我們用一流的產品來抓住機會的方式。

And you touched on it maybe a little bit there, but my second part as it relates to Layer0, just in terms of the bookings relative to expectations, other observations about bookings. And then from a revenue standpoint, Q1 to Q2, any seasonality, just not clear how the Layer0 revenues play seasonally as the quarters roll through the year?

您可能在那裡觸及了一點，但我的第二部分與 Layer0 相關，只是就預訂相對於期望以及有關預訂的其他觀察而言。然後從收入的角度來看，第一季到第二季度，有任何季節性嗎？只是不清楚隨著一年中各個季度的推移，Layer0 收入如何季節性發揮？

Yes, it's a great question. On the second point, there isn't a ton of seasonality because it's more contracted and consistent in basis. So there's not much seasonality there. There may be slight seasonality as it relates to bookings, but that's generally a smooth out because of the recurring nature of the kind of existing client base where sort of generally just growing. So that's to the question of seasonality.

是的，這是一個很好的問題。關於第二點，沒有太多的季節性，因為它的基礎更加緊湊和一致。所以那裡沒有太多季節性。與預訂相關的可能存在輕微的季節性，但這通常是平穩的，因為現有客戶群具有週期性，通常只是增長。這就是季節性問題。

In terms of -- just in general on bookings, things are great. And again, as Bob and Dan shared earlier, we've got triple-digit growth in pipeline as it relates to the AppOps arena, and that's not including some of the things that we're hearing about the progress that's being made on all the web CDN, web security business that Edgecast does. So we're really looking forward to that as well.

就預訂而言，總的來說，一切都很棒。再次強調，正如 Bob 和 Dan 之前分享的那樣，我們在與 AppOps 領域相關的管道中實現了三位數的增長，這還不包括我們聽到的有關所有領域正在取得的進展的一些內容。web CDN ，Edgecast做的網路安全業務。所以我們也非常期待這一點。

And what are you displacing? Last one from me, just what are you displacing?

你要取代什麼？我的最後一張，你到底要取代什麼？

Yes, it's a great question. So there were a minimum of 9 direct displacements. And it is a combination of pallet that who's who of web CDN and web security vendors, combined with up-and-comer private companies with Unicorn valuations. And it's a combination of those that are in the mix of at least 9 that were direct replacements.

是的，這是一個很好的問題。所以至少有 9 次直接位移。它是網路 CDN 和網路安全供應商名人錄以及具有獨角獸估值的新興私人公司的組合。它是至少 9 個直接替換的組合。

(Operator Instructions) Our next question is from the line of Rudy Kessinger of D.A. Davidson.

（操作員說明）我們的下一個問題來自 D.A. 的 Rudy Kessinger。戴維森。

Going back to Layer0 on that seasonality comment. The $3.8 million in Q1 was a bit lower than I think I had expected to see it was flat with Q4 at $3.8 million. And so, to get to that $20 million for the year, I mean, it implies you've got to grow that business like 18% or 19% sequentially each of the next 3 quarters. I understand triple-digit pipeline growth, but it seems like a pretty rapid acceleration in that business. What gives you confidence to hit that number?

回到 Layer0 的季節性評論。第一季的 380 萬美元比我預期的要低一些，與第四季的 380 萬美元持平。因此，為了達到今年 2000 萬美元的目標，我的意思是，這意味著您必須在接下來的 3 個季度中每季連續成長 18% 或 19% 的業務。我了解三位數的管道成長，但該業務的加速速度似乎相當快。是什麼讓您有信心達到這個數字？

Yes, I'll take that and then Bob and Ajay can chime in. As we built out that sales force, that pipeline and the demand gen capabilities that we have in place, that triple-digit growth in pipeline gives us confidence that we will convert that. And the conversion time period on those types of deals is a little bit quicker than the historical or legacy CDN business, which you have to run through a trial process and get through the procurement piece versus the Layer0, which we believe is a best-in-class product that developers are really looking forward to working with as quickly as possible given the productivity and efficiency improvements that that product has. And so, I think just the shortening of the conversion time line into actual revenue gives us that confidence. And the fact that we've only had the sales force and demand gen team in place for a really short period of time. And to see that growth in the pipeline is something that's very exciting for us.

是的，我會接受，然後鮑勃和阿賈伊可以插話。隨著我們建立銷售隊伍、管道和需求生成能力，管道的三位數增長讓我們有信心我們將轉換那個。這些類型交易的轉換時間比歷史或遺留 CDN 業務要快一點，您必須運行試用流程並完成採購部分，而我們認為 Layer0 是最好的考慮到該產品所帶來的生產力和效率的提高，開發人員真正期待盡快使用該產品。因此，我認為縮短轉化為實際收入的時間就給了我們信心。事實上，我們的銷售團隊和需求產生團隊只在很短的時間內就位。看到管道的成長對我們來說非常令人興奮。

Yes. I think the other thing, too, is to bifurcate the conversation separate bookings from revenue. So you mentioned the revenue number, Rudy. We have a bookings target that we have to hit every month, every quarter. We track it every week actually throughout the year. And when you get the bookings, obviously, then you have to convert that into revenue with the implementation. And we're actually on plan of where we expected to be in bookings to support the numbers that you talked about. And so, you'll see that in the first quarter, we had bookings, you'll see that translate into revenue in the next quarter. Probably the biggest risk that we have there, we talked about earlier is really making sure that we maintain the productivity we're seeing on the team in the Ukraine, and that's obviously a big part of turning bookings into revenue. And so, so far, we've been doing great job, give credit to them. And -- but that will be the area that we probably are closest -- most closely monitoring.

是的。我認為另一件事是將預訂與收入分開。所以你提到了收入數字，魯迪。我們有一個每個月、每季都必須達成的預訂目標。事實上，我們全年每週都會對其進行追蹤。顯然，當您獲得預訂時，您必須透過實施將其轉化為收入。實際上，我們正​​在計劃預訂量，以支持您談到的數字。因此，您會看到在第一季我們有預訂，您會看到這轉化為下個季度的收入。我們之前談到的最大風險可能是確保我們保持烏克蘭團隊的生產力，這顯然是將預訂轉化為收入的重要組成部分。所以，到目前為止，我們做得很好，要感謝他們。而且——但這將是我們可能最接近——最密切監控的領域。

Got it. And then just secondly from me, I think you said 24 gross from customer adds, 9 direct takeaways from competitors. So that's good to see. I think you said the highest gross new customer adds in 5 quarters. On a net basis, though, customers, I think it was down like 3 quarter-over-quarter. When do you expect -- I mean, Q2 is that kind of the inflection point with that being the first full quarter having all those sales reps fully ramped, where you think you'll start to actually see active customer count going up on a net basis?

知道了。其次，我認為您說的是 24 項來自客戶添加的總收入，9 項來自競爭對手的直接收益。所以很高興看到這一點。我想你說的是 5 個季度以來新增客戶總量最高的。不過，從淨值來看，客戶們，我認為環比下降了 3 個季度。你預計什麼時候 - 我的意思是，第二季度是那種拐點，這是所有銷售代表全面提升的第一個完整季度，你認為你將開始真正看到活躍客戶數量在網上增加基礎？

Yes. I think that would be an appropriate expectation. Actually, with our historical trends and customers, having that net decline of 3 with specifically the increase of 24 new ads and where we're getting those ads is very positive for us. But I think Q2 would be an appropriate point of view for that trending back in the positive direction.

是的。我認為這是一個適當的期望。事實上，根據我們的歷史趨勢和客戶，淨下降 3 個，特別是增加 24 個新廣告，以及我們在哪裡獲得這些廣告對我們來說非常積極。但我認為第二季度是一個適當的觀點，可以看出這種趨勢回到了積極的方向。

Yes. I think if you look over the last 5 quarters, were just plotted out, you go 5 quarters ago, we were having higher attrition and not adding customers. Every quarter, we've gotten better and better at that. And I think it's fair to say that the inflection point is probably Q2. We're adding a lot more customers and losing less. And so, I think that's the right expectation.

是的。我認為，如果你回顧過去 5 個季度，剛剛繪製出來的，你去 5 個季度前，我們的流失率更高，而且沒有增加客戶。每個季度，我們都在這方面做得越來越好。我認為可以公平地說，拐點可能是第二季。我們增加了更多的客戶，流失的客戶也更少。所以，我認為這是正確的期望。

(Operator Instructions) And it appears that we have no further questions being registered today. So I'll hand it back to management for any further remarks.

（操作員說明）我們今天似乎沒有再登記任何問題。因此，我會將其交還給管理層以供進一步評論。

Okay. Thank you, operator, and thank you, everyone, for joining us today. We look forward to sharing our progress and continuing our conversations with analysts and investors going forward. Have a great day. Thank you.

好的。謝謝運營商，也謝謝大家今天加入我們。我們期待分享我們的進展，並繼續與分析師和投資者進行對話。祝你有美好的一天。謝謝。

Thank you to all those who have joined us today. This concludes the call, and you may now disconnect your lines.

感謝今天加入我們的所有人。通話結束，您現在可以斷開線路了。