Edgio Inc (EGIO) 2011 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Limelight Networks 2001 second quarter financial results conference call. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, we'll provide instructions for those interested in entering the queue for the question-and-answer session.

I will now turn the call over to Mr. Paul Alfieri, Vice President of Corporate Communication. Please go ahead, Paul.

Good afternoon, and thank you for joining the Limelight Networks second quarter 2011 financial results conference call. Speaking today will be Jeff Lunsford, Chairman and Chief Executive Officer, and Doug Lindroth, the Chief Financial Officer.

This conference call is being recorded on August 8th, 2011, and will be archived on our website for approximately ten days. Some portions of this conference call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are all statements that are not strictly statements of historical fact, such as statements regarding future events or future financial performance, including but not limited to statements related to Limelight Networks' market opportunity and future business prospects, guidance on financial results, statements concerning anticipated future growth and profitability, as well as management's plans, goals, expectations, hopes, and beliefs, and statements concerning the anticipated effects of pending or completed business combinations or other strategic transactions.

These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those contained, projected, or implied in the forward-looking statements, including the inherent risks associated with litigation, particularly intellectual property-based litigation. Reported results should not be considered an indication of future performance. Factors that could cause actual results to differ are included in the Company's periodic filings with the Securities and Exchange Commission.

I would now like to introduce Jeff Lunsford.

Good afternoon. Thank you for joining us. Let's deal with the disappointing news right upfront. After stringing together four very solid quarters, Limelight experienced a $2 million revenue shortfall in Q2.

When such a thing happens, we as management must ask ourselves whether we have set the company on the right strategy, or whether a strategy shift is in order, given market conditions and the landscape in which we're operating our business.

At Limelight our growth plan has been consistent for the last two years. It's been a four-pronged growth plan.

Number one, grow the CDN business to be number one and number two in the world.

Number two, expand the CDN business into small object and site acceleration, which we've historically not been involved in.

Number three, build a higher-growth, higher-margin, complementary software-as-a-service business that runs on top of the CDN.

And number four, move up the digital media stack so that we could participate in more of the $85 billion of online advertising spend that experts forecast will grow at 15% per year for the next few years.

This quarter, initiatives number two, site and small object, and initiative number three, growth -- the growth of the SaaS business, performed very well, and we'll give you some of those metrics. Initiative number one, the CDN business, saw an approximate $1 million revenue shortfall, which was just under half of the $2 million miss. Initiative number four, digital media, was the rest of the miss, just over half, and we'll walk you through that.

The bulk of the CDN shortfall was the result of a widely-reported third-party security breach on a customer's platform which led to less content streaming and less software downloads to that platform, which led to lighter than forecasted revenue for two of our largest customers. It is important for investors to understand, this was an isolated security event that had nothing to do with our technology platform, and the traffic to that customer's platform has returned to normal levels since that event subsided.

The digital media half of the shortfall was due to lower campaign traffic on EyeWonder's platform during the quarter. We believe the root cause of this was a delay in the delivery of our next-generation EyeWonder Interactive Advertising platform, which will add standard ad serving to our market-leading rich media capabilities, which will allow us to secure more campaign revenue from advertisers.

We've made a change in the development leadership at EyeWonder, and now believe we have a clear path to having that enhanced platform rolled out by early 2012.

EyeWonder still has, we believe, the best brand in rich media advertising, and we ran high-profile, innovative campaigns in the quarter for companies like Sprint, BBC, National Geographic, and IKEA, to name a few. But the rich media advertising market is clearly shifting, and until we get our integrated ad server delivered, growth will likely be stalled. With that platform in the market in 2012, we believe we can return EyeWonder to its historic double-digit growth rates.

So, now back to the strategy question. Our CDN performance, quality, scale, and customer satisfaction have actually never been higher. We've made major investments in this platform during Q4 of last year and the first half of this year, and now believe we have two quarters, if not more, of much lighter CapEx while we fill up that capacity and enjoy the benefits of major performance and throughput enhancements that our engineers have come up with, with respect to server efficiency.

Our CDN business is still gaining market share and growing faster than that of the largest provider in the space, so we believe the strategy is working. We are still early in the shift of content online, and believe that we have the most efficient platform for delivering content online and have a promising future with that growth initiative.

In growth initiative number two, expansion in the small object half of the market, we enjoyed 40% year-over-year growth. Additionally in the quarter, we added unique and differentiated capabilities with our acquisition of AcceloWeb, a brilliant team of Israeli engineers that invented a way to accelerate webpage load time, what we call time to engagement.

With software rather than hardware, this represents a capital-light opportunity to offer our customers up to 40% improvement in engagement time without deploying thousands of servers around the world. This new service is called Limelight Accelerate and was announced last Thursday.

In the short two months since we added Accelerate to our arsenal, we have initiated over 70 new prospects in various stages of trials for our site and Accelerate solutions. We're incredibly fired up about our growth prospects with this initiatives number two, into the site and small object half of the market.

In growth initiative number three, building a suite of SaaS solutions on top of the CDN that are complementary with content delivery, we also saw exciting progress. If you back out core CDN and EyeWonder, these services, which include site and Accelerate, would be the equivalent of a $50 million run rate SaaS business that grew in excess of 45% organically year over year. That's including the acquisition from -- or the revenue from acquisitions pro forma prior to the acquisition.

These SaaS solutions offer mobile content processing, mobile ad delivery, web content management, online video platform, cloud-based storage, cloud-based transcoding, and expert consulting to help customers implement these solutions and advance their own business initiatives online. This is an incredibly exciting area of our business and value creation strategy. This SaaS initiative is also a capital-light way to grow and build value.

Initiative number four, digital media, is the area impacting our growth the most right now, but as we discussed above, we believe the delivery of our integrated standard ad server will solve that, and in the meantime we're beginning to see success in having our agency customers embrace our SaaS solutions.

Agencies that are constantly building new websites and microsites are ideal customers for cloud-based web content management, mobility, and online video platform solutions. They're also ideal customers for accelerated time to engagement solutions, as online advertising is increasingly all about engagement. EyeWonder is also a capital-light way to grow our business.

So, stepping back from all this and assessing the strategy as a whole, we don't believe the revenue shortfall is symptomatic of a strategy problem. The core causes were an isolated event in CDN, and a product delivery problem in rich media advertising.

Looking forward, we're optimistic about our growth prospects in all four areas, three of which we believe will provide much higher returns on capital over time than initiative number one, the large object content delivery business.

The global content delivery platform is still the enabling platform for all these value-added services, and what allows us to differentiate in the market, so we will still be growing it also, and over time our vision is to become the largest digital content delivery company in the world, with extensive higher-margin value-added services wrapped around that core service, which deepen our relationships with our customers and allow us to generate substantial free cash flow in our $400 million target model, which is published in the investor deck on our website.

In the quarter, our value-added services, which include all SaaS and EyeWonder solutions, comprised 40% of our revenue, well on the way to the 50% mix envisioned in our target model. When we sold core CDN services bundled with the value-added service, we saw almost 50% less discounting off of list price for those core CDN services, than when we sold CDN standalone. This is quantitative evidence for the third quarter in a row that value-added services really do add value.

We also saw lower year-over-year unit price declines in core CDN services than we had for the full year of 2010 and in 1Q of 2011, continuing the improving pricing condition theme we began discussing three quarters ago. The improvement is not, however, happening as rapidly as we would like to see.

Now I'll review some more specific highlights from the quarter, and then we'll have Doug review the financials. First, forward-looking, we had solid bookings in the quarter. It was the second highest bookings quarter we've had in over two years. And the bookings mix was promising, with about one-third coming from our SaaS solutions and two-thirds coming from core CDN.

Second, to give you further visibility into some of our exciting new products and their specific revenue growth year over year, our mobility services grew over 150%, our video content management services grew 200%, our web and application acceleration services, as mentioned earlier, grew 40%, our cloud storage services grew 60%.

Our mobility service continues to have success with the largest broadcasters in North America. We signed Belo as a customer, and we renewed our relationship with MTV. We also signed up our first customers in India, with Friday Movies and Neuron. Our mobile management team just returned from a tour of India, and we see a huge market for our services there, and are building -- are working to build on our team to capitalize on this opportunity.

Our mobile platform serviced over 200 million media requests in the quarter. We also launched REACH Interactive, a new service that delivers engaging, interactive, pre- and post-roll video ads that respond to user interaction.

When a user engages with an in-stream video ad, the REACH Interactive service will pause video playback and open a microsite associated with the advertiser. Additionally, REACH Interactive captures analytics on playback and user interaction, providing valuable insights to publishers aiming to monetize in-app video, and advertisers looking to engage viewers across mobile and connected devices. We believe we have the most sophisticated solution available in the mobile space.

Overall, we have 60 customers worldwide using Limelight Networks' mobile services, including CBS, Comedy Central, Disney, ESPN, Fox, GameSpot, HBO GO, MAX GO, Minnesota Public Radio, MTV, NPR, Sony, Showtime, Telemundo, and VH1. The numbers are small, but we're designed in as the mobile solution for these global media companies and believe that that business will grow nicely as mobile content consumption grows.

Our mobile video -- I'm sorry, our video platform service, the Limelight Video Platform, also had a great quarter, adding over 40 customers including [Merc], Suffolk University, and La Presidencia, which is considered the White House of Mexico. We became the only online video platform to integrate Facebook, chat, and community features, and added over 20 other new features into the service.

As I mentioned, Limelight Video Platform showed over 200% organic year-over-year growth in the quarter. We continue to believe this is a fantastic value creation opportunity for our shareholders.

Our web content management service, which we acquired as Clickability in May, is already helping us expand our relevance in the enterprise market. Since May, the team completed a large renewal with the Star Tribune. The Star Tribune was an existing user of Clickability services, but the renewal included Limelight Video Platform and Limelight Accelerate. Clickability delivered 1.8 billion web pages in the quarter. We see many synergistic opportunities like Star Tribune throughout our customer base, and we will be rebranding Clickability as part of the Limelight family later this month.

Our web and application service -- acceleration service, was rebranded earlier this month, as I've mentioned, as Limelight Accelerate. Limelight Accelerate now provides two forms of application acceleration, and we're the only service on the market to do so.

Traditional application acceleration services speed up bits at the network level, and Limelight Accelerate goes beyond just the network level to include what the industry refers to as presentation layer acceleration. We think of this as our platform being able to speak the specific language of a web browser such as Internet Explorer, Chrome, Firefox, or even Mobile Safari.

Our cloud provides specific instructions to the browser on how to render a page in the fastest way possible, which results in more time on site, less shopping cart abandonment, and better overall site performance based on a site owner's KPI, which we again call better time to engagement.

Limelight Accelerate will be powering a new series of dynamic websites from Rainbow Media, as another example. Rainbow is a traditional media delivery customer of Limelight, but we've now expanded our relationship with them to include acceleration of their main site, their fan community sites for TV shows like Mad Men, and their blogs.

Our EyeWonder Predictive Behavioral Targeting service, known as PBT, also continued to gain traction. During the quarter we expanded our relationship with Xaxis GroupM in the Netherlands, Poland, Spain, and Australia, and announced integration of the targeting engine with Google Ad Exchange. EyeWonder PBT alone served 3.5 billion targeted impressions in the second quarter.

Our cloud storage services showed 60% year over year growth in the quarter. During the quarter we added ten new customers for cloud storage, including customers in the gaming and entertainment sectors.

Cloud storage is a massive market opportunity for us. What we have here is different than what any standalone provider can offer -- a globally-distributed, high-performance storage platform with massively provisioned bandwidth to ease upload and accessing of stored files.

Finally, in core CDN services, we grew our relationships with the BBC, with Blizzard, Valve, and others, and were pleased to expand our relationship with Hulu. The CDN business continues to grow, albeit with still more price compression than we'd like, as alluded to earlier.

Overall, these sales highlights in our overall Q2 bookings are promising contributors toward future growth potential, but we take ownership for the revenue miss, and the hit to the bottom line as well, and Doug will walk you through this. We believe, though, looking forward, that we've powered through the soft patch of Q2 with a focused plan, and we're guiding to increased sequential growth in Q3, and looking forward to the normal seasonal uptick that we benefit from in Q4 in our large object CDN business and in our campaign business with EyeWonder.

I'll now turn it over to Doug for the financials, and then we'll open it up for Q&A. Doug?

Thanks, Jeff. During the second quarter, Limelight Networks reported revenue of $50.5 million, up 20% from the second quarter of 2010 and up 1% from Q1.

Our core CDN revenue, which does not include the five-year Microsoft license and build revenue amortization, which ended in February, grew approximately 8% during the second quarter compared to the same period last year. Our value-added services revenue, which includes the SaaS solutions Jeff mentioned earlier, and our EyeWonder Interactive Advertising services, increased to 40% of total revenue during the second quarter compared to 28% in the same period of 2010, and up from 33% in Q1. Value-added services revenue grew 19% on a year-over-year pro forma as if combined basis.

During the second quarter, Limelight's international operations represented 33% of total revenue, which was up from 30% in the same period of 2010 and up from 31% in Q1.

We reported second quarter adjusted EBITDA of $2.6 million compared to $5.6 million for the second quarter of 2010. Our Q2 GAAP net loss was $13.9 million or $0.12 per basic share, compared to a GAAP net loss of $2.3 million or $0.02 per basic share, in the same period of 2010.

We also reported second quarter non-GAAP net loss before stock-based compensation, litigation costs, amortization of intangibles, and acquisition-related expenses of approximately $5.9 million or $0.05 per basic share, compared to a non-GAAP net income of approximately $4.9 million or $0.05 per basic share in Q2 of 2010. Please refer to the tables included in our press release for the reconciliation of GAAP measures to these non-GAAP measures.

GAAP gross margin was 37% during Q2, down from 41% last quarter. Gross margin declined in Q2 as a result of the reduction in Microsoft license revenue and increase in our bandwidth cost primarily related to an increase in peering cost and increase in network depreciation, offset by higher gross margins from the increased revenue contribution of our value-added services. Cash gross margin was 53% for Q2, down from 56% in Q1.

A little earlier, Jeff mentioned investments in our CDN capacity. Over the last few quarters and continuing into Q3, we have been securing paid peering contracts with the major US access networks, which garner us direct high-quality access for delivering broadcast-quality video to their end customers. These contracts, and our relationships with these networks, are a strategic asset for Limelight as the industry runs into capacity problems in last mile access.

In other words, we saw the scarcity coming, and began securing our growth capacity ahead of it. This led to a minor margin squeeze in the quarter, but positions us well with fixed bandwidth costs on a large portion of our delivery from multiple quarters in the future as we fill up this capacity.

During the second quarter, our operating expenses were $32.4 million, an increase of approximately $2 million from last quarter and $6.3 million from Q2, 2010. Our operating expenses increased over Q1 as a result of the operating expenses for Clickability and AcceloWeb of approximately $1.2 million, an increase in intangible asset amortization related to those acquisitions of approximately $500,000, an increase in stock-based compensation of approximately $900,000, primarily related to our acquisitions, and an increase in acquisition-related expenses of approximately $400,000. These items were offset by decreases in employee-related costs of approximately $700,000, and $300,000 of expenses related to our annual global sales conference that occurred in Q1.

Total depreciation and amortization for the second quarter was $10 million, up from $8.7 million in the first quarter and up from $6.9 million in the second quarter of 2010. The increase compared to both the first quarter and the year-over-year periods, is primarily related to increased network depreciation and intangible asset amortization from our acquisitions. Depreciation and amortization in the second quarter includes $7.4 million of network-related depreciation. Stock-based compensation expenses for the quarter were $5.4 million compared to $4.3 million last quarter and $4.2 million in Q2, 2010.

Moving on to the balance sheet, our combined cash and short-term marketable securities balance on June 30th was approximately $116 million, down from approximately $135 million in the first quarter.

The decrease in cash and marketable securities is primarily related to acquisition payments for our Clickability and AcceloWeb acquisitions of $7.5 million net of cash acquired, and capital expenditures of $12 million, offset by cash flow from operations of approximately $2 million. Day sales outstanding for the quarter were 66 days, down from 70 days the previous quarter, and down from 74 days in the second quarter of 2010.

Regarding guidance for the third quarter of 2011, we expect to achieve revenues in the range of $51.7 million to $53.2 million. For this revenue range, we'd expect gross margin to be 38% to 39%. Stock-based compensation expenses for Q3 are expected to be approximately $4 million. Capital expenditures are expected to be approximately $4 million to $6 million for Q3.

We anticipate our third quarter operating expenses, excluding stock-based compensation, litigation expenses, and acquisition-related expenses, will be approximately $1 million higher than Q2. Our operating expenses will increase primarily due to having a full quarter of expenses related to the acquisitions of Clickability and AcceloWeb.

With that, I'll turn it back to Jeff.

Thanks, Doug. Operator, at this time we'll open the call up for Q&A.

(Operator Instructions) David Hilal, FBR & Company (sic).

A few questions. First, going forward, the two acquisitions of AcceloWeb and Clickability -- what, roughly, do you expect the revenue contribution to be in Q3?

Dave, we haven't broken that out. We throw them into value-added services, and I think we gave general guidance -- well, we gave top line guidance, and we're not breaking out individual stripes of that value-added services portion of the business.

So, let me ask you on guidance. You know, Jeff, I think you explained well the shortfall this quarter. I was hoping we could have a similar conversation about guidance, because the guidance is also a bit disappointing, and it sounds like the two CDN customers are back to normal levels. So, how much of that disappointment would you attribute to EyeWonder and the campaign volumes versus maybe weakness in traditional CDN volumes or pricing?

Well, I think it's -- the visibility in the digital media business, it's a campaign-by-campaign business. So, when we look at when we set guidance, we have to be more conservative with that part of the business. And since we just had a shortfall in Q2, I'd say we're being cautious with where we expect that to come out. And there also are, as we've said, product delivery -- key product deliverables that we won't have out until Q1. But it -- you know, it's hard to kind of give you a percentage of how much we weighted this with that, so that's the answer.

So, let me ask you a little bit differently. So, the CDN business, you saw weakness from those two customers. Outside of those two, how would you characterize the health of that core traditional CDN business?

Well, we still see traffic growing, and we see in excess of 60% in the quarter, as an example. But, as I said, while the price conditions are improving, they're not improving at the rate we would like to see. So, specifically in the script, in Q2 we had less year-over-year price compression than we did for the full year of 2010, and less year-over-year price compression than we had for Q1. So, sequentially, things are getting better, traffic is growing, but the price compression isn't getting better at a pace that we'd like to see.

All right. And then finally, Doug, in the past you've shared with us average product per customer metric and have shown the trends in that. Do you have that handy?

Yes. We did see a slight increase in our average product per customer this quarter, going up to about 1.8 products per customer.

All right. Great. Thank you, guys.

You're welcome.

Donna Jaegers, D.A. Davidson.

Two questions. On EyeWonder, you said you've made some changes in development leadership there. Can you expand on that?

And on the product deliverables, the new platform -- is that the entire new platform? So, you guys are going to miss most of the second half of this year? Some 65% of EyeWonder's revenue is in the second half. Can you give us some color?

Well, Donna -- well, no, we'll still have -- well, we believe we will still have growth in the second half. As I mentioned earlier, that -- you don't have great visibility. So, EyeWonder still has a fantastic brand for rich media campaigns.

What's happening in that market segment, though, is you're seeing some video networks also offer rich media capabilities, and then you're seeing some rich media guys who are larger than us, roll out integrated standard ad serving with rich media ad serving. So, we don't have the network and we don't yet have the standard ad serving, so we won't get as many campaigns.

What we're getting now are the pure rich media campaigns, and doing a great job with those, but we're not getting the incremental dollars that are going to standard ad serving or some of the video network dollars.

So, we -- the -- as far as the change in management, we have a new CTO at EyeWonder who came through an acquisition, who is a very proven engineering manager and has put a disciplined roadmap in front of us, which we are executing against now, and we feel good about our visibility into that product deliverable. And that's the standard ad serving deliverable. So, what you're competing with there is DoubleClick with standard ad serving and Motif, as an example.

And then on ecommerce, I didn't catch anything in the script. Anything new there as far as new customer sign-ups, because they'll lock down their platforms in another month or so, so I'm just curious how you guys are doing in the ecommerce sector?

Yes. There is a lockdown, so we have multiple site customers, and with AcceloWeb we will have the ability actually to accelerate ecommerce sites without even -- it's a proxy, so it doesn't even get into their IT environment. And we talked about having 70 prospects since we did our AcceloWeb deal, and fold that into the solution, in trials, or various stages of sales conversations and trials, just in the two months since we started selling with them.

Okay. And then on the mobile side, you guys gave sort of year-over-year comparisons but you had been giving sequential. Can you give us any sort of sequential reasons? We have no numbers for last year to compare to. Do you have any (inaudible) sequential?

Yes. I don't have all of that in front of me right now, and I don't want to break away from, I guess, our prepared remarks. But the year -- the customer list in mobile is all of the companies you want to work for, and so we're designed in with those companies. And they still very small viewership on mobile devices, but it's growing. And so, as they grow, we believe that business is going to continue on a nice trajectory.

Okay. Thanks.

(Operator Instructions) Sameet Sinha, B. Riley.

So, just going back to EyeWonder, what you -- in your prepared remarks you mentioned about market shifting, and I guess what you clarified was that your platform wasn't broad enough and that there were other players who had this broad platform.

Can you talk to, when you launch this new platform in Q1 of next year, how do you rate that platform? Any differentiating factors versus some of the other players in that market which will attract people to you, or to lead more off, since you'll be able to offer it at one particular place, people will just gravitate towards that?

And secondly, can you talk about CapEx? You spoke about reduced CapEx in the second half of this year, but where all had you invested in the last two or three quarters? Was it geographical expansion, or was it more increasing the density of servers? And where do you think that goes in the second half? That's it. Thank you.

Sure. So, on our product roadmap with EyeWonder, of course we have striven to design a solution that will be differentiated in the market, and where we have differentiation is in the integration of online video platform, mobile, rich media ad serving, standard ad serving when we deliver it, all running on, we believe, the highest-performance CDN on the planet, and potentially using data from all those sources for targeting. And that's where Limelight will -- and EyeWonder will be able to differentiate in the market.

And on CapEx, I'll let Doug -- I'll just give you high-level color. We did open a few new geographies. We are expanding into India, as we mentioned, and -- but we're also increasing capacity in our existing markets because traffic, as I mentioned earlier, grew in excess of 60%.

What we're seeing is -- with respect to server density and server efficiency, is dramatic improvements in server output based on some performance releases that our engineers have delivered over the last -- really the last year. With each subsequent release we've seen much higher server output, and so that plus the build-out has allowed us to look at the second half and believe that we will not have nearly as much CapEx as we had in the first half. Doug, you want to add any comments here?

Yes. I would say that's right, Jeff. The majority of the CapEx spend in the first half has primarily been in the area of adding new servers to add capacity into our existing POPs, so into existing points of presence that we currently have, versus adding to new ones. But as Jeff mentioned, some of it has gone to geographical expansion; but more of it has been adding to existing, where we're increasing the number of servers that we have in our existing POPs.

If I can just have one follow-up question, can you talk about the competitive environment internationally? You highlighted expanded footprint now including India. You know, things like these are still competitive markets. Are you seeing -- is competition from US CDNs or is it -- do you see -- have local players there, who have licensed other platforms, or how does it work?

The largest competitor in the market is Akamai, and then Limelight, and then you have Level 3 as a global telco, which acquired a CDN and has been getting traction in the video space. And then you do have some regional players here and there, like CDNetworks in Korea.

But what happens is, this is a global-scale game, and global companies have global delivery needs, and they want to work with a company that can handle those. So, they -- this is a market that is a scale market. Sort of like, I use the package delivery example of FedEx, UPS, and DHL. And you do have some local courier services, but if you're doing global logistics and package delivery, you use one of those three. And the market is solidified around them, and that's what we believe will happen with Limelight and Akamai and potentially Level 3.

Thank you.

Donna Jaegers, D.A. Davidson.

So, on the CDN shortfall, is that in the gaming world, I'm assuming, that that -- where the traffic was interrupted because of the large third-party network?

We're just staying away from specifics there, Donna, for obvious reasons, so -- sorry to not answer your question.

All right.

Rod Ratliff, SunTrust Robinson Humphrey.

Thank you. Were there any 10% customers in the quarter?

There were not.

Thank you.

Thank you, sir. And I see no further questions in the queue at this time. I'd like to turn the conference back to our executives for any closing remarks.

Okay, so, thank you for participating today. As I said in the very opening, we take ownership for the miss and are working to build out the higher-growth products on top of the CDN, which we think is where we're really going to create value here going forward, and we think the CDN business is a good enablement platform. We think the involvement of telcos around the globe has made the CDN business no longer a great business like it was five years ago, but it's still a good business, and we believe we're going to have one of the two -- and our strategy is to clearly have one of the two leading platforms on the planet for delivering that content, and then to resell or upsell customers with the value-added services -- things like online video platform management, site acceleration, mobile services, and monetization services -- that are complementary with that CDN mission.

And when we back away from the miss in the quarter and look at the reasons why, we believe our best opportunity for creating value here going forward, is investing in those SaaS solutions, and -- because those are less capital-intensive, while continuing to build the CDN to be market-leading. But over time, that SaaS business will overtake the CDN business and will really be the driver of value creation here.

So, with that, we thank you for your time and we will see you in the markets. Bye.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a good day.