LLNW *better* than FSLY

Limelight Networks is a fast-growing, shockingly under the radar edge computing and content delivery network company that has a hidden asset that may be worth multiples of the company’s entire enterprise value - ultra-low latency (sub-second) realtime streaming software that has applications in sports video streaming, online gaming and sports betting.

Limelight Realtime Streaming is the first scalable, sub-second live video streaming solution that’s natively supported by major browsers without special plug-ins.

Read here: https://www.limelight.com/realtime-streaming/

Limelight Looks to the Future of Live Sports Streaming: https://www.sportsvideo.org/2019/01/07/limelight-looks-to-th…

The management team owns a large amount of stock, and chose to trade a substantial portion of its salaries for shares in the company last year.

For the company’s core edge computing and content delivery network applications, customers include Amazon Prime Video, Disney+, HBO, Comcast Universal, ABC, ESPN+ and others.

The company’s investor presentation is here: https://investors.limelight.com/events

I own the shares because I think the stock should trade at least at 10x 2021 sales. At the current price of $5.10 the stock trades at only about 2.3x consensus 2021 sales of $255 million. FSLY presently trades at approximately 21x consensus 2021 sales.

In my opinion, this $5 stock could be worth much more, and could also be an acquisition target for one of the bigger industry players.

Quote from the April 23 earnings call: “Customer acquisition was solid in the first quarter despite a slowdown in March, and some opportunities were pushed into subsequent quarters as a result of the pandemic. Even with this headwind, we signed numerous new logos across all regions, and I’m particularly pleased that the average deal size in terms of expected revenue was up 50% year-over-year. We exited the first quarter with a strong pipeline and growing demand for our high-quality services from both new and existing customers. The strong demand we experienced in the first quarter was partially due to our continued participation in new, on-demand OTT offerings by some of the largest media companies in the world. We were pleased to support launches in new geographies in the quarter as well as the recent launch of NBC’s Peacock offering. These companies look to us as a trusted partner in these launches based on the performance of our network, global scale and strong value proposition.”

Just my opinions here, always do your own research to confirm the numbers and form your own opinion. Would be very interested in the board’s thoughts and analysis.

Thanks in advance.

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A quick glance at metrics as provided by Schwab: earnings per share are up over the past four quarters and show steady growth - - for that period. Cash flow has been spotty as has revenue growth. This might be the cat’s pajamas, but I think I will wait another quarter. I have put it on my watch list.

Thanks for bringing it to our attention.

Gordon

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Although this Company may have merit at first glance it appears that this stock doesn’t fit the criteria of the board. FY19 revenue was $200m, FY18 revenue was $196m. And margins have gone down from FY18 to FY19. So it is not a growth stock unless there is a hidden story.

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Revenue growth is what is important here, not EPS growth.

Here is what the CFO said on the April 23 call about street estimates, which sounds very bullish to me. Don’t you agree?

“I’d also like to make an observation regarding post-2020 Street estimates. While we have shared some long-term goals, the Street estimates appear conservative. After 15% growth at the midpoint this year, the estimates have us dropping to less than 10% every year and not reaching $300 million mark in revenues until 2024. That would be a very disappointing outcome. I do believe we can grow revenues in the double digits on a sustained basis. I also believe we should, on an organic basis, be able to attain the $300 million mark in revenues, a full year ahead of current analyst expectations. Current estimates do not have us getting there until 2024.”

Personally, I am hoping for the realtime streaming product to gain awareness and steam. It seems to be right place, right time for this technology.

All my opinions, as usual.

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So, 50% growth from 2019 FY to 2023 instead of 2024? That’s like 3% compound growth per quarter?

But, let me ask this: your quote by the CEO says: “While we have shared some long-term goals, the Street estimates appear conservative.” … what long term goals did they share? Are they revising those goals?

tbc, LLNW has the 50% gross margin, so it passes the “Rule of 40” but I think we’ve got to have strong reason to expect ‘Growth’, too.

-Another Rob

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Limelight Networks (LLNW) has gone nowhere in a dozen years, what has changed to make it attractive?

https://softwaretimes.com/pics/llnw-06-19-2020.gif

Promise is not something to bet on, there is no advantage is discovering something early if it takes years for the market to discover it. It’s dead money for a long time. It’s not something I would bet on.

Ask yourself, why did FSLY take off while LLNW didn’t?

The management team owns a large amount of stock, and chose to trade a substantial portion of its salaries for shares in the company last year.

Why? Did the company run out of cash? Sorry to be so negative but hope is not an investing strategy.

Denny Schlesinger

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Agree with you Denny.

I had heard about this company many years ago, but it had fallen off my radar. So I looked it up. They have been locked in a long term legal battle with Akamai, which they apparently lost.
https://en.wikipedia.org/wiki/Limelight_Networks

The tech must be old school at this point. They use their own fiber network. Who does that?

I am betting on Fastly to dominate next-gen CDN tech as they can support distributed data processing, not just content streaming. I am sure Limelight can’t do distributed data processing well, which is what will be required of a next-gen CDN to dominate 5G. But that’s just my 2-cents.

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LLNW is growing fast and is very inexpensive relative to FSLY and AKAM. It has a tremendous blue-chip customer base, revenues are growing, deal sizes are growing, and they have a patented realtime streaming technology than none of the other competitors has. The strategic value of this software could be very substantial in my opinion.

All prior litigation with Akamai (in both directions) appears to have been completely settled per my reading of the 2019 Q2 10-Q.

What do you guys think of realtime streaming technology? I’d encourage you to Google “limelight” and “realtime streaming” to read the numerous 3rd party commentaries about the technology.

Thanks.

LLNW is growing fast… – MountainDog

On this board, “growing fast” means at least over 30%/year.

Here’s a link to their 10K: https://www.sec.gov/Archives/edgar/data/1391127/000139112720…

      (mm-rounded)
Year     Revenue             

2015      171            

2016      168

2017      184                   

2018      196                   

2019      201

I was going to include operating cash flow, but the picture there has been clouded by litigation expenses. Now resolved, according to your post.

But…it hardly matters. From 2015 through 2019, revenue has grown by a meager 17.5%… just a few percent per year. Frankly, not worth my time. And I can’t see why you think it is worth your time… but that’s up to you.

I hope you stay tuned to this board. If you do, you’ll gain a lot.

Rob
Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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They grew revenues at 32% last quarter, higher than any time in the company’s history.

They state that streaming helped their numbers. This is literally an all play on streaming without the concern about advertising revenues.

It is interesting you point out they have patents on streaming. Do you know how they stack up in the market there, like who Netflix or sone of the other big services use that may indicate LLNW could have big market share in that vertical? It seems the streaming services themselves like NFLX, Roku or others may be the best invest alternatives. But many more like Peacock and Disney are wrapped around undesirable business.

I also see they just released their developer tools. This is supposedly a prime differentiator FSLY has but I see others are attempting to catch up in that regard.

But like ZM, I am really not sure how all this “new normal” plays out. It’s possible people stop streaming TV so much in a few quarters and go back outside.

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There is no reason to be so backward looking. I don’t think it’s really relevant what the company did in 2015. You said yourself that “growing fast” is at least 30% a year. That’s just what they did last quarter and it was easy to find out.

Things change and coronavirus is sure causingba big part of that. Someone that can spot a trend change in a business can take big advantage of multiple expansion.

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There is no reason to be so backward looking. I don’t think it’s really relevant what the company did in 2015. You said yourself that “growing fast” is at least 30% a year. That’s just what they did last quarter and it was easy to find out.

Things change and coronavirus is sure causingba big part of that. Someone that can spot a trend change in a business can take big advantage of multiple expansion. – 12x

Things change? They certainly do.

But if a company has had YEARS to make change happen (hence looking back several years), my point is that any current claim to suddenly be a disruptive-transformative-OH-MY-GOSH sort of company is worthy of some skepticism. I thought my point was obvious. I’ll connect the dots next time.

Rob
Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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One of the things I’ve appreciated from reading this board is following the numbers. This company MIGHT grow revenue substantially, but here we study firms that ARE growing revenue substantially.

If you want to invest in “might” there are many, many stories you can buy into. If you have unique insights into a particular space (say with industry experience in that space), then yes, by all means, catch on to one of those rocket ships. If you are right, you are going to make a whole lot of money.

But for me, as a public investor without in-depth industry expertise, I’m not buying a story without the numbers to back it up.

Rob

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The thesis would be a new product or service could turn a company around. It happens all the time but of course must be backed up by numbers.

LLNW releases its real time streaming service in September 2018. https://www.businesswire.com/news/home/20180913005263/en/Lim…

Netflix dumped LLNW in 2012 and began using its own infrastructure .

Analyst highlights mid last year that video streaming will be the growth driver for LLNW but it a bumpy road. https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/…

I’m just going to say that there are the numbers, and there are reasons behind the numbers. If someone wants to just stick with DDOG because they are clearly growing 85% YoY and not waste time delving into what’s going on with LLNW that’s fine I’m not going to argue with them. DDOG is my number one position and the biggest amount I have ever invested in a single company. But it seems to me LLNW does have one thing in its favor is they seem to me positioned to take advantage of streaming tv so I want to look at them a little further and will definitely track them though not convinced they are worth investing in at this time. Consider 1) they released their industry first real time streaming service in Sept 2018 that streams without a lag whatsoever and 2) they got out of unprofitable business in 2018 which made their comps look bad in 2019, which is an example of what happens when you really look into things.

Revenue was up 37% in December, before coronavirus. Then up 32% in March. Why the drop off? Not sure. Could be sports will have to get a better understanding.

They have Disney+ Released in mid November, which also just released in UK. They will see HBOMax and Peacock. So aside from Netflix which uses their own infrastructure they seem to have a good presence in video streaming and stand to benefit from cord cutting. They count Amazon Prime as a customer which is very surprising consider how vertically integrated they are.

They count Fortnight video game as a customer but it’s considered low margin business since it’s just simple game updates. Video is their differentiator. Idk what impact sports shutting down had. And whether or not that could also be a revenue driver.

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Just looking at the tech, Fastly seems to be ahead.

For instance, if you’re using the Wowsa streaming engine, Wowsa published a page on how to integrate with various CDNs: https://www.wowza.com/blog/best-cdns-live-streaming

For Limelight, they say:
Wowza details how to connect to the Limelight CDN here (Limelight’s support documentation isn’t publicly available). The connection technique is both less functional and more complicated than with most CDNs, so check this out first if you’re considering Limelight.

For Fastly:
Fastly’s Video CDN can deliver HLS, MSS (Microsoft Smooth Streaming), HDS, and DASH and has excellent documentation…Fastly is also partnering with Wowza to deliver advanced stream analytics, including near real-time visibility into bandwidth consumption, the number of viewers, and regional metrics.

More details on the integration here: https://www.wowza.com/blog/wowza-integration-fastly

Separately, here’s a Seeking Alpha article on Limelight: https://webcache.googleusercontent.com/search?q=cache:CqJyJF…

On paper, Limelight has a large opportunity to be a “picks and shovels” kind of play on streaming video and Internet traffic. But in practice, management concerns and a long-running inability to drive consistent profitability cast some doubt on that opportunity.

But
And I’m still not 100% convinced on the management front. Malhotra’s criticism of Street estimates for 2023 seems a bit odd given that the CFO himself said there was enough uncertainty in 2020 to hold off a guidance hike. Nor am I exactly sure why analysts are supposed to be updating their models based on management projections when Limelight has consistently fallen short of its own long-term targets.

So, when management says they’re being conservative, there is reason to be wary. Unlike Zoom, for instance, which consistently beats guidance.

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This take on Limelight is pretty suspect, as clearly their growth and execution is horrendous compared to Fastly and Cloudflare. They have been around since 2001, and they never caught up to first mover Akamai – and now, nearly 20 years later, upstarts Fastly and Cloudflare are leaving them in the rear view mirror. So they aren’t hypergrowth, and they aren’t best of breed. I fail to see how this company is in any way appealing to this board.

Limelight Realtime Streaming is the first scalable, sub-second live video streaming solution that’s natively supported by major browsers without special plug-ins.

Don’t rely on a 18 month old PR to think that Limelight has any secret sauce that is more special than our MUCH-more rapidly growing edge network companies already have. Limelight is by no means the only provider of video services and live event handling.

Fastly also heavily focuses on Live Event video streaming:
https://www.fastly.com/solutions/live-event-services

Cloudflare has an entire video stream creation and delivery platform (but not so much around live events): https://www.cloudflare.com/products/cloudflare-stream/

Yes, they likely have some tailwinds right now, as this stay-at-home is “rising all boats” (aka all edge networks doing well right now with the massive increase in web traffic occurring in this moment). But I would strongly suggest going with a proven winner in Fastly or Cloudflare over this company.

-muji
long NET and now FSLY

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This is interesting.

I know nothing about the tech or the company BUT here is what a glance shows:

Q over Q:
Revenue growth 33% to EV/GP ratio of 3, this trades for peanuts.
Gross profit growth: 29% to a multiple of 7. This is not peanuts, but cheap as of Jun 19 relative to cohort.
Gross profit margin: down from 49 to 40.

Cash and cash equivalents: little and down
Cash flow: all over the place, currently improving, -19mln.

FSLY, it puzzles me. It lacks the numbers to triple since early April and 6x from low. I am sure I am missing something but FSLY is much pricier than DDOG or CRWD right now. Its gross profit “only” grew 39% and the revenue 38%, this is worse than SMAR or APPN, both of which are 50+ Q over Q. There is no expansion of margin. Cash flow remains negative and trends down. Cash has been all over the place, trending down. I know what Tim Beyers thinks and it is not about the numbers. But short of TB having legions of followers, what explains FSLY’s meteoric rise? Did a large institution buy a big chunk? There was enormous volume on May 7.

As for Limelight, gotta look into the tech and the company.

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I know nothing about the tech or the company BUT here is what a glance shows:

MAS4R, please don’t post when you know nothing about the company. You are just embarrassing yourself with your ignorance.

Did a large institution buy a big chunk? There was enormous volume on May 7.

Please!!! They announced quarterly results and had their conference call on May 6! Duh… If you didn’t even know THAT, why are you posting?

I know what Tim Beyers thinks and it is not about the numbers. But short of TB having legions of followers, what explains FSLY’s meteoric rise?

Really!!! Do you think that a company went from $23.05 to $63.69, up almost 200%, in just over six weeks just on one analyst’s recommendation??? Come on! Read the damn earnings report and conference call at least!

Fastly rose because they gave guidance for revenue growth of 54% next quarter, which is up 16 percentage points sequentially(!) from the 38% growth in the quarter they just announced. They implied that this was due to increased usage because of the move to the Cloud, accelerated by the pandemic.

Well, This was an extraordinary sequential gain in the growth rate, but in the world we live in, the CEO going way out on a limb and forecasting that 54% growth, instead of a safe 44%, for instance (which would have been spectacular in itself), means that Fastly is ‘sure’ they will have revenue growth of at least 60% next quarter! That’s just the way it is!

That’s why they rose the way they did! A company going from 38% growth to 60% growth in one quarter is the reason. They are increasing their rate of growth by more than 50%!!! Sometimes it pays to know something about the company before you write.

Saul

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I see some need to work on their reading skills. And no, I had no time to read the FSLY transcript. So they rose on expectations, not results, thanks. It will be interesting to follow the new CEO and also to see how ownership has changed.

Btw, the numbers I posted about LLNW are as relevant as anything anyone said earlier in the thread.

More pertinently, a good contribution here would be for someone to explain LLNW vs FSLY in terms of technology, applications, addressable market, and so on. I thought you said in your intro posts that you did not know much about the tech either?

LLNW is cheap. The question is whether that’s because there is no reason we can expect it to “get going” or because Wall St simply does not see the reason. The fact that no MF service recommends LLNW is not a promising start. Don’t forget that Wall St did not give a dime about FSLY in Nov-Mar and, per your own words, did a 180 only because the new CEO managed to really surprise the street.

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So they rose on expectations, not results, thanks.

Not results? Sounds like your skilled reading missed Saul’s reference to 38% growth in the quarter they just announced.

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