CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 17, 2002--

• Second quarter revenue of $36.3 million

• Total EdgeSuite(SM) customers increased to 211

• Second quarter EBITDA loss of $8.3 million

Akamai Technologies, Inc. (NASDAQ:AKAM), the leading provider of edge computing solutions delivering secure content and distributed applications across the Internet, intranets, and extranets, today reported financial results for the second quarter ended June 30, 2002. Revenue for the second quarter 2002 was $36.3 million.

"The second quarter of 2002 had revenue in line with our expectations and a dramatically improved cash-flow performance," said George Conrades, chairman and CEO of Akamai. "We continue to win new, key enterprise accounts, despite the poor environment for corporate I.T. expenditures. Our performance during this past quarter keeps our fully-funded business plan squarely on track as we approach our 2003 profitability goals."

Net loss, in accordance with United States generally accepted accounting principles (U.S. GAAP), for second quarter 2002 was $42.2 million, or $0.38 per share, compared to a net loss for the first quarter 2002 of $59.1 million, or $0.54 per share, and for the second quarter 2001 a net loss of $92.6 million, or $0.91 per share.

Net loss for the second quarter 2002 before interest, taxes, depreciation, amortization and other one-time and non-cash charges (EBITDA(1)) was $8.3 million, as compared to the first quarter 2002 EBITDA loss of $5.8 million, and down 69% from the second quarter 2001 EBITDA loss of $26.5 million. EBITDA is calculated as gross profit less research and development expenses, sales and marketing expenses and general and administrative expenses.

Normalized net loss(1) for second quarter 2002 totaled $32.8 million, or $0.29 per share, in line with First Call's consensus summary net loss of $0.29 per share. Normalized net loss is calculated as EBITDA less net interest expense, provision for income taxes and depreciation. First quarter 2002 normalized net loss was $29.5 million, or $0.27 per share, and second quarter 2001 normalized net loss was $46.8 million, or $0.46 per share.

Second Quarter 2002 Highlights:

Customers

At the end of the second quarter of 2002, Akamai had 211 EdgeSuite customers under long-term, recurring contract, compared to 185 at the end of the previous quarter. New EdgeSuite customers in the second quarter included General Motors, Plumtree Software, Thomas Cook AG, TogetherSoft, Unicast Communications, and Visteon, among others. The second quarter also generated several EdgeSuite customer renewals including Apple, The Federal Bureau of Investigation, Victoria's Secret, and Xerox. Resellers and channel partners accounted for approximately 23% of second quarter revenue, near levels from the previous two quarters.

"EdgeSuite is our primary growth driver, and has demonstrated stronger traction each quarter," said Conrades. "Revenue from EdgeSuite was over 36% of total revenue for the quarter, up from 27% in the first quarter. As our relationships with Fortune 500 companies continue to deepen, the quality of our revenue and of our customer base has never been stronger."

The combination of Akamai's wholly-owned European operations plus the Akamai Technologies Japan K.K. joint venture contributed approximately 13% of revenue in the second quarter of 2002, which is consistent with the prior quarter.

Network

In the second quarter, Akamai continued to extend its deployment in 66 countries into a total of 1,095 networks, up from 1,047 networks at the end of the prior quarter. Akamai now has 12,976 servers deployed, up from 12,674 servers at the end of the prior quarter. Quarterly server deployment continues to fluctuate slightly as Akamai removes servers from several bankrupt ISPs and completes consolidation of some network assets.

Technology

During the second quarter of 2002, Akamai announced two significant technology relationships to further develop the company's edge computing capabilities. By moving application processing to the edge of the network, Akamai is pioneering the technology behind edge computing, a distributed computing environment of choice, independent of an enterprise's applications or operating system. Services announced during the quarter are:

EdgeSuite(SM) for Microsoft(R) .NET

Announced jointly with Microsoft, the EdgeSuite for Microsoft .NET service is designed to offer Akamai customers high-performance delivery of XML Web services and Web applications built on the Microsoft .NET Platform from the edge of the Akamai network. The service, which will also be available to all .NET developers, will integrate the Akamai EdgeSuite services with Microsoft .NET technologies.

EdgeSuite(SM) for Java based on IBM WebSphere

Announced jointly with IBM, this service will help enterprises maximize business efficiencies and scale by enabling Web applications to execute at the edge of the Internet via Akamai's global network. By deploying the distributed application platform provided by IBM's WebSphere in combination with Akamai EdgeSuite for Java, enterprises can benefit by further extending their Java-based applications and Web services closer to customers, partners and suppliers.

Financials

"Of significant importance when reviewing the second quarter is that our quarterly cash burn was only $11.5 million, the lowest level in years," said Timothy Weller, chief financial officer at Akamai. "This was a quarter marked by strong collections with 43 days sales outstanding, tight control of operating costs, and minimal capital expenditures thanks to our ability to leverage our already in-place network. We exited the quarter with $160.2 million in cash and marketable securities, strengthening our customer base while keeping our business plan fully funded."

In the second quarter 2002, Akamai announced the signing of a long-term sublease that keeps the company's corporate headquarters in Cambridge, and is expected to result in annual operating savings of approximately $9 million starting later this year. The move will be completed in the fall of 2002.

At June 30, 2002, the Company had approximately $160.2 million of cash, cash equivalents, and short-term and long-term marketable securities as compared to $171.7 million at March 31, 2002. Capital expenditures for the quarter were $3.7 million.

At June 30, 2002, the Company had 116.4 million shares of common stock outstanding. At June 30, 2002, common stock outstanding and unexercised stock options and warrants totaled 133.4 million shares.

Quarterly Conference Call

Akamai will host a conference call today at 4:30 p.m. ET that can be accessed through 800-274-4379 (or 1+ 706-645-9202 for international calls). A live Webcast of the call can be accessed at www.akamai.com. In addition, a replay of the call will be available for one week following the conference through the Akamai Website or by calling 800-642-1687 (or 1+ 706-645-9291 for international calls) and using conference ID No. 4601864.

About Akamai

Akamai is the leading provider of edge computing solutions, delivering secure content and distributed applications across the Internet, intranets, and extranets. These solutions enable customers to achieve optimal results from their e-business initiatives, thereby reducing the cost of ownership, improving return on investment, and creating new revenue streams. Akamai's globally distributed edge computing platform comprises more than 12,900 servers in more than 1,000 networks in 66 countries, ensuring the highest levels of availability, reliability, and performance. Headquartered in Cambridge, Massachusetts, Akamai provides services and world-class customer care to hundreds of successful enterprises, government entities, and leading e-businesses worldwide. For more information, visit www.akamai.com.

(1) EBITDA and normalized net loss are not recognized measures for financial statement presentation under U.S. GAAP. Non-U.S. GAAP earnings measures do not have standardized definitions and are therefore unlikely to be comparable to similar measures presented by other reporting companies. EBITDA and normalized net loss are provided to assist readers in evaluating Akamai's operating performance before certain non-cash, non-operating and one-time expenses. Readers are encouraged to consider Akamai's U.S. GAAP results along with these non-U.S. GAAP earnings measures.

Akamai Statement Under the Private Securities Litigation Reform Act

The release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, general economic conditions and those specific to the Internet and related industries, unexpected increases in Akamai's use of funds, the dependence on Akamai's Internet content delivery service, outsourced e-business infrastructure services and other technology products, lack of market acceptance of our services, including EdgeSuite, a failure by us to successfully enter into any license, technology development or other technology partnership agreement within the time periods expected by us or at all, the sometimes lengthy and unpredictable amount of time required to engage a customer, failure to achieve incremental revenue growth through increased sales resources in a timely fashion or at all, the complexity of our services and the networks on which our services are deployed, and human error in operating the same, a failure of Akamai's network infrastructure, failure to collect amounts owed by customers, our ability to service and repay our outstanding debt, changes in regulations or laws relating to privacy or other aspects of the Internet and other factors that are discussed in the Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

                       Akamai Technologies, Inc.
                 Condensed Consolidated Balance Sheets
                     (dollar amounts in thousands)
                              (unaudited)

                                        June 30, 2002  Dec. 31, 2001
                                        -------------  -------------
Assets

Current assets:
Cash and cash equivalents                 $  88,141      $  78,774
Marketable securities                        62,788        113,906
Accounts receivable, net                     17,032         20,067
Prepaid expenses and other current assets    13,145         15,252
                                          ---------      ---------
Total current assets                        181,106        227,999
Property and equipment, net                  97,458        132,237
Goodwill and other intangible assets, net    11,872         19,351
Marketable securities                         9,313         17,831
Other assets                                 12,453         24,060
                                          ---------      ---------
Total assets                              $ 312,202      $ 421,478
                                          =========      =========
Liabilities and stockholders'
 (deficit) equity

Current liabilities:
Accounts payable and accrued expenses     $  55,646      $  68,312
Other current liabilities                    18,616         22,986
                                          ---------      ---------
Total current liabilities                    74,262         91,298
Other liabilities                             8,630         12,946
Convertible notes                           300,000        300,000
                                          ---------      ---------
Total liabilities                           382,892        404,244

Stockholders' (deficit) equity              (70,690)        17,234
                                          ---------      ---------
Total liabilities and stockholders'
 (deficit) equity                         $ 312,202      $ 421,478
                                          =========      =========

                       Akamai Technologies, Inc.
            Condensed Consolidated Statements of Operations
         (dollar amounts in thousands, except per share data)

                                    Three Months Ended
                     June 30,  March 31, Dec. 31,  Sept. 30, June 30,
                       2002      2002      2001      2001      2001
                     --------  --------- --------  --------- --------

Revenue              $ 36,322  $ 37,927  $ 37,110  $ 42,754  $ 43,141
Cost of service
 (before
 network-related
 depreciation)         10,946    11,242    13,977    15,869    16,439
                     --------  --------  --------  --------  --------
Gross profit           25,376    26,685    23,133    26,885    26,702
                     --------  --------  --------  --------  --------
Gross margin %          69.9%     70.4%     62.3%     62.9%     61.9%

Operating expenses:
Research and
 development            4,624     4,869     6,575     7,627     9,595
Sales and marketing    13,837    13,610    13,355    17,432    19,072
General and
 administrative        15,215    13,966    17,517    18,396    24,532
Amortization of CNN
 advertising            1,246     1,246     1,410     1,818     2,013
Amortization of
 goodwill and other
 intangible assets      2,231     5,237     4,034     7,440     5,392
Depreciation           20,602    20,010    19,912    19,116    18,340
Equity-related
 compensation           4,646     6,371     7,188     8,717    11,038
Restructuring charge      602    12,409    14,302        --    26,194
                     --------  --------  --------  --------  --------
Total operating
 expenses              63,003    77,718    84,293    80,546   116,176
                     --------  --------  --------  --------  --------
Operating loss        (37,627)  (51,033)  (61,160)  (53,661)  (89,474)

Interest expense,
 net                   (3,733)   (3,574)   (3,336)   (2,210)   (1,637)
Other income               --        --        --     1,002        --
Loss on investments      (759)   (4,328)        8      (213)   (1,153)
                     --------  --------  --------  --------  --------
Loss before
 provision for
 income taxes         (42,119)  (58,935)  (64,488)  (55,082)  (92,264)
Provision for income
 taxes                    123       123       277       277       344
                     --------  --------  --------  --------  --------
Net loss             $(42,242) $(59,058) $(64,765) $(55,359) $(92,608)
                     ========  ========  ========  ========  ========

Basic and diluted
 net loss per share  $  (0.38) $  (0.54) $  (0.60) $  (0.53) $  (0.91)
Weighted average
 common shares
 outstanding          112,253   109,693   108,357   104,166   101,629

Supplemental financial data (dollars and shares in thousands):

Normalized net
 loss (A)            $(32,758) $(29,467) $(37,839) $(38,173) $(46,818)
Normalized basic
 and diluted net
 loss per share      $  (0.29) $  (0.27) $  (0.35) $  (0.37) $  (0.46)

EBITDA (B)           $ (8,300) $ (5,760) $(14,314) $(16,570) $(26,497)

Recurring free cash
 flow (C)            $(15,698) $(12,121) $(24,818) $(33,523) $(46,379)

Network-related
 depreciation        $ 11,687  $ 11,807  $ 12,098  $ 10,991  $ 10,276
Other depreciation   $  8,915  $  8,203  $  7,814  $  8,125  $  8,064

Capital expenditures $  3,665  $  2,787  $  7,168  $ 14,743  $ 18,245

End of period statistics:

EdgeSuite customers       211       185       152       100        51
Number of customers
 under recurring
 contract               1,034     1,055     1,078     1,096     1,208
Number of employees       807       822       841     1,111     1,129
Number of servers      12,976    12,674    13,522    13,036    11,689
Common stock
 outstanding          116,397   115,723   115,099   115,281   115,071
Common stock
 outstanding and
 unexercised options
 and warrants         133,377   130,594   128,926   126,090   125,470

End of period ratios:

Annualized average
 revenue per
 employee            $  178.4  $  182.5  $  152.1  $  152.7  $  142.1
Cost of service as
 a % of revenue         30.1%     29.6%     37.7%     37.1%     38.1%
Research and
 development as a %
 of revenue             12.7%     12.8%     17.7%     17.8%     22.2%
Sales and marketing
 as a % of revenue      38.1%     35.9%     36.0%     40.8%     44.2%
General and
 administrative as
 a % of revenue         41.9%     36.8%     47.2%     43.0%     56.9%
Capital expenditures
 as a % of revenue      10.1%      7.3%     19.3%     34.5%     42.3%
Days sales
 outstanding of
 accounts receivable       43        45        49        48        52

(A) Normalized net loss (net loss before amortization and other
one-time and non-cash charges) is calculated as EBITDA less net
interest expense, provision for income taxes and depreciation. See
Supplemental Financial Information for reconciliation to U.S. GAAP net
loss.

(B) EBITDA (earnings before interest, taxes, depreciation,
amortization and other one-time and non-cash charges) is calculated as
gross profit less research and development, sales and marketing and
general and administrative expenses. See Supplemental Financial
Information for reconciliation to U.S. GAAP net loss.

(C) Recurring free cash flow is calculated as EBITDA less capital
expenditures less net interest expense. See Supplemental Financial
Information for reconciliation to U.S. GAAP net loss.



                     Akamai Technologies, Inc.
                 Supplemental Financial Information


Reconciliation from U.S. GAAP to Normalized net loss, EBITDA and
Recurring free cash flow

                                    Three Months Ended
                     June 30,  March 31, Dec. 31,  Sept. 30, June 30,
                       2002      2002      2001      2001      2001
                     --------  --------  --------  --------  --------

Net loss in
 accordance with
 U.S. GAAP           $(42,242) $(59,058) $(64,765) $(55,359) $(92,608)

Adjustments to reconcile net loss to Normalized net loss, EBITDA and
Recurring free cash flow:

Amortization of
 goodwill,
 intangibles and CNN
 advertising            3,477     6,483     5,444     9,258     7,405
Equity-related
 compensation           4,646     6,371     7,188     8,717    11,038
Restructuring charge      602    12,409    14,302        --    26,194
Loss on investments       759     4,328        (8)      213     1,153
Other income               --        --        --    (1,002)       --
                     --------  --------  --------  --------  --------
(A) Normalized net
 loss                 (32,758)  (29,467)  (37,839)  (38,173)  (46,818)

Interest expense,
 net                    3,733     3,574     3,336     2,210     1,637
Provision for income
 taxes                    123       123       277       277       344
Depreciation           20,602    20,010    19,912    19,116    18,340
                     --------  --------  --------  --------  --------
(B) EBITDA             (8,300)   (5,760)  (14,314)  (16,570)  (26,497)

Interest expense,
 net                   (3,733)   (3,574)   (3,336)   (2,210)   (1,637)
Capital expenditures   (3,665)   (2,787)   (7,168)  (14,743)  (18,245)
                     --------  --------  --------  --------  --------
(C) Recurring free
 cash flow           $(15,698) $(12,121) $(24,818) $(33,523) $(46,379)
                     ========  ========  ========  ========  ========

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