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Limelight Networks Inc (NASDAQ:LLNW)
Q1 2020 Earnings Call
Apr 23, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Limelight Networks First Quarter 2020 Earnings Conference Call and Webcast. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions].

I would now like to turn the conference over to Dan Boncel. Please go ahead, sir.

Daniel R. Boncel -- Vice President of Finance & Principal Accounting Officer

Good afternoon, and thank you for joining the Limelight Networks first quarter 2020 financial results conference call. This call is being recorded on April 23, 2020, and will be archived on our website for approximately 10 days.

Let me start by quickly covering the safe harbor. We would 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 fact such as our outlook for 2020 and beyond, our priorities, our expectations, our operational plans, business strategies, secular trends and product and feature functionality announcements and the impact of COVID-19. 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 Annual Report on Form 10-K. 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.

Joining me on the call today are Bob Lento, our Chief Executive Officer; and Sajid Malhotra, our Chief Financial Officer. We will be available during the Q&A session at the end of prepared remarks from Bob and Sajid.

I would now like to turn the call over to Bob Lento.

Robert A. Lento -- President, Chief Executive Officer & Director

Thanks, Dan, and good afternoon. Before we discuss the first quarter results, I would like to start with some remarks about the current environment. This is an extremely challenging time for us -- for all of us. Our thoughts are with those directly impacted by COVID-19, including those who have contracted the virus and their families. I'd also like to express my deep gratitude for the extraordinary response by individuals, companies and government during this crisis, particularly the healthcare workers on the frontlines of the pandemic and the many people who provide essential services to ensure the world continues to function. We salute you and thank you for your service.

As COVID-19 disrupts operations around the world, we believe that Limelight plays an important role in supporting the digital experience of the global population under isolation mandates. As such the services we provide to our customers and our customers' customers are more important than ever.

We activated our pandemic response plan in early March and have taken numerous steps to maintain high-quality services for our customers, while prioritizing the safety and health of our global workforce. We have a dedicated team of senior leaders across our company who together are closely monitoring developments and determining swift and effective actions necessary in response to the changing circumstances resulting from COVID-19.

We have mobilized our employees around the globe to work remotely, ensuring they have the right tools to perform their jobs effectively. We have also taken action to ensure the uninterrupted availability of our network and services. Our operation teams are fully staffed and continue to manage our network. We have put in place infrastructure and systems, allowing our employees to work remotely, while ensuring security and access to all the tools needed to operate the network.

We have developed extensive backup and shifts coverage plan, which identify three layers of name backups to cover critical job functions. Our teams are also in close contact with our business-critical partners to ensure business continuity across regions.

Regarding our network infrastructure, we remain confident in its stability during the pandemic. We operate a globally distributed network in close to 140 data centers. Our network is fully redundant and includes extensive diversity through data center and telecom suppliers within and across regions. We have also initiated conversations with various ISPs to understand their pain points and how we can manage our traffic to better alleviate congestion.

From a customer's perspective, our services and support are unchanged. Our teams will continue to provide around-the-clock support to our customers worldwide. As this crisis continues around the world, I'm grateful for the efforts of Limelight's global workforce, whose focus and collaboration has ensured a seamless high-quality experience for our customers. We are confident in our ability to manage our network, serve our customers and maintain support functions during these very challenging times.

Now turning to the first quarter results announced today. This is a great quarter, building on the strong business momentum and strengthening financial and operational performance in 2019. Revenue in the first quarter was $57 million, up 32% year-over-year and was our highest first quarter revenue ever.

GAAP net loss improved by 39% over the year ago quarter and our non-GAAP net loss improved by 96% over the first quarter of 2019. Adjusted EBITDA was more than 10 times higher than the prior year amount and our balance sheet remains strong. We are proud of this quarter's results, which reflects our focus and steady execution for our customers.

Traffic was strong in the first quarter and volumes accelerated in March, as much of the global population came under isolation mandates. However, this increase was partially offset by lost traffic in March resulting from canceled live events such as March Madness and other sporting events.

There is much uncertainty about the duration of the isolation mandates, as well as the impact on traffic levels when isolation mandates are lifted, workers return to their jobs and warmer weather pulls people outside away from their screens. Despite these uncertainties, we are confident in the underlying momentum in our business and expect it to continue in 2020 and beyond.

To ensure we can meet the expected growth of online traffic, we are actively pursuing our aggressive network capacity expansion plan for 2020 that includes increasing capacity in existing PoPs and building new PoPs in new geographies that are important to our customers.

We continue to make progress on this plan in the first quarter. We have adapted to supply chain issues and travel and operational restrictions resulting from COVID-19, requiring longer lead times and capacity expansion. We believe these efforts will position us well to serve the strong demand expected from our customers and drive revenue growth in the future.

Customer acquisition was solid in the first quarter, despite a slowdown in March as 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.

Even with the pandemic, our employees continue to work hard on our new product initiatives during the quarter and I'm pleased about our progress. During the first quarter, we finalized a new service from Limelight called Live Push Ingest, which allows content providers to push live streaming video content to Limelight for distribution across our CDN. Live Push helps our customers simplify their video workflows, reduce egress costs and scale up to meet the needs of the largest live streaming events without the worry of overloading their origin servers.

We began beta customer trials in the third quarter for our serverless compute capabilities, also known as EdgeFunctions. This offering will provide a platform for our customers to deploy their own application functions into our network edge locations and run them on demand. Its functions will have use cases specifically aimed at supporting the requirements of our video delivery customers and it is generating a tremendous amount of customer interest. We're very excited about this new offering and expect to launch its general availability later this quarter.

We also recently launched the portal targeting developers within our customers' base. It's a rich source of API documents code samples, software development kits and a great place to obtain answers to their technical questions. While we are navigating these extreme conditions related to COVID-19, we're still very focused on planning and positioning for the future. We are executing on our four strategic imperatives for this year which includes, expanding capacity, expanding on proactive management of the network, placing more control in the hands of our customers and driving innovation.

Our employees are working hard every day on these initiatives despite the challenges and disruptions we now face. We are trying to ensure that when the pandemic ends, we emerge as a stronger company. We are fortunate that our industry is healthy and providing essential services to individuals businesses and governments during these immense challenges and disruptions.

We also announced today that Sajid will be transitioning from CFO to Chief Strategy Officer, assuming the responsibilities for Corporate Strategy, M&A and Investor Relations. Sajid stepped into the CFO role five years ago and I'm grateful for the tremendous contribution he has made to our improved financial and operating performance.

Dan Boncel will assume the position of Chief Financial Officer. He has been at Limelight for seven years as Vice President of Finance and Chief Accounting Officer. Dan's strong capabilities as a finance leader, his deep knowledge of Limelight and his existing relationships with many of you made him the ideal candidate for this position. These management changes will be effective July 1 of this year, providing ample time for a smooth transition.

In summary, this was a strong quarter for Limelight as we operated very well in an extremely challenging environment. As I look forward at the rest of 2020, while there are many uncertainties, I take strength in the health of our industry, the momentum in our business, our solid financial position and the ongoing dedication of our global workforce to deliver for our customers and drive results. I like to thank our employees for their hard work, focus and resiliency as we face this global pandemic together. I have never been more proud of the team at Limelight and I remain confident in our ability to meet our goals for 2020.

With that, I'll turn the call over to Sajid to discuss the first quarter financial performance in greater detail and our guidance for 2020.

Sajid Malhotra -- Chief Financial Officer

Thanks, Bob and good afternoon. Before I get started, I would also like to acknowledge the impact of COVID-19. Many people have lost loved ones. Many people have lost their jobs and face tremendous hardships. For all of us the way we live our everyday lives has changed dramatically and perhaps forever.

I would like to begin by thanking our global workforce for adapting to the change in the most professional and expeditious and least disruptive manner; our operations team for continuously running a complex global network remotely at escalated levels; our sales and marketing teams for staying in contact with customers; our research and development teams maintaining their focus on new products; and our general and administrative functions keeping their departments running smoothly and remotely. It has been reassuring to see what we can do as a team even when we are not next to each other in the office every day. I'm very proud of what we are achieving.

With that backdrop, I'm very pleased with the quarter we just reported and the prospects for the remainder of 2020 and beyond. Let me review the details. Q1 revenue of $57 million is our highest reported first quarter revenue in our history. Year-over-year revenue increased 32% and it exceeded our previous highest first quarter by almost $5 million.

International customers accounted for 39% of total revenue in Q1 compared to 42% a year ago. Approximately 10% of our first quarter revenue was in non-US dollar denominated currencies. Foreign exchange headwinds in the quarter amounted to approximately $100,000, due primarily to fluctuation in the pound. Average revenue per customer remained at approximately $100,000. This is our entire revenue divided by our entire customer base and we believe our average revenue per customer is the highest in the industry.

We are seeing record traffic levels in the last two weeks of March and that trend has continued into April, largely a result of over-the-top video streaming usage. On the flip side, we also have many customers in industries such as broadcasting of live sporting events and betting or travel sites, who have been adversely impacted. We will continue to work with all customers to help them get through this together.

Moving down the P&L. During the first quarter, we continued to expand our capacity and clearing arrangements in anticipation of a continued ramp-up in traffic from OTT offerings coming online in 2020 as well as significant new customer wins. Some of these offerings are still expanding into new geographies and this is a multiyear trend. Operating expenses increased approximately $1.1 million, primarily due to the increase in variable compensation expense.

We reported a GAAP net loss of $5.3 million in the first quarter or $0.04 per basic share compared to a $0.07 loss Q1 last year. We were breakeven from a non-GAAP standpoint compared to a $0.04 loss per basic share last year. Adjusted EBITDA was $5.6 million for the first quarter 2020 compared to negative $600,000 last year. We had cash and cash equivalents of $21.4 million at the end of the first quarter, up $3 million from the end of last year on strong operating cash inflow in the quarter of $9.6 million. Capital expenditures totaled $6.9 million.

At the end of March this year, DSO was down to 51 days compared to 59 at the end of March last year and 48 days at the end of December. We target DSO to be in the range of 50 to 55 days. Despite our strong overall performance in the first quarter there is significant uncertainty from a macroeconomic perspective. We mentioned earlier many of our customers are experiencing financial difficulties as a result of the global pandemic. We are working with these customers to determine the best course of action for us and them. For some that may take the shape of a deferral of committed traffic levels. For some maybe extended payment terms. We are also working to stay current with our vendors. Due to the uncertainty in timing of cash flows, we have extended our $20 million credit line with SVB through October 2022. That was previously set to expire in the fourth quarter of this year. We believe this flexibility in our balance sheet position is sufficient to fund our growth and operational needs as we work through these challenging times.

As of March 31st, we had approximately 119.6 million shares outstanding. Total employee count at the end of the quarter was 616, up six from the end of last quarter. We have again raised the lower end of our guidance bringing the midpoint to $230 million. I had two choices; keep the confidence interval the same and raise the guidance even more, or feel more confident about the guidance we are giving. With all the uncertainties I have chosen the latter out. We do not know when the pandemic ends, what is the reaction when it ends, how quickly the life returns to normal and on and on. In this environment, we are one of the few companies feeling more confident about our guidance, raising the midpoint of revenue and starting the year strong. We will have more to say and revisit this in 90 days.

In summary, in a very difficult environment I'm confident Limelight will be one of the small minority of companies that has actually met or beaten expectations and raised any element of the guidance. To recap the quarter, revenue is up 32%. GAAP net loss is better by 39%. Non-GAAP net loss improved by 96% and adjusted EBITDA is 10 times what it was a year ago. We generated almost $10 million of positive operating cash flow. The balance sheet remains debt free even as we continue to invest in the business and expect the highest growth year in our history.

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 till 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 till 2024. I say that now, because what the business looks like post-COVID is very relevant and important to the investment decisions and choices you're making every day.

And with that, I'll open the call up to your questions.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Lee Krowl with B. Riley. Please go ahead.

Lee Krowl -- B. Riley FBR -- Analyst

Great. Thanks for taking my questions. Congrats on a great quarter. And specifically congrats to both Dan and Sajid. Dan for the promotion and Sajid for many years of dutiful service as CFO.

As it relates to questions, I just want to start off on gross margin with the solid results in Q1 and kind of the expectations for seasonality also baked in. Maybe just some of the puts and takes as you've seen record traffic and perhaps with streaming services, building scale, how that impacts gross margin?

Robert A. Lento -- President, Chief Executive Officer & Director

Hey, Lee, this is Bob. I'm going to have Sajid answer that question. But before we get into the actual answers, I just want to make a statement that this conference call is a little unusual for everybody, but especially for us. We're actually in three different locations, following government mandates to stay home and so we're going to try to be as coordinated as we can. But just know that unlike our usual cadence with these calls where we're all in the same room, we're actually in three separate locations and we'll do our best to act like we're in one room and totally coordinated here. So Sajid with that being said, if you want to address the gross margin question.

Sajid Malhotra -- Chief Financial Officer

Yes, sure. And I would also say, at any time, any sound can happen in this household. So luckily, the dog hasn't barked so far or something like that, but we keep moving on. So listen, thanks, first of all, Lee, for your kind words. I appreciate that very much and so does everybody here.

I think the gross margin question, first of all, knowing me and knowing how we've operated this business, right, you know we start with the bottom line. I mean the most important thing that we care about is the total profitability and cash generation in the business, then the sustainability of that cash flow and cash generation, then the geography of the numbers, right? Many companies, in the absence of all the other items, pick the one geography which is kind of strong and healthy and focus on that. We want to talk about the total profitability.

Now when I get to the geography of the numbers, yes, I think that the gross margin has more room than it does today. I think that when the revenue drops from $60 million run rate in Q4 to some number lower than that, it is the absorption of the unused, and so that shows up in the gross margin being down. And at the same time, we are adding even more for what we anticipate coming on. So you have kind of a two -- a double action that's occurring.

The other item that I would just like to point to, it's a nuance, but the COVID traffic only hit for the last 1.5 weeks, two weeks in March. And the way the variable cost in the gross margin side, the bandwidth expenses occur, is that you get charged -- we get charged by our vendors for the peak. So on any ordinary month, you establish a peak and you pretty much sell under that throughout the month and you kind of get to a good outcome. Here, what happened was we got to peak very late in the month, and it was a steep peak. As a result, you have under-absorption throughout the course of the month. So I think there are a number of stories here. Obviously, I would have liked the gross margins to be higher. I think we should continue to see improvement in the gross margins. But I'm -- while I'm not happy with the gross margin at that particularly line, I'm really pleased with the leverage in the expense lines and the profitability overall.

Lee Krowl -- B. Riley FBR -- Analyst

Got it. And then specifically on the streaming launches. Just kind of curious, would you guys kind of expect similar or more or less traffic share as some of these services go live internationally?

Robert A. Lento -- President, Chief Executive Officer & Director

We don't really -- we don't have good data on market share by customer and some of the launches that are coming up aren't going to be international. For example NBC's Peacock is US only pretty much. HBO Max will be US only pretty much. Others like Disney for sure are marching pretty rapidly across the globe.

So whether there's growth international or not depends on which launch you're talking about and then obviously which countries. And we know we have a seat at the table. What we don't know is what percent of the total that's usually kept pretty close to the best by those companies.

Lee Krowl -- B. Riley FBR -- Analyst

Got it. And then last question, just kind of on the active customer count. The raw number ticked down double digits in the quarter, but you guys kind of spoke to some very constructive comments around new customers. So maybe just kind of the puts and takes between the commentary of new customers versus the active customer count. Thanks,

Sajid Malhotra -- Chief Financial Officer

Yes. We still have kind of a decline in our total customer count, and most of it is happening at the very base of the business with very small customers, where the average revenue is relatively minor. And as those have been replaced -- like I have said this again and again, that our top 20 customers account for so much of our business in traffic that to get one more player who qualifies in that category is worth the bottom 200 on kind of size and impact to the business standpoint. So our focus and our ability to add at the top, I think I'm very proud about. And I think at the low end of the business, sometimes because of profitability, sometimes because of a unique feature or a functionality or software that they're using that is third party, there's this kind of general cleanup that is occurring. And I'm not particularly troubled by that, but I should and do expect the customer count to flatten out and then even begin to grow. I think we've kind of reached the low point of those numbers.

Lee Krowl -- B. Riley FBR -- Analyst

Got it. Thanks for taking my questions guys.

Robert A. Lento -- President, Chief Executive Officer & Director

Yeah. Thank you Lee.

Operator

Our next question will come from Robert Majek of Raymond James. Please go ahead.

Michael Turits -- Raymond James -- Analyst

Hi. It's Michael Turits on. Hey, guys.

Robert A. Lento -- President, Chief Executive Officer & Director

Hi, Michael.

Michael Turits -- Raymond James -- Analyst

A couple of questions. Can we drill down on the traffic levels a little bit? So I just wanted to be clear. You said that you had an increase in traffic levels at the end of March and does that continued in April? I assume that peak traffic levels. And what was that increase? And exactly how -- did it completely sustain in the beginning of April?

Robert A. Lento -- President, Chief Executive Officer & Director

Well, I'll start answering that, and then I'll pass it over to Sajid. So as the world started to shut down, we saw two things. One, obviously, traffic -- live events go to zero. And while we've talked in the past, any one live event, even one as large as the Super Bowl, isn't really material enough to affect any one quarter's results. But when you add up a string of those throughout a quarter because we stream live events almost on a daily basis somewhere in the world, it's pretty material. So that went to zero.

At the same time, the video-on-demand side went up in a pretty material way. And I would say the one interesting thing, Michael, was we saw a steadier traffic. Sort of if I think about it as a peak average, the peak average decreased, meaning that it was more sustained traffic. So we saw more traffic in off-peak hours than we would normally see. But to Sajid's point, the peak was still up, but you saw more underneath that peak than you normally would.

Now as schools started to go back into session and people got used to working at home, some of that dynamic changed. But what I will tell you, we're sitting here in April, whatever today's date is, they're all blending together, 23rd, we're still seeing those elevated traffic levels continue through today. The question is -- the uncertainty part for us is when do sports come back, when do people start going back to more of a "normal" life and what is the effect on the traffic when that happens. That will be offset by some new launches because as we've discussed -- as NBC has discussed, their Peacock, while it's officially launched to some Comcast subscribers on some devices, doesn't really launch until July. HBO is end of May. So you have sort of a bunch of different things going on at the same time. Sajid, anything additional from you?

Sajid Malhotra -- Chief Financial Officer

No, I think you've covered it. Thanks.

Michael Turits -- Raymond James -- Analyst

So I guess what I was trying to -- well, first of all, Akamai had content made. They said their peak traffic levels were up 30% month-over-month. So I was wondering if you could quantify how much your peak traffic levels were up at the end of March, confirm that, that same level maintained into April. And then when we really look at your traffic including live, we're looking not just those pay traffic levels but what's happening in like sports, what the total amount downloaded but might be. So I'm trying to -- I'd like to know in addition, whether or not that total amount downloaded that you get paid on, was that sustained higher levels? And what's been the trend there?

Sajid Malhotra -- Chief Financial Officer

Sure. So I think on the sports, I think maybe a few franchisees, a few may have pulled the releases in sooner and earlier, and there may have been a higher frequency of an update. The launch dates are what the launch dates are.

The overall peak is not very dissimilar for us if you're talking about a number like 30%. We are kind of in that same ZIP code, maybe a little bit higher, a little bit lower in that range. But the way it is -- I think it's the same for everybody in the space that is primarily serving video, and that is a good thing.

Now keep in mind, whether it's school, even in apartment living or household living, people are mostly homebound, and this has suddenly hit, and there's a lot of content available. In our business, there is some slight seasonality, which we kind of factor into our guidance, right, which is why we say Q2, Q3 are the low points and then business picks up again. This year should be a little bit different, where I think you will see some flow-through of that business.

But then the question is, what happens when the state opens up? I don't have a playbook to see what happened the last time, right? We've done crisis, planning crisis management and all that. And we followed very strict guidelines of what we are supposed to do from an operating standpoint. But what happened the last time, I can tell you when a flood hit, when a hurricane hit, when there was a -- but I don't have what happened when the last pandemic occurred on a global basis and the world shut down. So we'll see what the reaction is at the back end. We're feeling good about where we are.

We're feeling very fortunate about the industry we are in, our position in that industry, the fact that we gave guidance for the highest revenue growth in our history, and we think we can achieve that with a higher degree of confidence. I just want this to -- I just need more data to be able to tell you in a really unambiguous way that this is what I see happening. Until I get there, I feel like I should just know we're back.

Michael Turits -- Raymond James -- Analyst

Sajid, if I can squeeze one more in. So I'm just trying to understand. So I can't recall, what was your capex expectation for this year? And have you changed it? In other words, are you increasing your build-out or decreasing your build-out in response to COVID?

Sajid Malhotra -- Chief Financial Officer

No. So our capex last year was close to $35 million. And this year, we said we were going to do somewhere between $25 million and $30 million, and it would be front-end loaded. We almost did $7 million in the first quarter, and we will stay within that guidance. So I think even with COVID, even with higher traffic, we think we have the capacity in the right geographies, for the most part, to go ahead and deliver what we talked about.

Michael Turits -- Raymond James -- Analyst

Great. Thanks.

Robert A. Lento -- President, Chief Executive Officer & Director

And then just to clarify one thing, Michael, because you had asked a pretty direct question about traffic growth. I don't know the exact number off top of my head, but the 30% that you mentioned, we are at or above that from a traffic growth standpoint on a year-over-year basis.

Michael Turits -- Raymond James -- Analyst

Thanks Bob and Sajid.

Robert A. Lento -- President, Chief Executive Officer & Director

Thanks Michael.

Operator

Our next question will come from Colby Synesael of Cowen. Please go ahead.

Colby Synesael -- Cowen & Company -- Analyst

Great. Thank you. I guess a few questions. One is, I think you had previously said that you expected revenue to be down sequentially in the first quarter. But then in each quarter thereafter in 2020, it would be higher than the quarter before. And I'm just curious if you still expect that.

And then I guess I'm going to follow up on the last question. Are you able to quantify what the downside was in terms of things that effectively went away because of COVID-19, like sporting or live events versus what the upside was?

And I guess as part of that, you raised the low end of your guidance. Is that explicitly because of COVID-19? Or is it really just the OTT traffic that you were seeing was really better throughout the quarter, not just in the last two weeks, and that's really what's driving it? In other words, if the COVID-19 spike in traffic that we've seen in the last two weeks was to sustain on a longer period of time in the second quarter, we actually could see -- that's when you would actually be raising guidance, I guess, more specific to COVID-19. Thanks.

Sajid Malhotra -- Chief Financial Officer

Sure. Thanks for the questions, Colby. So let me make sure I answer them all and no specific order. But some of our bid is absolutely tied to the COVID stay-at-home. I mean there was direct correlation between when that action took place and what happened with traffic. So we can kind of look at overall traffic and say, yes, traffic began to move up as more and more of that stay-at-home order got deployed.

We do very specific account-by-account, by price, by month, by type of traffic kind of planning when we go ahead and put our annual plans together. So we have detail. Here's what I expect from MLB or from March Madness or whatever it might be. And we have what the price expectation is with the customers, and we know what normal growth is. And customers share with us what their growth plans are, in some cases. So the detail exists over there, but it's not something that I want to go ahead and put out and say, here, it's three down because of this and five up because of that. But that is factored into what we saw.

And then your point about the sequential improvement and the COVID-related. So yes, the quarter benefited in revenue in totality because of the pandemic. And yes, when we initially gave the guidance, we had said four quarters of sequential improvement because it was -- I saw a clear path there, right? I saw kind of big step increases of a few million dollars going from where the guidance settled for Q1 to Q2 to Q3 and Q4. Now with the $230 million midpoint for the guidance and if you take into account where we finished in the first quarter, I think those four quarters will be more closely tied together. And so if in one quarter, it is not sequentially up, I don't want to have to come and apologize, but it is our -- in plan still to show four quarters of sequential improvement.

Colby Synesael -- Cowen & Company -- Analyst

Great. Thank you.

Operator

Our next question will come from Rishi Jaluria of D.A. Davidson. Please go ahead.

Rishi Jaluria -- D.A. Davidson -- Analyst

Hey guys. Thanks for taking my questions. And Sajid and Dan, congrats to both of you on your new roles. Maybe I just wanted to start first by drilling down a little bit more into the guidance. It sounds like from the commentary, you're clearly being conservative, which I think is the right thing to do. One of the commentaries made was the cancellation of some live sporting events, right? March Madness in Q1, Olympics getting pushed to next year, NBA season. I'm sure there's more. Maybe can you directionally help us quantify what sort of revenue you were expecting from those types of events as you first set out the initial guidance for 2020? And how big that chunk that now is kind of disappearing is going to be? And then I've got a follow-up.

Sajid Malhotra -- Chief Financial Officer

Yes. Sure. So there are two things. First of all, I think I have a higher degree of achieving the guidance that we've given now, given where we are and now. I've got four months behind me versus having 12 ahead of me, and I think that I have more confidence. And like I said, I had an option to raise the guidance even more, but I think conservatism at some level here is prudent, and that's what we'll do.

I also want to be clear that beyond this year, I'm actually getting a little bit more aggressive. I mean for a few quarters and for a few years, we've let guidance sit there or estimates sit there that we thought we could go beat. But we feel better about the fact that, yes, we can get to double-digit growth on a sustainable basis. And what the Street is suggesting for 2021, '22, '23, may be too conservative, right? So there is an aggressiveness on our part on that front. I just want you to at least recognize that.

And then in terms of the total dollar value, no, we don't talk about dollar value from a particular customer or a particular event as such. We haven't in the past. We won't do it now. But suffice to say that these events are in the seven figures. When you go through a month of activity and the bids that you push across over the network for game after game for basketball or baseball or football, that equates to seven-digit amounts. So yes, the absence of that hurts. In totality, though, that the benefit that we are seeing from everything else seems to not only just offset that but actually exceeded, and it's showing up in our results.

Robert A. Lento -- President, Chief Executive Officer & Director

And just as a reminder -- yes, and just as a reminder because Sajid said it in his earlier remarks, you're really talking about the loss of those live events for two or three weeks of a 13-week quarter, offset by the increase in OTT four, two or three weeks within a 13-week quarter, right? So it didn't sound like it affected the whole quarter.

Rishi Jaluria -- D.A. Davidson -- Analyst

Sounds right. Sounds right. Okay. That's helpful. And then I wanted to go back to the gross margin side. Sajid, I appreciate there's obviously a lot of moving pieces on that figure. I think taking a step back, as we look at gross margins now on a full year basis for 2020, I mean is there any reason we shouldn't expect gross margins to meaningfully improve year-over-year versus 2019, given now that you're in a state of sustained double-digit revenue growth for the entire year?

Sajid Malhotra -- Chief Financial Officer

Well, we push very hard to show sustained gross margin improvement year-over-year. That continues to be our plan. What that number finally lands up to be, I think we'll get there when we get there. But yes, I mean we are not satisfied with the 36% gross margin number that we reported in Q1 and have to move up from here. We know that. It's clear to us.

Rishi Jaluria -- D.A. Davidson -- Analyst

Got it. Okay. And then last one and I'll hop. But I wanted to go back to maybe something a little bit more philosophical that you've both talked about in the prepared remarks, which is thinking about some of the traffic spikes that you're getting and thinking about how sustainable they are, right, OTT consumption, gaming, obviously, really here. If we listen to the commentary from some of the gaming companies out there, which you're probably -- you're benefiting from a lot of that. How do you think about the sustainability of some of these spikes? Is this something that you're contemplating as we're getting the benefit now and when social distancing measures are relaxed, then some of that starts to disappear? Or are you looking at some of this as kind of being a permanent improvement now that more people are consuming video OTT versus through traditional cable, that there's a certain baseline that's always just going to be there with you? Maybe help me understand just philosophically how you're thinking about that concept. Thanks.

Robert A. Lento -- President, Chief Executive Officer & Director

Yes. Let me start. And then, Sajid, you can add on. It's an interesting philosophical question because it would be easy to assume that once things get back to whatever normal's going to look like, that traffic levels should go back to what normal was as well. But the thing that we think about is, are new behaviors being learned and so will there be faster shifting to streaming services? And so we really -- when you think about when sports comes back, will there be crowded stadiums and bars? Or will people be home watching on Internet-enabled devices, right? We don't really know what that's going to look like. So it's an interesting question that we think -- that we're thinking about every day. And it's part of what adds to the uncertainty of what will things look like in the future when sports gets turned back on. You've already heard the PGA announced that they're going to start the tour but without any fans. There's some other stuff going -- discussions like that going on in Europe with European football or soccer. So it's an interesting question that we are thinking about every day. And to your point, it is philosophical at this point because we just don't know. I don't know, Sajid, if you have any additional comments.

Sajid Malhotra -- Chief Financial Officer

Well, I was going to ask you, Rishi. Like you're talking to everybody in the industry, and where do you think this happens? What do you think happens?

Rishi Jaluria -- D.A. Davidson -- Analyst

My guess is as good as yours. I figure you've got probably a lot more insight, at least in that behavior, but it's interesting.

Robert A. Lento -- President, Chief Executive Officer & Director

I think we'll be learning as we go.

Sajid Malhotra -- Chief Financial Officer

Yes. I think that we'll develop a point of view, and we'll share that as we learn more and talk to more customers and see what happens in the early days and what the reaction is.

Rishi Jaluria -- D.A. Davidson -- Analyst

Okay. Got you. Fair enough. All right. Thank you guys, really helpful.

Sajid Malhotra -- Chief Financial Officer

Thanks, Rishi.

Operator

Our next question will come from James Breen of William Blair. Please go ahead.

James Breen -- William Blair -- Analyst

Thanks for taking the question. In the comments, you talked about expanding capacity. Just wondering how you think about that in terms of your capacity in the existing network or expanding geographically to pick up more hotspots for your customers? Thanks.

Robert A. Lento -- President, Chief Executive Officer & Director

Yes. So we came into 2020 with a plan that added to the aggressive capacity additions that we had in 2019. And luckily, we were very aggressive in 2019 with a lot of build-out in Q4, which on a downside hits your margins in Q1. But we have that behind us, and we were lucky enough to have capacity in most places that customers want it. There are, to your point, some hotspots. So we think there's underserved opportunity in certain locations in the world that we are planning to build out this year so that we can better serve the growth in those areas.

I will tell you that corona has had an impact on supply chain. So for example, in Q1, we had a really hard time getting the SSD hard drives that we use in our servers. We were originally told that there was a fire in some giant plant in China. Came to later find out that, that wasn't necessarily the whole story. China had started shutting down, and that's why we didn't get those drives in Q1 and, in fact, didn't get them until this month. So -- and there are various stories throughout the supply chain.

So the good news for us is we were very aggressive in 2019, especially in the back half of the year. We've got an aggressive plan this year. And other than the normal growth in every location, we do believe that there are some pretty large geographies that represent opportunities for Limelight based on what our customers are telling us with respect to demand, and we are working hard to fill that.

James Breen -- William Blair -- Analyst

Great. And then just given the traffic that you've seen across the network and the capacity that you've built in, is there any risk, I guess, of using up all that capacity given what's happening in the markets?

Robert A. Lento -- President, Chief Executive Officer & Director

It depends on the location. We have been caught short in some locations, which, as I talked to you, our version of the capacity hotspot. But in most places, we've been OK. But it is important that we keep adding capacity based on the growth that we're seeing, and we have enough confidence in that growth that we are going to continue with our 2020 build plan.

James Breen -- William Blair -- Analyst

Great. Thank you.

Operator

Our next question will come from Jeff Van Rhee of Craig-Hallum. Please go ahead.

Jeff Van Rhee -- Craig-Hallum -- Analyst

Great. Thanks for taking my question. A couple for me, guys. First on the gross margin side. I just want to revisit that. I don't want to put words in your mouth, but it sounds like gross margins were below your expectations. I don't know you -- I know you don't guide to them for the quarter. You referenced a bit about the linearity of the traffic coming so late in the quarter and having a cost revenue mismatch. But maybe you could just spend a second in terms of what were the incremental surprises or, should I say, headwinds on the gross margin side. Like how would you rank order the one, two or three? I know live events certainly come with attractive margins. It sounds like the linearity played a role. I'm assuming there were some other things in there. Maybe just talk a bit about the rank ordering of those headwinds.

Sajid Malhotra -- Chief Financial Officer

Sure. So let me try to do this, and I'll give you my view of what will drive this. First of all is just the difference between Q4 and Q1. You have an infrastructure in place, you have contracts, agreements, bandwidth, colo, expenses all in place. And if you have lower revenue on all of that fixed cost, you're going to get to lower gross margin, number one. Right?

Number two, even as you have lower revenue, you're busy expanding because you see your business expecting to go up from what was the estimate to a higher number in Q2 and Q3 and ultimately, Q4. So even though you have that, you're expanding and so you're investing more, so that kind of hurts the gross margin some more.

Then you get hit in the last week, 1.5 weeks of the last month of the quarter with higher peaks, so you'll end up paying your vendors even more because they have distributed for you and established new peaks. And so you're paying according to peak, so you'll end up paying a little bit more there. And the customers that you're getting more business from are moving up into tiers or levels or higher volumes, etc, where they get some price advantages as there's more volume. So you've got a mishmash of all of these things happening about the same time. Was my expectation for a gross margin higher? I think at some level, yes, but I was expecting a dip in gross margin from Q4 into Q1 just because I knew that I was looking revenue going from 60-something to 50-something, and I needed to absorb the cost somewhere. So I wasn't particularly surprised, except for a couple of those items that I talked about.

Jeff Van Rhee -- Craig-Hallum -- Analyst

That's helpful. Thanks, Sajid. So I guess as you think about gross margins for Q2 then, I know you don't want to guide to a specific number, but what are the key factors now that you've experienced Q1 that you're watching very closely? And how should we think about gross margins as we trend from Q1 to Q2?

Sajid Malhotra -- Chief Financial Officer

So I am still expanding. Like Bob talked about, we have hotspots. We are putting capacity in there. So I'm going to go ahead and allow costs to go up specifically to match the revenue profile that we have. I have some absence of revenue in some geographies where I have stranded costs. But this is -- it's 100 stories. We've got to manage across the line everywhere, and we are very focused on this. And we'll -- and with the increments in revenue, I expect that the gross margin will move up. Now I would love to tell you that it's going to move up 100 or 200 basis points or 300. I don't know what that number is because a lot of things get factored into all of that, and we'll just have to wait that out.

Jeff Van Rhee -- Craig-Hallum -- Analyst

Yes. Sounds good. And then shifting gears, I guess, to the revenue outlook. It sounds like, I think, as you framed it, you had the room. You could have potentially taken the high end of the range higher. You chose not to. You wanted to build in a little more conservatism. Given the range that as it stands now, what are the scenarios -- I guess at a high level, what are the scenarios that would drive revenue above the high end of the guided range?

Sajid Malhotra -- Chief Financial Officer

So well, there are still a couple of big launches coming on, and the range of outcomes for those big launches and our share of that traffic is a needle mover for what that outcome might look like. Let's just pick -- when sports come back. If they don't happen in front of live audiences in stadium but everybody is watching from home, and I think there's just kind of an insatiable desire to watch some live events and that picks up, maybe there is more revenue than we are anticipating. We are working with existing customers on all kinds of expansion plans that they have and so how those progress has a bearing. And of course, you're always looking to your sales effectiveness and sales teams to kind of go bring on a couple of big customers. So we have many things in play.

Now bringing on 50 customers at the low end of the business doesn't move the needle this year enough for -- kind of to go outside the range. To really go outside of the range, one of your top 20 customers or many of your top 20 customers begin to project or progress with you at a much higher rate than what you originally envisioned. And some of the new launches with the megas gives you more than what you kind of profile for. And you know all along, like I've been saying, when we get estimates from customers, we try to give you guidance around the conservative number, and yet we build for the aggressive number. And customers typically share with us a range of outcomes. You don't want to be stuck in a situation where they had more traffic to give and you didn't have capacity to take in.

Jeff Van Rhee -- Craig-Hallum -- Analyst

Very helpful. Last one for me then I just -- as it relates to the pipeline, I know you've commented in a number of anecdotes or snapshots of data points in terms of the progress you've made there. Maybe you could just talk about the pipeline and composition, what type yields, how that's changed in the last quarter or two. Maybe just a little more color in there. You gave one data point, but maybe a bit more there on what's in the pipe.

Robert A. Lento -- President, Chief Executive Officer & Director

So the pipeline remains healthy, as I stated earlier. We saw some of the deals that we expected to close in March -- typically in a quarter, for whatever reason, the third month of the quarter tends to be the strongest from a closing new deals perspective. And we saw as we got into March, things from a decision-making standpoint slowed down a little bit. But we look at that pipeline. I know Tom, Head of Sales, looks at daily, but I do a weekly review with him on that.

What I'm most encouraged by is the quality of the deals both in terms of size of customer, size of deal and fit with our strategic focus, meaning they're very video-focused deals. And so we've got, for example, a few customers now in the pilot with us that are very exciting opportunities for us, and we believe that those will close in this quarter. And so we're very pleased with the size of the pipeline but even more so with the quality both from size of deal and fit with our strategic focus. Hopefully, that's helpful.

Jeff Van Rhee -- Craig-Hallum -- Analyst

That's helpful. Thanks so much guys.

Robert A. Lento -- President, Chief Executive Officer & Director

Okay. Thanks Jeff.

Operator

Our next question will come from Tim Horan of Oppenheimer. Please go ahead.

Tim Horan -- Oppenheimer -- Analyst

Thanks guys. Do the virtual MVPD guys, are they meaningful customers? And if people replace linear with virtual MVPDS, can that have a material impact to you guys?

Robert A. Lento -- President, Chief Executive Officer & Director

Not yet. I mean we do have customers that we're doing linear with, but our bigger volume is tended to be in the video-on-demand and the live streaming. We've invested heavily in live streaming with a real-time streaming service and just in general, being able to serve live events. When you look at the pure data, the Internet was projected to grow at 25%, video at 35% and live, 70%, right? So it made sense to put that push there. I still believe it will grow. That 70% will probably be right over the next few years. But this year, it probably won't be. But we believe that there's tremendous opportunity for us in live, in video-on-demand. And yes, we're talking to many linear live -- talking to companies with many linear live opportunities, but that has not typically been a big business for us.

Tim Horan -- Oppenheimer -- Analyst

And then what can turn that around? I know you're talking to them and you prepared the network for it, I guess. Is it just that it's not a very large business now? Or do you have less market share that you would hope to get?

Robert A. Lento -- President, Chief Executive Officer & Director

I would say we have less market share than we hope to get. We just -- we hadn't really focused that much on it. And we are now -- in the pipeline, there are several meaningful opportunities in that area.

Tim Horan -- Oppenheimer -- Analyst

Great. And do you think your customers are happy with the overall industry, the CDN industry's kind of performance here during this crisis? And I guess the same thing for price? And do they feel that the industry has enough capacity for them to rely on you guys? Not just you, you and your competitors probably.

Robert A. Lento -- President, Chief Executive Officer & Director

Yeah. That's an interesting question. I would say from what I hear from customers that Limelight and not only Limelight, Limelight and its competitors have done a really good job. That being said, there have been some problems around the world. You may have read that for example in Europe several of the European governments have asked people like Disney and Amazon Prime and Netflix and others to scale down the bit rate, so not to deliver HD and 4K, but to go down to standard definition or lower. And so there are ways in which we can help the ISPs with their congestion.

So people like to think of the Internet as having unlimited capacity and of course it doesn't. Given that I would say, the industry has performed really well during this time. And there have been some issues in some areas. Some of them have been on CDN side. Some of them have been on the ISP side. But there's corrective actions that have been put in place to help alleviate that. And I'd say, overall, Limelight and its fellow competitors should feel very good about the way we've stepped up during this time of crisis.

Tim Horan -- Oppenheimer -- Analyst

Great. And so just last one for Sajid. Sajid, can you give us some color on your thinking of how much edge can contribute to incremental revenues over the next few years? Or five years from now what percentage of revenues it could be? Just you've gotten a lot more data and intelligence and you're set -- you're getting more visibility on the product. Just hard for us to understand from the outside what this can really mean.

Sajid Malhotra -- Chief Financial Officer

Sure. I think that the edge TAM is much larger than the CDN TAM. So let's just first agree on the overall market share. I think it has more competitors than the CDN business. But I think what we bring to the marketplace is rather unique, because of our last mile connectivity, because of how pervasive we are around the world and our global deployed infrastructure that is connected with a secure private backbone. So that situation for us is rather unique. Of small numbers the growth rates are and they should be very high in the early years. But you know, what if this is not $100 million business three, four, five, years from now then I think we would have missed something. I mean that's kind of -- we are setting this up to be an equal leg at some point to the base business that we have and that's what the opportunity is.

Tim Horan -- Oppenheimer -- Analyst

Great. Well, I got dozens of more questions but will follow-up.

Sajid Malhotra -- Chief Financial Officer

Yes. We'll follow-up with you later. Thanks. I'll just give room for a few more that we see here.

Operator

Our next question will come from Mike Latimore with Northland Capital Markets. Please go ahead.

Mike Latimore -- Northland Capital Markets -- Analyst

Thanks. You talked about some potential -- or some pilots that could potentially turn into -- close and turn into customers in the quarter. Would you start seeing revenue then? Or how long would the delay be to start seeing revenue on that?

Robert A. Lento -- President, Chief Executive Officer & Director

Meaningful revenue would probably not occur until Q3, right, because most large customers don't just slam you with a lot of traffic unless it's a launch. But typically, when they're migrating from one TV into another or adding you into the mix usually for -- with the health of both sides, they do that in a fairly measured way so that we can build the cash on our side of the most popular content and make sure that we have the opportunity to tweak the various configurations to ensure the highest level of performance on delivery.

And so usually, it's a fairly steady ramp after the pilot is done. And so my expectation is as you go into Q3 and for sure into Q4 the customers that we're doing pilots with in Q2 will have meaningful revenue in Q3. And then whatever the run rate will be that'll be achieved probably three months after that.

Mike Latimore -- Northland Capital Markets -- Analyst

Got it. And then did you give the kind of percent of revenue from your top customer, top 20 customer? I might have missed it.

Sajid Malhotra -- Chief Financial Officer

We did not.

Mike Latimore -- Northland Capital Markets -- Analyst

Okay. Do you have that? Or do we wait until the 10-Q on it?

Sajid Malhotra -- Chief Financial Officer

I think -- Dan, do you have that handy? I can -- I'll read that back to you before we hang up here while Dan looks for it, and maybe we can just take the next question in the meantime.

Tim Horan -- Oppenheimer -- Analyst

All right. Just last one. You talked about the spike in traffic and end of margin now and through April. Did the -- did online gaming contribute much to that? Or was it really kind of OTT video stuff?

Sajid Malhotra -- Chief Financial Officer

The sustained traffic comes from OTT video. The online gaming sees spikes for a short period of time when a game is released, when a Fortnite is released or if some other game is released or a new version's release, but most of the sustained traffic comes from video consumption.

Mike Latimore -- Northland Capital Markets -- Analyst

Got it.

Daniel R. Boncel -- Vice President of Finance & Principal Accounting Officer

The answer to that question was 77%.

Mike Latimore -- Northland Capital Markets -- Analyst

Okay. Thank you.

Robert A. Lento -- President, Chief Executive Officer & Director

All right. Thank you, Mike.

Operator

Our next question will come from Lee Haddad [Phonetic] of AIGH Investment Partners. Please go ahead.

Lee Haddad -- AIGH Investment Partners -- Analyst

Hi, thank you gentlemen for taking my call. I wanted to ask -- I'm always very excited when I see the announcements of how Limelight is introducing new features for capacity and latencies, most recently, the Live Push Ingest. Really, really wonderful stuff that's always keeping Limelight really in the -- ahead of the business in the CDN world. The part that I don't hear a lot about, which everyone else in tow was make a hoo-ha, is the security. And I understand about the private network aspect of Limelight being a tremendous leg up, but it doesn't seem to be something that's highlighted or mentioned now in the sort of state of confusion of the world, sort of any -- what's going on in terms of security measures that Limelight is implementing, etc? It would be great to hear something about that.

Robert A. Lento -- President, Chief Executive Officer & Director

We appreciate the comment. Obviously, security is important to lots of companies. At Limelight, we made the decision a few years ago that instead of buying a security company or building products on our own that we would partner to ensure we had best-in-class products and services, and we did that with Radware who's based in Israel and with Neustar based here in the US, both very important partners to us. The security business is important to our customers. It's a growing business for us. In fact, one of the largest deals that we signed last quarter in Q1 was for security with one of our existing customers. So a nice expansion of that relationship, and it was leveraging our partner, our partner's intellectual property to do that. So it's important for us. It's important for our customers. And as I said, we really appreciate and value the relationship we have with both Neustar and with Radware on that front.

Sajid Malhotra -- Chief Financial Officer

One more question, so lets take that and...

Operator

Our next question will come from Colby Synesael of Cowen.

Colby Synesael -- Cowen & Company -- Analyst

Sorry for jumping back on. But you had mentioned in your prepared remarks that you were considering having to extend payment terms for some customers, and you mentioned some verticals as potentially having trouble whether it's in -- I think you might have mentioned travel or hospitality or lodging. Have you already started to do these things? Or would you anticipate this becoming a bigger potential risk in the second quarter? And what can you talk to us -- can you talk to us about what happened with bad debt in the first quarter? And any expectations as it relates to the second quarter?

Sajid Malhotra -- Chief Financial Officer

Yes. Colby, I think that's a really good question. And I think in this industry, when we say we have some 500 and some odd customers, we're very fortunate with the names of those customers. Our list reads like a who's who, and I don't think any other company has 20 customers accounting for 77% of the revenue, which I consider in the secure space, where we don't have an issue with bad debt and with the credibility of the customers and their payment terms or their liquidity. So I think we are very, very fortunate in that regard.

But on the other hand, we do have small customers that are all over the world really, really small. And if somebody says, hey, listen, I had a commit of this level or I have to pay you, would you go from 30% to 45% while I sort through this? I'm not going to be a pain in the neck around that. I just don't think that, that's right. I think in the long term, that hurts us more than it helps us. And I think it should not hurt my balance sheet. I don't think it should add more to my receivables. We'll continue to target 50 to 55 days for AR, and we'll continue to execute against that. Now if something large happens, obviously, we'll kind of go ahead and call that out. But right now, it's not in high demand, but I do want to lay it out that it is out there. And to the extent it is and we can be helpful in our small way, we will be. And as far as that goes in the first quarter, nothing changed at that level, right? We are still able to collect and feel very good about the quality of our AR.

Colby Synesael -- Cowen & Company -- Analyst

Great. So as you -- as it stands today from what you've seen as of, I guess, April 23, nothing that you would, again, call out for the second quarter that you would consider to be material in terms of nonpayment?

Sajid Malhotra -- Chief Financial Officer

Yes.

Robert A. Lento -- President, Chief Executive Officer & Director

No.

Sajid Malhotra -- Chief Financial Officer

Or our inability to manage through that except for -- go ahead, Bob.

Robert A. Lento -- President, Chief Executive Officer & Director

Yes. I was just going to say, Colby, it's a really interesting question because, as you know, the government has come out with a PPP program and Saj and Dan moved very quickly to analyze whether we would qualify for a loan under that program given the uncertainty that we could be facing. And we look at that very closely and felt it was best for us to pass because we feel very fortunate to be in a solid financial position with good business momentum and made that decision many days ago. And now there's a lot of guidance coming out from the small business administration, and you're seeing other companies that have taken that now giving it back. So -- but it really forced us to really dig deep into the question you asked and how confident do we feel about that, and we made that determination that we would pass on the opportunity even though we technically qualified for that program based on our confidence in our business and our customers.

Colby Synesael -- Cowen & Company -- Analyst

Okay. Thank you.

Operator

[Operator Closing Remarks]

Duration: 71 minutes

Call participants:

Daniel R. Boncel -- Vice President of Finance & Principal Accounting Officer

Robert A. Lento -- President, Chief Executive Officer & Director

Sajid Malhotra -- Chief Financial Officer

Lee Krowl -- B. Riley FBR -- Analyst

Michael Turits -- Raymond James -- Analyst

Colby Synesael -- Cowen & Company -- Analyst

Rishi Jaluria -- D.A. Davidson -- Analyst

James Breen -- William Blair -- Analyst

Jeff Van Rhee -- Craig-Hallum -- Analyst

Tim Horan -- Oppenheimer -- Analyst

Mike Latimore -- Northland Capital Markets -- Analyst

Lee Haddad -- AIGH Investment Partners -- Analyst

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