Tom Barth F. Thomson Leighton - Co-Founder, Chief Executive Officer and Director James Benson - Chief Financial Officer, Chief Accounting Officer and Executive Vice President

Sterling P. Auty - JP Morgan Chase & Co, Research Division Jennifer Swanson Lowe - Morgan Stanley, Research Division Heather Bellini - Goldman Sachs Group Inc., Research Division Mark Kelleher - D.A. Davidson & Co., Research Division Aaron Schwartz - Jefferies LLC, Research Division Colby Synesael - Cowen and Company, LLC, Research Division Gray Powell - Wells Fargo Securities, LLC, Research Division Michael J. Olson - Piper Jaffray Companies, Research Division Michael Turits - Raymond James & Associates, Inc., Research Division Philip Winslow - Crédit Suisse AG, Research Division James D. Breen - William Blair & Company L.L.C., Research Division Ben Z. Rose - Battle Road Research Ltd. Edward Maguire - CLSA Limited, Research Division Timothy K. Horan - Oppenheimer & Co. Inc., Research Division Kevin Smithen - Macquarie Research

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 Akamai Technologies Earnings Conference Call. My name is Derrick and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay. I would now like to turn the conference over to Mr. Tom Barth, Head of Investor Relations. Please proceed.

Thank you, Derrick, and good afternoon, and thank you for joining Akamai's Fourth Quarter and Year-end 2013 Earnings Conference Call. Speaking today will be Tom Leighton, Akamai's Chief Executive Officer; and Jim Benson, Akamai's Chief Financial Officer. Before we get started, please note that today's comments include forward-looking statements, including statements regarding revenue and earnings guidance and the expected closing of our acquisition of Prolexic Technologies. These forward-looking statements are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied by such statements. Additional information concerning these factors is contained in Akamai's filings with the SEC, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements included in this call represent the company's view on February 5, 2014. Akamai disclaims any obligation to update these statements to reflect future events or circumstances. As a reminder, we will be referring to some non-GAAP financial metrics during today's call. A detailed reconciliation of GAAP and non-GAAP metrics can be found under the financial portion of the Investor Relations section of our website. With that, let me turn the call over to Tom. F. Thomson Leighton: Thanks, Tom, and thank you, all, for joining us today. Q4 was an excellent quarter for Akamai. We generated record revenues and earnings, with both exceeding the high end of our guidance range. Q4 revenue was $436 million, up 15% year-over-year and up 21% when adjusted for the ADS divestment and foreign exchange headwinds. Revenue exceeded our expectations in every solution category and in every geography. Non-GAAP net income for the fourth quarter was $100 million or $0.55 per diluted share. Our strong results in the quarter capped off a very solid year for Akamai. For the full year, we grew revenue to nearly $1.6 billion, up 20% over 2012 when adjusted for the ADS divestment and foreign exchange headwinds. We generated non-GAAP net income of $367 million or $2.02 per diluted share, up 26% over 2012 and up 15% when adjusted for the change in depreciation methodology that we introduced at the start of the year. And we continue to have strong cash flow generation, with $564 million in cash from operations during 2013. I'll be back in a few minutes to talk more about the progress that we made in 2013 and the opportunities that lie ahead. But first, let me turn the call over to Jim to review our financial results in detail and to provide the outlook for Q1. Jim?

Thank you, Tom. Akamai had a great fourth quarter and a very strong 2013 fiscal year. Before I get into the details, I would like to remind you that the ADS divestiture and the depreciation methodology change for our network assets continued to impact our 2013 reported results and growth rates. Where appropriate, I will point out the impact of these items, so you can better understand the operational performance in the quarter. As Tom outlined, Q4 revenue came in well above the high end of our guidance range at $436 million, up 15% year-over-year or up 21%, if you adjust for the ADS divestment and foreign exchange headwinds. As I mentioned in our last call, there were 2 factors that would play a large role in where we would land relative to our fourth quarter guidance. The first was the timing of the renegotiation with our largest media customer, which did not impact the fourth quarter. The second was the strength of the holiday season, which exceeded our expectations in every solution category and in every geography. Turning to our media delivery solutions. Revenue was $207 million in the quarter, up 19% over Q4 of last year and up 10% sequentially. Traffic and revenue growth continued to be very strong across our video, gaming, social media and software download customer base and particularly strong among our largest, most strategic accounts. Revenue from our performance and security solutions was $192 million in the quarter, up 18% over Q4 of last year and up 11% sequentially. Within this solution category, we continue to see strong demand for both our website and application acceleration solutions, as well as our security offerings. Notably, signings for these solutions were the strongest we saw all year. We believe this represents an important proof point for the traction we began to see from our sales force investments. Finally, revenue from our service and support solutions was $36 million in the quarter, up 36% over Q4 of last year and up 11% sequentially. We continue to see strong traction in service attachment rates to both our core media and core performance and security offerings. Turning now to our geographies. Sales in our markets outside North America represented 29% of total revenue in Q4, flat from the prior year and up 1 point from Q3. Revenue outside North America grew 17% from Q4 of last year and 13% sequentially, with currency fluctuations having a negative impact on revenue of approximately $4 million on a year-over-year basis and a positive impact of roughly $2 million on a sequential basis. Excluding the impact of currency, revenue outside North America grew 20% from Q4 of last year and 12% sequentially. We saw continued strong growth in our Asia-Pacific geography and performance in our EMEA markets was better than expected despite continued macroeconomic headwinds in Southern Europe. Revenue from North America grew 15% from Q4 of last year and 9% sequentially. If you adjust for the impact of the ADS divestiture, North America grew a healthy 21% year-over-year. North America continued to perform very well for us and had particularly strong growth in our large strategic accounts. And finally, revenue through resellers represented 21% of total revenue in Q4. Moving on to costs. We were pleased with our continued execution on managing cost of goods sold, which resulted in another quarter of expanding gross margins. Our cash gross margin was 78%, up 2 points from the prior quarter and up 3 points from the same period last year and coming in at the high end of our guidance range. As we have demonstrated over the last couple of years, our network operations and engineering teams continue to execute well on managing cost of goods sold through the implementation of ongoing platform efficiency initiatives. GAAP gross margin, which includes both depreciation and stock-based compensation, was 69%, up 2 points from Q3 and up 6 points from the same period last year. This year-over-year improvement included a favorable impact of roughly 2 points due to the depreciation methodology change that took place at the beginning of the year. GAAP operating expenses were $186 million in the quarter. These GAAP numbers include depreciation, amortization of intangible assets, stock-based compensation, restructuring charges and acquisition-related charges. Excluding these charges, non-GAAP cash operating expenses were $150 million, up $21 million from Q3 levels and slightly above our guidance range for the quarter, due primarily to an increase in year-end performance-based compensation accelerators from the revenue overachievement and an increase in demand generation spending. Adjusted EBITDA for the fourth quarter was $192 million. That's up 11% from Q3 levels and from the same period last year. Our adjusted EBITDA margin came in at 44%, at the high end of our guidance range due to the strong revenue performance. This result is consistent with Q3 levels but down 2 points from Q4 of last year, driven by our continued targeted investments in the business. For the fourth quarter, total depreciation and amortization was $50 million, which included $37 million of network-related depreciation, $8 million of G&A depreciation and $5 million of amortization of intangible assets. Interest income for the fourth quarter was $1.5 million, roughly flat with Q3 levels. Moving onto earnings. GAAP net income for the quarter was $80 million or $0.44 of earnings per diluted share. Non-GAAP net income was $100 million for the quarter or $0.55 of earnings per diluted share and coming in $0.02 above the high end of our guidance range due to the strong operational execution areas highlighted earlier. As a reminder and as we included in our Q4 guidance, $0.03 of our Q4 EPS is attributable to the depreciation methodology change which we made in the first quarter to extend the useful lives of our servers by 1 year. For the quarter, total taxes included in our GAAP earnings was $37 million based on a tax rate of about 31% and taxes in our non-GAAP earnings were $50 million based on a tax rate of about 33%, which was slightly favorable to guidance due primarily to higher-than-expected foreign earnings. Our weighted average diluted share count for the quarter was 182 million shares. With our strong first quarter results, we finished the year with nearly $1.6 billion in revenue, an increase of 15% over 2012 or an increase of 20%, when adjusted for the ADS divestment and foreign exchange headwinds. Cash gross margin was 77%, up 3 points from the prior year and the second straight year of improved gross margins. Full year GAAP gross margin came in at 68%, up 7 points from 2012 or up 4 points, if you adjust for the depreciation methodology change introduced at the beginning of 2013. We are extremely pleased with our margin expansion this past year and we believe we can maintain our ability to scale the network going forward. Full year GAAP operating expenses were $653 million. These GAAP numbers include depreciation, amortization of intangible assets, stock-based compensation, restructuring charges and acquisition-related charges. Excluding these charges, non-GAAP cash operating expenses for the full year were $517 million, up 28% on a year-over-year basis. As we discussed throughout 2013, we are committed to investing organically and through M&A to drive innovation and future growth. For the full year, we added over 800 employees across the company, focused primarily in sales and supporting go-to-market capacity, service and customer support staffing, network efficiency scaling and engineering innovation. Full year adjusted EBITDA was $697 million, up 13% from 2012. And full year adjusted EBITDA margin was 44%, down 1 point from the prior year. GAAP net income was $293 million or $1.61 of earnings per diluted share for 2013. $0.18 of our EPS is attributed to the depreciation methodology change. Non-GAAP net income for the year was $367 million or $2.02 of earnings per diluted share. That's up 26% as reported from 2012. This number includes the full year non-GAAP tax charge of $180 million based on a full year non-GAAP tax rate of 33%. Now I'll review some balance sheet items. Days sales outstanding for the fourth quarter was 55 days, down 2 days from last quarter and down 1 day from Q4 of 2012. Capital expenditures in Q4, excluding equity compensation, were $63 million, slightly above our guidance. As a reminder, this CapEx number includes network investments, as well as capitalized software development, facilities and IT-related expenditures. Cash generation continued to be very strong. Cash from operations for the fourth quarter was $172 million. And year-to-date, we generated $564 million in cash from operations. At the end of Q4, we had roughly $1.2 billion in cash, cash equivalents and marketable securities on the balance sheet. During the quarter, we spent approximately $48 million on share repurchases, buying back 1.1 million shares at an average price of just over $45. For the full year, we spent $160 million, buying back over 3.9 million shares at an average price of just over $41. And since the inception of our share repurchase program in April 2009 through Q4 2013, we have spent a total of $785 million, buying back over 26 million shares at an average price of just under $30. In summary, we are very pleased with how the business performed in Q4 and the full year. We continue to execute well, deliver strong revenue growth, manage network cost effectively and make the necessary investments in the business to build a momentum -- a foundation for sustained long-term growth. And we believe we have good momentum as we head into 2014 and are expecting another strong quarter in Q1. Before I get into the guidance specifics for the first quarter, I want to address 2 items that are related to our guidance. First, we outlined in our last call that we are in the process of renegotiating the contract and pricing terms with our largest media customer. Our Q1 guidance includes this customer's new pricing terms retroactive to January 1. Second, since the Prolexic acquisition is not yet closed, we have not included any impact of Prolexic in our Q1 guidance. With these 2 factors in mind, we are expecting Q1 revenue in the range of $426 million to $442 million. This range represents 17% to 21% year-over-year growth, when adjusted for the ADS divestiture and foreign exchange headwinds. At the midpoint, this translates to 19% year-over-year growth. At current spot rates, foreign exchange is expected to have a negative impact of approximately $1 million compared to Q4 and $2 million compared to Q1 of last year. We expect cash gross margins to remain flat to Q4 levels at 78% and GAAP gross margins to come in at 68%. Q1 non-GAAP cash operating expenses are projected to be $145 million to $150 million, down slightly from Q4 levels as commission accelerated reset at the beginning of the year. We anticipate EBITDA margins of about 44%. However, as I have mentioned previously, we intend to operate in the low-40s EBITDA margin over time. With this revenue and spend configuration, we expect non-GAAP EPS in the range of $0.51 to $0.55. This EPS guidance assumes taxes of $48 million to $52 million based on an estimated quarterly non-GAAP tax rate of 34%, which is negatively impacted by about 1 point due to the expiration of the federal R&D tax credit. This guidance also reflects a fully diluted share count of roughly 182 million shares. On CapEx, we expect to spend approximately $72 million to $77 million in the quarter, excluding equity compensation. This is an uptick in spend due to the addition of several large facilities and IT investments that are focused on scaling our infrastructure. Let me now give you a brief update on the Prolexic acquisition. We are working our way through the regulatory review process, but we cannot provide an exact closing date. When the deal does close, we intend to integrate the operations of the Prolexic business into our existing security business. And going forward, we will not be reporting Prolexic separately. However, to give you some color around the impact to our business, Prolexic's current revenue run rate is roughly $5 million per month. We also expect Prolexic to reduce Akamai's organic EBITDA margins by about 2 points and to be slightly dilutive to non-GAAP earnings by $0.06 to $0.08 in the first 12 months. Once we integrate the companies, we are confident that we can grow and scale the business to drive profit growth over the longer term with the anticipated growth in the business and market opportunity. In closing, we accomplished a great deal in 2013 and remain confident in our ability to execute on our plans for the long term. We look forward to having an opportunity to go into more details with you about the business and future trends in the industry at our upcoming Investor Summit in Cambridge on March 25. Now let me turn the call back over to Tom. F. Thomson Leighton: Thanks, Jim. Akamai is stronger and more profitable than ever. And I believe that our financial results demonstrate that the fundamentals across our business are solid and that we continue to be a key player in the growth of the Internet. February marks the 15th anniversary of the beginning of our commercial service when we first delivered a single object for a single website. We've come a long way since those early days in 1999. Today, Akamai delivers a large portion of the web content that matters, handling over 2 trillion requests per day from over 1 billion end users and supporting traffic levels of over 20 terabits per second. In the United States, we are trusted by 97 of the top 100 Internet retailers, 9 of the top 10 banks, 20 of the top 24 cable networks and 72 of the top 100 media companies, including 19 of the top 25 gaming companies. In Latin America, we support 8 of the top 10 e-commerce companies, all top 3 banks and the 5 largest media conglomerates in Brazil. In Europe, we are trusted by 5 of the top 7 automotive companies, 6 of the top 10 banks and 21 of the top 25 the media companies. And in Asia, our customers include 4 of the top 5 airlines, 5 of the top 10 banks, 3 of the top 5 stock exchanges and 9 of the top 10 media companies. It took a lot of hard work over many years by our very talented employees to achieve these impressive results. And we believe that work has positioned us well for an even more promising future. Everyone and everything is getting connected, creating a new environment that some refer to as the Internet of Everything, others call the Internet of Things and we know as the Hyperconnected World. Whatever you choose to call it, vast amounts of traffic are poised to move online and users everywhere are demanding near-instant access to applications and information from a myriad of connected devices. This demand represents both a challenge and an opportunity. And the investments that we've made over the past several years should help us to address the challenges and to capitalize on the opportunities that lie ahead. 2013, in particular, was a year in which we made significant investments to pave the way for future growth. For example, in our media business, we expanded our network footprint to nearly 150,000 servers in over 1,200 networks spanning over 90 countries. We reduced our network costs to improvements in software and hardware and the development of more robust and scalable network management processes. And we forged deep and strategic relationships with leading carriers such as AT&T, Orange, Swisscom, Korea Telecom and Türk Telekom. We expect these relationships will enable us to grow revenue more economically and to further improve end user performance. We're also excited to be continuing our work with the world's leading device manufacturers and technology companies. For example, at the recent Consumer Electronic Show in Las Vegas, Akamai teamed up with Qualcomm to showcase the online delivery of 4K videos. This new ultra high-definition format is expected to quadruple the resolution of the average HDTV. Delivering this level of quality and scale presents many technical and financial hurdles for content owners and service providers, problems that Akamai is already solving. We also joined forces with Qualcomm to demonstrate the significant performance benefits and cost savings that can be attained by having Akamai software run on a device in the home, such as Qualcomm's Atheros Smarthome gateway. Demonstrations like this provide a glimpse into the future, where we endeavor to locate our software in homes, offices and devices everywhere, thereby enabling faster and more secure access to media and applications at lower costs. Akamai has always worked closely with our customers to provide the ultimate in online viewing quality. Last weekend, Akamai delivered the Super Bowl online to over 0.5 million concurrent viewers with an aggregate traffic level of over 1 terabit per second, making it one of the most viewed live streams ever. Later this week, Akamai will be providing the streaming, site acceleration and security services for NBC's online coverage of the Winter Olympics Games in Sochi. The Sochi Olympics marks the first time that all the competitions will be streamed live. For live and on-demand video delivery, NBC Olympics is leveraging Akamai's digital media solutions to stream all 98 events, including highlights, athlete interviews and profiles. Akamai was chosen by NBC in part because our suite of cloud-based, media workflow storage and delivery solutions provides the necessary quality and scale to solve the challenges of multi-device media consumption. We also made major investments in our performance and security businesses in 2013, significantly growing our sales capacity and launching several new products and key features. We ended the year slightly ahead of our sales hiring plans, growing our direct rep count by over 40% in 2013. We believe this additional capacity will provide us with the opportunity to not only reach new prospects and new geographies, but also to provide additional solutions to our installed base, particularly in performance and security. Our product releases focus on self-service ability, more advanced reporting and on improving real end user experiences, especially for mobile devices. Our customers can now see how their websites and applications perform for real end users and they can dramatically improve that performance by leveraging the many innovations that Akamai brought to market in 2013 as part of our Ion suite of solutions. Cyber attacks continued to increase in both scale and sophistication in 2013, requiring a distributed approach to defending a website and the data behind it. Akamai Security Solutions leverage our global platform to provide a large and powerful layer of defense for any website or web application. As a result, security was our fastest-growing solution line across all of our geographies in 2013, as both our existing customers and new prospects turn to Akamai for help. At the end of the fourth quarter, nearly 800 customers were using our security products and nearly 230 had purchased our flagship Kona Site Defender solution. Our portfolio of security services will be significantly enhanced in the near future when, as Jim mentioned, we expect to close the Prolexic acquisition. Once the acquisition closes, Akamai will extend our security solutions to protect all enterprise applications against DDoS and other malicious attacks, substantially enhancing the completeness of our offerings. In summary, 2013 was an excellent year for Akamai. In addition to our solid financial performance, we continue to build the foundation that will propel our future growth. That's important because, as exciting as the last 15 years have been, I'm even more excited about the opportunities that lie ahead. Thank you for your time today. Now Jim and I will take your questions.

[Operator Instructions] And our first question will come from the line of Sterling Auty, JPMorgan. Sterling P. Auty - JP Morgan Chase & Co, Research Division: One question and one follow-up. I just want to make sure that we're clear. In terms of the guidance for the first quarter, you mentioned the price going into effect retroactively to January 1. Are you saying that, that contract renewal is complete and enforced? Or you're saying that once it's complete, you'll roll it back to January 1? And then, I have one follow-up.

So it's the latter, which is the -- we've agreed to pricing terms. We have to finalize all the -- kind of, dot the i's and cross the t's but it will retroactive pricing to January 1. And that's what's reflected in the guidance. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Okay. But the basic terms are -- you've got to go through the contracting process, but all the major items are [indiscernible].

That's correct. Sterling P. Auty - JP Morgan Chase & Co, Research Division: Okay. And then, one follow-up in a different area. You talked about the strong signings in security and performance as evidence of the traction of productivity in your sales hires. Can you give us a little bit more color there? So specifically, what are you seeing in terms of the productivity? What is it that's finally allowing them to turn the corner? And how should we think about what that will drive as 2014 unfolds?

That's a good question. I think we shared with you all year that there were going to be 2 things: One, you need to get the reps onboard; and then, two, we will be monitoring the productivity of the reps and we call it, by tenure class. And we said that it takes several quarters before a rep is fully productive. And as you know, we only began to ramp up the sales force investments really in the back half of 2012. And so, call it, the first class of tenured reps is, kind of, coming full circle here. And what we saw across the board was we just saw, again, all the reps by tenure class are tracking to our expectations and you're starting to see the benefit now of reps that have been a long -- in the company for a longer period of time are beginning to produce. And so, again, I would say it wasn't a big driver of the revenue overachievement in Q4, but that strong bookings, which was significantly higher than it had been all year, I think, is a proof point of what we've been saying, which is we expect to see accelerating revenue growth in the performance and security solutions category in 2014. I think this is a really important proof point, that the sales force is onboard, they're trained and we're starting see some productivity from them that we're expecting to see yield revenue growth in 2014.

The next question is from the line of Jennifer Lowe, Morgan Stanley. Jennifer Swanson Lowe - Morgan Stanley, Research Division: And maybe even following up on that last train around the guidance. We were impressed to see a guidance that basically implies revenue flat quarter-over-quarter, which is sort of normal seasonality despite what I would assume is a pretty material reduction in revenue from the large digital media customer. So can you just give us a little color on what's offsetting that price decline at the large customer? Is there anything unusual in Q1 that we should be thinking about? Or is it really just the demand in performance and security offsetting some of the pricing impacts there? How should we, sort of, contextualize the guidance relative to what is normal seasonality?

Sure. I think the way to think about it, I think the business, in general, across the board is very strong. It's strong in the media business, it's strong in performance and security, it's strong in service and support. And one of the reasons why we provided some color about this large customer renegotiation in Q4 is we wanted to make sure it was open and transparent that the rest of the business is performing very well. And I think what this is reflecting in our guidance is you can see the rest of the business is performing very well. That pricing impact is factored into the guidance and it's -- as we said, this is a customer that has not had a pricing adjustment for several years. So it is a significant impact. But the rest of the business in media and in performance and security is just compensating for that. And it's just offsetting what is a headwind from 1 particular customer. Jennifer Swanson Lowe - Morgan Stanley, Research Division: Great. And then, just one follow-up for me. Given the strong demand that you're seeing and the 40% growth in sales headcount last year. What are you thinking about in terms of the level of investment into sales this year?

Well, we're going to continue to make investments in the sales force. We haven't specifically provided guidance around what that's going to be, but you can expect that we're going to be adding sales reps at, kind of, a similar rate clip in 2014.

Your next question is from the line of Heather Bellini, Goldman Sachs. Heather Bellini - Goldman Sachs Group Inc., Research Division: Two questions. One is -- regards to some comments that you made, I think, a couple of months ago about the impact that the NSA and the spying, it has the potential to impact your business outside of the U.S. So I was wondering if you could touch a little bit about that. And then, secondly, just in relation to what happened last month regarding net neutrality and kind of your views on how that might impact the industry. F. Thomson Leighton: Okay. First, let me make it really clear that the PRISM press has had no meaningful impact on our business. And I don't anticipate it will. It is not a good thing out there. It does cause conversations to take place. There might be a deal or 2 in Germany that take longer, but that's not impactful in any meaningful way to our business. So I want to make that really clear. Second, in terms of net neutrality, I think there's still a ways to go before all that plays out. As you may know, CDNs were excluded as part of the net neutrality regulations in the first place. To the extent that changes are eventually made that are beneficial to the carriers, I think that's either neutral or beneficial to Akamai. As you know, we partner very closely with the carriers. We have deep strategic relationships with several of the major carriers. And so, if something happens that's favorable to them, being a major technology provider to them, that is helpful to us, I think.

The next question is from the line of Mark Kelleher, D.A. Davidson. Mark Kelleher - D.A. Davidson & Co., Research Division: Wanted to go back to the contract that you renegotiated. Is there any timing, any length of time that you can give us some insight on that? I'm just wondering when we need to worry about this again coming up. And then, just as a follow-up, is there any sense, within that contract negotiations that you discussed were -- may eventually, as large content provider sometimes do, bring their CDN in-house?

So we're not going to provide any details about the customer negotiation. That's us -- between us and the customer. So we're not going to give you the average contract length or any of that. I can tell you that the pricing impact is as of January 1 and we expect this customer to be a continued customer for us going forward. F. Thomson Leighton: And in terms of the do-it-yourself, generally, any very large media company at one time or another, I think, in the past or currently, is looking at a do-it-yourself solution. That is not uncommon. Do-it-yourself, as we've always talked about, is one of our largest competitors. It's a lot harder than people think, though, to really do the delivery at scale, continually improving it and to continually be reducing the cost for it. And we've seen examples where very large media companies have gone off and done it and then, within some small number of years, realized that it's not core to them and they're not doing it as well as they had hoped. And they actually come back and use Akamai again. In fact, there's a large media company today that's nearing the second end of that cycle. It's not as -- not so easy to do and we put a lot of effort into doing it really well and to continually improving the quality, the scalability and the cost.

Your next question is from the line of Aaron Schwartz, Jefferies. Aaron Schwartz - Jefferies LLC, Research Division: Two questions, if I could. First, on the media growth there, it seemed like the holiday or e-commerce metrics for you were probably a little bit of an uptick relative to what you saw last year. And I was wondering if there is any way you could differentiate between, sort of, the traffic growth you saw and then also the download activity -- you saw for download activity that may have been either directly or indirectly related to e-commerce sales just -- as just people sort of activate new devices around the holiday season? And then, the second question on the margins. I know you're not including Prolexic in the guidance. But if we assume the dilution you spoke to, your longer-term margin is still sort of below what would get us there. And I'm just wondering what the delta would be there. Is that just continued investment in the business that we should think about? Or is this just some wiggle room for potential future and organic deals? If there's any way you can, sort of, reconcile the 2 there, that would be great.

Sure. So to take your first -- and I'm glad you asked on the holiday season. I think, sometimes, people think that the holiday season impact is really just the commerce effect and it's really much more than that. The -- there's a significant amount of new devices that get released around the holiday season that drives a lot of traffic. There's usually a significant number of software downloads or gaming releases that come around the holidays that drive a lot of traffic. And really, what we saw in Q4 was -- as I mentioned, it was across the board. We saw very strong growth in our social media customers. We saw very strong growth in our video delivery customers. We saw very strong growth in gaming. We saw very strong growth in software downloads. So it wasn't 1 area, it was all areas, all 4 areas that we talked about as far as secular, kind of, tailwinds. And our media business continued to perform very well. And that was really what took place in Q4. And relative to commerce, commerce is really germane to our B2B customers and B2C customers and we had a strong commerce season. But I'd say, the -- probably, the most noteworthy was what we saw around just incremental traffic in the media space. And relative to margins, we have told you for a while that we intend to operate the company in the low-40s EBITDA. We ended Q4 at 44%. And you're right, you can do kind of the math around ultimately when the impact of the Prolexic acquisition occurs, that that's going to have about a 2 point impact on EBITDA margins. And I think what we're trying to tell you is that we believe that we -- our aspiration is to grow this company at a compound annual growth rate of 18-plus-percent growth rates. And we want to make the investments in the business either organically or through M&A to enable that. And we believe that operating the company in the low-40s EBITDA is going to enable us to do that.

The next question is from the line of Colby Synesael, Cowen. Colby Synesael - Cowen and Company, LLC, Research Division: Two questions, if I may. First off, I think, since you last reported, Verizon announced that it acquired EdgeCast. So if I'm not mistaken, Verizon is a reseller relationship of yours. So I'm curious if you anticipate that deal having any impact on your current relationship with Verizon. And then, my second question has to do with your guidance -- and maybe I'm being too cute. But your revenue range is about $16 million. I think that that's a little bit larger than it typically is. Is there something there that you're not as confident as you might typically be that could affect that there? F. Thomson Leighton: So I'll take the first question. The VDMS, or the digital media unit within Verizon, purchased EdgeCast. That group has been a competitor with Akamai in the past and will remain so in the future as a result of the acquisition. Akamai's relationship with Verizon has been through the Enterprise Services, or VES group. That relationship is not changing right now. So customers can continue to use that channel for Akamai services and both companies are committed to continuing and making that work. Obviously, it's a situation that we're closely monitoring. But at this point in time, we don't see any near-term impact to our business as a result of the acquisition.

And, Colby, relative to the guidance range, the company is getting bigger now. And so, I think it's time for the company to widen the guidance range, that when you start approaching $400-million-plus per quarter in revenues, I just think it makes sense to widen the range. We've told you in the past that, in particular, the media business will have more variability because of traffic spikes due to gaming releases, software downloads, et cetera. And even though we've seen some sustained growth there, there can be some spikiness there. And so, what we're trying to do and account for that by broadening the range a little bit.

Your next question is from the line of Gray Powell, Wells Fargo. Gray Powell - Wells Fargo Securities, LLC, Research Division: Tom, you made a really interesting comment specifically about larger customers that get to a stage where they want to go out and they want to build their own CDN. They realized it's tough and then they end up coming back. Is that part of this large uptick in traffic that we've seen in the last few months? F. Thomson Leighton: I don't think so. That's a macro trend. It's been going on for over 10 years, I would say. And that's -- any given account, it works over a period of years generally, both to get started and to wind it down, if that's what happens. Gray Powell - Wells Fargo Securities, LLC, Research Division: Okay. But is it something that you're seeing recently? F. Thomson Leighton: This is something we've been seeing in a steady state for as long as I can remember. It is not uncommon for a very big media company to think about and/or try to do it themselves. Once you go down that path, the lifespan is generally measured in a period of years. And over a period of years, a lot of things change. Our services get better all the time. Costs change pretty dramatically over a period of years. And so, what may have seemed like a good idea at the time, after a period of years often doesn't. Gray Powell - Wells Fargo Securities, LLC, Research Division: Understood. Okay. That's very helpful. And then just -- can you help us think about leverage on the cost of goods sold line? Specifically, it looks like co-location costs have been flat to down in absolute dollar terms the last 2 years, whereas your server count has increased by 50%. So I'm just -- how should we think about the efficiencies there going forward?

I think we told you that I'm actually -- it's a stuff that actually track -- we actually haven't added a dollar of co-location spend really in -- over 2 years. So you're right. And I think it really attributes to our network operations and engineering teams that they've just driven a lot of initiatives that have been -- allowed us, one, to get more throughput out of the servers that we have on the network and not have to add co-location costs. And so, it's really -- it's a combination of a lot of factors with -- but we think we can maintain all of that. I don't think that we're going to continue in a model that we'll never add co-location spending. But we think we can maintain the momentum that we have. And what that's going to equate to is a stabilization in gross margins from the levels that we're at right now. And then, I would say, over time -- when I say over time, as the mix shifts more to the performance and security solutions -- you should see some gross margin expansion. But that's going to take some time as those businesses grow.

Your next question is from the line of Mike Olson, Piper Jaffray. Michael J. Olson - Piper Jaffray Companies, Research Division: On the sales force ramp, there's been a lot of questions about this already. But would you be willing to share how many salespeople you've hired to-date or maybe by the end of Q4? And then, kind of, how many are left to be hired at this point based on your current plans?

Yes. So we shared with you that we had a plan to end the year with about 308 sales reps. We actually ended the year at 310. So we did a little bit better than we expected. And that's a net add of about 95 now -- year-on-year. There were a few sales reps in the prior year that were from the ADS business. We actually have a net add of actually over 100. So we had, roughly, 215 last year and now we have 310. And we're not going to provide specific guidance going forward of the exact number of sales reps that we're going to add. But I can tell you that we're going to add, as I mentioned earlier, at a similar rate and pace to what you've seen in the last year plus. Michael J. Olson - Piper Jaffray Companies, Research Division: Okay. For the remainder of 2014 or just for the first couple of quarters of the year?

No, no, it's going to be throughout the year. And I think one of the things we've shared with you is that, that sales force investment has been a little bit more weighted towards our international markets. And you'll -- you should expect that will continue to be the case. Michael J. Olson - Piper Jaffray Companies, Research Division: Okay. And then, for media delivery in Q1, I know you guys always say that any 1 particular event doesn't move the needle. But will the Olympics move the needle in Q1? Or in the context of the overall business, is it immaterial, or...

No, it's immaterial. It's not a notable driver of revenue. But it's an important proof point around the consumption of information on the Internet. And so, I think we comment on it because the more -- this is becoming much more pervasive, people watching live streams via the Internet. I think it just tells you that we're at the early days around people's consumption there. I think it's just going to continue to grow. But as an event by itself, it's not material at all.

Your next question is from the line of Michael Turits, Raymond James. Michael Turits - Raymond James & Associates, Inc., Research Division: Two questions, one on revenue and the guidance and the other on margins. First, on revenue guidance, it's obviously a great guidance for 1Q. Is there anything either in the price and contract negotiations that came out better than you expected, or is there anything in the quarter, in particular -- I know this is strong across the board, but in particular, that was upside such that we got such a strong upside to our expectation?

No, Michael, on the revenue guidance, the -- I think the expectation of the large customer negotiation is pretty much as we expected it to be. So it's just the health of the business outside this particular customer is just very, very solid. As I mentioned, it's solid across all of our categories. And I think we're just -- we're bullish that we're going to continue to see that in Q1. Michael Turits - Raymond James & Associates, Inc., Research Division: Okay. And then, on the margins, I mean, you've given guidance very roughly to low-40s. I think the Street is about 43%. I guess, I'm just wondering if we can get any more specific. Does that going to -- whether or not you think that, that's an aggressive or a conservative number for the rest of the year.

Yes. And the reason I used the term "low," is I hesitate to give you an exact number because I think it's going to vary based on different factors. Some people might think 43% is low, low-40s. Some people might think 41% to 42% is low. But I think that -- just to give you a little bit of color. So we're guiding to 44%. And I said that I think Prolexic is going to be a 2 point impact on EBITDA margin. So that will at least give you some color around what we expect in the near term to operate the company at. Michael Turits - Raymond James & Associates, Inc., Research Division: Right. But you thought it was low-40s x Prolexic, right?

No, it will be low-40s with Prolexic.

Your next question is from the line of Phil Winslow, Crédit Suisse. Philip Winslow - Crédit Suisse AG, Research Division: Just have a question digging back into the gross margin side and also on the sales force. Your comment on co-location expenses, I'm wondering if you could also give us some color on just bandwidth expenses you're seeing there and any sort of changes you have seen or might expect to see. And then, also, with the sales force, I'm wondering if you could just give us a sense for what you're seeing in terms of just a ramp of the sales force as you bring heads on, how long it takes for them to get to, sort of, the levels of the, kind of, efficiency that you'd want to see out of them.

So on the COGS side, again, we've made great progress on co-location. On the bandwidth side, we continue to drive bandwidth cost down. We are a large purchaser of bandwidth so we certainly get buying leverage from that. And we -- there are other -- there are initiatives that we're driving to try to reduce bandwidth even further. So we think we can continue the kind of rate and pace of both bandwidth reduction and the progress we've made on co-location, again, yielding a stabilization in margins. On the sales ramp, again, I think we provided some color before on other calls that there are few things that are going to drive improvements in bookings. One, for your tenured sales reps, you want to make sure you retain them and we've done a very good job of doing that. Two, for your new sales reps, you want to make sure they are tracking to productivity expectations. And it's hard to call an average but it takes 4 to 5 quarters for a rep to get fully productive. And we track each rep class and see how they're tracking. And throughout 2013, we were tracking very well. And I think what you had in Q4 was the wraparound effect of more tenured reps for those that were hired in late 2012 and a little bit in -- early in 2013.

Your next question is from the line of James Breen, William Blair. James D. Breen - William Blair & Company L.L.C., Research Division: Just on -- again, another question, sort of on the margins, where the guidance is relative to long term. Maybe, Jim, if you can just talk about the network agreement [ph] that you're seeing now. Is that something that you should expect to go for several more quarters, or do you feel like you're towards the end of that? And then, second part of the question, maybe for Tom. As you look at your business domestically versus internationally, obviously, Apple moving to China should have some impact. I'm just wondering as to what your thoughts are on the International business relative to the U.S. and where the growth rates are accelerating.

So I'll take the margin. On the margin front, again, this was the second year in a row. I mentioned in the opening remarks that we've expanded gross margins. And I believe we can maintain the margin levels that we're at. And not calling that they're going to expand further other than what I had said a few questions ago, which is I think, over time, as more of the business is weighted to performance and security solutions, which have higher on average gross margins in the media business, that you will get some gross margin expansion but certainly not in the near term. I think we can stabilize gross margins in the near term. F. Thomson Leighton: Yes. In terms of international markets, percentage of our revenue that's been outside of North America has been pretty steady. But I think the growth should start coming more internationally. We're making majority of our investment outside of North America. We're opening new territories, we're getting a lot more feet on the ground in territories where we've been established outside of North America. And you think about where the people are and the people are coming online in a lot of the businesses and you would look outside of North America. So I think, over the longer term, we would expect the percentage of our revenue that's outside of North America to grow. James D. Breen - William Blair & Company L.L.C., Research Division: And then, just one follow-up on the M&A side. You obviously have quite a bit of cash now and you're generating more and more each quarter. Can you just give us your thoughts on M&A, in general? In terms of, are you looking to buy $100 million of revenue a year, $200 million of revenue a year in terms of the size of the companies? F. Thomson Leighton: That's not exactly the way we think about it. We're looking to make acquisitions that will help Akamai grow, bring greater benefit to our customers that can come in the form of a company that has existing revenue. Quite often, we buy companies that really don't have any revenue, but they've got a good technology and really smart employees that we can integrate into Akamai and bring leverage to what they've got across our customer base to help Akamai grow. So when we think about M&A, we're looking to make acquisitions that will help Akamai grow and bring better value to our customers.

Your next question is from the line of Ben Rose, Battle Road Research. Ben Z. Rose - Battle Road Research Ltd.: Just a couple of questions. In light of the events that have taken place at Target in the last couple of months, are you seeing increased interest on the part of the e-tailer community? F. Thomson Leighton: Yes. I think the e-retail community is very interested in our Kona Site Defender and our Security Solutions. Because of our distributed network and tremendous capacity and all the investment we put into our web app firewall, we're really in a great position to help defend against the largest and most nefarious attacks out there, whether they're attempting to do a denial of service or to go in and corrupt content or to steal information from the website. And there's just many examples of named brands that have been hit by cyber attacks over the last several months and last couple of years. So I think there is increasing awareness now really across the board, but certainly in the e-commerce vertical.

Your next question is from the line of Ed Maguire, CLSA. Edward Maguire - CLSA Limited, Research Division: I was wondering if you could give an update on your progress with some of your carrier solutions so far that have been off to an encouraging start last year. Also, if you could comment on your hybrid cloud initiatives as well. I believe we were expecting to see some betas of your retail solutions. Would appreciate an update. F. Thomson Leighton: Yes. I think we're making excellent progress with carriers. Now of course, as you know, we have over 1,200 network partners. But in particular, we put a lot of focus on the leading global carriers and getting a much deeper and more strategic relationship there. And during the prepared remarks, I summarized the major step forward we took last year. And I hope you'll see an impressive group of new carrier strategic relationships this year. So it's an area where we're making a lot of effort and I think it has a lot of long-term value to Akamai. We view ourselves as being a technology -- a strategic technology supplier to the major carriers. The carriers own the last mile. They have great enterprise relationships. They are helpful to us in a variety of ways, help us to get to market, help us improve quality, help us reduce costs. And we do the same thing for them. We help them improve quality. We help them bring services to market. And we help them provide better service to their customers and to their end users. So I would say I'm very pleased with the progress there and we're making a lot of effort. In terms of hybrid cloud optimization, it's very early stages. We had excellent early traction last year. We actually have our technology deployed in several stores around the world on a trial basis. The feedback from those trials has been very encouraging. As you may know, we demonstrated our software running on a Cisco branch office router at our Edge Customer Conference in October and that relationship is making good progress. And just as I mentioned earlier, at CES, we took another set of Akamai software and put it onto a Qualcomm Atheros Home Gateway -- Smart Gateway device and showed how that can bring benefits to the home in terms of improving the speed of software delivery, improving the quality of movies that you watch and decreasing the congestion along the last mile. And the really nice thing about that is that demonstration was actually done by Qualcomm, at the Qualcomm booth at CES. So we're in early stages. We're not forecasting any meaningful revenue this year, but I am optimistic about the long-term value of that capability. And that's one of the areas we look at for driving new sources of revenue for Akamai going years into the future.

Your next question is from the line of Tim Horan, Oppenheimer. Timothy K. Horan - Oppenheimer & Co. Inc., Research Division: Do you have any other customers that are more than 5% of revenue at this point? And I -- would it include some of the resellers like Verizon out there? And just as part of that, have you kind of smoothed out the contracts at this point that we don't have to worry about, kind of, lumpiness quarter-to-quarter with repricing of media and other contracts?

Sure. So we don't have -- as I said before, we don't have any 10% customers. I'm not going to talk about size of customers beyond that. We don't have any 10% customers. Obviously, we talk about this 1 notable customer that was close to that given their impact. And relative to the way we structure contracts, again, we've told you this time and again that, that's a nature of the media business. The media business is a business that's going to have variability in traffic. It's a business that's going to go through periods where you're going through a pricing reset and that's just the nature of the business. And I think we've proven over multiple years, when you look at this business, this is a very solid growing business. And so, it's -- you shouldn't overreact when there's a downtick in the business. I think if you look at this business over multiple years, it's proving to be a very steady grower in a very sticky business with our customers. Timothy K. Horan - Oppenheimer & Co. Inc., Research Division: And then, you upgraded a lot of your products, obviously, about a year ago or so and have been rolling them out with the new sales force. Can you talk about the customer adoption of those upgraded products and how the pricing kind of compares versus some of the legacy -- for things like Kona and Aqua and other products?

I mean, I think it's consistent. Again, we're getting traction with all of our sales reps. I think we're getting traction across the portfolio. We continue to make good traction in selling our security solutions. We had a very strong quarter in selling our performance solutions in Q4. So I think, in general, across the board, we're getting good take rates for the new products that we've introduced.

Your next question is from the line of Kevin Smithen, Macquarie. Kevin Smithen - Macquarie Research: Can you talk about the impact of mobile on your business segment by segment and, specifically, how the uptake has been on the Aqua Ion refresh a lot of mobile applications on it? F. Thomson Leighton: Sure. Everything is going mobile. We see about 25% of the transactions today being done from a mobile device, some of our customers in some parts of the world, that's already the majority. We believe that, within a couple of years, it will be the majority across our platform. That creates the challenge for performance. As you can imagine and probably you know from just using a mobile device, that it's a lot slower to do your web applications and transactions on a mobile device than it is on a land device, especially if you're on a cellular network. And as more of those transactions go mobile, this becomes a really important problem for the application owner, for the enterprise, for the commerce side, for the bank. And that's where we provide, really, substantial value. We're not quite to the point where we can make it as fast as a landline yet, but we can bring it a lot closer. And with our new real user monitoring as part of Ion, we can really give that kind of visibility to our customer. And they are now much more interested in mobile performance since it's becoming so important. In terms of media, the proliferation of the devices causes the need for a lot of software downloads because the device, itself, runs big software packages. And then, as you download each app on your device, that means you're downloading software. And as you play games on it, that means you're downloading software. So we do see a lot of demand for software downloads because of the proliferation of the devices. Now in terms of video, I think, in the long run, the large majority of the bits will be watched from the living room, probably on some kind of TV device. That said, people will watch videos when they're on the run, they'll watch their sporting event when they're on the run. So there are certainly more devices which can be downloading video. The big quality or the high quality, which means the high bit traffic for a video, you think will tend to be more centered on a bigger screen, which tends to be less mobile. So there's some increase in video traffic because of mobile. But I think, in the long run, it's more of the change in the formats, things like 4K, Ultra-HD and the viewing habits, where you go home and you watch something over IP instead of over cable or satellite and that's what will drive the traffic. And lot of that growth won't be mobile devices, per se.

There are no more questions in queue. I would like to turn the call back over to Mr. Tom Barth for any closing remarks.

No closing remarks today, but just to thank you for joining us this evening. And we look forward to speaking to you, all, again soon. Have a nice night.

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.