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llnw-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 001-33508

Limelight Networks, Inc.

(Exact name of registrant as specified in its charter)


Delaware						20-1677033
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1465 North Scottsdale Road, Suite 400

Scottsdale, AZ 85257

(Address of principal executive offices, including Zip Code)

(602) 850-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act;


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	LLNW	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant’s Common Stock, par value $0.001 per share, as of July 13, 2020: 122,072,457 shares.

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LIMELIGHT NETWORKS, INC.

FORM 10-Q

Quarterly Period Ended June 30, 2020

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		Page
Note Regarding Forward-Looking Statements			3

PART I. FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019	4
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019	5
	Unaudited Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019	6
	Unaudited Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019	7
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
Item 4.	CONTROLS AND PROCEDURES	28

PART II. OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	30
Item 1A.	RISK FACTORS	30
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	44
Item 3.	DEFAULTS UPON SENIOR SECURITIES	44
Item 4.	MINE SAFETY DISCLOSURES	44
Item 5.	OTHER INFORMATION	44
Item 6.	EXHIBITS	45
	SIGNATURES	46

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Special Note Regarding Forward-Looking Statement

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the words “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events, as well as trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These statements include, among other things:

•our beliefs regarding delivery traffic growth trends and demand for digital content and edge services;

•our expectations regarding revenue, costs, expenses, gross margin, non-GAAP earnings per share, Adjusted EBITDA and capital expenditures;

•our plans regarding investing in our content delivery network, as well as other products and technologies;

•our beliefs regarding the growth of, and competition within, the content delivery industry;

•our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;

•our expectations regarding headcount;

•the impact of certain new accounting standards and guidance as well as the time and cost of continued compliance with existing rules and standards;

•our plans with respect to investments in marketable securities;

•our expectations and strategies regarding acquisitions;

•our estimations regarding taxes and belief regarding our tax reserves;

•our beliefs regarding the use of Non-GAAP financial measures;

•our approach to identifying, attracting and keeping new and existing customers, as well as our expectations regarding customer turnover;

•the sufficiency of and our sources of funding;

•our beliefs regarding our interest rate risk;

•our beliefs regarding inflation risks;

•our beliefs regarding expense and productivity of and competition for our sales force;

•our beliefs regarding the significance of our large customers;

•our beliefs regarding the impact of health epidemics and pandemics, including the recent outbreak of COVID-19, on our current and potential customers; and

•our beliefs regarding the impact of health epidemics and pandemics, including the recent outbreak of COVID-19, on our balance sheet, financial condition, and results of operations.

The risks included here are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors which could adversely affect our business and financial performance. Also, these forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the caption “Risk Factors” in Part II, Item 1A in this Quarterly Report on Form 10-Q and those discussed in other documents we file with the Securities and Exchange Commission (SEC).

In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

The forward-looking statements contained herein are based on our current expectations and assumptions and on information available as of the date of the filing of this Quarterly Report on Form 10-Q. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms "Limelight," "we," "us," and "our" in this document refer to Limelight Networks, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries. All information is presented in thousands, except per share amounts, customer count, headcount and where specifically noted.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Limelight Networks, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	June 30, 2020		December 31, 2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	18,200	$	18,335
Accounts receivable, net	45,246		34,476
Income taxes receivable	68		82
Prepaid expenses and other current assets	10,241		9,920
Total current assets	73,755		62,813
Property and equipment, net	48,908		46,136
Operating lease right of use assets	11,449		12,842
Marketable securities, less current portion	40		40
Deferred income taxes	1,328		1,319
Goodwill	77,113		77,102
Other assets	7,915		9,117
Total assets	$	220,508	$	209,369
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	17,004	$	12,020
Deferred revenue	934		976
Operating lease liability obligations	2,390		2,056
Income taxes payable	169		178
Other current liabilities	17,028		13,398
Total current liabilities	37,525		28,628
Operating lease liability obligations, less current portion	12,316		13,488
Deferred income taxes	283		239
Deferred revenue, less current portion	265		161
Other long-term liabilities	304		316
Total liabilities	50,693		42,832
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.001 par value; 300,000 shares authorized; 121,692 and 118,368 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively	122		118
Additional paid-in capital	541,363		530,285
Accumulated other comprehensive loss	(10,031)		(9,210)
Accumulated deficit	(361,639)		(354,656)
Total stockholders’ equity	169,815		166,537
Total liabilities and stockholders’ equity	$	220,508	$	209,369

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Limelight Networks, Inc.

Unaudited Consolidated Statements of Operations

(In thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenue	$	58,546	$	45,904	$	115,558	$	89,184
Cost of revenue:
Cost of services	29,389		22,769		60,502		45,710
Depreciation — network	5,360		4,628		10,510		8,944
Total cost of revenue	34,749		27,397		71,012		54,654
Gross profit	23,797		18,507		44,546		34,530
Operating expenses:
General and administrative	8,187		8,340		16,069		15,875
Sales and marketing	10,929		10,994		22,823		21,966
Research and development	5,572		6,013		11,189		11,915
Depreciation and amortization	323		127		665		372
Total operating expenses	25,011		25,474		50,746		50,128
Operating loss	(1,214)		(6,967)		(6,200)		(15,598)
Other income (expense):
Interest expense	(71)		(10)		(82)		(20)
Interest income	6		110		31		321
Other, net	(312)		(70)		(421)		(76)
Total other (expense) income	(377)		30		(472)		225
Loss before income taxes	(1,591)		(6,937)		(6,672)		(15,373)
Income tax expense	136		255		311		378
Net loss	$	(1,727)	$	(7,192)	$	(6,983)	$	(15,751)

Net loss per share:
Basic	$	(0.01)	$	(0.06)	$	(0.06)	$	(0.14)
Diluted	$	(0.01)	$	(0.06)	$	(0.06)	$	(0.14)

Weighted average shares used in per share calculation:
Basic	120,230		115,275		119,597		114,843
Diluted	120,230		115,275		119,597		114,843

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Limelight Networks, Inc.

Unaudited Consolidated Statements of Comprehensive Loss

(In thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net loss	$	(1,727)	$	(7,192)	$	(6,983)	$	(15,751)
Other comprehensive income (loss), net of tax:
Unrealized gain on investments	—		8		—		37
Foreign currency translation (loss) gain	518		166		(821)		513
Other comprehensive income (loss)	518		174		(821)		550
Comprehensive loss	$	(1,209)	$	(7,018)	$	(7,804)	$	(15,201)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Limelight Networks, Inc.

Unaudited Consolidated Statements of Stockholders' Equity

(In thousands)

For the Three Months Ended June 30, 2020


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance March 31, 2020	119,642	$	120	$	534,205	$	(10,549)	$	(359,912)	$	163,864
Net loss	—	—		—		—		(1,727)		(1,727)
Foreign currency translation adjustment, net of taxes	—	—		—		518		—		518
Exercise of common stock options	1,162	1		2,871		—		—		2,872
Vesting of restricted stock units	869	1		6		—		—		7
Restricted stock units surrendered in lieu of withholding taxes	(281)	—		(1,430)		—		—		(1,430)
Issuance of common stock under employee stock purchase plan	300	—		1,074		—		—		1,074
Share-based compensation	—	—		4,637		—		—		4,637
Balance June 30, 2020	121,692	$	122	$	541,363	$	(10,031)	$	(361,639)	$	169,815

For the Three Months Ended June 30, 2019


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance March 31, 2019	114,874	$	115	$	516,251	$	(9,657)	$	(347,171)	$	159,538
Net loss	—	—		—		—		(7,192)		(7,192)
Change in unrealized loss on available-for-sale investments, net of taxes	—	—		—		8		—		8
Foreign currency translation adjustment, net of taxes	—	—		—		166		—		166
Vesting of restricted stock units	638	1		(1)		—		—		—
Restricted stock units surrendered in lieu of withholding taxes	(201)	—		(619)		—		—		(619)
Issuance of common stock under employee stock purchase plan	449	—		1,095		—		—		1,095
Share-based compensation	—	—		3,649		—		—		3,649
Balance June 30, 2019	115,760	$	116	$	520,375	$	(9,483)	$	(354,363)	$	156,645

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For the Six Months Ended June 30, 2020


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance December 31, 2019	118,368	$	118	$	530,285	$	(9,210)	$	(354,656)	$	166,537
Net loss	—	—		—		—		(6,983)		(6,983)
Foreign currency translation adjustment, net of taxes	—	—		—		(821)		—		(821)
Exercise of common stock options	1,860	2		5,009		—		—		5,011
Vesting of restricted stock units	1,745	2		5		—		—		7
Restricted stock units surrendered in lieu of withholding taxes	(581)	—		(2,945)		—		—		(2,945)
Issuance of common stock under employee stock purchase plan	300	—		1,074		—		—		1,074
Share-based compensation	—	—		7,935		—		—		7,935
Balance June 30, 2020	121,692	$	122	$	541,363	$	(10,031)	$	(361,639)	$	169,815

For the Six Months Ended June 30, 2019


	Common Stock
	Shares	Amount	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance December 31, 2018	114,246	114	513,682	(10,033)	(338,612)	165,151
Net loss	—	—	—	—	(15,751)	(15,751)
Change in unrealized loss on available-for-sale investments, net of taxes	—	—	—	37	—	37
Foreign currency translation adjustment, net of taxes	—	—	—	513	—	513
Exercise of common stock options	5	—	8	—	—	8
Vesting of restricted stock units	1,566	2	(2)	—	—	—
Restricted stock units surrendered in lieu of withholding taxes	(506)	—	(1,513)	—	—	(1,513)
Issuance of common stock under employee stock purchase plan	449	—	1,095	—	—	1,095
Share-based compensation	—	—	7,105	—	—	7,105
Balance June 30, 2019	115,760	116	520,375	(9,483)	(354,363)	156,645

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Limelight Networks, Inc.

Unaudited Consolidated Statements of Cash Flows

(In thousands)


	Six Months Ended June 30,
	2020		2019
Operating activities
Net loss	$	(6,983)	$	(15,751)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	11,175		9,316
Share-based compensation	10,315		7,105
Foreign currency remeasurement gain	(140)		(125)
Deferred income taxes	15		31
Gain on sale of property and equipment	—		(51)
Accounts receivable charges	313		694
Amortization of premium on marketable securities	—		20
Changes in operating assets and liabilities:
Accounts receivable	(11,083)		(5,751)
Prepaid expenses and other current assets	(447)		108
Income taxes receivable	13		(2)
Other assets	1,747		(3,422)
Accounts payable and other current liabilities	6,937		6,473
Deferred revenue	63		(445)
Income taxes payable	2		143
Payments related to litigation, net	—		(3,040)
Other long term liabilities	(11)		(152)
Net cash provided by (used in) operating activities	11,916		(4,849)
Investing activities
Purchases of marketable securities	—		(10,279)
Sale and maturities of marketable securities	—		31,153
Purchases of property and equipment	(14,948)		(16,474)
Proceeds from sale of property and equipment	—		46
Net cash used in investing activities	(14,948)		4,446
Financing activities
Payments of employee tax withholdings related to restricted stock vesting	(2,945)		(1,513)
Proceeds from employee stock plans	6,092		1,103
Net cash provided by (used in) financing activities	3,147		(410)
Effect of exchange rate changes on cash and cash equivalents	(250)		128
Net decrease in cash and cash equivalents	(135)		(685)
Cash and cash equivalents, beginning of period	18,335		25,383
Cash and cash equivalents, end of period	$	18,200	$	24,698
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	82	$	20
Cash paid during the period for income taxes, net of refunds	$	261	$	213

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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Limelight Networks, Inc.

Notes to Unaudited Consolidated Financial Statements

June 30, 2020

1. Nature of Business

Limelight Networks Inc., a provider of digital content delivery, online video delivery, cloud security, edge computing and cloud storage services, empowers customers to provide exceptional digital experiences. Limelight’s edge services platform includes a globally distributed, high performance private network, intelligent software, and expert support services that enable current and future workflows.

We were incorporated in Delaware in 2003, and have operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. We began international operations in 2004.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (U.S. GAAP) for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the interim periods presented and of a normal recurring nature. This quarterly report on Form 10-Q should be read in conjunction with our audited financial statements and footnotes included in our annual report on Form 10-K for the fiscal year ended December 31, 2019. All information is presented in thousands, except per share amounts and where specifically noted.

The consolidated financial statements include accounts of Limelight and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior year amounts to conform to the current year presentation.

Use of Estimates

The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results and outcomes may differ from those estimates. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, or for any future periods.

Recent Accounting Standards

Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, which requires measurement and recognition of expected credit losses for financial assets held. The standard is to be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures and there was no cumulative-effect adjustment required.

In January 2017, the FASB issued ASU 2017-04, which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. We adopted this guidance effective January 1, 2020, using a prospective approach. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds to the disclosure requirements on fair value measurements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this updated guidance and delay adoption of the additional disclosures until their effective date. We adopted this guidance effective January

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1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. We adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

For contracts that contain minimum commitments over the contractual term, we estimate an amount of variable consideration by using either the expected value method or the most likely amount method. We include estimates of variable consideration in revenue only when we have a high degree of confidence that revenue will not be reversed in a subsequent reporting period. We believe that the expected value method is the most appropriate estimate of the amount of variable consideration. These customers have entered into contracts with contract terms generally from one to four years. As of June 30, 2020, we have approximately $4,372 of remaining unsatisfied performance obligations. We recognized revenue of approximately $1,943 and $2,500, respectively, during the three months ended June 30, 2020 and 2019, related to these types of contracts with our customers. During the six months ended June 30, 2020 and 2019, we recognized approximately $4,097 and $5,200, respectively. We expect to recognize approximately 60% of the remaining unsatisfied performance obligations in 2020, approximately 34% in 2021, and approximately 6% in 2022.

3. Accounts Receivable, net

Accounts receivable, net include:


	June 30,		December 31,
	2020		2019
Accounts receivable	$	46,254	$	35,619
Less: credit allowance	(170)		(170)
Less: allowance for doubtful accounts	(838)		(973)
Total accounts receivable, net	$	45,246	$	34,476

All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses. We maintain an allowance for credit losses, which represents an estimate of expected losses of our receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of our ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses for our trade receivables. For trade receivables, we apply a reserve percentage to the specific age of the receivable to estimate the allowance for doubtful accounts. The reserve percentages are determined based on our historical write-off experience. Determination of the proper amount of allowance requires management to exercise judgment about the timing, frequency and severity of potential credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

We evaluate the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect our customers’ ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau information.

The following is a roll-forward of the allowances for doubtful accounts related to trade accounts receivable for the six months ended June 30, 2020:

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			Six Months Ended
			June 30, 2020
Beginning of period			973
Provision for credit losses			313
Write-offs			(448)
End of period			838

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include:


	June 30,		December 31,
	2020		2019
Prepaid bandwidth and backbone	1,553		1,717
VAT receivable	3,096		3,068
Prepaid expenses and insurance	2,208		1,685
Vendor deposits and other	3,384		3,450
Total prepaid expenses and other current assets	$	10,241	$	9,920

5. Property and Equipment, net

Property and equipment, net include:


	June 30,		December 31,
	2020		2019
Network equipment	$	132,298	$	126,975
Computer equipment and software	7,307		7,603
Furniture and fixtures	1,893		1,906
Leasehold improvements	7,925		7,888
Other equipment	31		54
Total property and equipment	149,454		144,426
Less: accumulated depreciation	(100,546)		(98,290)
Total property and equipment, net	$	48,908	$	46,136

Cost of revenue depreciation expense related to property and equipment was approximately $5,360 and $4,628, respectively, for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, respectively, cost of revenue depreciation expense related to property and equipment was approximately $10,510 and $8,944, respectively.

Operating expense depreciation and amortization expense related to property and equipment was approximately $323 and $127, respectively, for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, respectively, operating expense depreciation and amortization expense related to property and equipment was approximately $665 and $372, respectively.

6. Other Current Liabilities

Other current liabilities include:


	June 30,		December 31,
	2020		2019
Accrued compensation and benefits	$	8,832	$	4,918
Accrued cost of revenue