Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | AKAMAI TECHNOLOGIES INC | ||
Entity Central Index Key | 1,086,222 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 170,031,585 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 8,322.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 313,382 | $ 324,169 |
Marketable securities | 398,554 | 512,849 |
Accounts receivable, net of reserves of $1,279 and $6,145 at December 31, 2017 and 2016, respectively | 459,127 | 368,596 |
Prepaid expenses and other current assets | 137,809 | 104,303 |
Total current assets | 1,308,872 | 1,309,917 |
Property and equipment, net | 862,535 | 801,017 |
Marketable securities | 567,592 | 779,311 |
Goodwill | 1,498,688 | 1,228,503 |
Acquired intangible assets, net | 201,259 | 149,463 |
Deferred income tax assets | 51,069 | 8,982 |
Other assets | 112,829 | 95,953 |
Total assets | 4,602,844 | 4,373,146 |
Current liabilities: | ||
Accounts payable | 80,278 | 76,120 |
Accrued expenses | 283,743 | 238,777 |
Deferred revenue | 77,705 | 52,972 |
Other current liabilities | 22,178 | 6,719 |
Total current liabilities | 463,904 | 374,588 |
Deferred revenue | 6,839 | 3,758 |
Deferred income tax liabilities | 15,510 | 11,652 |
Convertible senior notes | 662,913 | 640,087 |
Other liabilities | 142,955 | 118,691 |
Total liabilities | 1,292,121 | 1,148,776 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 700,000 shares designated as Series A Junior Participating Preferred Stock; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 700,000,000 shares authorized; 169,893,324 and 173,254,797 shares issued and outstanding at December 31, 2017 and 2016, respectively | 1,699 | 1,733 |
Additional paid-in capital | 4,073,362 | 4,239,588 |
Accumulated other comprehensive loss | (21,930) | (56,222) |
Accumulated deficit | (742,408) | (960,729) |
Total stockholders’ equity | 3,310,723 | 3,224,370 |
Total liabilities and stockholders’ equity | $ 4,602,844 | $ 4,373,146 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve (in dollars) | $ 1,279 | $ 6,145 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares designated as Series A Junior Participating Preferred Stock | 700,000 | 700,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 169,893,324 | 173,254,797 |
Common stock, shares outstanding | 169,893,324 | 173,254,797 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 2,502,996 | $ 2,340,049 | $ 2,197,448 |
Costs and operating expenses: | |||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 875,758 | 809,001 | 725,620 |
Research and development | 222,434 | 167,628 | 148,591 |
Sales and marketing | 493,632 | 426,967 | 440,988 |
General and administrative | 509,165 | 439,916 | 388,265 |
Amortization of acquired intangible assets | 30,904 | 26,642 | 27,067 |
Restructuring charges | 54,884 | 10,301 | 767 |
Total costs and operating expenses | 2,186,777 | 1,880,455 | 1,731,298 |
Income from operations | 316,219 | 459,594 | 466,150 |
Interest income | 17,855 | 14,702 | 11,200 |
Interest expense | (18,839) | (18,638) | (18,525) |
Other income (expense), net | 887 | 3,788 | (2,201) |
Income before provision for income taxes | 316,122 | 459,446 | 456,624 |
Provision for income taxes | 97,801 | 143,314 | 135,218 |
Net income | $ 218,321 | $ 316,132 | $ 321,406 |
Net income per share: | |||
Basic (in dollars per share) | $ 1.27 | $ 1.81 | $ 1.80 |
Diluted (in dollars per share) | $ 1.26 | $ 1.79 | $ 1.78 |
Shares used in per share calculations: | |||
Basic (in shares) | 171,559 | 174,917 | 178,391 |
Diluted (in shares) | 172,711 | 176,215 | 180,415 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 218,321 | $ 316,132 | $ 321,406 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 34,698 | (14,081) | (22,872) |
Change in unrealized loss on investments, net of income tax benefit of $245, $432 and $773 for the years ended December 31, 2017, 2016 and 2015, respectively | (406) | (688) | (970) |
Other comprehensive income (loss) | 34,292 | (14,769) | (23,842) |
Comprehensive income | $ 252,613 | $ 301,363 | $ 297,564 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Tax expense (benefit) on change in unrealized gain (loss) on investments, net | $ 245 | $ 432 | $ 773 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 218,321 | $ 316,132 | $ 321,406 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 372,313 | 334,302 | 299,563 |
Stock-based compensation | 164,308 | 144,506 | 126,677 |
(Benefit) provision for deferred income taxes | (869) | 7,308 | 4,098 |
Amortization of debt discount and issuance costs | 18,839 | 18,638 | 18,525 |
Restructuring-related software charges | 31,965 | 4,587 | 0 |
Other non-cash reconciling items, net | 10,068 | 5,987 | 5,804 |
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: | |||
Accounts receivable | (63,825) | 3,356 | (56,247) |
Prepaid expenses and other current assets | (22,311) | 23,881 | 7,137 |
Accounts payable and accrued expenses | 33,232 | 18,491 | 51,624 |
Deferred revenue | 1,142 | (1,213) | 3,224 |
Other current liabilities | 16,378 | 5,484 | (345) |
Other non-current assets and liabilities | 21,422 | (9,647) | 11,986 |
Net cash provided by operating activities | 800,983 | 871,812 | 793,452 |
Cash flows from investing activities: | |||
Cash paid for acquisitions, net of cash acquired | (369,073) | (95,439) | (141,147) |
Purchases of property and equipment | (254,146) | (180,949) | (311,676) |
Capitalization of internal-use software development costs | (160,632) | (135,340) | (133,307) |
Purchases of short- and long-term marketable securities | (326,497) | (781,061) | (692,879) |
Proceeds from sales of short and long-term marketable securities | 219,916 | 57,740 | 2,008 |
Proceeds from maturities of short and long-term marketable securities | 432,853 | 664,837 | 843,931 |
Other non-current assets and liabilities | (2,098) | 782 | (2,494) |
Net cash used in by investing activities | (459,677) | (469,430) | (435,564) |
Cash flows from financing activities: | |||
Proceeds related to the issuance of common stock under stock plans | 55,680 | 59,560 | 61,791 |
Employee taxes paid related to net share settlement of stock-based awards | (58,395) | (45,545) | (54,164) |
Repurchases of common stock | (361,194) | (373,794) | (302,606) |
Other non-current assets and liabilities | (1,096) | 0 | (2,050) |
Net cash used in financing activities | (365,005) | (359,779) | (297,029) |
Effects of exchange rate changes on cash and cash equivalents | 12,912 | (7,907) | (10,036) |
Net (decrease) increase in cash and cash equivalents | (10,787) | 34,696 | 50,823 |
Cash and cash equivalents at beginning of year | 324,169 | 289,473 | 238,650 |
Cash and cash equivalents at end of year | 313,382 | 324,169 | 289,473 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes, net of refunds received in the years ended December 31, 2017, 2016 and 2015 of $6,750, $1,664 and $19,374, respectively | 91,640 | 120,223 | 75,033 |
Non-cash financing and investing activities: | |||
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | 27,209 | 36,742 | 19,327 |
Capitalization of stock-based compensation | $ 28,851 | $ 23,093 | $ 17,867 |
Consolidated Statements of Cas8
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Income tax refund received | $ 6,750 | $ 1,664 | $ 19,374 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2014 | 178,300,603 | |||||
Beginning Balance at Dec. 31, 2014 | $ 2,945,335 | $ 1,783 | $ 4,559,430 | $ 0 | $ (17,611) | $ (1,598,267) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 2,756,357 | |||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (27,670) | $ 27 | (27,697) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 668,654 | |||||
Issuance of common stock under employee stock purchase plan | 34,841 | $ 7 | 34,834 | |||
Stock-based compensation | 144,544 | 144,544 | ||||
Tax benefit (deficiency) from stock-based award activity, net | 28,870 | 28,870 | ||||
Repurchases of common stock (in shares) | (4,513,433) | |||||
Repurchases of common stock | (302,606) | (302,606) | ||||
Treasury stock retirement | 0 | $ (45) | (302,561) | 302,606 | ||
Net income | 321,406 | 321,406 | ||||
Foreign currency translation adjustments | (22,872) | (22,872) | ||||
Change in unrealized gain on investments, net of tax | (970) | (970) | ||||
Ending balance (in shares) at Dec. 31, 2015 | 177,212,181 | |||||
Ending Balance at Dec. 31, 2015 | 3,120,878 | $ 1,772 | 4,437,420 | 0 | (41,453) | (1,276,861) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 2,194,699 | |||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (27,394) | $ 22 | (27,416) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 863,419 | |||||
Issuance of common stock under employee stock purchase plan | 39,914 | $ 9 | 39,905 | |||
Stock-based compensation | 166,987 | 166,987 | ||||
Tax benefit (deficiency) from stock-based award activity, net | (3,584) | (3,584) | ||||
Repurchases of common stock (in shares) | (7,015,502) | |||||
Repurchases of common stock | (373,794) | (373,794) | ||||
Treasury stock retirement | 0 | $ (70) | (373,724) | 373,794 | ||
Net income | 316,132 | 316,132 | ||||
Foreign currency translation adjustments | (14,081) | (14,081) | ||||
Change in unrealized gain on investments, net of tax | (688) | (688) | ||||
Ending balance (in shares) at Dec. 31, 2016 | 173,254,797 | |||||
Ending Balance at Dec. 31, 2016 | 3,224,370 | $ 1,733 | 4,239,588 | 0 | (56,222) | (960,729) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 2,453,961 | |||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (40,538) | $ 24 | (40,562) | |||
Issuance of common stock under employee stock purchase plan (in shares) | 1,052,684 | |||||
Issuance of common stock under employee stock purchase plan | 42,302 | $ 11 | 42,291 | |||
Stock-based compensation | 193,170 | 193,170 | ||||
Repurchases of common stock (in shares) | (6,868,118) | |||||
Repurchases of common stock | (361,194) | (361,194) | ||||
Treasury stock retirement | 0 | $ (69) | (361,125) | 361,194 | ||
Net income | 218,321 | 218,321 | ||||
Foreign currency translation adjustments | 34,698 | 34,698 | ||||
Change in unrealized gain on investments, net of tax | (406) | (406) | ||||
Ending balance (in shares) at Dec. 31, 2017 | 169,893,324 | |||||
Ending Balance at Dec. 31, 2017 | $ 3,310,723 | $ 1,699 | $ 4,073,362 | $ 0 | $ (21,930) | $ (742,408) |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Akamai Technologies, Inc. (the “Company”) provides cloud services for delivering, optimizing and securing content and business applications over the Internet. The Company's globally-distributed platform comprises more than 200,000 servers across 130 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company currently operates in one reportable segment: providing cloud services for delivering, optimizing and securing content and business applications over the Internet. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. The Company has reclassified certain line items within cash flows from operating activities in its consolidated statements of cash flows to conform to current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheet. The Company classifies its debt securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance. These reserves consist of allowances for doubtful accounts and reserves for cash-basis customers. Increases and decreases in the allowance for doubtful accounts are included as a component of general and administrative expense in the consolidated statements of income. The Company’s reserve for cash-basis customers increases as services are provided to customers where collection is no longer assured. Increases to the reserve for cash-basis customers are recorded as reductions of revenue. The reserve decreases and revenue is recognized when and if cash payments are received. Estimates are used in determining these reserves and are based upon the Company’s review of outstanding balances on a customer-specific, account-by-account basis. The allowance for doubtful accounts is based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2017 , its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2017, 2016 and 2015 , no customer accounted for more than 10% of total revenue. As of December 31, 2017 and 2016 , no customer had an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2017 , its concentration of credit risk related to accounts receivable was not significant. Fair Value of Financial Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities that have been classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year . Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment, and any changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred. Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2017, 2016 and 2015 , the fair value of the Company's reporting unit was substantially in excess of the carrying value. The tests did not result in an impairment to goodwill during the years ended December 31, 2017, 2016 and 2015 . Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Long-lived assets, including property and equipment and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. Revenue Recognition The Company recognizes service revenue in accordance with the authoritative guidance for revenue recognition, including guidance on revenue arrangements with multiple deliverables. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. These contracts generally commit the customer to a minimum of monthly, quarterly or annual level of usage and specify the rate at which the customer must pay for actual usage above the monthly, quarterly or annual minimum. For contracts with a monthly commitment, the Company recognizes the monthly minimum as revenue each month, provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. Should a customer’s usage of the Company's services exceed the monthly, quarterly or annual minimum, the Company recognizes revenue for such excess in the period of additional usage. For annual or other non-monthly period revenue commitments, the Company recognizes revenue monthly based upon the customer’s actual usage each month of the commitment period and only recognizes any remaining committed amount for the applicable period in the last month thereof. The Company typically charges its customers an integration fee when the services are first activated. Integration fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement. The Company also derives revenue from services sold as discrete, non-recurring events or based solely on usage. For these services, the Company recognizes revenue once the event or usage has occurred. When more than one element is contained in a revenue arrangement, the Company determines the fair value for each element in the arrangement based on vendor-specific objective evidence (“VSOE”) for each respective element, including any renewal rates for services contractually offered to the customer. Elements typically included in the Company's multiple element arrangements consist of its core services – the delivery of content, applications and software over the Internet – as well as mobile and security solutions and enterprise professional services. These elements have value to the customer on a stand-alone basis in that they can be sold separately by another vendor. Generally, there is no right of return relative to these services. The Company typically uses VSOE to determine the fair value of its separate elements. All stand-alone sales of professional services are reviewed to establish the average stand-alone selling price for those services. For the Company's core services, the fair value is the price charged for a single deliverable on a per unit basis when it is sold separately. For arrangements in which the Company is unable to establish VSOE, third-party evidence ("TPE") of the fair value of each element is determined based upon the price charged when the element is sold separately by another vendor. For arrangements in which the Company is unable to establish VSOE or TPE for each element, the Company uses the best estimate of selling price ("BESP") to determine the fair value of the separate deliverables. The Company estimates BESP based upon a management-approved listing of unit pricing for all solutions and pre-established discount levels for each solution that takes into consideration volume, geography and industry lines. The Company allocates arrangement consideration across the multiple elements using the relative selling price method. At the inception of a customer contract, the Company makes an assessment as to that customer’s ability to pay for the services provided. The Company bases its assessment on a combination of factors, including the successful completion of a credit check or financial review, its collection experience with the customer and other forms of payment assurance. Upon the completion of these steps, the Company recognizes revenue monthly in accordance with its revenue recognition policy. If the Company subsequently determines that collection from the customer is not reasonably assured, the Company records an allowance for doubtful accounts and bad debt expense for all of that customer’s unpaid invoices and ceases recognizing revenue for continued services provided until cash is received from the customer. Changes in the Company’s estimates and judgments about whether collection is reasonably assured would change the timing of revenue or amount of bad debt expense that the Company recognizes. The Company also sells its services through reseller channels. Assuming all other revenue recognition criteria are met, the Company recognizes revenue from reseller arrangements based on the reseller’s contracted non-refundable minimum purchase commitments over the term of the contract, plus amounts sold by the reseller to its customers in excess of the minimum commitments. Amounts attributable to this excess usage are recognized as revenue in the period in which the service is provided. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. If the Company concludes that these contracts were negotiated concurrently, the Company records as revenue only the net cash received from the vendor, unless the product or service received has a separate identifiable benefit and the fair value of the vendor’s product or service can be established objectively. The Company may from time to time resell licenses or services of third parties. The Company records revenue for these transactions on a gross basis when the Company has risk of loss related to the amounts purchased from the third party and the Company adds value to the license or service, such as by providing maintenance or support for such license or service. If these conditions are present, the Company recognizes revenue when all other revenue recognition criteria are satisfied. Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly billed service fees, prepayments made by customers for future periods, deferred integration and activation set-up fees and amounts billed under customer arrangements with extended payment terms. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, Internet service providers (“ISPs”) make rack space available for the Company’s servers and access to their bandwidth at a discount or no cost. In exchange, the ISP and its customers benefit by receiving content through a local Company server resulting in better content delivery. The Company does not consider these relationships to represent the culmination of an earnings process. Accordingly, the Company does not recognize as revenue the value to the ISPs associated with the use of the Company’s servers, nor does the Company recognize as expense the value of the rack space and bandwidth received at discounted or no cost. Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project, and continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life. Accounting for Stock-Based Compensation The Company recognizes compensation costs for all stock-based payment awards made to employees based upon the awards’ grant-date fair value. The stock-based payment awards include stock options, restricted stock units, deferred stock units and employee stock purchases related to the Company’s employee stock purchase plan. For stock options, the Company has selected the Black-Scholes option-pricing model to determine the fair value of stock option awards. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock options, restricted stock units and deferred stock units that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance condition-based vesting feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in Other income (expense), net . The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in Other income (expense), net . As of December 31, 2017 and 2016 , the fair value of the forward currency contracts and the underlying net gains for the years ended December 31, 2017, 2016 and 2015 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating. Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax and sales and use tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. In December 2017, the U.S. Tax Cuts and Jobs Act (the "TCJA") was enacted, making significant changes to the Internal Revenue Code. The U.S. Securities and Exchange Commission staff issued guidance for the accounting for certain income tax effects of the TCJA, which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The Company has recognized the provisional impacts of the TCJA in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact could materially differ from the provisional amounts recorded due to additional analysis, changes in assumptions or interpretations, additional guidance that may be issued and actions the Company may take as a result of the TCJA. The Company expects to complete the analysis within the measurement period and any subsequent adjustment to the provisional amounts will be recognized as a current tax provision or benefit in the quarter of 2018 in which the analysis is completed. Newly-Adopted Accounting Pronouncements Share-Based Payments In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance that is intended to simplify aspects of how share-based payments are accounted for and presented in financial statements. This guidance requires that entities record all tax effects of share-based payments at settlement or expiration through the income statement. The standard also amends how windfall tax benefits are recognized, the minimum statutory tax withholding requirements and how entities elect to recognize share-based payment forfeitures. In addition, this guidance impacts the presentation of cash flows related to excess tax benefits by no longer requiring separate presentation as a financing activity apart from other operating income tax cash flows. This guidance was effective for the Company on January 1, 2017. Upon adoption, the Company began recognizing tax benefits related to stock-based compensation in its provision for income taxes rather than as additional paid-in capital. The Company elected to continue estimating forfeitures in determining the amount of compensation cost. The Company was not required to adjust beginning retained earnings as a result of these two items. In addition, the Company adopted the presentation requirements related to the excess tax benefit in its statements of cash flows on a retrospective basis beginning January 1, 2015. The line item labeled excess tax benefits from stock-based compensation included in both cash flows from operating activities and financing activities was eliminated. This had the impact of increasing net cash provided by operating activities and net cash used in financing activities. Prior periods have been revised as follows (in thousands): Net Cash Provided by Operating Activities Net Cash Used in Financing Activities As Reported As Adjusted As Reported As Adjusted Year ended December 31, 2016 $ 866,298 $ 871,812 $ (354,265 ) $ (359,779 ) Year ended December 31, 2015 764,151 793,452 (267,728 ) (297,029 ) Recent Accounting Pronouncements Revenue Recognition In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step model for recognizing revenue from contracts with customers. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard could be adopted using one of two methods: retrospectively to each prior period presented or a modified retrospective application by recognizing a cumulative-effect adjustment as a component of equity as of the date of adoption. This standard became effective for the Company on January 1, 2018, and the Company has elected to adopt it retrospectively to each prior period presented. The updated guidance impacts, or requires the Company to modify, certain judgments and estimates that the Company currently makes as it relates to recognizing revenue. The Company primarily derives revenue from the sales of its services, but in some instances licenses software to some of its customers. Prior to adoption of the updated guidance, the Company did not establish VSOE for the undelivered elements sold with the software. Thus, revenue from license sales was deferred and recognized over the arrangement term. Upon adoption of the new revenue standard, license revenue will be recognized at a point in time when the license is delivered, provided all other revenue recognition criteria have been met. This will result in accelerating revenue recognition for these types of arrangements. For sales of the Company's services, integration fee revenue that was previously recognized ratably over the estimated life of the customer arrangement will be recognized when integration has been completed, which will have the effect of accelerating revenue recognition from integration fees. In addition, the Company historically established a reserve for cash basis customers if collectability was not reasonably assured and recognized revenue as cash was collected. Upon adoption of the new standard, revenue will be recognized for those customers when collectability becomes probable, transfer of control for all performance obligations has occurred and all other revenue recognition criteria have been achieved, rather than when collectability is reasonably assured. The Company has quantified the impact that these changes would have had on revenue reported for the years ended December 31, 2017 and 2016, and each of the quarters therein, and determined that they would not have had a material impact on the Company's consolidated financial statements. The Company is also assessing the impact of capitalizing costs associated with obtaining customer contracts, specifically commission and incentive payments. Historically, these payments have been expensed in the period in which they were incurred. Under the updated guidance, these payments will be deferred on the Company's consolidated balance sheets and amortized over the expected life of the customer arrangement. The Company has quantified the impact that these changes would have had on sales and marketing expenses recorded in the consolidated statements of income for the years ended December 31, 2016 and 2017, and for each of the quarters therein and determined it would not have had a material impact on the consolidated statements of income for such periods. Upon adoption, the Company expects to record a deferred commission and incentive asset on the consolidated balance sheet of $58.6 million as of December 31, 2017. The current portion of the asset will be included in prepaid expenses and other current assets, and the long-term portion will be included in other assets. The full amount of the adjustment will be included in retained earnings. The Company is substantially complete with its implementation efforts as of the filing of these financial statement |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following is a summary of available-for-sale marketable securities held as of December 31, 2017 and 2016 (in thousands): Gross Unrealized Aggregate Fair Value Classification on Balance Sheet Amortized Cost Short-Term Marketable Securities Long-Term Marketable Securities As of December 31, 2017 Gains Losses Commercial paper $ 6,951 $ — $ (9 ) $ 6,942 $ 6,942 $ — Corporate bonds 736,902 2 (3,829 ) 733,075 289,378 443,697 U.S. government agency obligations 220,014 — (1,764 ) 218,250 102,234 116,016 $ 963,867 $ 2 $ (5,602 ) $ 958,267 $ 398,554 $ 559,713 As of December 31, 2016 Commercial paper $ 40,965 $ — $ (45 ) $ 40,920 $ 40,920 $ — Corporate bonds 984,650 123 (3,697 ) 981,076 418,495 562,581 U.S. government agency obligations 267,473 35 (1,366 ) 266,142 53,157 212,985 $ 1,293,088 $ 158 $ (5,108 ) $ 1,288,138 $ 512,572 $ 775,566 The Company offers certain eligible employees the ability to participate in a non-qualified deferred compensation plan. The mutual funds held by the Company that are associated with this plan are classified as restricted trading securities. These securities are not included in the available-for-sale securities table above but are included in marketable securities in the consolidated balance sheets. Unrealized gains and unrealized temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive loss in the consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest income in the consolidated statements of income. As of December 31, 2017 , the Company held for investment corporate bonds with a fair value of $543.6 million , which are classified as available-for-sale marketable securities and have been in a continuous unrealized loss position for more than 12 months. The unrealized losses of $3.9 million related to these corporate bonds are included in accumulated other comprehensive income as of December 31, 2017 . The unrealized losses are attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments. The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of December 31, 2017 and 2016 (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 Level 3 As of December 31, 2017 Cash Equivalents and Marketable Securities: Money market funds $ 22,649 $ 22,649 $ — $ — Commercial paper 10,928 — 10,928 — Corporate bonds 733,075 — 733,075 — U.S. government agency obligations 218,248 — 218,248 — Mutual funds 7,879 7,879 — — $ 992,779 $ 30,528 $ 962,251 $ — Liabilities: Contingent consideration obligation related to completed acquisitions $ (8,631 ) $ — $ — $ (8,631 ) As of December 31, 2016 Cash Equivalents and Marketable Securities: Money market funds $ 8,726 $ 8,726 $ — $ — Commercial paper 40,920 — 40,920 — Corporate bonds 981,076 — 981,076 — U.S. government agency obligations 266,142 — 266,142 — Mutual funds 4,022 4,022 — — $ 1,300,886 $ 12,748 $ 1,288,138 $ — Liabilities: Contingent consideration obligation related to completed acquisitions $ (7,100 ) $ — $ — $ (7,100 ) As of December 31, 2017 and 2016 , the Company grouped money market funds and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of December 31, 2017 and 2016 , the Company grouped commercial paper, U.S. government agency obligations and corporate bonds using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. The Company did not have any transfers of assets or liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2017 and 2016 . When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. The valuation technique used to measure the fair value of the Company's Level 3 liabilities, which consist of contingent consideration related to the acquisitions of Soha Systems, Inc. ("Soha") and Cyberfend, Inc. ("Cyberfend") in 2016 (Note 8), was primarily an income-based approach. The significant unobservable input used in the fair value measurement of the contingent consideration is the likelihood of achieving development milestones to integrate the acquired technology into the Company's technology as well as achieving certain post-closing financial results. Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 December 31, 2016 Due in 1 year or less $ 398,554 $ 512,572 Due after 1 year through 5 years 559,713 775,566 $ 958,267 $ 1,288,138 The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2017 and 2016 (in thousands): Other Liabilities: Balance, January 1, 2016 $ — Contingent consideration obligation related to Soha acquisition (1,600 ) Contingent consideration obligation related to Cyberfend acquisition (5,500 ) Balance, December 31, 2016 $ (7,100 ) Fair value adjustment to contingent consideration included in general and administrative expense (2,781 ) Cash paid upon achievement of milestone 1,250 Balance, December 31, 2017 $ (8,631 ) |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Trade accounts receivable $ 319,996 $ 260,976 Unbilled accounts receivable 140,410 113,765 Gross accounts receivable 460,406 374,741 Allowance for doubtful accounts (1,043 ) (829 ) Reserve for cash-basis customers (236 ) (5,316 ) Total accounts receivable reserves (1,279 ) (6,145 ) Accounts receivable, net $ 459,127 $ 368,596 A summary of activity in the accounts receivable reserves for the years ended December 31, 2017, 2016 and 2015 , is as follows (in thousands): 2017 2016 2015 Beginning balance $ 6,145 $ 7,364 $ 9,023 Charges to income from operations 5,809 49,677 37,870 Collections from cash basis customers and write-offs (10,675 ) (50,896 ) (39,529 ) Ending balance $ 1,279 $ 6,145 $ 7,364 Charges to income from operations represent charges to bad debt expense for increases in the allowance for doubtful accounts and reductions to revenue for increases in reserves for cash basis customers. The decrease in the reserve activity during 2017 is primarily attributable to two customers that were removed from cash-basis revenue recognition due to a strong, consistent history of payment. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Prepaid income taxes $ 30,314 $ 25,161 Prepaid sales and other taxes 22,973 18,877 Prepaid equipment and software maintenance 26,354 15,805 Other prepaid expenses 28,866 24,727 Other current assets 29,302 19,733 Total $ 137,809 $ 104,303 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2017 and 2016 (in thousands except years): December 31, 2017 December 31, 2016 Estimated Useful Life Computer and networking equipment $ 1,292,587 $ 1,170,471 3-7 Purchased software 61,276 51,727 3-10 Furniture and fixtures 48,521 41,968 5 Office equipment 26,949 24,497 3-5 Leasehold improvements 152,487 139,991 1-16 Internal-use software 765,162 656,053 2-7 Property and equipment, gross 2,346,982 2,084,707 Accumulated depreciation and amortization (1,484,447 ) (1,283,690 ) Property and equipment, net $ 862,535 $ 801,017 Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2017, 2016 and 2015 was $341.4 million , $307.7 million and $272.5 million , respectively. During the years ended December 31, 2017, 2016 and 2015 , the Company capitalized $28.9 million , $23.1 million and $17.9 million , respectively, of stock-based compensation related to employees who developed and enhanced internal-use software applications. During the years ended December 31, 2017 and 2016 , the Company wrote off $174.6 million and $93.4 million , respectively, of property and equipment, gross, along with the associated accumulated depreciation and amortization. The write-offs were primarily related to computer and networking equipment and internal-use software no longer in use. These assets had been substantially depreciated and amortized. In addition, during the year ended December 31, 2017, the Company wrote off $36.2 million of internal-use software as a result of certain restructuring efforts. These assets had a net book value of $32.0 million and are included in restructuring charges in the consolidated statements of income. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Beginning balance $ 1,228,503 $ 1,150,244 Acquisition of Concord Systems, Inc. — 1,079 Acquisition of Soha Systems, Inc. — 43,515 Acquisition of Cyberfend, Inc. — 38,754 Acquisition of Soasta, Inc. 121,668 — Acquisition of Nominum, Inc. 133,754 — Measurement period adjustments 4,217 — Foreign currency translation 10,546 (5,089 ) Ending balance $ 1,498,688 $ 1,228,503 Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Completed technologies $ 145,091 $ (65,283 ) $ 79,808 $ 119,091 $ (50,823 ) $ 68,268 Customer-related intangible assets 245,310 (128,835 ) 116,475 192,810 (114,209 ) 78,601 Non-compete agreements 4,710 (3,975 ) 735 5,030 (3,775 ) 1,255 Trademarks and trade names 7,200 (2,959 ) 4,241 3,700 (2,361 ) 1,339 Acquired license rights 490 (490 ) — 490 (490 ) — Total $ 402,801 $ (201,542 ) $ 201,259 $ 321,121 $ (171,658 ) $ 149,463 Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2017, 2016 and 2015 was $30.9 million , $ 26.6 million and $ 27.1 million , respectively. Based on the Company's acquired intangible assets as of December 31, 2017 , aggregate expense related to amortization of acquired intangible assets is expected to be approximately $33.3 million , $36.5 million , $33.8 million , $27.9 million and $22.4 million for the years ending December 31, 2018 , 2019 , 2020 , 2021 and 2022 , respectively. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions Acquisition-related costs were $5.5 million , $1.7 million and $1.8 million during the years ended December 31, 2017, 2016 and 2015 , respectively, and are included in general and administrative expense in the consolidated statements of income. Pro forma results of operations for the acquisitions completed in the years ended December 31, 2017, 2016 and 2015 have not been presented because the effects of the acquisitions, individually and in the aggregate, are not material to the Company's consolidated financial results. Revenue and earnings attributable to acquired operations since the dates of their acquisitions are included in the Company's consolidated statements of income and not presented separately because they are not material. 2017 Acquisitions Nominum On November 27, 2017, the Company acquired Nominum, Inc. ("Nominum"), a provider of domain name system ("DNS") and enterprise security solutions, for $180.3 million in cash. The allocation of the purchase price has not been finalized as of the filing of these financial statements. The acquisition is intended to add complementary capabilities to the Company's portfolio of security offerings while expanding the Company’s distribution to carriers that serve enterprise customers. The following table presents the preliminary allocation of the purchase price for Nominum (in thousands): Total purchase consideration $ 180,327 Allocation of the purchase consideration: Cash $ 8,455 Accounts receivable 9,845 Prepaids and other current assets 1,481 Identifiable intangible assets 32,800 Goodwill 133,754 Fixed assets 2,169 Deferred tax assets 11,398 Other assets 19 Total assets acquired 199,921 Accounts payable (1,460 ) Accrued liabilities (3,306 ) Deferred revenue (14,828 ) Total liabilities assumed (19,594 ) Net assets acquired $ 180,327 The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Nominum expected to be deductible for tax purposes is $44.2 million . The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 7,200 2.2 Customer-related intangible assets 24,300 6.5 Trademarks 1,100 3.7 Non-compete agreements 200 1.5 Total $ 32,800 The total weighted average amortization period for the intangible assets acquired from Nominum is 5.4 years . The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Soasta On April 6, 2017, the Company acquired Soasta, Inc. ("Soasta"), a leader in digital performance management, for $199.3 million in cash. The allocation of the purchase price has not been finalized as of the filing of these financial statements. The acquisition is expected to allow the Company to offer solutions designed to provide greater visibility into the business impact of customers' website and application optimization strategies. The following table presents the preliminary allocation of the purchase price for Soasta (in thousands): Total purchase consideration $ 199,280 Allocation of the purchase consideration: Cash $ 1,935 Accounts receivable 4,108 Prepaids and other current assets 1,143 Identifiable intangible assets 49,900 Goodwill 125,584 Deferred tax assets 31,206 Total assets acquired 213,876 Accounts payable (1,119 ) Accrued liabilities (3,915 ) Deferred revenue (9,562 ) Total liabilities assumed (14,596 ) Net assets acquired $ 199,280 The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Soasta expected to be deductible for tax purposes is $35.6 million . The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 18,800 4.1 Customer-related intangible assets 28,200 4.6 Trademarks 2,400 4.9 Non-compete agreements 500 1.9 Total $ 49,900 The total weighted average amortization period for the intangible assets acquired from Soasta is 4.4 years . The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. 2016 Acquisitions Concord Systems On September 23, 2016, the Company acquired Concord Systems, Inc. ("Concord"), a provider of technology for processing data at scale, for $3.0 million in cash. The acquisition was intended to provide the Company with technology to complement existing platform data processing capabilities. The Company allocated $1.1 million of the cost of the acquisition to goodwill and $2.8 million to an identifiable intangible asset with a useful life of 7.0 years . The value of the goodwill is primarily attributable to synergies related to the integration of Concord technology onto the Company's platform as well as a trained technical workforce. An insignificant portion of the goodwill related to the acquisition of Concord is expected to be deducted for tax purposes. Soha On October 3, 2016, the Company acquired Soha, a provider of technology designed to facilitate secure access to enterprise applications, for $55.0 million in initial consideration and up to an additional $5.0 million for the achievement of post-closing milestones. The acquisition was intended to complement the Company's strategy of securing, protecting and accelerating enterprise applications and services in the cloud. The Company allocated $44.1 million of the cost of the acquisition to goodwill and $10.7 million to identifiable intangible assets. The total weighted average useful life of the intangible assets acquired from Soha is 4.7 years . The value of the goodwill is primarily attributable to synergies related to the integration of Soha technology onto the Company's platform as well as a trained technical workforce. The total amount of goodwill related to the acquisition of Soha expected to be deducted for tax purposes is $12.0 million . Cyberfend On December 15, 2016, the Company acquired Cyberfend, an innovator in bot and automation detection solutions for web and mobile environments, for $37.5 million in initial consideration and up to an additional $10.5 million upon the achievement of post-closing milestones. The acquisition was intended to further strengthen the Company's existing bot management and mitigation services. The Company allocated $38.5 million of the cost of the acquisition to goodwill and $6.5 million to acquired intangible assets. The total weighted average useful life of the intangible assets acquired from Cyberfend is 3.6 years . The value of the goodwill from the acquisition can be attributed to a number of business factors including a trained technical workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Cyberfend expected to be deducted for tax purposes is $11.0 million . 2015 Acquisitions Xerocole On February 27, 2015 , the Company acquired Xerocole, Inc. ("Xerocole"), a provider of recursive DNS functionality, for $16.6 million in cash. The Company acquired Xerocole with a goal of expanding its existing authoritative DNS products. The Company allocated $12.9 million of the cost of the acquisition to goodwill and $4.9 million to acquired intangible assets. The total weighted average useful life of the intangible assets acquired from Xerocole is 8.8 years . The value of the goodwill from the acquisition can be attributed to a number of business factors including a trained technical workforce and cost synergies expected to be realized. The total amount of goodwill expected to be deducted for tax purposes is $2.7 million . Octoshape On April 6, 2015 , the Company acquired all of the outstanding capital stock of Codemate A/S and its wholly-owned subsidiary Octoshape ApS (together, "Octoshape") in exchange for $107.0 million in cash. Octoshape was a cloud service provider focused on delivering broadcast, enterprise and carrier solutions. The goal of acquiring Octoshape was to make available for the Company's customers additional delivery and optimization technologies for video streams of over-the-top (often referred to as OTT) content and to enable the Company to more fully support Internet Protocol television solutions. The following table presents the final allocation of the purchase price for Octoshape (in thousands): Total purchase consideration $ 107,047 Allocation of the purchase consideration: Cash $ 664 Accounts receivable 1,976 Other current assets 393 Identifiable intangible assets 41,950 Goodwill 69,445 Deferred tax assets 5,230 Total assets acquired 119,658 Other current liabilities (1,983 ) Current deferred revenue (770 ) Deferred tax liabilities (9,858 ) Total liabilities assumed (12,611 ) Net assets acquired $ 107,047 The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Octoshape expected to be deducted for tax purposes is $69.4 million . The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 25,310 9.8 Customer-related intangible assets 16,560 11.8 Non-compete agreements 80 2.0 Total $ 41,950 The total weighted average amortization period for the intangible assets acquired from Octoshape is 10.6 years . The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Bloxx On October 30, 2015 , the Company acquired Bloxx Limited ("Bloxx"), a provider of Secure Web Gateway technology, for $18.7 million in cash. The acquisition was intended to provide the Company with technology to complement its cloud security strategy for protecting businesses against Internet vulnerabilities. The Company allocated $17.7 million of the cost of the acquisition to goodwill and $3.9 million to the acquired intangible assets. The total weighted average useful life of the intangible assets acquired from Bloxx is 7.2 years . The value of the goodwill from the acquisition can be attributed to a number of business factors including a trained technical workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Bloxx expected to be deducted for tax purposes is $17.7 million . |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Payroll and other related benefits $ 150,784 $ 110,822 Bandwidth and co-location 72,782 61,084 Property, use and other taxes 47,584 52,858 Professional service fees 4,225 4,277 Other accrued expenses 8,368 9,736 Total $ 283,743 $ 238,777 Other liabilities consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Deferred rent $ 31,510 $ 29,668 Uncertain tax positions 86,814 73,231 Other long-term liabilities 24,631 15,792 Total $ 142,955 $ 118,691 |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the fourth quarter of 2017, management committed to an action to restructure certain parts of the Company, with the intent of shifting focus to more critical areas of the business and away from products that have not seen expected commercial success. The restructuring is also intended to facilitate cost efficiencies and savings. Certain capitalized internal-use software charges have been realized for software not yet placed into service that will not be completed and implemented due to this action. In addition, as part of cost efficiency and savings, certain headcount and facility reductions were made. The total restructuring charge expected as part of this action is up to $65.0 million , of which $49.3 million was recognized during the year ended December 31, 2017. During the first quarter of 2016, management made changes to the Company's organizational structure to reorganize the Company's product and development groups and global sales, services and marketing teams into divisions centered on the Company's customers and solutions. The restructuring charges relate to severance expenses for impacted employees and charges for internal-use software not yet placed into service that will not be completed and launched due to changing priorities as part of the reorganization. The restructuring charges recognized for this action during the year ended December 31, 2016, were $9.7 million . No additional charges are expected. The Company also recognizes restructuring charges for redundant employees, facilities and contracts associated with completed acquisitions. The following table summarizes the activity of the Company's restructuring accrual during the years ended December 31, 2017, 2016 and 2015 (in thousands): Employee Severance and Related Benefits Software Charges Excess Facilities, Contract Terminations and Other Total Balance January 1, 2015 $ — $ — $ 281 $ 281 Costs incurred 767 — — 767 Cash disbursements (605 ) — (56 ) (661 ) Balance December 31, 2015 162 — 225 387 Costs incurred 5,714 4,587 — 10,301 Cash disbursements (4,432 ) — (56 ) (4,488 ) Software charges — (4,587 ) — (4,587 ) Balance December 31, 2016 1,444 — 169 1,613 Costs incurred 17,311 31,965 5,608 54,884 Cash disbursements (5,898 ) — (3,212 ) (9,110 ) Software and other non-cash charges — (31,965 ) (1,179 ) (33,144 ) Balance December 31, 2017 $ 12,857 $ — $ 1,386 $ 14,243 |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In February 2014, the Company issued $690.0 million in par value of convertible senior notes due 2019 (the "Notes"). The Notes are senior unsecured obligations of the Company, do not bear regular interest and mature on February 15, 2019 , unless repurchased or converted prior to maturity. At their option, holders may convert their Notes prior to the close of business on the business day immediately preceding August 15, 2018 only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ended June 30, 2014 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; or • during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or upon the occurrence of specified corporate events. On or after August 15, 2018 , holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. Upon conversion, the Company, at its election, may pay or deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The initial conversion rate is 11.1651 shares of the Company's common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $89.56 per share, subject to adjustments in certain events, and represents a potential conversion into 7.7 million shares. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar debt obligation that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the proceeds allocated to the liability component (“debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes. The equity component is recorded in additional paid-in capital in the consolidated balance sheet and will not be re-measured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the Notes, the Company allocated the total transaction costs incurred to the liability and equity components based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component are netted against the equity component of the Notes in stockholders’ equity. The Notes consist of the following components as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Liability component: Principal $ 690,000 $ 690,000 Less: debt discount and issuance costs, net of amortization (27,087 ) (49,913 ) Net carrying amount $ 662,913 $ 640,087 Equity component: $ 101,276 $ 101,276 The estimated fair value of the Notes at December 31, 2017 was $697.0 million . The fair value was determined based on the quoted price of the Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 within the fair value hierarchy. Based on the closing price of the Company's common stock of $65.04 on December 31, 2017 , the value of the Notes if converted to common stock was less than the principal amount of $690.0 million . The Company used $62.0 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the Notes. The repurchase was made in accordance with a share repurchase program previously approved by the Board of Directors (Note 13). Additionally, $23.3 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The remaining net proceeds are for working capital, share repurchases and other general corporate purposes, as well as for potential acquisitions and strategic transactions. Note Hedge To minimize the impact of potential dilution upon conversion of the Notes, the Company entered into convertible note hedge transactions with respect to its common stock in February 2014. The Company paid $101.3 million for the note hedge transactions. The note hedge transactions cover approximately 7.7 million shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The note hedge transactions are intended to reduce dilution in the event of conversion of the Notes. Warrants Separately, in February 2014, the Company entered into warrant transactions, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, up to 7.7 million shares of the Company’s common stock at a strike price of approximately $104.49 per share. The Company received aggregate proceeds of $78.0 million from the sale of the warrants. The convertible note hedge and warrant transactions will generally have the effect of increasing the conversion price of the Notes to approximately $104.49 per share. Interest Expense The Notes do not bear regular interest, but have an effective interest rate of 3.2% attributable to the conversion feature. The following table sets forth total interest expense included in the consolidated statements of income related to the Notes for the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Amortization of debt discount and issuance costs $ 22,826 $ 22,040 Capitalization of interest expense (3,987 ) (3,402 ) Total interest expense $ 18,839 $ 18,638 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Commitments The Company leases its facilities under non-cancelable operating leases. These operating leases expire at various dates through December 2034 and generally require the payment of real estate taxes, insurance, maintenance and operating costs. The minimum aggregate future obligations under non-cancelable leases as of December 31, 2017 were as follows (in thousands): 2018 $ 50,187 2019 49,418 2020 61,031 2021 58,680 2022 56,211 Thereafter 481,471 Total $ 756,998 Rent expense for the years ended December 31, 2017, 2016 and 2015 was $58.8 million , $50.3 million and $47.9 million , respectively. The Company has entered into sublease agreements with tenants of various properties previously vacated by the Company. The amounts paid to the Company by these sublease tenants was $3.6 million , $1.3 million and $3.6 million for the years ended December 31, 2017, 2016 and 2015 , respectively. As of December 31, 2017 , the Company had outstanding letters of credit in the amount of $6.4 million , primarily related to operating leases. The letters of credit remain in effect until the Company fulfills its obligations under these leases or as such obligations expire under the terms of the letters of credit. Purchase Commitments As of December 31, 2017 , the Company had long-term commitments for bandwidth usage and co-location with various networks and ISPs and for asset purchases for network equipment. Additionally, as of December 31, 2017 , the Company had entered into purchase orders with various vendors. The minimum future commitments as of December 31, 2017 were as follows (in thousands): Bandwidth and Co-location Commitments Purchase Order Commitments 2018 $ 108,988 $ 93,385 2019 27,304 6,175 2020 817 3,205 2021 — 1,385 2022 — 1,190 Thereafter — — Total $ 137,109 $ 105,340 Legal Matters The Company is party to various litigation matters that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material effect on the Company’s business, results of operations, financial condition or cash flows. In July 2016, as part of the resolution of a patent infringement lawsuit filed by the Company against Limelight Networks, Inc. (“Limelight”) in 2006, the Company entered into an agreement that requires Limelight to pay the Company $54.0 million in 12 equal installments over three years , beginning in August 2016. During the years ended December 31, 2017 and 2016, the Company received $18.0 million and $9.0 million , respectively, under this agreement, of which $16.4 million and $8.6 million was recorded as a gain contingency, which reduced general and administrative expenses in the consolidated statements of income, respectively, and $1.6 million and $0.4 million was recorded as interest income, respectively. In November 2015, Limelight filed a complaint in the U.S. District Court for the Eastern District of Virginia against the Company and XO Communications LLC (“XO”), alleging patent infringement by the two companies. The complaint seeks to recover from the Company and XO monetary damages based upon lost revenue due to infringing technology used by the companies. The Company has agreed to indemnify XO for damages it incurs in this matter. The Company has made counterclaims in the action against Limelight alleging that Limelight has infringed multiple of the Company’s content delivery patents, and the Company is seeking monetary damages based upon lost revenue due to the infringing technology used by Limelight. A trial date on Limelight's patents has been set for April 2018. No provision with respect to this matter has been made in the Company’s consolidated financial statements. An estimate of the possible loss or range of loss cannot be made. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's business partners, vendors or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright or other intellectual property right or the Company’s negligence, willful misconduct or violation of law. Subject to applicable statutes of limitation, the term of each of these indemnification agreements is generally perpetual from the time of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to its services and activities and that could limit the Company’s exposure in that respect. The Company has agreed to indemnify each of its officers and directors during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is or was or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable the Company to recover a portion of certain future amounts paid. To date, the Company has not encountered material costs as a result of such indemnification obligations and has not accrued any related liabilities in its financial statements. In assessing whether to establish an accrual, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program In October 2013, the Board of Directors authorized a $750.0 million share repurchase program, effective from October 2013 through December 2016. In February 2016, the Board of Directors authorized a $1.0 billion share repurchase program that superseded the October 2013 repurchase program and is effective from February 2016 through December 2018. The Company's goal for the share repurchase program is to offset the dilution created by its employee equity compensation programs and provide the flexibility to return capital to shareholders as business and market conditions warrant. During the years ended December 31, 2017, 2016 and 2015 , the Company repurchased 6.9 million , 7.0 million and 4.5 million shares, respectively, of its common stock for $361.2 million , $373.8 million and $302.6 million , respectively, pursuant to the current repurchase program as well as prior ones approved by the Board of Directors. As of December 31, 2017 , the Company had $333.3 million available for future purchases of shares under the current repurchase program. The Board of Directors authorized the retirement of all the outstanding shares of its treasury stock as of each of December 31, 2017, 2016 and 2015 . The retired shares were returned to the number of authorized but unissued shares of the Company's common stock, and the retirement was recorded to additional paid-in capital. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders' equity, for the year ended December 31, 2017 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2017 $ (59,017 ) $ 2,795 $ (56,222 ) Other comprehensive income (loss) 34,698 (406 ) 34,292 Balance as of December 31, 2017 $ (24,319 ) $ 2,389 $ (21,930 ) The tax effect on accumulated unrealized gains on investments was insignificant as of December 31, 2017 and 2016 . Amounts reclassified from accumulated other comprehensive loss to net income were insignificant for the year ended December 31, 2017 . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation Related Costs [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company has established a savings plan for its employees that is designed to be qualified under Section 401(k) of the Internal Revenue Code. Eligible employees are permitted to contribute to this plan through payroll deductions within statutory and plan limits. The Company contributed approximately $15.6 million , $13.7 million and $13.1 million of cash to the savings plan for the years ended December 31, 2017, 2016 and 2015 , respectively, under a matching program. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Stock-Based Compensation Equity Plans In May 2013, the Company's stockholders approved the Akamai Technologies, Inc. 2013 Stock Incentive Plan (as amended in 2015 and 2017, the "2013 Plan"). The 2013 Plan replaced the Akamai Technologies, Inc. 2009 Stock Incentive Plan (the "2009 Plan"), which in turn replaced the Akamai Technologies, Inc. 2006 Stock Incentive Plan, the Akamai Technologies, Inc. 2001 Stock Incentive Plan and the Akamai Technologies, Inc. 1998 Stock Incentive Plan (together with the 2009 Plan, the "Previous Plans"). The Company no longer issues equity awards under the Previous Plans, and they solely exist to satisfy outstanding equity awards previously granted under those plans. The 2013 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards up to 18.5 million shares of common stock to employees, officers, directors, consultants and advisers of the Company. Additionally, the Company may grant up to 3.8 million shares of common stock thereunder that were available for grant under the 2009 Plan immediately prior to stockholder approval of the 2013 Plan. Any shares of common stock that are currently outstanding under the Previous Plans that are terminated, canceled, surrendered or forfeited will become available to grant under the 2013 Plan. As of December 31, 2017 , the Company had reserved approximately 11.1 million shares of common stock available for future issuance of equity awards under the 2013 Plan. The Company has assumed certain stock option plans and the outstanding stock options of companies that it has acquired (“Assumed Plans”). Stock options outstanding as of the date of acquisition under the Assumed Plans were exchanged for the Company’s stock options and adjusted to reflect the appropriate conversion ratio as specified by the applicable acquisition agreement, but are otherwise administered in accordance with the terms of the Assumed Plans. Stock options under the Assumed Plans generally vest over four years and expire ten years from the date of grant. The 1999 Employee Stock Purchase Plan ("1999 ESPP") permits eligible employees to purchase up to 1.5 million shares each June 1 and December 1, provided that the aggregate number of shares issued shall not exceed 20.0 million . The 1999 ESPP allows participants to purchase shares of common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six -month intervals. During the years ended December 31, 2017, 2016 and 2015 , the Company issued 1.1 million , 0.9 million and 0.7 million shares under the 1999 ESPP, respectively, with a weighted average purchase price per share of $40.18 , $46.23 and $52.05 , respectively. Total cash proceeds from the purchase of shares under the 1999 ESPP in the years ended December 31, 2017 , 2016 and 2015 were $42.3 million , $39.9 million and $34.8 million , respectively. As of December 31, 2017 , approximately $6.1 million had been withheld from employees for future purchases under the 1999 ESPP. Stock-Based Compensation Expense The following table summarizes the components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Cost of revenue $ 20,314 $ 18,287 $ 14,145 Research and development 38,864 29,739 23,927 Sales and marketing 60,246 55,407 53,542 General and administrative 44,884 41,073 35,063 Total stock-based compensation 164,308 144,506 126,677 Provision for income taxes (56,237 ) (49,014 ) (49,033 ) Total stock-based compensation, net of taxes $ 108,071 $ 95,492 $ 77,644 In addition to the amounts of stock-based compensation reported in the table above, the Company’s consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 also include stock-based compensation reflected as a component of amortization of capitalized internal-use software; the additional stock-based compensation was $17.5 million , $13.8 million and $12.7 million , respectively, before taxes. The Company uses the Black-Scholes option pricing model to determine the fair value of the Company’s stock option awards. This model requires the input of subjective assumptions, including expected stock price volatility and the estimated term of each award. The estimated fair value of the Company's stock-based awards, less expected forfeitures, is amortized over the awards’ vesting period on a straight-line basis. Expected volatilities are based on the Company’s historical stock price volatility and implied volatility from traded options in its stock. The Company uses historical data to estimate the expected term of options granted within the valuation model. The risk-free interest rate for periods commensurate with the expected term of the option is based on the U.S. Treasury yield rate in effect at the time of grant. The expected dividend yield is zero, as the Company currently does not pay a dividend and does not anticipate doing so in the future. The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2017, 2016 and 2015 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: 2017 2016 2015 Expected term (in years) 0.5 0.5 0.5 Risk-free interest rate 1.0 % 0.5 % 0.2 % Expected volatility 35.8 % 36.2 % 28.0 % Dividend yield — % — % — % For the years ended December 31, 2017, 2016 and 2015 , the weighted average fair value of awards granted under the 1999 ESPP was $13.60 per share, $14.54 per share and $15.63 per share, respectively. As of December 31, 2017 , total pre-tax unrecognized compensation cost for stock options, restricted stock units, deferred stock units and shares of common stock issued under the 1999 ESPP was $267.8 million . The expense is expected to be recognized through 2021 over a weighted average period of 1.9 years . Stock Options The following table summarizes stock option activity during the year ended December 31, 2017 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2017 874 $ 35.51 Exercised (522 ) 34.68 Forfeited (13 ) 47.26 Outstanding at December 31, 2017 339 $ 36.36 1.66 $ 9,734 Exercisable at December 31, 2017 338 $ 36.31 1.66 $ 9,708 Vested or expected to vest December 31, 2017 339 $ 36.35 1.66 $ 9,731 The total pre-tax intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $12.3 million , $18.3 million and $53.6 million , respectively. The total fair value of options vested for the years ended December 31, 2017, 2016 and 2015 was $1.2 million , $6.5 million and $10.3 million , respectively. The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $65.04 on December 31, 2017 , that would have been received by the option holders had all option holders exercised their “in-the-money” options as of that date. The total number of shares issuable upon the exercise of “in-the-money” options exercisable as of December 31, 2017 was 0.3 million . Deferred Stock Units The Company has granted deferred stock units ("DSUs") to non-employee members of its Board of Directors. Each DSU represents the right to receive one share of the Company’s common stock upon vesting. The holder may elect to defer receipt of the vested shares of stock represented by the DSU for a period of at least one year but not more than ten years from the grant date. DSUs vest 100% on the first anniversary of the grant date. If a director has completed one year of Board service, vesting of 100% of the DSUs held by such director will accelerate at the time of his or her departure from the Board. The following table summarizes the DSU activity for the year ended December 31, 2017 : Units (in thousands) Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 164 $ 44.90 Granted 44 47.50 Vested and distributed (31 ) 54.97 Outstanding at December 31, 2017 177 $ 43.77 The total pre-tax intrinsic value of DSUs that were vested and distributed during the years ended December 31, 2017, 2016 and 2015 was $1.5 million , $1.4 million and $10.7 million , respectively. The total fair value of DSUs that were vested and distributed during the years ended December 31, 2017, 2016 and 2015 was $1.7 million , $1.6 million and $4.9 million , respectively. The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant. As of December 31, 2017 , 44,000 DSUs were unvested, with an aggregate intrinsic value of approximately $2.9 million and a weighted average remaining contractual life of approximately 0.4 years . These units are expected to vest in May 2018 . Restricted Stock Units The following table summarizes the different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2017 (in thousands): December 31, 2017 RSUs with service-based vesting conditions 3,411 RSUs with market-based vesting conditions 116 RSUs with performance-based vesting conditions 82 Total 3,609 RSUs represent the right to receive one share of the Company’s common stock upon vesting. RSUs are granted at the discretion of the Board of Directors, a committee thereof or, subject to defined limitations, the Chief Executive Officer of the Company, acting as a committee of one director, to whom such authority has been delegated. The Company has issued RSUs that vest based on the passage of time assuming continued service with the Company, RSUs that vest only upon the achievement of defined performance metrics tied primarily to revenue and income targets and other key financial performance indicators and RSUs that vest based upon total shareholder return ("TSR") measured against the benchmark TSR of a peer group. For RSUs with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant, and the stock-based compensation expense is being recognized over the vesting period. Most RSUs with service-based vesting provisions vest in installments over a three - or four -year period following the grant date. Beginning in the first quarter of 2016, the Company granted RSUs with market-based vesting conditions to certain of its executive officers. The Company uses the Monte Carlo simulation model to determine the fair value of the Company’s RSUs based on TSR. This model requires the input of assumptions, including the estimated term of each award, the risk-free interest rate, historical stock price volatility of the Company's shares and historical stock price volatility of peer-company shares. The grant-date fair values of the Company's RSUs with market-based vesting conditions granted during the year ended December 31, 2017 and 2016 were estimated using a Monte Carlo simulation model with the following assumptions: 2017 2016 Expected term (in years) 3.0 3.0 Risk-free interest rate 1.4 % 0.8 % Akamai historical share price volatility 33.2 % 34.3 % Average volatility of peer-company share price 27.1 % 27.6 % For the years ended December 31, 2017, 2016 and 2015 , management measured compensation expense for performance-based RSUs based upon a review of the Company’s expected achievement against specified financial performance targets. Such compensation cost is being recorded using a graded-vesting method for each series of grants of performance-based RSUs, to the extent management has deemed that such awards are probable of vesting based upon the expected achievement against the specified targets. On a periodic basis, management reviews the Company’s expected performance and adjusts the compensation cost, if needed, at such time. The following table summarizes the RSU activity for the year ended December 31, 2017 : Units (in thousands) Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 5,710 $ 59.51 Granted 3,609 59.60 Vested (2,910 ) 59.59 Forfeited (566 ) 46.65 Outstanding at December 31, 2017 5,843 $ 59.94 The total pre-tax intrinsic value of RSUs that vested during the years ended December 31, 2017, 2016 and 2015 was $168.6 million , $128.5 million and $153.6 million , respectively. The total fair value of RSUs that vested during the years ended December 31, 2017, 2016 and 2015 was $173.6 million , $140.4 million and $105.3 million , respectively. The grant-date fair value of each RSU is calculated based upon the Company’s closing stock price on the date of grant. As of December 31, 2017 , 5.8 million RSUs were outstanding and unvested, with an aggregate intrinsic value of $380.2 million and a weighted average remaining vesting period of approximately 1.9 years . These RSUs are expected to vest on various dates through October 2021 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before provision for income taxes were as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 U.S. $ 94,518 $ 273,176 $ 233,247 Foreign 221,604 186,270 223,377 Income before provision for income taxes $ 316,122 $ 459,446 $ 456,624 The provision for income taxes consisted of the following for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Current tax provision (benefit): Federal $ 41,090 $ 89,816 $ 70,298 State 6,336 6,238 (1,750 ) Foreign 51,244 39,952 62,572 Deferred tax provision (benefit): Federal (17,136 ) 4,265 23,381 State 21,689 (86 ) (742 ) Foreign (4,992 ) 3,916 (18,536 ) Change in valuation allowance (430 ) (787 ) (5 ) Total $ 97,801 $ 143,314 $ 135,218 The current tax provision includes income taxes incurred on intercompany sales, primarily intellectual property. For financial statement purposes this amount is required to be deferred on the balance sheet with the offset recorded as a deferred tax benefit. The income tax that is deferred is amortized into earnings over the economic life of the intellectual property that was sold. The amount of the current year deferral included in the Company’s deferred tax provision was a benefit of $16.0 million , $9.1 million and $15.5 million in the years ended December 31, 2017, 2016 and 2015 , respectively. The Company’s effective rate differed from the U.S. federal statutory rate as follows for the years ended December 31, 2017, 2016 and 2015 : 2017 2016 2015 U.S. federal income tax rate 35.0 % 35.0 % 35.0 % State taxes 1.6 2.0 1.7 Share-based compensation 3.7 2.7 1.9 U.S. federal, state and foreign research and development credits (6.9 ) (3.3 ) (4.1 ) Foreign earnings (7.8 ) (3.4 ) (4.6 ) Domestic production activities deduction (0.7 ) (1.7 ) (1.2 ) U.S Tax Cuts and Jobs Act, net 8.2 — — Impact of acquisition-related uncertain tax position (2.9 ) — — Other 0.7 (0.1 ) 0.9 30.9 % 31.2 % 29.6 % In December 2017 the TCJA was enacted, making significant changes to the U.S. Internal Revenue Code. Changes include a corporate income tax rate decrease from 35% to 21%, the implementation of a modified territorial tax system, a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017 and the repeal of the domestic production activities deduction, among other items. The Company has recognized a provisional net tax expense of $26.0 million for the impact of the TJCA which is comprised of a one-time transition tax expense of $43.4 million on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017, offset by a $17.4 million tax benefit related to the re-measurement of deferred tax assets and liabilities due to the lower corporate income tax rate. Any subsequent adjustments to the provisional amounts will be recorded to current tax expense or benefit in the quarter of 2018 in which the analysis is completed. The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Accrued bonus $ 19,950 $ 18,390 Deferred revenue 8,861 10,055 Deferred rent 8,000 12,592 Stock-based compensation 20,557 32,030 Net operating losses 26,698 7,855 Unrealized losses 1,239 1,862 Tax credit carryforwards 49,135 23,629 License income 6,611 16,932 Other 11,909 7,048 Deferred tax assets 152,960 130,393 Depreciation and amortization (13,933 ) (10,470 ) Acquired intangible assets (48,781 ) (44,788 ) Internal-use software development costs capitalized (54,687 ) (77,375 ) Deferred tax liabilities (117,401 ) (132,633 ) Valuation allowance — (430 ) Net deferred tax assets (liabilities) $ 35,559 $ (2,670 ) The Company re-measured the U.S. deferred tax assets and liabilities as of December 31, 2017 included in the table above at the applicable tax rate of 21% in accordance with the TCJA. The table below summarizes the Company's NOL and tax credit carryforwards in federal, state, and foreign jurisdictions as of December 31, 2017 and 2016 (in thousands, except for years): 2017 2016 Expirations at Various Dates Through: NOL carryforwards: Federal $ 99,200 $ 16,500 2037 State 89,500 11,400 2035 Foreign — — — Federal and state research and development tax credit and other credit carryforwards 65,900 41,500 2032 The Company's U.S. federal and state NOL carryforwards relate to acquisitions completed in 2012 and 2017. As of December 31, 2017, foreign earnings of approximately $603.2 million have been taxed due to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings required by the TCJA. No provision for U.S. income and foreign withholding taxes has been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional basis differences inherent in these entities, as these amounts continue to be indefinitely reinvested. Determination of the amount of the unrecognized deferred tax liability on outside basis differences is not practicable because of the complexity of laws and regulations, the varying tax treatment of alternative repatriation scenarios, and the variation due to multiple potential assumptions relating to the timing of any future repatriation. The following is a roll forward of the Company’s unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Balance at beginning of year $ 69,117 $ 65,290 $ 33,320 Gross increases — tax positions of prior periods 2,692 6,391 11,238 Gross increases — current period tax positions 27,163 6,252 27,043 Gross decreases — tax positions of prior periods (277 ) (6,491 ) (5,739 ) Gross decreases — lapse of applicable statute of limitations (12,850 ) (287 ) (257 ) Gross decreases — settlements — (2,038 ) (315 ) Balance at end of year $ 85,845 $ 69,117 $ 65,290 As of December 31, 2017, 2016 and 2015 , the Company had approximately $90.7 million , $77.1 million and $72.3 million of unrecognized tax benefits, respectively. The total unrecognized tax benefits include $10.7 million , $13.7 million , and $10.0 million of accrued interest and penalties as of December 31, 2017, 2016 and 2015 , respectively. Interest and penalties related to unrecognized tax benefits are recorded in the provision for income taxes and were $2.3 million , $3.9 million and $2.2 million for the years ended December 31, 2017, 2016 and 2015 , respectively. The amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate is approximately $76.0 million . As of December 31, 2017 , it is reasonably possible that $3.3 million of unrecognized tax benefits may be recognized by the end of 2018 as a result of the expiration of local statutes of limitations. Certain state and foreign income tax returns from 2011 through 2016 are currently under audit, including the Commonwealth of Massachusetts. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock options, RSUs, DSUs, convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the components used in the computation of basic and diluted net income per share for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per share data): 2017 2016 2015 Numerator: Net income $ 218,321 $ 316,132 $ 321,406 Denominator: Shares used for basic net income per share 171,559 174,917 178,391 Effect of dilutive securities: Stock options 260 384 794 RSUs and DSUs 892 914 1,230 Convertible senior notes — — — Warrants related to issuance of convertible senior notes — — — Shares used for diluted net income per share 172,711 176,215 180,415 Basic net income per share $ 1.27 $ 1.81 $ 1.80 Diluted net income per share $ 1.26 $ 1.79 $ 1.78 For the years ended December 31, 2017, 2016 and 2015 , certain potential outstanding shares from stock options, service-based RSUs, convertible notes and warrants were excluded from the computation of diluted net income per share because the effect of including these items was anti-dilutive. Additionally, certain performance-based RSUs were excluded from the computation of diluted net income per share because the underlying performance conditions for such RSUs had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Stock options 9 58 22 Service-based RSUs 3,258 2,262 660 Performance-based RSUs 1,054 690 1,007 Convertible senior notes 7,704 7,704 7,704 Warrants related to issuance of convertible senior notes 7,704 7,704 7,704 Total shares excluded from computation 19,729 18,418 17,097 |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision-maker is the chief executive officer and the executive management team. As of December 31, 2017 , the Company operated in one industry segment: providing cloud services for delivering, optimizing and securing content and business applications over the Internet. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments. The Company deploys its servers into networks worldwide. As of December 31, 2017 , the Company had approximately $311.7 million and $249.8 million of net property and equipment, excluding internal-use software, located in the U.S. and foreign locations, respectively. As of December 31, 2016 , the Company had approximately $297.8 million and $231.8 million of net property and equipment, excluding internal-use software, located in the U.S. and foreign locations, respectively. The Company sells its services and licenses through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated and was $855.0 million , $720.0 million and $593.0 million for the years ended December 31, 2017, 2016 and 2015 , respectively. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. |
Quarterly Financial Results (un
Quarterly Financial Results (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Results (unaudited) | Quarterly Financial Results (unaudited) (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Year ended December 31, 2017: Revenue $ 609,237 $ 608,908 $ 621,399 $ 663,452 Cost of revenue (exclusive of amortization of acquired intangible assets) 205,703 214,650 225,468 229,937 Net income 80,930 57,772 60,512 19,107 Basic net income per share 0.47 0.33 0.35 0.11 Diluted net income per share 0.46 0.33 0.35 0.11 Year ended December 31, 2016: Revenue $ 567,725 $ 572,135 $ 584,065 $ 616,124 Cost of revenue (exclusive of amortization of acquired intangible assets) 194,736 206,323 204,467 203,475 Net income 74,858 73,635 76,000 91,639 Basic net income per share 0.42 0.42 0.44 0.53 Diluted net income per share 0.42 0.42 0.43 0.52 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheet. The Company classifies its debt securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. |
Accounts Receivable and Related Reserves | Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance. These reserves consist of allowances for doubtful accounts and reserves for cash-basis customers. Increases and decreases in the allowance for doubtful accounts are included as a component of general and administrative expense in the consolidated statements of income. The Company’s reserve for cash-basis customers increases as services are provided to customers where collection is no longer assured. Increases to the reserve for cash-basis customers are recorded as reductions of revenue. The reserve decreases and revenue is recognized when and if cash payments are received. Estimates are used in determining these reserves and are based upon the Company’s review of outstanding balances on a customer-specific, account-by-account basis. The allowance for doubtful accounts is based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. |
Concentrations of Credit Risk | Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2017 , its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2017, 2016 and 2015 , no customer accounted for more than 10% of total revenue. As of December 31, 2017 and 2016 , no customer had an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2017 , its concentration of credit risk related to accounts receivable was not significant. |
Fair Value of Financial Measurements | Fair Value of Financial Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities that have been classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year . Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment, and any changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred. |
Goodwill, Acquired Intangible Assets and Long-Lived Assets | Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2017, 2016 and 2015 , the fair value of the Company's reporting unit was substantially in excess of the carrying value. The tests did not result in an impairment to goodwill during the years ended December 31, 2017, 2016 and 2015 . Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Long-lived assets, including property and equipment and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. |
Revenue Recognition | Revenue Recognition The Company recognizes service revenue in accordance with the authoritative guidance for revenue recognition, including guidance on revenue arrangements with multiple deliverables. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. These contracts generally commit the customer to a minimum of monthly, quarterly or annual level of usage and specify the rate at which the customer must pay for actual usage above the monthly, quarterly or annual minimum. For contracts with a monthly commitment, the Company recognizes the monthly minimum as revenue each month, provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. Should a customer’s usage of the Company's services exceed the monthly, quarterly or annual minimum, the Company recognizes revenue for such excess in the period of additional usage. For annual or other non-monthly period revenue commitments, the Company recognizes revenue monthly based upon the customer’s actual usage each month of the commitment period and only recognizes any remaining committed amount for the applicable period in the last month thereof. The Company typically charges its customers an integration fee when the services are first activated. Integration fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement. The Company also derives revenue from services sold as discrete, non-recurring events or based solely on usage. For these services, the Company recognizes revenue once the event or usage has occurred. When more than one element is contained in a revenue arrangement, the Company determines the fair value for each element in the arrangement based on vendor-specific objective evidence (“VSOE”) for each respective element, including any renewal rates for services contractually offered to the customer. Elements typically included in the Company's multiple element arrangements consist of its core services – the delivery of content, applications and software over the Internet – as well as mobile and security solutions and enterprise professional services. These elements have value to the customer on a stand-alone basis in that they can be sold separately by another vendor. Generally, there is no right of return relative to these services. The Company typically uses VSOE to determine the fair value of its separate elements. All stand-alone sales of professional services are reviewed to establish the average stand-alone selling price for those services. For the Company's core services, the fair value is the price charged for a single deliverable on a per unit basis when it is sold separately. For arrangements in which the Company is unable to establish VSOE, third-party evidence ("TPE") of the fair value of each element is determined based upon the price charged when the element is sold separately by another vendor. For arrangements in which the Company is unable to establish VSOE or TPE for each element, the Company uses the best estimate of selling price ("BESP") to determine the fair value of the separate deliverables. The Company estimates BESP based upon a management-approved listing of unit pricing for all solutions and pre-established discount levels for each solution that takes into consideration volume, geography and industry lines. The Company allocates arrangement consideration across the multiple elements using the relative selling price method. At the inception of a customer contract, the Company makes an assessment as to that customer’s ability to pay for the services provided. The Company bases its assessment on a combination of factors, including the successful completion of a credit check or financial review, its collection experience with the customer and other forms of payment assurance. Upon the completion of these steps, the Company recognizes revenue monthly in accordance with its revenue recognition policy. If the Company subsequently determines that collection from the customer is not reasonably assured, the Company records an allowance for doubtful accounts and bad debt expense for all of that customer’s unpaid invoices and ceases recognizing revenue for continued services provided until cash is received from the customer. Changes in the Company’s estimates and judgments about whether collection is reasonably assured would change the timing of revenue or amount of bad debt expense that the Company recognizes. The Company also sells its services through reseller channels. Assuming all other revenue recognition criteria are met, the Company recognizes revenue from reseller arrangements based on the reseller’s contracted non-refundable minimum purchase commitments over the term of the contract, plus amounts sold by the reseller to its customers in excess of the minimum commitments. Amounts attributable to this excess usage are recognized as revenue in the period in which the service is provided. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. If the Company concludes that these contracts were negotiated concurrently, the Company records as revenue only the net cash received from the vendor, unless the product or service received has a separate identifiable benefit and the fair value of the vendor’s product or service can be established objectively. The Company may from time to time resell licenses or services of third parties. The Company records revenue for these transactions on a gross basis when the Company has risk of loss related to the amounts purchased from the third party and the Company adds value to the license or service, such as by providing maintenance or support for such license or service. If these conditions are present, the Company recognizes revenue when all other revenue recognition criteria are satisfied. Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly billed service fees, prepayments made by customers for future periods, deferred integration and activation set-up fees and amounts billed under customer arrangements with extended payment terms. |
Cost of Revenues | Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, Internet service providers (“ISPs”) make rack space available for the Company’s servers and access to their bandwidth at a discount or no cost. In exchange, the ISP and its customers benefit by receiving content through a local Company server resulting in better content delivery. The Company does not consider these relationships to represent the culmination of an earnings process. Accordingly, the Company does not recognize as revenue the value to the ISPs associated with the use of the Company’s servers, nor does the Company recognize as expense the value of the rack space and bandwidth received at discounted or no cost. |
Research and Development Costs and Capitalized Internal-Use Software | Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project, and continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company recognizes compensation costs for all stock-based payment awards made to employees based upon the awards’ grant-date fair value. The stock-based payment awards include stock options, restricted stock units, deferred stock units and employee stock purchases related to the Company’s employee stock purchase plan. For stock options, the Company has selected the Black-Scholes option-pricing model to determine the fair value of stock option awards. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock options, restricted stock units and deferred stock units that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance condition-based vesting feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. |
Foreign Currency Translation and Forward Currency Contracts | Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in Other income (expense), net . The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in Other income (expense), net . As of December 31, 2017 and 2016 , the fair value of the forward currency contracts and the underlying net gains for the years ended December 31, 2017, 2016 and 2015 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating. |
Taxes | Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax and sales and use tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. In December 2017, the U.S. Tax Cuts and Jobs Act (the "TCJA") was enacted, making significant changes to the Internal Revenue Code. The U.S. Securities and Exchange Commission staff issued guidance for the accounting for certain income tax effects of the TCJA, which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The Company has recognized the provisional impacts of the TCJA in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact could materially differ from the provisional amounts recorded due to additional analysis, changes in assumptions or interpretations, additional guidance that may be issued and actions the Company may take as a result of the TCJA. The Company expects to complete the analysis within the measurement period and any subsequent adjustment to the provisional amounts will be recognized as a current tax provision or benefit in the quarter of 2018 in which the analysis is completed. |
Newly-Adopted Accounting Pronouncements and Recent Accounting Pronouncements | Newly-Adopted Accounting Pronouncements Share-Based Payments In March 2016, the Financial Accounting Standards Board ("FASB") issued guidance that is intended to simplify aspects of how share-based payments are accounted for and presented in financial statements. This guidance requires that entities record all tax effects of share-based payments at settlement or expiration through the income statement. The standard also amends how windfall tax benefits are recognized, the minimum statutory tax withholding requirements and how entities elect to recognize share-based payment forfeitures. In addition, this guidance impacts the presentation of cash flows related to excess tax benefits by no longer requiring separate presentation as a financing activity apart from other operating income tax cash flows. This guidance was effective for the Company on January 1, 2017. Upon adoption, the Company began recognizing tax benefits related to stock-based compensation in its provision for income taxes rather than as additional paid-in capital. The Company elected to continue estimating forfeitures in determining the amount of compensation cost. The Company was not required to adjust beginning retained earnings as a result of these two items. In addition, the Company adopted the presentation requirements related to the excess tax benefit in its statements of cash flows on a retrospective basis beginning January 1, 2015. The line item labeled excess tax benefits from stock-based compensation included in both cash flows from operating activities and financing activities was eliminated. This had the impact of increasing net cash provided by operating activities and net cash used in financing activities. Prior periods have been revised as follows (in thousands): Net Cash Provided by Operating Activities Net Cash Used in Financing Activities As Reported As Adjusted As Reported As Adjusted Year ended December 31, 2016 $ 866,298 $ 871,812 $ (354,265 ) $ (359,779 ) Year ended December 31, 2015 764,151 793,452 (267,728 ) (297,029 ) Recent Accounting Pronouncements Revenue Recognition In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step model for recognizing revenue from contracts with customers. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard could be adopted using one of two methods: retrospectively to each prior period presented or a modified retrospective application by recognizing a cumulative-effect adjustment as a component of equity as of the date of adoption. This standard became effective for the Company on January 1, 2018, and the Company has elected to adopt it retrospectively to each prior period presented. The updated guidance impacts, or requires the Company to modify, certain judgments and estimates that the Company currently makes as it relates to recognizing revenue. The Company primarily derives revenue from the sales of its services, but in some instances licenses software to some of its customers. Prior to adoption of the updated guidance, the Company did not establish VSOE for the undelivered elements sold with the software. Thus, revenue from license sales was deferred and recognized over the arrangement term. Upon adoption of the new revenue standard, license revenue will be recognized at a point in time when the license is delivered, provided all other revenue recognition criteria have been met. This will result in accelerating revenue recognition for these types of arrangements. For sales of the Company's services, integration fee revenue that was previously recognized ratably over the estimated life of the customer arrangement will be recognized when integration has been completed, which will have the effect of accelerating revenue recognition from integration fees. In addition, the Company historically established a reserve for cash basis customers if collectability was not reasonably assured and recognized revenue as cash was collected. Upon adoption of the new standard, revenue will be recognized for those customers when collectability becomes probable, transfer of control for all performance obligations has occurred and all other revenue recognition criteria have been achieved, rather than when collectability is reasonably assured. The Company has quantified the impact that these changes would have had on revenue reported for the years ended December 31, 2017 and 2016, and each of the quarters therein, and determined that they would not have had a material impact on the Company's consolidated financial statements. The Company is also assessing the impact of capitalizing costs associated with obtaining customer contracts, specifically commission and incentive payments. Historically, these payments have been expensed in the period in which they were incurred. Under the updated guidance, these payments will be deferred on the Company's consolidated balance sheets and amortized over the expected life of the customer arrangement. The Company has quantified the impact that these changes would have had on sales and marketing expenses recorded in the consolidated statements of income for the years ended December 31, 2016 and 2017, and for each of the quarters therein and determined it would not have had a material impact on the consolidated statements of income for such periods. Upon adoption, the Company expects to record a deferred commission and incentive asset on the consolidated balance sheet of $58.6 million as of December 31, 2017. The current portion of the asset will be included in prepaid expenses and other current assets, and the long-term portion will be included in other assets. The full amount of the adjustment will be included in retained earnings. The Company is substantially complete with its implementation efforts as of the filing of these financial statements; however, it is continuing to evaluate the impact that this guidance will have on disclosure requirements related to revenue and revenue-related items. Leases In February 2016, the FASB issued guidance that requires companies to present assets and liabilities arising from leases with terms greater than 12 months on the consolidated balance sheets. The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize right-of-use assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. This will impact all leases, including leases for real estate and co-location facilities, among other arrangements currently under evaluation. The Company plans to adopt this standard in the first quarter of 2019 and expects to record significant right-of-use assets and lease liabilities on its consolidated balance sheets. The Company has formed a project team to assess the current state of accounting for leases, to understand the gaps between the current state and required future state and to implement the new processes, systems and controls required. The Company expects the adoption of this standard to require changes to its processes, systems and controls over financial reporting. Credit Losses on Financial Instruments In June 2016, the FASB issued guidance that introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new "expected loss model" that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. This guidance will be effective for the Company on January 1, 2020. The Company is evaluating the potential impact on its consolidated financial statements of adopting this new accounting guidance. Intra-Entity Asset Transfers In October 2016, the FASB issued guidance that requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance became effective for the Company on January 1, 2018 and is to be applied on a modified retrospective basis through recognizing a cumulative-effect adjustment as a component of equity as of the date of adoption. Upon adoption, the Company expects to reclassify $11.6 million from other current assets and $27.0 million from other assets to retained earnings. Business Combinations In January 2017, the FASB issued guidance that changes the definition of a business to assist entities with evaluating whether transactions should be accounted for as transfers of assets or business combinations. This guidance became effective for the Company on January 1, 2018 and is to be applied prospectively. The adoption of this new accounting guidance will change the manner in which the Company evaluates whether a transaction is a transfer of assets or a business combination. This may result in a transaction being recorded as a transfer of assets, whereas previously the Company may have concluded it was a business combination. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Newly-Adopted Accounting Pronouncements | Prior periods have been revised as follows (in thousands): Net Cash Provided by Operating Activities Net Cash Used in Financing Activities As Reported As Adjusted As Reported As Adjusted Year ended December 31, 2016 $ 866,298 $ 871,812 $ (354,265 ) $ (359,779 ) Year ended December 31, 2015 764,151 793,452 (267,728 ) (297,029 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following is a summary of available-for-sale marketable securities held as of December 31, 2017 and 2016 (in thousands): Gross Unrealized Aggregate Fair Value Classification on Balance Sheet Amortized Cost Short-Term Marketable Securities Long-Term Marketable Securities As of December 31, 2017 Gains Losses Commercial paper $ 6,951 $ — $ (9 ) $ 6,942 $ 6,942 $ — Corporate bonds 736,902 2 (3,829 ) 733,075 289,378 443,697 U.S. government agency obligations 220,014 — (1,764 ) 218,250 102,234 116,016 $ 963,867 $ 2 $ (5,602 ) $ 958,267 $ 398,554 $ 559,713 As of December 31, 2016 Commercial paper $ 40,965 $ — $ (45 ) $ 40,920 $ 40,920 $ — Corporate bonds 984,650 123 (3,697 ) 981,076 418,495 562,581 U.S. government agency obligations 267,473 35 (1,366 ) 266,142 53,157 212,985 $ 1,293,088 $ 158 $ (5,108 ) $ 1,288,138 $ 512,572 $ 775,566 |
Schedule of Fair Value Measurement | The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of December 31, 2017 and 2016 (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 Level 3 As of December 31, 2017 Cash Equivalents and Marketable Securities: Money market funds $ 22,649 $ 22,649 $ — $ — Commercial paper 10,928 — 10,928 — Corporate bonds 733,075 — 733,075 — U.S. government agency obligations 218,248 — 218,248 — Mutual funds 7,879 7,879 — — $ 992,779 $ 30,528 $ 962,251 $ — Liabilities: Contingent consideration obligation related to completed acquisitions $ (8,631 ) $ — $ — $ (8,631 ) As of December 31, 2016 Cash Equivalents and Marketable Securities: Money market funds $ 8,726 $ 8,726 $ — $ — Commercial paper 40,920 — 40,920 — Corporate bonds 981,076 — 981,076 — U.S. government agency obligations 266,142 — 266,142 — Mutual funds 4,022 4,022 — — $ 1,300,886 $ 12,748 $ 1,288,138 $ — Liabilities: Contingent consideration obligation related to completed acquisitions $ (7,100 ) $ — $ — $ (7,100 ) |
Schedule of Activity of Major Classes of Assets Measured at Fair Value Using Level 3 Inputs | The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2017 and 2016 (in thousands): Other Liabilities: Balance, January 1, 2016 $ — Contingent consideration obligation related to Soha acquisition (1,600 ) Contingent consideration obligation related to Cyberfend acquisition (5,500 ) Balance, December 31, 2016 $ (7,100 ) Fair value adjustment to contingent consideration included in general and administrative expense (2,781 ) Cash paid upon achievement of milestone 1,250 Balance, December 31, 2017 $ (8,631 ) |
Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets | Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2017 and 2016 were as follows (in thousands): December 31, 2017 December 31, 2016 Due in 1 year or less $ 398,554 $ 512,572 Due after 1 year through 5 years 559,713 775,566 $ 958,267 $ 1,288,138 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Accounts Receivable | Net accounts receivable consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Trade accounts receivable $ 319,996 $ 260,976 Unbilled accounts receivable 140,410 113,765 Gross accounts receivable 460,406 374,741 Allowance for doubtful accounts (1,043 ) (829 ) Reserve for cash-basis customers (236 ) (5,316 ) Total accounts receivable reserves (1,279 ) (6,145 ) Accounts receivable, net $ 459,127 $ 368,596 |
Schedule of Activity in the Accounts Receivable Reserves | A summary of activity in the accounts receivable reserves for the years ended December 31, 2017, 2016 and 2015 , is as follows (in thousands): 2017 2016 2015 Beginning balance $ 6,145 $ 7,364 $ 9,023 Charges to income from operations 5,809 49,677 37,870 Collections from cash basis customers and write-offs (10,675 ) (50,896 ) (39,529 ) Ending balance $ 1,279 $ 6,145 $ 7,364 |
Prepaid Expenses and Other Cu34
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Prepaid income taxes $ 30,314 $ 25,161 Prepaid sales and other taxes 22,973 18,877 Prepaid equipment and software maintenance 26,354 15,805 Other prepaid expenses 28,866 24,727 Other current assets 29,302 19,733 Total $ 137,809 $ 104,303 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2017 and 2016 (in thousands except years): December 31, 2017 December 31, 2016 Estimated Useful Life Computer and networking equipment $ 1,292,587 $ 1,170,471 3-7 Purchased software 61,276 51,727 3-10 Furniture and fixtures 48,521 41,968 5 Office equipment 26,949 24,497 3-5 Leasehold improvements 152,487 139,991 1-16 Internal-use software 765,162 656,053 2-7 Property and equipment, gross 2,346,982 2,084,707 Accumulated depreciation and amortization (1,484,447 ) (1,283,690 ) Property and equipment, net $ 862,535 $ 801,017 |
Goodwill and Acquired Intangi36
Goodwill and Acquired Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Beginning balance $ 1,228,503 $ 1,150,244 Acquisition of Concord Systems, Inc. — 1,079 Acquisition of Soha Systems, Inc. — 43,515 Acquisition of Cyberfend, Inc. — 38,754 Acquisition of Soasta, Inc. 121,668 — Acquisition of Nominum, Inc. 133,754 — Measurement period adjustments 4,217 — Foreign currency translation 10,546 (5,089 ) Ending balance $ 1,498,688 $ 1,228,503 |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Completed technologies $ 145,091 $ (65,283 ) $ 79,808 $ 119,091 $ (50,823 ) $ 68,268 Customer-related intangible assets 245,310 (128,835 ) 116,475 192,810 (114,209 ) 78,601 Non-compete agreements 4,710 (3,975 ) 735 5,030 (3,775 ) 1,255 Trademarks and trade names 7,200 (2,959 ) 4,241 3,700 (2,361 ) 1,339 Acquired license rights 490 (490 ) — 490 (490 ) — Total $ 402,801 $ (201,542 ) $ 201,259 $ 321,121 $ (171,658 ) $ 149,463 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 18,800 4.1 Customer-related intangible assets 28,200 4.6 Trademarks 2,400 4.9 Non-compete agreements 500 1.9 Total $ 49,900 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 7,200 2.2 Customer-related intangible assets 24,300 6.5 Trademarks 1,100 3.7 Non-compete agreements 200 1.5 Total $ 32,800 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 25,310 9.8 Customer-related intangible assets 16,560 11.8 Non-compete agreements 80 2.0 Total $ 41,950 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table presents the preliminary allocation of the purchase price for Nominum (in thousands): Total purchase consideration $ 180,327 Allocation of the purchase consideration: Cash $ 8,455 Accounts receivable 9,845 Prepaids and other current assets 1,481 Identifiable intangible assets 32,800 Goodwill 133,754 Fixed assets 2,169 Deferred tax assets 11,398 Other assets 19 Total assets acquired 199,921 Accounts payable (1,460 ) Accrued liabilities (3,306 ) Deferred revenue (14,828 ) Total liabilities assumed (19,594 ) Net assets acquired $ 180,327 The following table presents the preliminary allocation of the purchase price for Soasta (in thousands): Total purchase consideration $ 199,280 Allocation of the purchase consideration: Cash $ 1,935 Accounts receivable 4,108 Prepaids and other current assets 1,143 Identifiable intangible assets 49,900 Goodwill 125,584 Deferred tax assets 31,206 Total assets acquired 213,876 Accounts payable (1,119 ) Accrued liabilities (3,915 ) Deferred revenue (9,562 ) Total liabilities assumed (14,596 ) Net assets acquired $ 199,280 The following table presents the final allocation of the purchase price for Octoshape (in thousands): Total purchase consideration $ 107,047 Allocation of the purchase consideration: Cash $ 664 Accounts receivable 1,976 Other current assets 393 Identifiable intangible assets 41,950 Goodwill 69,445 Deferred tax assets 5,230 Total assets acquired 119,658 Other current liabilities (1,983 ) Current deferred revenue (770 ) Deferred tax liabilities (9,858 ) Total liabilities assumed (12,611 ) Net assets acquired $ 107,047 |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Completed technologies $ 145,091 $ (65,283 ) $ 79,808 $ 119,091 $ (50,823 ) $ 68,268 Customer-related intangible assets 245,310 (128,835 ) 116,475 192,810 (114,209 ) 78,601 Non-compete agreements 4,710 (3,975 ) 735 5,030 (3,775 ) 1,255 Trademarks and trade names 7,200 (2,959 ) 4,241 3,700 (2,361 ) 1,339 Acquired license rights 490 (490 ) — 490 (490 ) — Total $ 402,801 $ (201,542 ) $ 201,259 $ 321,121 $ (171,658 ) $ 149,463 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 18,800 4.1 Customer-related intangible assets 28,200 4.6 Trademarks 2,400 4.9 Non-compete agreements 500 1.9 Total $ 49,900 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 7,200 2.2 Customer-related intangible assets 24,300 6.5 Trademarks 1,100 3.7 Non-compete agreements 200 1.5 Total $ 32,800 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life Completed technologies $ 25,310 9.8 Customer-related intangible assets 16,560 11.8 Non-compete agreements 80 2.0 Total $ 41,950 |
Accrued Expenses and Other Li38
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Payroll and other related benefits $ 150,784 $ 110,822 Bandwidth and co-location 72,782 61,084 Property, use and other taxes 47,584 52,858 Professional service fees 4,225 4,277 Other accrued expenses 8,368 9,736 Total $ 283,743 $ 238,777 Other liabilities consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Deferred rent $ 31,510 $ 29,668 Uncertain tax positions 86,814 73,231 Other long-term liabilities 24,631 15,792 Total $ 142,955 $ 118,691 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Accrual | The following table summarizes the activity of the Company's restructuring accrual during the years ended December 31, 2017, 2016 and 2015 (in thousands): Employee Severance and Related Benefits Software Charges Excess Facilities, Contract Terminations and Other Total Balance January 1, 2015 $ — $ — $ 281 $ 281 Costs incurred 767 — — 767 Cash disbursements (605 ) — (56 ) (661 ) Balance December 31, 2015 162 — 225 387 Costs incurred 5,714 4,587 — 10,301 Cash disbursements (4,432 ) — (56 ) (4,488 ) Software charges — (4,587 ) — (4,587 ) Balance December 31, 2016 1,444 — 169 1,613 Costs incurred 17,311 31,965 5,608 54,884 Cash disbursements (5,898 ) — (3,212 ) (9,110 ) Software and other non-cash charges — (31,965 ) (1,179 ) (33,144 ) Balance December 31, 2017 $ 12,857 $ — $ 1,386 $ 14,243 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The Notes consist of the following components as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Liability component: Principal $ 690,000 $ 690,000 Less: debt discount and issuance costs, net of amortization (27,087 ) (49,913 ) Net carrying amount $ 662,913 $ 640,087 Equity component: $ 101,276 $ 101,276 |
Schedule of Interest Expense | The following table sets forth total interest expense included in the consolidated statements of income related to the Notes for the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Amortization of debt discount and issuance costs $ 22,826 $ 22,040 Capitalization of interest expense (3,987 ) (3,402 ) Total interest expense $ 18,839 $ 18,638 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Aggregate Future Obligations Under Non-Cancelable Leases | The minimum aggregate future obligations under non-cancelable leases as of December 31, 2017 were as follows (in thousands): 2018 $ 50,187 2019 49,418 2020 61,031 2021 58,680 2022 56,211 Thereafter 481,471 Total $ 756,998 |
Schedule of Long-Term Commitments | The minimum future commitments as of December 31, 2017 were as follows (in thousands): Bandwidth and Co-location Commitments Purchase Order Commitments 2018 $ 108,988 $ 93,385 2019 27,304 6,175 2020 817 3,205 2021 — 1,385 2022 — 1,190 Thereafter — — Total $ 137,109 $ 105,340 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders' equity, for the year ended December 31, 2017 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2017 $ (59,017 ) $ 2,795 $ (56,222 ) Other comprehensive income (loss) 34,698 (406 ) 34,292 Balance as of December 31, 2017 $ (24,319 ) $ 2,389 $ (21,930 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Cost of revenue $ 20,314 $ 18,287 $ 14,145 Research and development 38,864 29,739 23,927 Sales and marketing 60,246 55,407 53,542 General and administrative 44,884 41,073 35,063 Total stock-based compensation 164,308 144,506 126,677 Provision for income taxes (56,237 ) (49,014 ) (49,033 ) Total stock-based compensation, net of taxes $ 108,071 $ 95,492 $ 77,644 |
Schedule of Assumptions Used | The grant-date fair values of the Company's RSUs with market-based vesting conditions granted during the year ended December 31, 2017 and 2016 were estimated using a Monte Carlo simulation model with the following assumptions: 2017 2016 Expected term (in years) 3.0 3.0 Risk-free interest rate 1.4 % 0.8 % Akamai historical share price volatility 33.2 % 34.3 % Average volatility of peer-company share price 27.1 % 27.6 % The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2017, 2016 and 2015 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: 2017 2016 2015 Expected term (in years) 0.5 0.5 0.5 Risk-free interest rate 1.0 % 0.5 % 0.2 % Expected volatility 35.8 % 36.2 % 28.0 % Dividend yield — % — % — % |
Schedule of Summary of Stock Option Activity | The following table summarizes stock option activity during the year ended December 31, 2017 : Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2017 874 $ 35.51 Exercised (522 ) 34.68 Forfeited (13 ) 47.26 Outstanding at December 31, 2017 339 $ 36.36 1.66 $ 9,734 Exercisable at December 31, 2017 338 $ 36.31 1.66 $ 9,708 Vested or expected to vest December 31, 2017 339 $ 36.35 1.66 $ 9,731 |
Schedule Of Deferred Stock Units Activity | The following table summarizes the DSU activity for the year ended December 31, 2017 : Units (in thousands) Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 164 $ 44.90 Granted 44 47.50 Vested and distributed (31 ) 54.97 Outstanding at December 31, 2017 177 $ 43.77 |
Schedule of Restricted Stock Units by Type | The following table summarizes the different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2017 (in thousands): December 31, 2017 RSUs with service-based vesting conditions 3,411 RSUs with market-based vesting conditions 116 RSUs with performance-based vesting conditions 82 Total 3,609 |
Schedule of Restricted Stock Units Activity | The following table summarizes the RSU activity for the year ended December 31, 2017 : Units (in thousands) Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 5,710 $ 59.51 Granted 3,609 59.60 Vested (2,910 ) 59.59 Forfeited (566 ) 46.65 Outstanding at December 31, 2017 5,843 $ 59.94 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Tax | The components of income before provision for income taxes were as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 U.S. $ 94,518 $ 273,176 $ 233,247 Foreign 221,604 186,270 223,377 Income before provision for income taxes $ 316,122 $ 459,446 $ 456,624 |
Schedule of Provision for Income Tax | The provision for income taxes consisted of the following for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Current tax provision (benefit): Federal $ 41,090 $ 89,816 $ 70,298 State 6,336 6,238 (1,750 ) Foreign 51,244 39,952 62,572 Deferred tax provision (benefit): Federal (17,136 ) 4,265 23,381 State 21,689 (86 ) (742 ) Foreign (4,992 ) 3,916 (18,536 ) Change in valuation allowance (430 ) (787 ) (5 ) Total $ 97,801 $ 143,314 $ 135,218 |
Schedule of Difference Between Effective and Statutory | The Company’s effective rate differed from the U.S. federal statutory rate as follows for the years ended December 31, 2017, 2016 and 2015 : 2017 2016 2015 U.S. federal income tax rate 35.0 % 35.0 % 35.0 % State taxes 1.6 2.0 1.7 Share-based compensation 3.7 2.7 1.9 U.S. federal, state and foreign research and development credits (6.9 ) (3.3 ) (4.1 ) Foreign earnings (7.8 ) (3.4 ) (4.6 ) Domestic production activities deduction (0.7 ) (1.7 ) (1.2 ) U.S Tax Cuts and Jobs Act, net 8.2 — — Impact of acquisition-related uncertain tax position (2.9 ) — — Other 0.7 (0.1 ) 0.9 30.9 % 31.2 % 29.6 % |
Net Deferred Tax and Valuation Allowance | The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Accrued bonus $ 19,950 $ 18,390 Deferred revenue 8,861 10,055 Deferred rent 8,000 12,592 Stock-based compensation 20,557 32,030 Net operating losses 26,698 7,855 Unrealized losses 1,239 1,862 Tax credit carryforwards 49,135 23,629 License income 6,611 16,932 Other 11,909 7,048 Deferred tax assets 152,960 130,393 Depreciation and amortization (13,933 ) (10,470 ) Acquired intangible assets (48,781 ) (44,788 ) Internal-use software development costs capitalized (54,687 ) (77,375 ) Deferred tax liabilities (117,401 ) (132,633 ) Valuation allowance — (430 ) Net deferred tax assets (liabilities) $ 35,559 $ (2,670 ) |
Schedule of Operating Loss Carryforwards | The table below summarizes the Company's NOL and tax credit carryforwards in federal, state, and foreign jurisdictions as of December 31, 2017 and 2016 (in thousands, except for years): 2017 2016 Expirations at Various Dates Through: NOL carryforwards: Federal $ 99,200 $ 16,500 2037 State 89,500 11,400 2035 Foreign — — — Federal and state research and development tax credit and other credit carryforwards 65,900 41,500 2032 |
Unrecognized Tax Benefits | The following is a roll forward of the Company’s unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Balance at beginning of year $ 69,117 $ 65,290 $ 33,320 Gross increases — tax positions of prior periods 2,692 6,391 11,238 Gross increases — current period tax positions 27,163 6,252 27,043 Gross decreases — tax positions of prior periods (277 ) (6,491 ) (5,739 ) Gross decreases — lapse of applicable statute of limitations (12,850 ) (287 ) (257 ) Gross decreases — settlements — (2,038 ) (315 ) Balance at end of year $ 85,845 $ 69,117 $ 65,290 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Components Used in Diluted and Basic Income Per Common Share | The following table sets forth the components used in the computation of basic and diluted net income per share for the years ended December 31, 2017, 2016 and 2015 (in thousands, except per share data): 2017 2016 2015 Numerator: Net income $ 218,321 $ 316,132 $ 321,406 Denominator: Shares used for basic net income per share 171,559 174,917 178,391 Effect of dilutive securities: Stock options 260 384 794 RSUs and DSUs 892 914 1,230 Convertible senior notes — — — Warrants related to issuance of convertible senior notes — — — Shares used for diluted net income per share 172,711 176,215 180,415 Basic net income per share $ 1.27 $ 1.81 $ 1.80 Diluted net income per share $ 1.26 $ 1.79 $ 1.78 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2017, 2016 and 2015 (in thousands): 2017 2016 2015 Stock options 9 58 22 Service-based RSUs 3,258 2,262 660 Performance-based RSUs 1,054 690 1,007 Convertible senior notes 7,704 7,704 7,704 Warrants related to issuance of convertible senior notes 7,704 7,704 7,704 Total shares excluded from computation 19,729 18,418 17,097 |
Quarterly Financial Results (46
Quarterly Financial Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Results | (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Year ended December 31, 2017: Revenue $ 609,237 $ 608,908 $ 621,399 $ 663,452 Cost of revenue (exclusive of amortization of acquired intangible assets) 205,703 214,650 225,468 229,937 Net income 80,930 57,772 60,512 19,107 Basic net income per share 0.47 0.33 0.35 0.11 Diluted net income per share 0.46 0.33 0.35 0.11 Year ended December 31, 2016: Revenue $ 567,725 $ 572,135 $ 584,065 $ 616,124 Cost of revenue (exclusive of amortization of acquired intangible assets) 194,736 206,323 204,467 203,475 Net income 74,858 73,635 76,000 91,639 Basic net income per share 0.42 0.42 0.44 0.53 Diluted net income per share 0.42 0.42 0.43 0.52 |
Nature of Business and Basis 47
Nature of Business and Basis of Presentation - Narrative (Details) | 12 Months Ended |
Dec. 31, 2017segmentcountryserver | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of servers (more than) | server | 200,000 |
Number of countries with networks | country | 130 |
Number of operating segments | segment | 1 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Line Items] | |||
Property and equipment per unit value, minimum | $ 1,000 | ||
Property, plant and equipment, estimated useful life, minimum (in years) | 1 year | ||
Minimum percentage of tax benefit to be recognized (in percentage) | 50.00% | ||
Net Cash Provided by Operating Activities | $ 800,983,000 | $ 871,812,000 | $ 793,452,000 |
Net Cash Used in Financing Activities | (365,005,000) | (359,779,000) | (297,029,000) |
Revenue Recognition [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Cumulative effect adjustment on assets | 58,600,000 | ||
Intra-Entity Asset Transfers [Member] | Other Current Assets [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Cumulative effect adjustment on assets | 11,600,000 | ||
Intra-Entity Asset Transfers [Member] | Other Assets [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Cumulative effect adjustment on assets | $ 27,000,000 | ||
Scenario, Previously Reported [Member] | Accounting Standards Update 2016-09 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Net Cash Provided by Operating Activities | 866,298,000 | 764,151,000 | |
Net Cash Used in Financing Activities | $ (354,265,000) | $ (267,728,000) |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, cost | $ 963,867 | $ 1,293,088 |
Gross unrealized gains | 2 | 158 |
Gross unrealized losses | (5,602) | (5,108) |
Available-for-sale securities | 958,267 | 1,288,138 |
Short-term marketable securities | 398,554 | 512,572 |
Long-term marketable securities | 559,713 | 775,566 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, cost | 6,951 | 40,965 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (9) | (45) |
Available-for-sale securities | 6,942 | 40,920 |
Short-term marketable securities | 6,942 | 40,920 |
Long-term marketable securities | 0 | 0 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, cost | 736,902 | 984,650 |
Gross unrealized gains | 2 | 123 |
Gross unrealized losses | (3,829) | (3,697) |
Available-for-sale securities | 733,075 | 981,076 |
Short-term marketable securities | 289,378 | 418,495 |
Long-term marketable securities | 443,697 | 562,581 |
U.S. government agency obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, cost | 220,014 | 267,473 |
Gross unrealized gains | 0 | 35 |
Gross unrealized losses | (1,764) | (1,366) |
Available-for-sale securities | 218,250 | 266,142 |
Short-term marketable securities | 102,234 | 53,157 |
Long-term marketable securities | $ 116,016 | $ 212,985 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | Dec. 31, 2017USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position, accumulated loss | $ 3.9 |
Corporate bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | $ 543.6 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | $ 958,267 | $ 1,288,138 | |
Commercial paper | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 6,942 | 40,920 | |
Corporate bonds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 733,075 | 981,076 | |
U.S. government agency obligations | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 218,250 | 266,142 | |
Level 1 | |||
Cash Equivalents and Marketable Securities: | |||
Assets, fair value | 30,528 | 12,748 | |
Liabilities: | |||
Contingent consideration obligation related to completed acquisitions | 0 | 0 | |
Level 1 | Money market funds | |||
Cash Equivalents and Marketable Securities: | |||
Cash equivalents | 22,649 | 8,726 | |
Level 1 | Commercial paper | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 1 | Corporate bonds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 1 | U.S. government agency obligations | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 1 | Mutual funds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 7,879 | 4,022 | |
Level 2 | |||
Cash Equivalents and Marketable Securities: | |||
Assets, fair value | 962,251 | 1,288,138 | |
Liabilities: | |||
Contingent consideration obligation related to completed acquisitions | 0 | 0 | |
Level 2 | Money market funds | |||
Cash Equivalents and Marketable Securities: | |||
Cash equivalents | 0 | 0 | |
Level 2 | Commercial paper | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 10,928 | 40,920 | |
Level 2 | Corporate bonds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 733,075 | 981,076 | |
Level 2 | U.S. government agency obligations | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 218,248 | 266,142 | |
Level 2 | Mutual funds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 3 | |||
Cash Equivalents and Marketable Securities: | |||
Assets, fair value | 0 | 0 | |
Liabilities: | |||
Contingent consideration obligation related to completed acquisitions | (8,631) | (7,100) | $ 0 |
Level 3 | Money market funds | |||
Cash Equivalents and Marketable Securities: | |||
Cash equivalents | 0 | 0 | |
Level 3 | Commercial paper | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 3 | Corporate bonds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 3 | U.S. government agency obligations | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Level 3 | Mutual funds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 0 | 0 | |
Total Fair Value | |||
Cash Equivalents and Marketable Securities: | |||
Assets, fair value | 992,779 | 1,300,886 | |
Total Fair Value | Money market funds | |||
Cash Equivalents and Marketable Securities: | |||
Cash equivalents | 22,649 | 8,726 | |
Total Fair Value | Commercial paper | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 10,928 | 40,920 | |
Total Fair Value | Corporate bonds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 733,075 | 981,076 | |
Total Fair Value | U.S. government agency obligations | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | 218,248 | 266,142 | |
Total Fair Value | Mutual funds | |||
Cash Equivalents and Marketable Securities: | |||
Available-for-sale securities | $ 7,879 | $ 4,022 |
Fair Value Measurements - Sch52
Fair Value Measurements - Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 398,554 | $ 512,572 |
Due after 1 year through 5 years | 559,713 | 775,566 |
Available-for-sale securities | $ 958,267 | $ 1,288,138 |
Fair Value Measurements - Sch53
Fair Value Measurements - Schedule of Activity of Major Classes of Assets Measured at Fair Value Using Level 3 Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Other Liabilities: Contingent Consideration Obligation | $ 7,100 | $ 0 |
Fair value adjustment to contingent consideration included in general and administrative expense | (2,781) | |
Cash paid upon achievement of milestone | 1,250 | |
Other Liabilities: Contingent Consideration Obligation | $ 8,631 | 7,100 |
Soha Systems, Inc. | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration obligations | (1,600) | |
Cyberfend, Inc. | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration obligations | $ (5,500) |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 460,406 | $ 374,741 |
Allowance for doubtful accounts | (1,043) | (829) |
Reserve for cash-basis customers | (236) | (5,316) |
Total accounts receivable reserves | (1,279) | (6,145) |
Accounts receivable, net | 459,127 | 368,596 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 319,996 | 260,976 |
Unbilled Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 140,410 | $ 113,765 |
Accounts Receivable - Activity
Accounts Receivable - Activity in Accounts Receivable Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balance | $ 6,145 | $ 7,364 | $ 9,023 |
Charges to income from operations | 5,809 | 49,677 | 37,870 |
Collections from cash basis customers | (10,675) | (50,896) | (39,529) |
Ending balance | $ 1,279 | $ 6,145 | $ 7,364 |
Prepaid Expenses and Other Cu56
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid income taxes | $ 30,314 | $ 25,161 |
Prepaid sales and other taxes | 22,973 | 18,877 |
Prepaid equipment and software maintenance | 26,354 | 15,805 |
Other prepaid expenses | 28,866 | 24,727 |
Other current assets | 29,302 | 19,733 |
Total | $ 137,809 | $ 104,303 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Property, software and equipment depreciation, amortization expense | $ 341.4 | $ 307.7 | $ 272.5 |
Capitalization of stock-based compensation | 28.9 | 23.1 | $ 17.9 |
Disposal of property plant and equipment | 174.6 | $ 93.4 | |
Write off of internal-use software | 36.2 | ||
Net book value of internal-use software | $ 32 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,346,982 | $ 2,084,707 |
Accumulated depreciation and amortization | (1,484,447) | (1,283,690) |
Property and equipment, net | 862,535 | 801,017 |
Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,292,587 | 1,170,471 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 61,276 | 51,727 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 48,521 | 41,968 |
Estimated useful life (in years) | 5 years | |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 26,949 | 24,497 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 152,487 | 139,991 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 765,162 | $ 656,053 |
Minimum | Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Minimum | Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Minimum | Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Minimum | Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 1 year | |
Minimum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 2 years | |
Maximum | Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 7 years | |
Maximum | Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 10 years | |
Maximum | Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Maximum | Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 16 years | |
Maximum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 7 years |
Goodwill and Acquired Intangi59
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of acquired intangible assets | $ 30,904 | $ 26,642 | $ 27,067 |
Future amortization expense, 2018 | 33,300 | ||
Future amortization expense, 2019 | 36,500 | ||
Future amortization expense, 2020 | 33,800 | ||
Future amortization expense, 2021 | 27,900 | ||
Future amortization expense, 2022 | $ 22,400 |
Goodwill and Acquired Intangi60
Goodwill and Acquired Intangible Assets - Schedule of the Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in the carrying amount of goodwill | ||
Beginning balance | $ 1,228,503 | $ 1,150,244 |
Measurement period adjustments | 4,217 | 0 |
Foreign currency translation | 10,546 | (5,089) |
Ending balance | 1,498,688 | 1,228,503 |
Concord Systems, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisitions | 0 | 1,079 |
Soha Systems, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisitions | 0 | 43,515 |
Cyberfend, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisitions | 0 | 38,754 |
Soasta, Inc. [Member] | ||
Changes in the carrying amount of goodwill | ||
Acquisitions | 121,668 | 0 |
Nominum, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisitions | $ 133,754 | $ 0 |
Goodwill and Acquired Intangi61
Goodwill and Acquired Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 402,801 | $ 321,121 |
Accumulated amortization | (201,542) | (171,658) |
Net carrying amount | 201,259 | 149,463 |
Completed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 145,091 | 119,091 |
Accumulated amortization | (65,283) | (50,823) |
Net carrying amount | 79,808 | 68,268 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 245,310 | 192,810 |
Accumulated amortization | (128,835) | (114,209) |
Net carrying amount | 116,475 | 78,601 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 4,710 | 5,030 |
Accumulated amortization | (3,975) | (3,775) |
Net carrying amount | 735 | 1,255 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 7,200 | 3,700 |
Accumulated amortization | (2,959) | (2,361) |
Net carrying amount | 4,241 | 1,339 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 490 | 490 |
Accumulated amortization | (490) | (490) |
Net carrying amount | $ 0 | $ 0 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Thousands | Nov. 27, 2017 | Apr. 07, 2017 | Dec. 15, 2016 | Oct. 03, 2016 | Sep. 23, 2016 | Oct. 30, 2015 | Apr. 06, 2015 | Feb. 27, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 03, 2016 |
Business Acquisition [Line Items] | ||||||||||||
Acquisition related costs | $ 5,500 | $ 1,700 | $ 1,800 | |||||||||
Allocation of the purchase consideration: | ||||||||||||
Goodwill | $ 1,498,688 | $ 1,228,503 | $ 1,150,244 | |||||||||
Nominum, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash transferred | $ 180,300 | |||||||||||
Total purchase consideration | 180,327 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Cash | 8,455 | |||||||||||
Accounts receivable | 9,845 | |||||||||||
Prepaids and other current assets | 1,481 | |||||||||||
Identifiable intangible assets | 32,800 | |||||||||||
Goodwill | 133,754 | |||||||||||
Fixed assets | 2,169 | |||||||||||
Deferred tax assets | 11,398 | |||||||||||
Other assets | 19 | |||||||||||
Total assets acquired | 199,921 | |||||||||||
Accounts payable | (1,460) | |||||||||||
Accrued liabilities | (3,306) | |||||||||||
Deferred revenue | (14,828) | |||||||||||
Total liabilities assumed | (19,594) | |||||||||||
Net assets acquired | 180,327 | |||||||||||
Goodwill, expected tax deductible amount | 44,200 | |||||||||||
Gross carrying amount of intangible assets | $ 32,800 | |||||||||||
Weighted average useful life | 5 years 4 months 24 days | |||||||||||
Nominum, Inc. | Completed technologies | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 7,200 | |||||||||||
Weighted average useful life | 2 years 2 months 12 days | |||||||||||
Nominum, Inc. | Customer-related intangible assets | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 24,300 | |||||||||||
Weighted average useful life | 6 years 6 months | |||||||||||
Nominum, Inc. | Trademarks | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 1,100 | |||||||||||
Weighted average useful life | 3 years 8 months 12 days | |||||||||||
Nominum, Inc. | Non-compete agreements | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 200 | |||||||||||
Weighted average useful life | 1 year 6 months | |||||||||||
Soasta, Inc. [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash transferred | $ 199,300 | |||||||||||
Total purchase consideration | 199,280 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Cash | 1,935 | |||||||||||
Accounts receivable | 4,108 | |||||||||||
Prepaids and other current assets | 1,143 | |||||||||||
Identifiable intangible assets | 49,900 | |||||||||||
Goodwill | 125,584 | |||||||||||
Deferred tax assets | 31,206 | |||||||||||
Total assets acquired | 213,876 | |||||||||||
Accounts payable | (1,119) | |||||||||||
Accrued liabilities | (3,915) | |||||||||||
Deferred revenue | (9,562) | |||||||||||
Total liabilities assumed | (14,596) | |||||||||||
Net assets acquired | 199,280 | |||||||||||
Goodwill, expected tax deductible amount | 35,600 | |||||||||||
Gross carrying amount of intangible assets | $ 49,900 | |||||||||||
Weighted average useful life | 4 years 4 months 24 days | |||||||||||
Soasta, Inc. [Member] | Completed technologies | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 18,800 | |||||||||||
Weighted average useful life | 4 years 1 month 6 days | |||||||||||
Soasta, Inc. [Member] | Customer-related intangible assets | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 28,200 | |||||||||||
Weighted average useful life | 4 years 7 months 6 days | |||||||||||
Soasta, Inc. [Member] | Trademarks | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 2,400 | |||||||||||
Weighted average useful life | 4 years 10 months 24 days | |||||||||||
Soasta, Inc. [Member] | Non-compete agreements | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 500 | |||||||||||
Weighted average useful life | 1 year 10 months 24 days | |||||||||||
Concord Systems, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash transferred | $ 3,000 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Identifiable intangible assets | 2,800 | |||||||||||
Goodwill | $ 1,100 | |||||||||||
Weighted average useful life | 7 years | |||||||||||
Soha Systems, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total purchase consideration | $ 55,000 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Identifiable intangible assets | 10,700 | |||||||||||
Goodwill | 44,100 | |||||||||||
Goodwill, expected tax deductible amount | $ 12,000 | |||||||||||
Weighted average useful life | 4 years 8 months 12 days | |||||||||||
Maximum potential payout of the contingent consideration | $ 5,000 | |||||||||||
Cyberfend, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total purchase consideration | $ 37,500 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Identifiable intangible assets | 6,500 | |||||||||||
Goodwill | 38,500 | |||||||||||
Goodwill, expected tax deductible amount | $ 11,000 | |||||||||||
Weighted average useful life | 3 years 7 months | |||||||||||
Maximum potential payout of the contingent consideration | $ 10,500 | |||||||||||
Xerocole, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total purchase consideration | $ 16,600 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Identifiable intangible assets | 4,900 | |||||||||||
Goodwill | 12,900 | |||||||||||
Goodwill, expected tax deductible amount | $ 2,700 | |||||||||||
Weighted average useful life | 8 years 9 months 18 days | |||||||||||
Octoshape | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash transferred | $ 107,000 | |||||||||||
Total purchase consideration | 107,047 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Cash | 664 | |||||||||||
Accounts receivable | 1,976 | |||||||||||
Other current assets | 393 | |||||||||||
Identifiable intangible assets | 41,950 | |||||||||||
Goodwill | 69,445 | |||||||||||
Deferred tax assets | 5,230 | |||||||||||
Total assets acquired | 119,658 | |||||||||||
Other current liabilities | (1,983) | |||||||||||
Deferred revenue | (770) | |||||||||||
Deferred tax liabilities | (9,858) | |||||||||||
Total liabilities assumed | (12,611) | |||||||||||
Net assets acquired | 107,047 | |||||||||||
Goodwill, expected tax deductible amount | 69,400 | |||||||||||
Gross carrying amount of intangible assets | $ 41,950 | |||||||||||
Weighted average useful life | 10 years 7 months 6 days | |||||||||||
Octoshape | Completed technologies | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 25,310 | |||||||||||
Weighted average useful life | 9 years 9 months | |||||||||||
Octoshape | Customer-related intangible assets | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 16,560 | |||||||||||
Weighted average useful life | 11 years 9 months | |||||||||||
Octoshape | Non-compete agreements | ||||||||||||
Allocation of the purchase consideration: | ||||||||||||
Gross carrying amount of intangible assets | $ 80 | |||||||||||
Weighted average useful life | 2 years | |||||||||||
Bloxx | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total purchase consideration | $ 18,700 | |||||||||||
Allocation of the purchase consideration: | ||||||||||||
Identifiable intangible assets | 3,900 | |||||||||||
Goodwill | 17,700 | |||||||||||
Goodwill, expected tax deductible amount | $ 17,700 | |||||||||||
Weighted average useful life | 7 years 2 months 12 days |
Accrued Expenses and Other Li63
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and other related benefits | $ 150,784 | $ 110,822 |
Bandwidth and co-location | 72,782 | 61,084 |
Property, use and other taxes | 47,584 | 52,858 |
Professional service fees | 4,225 | 4,277 |
Other accrued expenses | 8,368 | 9,736 |
Total | 283,743 | 238,777 |
Deferred rent | 31,510 | 29,668 |
Uncertain tax positions | 86,814 | 73,231 |
Other long-term liabilities | 24,631 | 15,792 |
Total | $ 142,955 | $ 118,691 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring charge | $ 65,000 | ||
Restructuring charges recognized | 49,300 | $ 9,700 | |
Restructuring Reserve [Roll Forward] | |||
Balance | 1,613 | 387 | $ 281 |
Costs incurred | 54,884 | 10,301 | 767 |
Cash disbursements | (9,110) | (4,488) | (661) |
Restructuring-related software charges | (33,144) | (4,587) | |
Balance | 14,243 | 1,613 | 387 |
Employee Severance and Related Benefits | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 1,444 | 162 | 0 |
Costs incurred | 17,311 | 5,714 | 767 |
Cash disbursements | (5,898) | (4,432) | (605) |
Restructuring-related software charges | 0 | 0 | |
Balance | 12,857 | 1,444 | 162 |
Software Charges | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 0 | 0 | 0 |
Costs incurred | 31,965 | 4,587 | 0 |
Cash disbursements | 0 | 0 | 0 |
Restructuring-related software charges | (31,965) | (4,587) | |
Balance | 0 | 0 | 0 |
Excess Facilities, Contract Terminations and Other | |||
Restructuring Reserve [Roll Forward] | |||
Balance | 169 | 225 | 281 |
Costs incurred | 5,608 | 0 | 0 |
Cash disbursements | (3,212) | (56) | (56) |
Restructuring-related software charges | (1,179) | 0 | |
Balance | $ 1,386 | $ 169 | $ 225 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||||
Debt issued | $ 690,000,000 | $ 690,000,000 | $ 690,000,000 | |
Threshold trading days exceeding price | 20 days | |||
Threshold consecutive trading days exceeding price | 30 days | |||
Threshold greater than percentage of stock price trigger | 130.00% | |||
Threshold trading days not exceeding price | 5 days | |||
Threshold consecutive trading days not exceeding price | 5 days | |||
Principal amount per conversion | $ 1,000 | |||
Threshold less than percentage of stock price trigger | 98.00% | |||
Conversion rate (in shares) | 11.1651 | |||
Conversion price (in dollars per share) | $ 89.56 | |||
Potential conversion shares of convertible debt (in shares) | 7.7 | |||
Fair value of convertible senior notes | $ 697,000,000 | |||
Closing stock price (in dollars per share) | $ 65.04 | |||
Repurchases of common stock | $ 62,000,000 | $ 361,194,000 | $ 373,794,000 | $ 302,606,000 |
Payments for purchase of convertible note hedge and warrant transactions | 23,300,000 | |||
Payments for note hedge transactions | $ 101,300,000 | |||
Note hedge shares outstanding (in shares) | 7.7 | |||
Warrants outstanding (in shares) | 7.7 | |||
Warrant strike price (in dollars per share) | $ 104.49 | |||
Proceeds from sale of warrants | $ 78,000,000 | |||
Effective interest rate | 3.20% |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Convertible Senior Notes (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2014 |
Liability component: | |||
Principal | $ 690,000,000 | $ 690,000,000 | $ 690,000,000 |
Less: debt discount and issuance costs, net of amortization | (27,087,000) | (49,913,000) | |
Net carrying amount | 662,913,000 | 640,087,000 | |
Convertible senior notes | |||
Liability component: | |||
Equity component: | $ 101,276,000 | $ 101,276,000 |
Convertible Senior Notes - Sc67
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |||
Amortization of debt discount and issuance costs | $ 22,826 | $ 22,040 | |
Capitalization of interest expense | (3,987) | (3,402) | |
Total interest expense | $ 18,839 | $ 18,638 | $ 18,525 |
Commitments and Contingencies -
Commitments and Contingencies - Minimum Aggregate Future Obligations Under Non-cancelable Leases and Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
2,018 | $ 50,187 | ||
2,019 | 49,418 | ||
2,020 | 61,031 | ||
2,021 | 58,680 | ||
2,022 | 56,211 | ||
Thereafter | 481,471 | ||
Total | 756,998 | ||
Rent expense | 58,800 | $ 50,300 | $ 47,900 |
Proceeds from sublease tenants | 3,600 | $ 1,300 | $ 3,600 |
Letters of credit for real estate leases | $ 6,400 |
Commitments and Contingencies69
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Bandwidth and Co-location Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2,018 | $ 108,988 |
2,019 | 27,304 |
2,020 | 817 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | 137,109 |
Purchase Order Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2,018 | 93,385 |
2,019 | 6,175 |
2,020 | 3,205 |
2,021 | 1,385 |
2,022 | 1,190 |
Thereafter | 0 |
Total | $ 105,340 |
Commitments and Contingencies70
Commitments and Contingencies - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2016USD ($)installment | Nov. 30, 2015company | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Patent Infringement Case Against Limelight | ||||
Gain and Loss Contingencies [Line Items] | ||||
Settlement amount | $ 54,000,000 | |||
Number of installments in settlement | installment | 12 | |||
Settlement payment term | 3 years | |||
Proceeds from settlements | $ 18,000,000 | $ 9,000,000 | ||
Patent Infringement Case Against Company and XO | Pending Litigation | ||||
Gain and Loss Contingencies [Line Items] | ||||
Number of companies in case | company | 2 | |||
Provision for loss | 0 | |||
General and administrative | Patent Infringement Case Against Limelight | ||||
Gain and Loss Contingencies [Line Items] | ||||
Litigation income | 16,400,000 | 8,600,000 | ||
Interest Income [Member] | Patent Infringement Case Against Limelight | ||||
Gain and Loss Contingencies [Line Items] | ||||
Litigation income | $ 1,600,000 | $ 400,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) shares in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 29, 2016 | Oct. 31, 2013 | |
Class of Stock [Line Items] | |||||
Amount of common stock repurchases authorized | $ 1,000,000,000 | $ 750,000,000 | |||
Value of shares repurchased during period | $ 361,194,000 | $ 373,794,000 | $ 302,606,000 | ||
Remaining amount available for future purchases of shares under approved repurchase program. | $ 333,300,000 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Repurchases of common stock (in shares) | 6.9 | 7 | 4.5 | ||
Value of shares repurchased during period | $ 361,200,000 | $ 373,800,000 | $ 302,600,000 |
Accumulated Other Comprehensi72
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 3,224,370 |
Ending Balance | 3,310,723 |
Accumulated Other Comprehensive Loss | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (56,222) |
Other comprehensive income (loss) | 34,292 |
Ending Balance | (21,930) |
Foreign Currency Translation | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (59,017) |
Other comprehensive income (loss) | 34,698 |
Ending Balance | (24,319) |
Net Unrealized Gains (Losses) on Investments | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 2,795 |
Other comprehensive income (loss) | (406) |
Ending Balance | $ 2,389 |
Employee Benefit Plan - Narrati
Employee Benefit Plan - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation Related Costs [Abstract] | |||
Contributions by employer | $ 15.6 | $ 13.7 | $ 13.1 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax unrecognized compensation cost | $ 267.8 | ||
Weighted average period for recognizing compensation cost (in years) | 1 year 10 months 24 days | ||
Closing stock price (in dollars per share) | $ 65.04 | ||
In the money options exercisable (in shares) | 300,000 | ||
Capitalized Internal Use Software | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Additional stock based compensation | $ 17.5 | $ 13.8 | $ 12.7 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Expiration period | 10 years | ||
Total pre-tax intrinsic value of options exercised | $ 12.3 | 18.3 | 53.6 |
Total fair value of vested options | $ 1.2 | $ 6.5 | $ 10.3 |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of equity instruments other than options granted (in dollars per share) | $ 13.60 | $ 14.54 | $ 15.63 |
Deferred Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of equity instruments other than options granted (in dollars per share) | $ 47.50 | ||
Each DSU receives this number of shares of common stock upon vesting (in whole numbers) | 1 | ||
Holder elect to defer vested shares period, minimum (in years) | 1 year | ||
Holder elect to defer vested shares period, maximum (in years) | 10 years | ||
The amount typically vested by anniversary grant date (percentage) | 100.00% | ||
Director's minimum period of service before vesting accelerates (in years) | 1 year | ||
Total pre-tax intrinsic value end of year | $ 1.5 | $ 1.4 | $ 10.7 |
Total fair value of vested and distributed | $ 1.7 | 1.6 | 4.9 |
Unvested deferred stock units (in shares) | 44,000 | ||
Aggregate intrinsic value | $ 2.9 | ||
Weighted average contractual remaining life (in years) | 4 months 24 days | ||
Granted (in shares) | 44,000 | ||
Deferred Stock Units | Director Vesting Acceleration | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100.00% | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of equity instruments other than options granted (in dollars per share) | $ 59.60 | ||
Total pre-tax intrinsic value end of year | $ 168.6 | 128.5 | 153.6 |
Total fair value of vested and distributed | 173.6 | $ 140.4 | $ 105.3 |
Aggregate intrinsic value | $ 380.2 | ||
Weighted average contractual remaining life (in years) | 1 year 10 months 24 days | ||
Each RSU receives this number of shares of common stock upon vesting (in shares) | 1 | ||
Granted (in shares) | 3,609,000 | ||
Forfeited (in shares) | 566,000 | ||
Restricted stock unit vesting provision, minimum (in years) | 3 years | ||
Restricted stock unit vesting provision, maximum (in years) | 4 years | ||
Number of equity instruments other than options unvested (in shares) | 5,800,000 | ||
2009 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock available for grant (in shares) | 3,800,000 | ||
2013 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock approved for issuance under plan (in shares) | 18,500,000 | ||
Common stock available for grant (in shares) | 11,100,000 | ||
1999 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum amount of shares available for issuance (in shares) | 1,500,000 | ||
Aggregate amount of shares available, maximum (in shares) | 20,000,000 | ||
Discount on fair market value for purchase of stock (in percentage) | 15.00% | ||
Share purchase interval term (in months) | 6 months | ||
Issuance of common stock under employee stock purchase plan (in shares) | 1,100,000 | 900,000 | 700,000 |
Weighted average purchase price (in dollars per share) | $ 40.18 | $ 46.23 | $ 52.05 |
Total cash proceeds from shares purchased | $ 42.3 | $ 39.9 | $ 34.8 |
Amount withheld from employees for future purchases | $ 6.1 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 164,308 | $ 144,506 | $ 126,677 |
Provision for income taxes | (56,237) | (49,014) | (49,033) |
Total stock-based compensation, net of taxes | 108,071 | 95,492 | 77,644 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 20,314 | 18,287 | 14,145 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 38,864 | 29,739 | 23,927 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 60,246 | 55,407 | 53,542 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 44,884 | $ 41,073 | $ 35,063 |
Stock-Based Compensation - Sc76
Stock-Based Compensation - Schedule of Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 years | 3 years | |
Risk-free interest rate | 1.40% | 0.80% | |
Expected volatility | 33.20% | 34.30% | |
Average volatility of peer-company share price | 27.10% | 27.60% | |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 1.00% | 0.50% | 0.20% |
Expected volatility | 35.80% | 36.20% | 28.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Sc77
Stock-Based Compensation - Schedule of Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Shares (in thousands) | |
Outstanding at January 1, 2016 (in shares) | shares | 874 |
Exercised (in shares) | shares | (522) |
Forfeited (in shares) | shares | (13) |
Outstanding at December 31, 2016 (in shares) | shares | 339 |
Exercisable at December 31, 2016 (in shares) | shares | 338 |
Vested or expected to vest December 31, 2016 (in shares) | shares | 339 |
Weighted Average Exercise Price | |
Outstanding at January 1, 2016 (in dollars per share) | $ / shares | $ 35.51 |
Exercised (in dollars per share) | $ / shares | 34.68 |
Forfeited (in dollars per share) | $ / shares | 47.26 |
Outstanding at December 31, 2016 (in dollars per share) | $ / shares | 36.36 |
Exercisable at December 31, 2016 (in dollars per share) | $ / shares | 36.31 |
Vested or expected to vest December 31, 2016 (in dollars per share) | $ / shares | $ 36.35 |
Weighted Average Remaining Contractual Term & Aggregate Intrinsic Value | |
Outstanding at December 31, 2017 | 1 year 7 months 28 days |
Exercisable at December 31, 2017 | 1 year 7 months 28 days |
Vested or expected to vest December 31, 2017 | 1 year 7 months 28 days |
Outstanding at December 31, 2017 | $ | $ 9,734 |
Exercisable at December 31, 2017 | $ | 9,708 |
Vested or expected to vest December 31, 2017 | $ | $ 9,731 |
Stock-Based Compensation - Sc78
Stock-Based Compensation - Schedule of Restricted Stock Units by Type (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total restricted stock units vesting conditions granted (in shares) | 3,609 |
Service-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units vesting conditions granted (in shares) | 3,411 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted with performance based vesting (in shares) | 116 |
Performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted with performance based vesting (in shares) | 82 |
Stock-Based Compensation - Sc79
Stock-Based Compensation - Schedule of Deferred Stock Units Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Deferred Stock Units | |
Units (in thousands) | |
Outstanding at January 1, 2016 (in shares) | shares | 164 |
Granted (in shares) | shares | 44 |
Vested and distributed (in shares) | shares | (31) |
Outstanding at December 31, 2016 (in shares) | shares | 177 |
Weighted Average Grant Date Fair Value | |
Outstanding at January 1, 2016 (in dollars per share) | $ / shares | $ 44.90 |
Granted (in dollars per share) | $ / shares | 47.50 |
Vested and distributed (in dollars per share) | $ / shares | 54.97 |
Outstanding at December 31, 2016 (in dollars per share) | $ / shares | $ 43.77 |
Restricted Stock Units (RSUs) | |
Units (in thousands) | |
Outstanding at January 1, 2016 (in shares) | shares | 5,710 |
Granted (in shares) | shares | 3,609 |
Vested and distributed (in shares) | shares | (2,910) |
Forfeited (in shares) | shares | (566) |
Outstanding at December 31, 2016 (in shares) | shares | 5,843 |
Weighted Average Grant Date Fair Value | |
Outstanding at January 1, 2016 (in dollars per share) | $ / shares | $ 59.51 |
Granted (in dollars per share) | $ / shares | 59.60 |
Vested and distributed (in dollars per share) | $ / shares | 59.59 |
Forfeited (in dollars per share) | $ / shares | 46.65 |
Outstanding at December 31, 2016 (in dollars per share) | $ / shares | $ 59.94 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Deferred benefit on intercompany sales | $ 16 | $ 9.1 | $ 15.5 |
Provisional tax expense | 26 | ||
Transition tax expense | 43.4 | ||
Change in tax rate benefit | 17.4 | ||
Foreign earnings repatriated | 603.2 | ||
Unrecognized tax benefits including accrued interest and penalties | 90.7 | 77.1 | 72.3 |
Unrecognized tax benefits, income tax penalties and interest accrued | 10.7 | 13.7 | 10 |
Income tax interest and penalties expense | 2.3 | $ 3.9 | $ 2.2 |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 76 | ||
Unrecognized tax benefits that may be recognized | $ 3.3 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 94,518 | $ 273,176 | $ 233,247 |
Foreign | 221,604 | 186,270 | 223,377 |
Income before provision for income taxes | $ 316,122 | $ 459,446 | $ 456,624 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax provision (benefit): | |||
Federal | $ 41,090 | $ 89,816 | $ 70,298 |
State | 6,336 | 6,238 | (1,750) |
Foreign | 51,244 | 39,952 | 62,572 |
Deferred tax provision (benefit): | |||
Federal | (17,136) | 4,265 | 23,381 |
State | 21,689 | (86) | (742) |
Foreign | (4,992) | 3,916 | (18,536) |
Change in valuation allowance | (430) | (787) | (5) |
Total | $ 97,801 | $ 143,314 | $ 135,218 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between Effective and Statutory (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
State taxes | 1.60% | 2.00% | 1.70% |
Share-based compensation | 3.70% | 2.70% | 1.90% |
U.S. federal, state and foreign research and development credits | (6.90%) | (3.30%) | (4.10%) |
Foreign earnings | (7.80%) | (3.40%) | (4.60%) |
Domestic production activities deduction | (0.70%) | (1.70%) | (1.20%) |
U.S Tax Cuts and Jobs Act, net | 8.20% | 0.00% | 0.00% |
Impact of acquisition-related uncertain tax position | (2.90%) | (0.00%) | (0.00%) |
Other | 0.70% | (0.10%) | 0.90% |
Effective income tax rate | 30.90% | 31.20% | 29.60% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax and Related Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Accrued bonus | $ 19,950 | $ 18,390 |
Deferred revenue | 8,861 | 10,055 |
Deferred rent | 8,000 | 12,592 |
Stock-based compensation | 20,557 | 32,030 |
Net operating losses | 26,698 | 7,855 |
Unrealized losses | 1,239 | 1,862 |
Tax credit carryforwards | 49,135 | 23,629 |
License income | 6,611 | 16,932 |
Other | 11,909 | 7,048 |
Deferred tax assets | 152,960 | 130,393 |
Depreciation and amortization | (13,933) | (10,470) |
Acquired intangible assets | (48,781) | (44,788) |
Internal-use software development costs capitalized | (54,687) | (77,375) |
Deferred tax liabilities | (117,401) | (132,633) |
Valuation allowance | 0 | (430) |
Net deferred tax assets (liabilities) | $ 35,559 | |
Net deferred tax assets (liabilities) | $ (2,670) |
Income Taxes - Schedule of NOL
Income Taxes - Schedule of NOL Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Operating Loss Carryforwards [Line Items] | ||
Federal and state research and development tax credit and other credit carryforwards | $ 65,900 | $ 41,500 |
Domestic country | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | 99,200 | 16,500 |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | 89,500 | 11,400 |
Foreign country | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards | $ 0 | $ 0 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 69,117 | $ 65,290 | $ 33,320 |
Gross increases — tax positions of prior periods | 2,692 | 6,391 | 11,238 |
Gross increases — current period tax positions | 27,163 | 6,252 | 27,043 |
Gross decreases — tax positions of prior periods | (277) | (6,491) | (5,739) |
Gross decreases — lapse of applicable statute of limitations | (12,850) | (287) | (257) |
Gross decreases — settlements | 0 | (2,038) | (315) |
Balance at end of year | $ 85,845 | $ 69,117 | $ 65,290 |
Net Income per Share - Schedule
Net Income per Share - Schedule of Components Used in Diluted and Basic Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income | $ 19,107 | $ 60,512 | $ 57,772 | $ 80,930 | $ 91,639 | $ 76,000 | $ 73,635 | $ 74,858 | $ 218,321 | $ 316,132 | $ 321,406 |
Denominator: | |||||||||||
Shares used for basic net income per share (in shares) | 171,559 | 174,917 | 178,391 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options (in shares) | 260 | 384 | 794 | ||||||||
RSUs and deferred stock units (in shares) | 892 | 914 | 1,230 | ||||||||
Convertible senior notes (in shares) | 0 | 0 | 0 | ||||||||
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 | 0 | ||||||||
Shares used for diluted net income per share (in shares) | 172,711 | 176,215 | 180,415 | ||||||||
Basic net income per share (in dollars per share) | $ 0.11 | $ 0.35 | $ 0.33 | $ 0.47 | $ 0.53 | $ 0.44 | $ 0.42 | $ 0.42 | $ 1.27 | $ 1.81 | $ 1.80 |
Diluted net income per share (in dollars per share) | $ 0.11 | $ 0.35 | $ 0.33 | $ 0.46 | $ 0.52 | $ 0.43 | $ 0.42 | $ 0.42 | $ 1.26 | $ 1.79 | $ 1.78 |
Net Income per Share - Schedu88
Net Income per Share - Schedule of Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 19,729 | 18,418 | 17,097 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 9 | 58 | 22 |
Service-based RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 3,258 | 2,262 | 660 |
Performance-based RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 1,054 | 690 | 1,007 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 7,704 | 7,704 | 7,704 |
Warrants related to issuance of convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 7,704 | 7,704 | 7,704 |
Segment and Geographic Inform89
Segment and Geographic Information - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Property and equipment, net | $ 862,535 | $ 801,017 | $ 862,535 | $ 801,017 | |||||||
Revenue | 663,452 | $ 621,399 | $ 608,908 | $ 609,237 | 616,124 | $ 584,065 | $ 572,135 | $ 567,725 | 2,502,996 | 2,340,049 | $ 2,197,448 |
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Property and equipment, net | 311,700 | 297,800 | 311,700 | 297,800 | |||||||
Non-U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Property and equipment, net | $ 249,800 | $ 231,800 | 249,800 | 231,800 | |||||||
Revenue | $ 855,000 | $ 720,000 | $ 593,000 | ||||||||
Sales | Geographic Concentration Risk | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration risk percent (more than) | 10.00% | 10.00% | 10.00% |
Quarterly Financial Results (90
Quarterly Financial Results (unaudited) - Schedule of Quarterly Financial Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 663,452 | $ 621,399 | $ 608,908 | $ 609,237 | $ 616,124 | $ 584,065 | $ 572,135 | $ 567,725 | $ 2,502,996 | $ 2,340,049 | $ 2,197,448 |
Cost of revenue (exclusive of amortization of acquired intangible assets) | 229,937 | 225,468 | 214,650 | 205,703 | 203,475 | 204,467 | 206,323 | 194,736 | 875,758 | 809,001 | 725,620 |
Net income | $ 19,107 | $ 60,512 | $ 57,772 | $ 80,930 | $ 91,639 | $ 76,000 | $ 73,635 | $ 74,858 | $ 218,321 | $ 316,132 | $ 321,406 |
Basic net income per share (in dollars per share) | $ 0.11 | $ 0.35 | $ 0.33 | $ 0.47 | $ 0.53 | $ 0.44 | $ 0.42 | $ 0.42 | $ 1.27 | $ 1.81 | $ 1.80 |
Diluted net income per share (in dollars per share) | $ 0.11 | $ 0.35 | $ 0.33 | $ 0.46 | $ 0.52 | $ 0.43 | $ 0.42 | $ 0.42 | $ 1.26 | $ 1.79 | $ 1.78 |