Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 162,866,026 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 705,407 | $ 313,382 |
Marketable securities | 1,096,233 | 398,554 |
Accounts receivable, net of reserves of $1,358 and $1,281 at September 30, 2018, and December 31, 2017, respectively | 466,364 | 461,457 |
Prepaid expenses and other current assets | 161,785 | 172,853 |
Total current assets | 2,429,789 | 1,346,246 |
Property and equipment, net | 884,483 | 862,535 |
Marketable securities | 257,135 | 567,592 |
Goodwill | 1,488,868 | 1,498,688 |
Acquired intangible assets, net | 176,640 | 201,259 |
Deferred income tax assets | 23,688 | 36,231 |
Other assets | 103,284 | 136,365 |
Total assets | 5,363,887 | 4,648,916 |
Current liabilities: | ||
Accounts payable | 96,051 | 80,278 |
Accrued expenses | 305,267 | 283,743 |
Deferred revenue | 93,732 | 70,495 |
Convertible senior notes | 680,564 | 0 |
Other current liabilities | 20,324 | 22,178 |
Total current liabilities | 1,195,938 | 456,694 |
Deferred revenue | 5,218 | 6,062 |
Deferred income tax liabilities | 18,827 | 17,823 |
Convertible senior notes | 864,679 | 662,913 |
Other liabilities | 123,695 | 142,955 |
Total liabilities | 2,208,357 | 1,286,447 |
Commitments and contingencies (Note 9) | ||
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; 172,234,085 shares issued and 163,886,719 shares outstanding at September 30, 2018, and 169,893,324 shares issued and outstanding at December 31, 2017 | 1,722 | 1,699 |
Additional paid-in capital | 4,352,857 | 4,073,362 |
Accumulated other comprehensive loss | (48,218) | (21,930) |
Treasury stock, at cost, 8,347,366 shares at September 30, 2018, and no shares at December 31, 2017 | (625,925) | 0 |
Accumulated deficit | (524,906) | (690,662) |
Total stockholders’ equity | 3,155,530 | 3,362,469 |
Total liabilities and stockholders’ equity | $ 5,363,887 | $ 4,648,916 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 1,358 | $ 1,281 |
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 | 172,234,085 | 169,893,324 |
Common stock, shares outstanding | 163,886,719 | 169,893,324 |
Treasury stock, shares | 8,347,366 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 669,628 | $ 624,440 | $ 2,001,111 | $ 1,830,565 |
Costs and operating expenses: | ||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 239,246 | 225,490 | 709,558 | 645,897 |
Research and development | 61,049 | 57,226 | 185,823 | 162,761 |
Sales and marketing | 125,323 | 117,863 | 379,556 | 350,299 |
General and administrative | 119,911 | 124,523 | 444,502 | 363,050 |
Amortization of acquired intangible assets | 8,294 | 7,753 | 25,019 | 23,075 |
Restructuring (benefit) charges | (732) | 332 | 14,442 | 3,303 |
Total costs and operating expenses | 553,091 | 533,187 | 1,758,900 | 1,548,385 |
Income from operations | 116,537 | 91,253 | 242,211 | 282,180 |
Interest income | 9,258 | 4,463 | 19,632 | 13,368 |
Interest expense | (14,566) | (4,746) | (28,620) | (13,989) |
Other (expense) income, net | (459) | 535 | (3,207) | 414 |
Income before provision for income taxes | 110,770 | 91,505 | 230,016 | 281,973 |
Provision for income taxes | 3,187 | 27,594 | 25,658 | 86,727 |
Net income | $ 107,583 | $ 63,911 | $ 204,358 | $ 195,246 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.65 | $ 0.37 | $ 1.21 | $ 1.13 |
Diluted (in dollars per share) | $ 0.64 | $ 0.37 | $ 1.20 | $ 1.13 |
Shares used in per share calculations: | ||||
Basic (in shares) | 165,924 | 170,976 | 168,763 | 172,269 |
Diluted (in shares) | 167,900 | 171,505 | 170,732 | 173,371 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 107,583 | $ 63,911 | $ 204,358 | $ 195,246 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (7,771) | 7,689 | (26,046) | 31,184 |
Change in unrealized gain (loss) on investments, net of income tax (provision) benefit of $(494), $(187), $78 and $(868) for the three and nine months ended September 30, 2018 and 2017, respectively | 1,524 | 310 | (242) | 1,438 |
Other comprehensive (loss) income | (6,247) | 7,999 | (26,288) | 32,622 |
Comprehensive income | $ 101,336 | $ 71,910 | $ 178,070 | $ 227,868 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Income tax on unrealized gain (loss) on investments | $ (494) | $ (187) | $ 78 | $ (868) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 204,358 | $ 195,246 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 318,226 | 272,917 |
Stock-based compensation | 138,815 | 122,103 |
Provision for deferred income taxes | 12,906 | 23,134 |
Amortization of debt discount and issuance costs | 27,844 | 13,989 |
Restructuring-related software charges | 2,818 | 0 |
Other non-cash reconciling items, net | 9,360 | 3,655 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (13,611) | (9,423) |
Prepaid expenses and other current assets | (2,084) | (36,580) |
Accounts payable and accrued expenses | 7,921 | 22,150 |
Deferred revenue | 23,927 | 1,528 |
Other current liabilities | 2,030 | 3,651 |
Other non-current assets and liabilities | (10,338) | (8,828) |
Net cash provided by operating activities | 722,172 | 603,542 |
Cash flows from investing activities: | ||
Cash paid for acquired businesses, net of cash acquired | (79) | (197,201) |
Purchases of property and equipment | (143,285) | (185,466) |
Capitalization of internal-use software development costs | (145,122) | (122,460) |
Purchases of short- and long-term marketable securities | (782,086) | (249,098) |
Proceeds from sales of short- and long-term marketable securities | 16,308 | 180,405 |
Proceeds from maturities of short- and long-term marketable securities | 378,708 | 317,974 |
Other non-current assets and liabilities | (2,678) | (1,166) |
Net cash used in investing activities | (678,234) | (257,012) |
Cash flows from financing activities: | ||
Proceeds from the issuance of convertible senior notes | 1,132,185 | 0 |
Proceeds from the issuance of warrants | 119,945 | 0 |
Purchase of note hedge related to convertible senior notes | (261,740) | 0 |
Proceeds related to the issuance of common stock under stock plans | 52,497 | 41,740 |
Employee taxes paid related to net share settlement of stock-based awards | (52,145) | (48,122) |
Repurchases of common stock | (625,925) | (306,629) |
Other non-current assets and liabilities | (5,085) | (1,096) |
Net cash provided by (used in) financing activities | 359,732 | (314,107) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (11,528) | 12,359 |
Net increase in cash, and cash equivalents and restricted cash | 392,142 | 44,782 |
Cash, cash equivalents and restricted cash at beginning of period | 314,429 | 324,626 |
Cash, cash equivalents and restricted cash at end of period | 706,571 | 369,408 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net of refunds received of $17,286 and $5,867 for the nine months ended September 30, 2018 and 2017, respectively | 32,485 | 79,479 |
Non-cash investing activities: | ||
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | 54,414 | 29,546 |
Capitalization of stock-based compensation | $ 25,676 | $ 21,602 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Income tax refund received | $ 17,286 | $ 5,867 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 705,407 | 368,152 |
Restricted cash | 1,164 | 1,256 |
Cash, cash equivalents and restricted cash | $ 706,571 | $ 369,408 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 security, web and mobile performance, enterprise access, and video delivery solutions to enterprises across the world. Its globally-distributed platform comprises more than 200,000 servers across more than 130 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company currently operates in one industry segment: providing cloud services for delivering, optimizing and securing content and business applications over the Internet. The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed in, or omitted from, these interim financial statements. Accordingly, the unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2017 , filed with the Securities and Exchange Commission on March 1, 2018. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of the results of all interim periods reported herein. Newly-Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("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 can 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. The Company adopted this new standard on a retrospective basis on January 1, 2018. The changes to the Company's revenue recognition approach under this new standard primarily impact the timing of recognizing revenue from a small number of licensed software customers. There is little impact on revenue recognized for the Company's core services. As a result of the change, the Company also began capitalizing certain commission and incentive payments. In November 2016, the FASB issued guidance that requires restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this new standard on a retrospective basis on January 1, 2018. The following table details the changes to the consolidated balance sheet as of December 31, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands): As Previously Reported Revenue Recognition Standard Adjustments As Revised ASSETS Current assets: Accounts receivable $ 459,127 $ 2,330 $ 461,457 Prepaid expenses and other current assets 137,809 35,044 172,853 Total current assets 1,308,872 37,374 1,346,246 Deferred income tax assets 51,069 (14,838 ) 36,231 Other assets 112,829 23,536 136,365 Total assets 4,602,844 46,072 4,648,916 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Deferred revenue $ 77,705 $ (7,210 ) $ 70,495 Total current liabilities 463,904 (7,210 ) 456,694 Deferred revenue 6,839 (777 ) 6,062 Deferred income tax liabilities 15,510 2,313 17,823 Total liabilities 1,292,121 (5,674 ) 1,286,447 Stockholders' equity: Accumulated deficit (742,408 ) 51,746 (690,662 ) Total stockholders' equity 3,310,723 51,746 3,362,469 Total liabilities and stockholders' equity 4,602,844 46,072 4,648,916 The following table details the changes to the consolidated statements of income for the three and nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands, except per share data): For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2017 As Previously Reported Revenue Recognition Standard Adjustments As Revised As Previously Reported Revenue Recognition Standard Adjustments As Revised Revenue $ 621,399 $ 3,041 $ 624,440 $ 1,839,544 $ (8,979 ) $ 1,830,565 Costs and operating expenses: Cost of revenue (exclusive of amortization of acquired intangible assets) 225,468 22 225,490 645,821 76 645,897 Sales and marketing 120,220 (2,357 ) 117,863 353,218 (2,919 ) 350,299 Total costs and operating expenses 535,522 (2,335 ) 533,187 1,551,228 (2,843 ) 1,548,385 Income from operations 85,877 5,376 91,253 288,316 (6,136 ) 282,180 Income before provision for income taxes 86,129 5,376 91,505 288,109 (6,136 ) 281,973 Provision for income taxes 25,617 1,977 27,594 88,895 (2,168 ) 86,727 Net income 60,512 3,399 63,911 199,214 (3,968 ) 195,246 Net income per share: Basic $ 0.35 $ 0.02 $ 0.37 $ 1.16 $ (0.03 ) $ 1.13 Diluted $ 0.35 $ 0.02 $ 0.37 $ 1.15 $ (0.02 ) $ 1.13 The statements of comprehensive income for the three and nine months ended September 30, 2017 was also impacted by the adjustments to net income of $3.4 million and $(4.0) million , respectively. The following table details the changes to the consolidated statement of cash flows for the nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition and statement of cash flow standards (in thousands): As Previously Reported Revenue Recognition Standard Adjustments Cash Flow Standard Adjustments As Revised Cash flows from operating activities: Net income $ 199,214 $ (3,968 ) $ — $ 195,246 Adjustments to reconcile net income to net cash provided by operating activities: Provision for deferred income taxes 25,302 (2,168 ) — 23,134 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable (19,199 ) 9,776 — (9,423 ) Prepaid expenses and other current assets (34,195 ) (2,385 ) — (36,580 ) Deferred revenue 991 537 — 1,528 Other non-current assets and liabilities (7,036 ) (1,792 ) — (8,828 ) Net cash provided by operating activities 603,542 — — 603,542 Cash flows from investing activities: Other non-current assets and liabilities (1,895 ) — 729 (1,166 ) Net cash used in investing activities (257,741 ) — 729 (257,012 ) Effects of exchange rate changes on cash, cash equivalents and restricted cash 12,289 — 70 12,359 Net increase in cash, and cash equivalents and restricted cash 43,983 — 799 44,782 Cash, cash equivalents and restricted cash at beginning of period 324,169 — 457 324,626 Cash, cash equivalents and restricted cash at end of period 368,152 — 1,256 369,408 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. The Company adopted this new standard on January 1, 2018 using the modified retrospective basis, recognizing a cumulative-effect adjustment as a component of equity as of the date of adoption. Upon adoption, the Company reclassified $11.6 million from prepaid and other current assets and $27.0 million from other assets to beginning retained earnings. 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. The Company adopted this guidance on January 1, 2018 and will apply it prospectively to future transactions. The adoption of this new accounting guidance had no immediate impact on the Company's consolidated financial statements; however, it may result in a future transaction being recorded as a transfer of assets, whereas previously the Company may have concluded it was a business combination. Recent Accounting Pronouncements 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 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 on a modified retrospective basis. The Company expects to record significant right-of-use assets and lease liabilities on its consolidated balance sheets, but does not expect the adoption to impact its results of operations or cash flows. 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. To date, the Company has completed its gap analysis, selected a software tool to assist with the accounting for leases, has begun to implement the software, and has begun its data collection and migration efforts. The Company is also in the process of finalizing its accounting policies and designing the related processes and internal controls. The Company expects the adoption of this standard to require changes to its processes, systems and controls over financial reporting. 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 of adopting this new accounting guidance on its consolidated financial statements. In February 2018, the FASB issued guidance that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (the "TCJA") that was enacted in 2017. The amendments in this update are effective either in the period of adoption or retrospectively, to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized, during interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements. In August 2018, the FASB issued guidance which changes the fair value measurement disclosure requirements. This guidance will be effective for the Company on January 1, 2019. The Company is evaluating the impact the update will have on its disclosures. In August 2018, the FASB issued guidance which address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. This guidance will be effective for the Company on January 1, 2020, with early adoption permitted. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies Update | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies Update | Significant Accounting Policies Update The Company's significant accounting policies are detailed in Note 2 of its annual report on Form 10-K for the year ended December 31, 2017. As a result of the FASB's updated guidance for revenue recognition and related changes, as described in Note 1, the following policies have been updated as of the Company's adoption date of January 1, 2018, with retrospective application to the historical periods presented. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the Internet – as well as security solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately, or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most content delivery and security services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. Any bursting over given commitments is recognized in the period in which the traffic was served. For services that involve traffic consumption, revenue is recognized in an amount that reflects the level of traffic served to a customer in a given period. For custom arrangements, other methods may be used as a measure of progress towards satisfying the performance obligations. Some of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. 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. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in an incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately 2.5 years . Amortization is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees, and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following is a summary of available-for-sale marketable securities held as of September 30, 2018 and December 31, 2017 (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Fair Value Short-Term Marketable Securities Long-Term Marketable Securities As of September 30, 2018 Certificates of deposit $ 65,000 $ 5 $ (11 ) $ 64,994 $ 64,994 $ — Commercial paper 393,835 3 (98 ) 393,740 393,740 — Corporate bonds 830,558 17 (5,253 ) 825,322 581,609 243,713 U.S. government agency obligations 58,683 — (564 ) 58,119 55,660 2,459 $ 1,348,076 $ 25 $ (5,926 ) $ 1,342,175 $ 1,096,003 $ 246,172 As of December 31, 2017 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 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 September 30, 2018 , the Company held for investment corporate and government bonds with a fair value of $406.6 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 $3.8 million related to these corporate and government bonds are included in accumulated other comprehensive income as of September 30, 2018 . 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 September 30, 2018 and December 31, 2017 (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 Level 3 As of September 30, 2018 Cash Equivalents and Marketable Securities: Money market funds $ 139,125 $ 139,125 $ — $ — Certificates of deposit 64,994 64,994 — — Commercial paper 393,740 — 393,740 — Corporate bonds 825,322 — 825,322 — U.S. government agency obligations 58,119 — 58,119 — Mutual funds 11,193 11,193 — — $ 1,492,493 $ 215,312 $ 1,277,181 $ — Liabilities: Contingent consideration related to a completed acquisition $ (6,200 ) $ — $ — $ (6,200 ) 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 related to a completed acquisition $ (8,631 ) $ — $ — $ (8,631 ) As of September 30, 2018 and December 31, 2017 , the Company grouped certificates of deposit, 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 September 30, 2018 and December 31, 2017 , the Company grouped commercial paper, corporate bonds and U.S. government agency obligations using a Level 2 valuation because quoted prices for identical or similar assets are available in markets that are inactive. The Company did not have any transfers of assets between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three months ended September 30, 2018 . 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 primarily use 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 fair value of the Company's Level 3 liabilities, which consist of contingent consideration related to the acquisition of Cyberfend, Inc. in 2016, was primarily an income-based approach. The significant unobservable input used in the fair value measurement of the contingent consideration was the likelihood of achieving certain post-closing financial results. Contractual maturities of the Company’s available-for-sale marketable securities held as of September 30, 2018 and December 31, 2017 were as follows (in thousands): September 30, December 31, Due in 1 year or less $ 1,096,003 $ 398,554 Due after 1 year through 3 years 246,172 559,713 $ 1,342,175 $ 958,267 The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs during the nine months ended September 30, 2018 (in thousands): Other Liabilities: Balance as of January 1, 2018 $ (8,631 ) Fair value adjustment to contingent consideration included in general and administrative expense (1,735 ) Cash paid upon achievement of milestone 4,166 Balance as of September 30, 2018 $ (6,200 ) |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Trade accounts receivable $ 330,989 $ 320,001 Unbilled accounts receivable 136,733 142,737 Gross accounts receivable 467,722 462,738 Allowance for doubtful accounts and other reserves (1,358 ) (1,281 ) Accounts receivable, net $ 466,364 $ 461,457 |
Incremental Costs to Obtain a C
Incremental Costs to Obtain a Contract with a Customer | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Incremental Costs to Obtain a Contract with a Customer | Incremental Costs to Obtain a Contract with a Customer The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Deferred costs included in prepaid and other current assets $ 38,929 $ 35,044 Deferred costs included in other assets 24,064 23,536 Total deferred costs $ 62,993 $ 58,580 During the three and nine months ended September 30, 2018 , the Company recognized $11.2 million and $32.9 million , respectively, of amortization expense related to deferred commissions. During the three and nine months ended September 30, 2017 , the Company recognized $9.3 million and $27.3 million , respectively, of amortization expense related to deferred commissions. Amortization expense related to deferred commissions is primarily included in sales and marketing expense in the consolidated statements of income. Revenue from Contracts with Customers The Company sells its services 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. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 U.S. $ 412,573 $ 412,348 $ 1,249,041 $ 1,211,454 International 257,055 212,092 752,070 619,111 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 While the Company sells its services through a geographically dispersed sales force, it manages its customer relationships in two divisions: the Web Division and the Media and Carrier Division. Customers are assigned to a division for relationship management purposes according to their predominant purchasing activity; however, customers may purchase solutions managed by the other division as well. The following table summarizes revenue by division included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Web Division $ 356,856 $ 329,684 $ 1,060,777 $ 950,580 Media and Carrier Division 312,772 294,756 940,334 879,985 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 Most content delivery and security services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. A small percentage of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation. During the nine months ended September 30, 2018 and 2017 , the Company recognized $64.3 million and $43.9 million of revenue that was included in deferred revenue as of December 31, 2017 and 2016, respectively. As of September 30, 2018 , the aggregate amount of remaining performance obligations from contracts with customers was $2.3 billion . The Company expects to recognize more than 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The change in the carrying amount of goodwill for the nine months ended September 30, 2018 was as follows (in thousands): Balance as of January 1, 2018 $ 1,498,688 Measurement period adjustments (6,667 ) Foreign currency translation (3,153 ) Balance as of September 30, 2018 $ 1,488,868 The Company tests goodwill for impairment at least annually. Through the date the consolidated financial statements were issued, no triggering events had occurred that would indicate a potential impairment exists. Acquired intangible assets that are subject to amortization consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Net Completed technology $ 145,091 $ (77,512 ) $ 67,579 $ 145,091 $ (65,283 ) $ 79,808 Customer-related intangible assets 245,710 (140,798 ) 104,912 245,310 (128,835 ) 116,475 Non-compete agreements 700 (256 ) 444 4,710 (3,975 ) 735 Trademarks and trade names 7,200 (3,495 ) 3,705 7,200 (2,959 ) 4,241 Acquired license rights 490 (490 ) — 490 (490 ) — Total $ 399,191 $ (222,551 ) $ 176,640 $ 402,801 $ (201,542 ) $ 201,259 Aggregate expense related to amortization of acquired intangible assets for the three and nine months ended September 30, 2018 was $8.3 million and $25.0 million , respectively. Aggregate expense related to amortization of acquired intangible assets for the three and nine months ended September 30, 2017 was $7.8 million and $23.1 million , respectively. Based on the Company’s acquired intangible assets as of September 30, 2018 , aggregate expense related to amortization of acquired intangible assets is expected to be $8.3 million for the remainder of 2018 , and $36.6 million , $33.9 million , $28.0 million and $22.4 million for 2019 , 2020 , 2021 and 2022 , respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible Notes – Due 2025 In May 2018 , the Company issued $1,150.0 million in par value of convertible senior notes due 2025 (the "2025 Notes"). The 2025 Notes are senior unsecured obligations of the Company, bear regular interest of 0.125% , payable semi-annually on May 1 and November 1 of each year, and mature on May 1, 2025 , unless repurchased or converted prior to maturity. At their option, holders may convert their 2025 Notes prior to the close of business on the business day immediately preceding January 1, 2025 , only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ended June 30, 2018 (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, and including, 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; • during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of 2025 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 January 1, 2025 , holders may convert all or any portion of their 2025 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 10.5150 shares of the Company's common stock per $ 1,000 principal amount, which is equivalent to an initial conversion price of approximately $95.10 per share, subject to adjustments in certain events, and represents a potential conversion into 12.1 million shares. In accounting for the issuance of the 2025 Notes, the Company separated the 2025 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 2025 Notes. The difference between the principal amount of the 2025 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 2025 Notes. The equity component is recorded in additional paid-in capital in the consolidated balance sheet and will not be remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the 2025 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 2025 Notes, and transaction costs attributable to the equity component are netted against the equity component of the 2025 Notes in stockholders’ equity. The 2025 Notes consist of the following components as of September 30, 2018 (in thousands): September 30, Liability component: Principal $ 1,150,000 Less: debt discount and issuance costs, net of amortization (285,321 ) Net carrying amount $ 864,679 Equity component: $ 285,225 The estimated fair value of the 2025 Notes at September 30, 2018 was $1,129.7 million . The fair value was determined based on the quoted price of the 2025 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 $73.15 on September 30, 2018 , the value of the 2025 Notes if converted to common stock was less than the principal amount of $1,150.0 million . The Company used $46.2 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the 2025 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the Board of Directors. Additionally, $141.8 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The remaining net proceeds are intended to be used for the repayment at maturity of the $690.0 million in par value of convertible senior notes due 2019 as well as for working capital, share repurchases, potential acquisitions and strategic transactions and other corporate purposes. Note Hedge To minimize the impact of potential dilution upon conversion of the 2025 Notes, the Company entered into convertible note hedge transactions with respect to its common stock in May 2018 . The Company paid $261.7 million for the note hedge transactions. The note hedge transactions cover approximately 12.1 million shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2025 Notes, also subject to adjustment, and are exercisable upon conversion of the 2025 Notes. The note hedge transactions are intended to reduce dilution in the event of conversion of the 2025 Notes. Warrants Separately, in May 2018 , the Company entered into warrant transactions, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, up to 12.1 million shares of the Company’s common stock at a strike price of approximately $149.18 per share. The Company received aggregate proceeds of $119.9 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 2025 Notes to approximately $149.18 per share. Convertible Notes – Due 2019 In February 2014 , the Company issued $690.0 million in par value of convertible senior notes due 2019 (the "2019 Notes"). The 2019 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 2019 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 2019 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 2019 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 2019 Notes, the Company separated the 2019 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 2019 Notes. The difference between the principal amount of the 2019 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 2019 Notes. The equity component is recorded in additional paid-in capital in the consolidated balance sheet and will not be remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the 2019 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 2019 Notes, and transaction costs attributable to the equity component are netted against the equity component of the 2019 Notes in stockholders’ equity. The 2019 Notes consist of the following components as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, 2017 Liability component: Principal $ 690,000 $ 690,000 Less: debt discount and issuance costs, net of amortization (9,436 ) (27,087 ) Net carrying amount $ 680,564 $ 662,913 Equity component: $ 101,276 $ 101,276 The estimated fair value of the 2019 Notes at September 30, 2018 was $684.8 million . The fair value was determined based on the quoted price of the 2019 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 $73.15 on September 30, 2018 , the value of the 2019 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 2019 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the Board of Directors. 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 2019 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 2019 Notes, also subject to adjustment, and are exercisable upon conversion of the 2019 Notes. The note hedge transactions are intended to reduce dilution in the event of conversion of the 2019 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 2019 Notes to approximately $104.49 per share. Revolving Credit Facility In May 2018 , the Company entered into a $500.0 million five -year, revolving credit agreement (the “Credit Agreement”). Borrowings under the Credit Agreement may be used to finance working capital needs and for general corporate purposes. The Credit Agreement provides for an initial $500.0 million in revolving loans. Under specified circumstances, the facility can be increased to up to $1.0 billion in aggregate principal amount. Borrowings under the Credit Agreement bear interest, at the Company's option, at a base rate plus a spread of 0.00% to 0.25% or an adjusted LIBOR rate plus a spread of 0.875% to 1.25% , in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the Credit Agreement. Regardless of what amounts, if any, are outstanding under the Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.075% to 0.15% , with such rate being based on the Company's consolidated leverage ratio specified in the Credit Agreement. The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. Principal covenants include a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. There were no outstanding borrowings under the Credit Agreement as of September 30, 2018 . Interest Expense The 2025 Notes bear interest at a fixed rate of 0.125% . The interest is payable semi-annually on May 1 and November 1 of each year, commencing in November 2018. The 2025 Notes have an effective interest rate of 4.26% attributable to the conversion feature. The 2019 Notes do not bear regular interest, but have an effective interest rate of 3.2% attributable to the conversion feature. The Company is also obligated to pay ongoing commitment fees under the terms of the Credit Agreement. The following table sets forth total interest expense included in the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Amortization of debt discount and issuance costs $ 15,295 $ 5,731 31,045 $ 17,044 Coupon interest payable on 2025 Notes 359 — 514 — Revolving credit facility contractual interest expense 122 — 261 — Capitalization of interest expense (1,210 ) (985 ) (3,200 ) (3,055 ) Total interest expense $ 14,566 $ 4,746 $ 28,620 $ 13,989 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2018 | |
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. As part of the cost efficiency and savings plans, certain headcount and facility reductions were made in 2017 and the first three quarters of 2018. Certain capitalized internal-use software charges have also been realized for software not yet placed into service that will not be completed and implemented due to this action. The Company has incurred $62.0 million of restructuring charges as part of this action, of which $12.7 million was recognized during the nine months ended September 30, 2018 , and $49.3 million was recognized during the three months ended December 31, 2017. The Company does not expect any additional restructuring charges related to this action to be significant. The Company also recognized restructuring charges for redundant employees, facilities and contracts associated with acquisitions completed in 2017. The following table summarizes the activity of the Company's restructuring accrual during the nine months ended September 30, 2018 (in thousands): Employee Severance and Related Benefits Software Charges Excess Facilities, Contract Terminations and Other Total Balance as of January 1, 2018 $ 12,857 $ — $ 1,386 $ 14,243 Costs incurred 5,910 2,818 5,714 14,442 Cash disbursements (18,509 ) — (4,885 ) (23,394 ) Software and other non-cash charges — (2,818 ) (1,787 ) (4,605 ) Translation adjustments and other 706 — (205 ) 501 Balance as of September 30, 2018 $ 964 $ — $ 223 $ 1,187 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters In April 2018, as part of the resolution of multiple existing lawsuits between Limelight Networks, Inc. ("Limelight") and the Company, including in the U.S. District Court for the Eastern District of Virginia and in the U.S. District Court for the District of Massachusetts, the Company and Limelight entered into an agreement to settle the cases and request that the U.S. Patent Trial and Appeal Board terminate certain proceedings related to patents at issue in the litigation. The Company recorded a $14.9 million charge in the second quarter of 2018, which is included in general and administrative expenses in the consolidated statement of income for the nine months ended September 30, 2018 , related to this settlement. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Repurchase Program In February 2016, the Board of Directors authorized a $1.0 billion repurchase program effective from February 2016 through December 2018. In March 2018, the Company announced that its Board had increased its share repurchase authorization by $416.7 million , such that the amount that was authorized and available for repurchase in 2018 was $750.0 million . Subsequently, effective November 2018, the Board authorized an additional $1.1 billion repurchase program through December 2021. During the three and nine months ended September 30, 2018 , the Company repurchased 5.9 million and 8.3 million shares of its common stock, respectively, for $440.4 million and $625.9 million , respectively. Stock-Based Compensation The following table summarizes stock-based compensation included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Cost of revenue $ 5,494 $ 5,296 $ 16,343 $ 15,055 Research and development 11,249 10,100 32,684 28,743 Sales and marketing 16,835 15,672 49,543 44,780 General and administrative 13,054 10,780 40,245 33,525 Total stock-based compensation 46,632 41,848 138,815 122,103 Provision for income taxes (7,802 ) (11,211 ) (37,692 ) (41,417 ) Total stock-based compensation, net of income taxes $ 38,830 $ 30,637 $ 101,123 $ 80,686 In addition to the amounts of stock-based compensation reported in the table above, the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 include stock-based compensation reflected as a component of amortization of capitalized internal-use software of $6.6 million and $18.1 million , respectively, before taxes and, for the three and nine months ended September 30, 2017 , include stock-based compensation reflected as a component of amortization of capitalized internal-use software of $5.1 million and $12.5 million , respectively, before taxes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
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, net of tax, which is reported as a component of stockholders' equity, for the nine months ended September 30, 2018 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2018 $ (24,319 ) $ 2,389 $ (21,930 ) Other comprehensive loss (26,046 ) (242 ) (26,288 ) Balance as of September 30, 2018 $ (50,365 ) $ 2,147 $ (48,218 ) Amounts reclassified from accumulated other comprehensive loss to net income were insignificant for the nine months ended September 30, 2018 . |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Incremental Costs to Obtain a Contract with a Customer The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Deferred costs included in prepaid and other current assets $ 38,929 $ 35,044 Deferred costs included in other assets 24,064 23,536 Total deferred costs $ 62,993 $ 58,580 During the three and nine months ended September 30, 2018 , the Company recognized $11.2 million and $32.9 million , respectively, of amortization expense related to deferred commissions. During the three and nine months ended September 30, 2017 , the Company recognized $9.3 million and $27.3 million , respectively, of amortization expense related to deferred commissions. Amortization expense related to deferred commissions is primarily included in sales and marketing expense in the consolidated statements of income. Revenue from Contracts with Customers The Company sells its services 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. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 U.S. $ 412,573 $ 412,348 $ 1,249,041 $ 1,211,454 International 257,055 212,092 752,070 619,111 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 While the Company sells its services through a geographically dispersed sales force, it manages its customer relationships in two divisions: the Web Division and the Media and Carrier Division. Customers are assigned to a division for relationship management purposes according to their predominant purchasing activity; however, customers may purchase solutions managed by the other division as well. The following table summarizes revenue by division included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Web Division $ 356,856 $ 329,684 $ 1,060,777 $ 950,580 Media and Carrier Division 312,772 294,756 940,334 879,985 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 Most content delivery and security services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. A small percentage of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation. During the nine months ended September 30, 2018 and 2017 , the Company recognized $64.3 million and $43.9 million of revenue that was included in deferred revenue as of December 31, 2017 and 2016, respectively. As of September 30, 2018 , the aggregate amount of remaining performance obligations from contracts with customers was $2.3 billion . The Company expects to recognize more than 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate is based on estimated income for the year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable quarterly periods. Potential discrete adjustments include tax charges or benefits related to stock-based compensation, changes in tax legislation, settlements of tax audits or assessments, uncertain tax positions and acquisitions, among other items. The Company is currently under audit in multiple jurisdictions and, in certain cases, is involved in litigation related to adverse audit determinations. In the second quarter of 2018, the Company filed an appeal with the Massachusetts Appellate Tax Board contesting adverse audit findings related to certain tax benefits and exemptions. Over the next 12 months, the Company’s current assumptions and positions could change based on audit determinations and other events impacting its analysis. Such events, if resolved unfavorably, could significantly impact the Company’s effective income tax rate. The Company’s effective income tax rate was 11.2% and 30.8% for the nine months ended September 30, 2018 and 2017 , respectively. The lower effective tax rate for the nine months ended September 30, 2018 , is primarily due to a reduction in the U.S. federal statutory tax rate from 35.0% to 21.0% as part of the TCJA, an increase in the excess tax benefit related to stock-based compensation and a decrease in the provisional amount of the one-time transition tax that was recorded in the fourth quarter of 2017. These amounts were partially offset by U.S. federal taxes on Global Intangible Low-Taxed Income (“GILTI”) enacted as part of the TCJA and an intercompany sale of intellectual property. For the nine months ended September 30, 2018 , the effective income tax rate was lower than the federal statutory tax rate due to foreign income taxed at lower rates, the excess tax benefit related to stock-based compensation, a decrease in the provisional amount of the one-time transition tax that was recorded in the fourth quarter of 2017, the release of certain tax reserves related to the expiration of local statutes and the benefit of U.S. federal, state and foreign research and development credits. These amounts were partially offset by U.S. federal taxes on GILTI enacted as part of the TCJA and an intercompany sale of intellectual property. For the nine months ended September 30, 2017 , the effective income tax rate was lower than the federal statutory tax rate due to foreign income taxed at lower rates and the benefit of U.S. federal, state and foreign research and development credits, partially offset by the effects of accounting for stock-based compensation in accordance with the authoritative guidance for share-based payments and state income taxes. As of September 30, 2018 , the Company has not finalized the accounting for all of the tax effects of the TCJA. However, upon further analysis of certain aspects of the TCJA and refinements to the calculations, the provisional estimate of the one-time transition tax, which was recorded in the Company’s consolidated financial statements for the year ended December 31, 2017, decreased by $5.5 million . This decrease in the provisional estimate has been included as a discrete item in the interim period ended September 30, 2018. The Company will continue to refine the provisional amounts of the tax effect of the TCJA as additional guidance and information is available, including clarity regarding state income tax conformity to the current federal tax code. Any further changes to the provisional estimate of the tax effect of the TCJA will be recorded in the period in which the adjustments are made and within the prescribed measurement period. Beginning in 2018, the TCJA provides for a modified territorial tax system imposing an incremental tax on foreign income deemed to be taxed at a “low rate” (the aforementioned GILTI provisions). Under GAAP, an election must be made to either (1) treat taxes due related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factor such amounts into the measurement of deferred taxes (the “deferred method”). The Company is still evaluating the effects of these provisions and has not yet adopted a policy to account for the related impacts. As of September 30, 2018, the Company believes it is reasonably possible that its gross unrecognized tax benefits could decrease within the next twelve months by $30.8 million as a result of the expiration of local statutes of limitations. |
Net Income per Share
Net Income per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share Reconciliation [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, restricted stock units ("RSUs"), deferred stock units ("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 three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data): For the Three Months For the Nine Months 2018 2017 2018 2017 Numerator: Net income $ 107,583 $ 63,911 $ 204,358 $ 195,246 Denominator: Shares used for basic net income per share 165,924 170,976 168,763 172,269 Effect of dilutive securities: Stock options 80 150 158 279 RSUs and DSUs 1,896 379 1,811 823 Convertible senior notes — — — — Warrants related to issuance of convertible senior notes — — — — Shares used for diluted net income per share 167,900 171,505 170,732 173,371 Basic net income per share $ 0.65 $ 0.37 $ 1.21 $ 1.13 Diluted net income per share $ 0.64 $ 0.37 $ 1.20 $ 1.13 For the three and nine months ended September 30, 2018 and 2017 , 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 three and nine months ended September 30, 2018 and 2017 are as follows (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Stock options — 25 — 13 Service-based RSUs 185 5,407 1,068 4,074 Performance-based RSUs 1,515 1,116 1,520 1,165 Convertible senior notes 19,797 7,704 19,797 7,704 Warrants related to issuance of convertible senior notes 19,797 7,704 19,797 7,704 Total shares excluded from computation 41,294 21,956 42,182 20,660 |
Akamai Foundation Endowment Fun
Akamai Foundation Endowment Funding | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Akamai Foundation Endowment Funding | Akamai Foundation Endowment During the second quarter of 2018, the Company contributed $50.0 million to the Akamai Foundation, a non-profit organization founded by certain current and former employees of the Company in 2000 (the "Foundation"). The Company has the right to appoint the directors of the Foundation. The contribution is intended to be a one-time endowment. The associated expense is included in general and administrative expenses in the consolidated statements of income for the nine months ended September 30, 2018 . The Foundation is a private corporate foundation with a mission of supporting youth education, with a focus on mathematics, as well as other charitable causes. |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Newly-Adopted and Recent Accounting Pronouncements | Newly-Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("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 can 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. The Company adopted this new standard on a retrospective basis on January 1, 2018. The changes to the Company's revenue recognition approach under this new standard primarily impact the timing of recognizing revenue from a small number of licensed software customers. There is little impact on revenue recognized for the Company's core services. As a result of the change, the Company also began capitalizing certain commission and incentive payments. In November 2016, the FASB issued guidance that requires restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this new standard on a retrospective basis on January 1, 2018. The following table details the changes to the consolidated balance sheet as of December 31, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands): As Previously Reported Revenue Recognition Standard Adjustments As Revised ASSETS Current assets: Accounts receivable $ 459,127 $ 2,330 $ 461,457 Prepaid expenses and other current assets 137,809 35,044 172,853 Total current assets 1,308,872 37,374 1,346,246 Deferred income tax assets 51,069 (14,838 ) 36,231 Other assets 112,829 23,536 136,365 Total assets 4,602,844 46,072 4,648,916 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Deferred revenue $ 77,705 $ (7,210 ) $ 70,495 Total current liabilities 463,904 (7,210 ) 456,694 Deferred revenue 6,839 (777 ) 6,062 Deferred income tax liabilities 15,510 2,313 17,823 Total liabilities 1,292,121 (5,674 ) 1,286,447 Stockholders' equity: Accumulated deficit (742,408 ) 51,746 (690,662 ) Total stockholders' equity 3,310,723 51,746 3,362,469 Total liabilities and stockholders' equity 4,602,844 46,072 4,648,916 The following table details the changes to the consolidated statements of income for the three and nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands, except per share data): For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2017 As Previously Reported Revenue Recognition Standard Adjustments As Revised As Previously Reported Revenue Recognition Standard Adjustments As Revised Revenue $ 621,399 $ 3,041 $ 624,440 $ 1,839,544 $ (8,979 ) $ 1,830,565 Costs and operating expenses: Cost of revenue (exclusive of amortization of acquired intangible assets) 225,468 22 225,490 645,821 76 645,897 Sales and marketing 120,220 (2,357 ) 117,863 353,218 (2,919 ) 350,299 Total costs and operating expenses 535,522 (2,335 ) 533,187 1,551,228 (2,843 ) 1,548,385 Income from operations 85,877 5,376 91,253 288,316 (6,136 ) 282,180 Income before provision for income taxes 86,129 5,376 91,505 288,109 (6,136 ) 281,973 Provision for income taxes 25,617 1,977 27,594 88,895 (2,168 ) 86,727 Net income 60,512 3,399 63,911 199,214 (3,968 ) 195,246 Net income per share: Basic $ 0.35 $ 0.02 $ 0.37 $ 1.16 $ (0.03 ) $ 1.13 Diluted $ 0.35 $ 0.02 $ 0.37 $ 1.15 $ (0.02 ) $ 1.13 The statements of comprehensive income for the three and nine months ended September 30, 2017 was also impacted by the adjustments to net income of $3.4 million and $(4.0) million , respectively. The following table details the changes to the consolidated statement of cash flows for the nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition and statement of cash flow standards (in thousands): As Previously Reported Revenue Recognition Standard Adjustments Cash Flow Standard Adjustments As Revised Cash flows from operating activities: Net income $ 199,214 $ (3,968 ) $ — $ 195,246 Adjustments to reconcile net income to net cash provided by operating activities: Provision for deferred income taxes 25,302 (2,168 ) — 23,134 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable (19,199 ) 9,776 — (9,423 ) Prepaid expenses and other current assets (34,195 ) (2,385 ) — (36,580 ) Deferred revenue 991 537 — 1,528 Other non-current assets and liabilities (7,036 ) (1,792 ) — (8,828 ) Net cash provided by operating activities 603,542 — — 603,542 Cash flows from investing activities: Other non-current assets and liabilities (1,895 ) — 729 (1,166 ) Net cash used in investing activities (257,741 ) — 729 (257,012 ) Effects of exchange rate changes on cash, cash equivalents and restricted cash 12,289 — 70 12,359 Net increase in cash, and cash equivalents and restricted cash 43,983 — 799 44,782 Cash, cash equivalents and restricted cash at beginning of period 324,169 — 457 324,626 Cash, cash equivalents and restricted cash at end of period 368,152 — 1,256 369,408 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. The Company adopted this new standard on January 1, 2018 using the modified retrospective basis, recognizing a cumulative-effect adjustment as a component of equity as of the date of adoption. Upon adoption, the Company reclassified $11.6 million from prepaid and other current assets and $27.0 million from other assets to beginning retained earnings. 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. The Company adopted this guidance on January 1, 2018 and will apply it prospectively to future transactions. The adoption of this new accounting guidance had no immediate impact on the Company's consolidated financial statements; however, it may result in a future transaction being recorded as a transfer of assets, whereas previously the Company may have concluded it was a business combination. Recent Accounting Pronouncements 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 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 on a modified retrospective basis. The Company expects to record significant right-of-use assets and lease liabilities on its consolidated balance sheets, but does not expect the adoption to impact its results of operations or cash flows. 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. To date, the Company has completed its gap analysis, selected a software tool to assist with the accounting for leases, has begun to implement the software, and has begun its data collection and migration efforts. The Company is also in the process of finalizing its accounting policies and designing the related processes and internal controls. The Company expects the adoption of this standard to require changes to its processes, systems and controls over financial reporting. 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 of adopting this new accounting guidance on its consolidated financial statements. In February 2018, the FASB issued guidance that allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (the "TCJA") that was enacted in 2017. The amendments in this update are effective either in the period of adoption or retrospectively, to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized, during interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements. In August 2018, the FASB issued guidance which changes the fair value measurement disclosure requirements. This guidance will be effective for the Company on January 1, 2019. The Company is evaluating the impact the update will have on its disclosures. In August 2018, the FASB issued guidance which address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. This guidance will be effective for the Company on January 1, 2020, with early adoption permitted. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements. |
Revenue Recognition, Incremental Costs to Obtain a Contract with a Customer and Contract Liabilities | Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the Internet – as well as security solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately, or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most content delivery and security services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. Any bursting over given commitments is recognized in the period in which the traffic was served. For services that involve traffic consumption, revenue is recognized in an amount that reflects the level of traffic served to a customer in a given period. For custom arrangements, other methods may be used as a measure of progress towards satisfying the performance obligations. Some of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. 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. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in an incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately 2.5 years . Amortization is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees, and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of newly-adopted accounting pronouncements | The following table details the changes to the consolidated balance sheet as of December 31, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands): As Previously Reported Revenue Recognition Standard Adjustments As Revised ASSETS Current assets: Accounts receivable $ 459,127 $ 2,330 $ 461,457 Prepaid expenses and other current assets 137,809 35,044 172,853 Total current assets 1,308,872 37,374 1,346,246 Deferred income tax assets 51,069 (14,838 ) 36,231 Other assets 112,829 23,536 136,365 Total assets 4,602,844 46,072 4,648,916 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Deferred revenue $ 77,705 $ (7,210 ) $ 70,495 Total current liabilities 463,904 (7,210 ) 456,694 Deferred revenue 6,839 (777 ) 6,062 Deferred income tax liabilities 15,510 2,313 17,823 Total liabilities 1,292,121 (5,674 ) 1,286,447 Stockholders' equity: Accumulated deficit (742,408 ) 51,746 (690,662 ) Total stockholders' equity 3,310,723 51,746 3,362,469 Total liabilities and stockholders' equity 4,602,844 46,072 4,648,916 The following table details the changes to the consolidated statements of income for the three and nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition standard (in thousands, except per share data): For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2017 As Previously Reported Revenue Recognition Standard Adjustments As Revised As Previously Reported Revenue Recognition Standard Adjustments As Revised Revenue $ 621,399 $ 3,041 $ 624,440 $ 1,839,544 $ (8,979 ) $ 1,830,565 Costs and operating expenses: Cost of revenue (exclusive of amortization of acquired intangible assets) 225,468 22 225,490 645,821 76 645,897 Sales and marketing 120,220 (2,357 ) 117,863 353,218 (2,919 ) 350,299 Total costs and operating expenses 535,522 (2,335 ) 533,187 1,551,228 (2,843 ) 1,548,385 Income from operations 85,877 5,376 91,253 288,316 (6,136 ) 282,180 Income before provision for income taxes 86,129 5,376 91,505 288,109 (6,136 ) 281,973 Provision for income taxes 25,617 1,977 27,594 88,895 (2,168 ) 86,727 Net income 60,512 3,399 63,911 199,214 (3,968 ) 195,246 Net income per share: Basic $ 0.35 $ 0.02 $ 0.37 $ 1.16 $ (0.03 ) $ 1.13 Diluted $ 0.35 $ 0.02 $ 0.37 $ 1.15 $ (0.02 ) $ 1.13 The statements of comprehensive income for the three and nine months ended September 30, 2017 was also impacted by the adjustments to net income of $3.4 million and $(4.0) million , respectively. The following table details the changes to the consolidated statement of cash flows for the nine months ended September 30, 2017 as a result of the retrospective adoption of the new revenue recognition and statement of cash flow standards (in thousands): As Previously Reported Revenue Recognition Standard Adjustments Cash Flow Standard Adjustments As Revised Cash flows from operating activities: Net income $ 199,214 $ (3,968 ) $ — $ 195,246 Adjustments to reconcile net income to net cash provided by operating activities: Provision for deferred income taxes 25,302 (2,168 ) — 23,134 Changes in operating assets and liabilities, net of effects of acquisitions: Accounts receivable (19,199 ) 9,776 — (9,423 ) Prepaid expenses and other current assets (34,195 ) (2,385 ) — (36,580 ) Deferred revenue 991 537 — 1,528 Other non-current assets and liabilities (7,036 ) (1,792 ) — (8,828 ) Net cash provided by operating activities 603,542 — — 603,542 Cash flows from investing activities: Other non-current assets and liabilities (1,895 ) — 729 (1,166 ) Net cash used in investing activities (257,741 ) — 729 (257,012 ) Effects of exchange rate changes on cash, cash equivalents and restricted cash 12,289 — 70 12,359 Net increase in cash, and cash equivalents and restricted cash 43,983 — 799 44,782 Cash, cash equivalents and restricted cash at beginning of period 324,169 — 457 324,626 Cash, cash equivalents and restricted cash at end of period 368,152 — 1,256 369,408 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following is a summary of available-for-sale marketable securities held as of September 30, 2018 and December 31, 2017 (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Fair Value Short-Term Marketable Securities Long-Term Marketable Securities As of September 30, 2018 Certificates of deposit $ 65,000 $ 5 $ (11 ) $ 64,994 $ 64,994 $ — Commercial paper 393,835 3 (98 ) 393,740 393,740 — Corporate bonds 830,558 17 (5,253 ) 825,322 581,609 243,713 U.S. government agency obligations 58,683 — (564 ) 58,119 55,660 2,459 $ 1,348,076 $ 25 $ (5,926 ) $ 1,342,175 $ 1,096,003 $ 246,172 As of December 31, 2017 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 |
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 September 30, 2018 and December 31, 2017 (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 Level 3 As of September 30, 2018 Cash Equivalents and Marketable Securities: Money market funds $ 139,125 $ 139,125 $ — $ — Certificates of deposit 64,994 64,994 — — Commercial paper 393,740 — 393,740 — Corporate bonds 825,322 — 825,322 — U.S. government agency obligations 58,119 — 58,119 — Mutual funds 11,193 11,193 — — $ 1,492,493 $ 215,312 $ 1,277,181 $ — Liabilities: Contingent consideration related to a completed acquisition $ (6,200 ) $ — $ — $ (6,200 ) 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 related to a completed acquisition $ (8,631 ) $ — $ — $ (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 September 30, 2018 and December 31, 2017 were as follows (in thousands): September 30, December 31, Due in 1 year or less $ 1,096,003 $ 398,554 Due after 1 year through 3 years 246,172 559,713 $ 1,342,175 $ 958,267 |
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 during the nine months ended September 30, 2018 (in thousands): Other Liabilities: Balance as of January 1, 2018 $ (8,631 ) Fair value adjustment to contingent consideration included in general and administrative expense (1,735 ) Cash paid upon achievement of milestone 4,166 Balance as of September 30, 2018 $ (6,200 ) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Accounts Receivable | Net accounts receivable consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Trade accounts receivable $ 330,989 $ 320,001 Unbilled accounts receivable 136,733 142,737 Gross accounts receivable 467,722 462,738 Allowance for doubtful accounts and other reserves (1,358 ) (1,281 ) Accounts receivable, net $ 466,364 $ 461,457 |
Incremental Costs to Obtain a_2
Incremental Costs to Obtain a Contract with a Customer (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of deferred costs associated with obtaining customer contracts | The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, Deferred costs included in prepaid and other current assets $ 38,929 $ 35,044 Deferred costs included in other assets 24,064 23,536 Total deferred costs $ 62,993 $ 58,580 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill for the nine months ended September 30, 2018 was as follows (in thousands): Balance as of January 1, 2018 $ 1,498,688 Measurement period adjustments (6,667 ) Foreign currency translation (3,153 ) Balance as of September 30, 2018 $ 1,488,868 |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Accumulated Net Completed technology $ 145,091 $ (77,512 ) $ 67,579 $ 145,091 $ (65,283 ) $ 79,808 Customer-related intangible assets 245,710 (140,798 ) 104,912 245,310 (128,835 ) 116,475 Non-compete agreements 700 (256 ) 444 4,710 (3,975 ) 735 Trademarks and trade names 7,200 (3,495 ) 3,705 7,200 (2,959 ) 4,241 Acquired license rights 490 (490 ) — 490 (490 ) — Total $ 399,191 $ (222,551 ) $ 176,640 $ 402,801 $ (201,542 ) $ 201,259 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The 2019 Notes consist of the following components as of September 30, 2018 and December 31, 2017 (in thousands): September 30, December 31, 2017 Liability component: Principal $ 690,000 $ 690,000 Less: debt discount and issuance costs, net of amortization (9,436 ) (27,087 ) Net carrying amount $ 680,564 $ 662,913 Equity component: $ 101,276 $ 101,276 The 2025 Notes consist of the following components as of September 30, 2018 (in thousands): September 30, Liability component: Principal $ 1,150,000 Less: debt discount and issuance costs, net of amortization (285,321 ) Net carrying amount $ 864,679 Equity component: $ 285,225 |
Schedule of Interest Expense | The following table sets forth total interest expense included in the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Amortization of debt discount and issuance costs $ 15,295 $ 5,731 31,045 $ 17,044 Coupon interest payable on 2025 Notes 359 — 514 — Revolving credit facility contractual interest expense 122 — 261 — Capitalization of interest expense (1,210 ) (985 ) (3,200 ) (3,055 ) Total interest expense $ 14,566 $ 4,746 $ 28,620 $ 13,989 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Accrual | The following table summarizes the activity of the Company's restructuring accrual during the nine months ended September 30, 2018 (in thousands): Employee Severance and Related Benefits Software Charges Excess Facilities, Contract Terminations and Other Total Balance as of January 1, 2018 $ 12,857 $ — $ 1,386 $ 14,243 Costs incurred 5,910 2,818 5,714 14,442 Cash disbursements (18,509 ) — (4,885 ) (23,394 ) Software and other non-cash charges — (2,818 ) (1,787 ) (4,605 ) Translation adjustments and other 706 — (205 ) 501 Balance as of September 30, 2018 $ 964 $ — $ 223 $ 1,187 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes stock-based compensation included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Cost of revenue $ 5,494 $ 5,296 $ 16,343 $ 15,055 Research and development 11,249 10,100 32,684 28,743 Sales and marketing 16,835 15,672 49,543 44,780 General and administrative 13,054 10,780 40,245 33,525 Total stock-based compensation 46,632 41,848 138,815 122,103 Provision for income taxes (7,802 ) (11,211 ) (37,692 ) (41,417 ) Total stock-based compensation, net of income taxes $ 38,830 $ 30,637 $ 101,123 $ 80,686 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, net of tax, which is reported as a component of stockholders' equity, for the nine months ended September 30, 2018 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2018 $ (24,319 ) $ 2,389 $ (21,930 ) Other comprehensive loss (26,046 ) (242 ) (26,288 ) Balance as of September 30, 2018 $ (50,365 ) $ 2,147 $ (48,218 ) |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue by division included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Web Division $ 356,856 $ 329,684 $ 1,060,777 $ 950,580 Media and Carrier Division 312,772 294,756 940,334 879,985 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 U.S. $ 412,573 $ 412,348 $ 1,249,041 $ 1,211,454 International 257,055 212,092 752,070 619,111 Total revenue $ 669,628 $ 624,440 $ 2,001,111 $ 1,830,565 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share Reconciliation [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 three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data): For the Three Months For the Nine Months 2018 2017 2018 2017 Numerator: Net income $ 107,583 $ 63,911 $ 204,358 $ 195,246 Denominator: Shares used for basic net income per share 165,924 170,976 168,763 172,269 Effect of dilutive securities: Stock options 80 150 158 279 RSUs and DSUs 1,896 379 1,811 823 Convertible senior notes — — — — Warrants related to issuance of convertible senior notes — — — — Shares used for diluted net income per share 167,900 171,505 170,732 173,371 Basic net income per share $ 0.65 $ 0.37 $ 1.21 $ 1.13 Diluted net income per share $ 0.64 $ 0.37 $ 1.20 $ 1.13 |
Schedule of Shares Excluded from Computation of Diluted Earnings Per Share | The number of potentially outstanding shares excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2018 and 2017 are as follows (in thousands): For the Three Months For the Nine Months 2018 2017 2018 2017 Stock options — 25 — 13 Service-based RSUs 185 5,407 1,068 4,074 Performance-based RSUs 1,515 1,116 1,520 1,165 Convertible senior notes 19,797 7,704 19,797 7,704 Warrants related to issuance of convertible senior notes 19,797 7,704 19,797 7,704 Total shares excluded from computation 41,294 21,956 42,182 20,660 |
Nature of Business and Basis _4
Nature of Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)countryserver$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2018USD ($)segmentcountryserver$ / shares | Sep. 30, 2017USD ($)$ / shares | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of servers (more than) | server | 200,000 | 200,000 | |||
Number of countries in which servers are located (more than) | country | 130 | 130 | |||
Number of industry segments | segment | 1 | ||||
Current assets: | |||||
Accounts receivable | $ 466,364 | $ 466,364 | $ 461,457 | ||
Prepaid expenses and other current assets | 161,785 | 161,785 | 172,853 | ||
Total current assets | 2,429,789 | 2,429,789 | 1,346,246 | ||
Deferred income tax assets | 23,688 | 23,688 | 36,231 | ||
Other assets | 103,284 | 103,284 | 136,365 | ||
Total assets | 5,363,887 | 5,363,887 | 4,648,916 | ||
Current liabilities: | |||||
Deferred revenue | 93,732 | 93,732 | 70,495 | ||
Total current liabilities | 1,195,938 | 1,195,938 | 456,694 | ||
Deferred revenue | 5,218 | 5,218 | 6,062 | ||
Deferred income tax liabilities | 18,827 | 18,827 | 17,823 | ||
Total liabilities | 2,208,357 | 2,208,357 | 1,286,447 | ||
Stockholders’ equity: | |||||
Accumulated deficit | (524,906) | (524,906) | (690,662) | ||
Total stockholders’ equity | 3,155,530 | 3,155,530 | 3,362,469 | ||
Total liabilities and stockholders’ equity | 5,363,887 | 5,363,887 | 4,648,916 | ||
Revenue | 669,628 | $ 624,440 | 2,001,111 | $ 1,830,565 | |
Costs and operating expenses: | |||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 239,246 | 225,490 | 709,558 | 645,897 | |
Sales and marketing | 125,323 | 117,863 | 379,556 | 350,299 | |
Total costs and operating expenses | 553,091 | 533,187 | 1,758,900 | 1,548,385 | |
Income from operations | 116,537 | 91,253 | 242,211 | 282,180 | |
Income before provision for income taxes | 110,770 | 91,505 | 230,016 | 281,973 | |
Provision for income taxes | $ 3,187 | $ 27,594 | $ 25,658 | $ 86,727 | |
Net income per share: | |||||
Basic (in dollars per share) | $ / shares | $ 0.65 | $ 0.37 | $ 1.21 | $ 1.13 | |
Diluted (in dollars per share) | $ / shares | $ 0.64 | $ 0.37 | $ 1.20 | $ 1.13 | |
Comprehensive income | $ 101,336 | $ 71,910 | $ 178,070 | $ 227,868 | |
Cash flows from operating activities: | |||||
Net income | 107,583 | 63,911 | 204,358 | 195,246 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Provision for deferred income taxes | 12,906 | 23,134 | |||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||
Accounts receivable | (13,611) | (9,423) | |||
Prepaid expenses and other current assets | (2,084) | (36,580) | |||
Deferred revenue | 23,927 | 1,528 | |||
Other non-current assets and liabilities | (10,338) | (8,828) | |||
Net cash provided by operating activities | 722,172 | 603,542 | |||
Cash flows from investing activities: | |||||
Other non-current assets and liabilities | (2,678) | (1,166) | |||
Net cash used in investing activities | (678,234) | (257,012) | |||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (11,528) | 12,359 | |||
Net increase in cash, and cash equivalents and restricted cash | 392,142 | 44,782 | |||
Cash, cash equivalents and restricted cash at beginning of period | 314,429 | 324,626 | |||
Cash, cash equivalents and restricted cash at end of period | $ 706,571 | 369,408 | $ 706,571 | 369,408 | |
Prepaid and other current assets | Intra-Entity Asset Transfers | |||||
Cash flows from investing activities: | |||||
Cumulative-effect adjustment | 11,600 | ||||
Deferred costs included in other assets | Intra-Entity Asset Transfers | |||||
Cash flows from investing activities: | |||||
Cumulative-effect adjustment | 27,000 | ||||
As Previously Reported | |||||
Current assets: | |||||
Accounts receivable | 459,127 | ||||
Prepaid expenses and other current assets | 137,809 | ||||
Total current assets | 1,308,872 | ||||
Deferred income tax assets | 51,069 | ||||
Other assets | 112,829 | ||||
Total assets | 4,602,844 | ||||
Current liabilities: | |||||
Deferred revenue | 77,705 | ||||
Total current liabilities | 463,904 | ||||
Deferred revenue | 6,839 | ||||
Deferred income tax liabilities | 15,510 | ||||
Total liabilities | 1,292,121 | ||||
Stockholders’ equity: | |||||
Accumulated deficit | (742,408) | ||||
Total stockholders’ equity | 3,310,723 | ||||
Total liabilities and stockholders’ equity | 4,602,844 | ||||
Revenue | 621,399 | 1,839,544 | |||
Costs and operating expenses: | |||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 225,468 | 645,821 | |||
Sales and marketing | 120,220 | 353,218 | |||
Total costs and operating expenses | 535,522 | 1,551,228 | |||
Income from operations | 85,877 | 288,316 | |||
Income before provision for income taxes | 86,129 | 288,109 | |||
Provision for income taxes | $ 25,617 | $ 88,895 | |||
Net income per share: | |||||
Basic (in dollars per share) | $ / shares | $ 0.35 | $ 1.16 | |||
Diluted (in dollars per share) | $ / shares | $ 0.35 | $ 1.15 | |||
Cash flows from operating activities: | |||||
Net income | $ 60,512 | $ 199,214 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Provision for deferred income taxes | 25,302 | ||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||
Accounts receivable | (19,199) | ||||
Prepaid expenses and other current assets | (34,195) | ||||
Deferred revenue | 991 | ||||
Other non-current assets and liabilities | (7,036) | ||||
Net cash provided by operating activities | 603,542 | ||||
Cash flows from investing activities: | |||||
Other non-current assets and liabilities | (1,895) | ||||
Net cash used in investing activities | (257,741) | ||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 12,289 | ||||
Net increase in cash, and cash equivalents and restricted cash | 43,983 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 324,169 | ||||
Cash, cash equivalents and restricted cash at end of period | 368,152 | 368,152 | |||
Adjustments | Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Accounts receivable | 2,330 | ||||
Prepaid expenses and other current assets | 35,044 | ||||
Total current assets | 37,374 | ||||
Deferred income tax assets | (14,838) | ||||
Other assets | 23,536 | ||||
Total assets | 46,072 | ||||
Current liabilities: | |||||
Deferred revenue | (7,210) | ||||
Total current liabilities | (7,210) | ||||
Deferred revenue | (777) | ||||
Deferred income tax liabilities | 2,313 | ||||
Total liabilities | (5,674) | ||||
Stockholders’ equity: | |||||
Accumulated deficit | 51,746 | ||||
Total stockholders’ equity | 51,746 | ||||
Total liabilities and stockholders’ equity | $ 46,072 | ||||
Revenue | 3,041 | (8,979) | |||
Costs and operating expenses: | |||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 22 | 76 | |||
Sales and marketing | (2,357) | (2,919) | |||
Total costs and operating expenses | (2,335) | (2,843) | |||
Income from operations | 5,376 | (6,136) | |||
Income before provision for income taxes | 5,376 | (6,136) | |||
Provision for income taxes | $ 1,977 | $ (2,168) | |||
Net income per share: | |||||
Basic (in dollars per share) | $ / shares | $ 0.02 | $ (0.03) | |||
Diluted (in dollars per share) | $ / shares | $ 0.02 | $ (0.02) | |||
Comprehensive income | $ 3,400 | $ (4,000) | |||
Cash flows from operating activities: | |||||
Net income | 3,399 | (3,968) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Provision for deferred income taxes | (2,168) | ||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||
Accounts receivable | 9,776 | ||||
Prepaid expenses and other current assets | (2,385) | ||||
Deferred revenue | 537 | ||||
Other non-current assets and liabilities | (1,792) | ||||
Net cash provided by operating activities | 0 | ||||
Cash flows from investing activities: | |||||
Other non-current assets and liabilities | 0 | ||||
Net cash used in investing activities | 0 | ||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 0 | ||||
Net increase in cash, and cash equivalents and restricted cash | 0 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 0 | ||||
Cash, cash equivalents and restricted cash at end of period | 0 | 0 | |||
Adjustments | Accounting Standards Update 2016-18 | |||||
Cash flows from operating activities: | |||||
Net income | 0 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Provision for deferred income taxes | 0 | ||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||
Accounts receivable | 0 | ||||
Prepaid expenses and other current assets | 0 | ||||
Deferred revenue | 0 | ||||
Other non-current assets and liabilities | 0 | ||||
Net cash provided by operating activities | 0 | ||||
Cash flows from investing activities: | |||||
Other non-current assets and liabilities | 729 | ||||
Net cash used in investing activities | 729 | ||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 70 | ||||
Net increase in cash, and cash equivalents and restricted cash | 799 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 457 | ||||
Cash, cash equivalents and restricted cash at end of period | $ 1,256 | $ 1,256 |
Significant Accounting Polici_2
Significant Accounting Policies Update (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Internally developed software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years 6 months |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,348,076 | $ 963,867 |
Gross Unrealized Gains | 25 | 2 |
Gross Unrealized Losses | (5,926) | (5,602) |
Aggregate Fair Value | 1,342,175 | 958,267 |
Short-Term Marketable Securities | 1,096,003 | 398,554 |
Long-Term Marketable Securities | 246,172 | 559,713 |
Unrealized losses included in accumulated other comprehensive loss | 406,600 | |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 65,000 | |
Gross Unrealized Gains | 5 | |
Gross Unrealized Losses | (11) | |
Aggregate Fair Value | 64,994 | |
Short-Term Marketable Securities | 64,994 | |
Long-Term Marketable Securities | 0 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 393,835 | 6,951 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (98) | (9) |
Aggregate Fair Value | 393,740 | 6,942 |
Short-Term Marketable Securities | 393,740 | 6,942 |
Long-Term Marketable Securities | 0 | 0 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 830,558 | 736,902 |
Gross Unrealized Gains | 17 | 2 |
Gross Unrealized Losses | (5,253) | (3,829) |
Aggregate Fair Value | 825,322 | 733,075 |
Short-Term Marketable Securities | 581,609 | 289,378 |
Long-Term Marketable Securities | 243,713 | 443,697 |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | 3,800 | |
U.S. government agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 58,683 | 220,014 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (564) | (1,764) |
Aggregate Fair Value | 58,119 | 218,250 |
Short-Term Marketable Securities | 55,660 | 102,234 |
Long-Term Marketable Securities | $ 2,459 | $ 116,016 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurement (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | $ 1,342,175 | $ 958,267 |
Certificates of deposit | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 64,994 | |
Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 393,740 | 6,942 |
Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 825,322 | 733,075 |
U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 58,119 | 218,250 |
Level 1 | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents and marketable securities | 215,312 | 30,528 |
Contingent consideration related to a completed acquisition | 0 | 0 |
Level 1 | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Money market funds | 139,125 | 22,649 |
Level 1 | Certificates of deposit | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 64,994 | |
Level 1 | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 1 | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 1 | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 1 | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 11,193 | 7,879 |
Level 2 | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents and marketable securities | 1,277,181 | 962,251 |
Contingent consideration related to a completed acquisition | 0 | 0 |
Level 2 | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Money market funds | 0 | 0 |
Level 2 | Certificates of deposit | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | |
Level 2 | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 393,740 | 10,928 |
Level 2 | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 825,322 | 733,075 |
Level 2 | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 58,119 | 218,248 |
Level 2 | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 3 | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents and marketable securities | 0 | 0 |
Contingent consideration related to a completed acquisition | (6,200) | (8,631) |
Level 3 | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Money market funds | 0 | 0 |
Level 3 | Certificates of deposit | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | |
Level 3 | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 3 | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 3 | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Level 3 | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 0 | 0 |
Total Fair Value | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents and marketable securities | 1,492,493 | 992,779 |
Contingent consideration related to a completed acquisition | (6,200) | (8,631) |
Total Fair Value | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Money market funds | 139,125 | 22,649 |
Total Fair Value | Certificates of deposit | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 64,994 | |
Total Fair Value | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 393,740 | 10,928 |
Total Fair Value | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 825,322 | 733,075 |
Total Fair Value | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | 58,119 | 218,248 |
Total Fair Value | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Aggregate Fair Value | $ 11,193 | $ 7,879 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 1,096,003 | $ 398,554 |
Due after 1 year through 3 years | 246,172 | 559,713 |
Aggregate Fair Value | $ 1,342,175 | $ 958,267 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Liability Measured at Fair Value using Level 3 Inputs (Details) - Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of January 1, 2018 | $ (8,631) |
Fair value adjustment to contingent consideration included in general and administrative expense | (1,735) |
Cash paid upon achievement of milestone | 4,166 |
Balance as of September 30, 2018 | $ (6,200) |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 467,722 | $ 462,738 |
Allowance for doubtful accounts and other reserves | (1,358) | (1,281) |
Accounts receivable, net | 466,364 | 461,457 |
Unbilled accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 136,733 | 142,737 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 330,989 | $ 320,001 |
Incremental Costs to Obtain a_3
Incremental Costs to Obtain a Contract with a Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Commission and incentive payments | |||||
Capitalized Contract Cost [Line Items] | |||||
Total deferred costs | $ 62,993 | $ 62,993 | $ 58,580 | ||
Commission and incentive payments | Deferred costs included in prepaid and other current assets | |||||
Capitalized Contract Cost [Line Items] | |||||
Total deferred costs | 38,929 | 38,929 | 35,044 | ||
Commission and incentive payments | Deferred costs included in other assets | |||||
Capitalized Contract Cost [Line Items] | |||||
Total deferred costs | 24,064 | 24,064 | $ 23,536 | ||
Deferred commissions | |||||
Capitalized Contract Cost [Line Items] | |||||
Amortization expense | $ 11,200 | $ 9,300 | $ 32,900 | $ 27,300 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Schedule of Goodwill [Roll Forward] | |
Balance as of January 1, 2018 | $ 1,498,688 |
Measurement period adjustments | (6,667) |
Foreign currency translation | (3,153) |
Balance as of September 30, 2018 | $ 1,488,868 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 399,191 | $ 402,801 |
Accumulated Amortization | (222,551) | (201,542) |
Net Carrying Amount | 176,640 | 201,259 |
Completed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 145,091 | 145,091 |
Accumulated Amortization | (77,512) | (65,283) |
Net Carrying Amount | 67,579 | 79,808 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 245,710 | 245,310 |
Accumulated Amortization | (140,798) | (128,835) |
Net Carrying Amount | 104,912 | 116,475 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 700 | 4,710 |
Accumulated Amortization | (256) | (3,975) |
Net Carrying Amount | 444 | 735 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,200 | 7,200 |
Accumulated Amortization | (3,495) | (2,959) |
Net Carrying Amount | 3,705 | 4,241 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 490 | 490 |
Accumulated Amortization | (490) | (490) |
Net Carrying Amount | $ 0 | $ 0 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of acquired intangible assets | $ 8,294 | $ 7,753 | $ 25,019 | $ 23,075 |
Future amortization expense to be recognized in remainder of 2018 | 8,300 | 8,300 | ||
Future amortization expense 2019 | 36,600 | 36,600 | ||
Future amortization expense 2020 | 33,900 | 33,900 | ||
Future amortization expense 2021 | 28,000 | 28,000 | ||
Future amortization expense 2022 | $ 22,400 | $ 22,400 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
May 31, 2018USD ($)d$ / sharesshares | Feb. 28, 2014USD ($)d$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||
Repurchases of common stock | $ 440,400,000 | $ 625,925,000 | $ 306,629,000 | |||
Payments for note hedge transactions | 261,740,000 | 0 | ||||
Proceeds from sale of warrants | 119,945,000 | $ 0 | ||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Maximum borrowing capacity under specific conditions | $ 1,000,000,000 | |||||
Debt term | 5 years | |||||
Outstanding borrowings | 0 | $ 0 | ||||
Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee | 0.075% | |||||
Credit Agreement | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.00% | |||||
Credit Agreement | Minimum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.875% | |||||
Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee | 0.15% | |||||
Credit Agreement | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
Credit Agreement | Maximum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
2025 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 1,150,000,000 | 1,150,000,000 | $ 1,150,000,000 | |||
Interest rate | 0.125% | |||||
Threshold trading days exceeding price | d | 20 | |||||
Threshold consecutive trading days exceeding price | d | 30 | |||||
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 | 0.010515 | |||||
Conversion price (in dollars per share) | $ / shares | $ 95.10 | |||||
Potential conversion shares of convertible debt (in shares) | shares | 12.1 | |||||
Fair value of convertible senior notes | $ 1,129,700,000 | $ 1,129,700,000 | ||||
Closing price of common stock (in dollars per share) | $ / shares | $ 73.15 | $ 73.15 | ||||
Repurchases of common stock | $ 46,200,000 | |||||
Payments for purchase of convertible note hedge and warrant transactions | 141,800,000 | |||||
Equity component: | $ 285,225,000 | $ 285,225,000 | ||||
Payments for note hedge transactions | $ 261,700,000 | |||||
Warrants outstanding (in shares) | shares | 12.1 | |||||
Warrant strike price (in dollars per share) | $ / shares | $ 149.18 | |||||
Proceeds from sale of warrants | $ 119,900,000 | |||||
Effective interest rate | 4.26% | 4.26% | ||||
2019 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 690,000,000 | $ 690,000,000 | $ 690,000,000 | $ 690,000,000 | ||
Threshold trading days exceeding price | d | 20 | |||||
Threshold consecutive trading days exceeding price | d | 30 | |||||
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 | 0.0111651 | |||||
Conversion price (in dollars per share) | $ / shares | $ 89.56 | |||||
Potential conversion shares of convertible debt (in shares) | shares | 7.7 | |||||
Fair value of convertible senior notes | $ 684,800,000 | $ 684,800,000 | ||||
Closing price of common stock (in dollars per share) | $ / shares | $ 73.15 | $ 73.15 | ||||
Repurchases of common stock | $ 62,000,000 | |||||
Payments for purchase of convertible note hedge and warrant transactions | 23,300,000 | |||||
Equity component: | $ 101,276,000 | $ 101,276,000 | $ 101,276,000 | |||
Payments for note hedge transactions | $ 101,300,000 | |||||
Note hedge shares outstanding (in shares) | shares | 7.7 | |||||
Warrants outstanding (in shares) | shares | 7.7 | |||||
Warrant strike price (in dollars per share) | $ / shares | $ 104.49 | |||||
Proceeds from sale of warrants | $ 78,000,000 | |||||
Effective interest rate | 3.20% | 3.20% |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) | Sep. 30, 2018 | May 31, 2018 | Dec. 31, 2017 | Feb. 28, 2014 |
2025 Notes | ||||
Liability component: | ||||
Principal | $ 1,150,000,000 | $ 1,150,000,000 | ||
Less: debt discount and issuance costs, net of amortization | (285,321,000) | |||
Net carrying amount | 864,679,000 | |||
Equity component: | 285,225,000 | |||
2019 Notes | ||||
Liability component: | ||||
Principal | 690,000,000 | $ 690,000,000 | $ 690,000,000 | |
Less: debt discount and issuance costs, net of amortization | (9,436,000) | (27,087,000) | ||
Net carrying amount | 680,564,000 | 662,913,000 | ||
Equity component: | $ 101,276,000 | $ 101,276,000 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount and issuance costs | $ 15,295 | $ 5,731 | $ 31,045 | $ 17,044 |
Capitalization of interest expense | (1,210) | (985) | (3,200) | (3,055) |
Total interest expense | 14,566 | 4,746 | 28,620 | 13,989 |
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Interest on debt instruments | 122 | 0 | 261 | 0 |
Convertible Debt | 2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest on debt instruments | $ 359 | $ 0 | $ 514 | $ 0 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges incurred | $ 49,300 | $ 12,700 | $ 62,000 | |||
Restructuring Reserve [Roll Forward] | ||||||
Balance as of January 1, 2018 | 14,243 | |||||
Costs incurred | $ (732) | $ 332 | 14,442 | $ 3,303 | ||
Cash disbursements | (23,394) | |||||
Software and other non-cash charges | (4,605) | |||||
Translation adjustments and other | 501 | |||||
Balance as of September 30, 2018 | 1,187 | 14,243 | 1,187 | 1,187 | ||
Employee Severance and Related Benefits | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance as of January 1, 2018 | 12,857 | |||||
Costs incurred | 5,910 | |||||
Cash disbursements | (18,509) | |||||
Software and other non-cash charges | 0 | |||||
Translation adjustments and other | 706 | |||||
Balance as of September 30, 2018 | 964 | 12,857 | 964 | 964 | ||
Software Charges | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance as of January 1, 2018 | 0 | |||||
Costs incurred | 2,818 | |||||
Cash disbursements | 0 | |||||
Software and other non-cash charges | (2,818) | |||||
Translation adjustments and other | 0 | |||||
Balance as of September 30, 2018 | 0 | 0 | 0 | 0 | ||
Excess Facilities, Contract Terminations and Other | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance as of January 1, 2018 | 1,386 | |||||
Costs incurred | 5,714 | |||||
Cash disbursements | (4,885) | |||||
Software and other non-cash charges | (1,787) | |||||
Translation adjustments and other | (205) | |||||
Balance as of September 30, 2018 | $ 223 | $ 1,386 | $ 223 | $ 223 |
Commitments and Contingencies -
Commitments and Contingencies - Legal Matters (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Multiple existing lawsuits between Limelight Networks, Inc. (Limelight) and the Company | Settled Litigation | |
Loss Contingencies [Line Items] | |
Settlement charge | $ 14.9 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Nov. 08, 2018 | Feb. 29, 2016 | |
Class of Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 1,000,000,000 | ||||||
Repurchase authorization increase | $ 416,700,000 | ||||||
Authorized and available for repurchase | $ 750,000,000 | $ 750,000,000 | |||||
Repurchases of common stock | (440,400,000) | (625,925,000) | $ (306,629,000) | ||||
Amortization expense from capitalized stock-based compensation | $ 6,600,000 | $ 5,100,000 | $ 18,100,000 | $ 12,500,000 | |||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Shares repurchased during period (in shares) | 5.9 | 8.3 | |||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 1,100,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 46,632 | $ 41,848 | $ 138,815 | $ 122,103 |
Provision for income taxes | (7,802) | (11,211) | (37,692) | (41,417) |
Total stock-based compensation, net of income taxes | 38,830 | 30,637 | 101,123 | 80,686 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 5,494 | 5,296 | 16,343 | 15,055 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 11,249 | 10,100 | 32,684 | 28,743 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 16,835 | 15,672 | 49,543 | 44,780 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 13,054 | $ 10,780 | $ 40,245 | $ 33,525 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance as of January 1, 2018 | $ 3,362,469 | |||
Other comprehensive loss | $ (6,247) | $ 7,999 | (26,288) | $ 32,622 |
Balance as of September 30, 2018 | 3,155,530 | 3,155,530 | ||
Total | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance as of January 1, 2018 | (21,930) | |||
Balance as of September 30, 2018 | (48,218) | (48,218) | ||
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance as of January 1, 2018 | (24,319) | |||
Other comprehensive loss | (26,046) | |||
Balance as of September 30, 2018 | (50,365) | (50,365) | ||
Net Unrealized Gains (Losses) on Investments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance as of January 1, 2018 | 2,389 | |||
Other comprehensive loss | (242) | |||
Balance as of September 30, 2018 | $ 2,147 | $ 2,147 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)division | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)division | Sep. 30, 2017USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 669,628 | $ 624,440 | $ 2,001,111 | $ 1,830,565 |
Number of divisions | division | 2 | 2 | ||
Web Division | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 356,856 | 329,684 | $ 1,060,777 | 950,580 |
Media and Carrier Division | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 312,772 | 294,756 | 940,334 | 879,985 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 412,573 | 412,348 | 1,249,041 | 1,211,454 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 257,055 | $ 212,092 | $ 752,070 | $ 619,111 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Performance Obligation (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 64.3 | $ 43.9 |
Remaining performance obligation | $ 2,300 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, percentage | 70.00% | |
Remaining performance obligation, expected timing | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, percentage | 30.00% | |
Remaining performance obligation, expected timing |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 11.20% | 30.80% | |
Amount of decrease in transition tax provisional estimate | $ 5.5 | ||
Reasonably possible decrease in gross unrecognized tax benefits within the next twelve months | $ 30.8 | $ 30.8 |
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (in dollars) | $ 107,583 | $ 63,911 | $ 204,358 | $ 195,246 |
Denominator: | ||||
Shares used for basic net income per share (in shares) | 165,924 | 170,976 | 168,763 | 172,269 |
Effect of dilutive securities: | ||||
Stock options (in shares) | 80 | 150 | 158 | 279 |
RSUs and DSUs (in shares) | 1,896 | 379 | 1,811 | 823 |
Convertible senior notes (in shares) | 0 | 0 | 0 | 0 |
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 | 0 | 0 |
Shares used for diluted net income per share (in shares) | 167,900 | 171,505 | 170,732 | 173,371 |
Basic net income per share (in dollars per share) | $ 0.65 | $ 0.37 | $ 1.21 | $ 1.13 |
Diluted net income per share (in dollars per share) | $ 0.64 | $ 0.37 | $ 1.20 | $ 1.13 |
Net Income per Share - Schedu_2
Net Income per Share - Schedule of Shares Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 41,294 | 21,956 | 42,182 | 20,660 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 0 | 25 | 0 | 13 |
Service-based RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 185 | 5,407 | 1,068 | 4,074 |
Performance-based RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 1,515 | 1,116 | 1,520 | 1,165 |
Convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 19,797 | 7,704 | 19,797 | 7,704 |
Warrants related to issuance of convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 19,797 | 7,704 | 19,797 | 7,704 |
Akamai Foundation Endowment F_2
Akamai Foundation Endowment Funding (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($) | |
The Akamai Foundation | One-Time Charitable Endowment | |
Related Party Transaction [Line Items] | |
Contribution amount | $ 50 |