Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-27275 | ||
Entity Registrant Name | Akamai Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 04-3432319 | ||
Entity Address, Address Line One | 145 Broadway | ||
Entity Address, City or Town | Cambridge | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02142 | ||
City Area Code | 617 | ||
Local Phone Number | 444-3000 | ||
Title of 12(b) Security | Common Stock - par value $0.01 per share | ||
Trading Symbol | AKAM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13,393.7 | ||
Entity Common Stock, Shares Outstanding | 151,530,300 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission relative to the registrant’s 2024 Annual Meeting of Stockholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of this annual report on Form 10-K | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001086222 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Boston, Massachusetts |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 489,468 | $ 542,337 |
Marketable securities | 374,971 | 562,979 |
Accounts receivable, net of reserves of $3,469 and $5,917 at December 31, 2023 and 2022, respectively | 724,302 | 679,206 |
Prepaid expenses and other current assets | 216,114 | 185,040 |
Total current assets | 1,804,855 | 1,969,562 |
Marketable securities | 1,431,354 | 320,531 |
Property and equipment, net | 1,825,944 | 1,540,182 |
Operating lease right-of-use assets | 908,634 | 813,372 |
Acquired intangible assets, net | 536,143 | 441,716 |
Goodwill | 2,850,470 | 2,763,838 |
Deferred income tax assets | 418,297 | 337,677 |
Other assets | 124,340 | 116,522 |
Total assets | 9,900,037 | 8,303,400 |
Current liabilities: | ||
Accounts payable | 146,927 | 145,420 |
Accrued expenses | 352,181 | 367,017 |
Deferred revenue | 107,544 | 105,109 |
Operating lease liabilities | 222,944 | 196,094 |
Other current liabilities | 6,442 | 5,228 |
Total current liabilities | 836,038 | 818,868 |
Deferred revenue | 23,006 | 22,117 |
Deferred income tax liabilities | 24,622 | 18,400 |
Convertible senior notes | 3,538,229 | 2,285,258 |
Operating lease liabilities | 774,806 | 693,265 |
Other liabilities | 106,181 | 105,305 |
Total liabilities | 5,302,882 | 3,943,213 |
Commitments and contingencies (Note 13) | ||
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; 151,232,908 and 156,494,816 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,512 | 1,565 |
Additional paid-in capital | 2,222,993 | 2,578,603 |
Accumulated other comprehensive loss | (95,330) | (140,332) |
Retained earnings | 2,467,980 | 1,920,351 |
Total stockholders’ equity | 4,597,155 | 4,360,187 |
Total liabilities and stockholders’ equity | $ 9,900,037 | $ 8,303,400 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 3,469 | $ 5,917 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares designated as Series A Junior Participating Preferred Stock (in shares) | 700,000 | 700,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 151,232,908 | 156,494,816 |
Common stock, shares outstanding (in shares) | 151,232,908 | 156,494,816 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenue | $ 3,811,920 | $ 3,616,654 | $ 3,461,223 |
Costs and operating expenses: | |||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 1,511,063 | 1,383,819 | 1,268,956 |
Research and development | 406,048 | 391,434 | 335,372 |
Sales and marketing | 533,226 | 502,409 | 461,967 |
General and administrative | 600,851 | 584,206 | 553,024 |
Amortization of acquired intangible assets | 66,751 | 64,983 | 48,019 |
Restructuring charge | 56,643 | 13,529 | 10,737 |
Total costs and operating expenses | 3,174,582 | 2,940,380 | 2,678,075 |
Income from operations | 637,338 | 676,274 | 783,148 |
Interest and marketable securities income, net | 45,194 | 3,258 | 15,620 |
Interest expense | (17,709) | (11,096) | (72,332) |
Other (expense) income, net | (12,296) | (10,433) | 1,785 |
Income before provision for income taxes | 652,527 | 658,003 | 728,221 |
Provision for income taxes | (106,373) | (126,696) | (62,571) |
Gain (loss) from equity method investment | 1,475 | (7,635) | (14,008) |
Net income | $ 547,629 | $ 523,672 | $ 651,642 |
Net income per share: | |||
Basic (in dollars per share) | $ 3.59 | $ 3.29 | $ 4.01 |
Diluted (in dollars per share) | $ 3.52 | $ 3.26 | $ 3.93 |
Shares used in per share calculations: | |||
Basic (in shares) | 152,510 | 159,089 | 162,665 |
Diluted (in shares) | 155,397 | 160,467 | 165,804 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 547,629 | $ 523,672 | $ 651,642 |
Other comprehensive gain (loss): | |||
Foreign currency translation adjustment | 18,439 | (44,665) | (38,514) |
Change in unrealized gain (loss) on investments, net of income tax (expense) benefit of $(8,562), $6,589 and $3,412 for the years ended December 31, 2023, 2022 and 2021, respectively | 26,563 | (26,562) | (10,390) |
Other comprehensive gain (loss) | 45,002 | (71,227) | (48,904) |
Comprehensive income | $ 592,631 | $ 452,445 | $ 602,738 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Tax (expense) benefit on change in unrealized gain on investments | $ (8,562) | $ 6,589 | $ 3,412 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 547,629 | $ 523,672 | $ 651,642 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 570,776 | 592,754 | 550,632 |
Stock-based compensation | 328,467 | 217,185 | 202,759 |
Benefit for deferred income taxes | (22,987) | (104,971) | (47,794) |
Amortization of debt discount and issuance costs | 5,341 | 4,395 | 66,025 |
(Gain) loss on investments | (311) | 15,895 | 10,328 |
Other non-cash reconciling items, net | 50,221 | 31,063 | 11,495 |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | (49,203) | (21,214) | (24,096) |
Prepaid expenses and other current assets | (18,726) | (20,125) | 4,034 |
Accounts payable and accrued expenses | (39,825) | (26,499) | 31,523 |
Deferred revenue | 48 | 16,713 | (2,865) |
Other current liabilities | 1,516 | (5,318) | (20,404) |
Other non-current assets and liabilities | (24,507) | 51,126 | (28,716) |
Net cash provided by operating activities | 1,348,439 | 1,274,676 | 1,404,563 |
Cash flows from investing activities: | |||
Cash paid for business acquisitions, net of cash acquired | (106,171) | (872,091) | (598,825) |
Cash paid for asset acquisitions | (120,985) | 0 | 0 |
Purchases of property and equipment | (457,909) | (241,266) | (328,969) |
Capitalization of internal-use software development costs | (272,131) | (217,036) | (216,261) |
Purchases of short-and long-term marketable securities | (1,461,890) | (17,975) | (932,604) |
Proceeds from sales of short-and long-term marketable securities | 201,585 | 575,522 | 442,133 |
Proceeds from maturities and redemptions of short-and long-term marketable securities | 375,332 | 156,658 | 991,949 |
Other, net | (6,069) | (6,122) | (4,322) |
Net cash used in investing activities | (1,848,238) | (622,310) | (646,899) |
Cash flows from financing activities: | |||
Proceeds from borrowings under revolving credit facility | 90,000 | 125,000 | 0 |
Repayment of borrowings under revolving credit facility | (90,000) | (125,000) | 0 |
Proceeds from the issuance of convertible senior notes, net of issuance costs | 1,247,388 | 0 | 0 |
Proceeds from the issuance of warrants related to convertible senior notes | 90,195 | 0 | 0 |
Purchases of note hedges related to convertible senior notes | (236,555) | 0 | 0 |
Proceeds related to the issuance of common stock under stock plans | 62,979 | 56,462 | 59,632 |
Employee taxes paid related to net share settlement of stock awards | (66,222) | (82,236) | (99,112) |
Repurchases of common stock | (654,046) | (608,010) | (522,255) |
Other, net | (360) | (393) | (268) |
Net cash provided by (used in) financing activities | 443,379 | (634,177) | (562,003) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | 3,868 | (12,918) | (11,376) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (52,552) | 5,271 | 184,285 |
Cash, cash equivalents and restricted cash at beginning of year | 543,022 | 537,751 | 353,466 |
Cash, cash equivalents and restricted cash at end of year | 490,470 | 543,022 | 537,751 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes, net of refunds received of $11,006, $15,458 and $14,808 for the years ended December 31, 2023, 2022 and 2021, respectively | 134,478 | 183,900 | 100,533 |
Cash paid for interest expense | 6,328 | 6,158 | 5,750 |
Cash paid for operating lease liabilities | 257,961 | 224,898 | 224,085 |
Non-cash activities: | |||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 333,590 | 202,409 | 218,753 |
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | 65,048 | 80,170 | 63,309 |
Capitalization of stock-based compensation | 83,676 | 33,060 | 36,545 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 489,468 | 542,337 | 536,725 |
Restricted cash | 1,002 | 685 | 1,026 |
Cash, cash equivalents and restricted cash | $ 490,470 | $ 543,022 | $ 537,751 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Cash Flows [Abstract] | |||
Income tax refund received | $ 11,006 | $ 15,458 | $ 14,808 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2020 | 162,709,720 | ||||||||
Beginning Balance at Dec. 31, 2020 | $ 4,251,296 | $ 1,627 | $ 3,664,820 | $ 0 | $ (20,201) | $ 605,050 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 1,902,742 | ||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (99,756) | $ 18 | (99,774) | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 648,686 | ||||||||
Issuance of common stock under employee stock purchase plan | 59,714 | $ 7 | 59,707 | ||||||
Stock-based compensation | 238,277 | 238,277 | |||||||
Repurchases of common stock (in shares) | (4,749,037) | ||||||||
Repurchases of common stock | (522,255) | (522,255) | |||||||
Treasury stock retirement | 0 | $ (47) | (522,208) | 522,255 | |||||
Net income | 651,642 | 651,642 | |||||||
Foreign currency translation adjustment | (38,514) | (38,514) | |||||||
Change in unrealized gain (loss) on investments, net of tax | (10,390) | (10,390) | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 160,512,111 | ||||||||
Ending Balance at Dec. 31, 2021 | 4,530,014 | $ (235,427) | $ 1,605 | 3,340,822 | $ (375,414) | 0 | (69,105) | 1,256,692 | $ 139,987 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 1,697,410 | ||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (82,277) | $ 17 | (82,294) | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 687,945 | ||||||||
Issuance of common stock under employee stock purchase plan | 56,570 | $ 7 | 56,563 | ||||||
Stock-based compensation | 246,872 | 246,872 | |||||||
Repurchases of common stock (in shares) | (6,402,650) | ||||||||
Repurchases of common stock | (608,010) | (608,010) | |||||||
Treasury stock retirement | 0 | $ (64) | (607,946) | 608,010 | |||||
Net income | 523,672 | 523,672 | |||||||
Foreign currency translation adjustment | (44,665) | (44,665) | |||||||
Change in unrealized gain (loss) on investments, net of tax | $ (26,562) | (26,562) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 156,494,816 | 156,494,816 | |||||||
Ending Balance at Dec. 31, 2022 | $ 4,360,187 | $ 1,565 | 2,578,603 | 0 | (140,332) | 1,920,351 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 1,743,329 | ||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (69,604) | $ 17 | (69,621) | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 796,541 | ||||||||
Issuance of common stock under employee stock purchase plan | 62,365 | $ 8 | 62,357 | ||||||
Stock-based compensation | 398,495 | 398,495 | |||||||
Issuance of warrants related to convertible senior notes | 90,195 | 90,195 | |||||||
Purchase of note hedge related to convertible senior notes, net of deferred taxes of $57,628 | (178,927) | (178,927) | |||||||
Repurchases of common stock (in shares) | (7,801,778) | ||||||||
Repurchases of common stock | (658,187) | (658,187) | |||||||
Treasury stock retirement | 0 | $ (78) | (658,109) | 658,187 | |||||
Net income | 547,629 | 547,629 | |||||||
Foreign currency translation adjustment | 18,439 | 18,439 | |||||||
Change in unrealized gain (loss) on investments, net of tax | $ 26,563 | 26,563 | |||||||
Ending balance (in shares) at Dec. 31, 2023 | 151,232,908 | 151,232,908 | |||||||
Ending Balance at Dec. 31, 2023 | $ 4,597,155 | $ 1,512 | $ 2,222,993 | $ 0 | $ (95,330) | $ 2,467,980 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Purchase of note hedges, net of tax | $ 57,628 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
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 solutions to power and protect life online. Its massively distributed edge and cloud platform, or Akamai Connected Cloud, comprises more than 4,100 edge points-of-presence in approximately 130 countries and nearly 750 cities. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company is currently organized and operates as one operating and reportable segment. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. The presentation of certain items in the consolidated statements of cash flows has changed for the prior periods to be comparable with the presentation for the year ended December 31, 2023. The change had no net impact on the Company's cash flows from operating, investing or financing activities for the prior periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its fixed income securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. 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. 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 three years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. 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. Amortization of the costs 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. Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2023, its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2023, 2022 and 2021, no customer accounted for more than 10% of total revenue. As of December 31, 2023, no customer had an accounts receivable balance greater than 10% of total accounts receivable, and as of December 31, 2022, there was one customer with an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2023 and 2022, its concentration of credit risk related to accounts receivable was not significant. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. When the Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities, they are classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred. The Company has implemented software and hardware initiatives to manage its global network more efficiently and, as a result, the expected average useful life of its servers increased from five years to six years, effective January 1, 2023. These changes decreased depreciation expense by $62.7 million for the year ended December 31, 2023, and increased net income by $52.3 million, or $0.34 per share, for the year ended December 31, 2023. Operating Leases The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset. Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the implicit rates in the Company’s leases are not readily determinable, an incremental borrowing rate has been applied based on the Company's credit-adjusted risk-free rate. The Company often enters into contracts that contain both lease and non-lease components. Real estate non-lease components include real estate taxes, insurance, maintenance, parking and other operating costs. Co-location non-lease components include utilities and other operating costs. The Company accounts for both lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, primarily utilities based on actual usage, common area maintenance and real estate taxes, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The Company’s lease terms often include renewal options and, particularly in the case of co-location arrangements, may include evergreen provisions. The Company’s right-of-use assets and lease liabilities generally do not include the options to extend, or terminate, unless it is reasonably certain that the Company will exercise these options. The Company has elected to exclude leases for certain networking equipment and leases assumed through acquisitions with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. Reductions in right-of-use assets and changes in lease liabilities are presented on a net basis within other non-current assets and liabilities within the operating section of the Company's consolidated statement of cash flows. Equity Method Investments The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses. The Company and Mitsubishi UFJ Financial Group ("MUFG") established Global Open Network, Inc. ("GO-NET") as a joint venture. The Company's 20% stake in GO-NET was accounted for using the equity method. In 2022, MUFG announced its intention to suspend operations and liquidate GO-NET. The liquidation was finalized in 2023. Due to these actions, the Company impaired its remaining investment of $7.5 million in GO-NET in 2022. In 2023, a gain of $1.5 million was recognized related to the Company's receipt of its share of GO-NET's remaining assets upon final liquidation. While GO-NET was in operation, the Company recognized a loss of $14.0 million during the year ended December 31, 2021, which reflects its share of losses incurred by GO-NET during that year. The Company also recognized revenue of $4.0 million and $10.1 million for the years ended December 31, 2022 and 2021, respectively, for services provided to GO-NET. The Company no longer provided these services after June 2022 due to the suspension of operations. Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2023, 2022 and 2021, the Company concluded that it has one reporting unit and that its chief operating decision maker is its chief executive officer and the executive management team. The Company has assigned the entire balance of goodwill to one reporting unit. The fair value of the reporting unit was based on the Company's market capitalization as of each of December 31, 2023 and 2022, and it was substantially in excess of the carrying value of the reporting unit at each date. The fair value of the Company's reporting unit was determined by the Company's enterprise value as of the years ended December 31, 2023, 2022 and 2021. Acquired intangible assets consist of completed technologies, customer-related intangible assets, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Significant judgment is used in determining fair values of acquired intangibles assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. Long-lived assets, including property and equipment, operating lease right-of-use assets and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. 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. 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 security solutions, the delivery of content, applications and software over the internet, cloud computing 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 security, delivery and compute 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 usage commitments that expire each period. Any bursting over given commitments is recognized in the period in which the usage 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 contracts are satisfied at a point in time, such as one-time professional services, 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. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost. Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s solutions and Akamai Connected Cloud. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s engineering, research and development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life. Restructuring Charges The Company classifies certain expenses as restructuring charges that result from programs that have significantly changed either the scope of the business undertaken by management or the manner in which that business is conducted. These charges include employee severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. Employee severance and related expenses are recognized when the action giving rise to the expense is probable. Employee severance and related expenses are based upon contractual severance plans. Accounting for Stock-Based Compensation The Company issues various forms of stock-based compensation, which includes stock options, restricted stock, restricted stock units and deferred stock units, and has an employee stock purchase plan (collectively referred to as "stock awards"). The Company’s stock awards are classified as equity and the fair value is determined at the time of grant, unless the number of shares to be granted is unknown. Stock awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares are known, at which time the stock awards are re-classified to equity. For liability-classified awards, the fair value is determined each reporting period beginning at the grant date until final vesting. The Company has selected the Black-Scholes option-pricing model to determine the fair value of its stock options. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock awards that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance-based vesting condition feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other (expense) income, net. The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other income (expense), net. As of December 31, 2023 and 2022, the fair value of the forward currency contracts and the underlying gains and losses for the years ended December 31, 2023, 2022 and 2021 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating. Income Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Rece |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Available-for-sale marketable securities held as of December 31, 2023 and 2022 were as follows (in thousands): Gross Unrealized Aggregate Classification on Balance Sheet Amortized Cost Short-Term Long-Term As of December 31, 2023 Gains Losses Time deposits $ 14,426 $ — $ — $ 14,426 $ 14,426 $ — Commercial paper 6,249 — (5) 6,244 6,244 — Corporate bonds 1,328,980 6,429 (4,201) 1,331,208 276,975 1,054,233 U.S. government agency obligations 428,157 2,462 (979) 429,640 74,369 355,271 $ 1,777,812 $ 8,891 $ (5,185) $ 1,781,518 $ 372,014 $ 1,409,504 As of December 31, 2022 Time deposits $ 19,530 $ — $ — $ 19,530 $ 19,530 $ — Corporate bonds 624,082 — (21,029) 603,053 362,458 240,595 U.S. government agency obligations 252,573 — (10,391) 242,182 180,320 61,862 $ 896,185 $ — $ (31,420) $ 864,765 $ 562,308 $ 302,457 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. Additionally, the Company holds certain money market funds that are classified as marketable 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 and marketable securities income, net in the consolidated statements of income. As of December 31, 2023, the Company held for investment corporate bonds and U.S. government agency obligations with a fair value of $313.5 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 related to these securities were $4.9 million and are included in accumulated other comprehensive loss as of December 31, 2023. 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 fair value measurements within the fair value hierarchy of the Company’s financial assets as of December 31, 2023 and 2022 were as follows (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 As of December 31, 2023 Cash Equivalents and Marketable Securities: Money market funds $ 177,240 $ 177,240 $ — Time deposits 39,670 — 39,670 Commercial paper 6,244 — 6,244 Corporate bonds 1,331,208 — 1,331,208 U.S. government agency obligations 429,640 — 429,640 Mutual funds 22,942 22,942 — $ 2,006,944 $ 200,182 $ 1,806,762 As of December 31, 2022 Cash Equivalents and Marketable Securities: Money market funds $ 999 $ 999 $ — Time deposits 285,830 — 285,830 Corporate bonds 603,053 — 603,053 U.S. government agency obligations 242,182 — 242,182 Mutual funds 18,745 18,745 — $ 1,150,809 $ 19,744 $ 1,131,065 As of December 31, 2023 and 2022, the Company grouped money market funds and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of December 31, 2023 and 2022, the Company grouped time deposits, commercial paper, corporate bonds and U.S. government agency obligations using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. The Company did not have any transfers of assets or liabilities between Level 1 or Level 2 of the fair value measurement hierarchy during the years ended December 31, 2023 and 2022. When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about the assumptions market participants would use to estimate the fair value of a financial instrument. Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Due in 1 year or less $ 372,014 $ 562,308 Due after 1 year through 5 years 1,409,504 302,457 $ 1,781,518 $ 864,765 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Trade accounts receivable $ 516,175 $ 490,162 Unbilled accounts receivable 211,596 194,961 Gross accounts receivable 727,771 685,123 Allowances for current expected credit losses and other reserves (3,469) (5,917) Accounts receivable, net $ 724,302 $ 679,206 A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Beginning balance $ 5,917 $ 1,397 $ 1,822 Charges to income from operations 13,431 9,292 4,576 Collections from customers previously reserved and other (15,879) (4,772) (5,001) Ending balance $ 3,469 $ 5,917 $ 1,397 Charges to income from operations primarily represents charges to provision for doubtful accounts for increases in the allowance for current expected credit losses. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Prepaid income taxes $ 33,448 $ 33,898 Prepaid sales and other taxes 40,843 31,285 Prepaid software and related service costs 29,155 28,022 Deferred commissions 44,383 37,316 Other prepaid expenses 26,316 39,520 Other current assets 41,969 14,999 Total $ 216,114 $ 185,040 Incremental Costs to Obtain a Contract with a Customer Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Deferred costs included in prepaid expenses and other current assets $ 44,383 $ 37,316 Deferred costs included in other assets 42,738 29,069 Total deferred costs $ 87,121 $ 66,385 Information related to incremental costs to obtain a contract with a customer for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Amortization expense related to deferred costs $ 50,414 $ 52,691 $ 58,433 Incremental costs capitalized 70,072 47,416 56,509 Amortization expense related to deferred costs is primarily included in sales and marketing expense in the consolidated statements of income. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2023 and 2022 (in thousands, except years): December 31, 2023 December 31, 2022 Estimated Useful Life Computer and networking equipment $ 2,456,470 $ 2,139,518 3-7 Purchased software 96,979 89,695 3-10 Furniture and fixtures 67,657 71,427 1-7 Office equipment 40,546 41,866 3-5 Leasehold improvements 214,712 229,037 1-15 Internal-use software 1,829,933 1,529,264 2-10 Property and equipment, gross 4,706,297 4,100,807 Accumulated depreciation and amortization (2,880,353) (2,560,625) Property and equipment, net $ 1,825,944 $ 1,540,182 Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2023, 2022 and 2021 was $504.0 million, $527.8 million and $502.6 million, respectively. During the years ended December 31, 2023, 2022 and 2021, the Company capitalized $81.8 million, $32.3 million and $35.0 million, respectively, of stock-based compensation related to employees who developed and enhanced internal-use software applications. During the years ended December 31, 2023 and 2022, the Company wrote off $174.3 million and $210.2 million, respectively, of property and equipment, gross, along with the associated accumulated depreciation and amortization. The write-offs were primarily related to computer and networking equipment and internal-use software no longer in use. These assets had been substantially depreciated and amortized. In addition, the Company wrote off $13.8 million and $9.1 million during the years ended December 31, 2023 and 2022, respectively, related to internal-use software and facility-related property and equipment as a result of certain restructuring actions. |
Acquired Intangible Assets and
Acquired Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquired Intangible Assets and Goodwill | Acquired Intangible Assets and Goodwill Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Completed technologies $ 354,539 $ (196,572) $ 157,967 $ 327,848 $ (162,323) $ 165,525 Customer-related intangible assets 616,267 (273,758) 342,509 480,817 (244,158) 236,659 Non-compete agreements — — — 244 (183) 61 Trademarks and trade names 14,659 (9,117) 5,542 14,642 (7,585) 7,057 Acquired license rights 34,810 (4,685) 30,125 34,810 (2,396) 32,414 Total $ 1,020,275 $ (484,132) $ 536,143 $ 858,361 $ (416,645) $ 441,716 Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2023, 2022 and 2021 was $66.8 million, $65.0 million and $48.0 million, respectively. Based on the Company's acquired intangible assets as of December 31, 2023, aggregate expense related to amortization of acquired intangible assets is expected to be $84.8 million, $80.5 million, $76.1 million, $62.0 million and $49.6 million for the years ending December 31, 2024, 2025, 2026, 2027 and 2028, respectively. The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Beginning balance $ 2,763,838 $ 2,156,254 Acquisition of StorageOS, Inc. 14,046 — Acquisition of Neosec, Inc. 66,882 — Acquisition of Linode Limited Liability Company — 617,292 Measurement period adjustments related to acquisitions completed in prior years — 724 Foreign currency translation 5,704 (10,432) Ending balance $ 2,850,470 $ 2,763,838 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Asset Acquisitions Lumen In October 2023, the Company acquired certain customer contracts from Lumen Technologies, Inc. ("Lumen"), a content delivery provider, and certain of its affiliates. The preliminary purchase price was $81.8 million and was allocated to a customer-related intangible asset that will be amortized over 12.2 years in a pattern that matches expense with expected economic benefits. The purchase price is subject to adjustment for certain post-closing activities expected to be completed in the first half of 2024. The acquisition is intended to further strengthen the Company's existing content delivery and other businesses as the Company transitions the acquired customers to its Akamai Connected Cloud and offers its portfolio of other services to such customers. StackPath In August 2023, the Company acquired certain customer contracts from StackPath, LLC ("StackPath"), a content delivery provider, and certain of its affiliates. The preliminary purchase price was $51.4 million which includes costs to acquire assets and an estimated additional payment for the expected achievement of certain post-closing milestones. As of December 31, 2023, the Company paid $41.0 million of the purchase price in cash to StackPath and expects to pay the remaining consideration, if payable, by the end of the second quarter of 2024. The purchase price was allocated to a customer-related intangible asset that will be amortized over 13.4 years in a pattern that matches expense with expected economic benefits. The acquisition is intended to further strengthen the Company’s existing content delivery and other businesses as the Company transitions the acquired customers to its Akamai Connected Cloud and offers its portfolio of other services to such customers. Business Acquisitions Business acquisition-related costs were $2.7 million, $10.7 million and $13.3 million during the years ended December 31, 2023, 2022 and 2021, respectively, and are included in general and administrative expense in the consolidated statements of income. Pro forma results of operations for the acquisitions completed in the years ended December 31, 2023, 2022 and 2021 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's consolidated financial results. Revenue and earnings of the acquired companies since the dates of the acquisitions are included in the Company's consolidated statements of income and are not presented separately because they are not material. Neosec In May 2023, the Company acquired all the outstanding equity interests of Neosec, Inc. ("Neosec") for $91.4 million in cash. Neosec is an application programming interface ("API") detection and response platform based on data and behavioral analytics. The acquisition is intended to complement the Company's application and API security portfolio by extending its visibility into the rapidly growing API threat landscape. The Company allocated $66.9 million of the purchase price to goodwill and $19.9 million to identifiable intangible assets, primarily consisting of completed technologies. The total weighted average useful life of the intangible assets acquired from Neosec is 9.7 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. The value of the goodwill can be attributed to a number of business factors, including the expected impact from the ability to interface with the Company's platform. The Company expects that $33.8 million of the goodwill related to the acquisition of Neosec will be deductible for tax purposes as a result of post-acquisition transactions. As of December 31, 2023, the purchase price allocation was substantially complete except for the finalization of certain income tax matters. StorageOS In March 2023, the Company acquired all the outstanding equity interests of StorageOS, Inc. ("StorageOS"), also known as Ondat, a cloud-based storage technology provider for $20.6 million in cash. The acquisition of StorageOS's cloud storage technology and its industry-recognized talent is intended to strengthen the Company's cloud computing offerings. Storage is a key component of any cloud computing offering, and this acquisition is expected to enhance the Company's storage capabilities, allowing the Company to offer a fundamentally different approach to cloud that integrates core and distributed computing sites with a massively scaled edge network. The Company allocated $14.0 million of the purchase price to goodwill and $4.5 million to a completed technology identifiable intangible asset with a useful life of 8.8 years. The intangible asset is being amortized based upon the pattern in which the economic benefit of the intangible asset is being utilized. The value of the goodwill is primarily attributable to synergies related to the integration of StorageOS technology onto the Company's platform as well as a trained technical workforce. All of the goodwill related to the acquisition of StorageOS is expected to be deductible for tax purposes as a result of post-acquisition transactions. As of December 31, 2023, the purchase price allocation was substantially complete except for the finalization of certain income tax matters. Linode In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode") for $898.5 million in cash. Linode is an infrastructure-as-a-service platform provider that allows for developer-friendly cloud computing capabilities. The acquisition is intended to enhance the Company’s computing services by enabling it to create a unique cloud platform to build, run and secure applications from the cloud to the edge. Revenue attributable to Linode in the year of acquisition, included in the Company's consolidated statements of income, for 2022 was $103.5 million. Earnings included in the Company's consolidated statements of income since the date of the acquisition are not material. The Company finalized its allocation of the purchase price in the first quarter of 2023. The allocation of the purchase price for Linode was as follows (in thousands): Total purchase consideration $ 898,516 Allocation of the purchase consideration: Cash $ 26,678 Accounts receivable 7,171 Prepaid expenses and other current assets 4,478 Property and equipment 56,268 Operating lease right-of-use assets 17,000 Identifiable intangible assets 196,020 Deferred income tax assets 2,528 Other assets 292 Total assets acquired 310,435 Accounts payable (5,767) Accrued expenses (1,958) Operating lease liabilities (17,235) Other liabilities (4,251) Total liabilities assumed (29,211) Net assets acquired 281,224 Goodwill $ 617,292 The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and cost synergies expected to be realized. The Company expects that all of the goodwill related to the acquisition of Linode will be deductible for tax purposes as a result of post-acquisition transactions. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 84,200 16.8 Completed technologies 70,900 5.8 Acquired license rights 34,320 15.0 Trademarks and trade name 6,600 8.8 Total $ 196,020 The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks and the multi-period excess earnings method under the income approach to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates, cost of revenue, operating expenses, contributory asset charges and discount rates. The Company used readily available market data to estimate the fair values of the acquired license rights. The total weighted average amortization period for the intangible assets acquired from Linode is 12.2 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Guardicore In October 2021, the Company acquired all the outstanding equity interests of Guardicore Ltd. ("Guardicore"), for $610.7 million in cash. Guardicore's micro-segmentation solution is designed to limit user access to only those applications that are authorized to communicate with each other, thereby limiting the spread of malware and protecting the flow of enterprise data across the network. The acquisition is intended to enhance the Company's security portfolio with the addition of Guardicore's micro-segmentation technology. The Company finalized its allocation of the purchase price in the fourth quarter of 2022. The allocation of the purchase price for Guardicore was as follows (in thousands): Total purchase consideration $ 610,693 Allocation of the purchase consideration: Cash $ 27,252 Accounts receivable 10,179 Prepaid expenses and other current assets 1,307 Property and equipment 1,211 Operating lease right-of-use assets 2,657 Identifiable intangible assets 123,600 Deferred income tax assets 9,686 Other assets 890 Total assets acquired 176,782 Accounts payable (1,523) Accrued liabilities (7,742) Deferred revenue (35,658) Operating lease liabilities (1,000) Total liabilities assumed (45,923) Net assets acquired $ 130,859 Goodwill 479,834 The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The Company expects that most of the goodwill related to the acquisition of Guardicore will be deductible for tax purposes as a result of post-acquisition transactions. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Completed technologies $ 79,000 15.0 Customer-related intangible assets 44,200 14.0 Trademarks 400 1.9 Total $ 123,600 The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks, and the excess earnings method to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates and discount rates. The total weighted average amortization period for the intangible assets acquired from Guardicore is 14.6 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Inverse In February 2021, the Company acquired all the outstanding equity interests of Inverse, Inc. ("Inverse"), for $17.1 million. Inverse provides a data repository and algorithms capable of identifying device types accessing the internet. The acquisition enhances the Company's enterprise security capabilities. The Company allocated $10.7 million of the cost of the acquisition to goodwill and $7.6 million to a technology-related identifiable intangible asset with an average useful life of 14.0 years. The acquired goodwill and intangible assets are partially offset by acquired negative working capital balances. The value of the goodwill is primarily attributable to synergies related to the integration of Inverse technology onto the Company's platform as well as a trained technical workforce. The total amount of goodwill related to the acquisition of Inverse expected to be deductible for tax purposes as a result of post-acquisition transactions is $10.7 million. The Company finalized its allocation of purchase price in the fourth quarter of 2021. |
Asset Acquisition | Acquisitions Asset Acquisitions Lumen In October 2023, the Company acquired certain customer contracts from Lumen Technologies, Inc. ("Lumen"), a content delivery provider, and certain of its affiliates. The preliminary purchase price was $81.8 million and was allocated to a customer-related intangible asset that will be amortized over 12.2 years in a pattern that matches expense with expected economic benefits. The purchase price is subject to adjustment for certain post-closing activities expected to be completed in the first half of 2024. The acquisition is intended to further strengthen the Company's existing content delivery and other businesses as the Company transitions the acquired customers to its Akamai Connected Cloud and offers its portfolio of other services to such customers. StackPath In August 2023, the Company acquired certain customer contracts from StackPath, LLC ("StackPath"), a content delivery provider, and certain of its affiliates. The preliminary purchase price was $51.4 million which includes costs to acquire assets and an estimated additional payment for the expected achievement of certain post-closing milestones. As of December 31, 2023, the Company paid $41.0 million of the purchase price in cash to StackPath and expects to pay the remaining consideration, if payable, by the end of the second quarter of 2024. The purchase price was allocated to a customer-related intangible asset that will be amortized over 13.4 years in a pattern that matches expense with expected economic benefits. The acquisition is intended to further strengthen the Company’s existing content delivery and other businesses as the Company transitions the acquired customers to its Akamai Connected Cloud and offers its portfolio of other services to such customers. Business Acquisitions Business acquisition-related costs were $2.7 million, $10.7 million and $13.3 million during the years ended December 31, 2023, 2022 and 2021, respectively, and are included in general and administrative expense in the consolidated statements of income. Pro forma results of operations for the acquisitions completed in the years ended December 31, 2023, 2022 and 2021 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's consolidated financial results. Revenue and earnings of the acquired companies since the dates of the acquisitions are included in the Company's consolidated statements of income and are not presented separately because they are not material. Neosec In May 2023, the Company acquired all the outstanding equity interests of Neosec, Inc. ("Neosec") for $91.4 million in cash. Neosec is an application programming interface ("API") detection and response platform based on data and behavioral analytics. The acquisition is intended to complement the Company's application and API security portfolio by extending its visibility into the rapidly growing API threat landscape. The Company allocated $66.9 million of the purchase price to goodwill and $19.9 million to identifiable intangible assets, primarily consisting of completed technologies. The total weighted average useful life of the intangible assets acquired from Neosec is 9.7 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. The value of the goodwill can be attributed to a number of business factors, including the expected impact from the ability to interface with the Company's platform. The Company expects that $33.8 million of the goodwill related to the acquisition of Neosec will be deductible for tax purposes as a result of post-acquisition transactions. As of December 31, 2023, the purchase price allocation was substantially complete except for the finalization of certain income tax matters. StorageOS In March 2023, the Company acquired all the outstanding equity interests of StorageOS, Inc. ("StorageOS"), also known as Ondat, a cloud-based storage technology provider for $20.6 million in cash. The acquisition of StorageOS's cloud storage technology and its industry-recognized talent is intended to strengthen the Company's cloud computing offerings. Storage is a key component of any cloud computing offering, and this acquisition is expected to enhance the Company's storage capabilities, allowing the Company to offer a fundamentally different approach to cloud that integrates core and distributed computing sites with a massively scaled edge network. The Company allocated $14.0 million of the purchase price to goodwill and $4.5 million to a completed technology identifiable intangible asset with a useful life of 8.8 years. The intangible asset is being amortized based upon the pattern in which the economic benefit of the intangible asset is being utilized. The value of the goodwill is primarily attributable to synergies related to the integration of StorageOS technology onto the Company's platform as well as a trained technical workforce. All of the goodwill related to the acquisition of StorageOS is expected to be deductible for tax purposes as a result of post-acquisition transactions. As of December 31, 2023, the purchase price allocation was substantially complete except for the finalization of certain income tax matters. Linode In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode") for $898.5 million in cash. Linode is an infrastructure-as-a-service platform provider that allows for developer-friendly cloud computing capabilities. The acquisition is intended to enhance the Company’s computing services by enabling it to create a unique cloud platform to build, run and secure applications from the cloud to the edge. Revenue attributable to Linode in the year of acquisition, included in the Company's consolidated statements of income, for 2022 was $103.5 million. Earnings included in the Company's consolidated statements of income since the date of the acquisition are not material. The Company finalized its allocation of the purchase price in the first quarter of 2023. The allocation of the purchase price for Linode was as follows (in thousands): Total purchase consideration $ 898,516 Allocation of the purchase consideration: Cash $ 26,678 Accounts receivable 7,171 Prepaid expenses and other current assets 4,478 Property and equipment 56,268 Operating lease right-of-use assets 17,000 Identifiable intangible assets 196,020 Deferred income tax assets 2,528 Other assets 292 Total assets acquired 310,435 Accounts payable (5,767) Accrued expenses (1,958) Operating lease liabilities (17,235) Other liabilities (4,251) Total liabilities assumed (29,211) Net assets acquired 281,224 Goodwill $ 617,292 The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and cost synergies expected to be realized. The Company expects that all of the goodwill related to the acquisition of Linode will be deductible for tax purposes as a result of post-acquisition transactions. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 84,200 16.8 Completed technologies 70,900 5.8 Acquired license rights 34,320 15.0 Trademarks and trade name 6,600 8.8 Total $ 196,020 The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks and the multi-period excess earnings method under the income approach to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates, cost of revenue, operating expenses, contributory asset charges and discount rates. The Company used readily available market data to estimate the fair values of the acquired license rights. The total weighted average amortization period for the intangible assets acquired from Linode is 12.2 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Guardicore In October 2021, the Company acquired all the outstanding equity interests of Guardicore Ltd. ("Guardicore"), for $610.7 million in cash. Guardicore's micro-segmentation solution is designed to limit user access to only those applications that are authorized to communicate with each other, thereby limiting the spread of malware and protecting the flow of enterprise data across the network. The acquisition is intended to enhance the Company's security portfolio with the addition of Guardicore's micro-segmentation technology. The Company finalized its allocation of the purchase price in the fourth quarter of 2022. The allocation of the purchase price for Guardicore was as follows (in thousands): Total purchase consideration $ 610,693 Allocation of the purchase consideration: Cash $ 27,252 Accounts receivable 10,179 Prepaid expenses and other current assets 1,307 Property and equipment 1,211 Operating lease right-of-use assets 2,657 Identifiable intangible assets 123,600 Deferred income tax assets 9,686 Other assets 890 Total assets acquired 176,782 Accounts payable (1,523) Accrued liabilities (7,742) Deferred revenue (35,658) Operating lease liabilities (1,000) Total liabilities assumed (45,923) Net assets acquired $ 130,859 Goodwill 479,834 The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The Company expects that most of the goodwill related to the acquisition of Guardicore will be deductible for tax purposes as a result of post-acquisition transactions. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Completed technologies $ 79,000 15.0 Customer-related intangible assets 44,200 14.0 Trademarks 400 1.9 Total $ 123,600 The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks, and the excess earnings method to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates and discount rates. The total weighted average amortization period for the intangible assets acquired from Guardicore is 14.6 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Inverse In February 2021, the Company acquired all the outstanding equity interests of Inverse, Inc. ("Inverse"), for $17.1 million. Inverse provides a data repository and algorithms capable of identifying device types accessing the internet. The acquisition enhances the Company's enterprise security capabilities. The Company allocated $10.7 million of the cost of the acquisition to goodwill and $7.6 million to a technology-related identifiable intangible asset with an average useful life of 14.0 years. The acquired goodwill and intangible assets are partially offset by acquired negative working capital balances. The value of the goodwill is primarily attributable to synergies related to the integration of Inverse technology onto the Company's platform as well as a trained technical workforce. The total amount of goodwill related to the acquisition of Inverse expected to be deductible for tax purposes as a result of post-acquisition transactions is $10.7 million. The Company finalized its allocation of purchase price in the fourth quarter of 2021. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Payroll and other related benefits $ 143,010 $ 172,670 Income taxes payable 70,017 76,459 Bandwidth and co-location expenses 78,210 79,937 Property, use and other taxes 38,270 30,711 Convertible senior notes interest 6,807 1,613 Other accrued expenses 15,867 5,627 Total $ 352,181 $ 367,017 |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the first quarter of 2023, management committed to an action to restructure certain parts of the Company to enable it to prioritize investments in the fastest growing areas of the business. As a result, certain headcount reductions were necessary. The Company incurred $20.7 million related to this action during the year ended December 31, 2023. The Company does not expect to incur material additional charges related to this action. The Company launched its FlexBase program in May 2022, which is a flexible workspace arrangement that allows employees to choose to work from their home office, a Company office or a combination of both, which is a significant change to the way employees worked prior to the program. The Company began to identify certain facilities that were no longer needed in the fourth quarter of 2021. As a result, impairments of right-of-use assets and facility-related assets were recognized. The Company has incurred expenses of $27.7 million, $3.6 million and $3.8 million during the years ended December 31, 2023, 2022 and 2021, respectively, related to this program. As the Company continues to execute its FlexBase program, additional charges related to this action are expected to occur into early 2024, however, the Company does not expect to incur any material additional restructuring charges related to this action. As a result of MUFG's suspension of GO-NET's operations, the Company recognized as a restructuring charge an impairment of $7.5 million during the year ended December 31, 2022, primarily related to certain capitalized internal-use software assets that will no longer be used in operations or will not generate sufficient future cash flows to support their values. The Company does not expect to incur any additional charges related to this action. The Company also recognizes restructuring charges for redundant employees, facilities, contracts and capitalized internal-use software assets associated with completed acquisitions. Restructuring charges related to acquisitions were not material in any of the years ended December 31, 2023, 2022 and 2021. The activity of the Company's accrual for employee severance and related benefits for all restructuring actions during the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Beginning balance $ 541 $ 1,188 $ 22,051 Costs incurred 21,085 747 6,600 Cash disbursements (20,748) (1,209) (27,095) Translation adjustments and other (41) (185) (368) Ending balance $ 837 $ 541 $ 1,188 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible Senior Notes The Company has three convertible senior notes ("2029 Notes", "2027 Notes" and "2025 Notes") outstanding with a par value totaling $3,565.0 million (collectively, the "Notes") that are senior unsecured obligations of the Company and bear interest payable semi-annually in arrears. The following table summarizes further details of the Notes: Notes Issuance Date Maturity Date Principal Amount (in thousands) Coupon Interest Rate Effective Interest Rate 2029 Notes August 18, 2023 February 15, 2029 $ 1,265,000 1.125 % 1.388 % 2027 Notes August 16, 2019 September 1, 2027 $ 1,150,000 0.375 % 0.539 % 2025 Notes May 21, 2018 May 1, 2025 $ 1,150,000 0.125 % 0.350 % Conversion Rights of the Notes At their option, holders may exercise the conversion right of the respective Notes at the following specified times and rates to receive the principal amount in cash and receive any amount in excess of the principal amount in cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. Prior to the close of business on the business day immediately preceding the conversion date, as noted in the table below, under the following circumstances a holder may exercise their conversion right: • during any calendar quarter commencing after the calendar quarter ended December 31, 2023 for the 2029 Notes, December 31, 2019 for the 2027 Notes and June 30, 2018 for the 2025 Notes (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 the respective 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 the respective conversion date, as noted in the table below, holders may convert all or any portion of their respective Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. If the Company undergoes a fundamental change at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. The conversion rights of the Notes are as follows: Notes Conversion Date Conversion Rate (1) Conversion Price per Share (1) 2029 Notes October 15, 2028 7.9170 $ 126.31 2027 Notes May 1, 2027 8.6073 $ 116.18 2025 Notes January 1, 2025 10.5150 $ 95.10 (1) The conversion rate for the Notes is established as a number of shares of the Company's commons stock per $1,000 principal amount of the Notes, that is equivalent to the conversion price per share, subject to adjustments in certain events. Upon the occurrence of certain corporate events the Company will increase the conversion rate for a holder that elects to convert its Notes. Components and Fair Value of the Notes The Notes consisted of the following components as of December 31, 2023 and 2022 (in thousands): 2029 Notes 2027 Notes 2025 Notes Total As of December 31, 2023 Principal $ 1,265,000 $ 1,150,000 $ 1,150,000 $ 3,565,000 Less: issuance costs, net of amortization (16,478) (6,831) (3,462) (26,771) Net carrying amount $ 1,248,522 $ 1,143,169 $ 1,146,538 $ 3,538,229 Estimated fair value (1) $ 1,376,915 $ 1,289,219 $ 1,467,274 $ 4,133,408 As of December 31, 2022 Principal $ — $ 1,150,000 $ 1,150,000 $ 2,300,000 Less: issuance costs, net of amortization — (8,707) (6,035) (14,742) Net carrying amount $ — $ 1,141,293 $ 1,143,965 $ 2,285,258 Estimated fair value (1) $ — $ 1,111,038 $ 1,209,076 $ 2,320,114 (1) The fair values were determined based on the quoted prices of the Notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 within the fair value hierarchy. Note Hedges and Warrants To minimize the impact of potential dilution upon conversion of the Notes, the Company entered into convertible note hedge transactions with respect to its common stock concurrently with each respective note issuance. The note hedge transactions cover an approximate number of shares of the Company’s common stock at a strike price that corresponds to the conversion prices for the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The note hedge transactions expire upon the respective maturity dates of the Notes. The Company determined that the note hedges meet the definition of a derivative and are classified in stockholders’ equity, as the note hedges are indexed to the Company's common stock, and the Company, at its election, may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the purchase of the hedges as a decrease to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the note hedges in its consolidated financial statements. Separately, the Company also entered into warrant transactions concurrently with each of the note issuances, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, shares of the Company’s common stock at a predetermined strike price per share. The convertible note hedge and warrant transactions will generally have the effect of increasing the conversion price of each of the Notes to the respective strike price related to the warrant transactions. The Company determined that the warrants meet the definition of a derivative and are classified in stockholders’ equity, as the warrants are indexed to the Company's common stock, and the Company, at its election, may pay or deliver to holders cash or shares of the Company's common stock. The Company recorded the proceeds from the issuance of the warrants as an increase to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the warrants in its consolidated financial statements. The following table summarizes the main terms impacting the note hedges and warrants (in thousands, except per share data): 2029 Notes 2027 Notes 2025 Notes Note hedge transaction costs $ 236,555 $ 312,225 $ 261,740 Shares covered by note hedge transactions 10,015 9,898 12,093 Shares related to warrant transactions 10,015 9,898 12,093 Strike price per share related to warrant transactions $ 180.44 $ 178.74 $ 149.18 Aggregate proceeds from sale of warrants $ 90,195 $ 185,150 $ 119,945 Revolving Credit Facility In May 2018, the Company entered into a $500.0 million five-year, revolving credit agreement (the “2018 Credit Agreement”). Borrowings under the 2018 Credit Agreement bore 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 2018 Credit Agreement. Regardless of what amounts, if any, outstanding under the 2018 Credit Agreement, the Company was 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 2018 Credit Agreement. In November 2022, the Company entered into a $500.0 million five-year, revolving credit agreement (the “2022 Credit Agreement”). The 2022 Credit Agreement replaces the 2018 Credit Agreement. Borrowings under the 2022 Credit Agreement may be used to finance working capital needs and for general corporate purposes. The 2022 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. The 2022 Credit Agreement expires, and any amounts outstanding thereunder will become due and payable, on November 22, 2027, subject to up to two one-year extensions at the Company's request and with the consent of the lenders party thereto. Borrowings under the 2022 Credit Agreement bear interest, at the Company's option, and subject to a credit spread adjustment, at a term benchmark rate plus a spread of 0.75% to 1.125%, a reference rate plus a spread of 0.75% to 1.125%, or a base rate plus a spread of 0.00% to 0.125%, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement. Regardless of what amounts, if any, are outstanding under the 2022 Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.07% to 0.125%, with such rate being based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement. The 2022 Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The negative covenants include restrictions on subsidiary indebtedness, liens and fundamental changes. These covenants are subject to a number of important exceptions and qualifications. The principal financial covenant requires a maximum consolidated leverage ratio . There were no outstanding borrowings under the 2022 Credit Agreement as of December 31, 2023. Interest Expense The Notes bear interest at fixed rates that are payable semi-annually in arrears on their respective interest payment dates each year. Interest expense, together with ongoing commitment fees under the terms of the Company's credit agreements, included in the consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Amortization of debt discount and issuance costs $ 5,803 $ 4,688 $ 69,697 Coupon interest payable on 2029 Notes 5,218 — — Coupon interest payable on 2027 Notes 4,312 4,312 4,313 Coupon interest payable on 2025 Notes 1,436 1,437 1,437 Interest payable and commitment fees under the credit agreements 1,402 952 557 Capitalization of interest expense (462) (293) (3,672) Total interest expense $ 17,709 $ 11,096 $ 72,332 Prior to the adoption of the new guidance for accounting for convertible instruments on January 1, 2022, the Company also amortized as interest expense the value of debt discounts of the 2027 Notes and the 2025 Notes. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various operating lease agreements for its offices and co-location sites and related equipment. The Company has also entered into sublease agreements with tenants of various offices previously vacated by the Company. These operating leases have lease periods expiring between 2024 and 2034. The Company’s operating lease costs for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): Real Estate Arrangements Co-location Arrangements Total 2023 Operating lease cost $ 74,054 $ 179,552 $ 253,606 Short-term lease cost 133 23,565 23,698 Variable lease cost 25,860 62,084 87,944 Sublease income (32,024) — (32,024) Total operating lease costs $ 68,023 $ 265,201 $ 333,224 2022 Operating lease cost $ 82,761 $ 152,215 $ 234,976 Short-term lease cost 52 21,741 21,793 Variable lease cost 25,167 35,025 60,192 Sublease income (25,743) — (25,743) Total operating lease costs $ 82,237 $ 208,981 $ 291,218 2021 Operating lease cost $ 84,100 $ 136,673 $ 220,773 Short-term lease cost 58 17,660 17,718 Variable lease cost 22,016 31,428 53,444 Sublease income (21,033) — (21,033) Total operating lease costs $ 85,141 $ 185,761 $ 270,902 Lease costs for real estate arrangements are included in general and administrative expenses in the consolidated statements of income. Lease costs for co-location arrangements are primarily included in cost of revenue. Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2023 and 2022 were as follows: December 31, 2023 December 31, 2022 Real Estate Arrangements Co-location Arrangements Real Estate Arrangements Co-location Arrangements Weighted average remaining lease term (in years) 9.9 4.6 10.3 3.9 Weighted average discount rate 3.5 % 4.2 % 3.6 % 2.8 % Maturities of operating lease liabilities as of December 31, 2023 were as follows (in thousands): Real Estate Arrangements Co-location Arrangements 2024 $ 68,713 $ 155,505 2025 68,522 100,765 2026 64,607 80,545 2027 58,988 64,765 2028 54,725 46,010 Thereafter 313,506 67,519 Total lease payments 629,061 515,109 Less: imputed interest 97,716 48,704 Total lease liabilities $ 531,345 $ 466,405 As of December 31, 2023, the Company had additional operating leases for co-location sites that had not yet commenced of $195.0 million, of which a majority will commence in 2024, with lease terms of one year to ten years. The table above excludes $207.4 million of future sublease income that is expected to be recognized through 2034. As of December 31, 2023, the Company had outstanding letters of credit in the amount of $4.9 million, primarily related to operating leases. The letters of credit remain in effect until the Company fulfills its obligations under these leases or as such obligations expire under the terms of the letters of credit. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments The Company enters into long-term agreements with network and internet service providers for bandwidth, as well as executes purchase orders for the purchase of goods or services in the ordinary course of business, which may contain minimum commitments. These minimum commitments may vary from period to period depending on the timing and length of contract renewals with vendors, and on the Company's plans for network expansion, including expansion plans related to the Company's compute business. Minimum commitments are not recorded as liabilities on the consolidated balance sheet until the Company has received the related good or service. Legal Matters The Company is party to various litigation matters that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material effect on the Company’s business, results of operations, financial condition or cash flows. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's business partners, vendors or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright or other intellectual property right or the Company’s negligence, willful misconduct or violation of law. Subject to applicable statutes of limitation, the term of each of these indemnification agreements is generally perpetual from the time of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to its services and activities and that could limit the Company’s exposure in that respect. The Company has agreed to indemnify each of its officers and directors, or employees who serve as officers or directors of its subsidiaries at management's request, during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is or was or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable the Company to recover a portion of certain future amounts paid. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program In November 2018, the board of directors authorized a $1.1 billion repurchase program through December 2021. In October 2021, the board of directors authorized a new $1.8 billion share repurchase program, effective January 2022 through December 2024. The Company's goals for the share repurchase programs are to offset the dilution created by its employee equity compensation programs over time and provide the flexibility to return capital to shareholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities. The following summarizes the share repurchase activity pursuant to the share repurchase programs described above (in thousands): 2023 2022 2021 Repurchases of common stock $ 654,046 $ 608,010 $ 522,255 Number of shares repurchased 7,802 6,403 4,749 As of December 31, 2023, the Company had $537.9 million available for future purchases of shares under the current repurchase program. The board of directors authorized the retirement of all the outstanding shares of its treasury stock as of each of December 31, 2023, 2022 and 2021. The retired shares were returned to the number of authorized but unissued shares of the Company's common stock, and the retirement was recorded to additional paid-in capital. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the years ended December 31, 2023 and 2022 were as follows (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2022 $ (71,809) $ 2,704 $ (69,105) Other comprehensive loss (44,665) (26,562) (71,227) Balance as of December 31, 2022 (116,474) (23,858) (140,332) Other comprehensive income 18,439 26,563 45,002 Balance as of December 31, 2023 $ (98,035) $ 2,705 $ (95,330) Amounts reclassified from accumulated other comprehensive loss to net income were immaterial for the years ended December 31, 2023 and 2022. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company sells its services through a sales force located both domestically and internationally. 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. Revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 U.S. $ 1,968,779 $ 1,902,051 $ 1,837,508 International 1,843,141 1,714,603 1,623,715 Total revenue $ 3,811,920 $ 3,616,654 $ 3,461,223 The Company reports its revenue in three solution categories: security, delivery and compute. Security includes solutions that are designed to protect business online by keeping infrastructure, websites, applications and users safe. Delivery includes solutions that are designed to enable business online, including media delivery and web performance. Compute includes cloud computing, edge applications, cloud optimization and storage. Revenue by solution category included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Security $ 1,765,267 $ 1,541,941 $ 1,334,836 Delivery 1,542,434 1,669,257 1,873,243 Compute 504,219 405,456 253,144 Total revenue $ 3,811,920 $ 3,616,654 $ 3,461,223 Most security, delivery and compute 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 usage commitments that expire each period. Any usage over a given commitment is recognized in the period in which the units are served. A small percentage of the Company's contracts 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 years ended December 31, 2023, 2022 and 2021, the Company recognized $105.9 million, $105.1 million and $78.8 million of revenue that was included in deferred revenue as of December 31, 2022, 2021 and 2020, respectively. As of December 31, 2023, the aggregate amount of remaining performance obligations from contracts with customers was $3.4 billion. The Company expects to recognize approximately 65% of its remaining performance obligations as revenue over the next 12 months. The majority of the remaining balance is expected to be recognized over the next two to three years. 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. Revenue recognized during the years ended December 31, 2023, 2022 and 2021, related to performance obligations satisfied in previous periods was not material. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Compensation Related Costs [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company has established a savings plan for its employees that is designed to be qualified under Section 401(k) of the Internal Revenue Code. Eligible employees are permitted to contribute to this plan through payroll deductions within statutory and plan limits. The Company contributed $19.7 million, $18.8 million and $17.7 million of cash to the savings plan for the years ended December 31, 2023, 2022 and 2021, respectively, under a matching program. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Plans In May 2013, the Company's stockholders approved the Akamai Technologies, Inc. 2013 Stock Incentive Plan, which was amended with Company shareholder approval in each of 2015, 2017, 2019, 2021, 2022 and 2023 (as amended and restated, the "2013 Plan"). The 2013 Plan replaced the Akamai Technologies, Inc. 2009 Stock Incentive Plan (the "2009 Plan"), which in turn replaced the Akamai Technologies, Inc. 2006 Stock Incentive Plan, the Akamai Technologies, Inc. 2001 Stock Incentive Plan and the Akamai Technologies, Inc. 1998 Stock Incentive Plan (such plans, together with the 2009 Plan, the "Previous Plans"). The Company no longer issues equity awards under the Previous Plans, and there are no outstanding equity awards related to those plans. The 2013 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards for up to 33.8 million shares of common stock, subject to certain adjustments, to employees, officers, directors, consultants and advisers of the Company. There are no shares of common stock that are currently outstanding under the Previous Plans available to grant under the 2013 Plan. As of December 31, 2023, the Company had reserved 7.4 million shares of common stock available for future issuance of equity awards under the 2013 Plan. The Company has assumed certain stock incentive plans and the outstanding stock incentives of companies that it has acquired (“Assumed Plans”). Stock awards outstanding as of the date of acquisition under the Assumed Plans were exchanged for the Company’s stock awards and adjusted to reflect the appropriate conversion ratio as specified by the applicable acquisition agreement, but are otherwise administered in accordance with the terms of the Assumed Plans. Stock awards under the Assumed Plans generally vest over three years to four years, and outstanding stock options under the Assumed Plans expire ten years from the date of grant. Additionally, the Company has the 1999 Employee Stock Purchase Plan ("1999 ESPP") that permits eligible employees to purchase up to 1.5 million shares each June 1 and December 1, provided that the aggregate number of shares issued shall not exceed 20.0 million. The 1999 ESPP allows participants to purchase shares of common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six-month intervals. Stock-Based Compensation Expense Components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Cost of revenue $ 43,802 $ 28,354 $ 27,143 Research and development 123,896 78,116 65,950 Sales and marketing 66,453 47,789 46,342 General and administrative 94,316 62,926 63,324 Total stock-based compensation 328,467 217,185 202,759 Provision for income taxes (59,359) (46,829) (56,084) Total stock-based compensation, net of taxes $ 269,108 $ 170,356 $ 146,675 In addition to the amounts of stock-based compensation reported in the table above, the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 also include stock-based compensation reflected as a component of amortization primarily consisting of capitalized internal-use software; the additional stock-based compensation was $32.5 million, $31.3 million and $32.4 million, respectively, before taxes. During 2023, the Company redesigned one of its non-executive short-term incentive compensation programs from a cash-based to a stock-based program that vests in one year. The Company also introduced a non-executive incentive program tied to its initiative to migrate certain applications from third-party cloud platforms onto Akamai Connected Cloud that vests over two years. These programs, headcount growth, an increase in equity award sizes to some new hires and existing employees due to market conditions and expected achievement of executive performance-based compensation plans increased stock-based compensation for the year ended December 31, 2023. As of December 31, 2023, total pre-tax unrecognized compensation cost for stock awards was $462.1 million. The expense is expected to be recognized through 2027 over a weighted average period of 1.6 years. Employee Stock Purchase Plan The following summarizes the activity under the 1999 ESPP (in thousands, except per share amounts): 2023 2022 2021 Shares issued 797 688 649 Weighted average purchase price of shares issued, per share $ 78.29 $ 82.83 $ 92.05 Issuance of common stock $ 62,365 $ 56,570 $ 59,714 As of December 31, 2023, $6.3 million had been withheld from employees for future purchases under the 1999 ESPP. The Company uses the Black-Scholes option pricing model to determine the fair value of the stock awards issued under the Company’s 1999 ESPP. This model requires the input of subjective assumptions, including expected stock price volatility and the estimated term of each award. The estimated fair value of the stock awards issued under the Company's 1999 ESPP, less expected forfeitures, is amortized over the stock awards' six-month contribution period on a straight-line basis. Expected volatilities are based on the Company’s historical stock price volatility. The risk-free interest rate for periods commensurate with the expected term of the stock award is based on the U.S. Treasury yield rate in effect at the time of grant. The expected dividend yield is zero, as the Company currently does not pay a dividend and does not anticipate doing so in the future. The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2023, 2022 and 2021 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: 2023 2022 2021 Expected term (in years) 0.5 0.5 0.5 Risk-free interest rate 5.2 % 1.9 % 0.1 % Expected volatility 29.1 % 26.0 % 32.2 % Dividend yield — % — % — % For the years ended December 31, 2023, 2022 and 2021, the weighted average fair value of awards granted under the 1999 ESPP was $23.12 per share, $33.26 per share and $36.17 per share, respectively. Stock Options As of December 31, 2023 there were no stock options outstanding. The total pre-tax intrinsic value of options exercised during the years ended December 31, 2023 and 2022 was insignificant. The total pre-tax intrinsic value of options exercised during the year ended December 31, 2021 was $0.6 million. No options vested during the years ended December 31, 2023, 2022 and 2021. Restricted Stock Units, Restricted Stock and Deferred Stock Units Restricted stock units ("RSUs") represent the right to receive one share of the Company’s common stock upon vesting, while restricted stock is a grant of one share of the Company's common stock subject to vesting conditions. These awards are granted at the discretion of the board of directors, a committee thereof or, subject to defined limitations, the Chief Executive Officer of the Company, acting as a committee of one director, to whom such authority has been delegated. The Company has issued service-based RSUs and restricted stock that vest based on the passage of time assuming continued service with the Company, market-based RSUs that vest based upon total shareholder return ("TSR") measured against the benchmark TSR of a peer group, and performance-based RSUs that vest only upon the achievement of defined internal performance metrics tied primarily to defined financial metrics. In addition to granting RSUs and restricted stock to its employees, the Company has granted deferred stock units ("DSUs") to non-employee members of its board of directors. These DSUs are granted at the discretion of the board of directors, subject to defined limitations. Each DSU represents the right to receive one share of the Company’s common stock upon vesting. The holder may elect to defer receipt of the vested shares of stock represented by the DSU for a period of at least one year but not more than ten years from the grant date. DSUs vest 100% on the first anniversary of the grant date. If a director has completed one year of service, vesting of 100% of the DSUs held by such director will accelerate at the time of his or her departure from the board. The RSUs, restricted stock and DSUs granted by the Company during the year ended December 31, 2023 were as follows (in thousands): December 31, 2023 Service-based (1) 5,767 Market-based 199 Performance-based 284 Total 6,250 (1) Includes DSU grants of 30,953 shares For service-based RSUs, DSUs and restricted stock, the fair value is calculated based upon the Company’s closing stock price on the date of grant, and the stock-based compensation expense is being recognized over the vesting period. The majority of these awards vest over a three For market-based RSUs, the Company uses the Monte Carlo simulation model to determine the fair value. This model requires the input of assumptions, including the estimated term of each award, the risk-free interest rate, historical stock price volatility of the Company's shares and historical stock price volatility of peer-company shares. The grant-date fair values of the TSR-based RSUs granted during the years ended December 31, 2023, 2022 and 2021 were estimated using a Monte Carlo simulation model with the following assumptions: 2023 2022 2021 Expected term (in years) 3.0 3.0 3.0 Risk-free interest rate 4.5 % 1.7 % 0.3 % Akamai historical share price volatility 28.8 % 30.3 % 32.7 % Average volatility of peer-company share price 33.6 % 40.7 % 39.6 % For performance-based RSUs, management measured compensation expense based upon a review of the Company’s expected achievement against specified financial performance targets. Such compensation cost is being recognized using a graded-vesting method for each series of grants of performance-based RSUs, to the extent management has deemed that such awards are probable of vesting based upon the expected achievement against the specified targets. Each reporting period, management reviews the Company’s expected performance and adjusts the compensation cost, if needed, at such time. RSUs, restricted stock and DSUs award activity for the year ended December 31, 2023 was as follows: Units Weighted Average Grant Date Fair Value Outstanding at January 1, 2023 5,278 $ 121.92 Granted 6,250 74.89 Vested (1) (2,531) 102.70 Forfeited (920) 99.07 Outstanding at December 31, 2023 8,077 $ 83.12 (1) Includes DSUs of 24,422 shares which have vested and been distributed. Excludes DSUs which have vested, but have not yet been distributed The pre-tax intrinsic value and fair value of RSUs, restricted stock and DSUs were as follows (in thousands, except per share amounts): 2023 2022 2021 Pre-tax intrinsic value of awards vested $ 254,686 $ 227,143 $ 226,414 Fair value of awards vested $ 259,919 $ 231,708 $ 233,027 Weighted average fair value of awards granted, per share (1) $ 74.89 $ 107.17 $ 99.09 (1) The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant. As of December 31, 2023, outstanding and unvested RSUs, restricted stock and DSUs had an aggregate intrinsic valu e of $955.9 million and a weighted average remaining vesting period of approximately 1.6 years . These awards are expected to vest on various dates through 2027. As of December 31, 2023 and 2022, the Company had liability-classified awards outstanding of $16.3 million and $3.0 million, respectively. The liability-classified awards outstanding at December 31, 2023 are expected to vest and be re-classified to equity in less than one year. The liability-classified awards outstanding at December 31, 2022 vested and were re-classified to equity in 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before provision for income taxes were as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 U.S. $ 20,146 $ 61,383 $ 70,300 Foreign 632,381 596,620 657,921 Income before provision for income taxes $ 652,527 $ 658,003 $ 728,221 The provision for income taxes consisted of the following for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 Current tax provision: Federal $ 23,406 $ 49,808 $ 11,824 State 6,731 9,214 8,515 Foreign 99,223 172,645 90,026 Deferred tax benefit: Federal (18,213) (73,826) (33,366) State (6,692) (18,657) (14,611) Foreign (2,536) (16,595) (4,358) Change in valuation allowance 4,454 4,107 4,541 Total $ 106,373 $ 126,696 $ 62,571 The Company’s effective tax rate differed from the U.S. federal statutory tax rate as follows for the years ended December 31, 2023, 2022 and 2021: 2023 2022 2021 U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State taxes 1.0 0.7 0.7 Stock-based compensation 3.6 2.0 0.1 U.S. federal, state and foreign research and development credits (4.7) (5.1) (3.7) Foreign earnings (6.5) (6.6) (7.3) Nondeductible (nontaxable) foreign items (0.2) 0.7 — Global intangible low-taxed income 1.1 2.5 0.5 Release of uncertain tax position reserve (0.4) (0.7) (1.0) Intercompany sale of intellectual property 0.6 4.0 — Valuation allowance 0.7 0.6 0.6 Foreign-derived intangible income (1.1) (0.8) (0.5) Other 1.2 1.0 (1.8) 16.3 % 19.3 % 8.6 % The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Accrued bonus $ 3,716 $ 21,181 Deferred revenue 14,223 11,925 Operating lease liabilities 116,752 125,567 Stock-based compensation 42,856 19,874 NOLs 19,791 18,172 Tax credit carryforwards 96,020 93,672 Capitalized research and development costs 108,592 43,215 Convertible senior notes interest 111,509 75,603 Depreciation and amortization 66,053 79,595 Other 21,856 28,879 Deferred tax assets 601,368 517,683 Acquired intangible assets (12,126) (530) Operating lease right-of-use assets (103,392) (113,118) Deferred commissions (14,752) (12,949) Capitalized internal-use software development costs (31,719) (30,559) Deferred tax liabilities (161,989) (157,156) Valuation allowance (45,704) (41,250) Net deferred tax assets $ 393,675 $ 319,277 As summary of activity in the valuation allowance on deferred tax assets for the years ended December 31, 2023, 2022 and 2021 is as follows (in thousands): 2023 2022 2021 Beginning balance $ 41,250 $ 37,143 $ 32,602 Charges to income tax expense 4,814 4,392 4,707 Release of valuation allowance (360) (285) (166) Ending balance $ 45,704 $ 41,250 $ 37,143 Valuation allowances will be recognized on deferred tax assets if it is more-likely-than-not that some or all of the deferred tax assets will not be utilized. In measuring deferred tax assets, the Company considers all available evidence, both positive and negative, to determine whether a valuation allowance is needed. As of December 31, 2023, the Company recorded a $45.7 million valuation allowance against deferred tax assets related to state and foreign tax credits, foreign tax deductions and state and foreign NOLs in which it is more-likely-than-not that such attributes will expire prior to utilization. The increase in the valuation allowance during 2023 was $4.5 million. The increase in the valuation allowance is primarily related to state tax credits and foreign tax deductions. The Company's NOL and tax credit carryforwards in U.S. federal, state and foreign jurisdictions as of December 31, 2023 and 2022 were as follows (in thousands, except years): 2023 2022 Expirations at Various Dates Through: NOL carryforwards: Federal $ 32,700 $ 30,100 2037 State 33,100 22,400 2043 Foreign 42,600 40,100 2039 Federal and state research and development tax credit and other credit carryforwards 125,200 121,300 2038 A portion of the Company's U.S. federal, state and foreign NOL carryforwards relate to acquisitions completed between 2012 and 2023. As of December 31, 2023, accumulated earnings outside the U.S. totaled $2.1 billion, the majority of which have been taxed due to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings and the tax on global intangible low-taxed income required by the U.S. Tax Cuts and Jobs Act ("TCJA"). No provision for U.S. state income taxes and foreign withholding taxes has been provided for any remaining undistributed foreign earnings not subject to tax under the TCJA, or any additional basis differences inherent in the Company's international subsidiaries, as these amounts continue to be indefinitely reinvested. Determination of the amount of the unrecognized deferred tax liability on outside basis differences is not practicable because of the complexity of laws and regulations, the varying tax treatment of alternative repatriation scenarios and the variation due to multiple potential assumptions relating to the timing of any future repatriation. The changes in the Company’s unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Balance at beginning of year $ 67,958 $ 22,563 $ 24,105 Gross increases – tax positions of prior periods 2,074 3,880 4,293 Gross increases – current period tax positions 4,091 45,975 3,607 Gross decreases – tax positions of prior periods (3,685) (688) (816) Gross decreases – lapse of applicable statute of limitations (1,780) (3,772) (8,626) Balance at end of year $ 68,658 $ 67,958 $ 22,563 As of December 31, 2023, 2022 and 2021, the Company had $39.1 million, $38.3 million and $23.1 million of unrecognized tax benefits, respectively. Total interest and penalties for unrecognized tax benefits includes $11.0 million, $8.6 million and $7.2 million as of December 31, 2023, 2022 and 2021, respectively. Interest and penalties related to unrecognized tax benefits are recorded in the provision for income taxes and were $2.4 million, $2.0 million and $0.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. The amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate is $36.0 million. As of December 31, 2023, it is reasonably possible that $3.8 million of unrecognized tax benefits may be recognized within the next 12 months due to the expiration of local statutes of limitations. Certain U.S. state and foreign income tax returns from 2015 through 2021 are currently under audit. The Company has reserved for those positions that are not more-likely-than-not to be sustained. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock awards, convertible senior notes and warrants issued by the Company. For the year ended December 31, 2023 and 2022, the dilutive effect of outstanding stock awards is reflected in diluted earnings per share by application of the treasury stock method and the dilutive effect of the convertible securities is reflected in diluted earnings per share by application of the if-converted method. For the year ended December 31, 2021, the dilutive effect of outstanding stock awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. The components used in the computation of basic and diluted net income per share for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands, except per share data): 2023 2022 2021 Numerator: Net income $ 547,629 $ 523,672 $ 651,642 Denominator: Shares used for basic net income per share 152,510 159,089 162,665 Effect of dilutive securities: Stock awards 2,312 658 1,539 Convertible senior notes 575 720 1,600 Warrants related to issuance of convertible senior notes — — — Shares used for diluted net income per share 155,397 160,467 165,804 Basic net income per share $ 3.59 $ 3.29 $ 4.01 Diluted net income per share $ 3.52 $ 3.26 $ 3.93 For the years ended December 31, 2023, 2022 and 2021, certain potential outstanding shares from service-based stock awards, convertible senior 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 market- and performance-based stock awards were excluded from the computation of diluted net income per share because the underlying market and performance conditions for such stock awards had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Service-based stock awards 2,947 2,211 776 Market- and performance-based stock awards 1,371 1,030 1,199 Convertible senior notes — — 9,898 Warrants related to issuance of convertible senior notes 26,998 21,991 21,991 Total shares excluded from computation 31,316 25,232 33,864 |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision-maker is the chief executive officer and the executive management team. As of December 31, 2023, the Company is currently organized and operates as one operating and reportable segment. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate entities and does not have separate operating or reportable segments. The Company deploys its servers into networks worldwide. Net property and equipment, excluding internal-use software, and operating lease right-of-use assets, located in the U.S. and international locations, as of December 31, 2023 and 2022 was as follows (in thousands): December 31, 2023 December 31, 2022 Property and equipment, net, excluding internal-use software, located in the U.S. $ 639,816 $ 568,590 Property and equipment, net, excluding internal-use software, located internationally 616,750 516,127 Operating lease right-of-use assets located in the U.S. 624,489 608,854 Operating lease right-of-use assets located internationally 284,145 204,518 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 547,629 | $ 523,672 | $ 651,642 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | The following table describes, for the quarterly period ending December 31, 2023, each trading arrangement for the sale or purchase of Company securities adopted, terminated or for which the amount, pricing or timing provisions were modified by our directors and officers that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 trading arrangement”) or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K): Name (Title) Action Taken (Date of Action) Type of Trading Arrangement Nature of Trading Arrangement Duration of Trading Arrangement Aggregate Number of Securities to be Purchased or Sold Mani Sundaram (Executive Vice President and General Manager of the Security Technology Group) Adoption (December 5, 2023) Rule 10b5-1 trading arrangement Sales Until March 9, 2025, or such earlier date upon which all transactions are completed or expire without execution Up to 7,461 shares of common stock Edward McGowan (Chief Financial Officer and Treasurer) Adoption (December 6, 2023) Rule 10b5-1 trading arrangement Sales Until September 6, 2024, or such earlier date upon which all transactions are completed or expire without execution Up to 35,003 shares of common stock 1 Adam Karon (Chief Operating Officer and General Manager of the Cloud Technology Group) Adoption (December 8, 2023) Rule 10b5-1 trading arrangement Sales Until September 8, 2024, or such earlier date upon which all transactions are completed or expire without execution Up to 61,444 shares of common stock 2 Aaron Ahola (General Counsel and Corporate Secretary) Adoption (December 11, 2023) Rule 10b5-1 trading arrangement Sales Until June 11, 2024, or such earlier date upon which all transactions are completed or expire without execution Up to 16,489 shares of common stock 3 (1) The Rule 10b5-1 trading arrangement provides for the sale of a percentage of shares to be received upon future vesting of certain outstanding equity awards, net of any shares withheld by us to satisfy applicable taxes. The number of shares to be withheld, and thus the exact number of shares to be sold pursuant to Mr. McGowan's Rule 10b5-1 trading arrangement, can only be determined upon the occurrence of future vesting events. For purposes of this disclosure, we have reported the maximum aggregate number of shares to be sold without subtracting any shares to be withheld upon future vesting events. (2) The Rule 10b5-1 trading arrangement provides for the sale of a percentage of shares to be received upon future vesting of certain outstanding equity awards, net of any shares withheld by us to satisfy applicable taxes. The number of shares to be withheld, and thus the exact number of shares to be sold pursuant to Mr. Karon's Rule 10b5-1 trading arrangement, can only be determined upon the occurrence of future vesting events. For purposes of this disclosure, we have reported the maximum aggregate number of shares to be sold without subtracting any shares to be withheld upon future vesting events. (3) The Rule 10b5-1 trading arrangement provides for the sale of a percentage of shares to be received upon future vesting of certain outstanding equity awards, net of any shares withheld by us to satisfy applicable taxes. The number of shares to be withheld, and thus the exact number of shares to be sold pursuant to Mr. Ahola's Rule 10b5-1 trading arrangement, can only be determined upon the occurrence of future vesting events. For purposes of this disclosure, we have reported the maximum aggregate number of shares to be sold without subtracting any shares to be withheld upon future vesting events. | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Mani Sundaram [Member] | ||
Trading Arrangements, by Individual | ||
Name | Mani Sundaram | |
Title | Executive Vice President and General Manager of the Security Technology Group | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 5, 2023 | |
Arrangement Duration | 460 days | |
Aggregate Available | 7,461 | 7,461 |
Edward McGowan [Member] | ||
Trading Arrangements, by Individual | ||
Name | Edward McGowan | |
Title | Chief Financial Officer and Treasurer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 6, 2023 | |
Arrangement Duration | 275 days | |
Aggregate Available | 35,003 | 35,003 |
Adam Karon [Member] | ||
Trading Arrangements, by Individual | ||
Name | Adam Karon | |
Title | Chief Operating Officer and General Manager of the Cloud Technology Group | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 8, 2023 | |
Arrangement Duration | 275 days | |
Aggregate Available | 61,444 | 61,444 |
Aaron Ahola [Member] | ||
Trading Arrangements, by Individual | ||
Name | Aaron Ahola | |
Title | General Counsel and Corporate Secretary | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 11, 2023 | |
Arrangement Duration | 183 days | |
Aggregate Available | 16,489 | 16,489 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its fixed income securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. |
Accounts Receivable and Related Reserves | Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. |
Revenue Recognition, Incremental Costs to Obtain a Contract with a Customer, Contract Liabilities and Cost of Revenue | 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. 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 three years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. 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. Amortization of the costs 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. 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 security solutions, the delivery of content, applications and software over the internet, cloud computing 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 security, delivery and compute 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 usage commitments that expire each period. Any bursting over given commitments is recognized in the period in which the usage 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 contracts are satisfied at a point in time, such as one-time professional services, 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. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost. |
Concentrations of Credit Risk | Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2023, its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2023, 2022 and 2021, no customer accounted for more than 10% of total revenue. As of December 31, 2023, no customer had an accounts receivable balance greater than 10% of total accounts receivable, and as of December 31, 2022, there was one customer with an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2023 and 2022, its concentration of credit risk related to accounts receivable was not significant. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. When the Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities, they are classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred. The Company has implemented software and hardware initiatives to manage its global network more efficiently and, as a result, the expected average useful life of its servers increased from five years to six years, effective January 1, 2023. These changes decreased depreciation expense by $62.7 million for the year ended December 31, 2023, and increased net income by $52.3 million, or $0.34 per share, for the year ended December 31, 2023. |
Operating Leases | Operating Leases The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset. Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the implicit rates in the Company’s leases are not readily determinable, an incremental borrowing rate has been applied based on the Company's credit-adjusted risk-free rate. The Company often enters into contracts that contain both lease and non-lease components. Real estate non-lease components include real estate taxes, insurance, maintenance, parking and other operating costs. Co-location non-lease components include utilities and other operating costs. The Company accounts for both lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, primarily utilities based on actual usage, common area maintenance and real estate taxes, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The Company’s lease terms often include renewal options and, particularly in the case of co-location arrangements, may include evergreen provisions. The Company’s right-of-use assets and lease liabilities generally do not include the options to extend, or terminate, unless it is reasonably certain that the Company will exercise these options. The Company has elected to exclude leases for certain networking equipment and leases assumed through acquisitions with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. Reductions in right-of-use assets and changes in lease liabilities are presented on a net basis within other non-current assets and liabilities within the operating section of the Company's consolidated statement of cash flows. |
Equity Method Investments | Equity Method Investments The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses. |
Goodwill, Acquired Intangible Assets and Long-Lived Assets | Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2023, 2022 and 2021, the Company concluded that it has one reporting unit and that its chief operating decision maker is its chief executive officer and the executive management team. The Company has assigned the entire balance of goodwill to one reporting unit. The fair value of the reporting unit was based on the Company's market capitalization as of each of December 31, 2023 and 2022, and it was substantially in excess of the carrying value of the reporting unit at each date. The fair value of the Company's reporting unit was determined by the Company's enterprise value as of the years ended December 31, 2023, 2022 and 2021. Acquired intangible assets consist of completed technologies, customer-related intangible assets, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Significant judgment is used in determining fair values of acquired intangibles assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. Long-lived assets, including property and equipment, operating lease right-of-use assets and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. |
Research and Development Costs and Capitalized Internal-Use Software | Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s solutions and Akamai Connected Cloud. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s engineering, research and development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life. |
Restructuring Charges | Restructuring Charges The Company classifies certain expenses as restructuring charges that result from programs that have significantly changed either the scope of the business undertaken by management or the manner in which that business is conducted. These charges include employee severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. Employee severance and related expenses are recognized when the action giving rise to the expense is probable. Employee severance and related expenses are based upon contractual severance plans. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company issues various forms of stock-based compensation, which includes stock options, restricted stock, restricted stock units and deferred stock units, and has an employee stock purchase plan (collectively referred to as "stock awards"). The Company’s stock awards are classified as equity and the fair value is determined at the time of grant, unless the number of shares to be granted is unknown. Stock awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares are known, at which time the stock awards are re-classified to equity. For liability-classified awards, the fair value is determined each reporting period beginning at the grant date until final vesting. The Company has selected the Black-Scholes option-pricing model to determine the fair value of its stock options. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock awards that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance-based vesting condition feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. |
Foreign Currency Translation and Forward Currency Contracts | Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other (expense) income, net. The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other income (expense), net. As of December 31, 2023 and 2022, the fair value of the forward currency contracts and the underlying gains and losses for the years ended December 31, 2023, 2022 and 2021 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating. |
Income Taxes | Income Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. |
Recently Adopted Accounting Pronouncements And Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2022, the Company adopted guidance issued by the Financial Accounting Standards Board ("FASB") associated with accounting for convertible instruments and contracts in an entity’s own equity on a modified retrospective basis. Prior to the adoption of this guidance, the Company separated its convertible senior notes into a liability and an equity component. The equity portion was eliminated. The net effect of adoption was recorded as an increase of $140.0 million to retained earnings as of January 1, 2022. With the elimination of the debt discount created by the equity component, amortization of the debt discount to interest expense was eliminated. Additionally, the guidance eliminated the application of the treasury stock method and required the application of the if-converted method for convertible instruments that can be settled in whole or in part with equity, when calculating diluted earnings per share. Recent Accounting Pronouncements In December 2023, the FASB issued guidance to improve income tax disclosures, primarily through enhanced disclosures for the rate reconciliation and income taxes paid, in addition to the modification or elimination of other disclosures. This guidance will be effective for the Company's annual period ending December 31, 2025 and is to be applied prospectively with the option to adopt retrospectively. The Company is evaluating the impact the update will have on its disclosures. In November 2023, the FASB issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense and application of all segment disclosure requirements to entities with a single reportable segment. This guidance will be effective for the Company's annual period ending December 31, 2024 and interim periods beginning on January 1, 2025 and is to be applied retrospectively. The Company is evaluating the impact the update will have on its disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | Available-for-sale marketable securities held as of December 31, 2023 and 2022 were as follows (in thousands): Gross Unrealized Aggregate Classification on Balance Sheet Amortized Cost Short-Term Long-Term As of December 31, 2023 Gains Losses Time deposits $ 14,426 $ — $ — $ 14,426 $ 14,426 $ — Commercial paper 6,249 — (5) 6,244 6,244 — Corporate bonds 1,328,980 6,429 (4,201) 1,331,208 276,975 1,054,233 U.S. government agency obligations 428,157 2,462 (979) 429,640 74,369 355,271 $ 1,777,812 $ 8,891 $ (5,185) $ 1,781,518 $ 372,014 $ 1,409,504 As of December 31, 2022 Time deposits $ 19,530 $ — $ — $ 19,530 $ 19,530 $ — Corporate bonds 624,082 — (21,029) 603,053 362,458 240,595 U.S. government agency obligations 252,573 — (10,391) 242,182 180,320 61,862 $ 896,185 $ — $ (31,420) $ 864,765 $ 562,308 $ 302,457 |
Fair Value Measurement Within Fair Value Hierarchy | The fair value measurements within the fair value hierarchy of the Company’s financial assets as of December 31, 2023 and 2022 were as follows (in thousands): Total Fair Value Fair Value Measurements at Reporting Date Using Level 1 Level 2 As of December 31, 2023 Cash Equivalents and Marketable Securities: Money market funds $ 177,240 $ 177,240 $ — Time deposits 39,670 — 39,670 Commercial paper 6,244 — 6,244 Corporate bonds 1,331,208 — 1,331,208 U.S. government agency obligations 429,640 — 429,640 Mutual funds 22,942 22,942 — $ 2,006,944 $ 200,182 $ 1,806,762 As of December 31, 2022 Cash Equivalents and Marketable Securities: Money market funds $ 999 $ 999 $ — Time deposits 285,830 — 285,830 Corporate bonds 603,053 — 603,053 U.S. government agency obligations 242,182 — 242,182 Mutual funds 18,745 18,745 — $ 1,150,809 $ 19,744 $ 1,131,065 |
Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets | Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Due in 1 year or less $ 372,014 $ 562,308 Due after 1 year through 5 years 1,409,504 302,457 $ 1,781,518 $ 864,765 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Accounts Receivable | Net accounts receivable consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Trade accounts receivable $ 516,175 $ 490,162 Unbilled accounts receivable 211,596 194,961 Gross accounts receivable 727,771 685,123 Allowances for current expected credit losses and other reserves (3,469) (5,917) Accounts receivable, net $ 724,302 $ 679,206 |
Schedule of Activity in the Accounts Receivable Reserves | A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Beginning balance $ 5,917 $ 1,397 $ 1,822 Charges to income from operations 13,431 9,292 4,576 Collections from customers previously reserved and other (15,879) (4,772) (5,001) Ending balance $ 3,469 $ 5,917 $ 1,397 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expense and other current assets | Prepaid expenses and other current assets consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Prepaid income taxes $ 33,448 $ 33,898 Prepaid sales and other taxes 40,843 31,285 Prepaid software and related service costs 29,155 28,022 Deferred commissions 44,383 37,316 Other prepaid expenses 26,316 39,520 Other current assets 41,969 14,999 Total $ 216,114 $ 185,040 |
Schedule of deferred costs associated with obtaining customer contracts | Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 December 31, 2022 Deferred costs included in prepaid expenses and other current assets $ 44,383 $ 37,316 Deferred costs included in other assets 42,738 29,069 Total deferred costs $ 87,121 $ 66,385 Information related to incremental costs to obtain a contract with a customer for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Amortization expense related to deferred costs $ 50,414 $ 52,691 $ 58,433 Incremental costs capitalized 70,072 47,416 56,509 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2023 and 2022 (in thousands, except years): December 31, 2023 December 31, 2022 Estimated Useful Life Computer and networking equipment $ 2,456,470 $ 2,139,518 3-7 Purchased software 96,979 89,695 3-10 Furniture and fixtures 67,657 71,427 1-7 Office equipment 40,546 41,866 3-5 Leasehold improvements 214,712 229,037 1-15 Internal-use software 1,829,933 1,529,264 2-10 Property and equipment, gross 4,706,297 4,100,807 Accumulated depreciation and amortization (2,880,353) (2,560,625) Property and equipment, net $ 1,825,944 $ 1,540,182 |
Acquired Intangible Assets an_2
Acquired Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Completed technologies $ 354,539 $ (196,572) $ 157,967 $ 327,848 $ (162,323) $ 165,525 Customer-related intangible assets 616,267 (273,758) 342,509 480,817 (244,158) 236,659 Non-compete agreements — — — 244 (183) 61 Trademarks and trade names 14,659 (9,117) 5,542 14,642 (7,585) 7,057 Acquired license rights 34,810 (4,685) 30,125 34,810 (2,396) 32,414 Total $ 1,020,275 $ (484,132) $ 536,143 $ 858,361 $ (416,645) $ 441,716 Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 84,200 16.8 Completed technologies 70,900 5.8 Acquired license rights 34,320 15.0 Trademarks and trade name 6,600 8.8 Total $ 196,020 Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Completed technologies $ 79,000 15.0 Customer-related intangible assets 44,200 14.0 Trademarks 400 1.9 Total $ 123,600 |
Schedule of the Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Beginning balance $ 2,763,838 $ 2,156,254 Acquisition of StorageOS, Inc. 14,046 — Acquisition of Neosec, Inc. 66,882 — Acquisition of Linode Limited Liability Company — 617,292 Measurement period adjustments related to acquisitions completed in prior years — 724 Foreign currency translation 5,704 (10,432) Ending balance $ 2,850,470 $ 2,763,838 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocation | The allocation of the purchase price for Linode was as follows (in thousands): Total purchase consideration $ 898,516 Allocation of the purchase consideration: Cash $ 26,678 Accounts receivable 7,171 Prepaid expenses and other current assets 4,478 Property and equipment 56,268 Operating lease right-of-use assets 17,000 Identifiable intangible assets 196,020 Deferred income tax assets 2,528 Other assets 292 Total assets acquired 310,435 Accounts payable (5,767) Accrued expenses (1,958) Operating lease liabilities (17,235) Other liabilities (4,251) Total liabilities assumed (29,211) Net assets acquired 281,224 Goodwill $ 617,292 The allocation of the purchase price for Guardicore was as follows (in thousands): Total purchase consideration $ 610,693 Allocation of the purchase consideration: Cash $ 27,252 Accounts receivable 10,179 Prepaid expenses and other current assets 1,307 Property and equipment 1,211 Operating lease right-of-use assets 2,657 Identifiable intangible assets 123,600 Deferred income tax assets 9,686 Other assets 890 Total assets acquired 176,782 Accounts payable (1,523) Accrued liabilities (7,742) Deferred revenue (35,658) Operating lease liabilities (1,000) Total liabilities assumed (45,923) Net assets acquired $ 130,859 Goodwill 479,834 |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Completed technologies $ 354,539 $ (196,572) $ 157,967 $ 327,848 $ (162,323) $ 165,525 Customer-related intangible assets 616,267 (273,758) 342,509 480,817 (244,158) 236,659 Non-compete agreements — — — 244 (183) 61 Trademarks and trade names 14,659 (9,117) 5,542 14,642 (7,585) 7,057 Acquired license rights 34,810 (4,685) 30,125 34,810 (2,396) 32,414 Total $ 1,020,275 $ (484,132) $ 536,143 $ 858,361 $ (416,645) $ 441,716 Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 84,200 16.8 Completed technologies 70,900 5.8 Acquired license rights 34,320 15.0 Trademarks and trade name 6,600 8.8 Total $ 196,020 Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Completed technologies $ 79,000 15.0 Customer-related intangible assets 44,200 14.0 Trademarks 400 1.9 Total $ 123,600 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Payroll and other related benefits $ 143,010 $ 172,670 Income taxes payable 70,017 76,459 Bandwidth and co-location expenses 78,210 79,937 Property, use and other taxes 38,270 30,711 Convertible senior notes interest 6,807 1,613 Other accrued expenses 15,867 5,627 Total $ 352,181 $ 367,017 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Accrual | The activity of the Company's accrual for employee severance and related benefits for all restructuring actions during the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Beginning balance $ 541 $ 1,188 $ 22,051 Costs incurred 21,085 747 6,600 Cash disbursements (20,748) (1,209) (27,095) Translation adjustments and other (41) (185) (368) Ending balance $ 837 $ 541 $ 1,188 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The following table summarizes further details of the Notes: Notes Issuance Date Maturity Date Principal Amount (in thousands) Coupon Interest Rate Effective Interest Rate 2029 Notes August 18, 2023 February 15, 2029 $ 1,265,000 1.125 % 1.388 % 2027 Notes August 16, 2019 September 1, 2027 $ 1,150,000 0.375 % 0.539 % 2025 Notes May 21, 2018 May 1, 2025 $ 1,150,000 0.125 % 0.350 % The conversion rights of the Notes are as follows: Notes Conversion Date Conversion Rate (1) Conversion Price per Share (1) 2029 Notes October 15, 2028 7.9170 $ 126.31 2027 Notes May 1, 2027 8.6073 $ 116.18 2025 Notes January 1, 2025 10.5150 $ 95.10 (1) The conversion rate for the Notes is established as a number of shares of the Company's commons stock per $1,000 principal amount of the Notes, that is equivalent to the conversion price per share, subject to adjustments in certain events. Upon the occurrence of certain corporate events the Company will increase the conversion rate for a holder that elects to convert its Notes. The Notes consisted of the following components as of December 31, 2023 and 2022 (in thousands): 2029 Notes 2027 Notes 2025 Notes Total As of December 31, 2023 Principal $ 1,265,000 $ 1,150,000 $ 1,150,000 $ 3,565,000 Less: issuance costs, net of amortization (16,478) (6,831) (3,462) (26,771) Net carrying amount $ 1,248,522 $ 1,143,169 $ 1,146,538 $ 3,538,229 Estimated fair value (1) $ 1,376,915 $ 1,289,219 $ 1,467,274 $ 4,133,408 As of December 31, 2022 Principal $ — $ 1,150,000 $ 1,150,000 $ 2,300,000 Less: issuance costs, net of amortization — (8,707) (6,035) (14,742) Net carrying amount $ — $ 1,141,293 $ 1,143,965 $ 2,285,258 Estimated fair value (1) $ — $ 1,111,038 $ 1,209,076 $ 2,320,114 (1) The fair values were determined based on the quoted prices of the Notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 within the fair value hierarchy. 2029 Notes 2027 Notes 2025 Notes Note hedge transaction costs $ 236,555 $ 312,225 $ 261,740 Shares covered by note hedge transactions 10,015 9,898 12,093 Shares related to warrant transactions 10,015 9,898 12,093 Strike price per share related to warrant transactions $ 180.44 $ 178.74 $ 149.18 Aggregate proceeds from sale of warrants $ 90,195 $ 185,150 $ 119,945 |
Schedule of Interest Expense | Interest expense, together with ongoing commitment fees under the terms of the Company's credit agreements, included in the consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Amortization of debt discount and issuance costs $ 5,803 $ 4,688 $ 69,697 Coupon interest payable on 2029 Notes 5,218 — — Coupon interest payable on 2027 Notes 4,312 4,312 4,313 Coupon interest payable on 2025 Notes 1,436 1,437 1,437 Interest payable and commitment fees under the credit agreements 1,402 952 557 Capitalization of interest expense (462) (293) (3,672) Total interest expense $ 17,709 $ 11,096 $ 72,332 Prior to the adoption of the new guidance for accounting for convertible instruments on January 1, 2022, the Company also amortized as interest expense the value of debt discounts of the 2027 Notes and the 2025 Notes. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Components of Lease Expense | The Company’s operating lease costs for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): Real Estate Arrangements Co-location Arrangements Total 2023 Operating lease cost $ 74,054 $ 179,552 $ 253,606 Short-term lease cost 133 23,565 23,698 Variable lease cost 25,860 62,084 87,944 Sublease income (32,024) — (32,024) Total operating lease costs $ 68,023 $ 265,201 $ 333,224 2022 Operating lease cost $ 82,761 $ 152,215 $ 234,976 Short-term lease cost 52 21,741 21,793 Variable lease cost 25,167 35,025 60,192 Sublease income (25,743) — (25,743) Total operating lease costs $ 82,237 $ 208,981 $ 291,218 2021 Operating lease cost $ 84,100 $ 136,673 $ 220,773 Short-term lease cost 58 17,660 17,718 Variable lease cost 22,016 31,428 53,444 Sublease income (21,033) — (21,033) Total operating lease costs $ 85,141 $ 185,761 $ 270,902 |
Weighted Average Remaining Lease Terms and Discount Rates | Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2023 and 2022 were as follows: December 31, 2023 December 31, 2022 Real Estate Arrangements Co-location Arrangements Real Estate Arrangements Co-location Arrangements Weighted average remaining lease term (in years) 9.9 4.6 10.3 3.9 Weighted average discount rate 3.5 % 4.2 % 3.6 % 2.8 % |
Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2023 were as follows (in thousands): Real Estate Arrangements Co-location Arrangements 2024 $ 68,713 $ 155,505 2025 68,522 100,765 2026 64,607 80,545 2027 58,988 64,765 2028 54,725 46,010 Thereafter 313,506 67,519 Total lease payments 629,061 515,109 Less: imputed interest 97,716 48,704 Total lease liabilities $ 531,345 $ 466,405 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Repurchased Activity | The following summarizes the share repurchase activity pursuant to the share repurchase programs described above (in thousands): 2023 2022 2021 Repurchases of common stock $ 654,046 $ 608,010 $ 522,255 Number of shares repurchased 7,802 6,403 4,749 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the years ended December 31, 2023 and 2022 were as follows (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2022 $ (71,809) $ 2,704 $ (69,105) Other comprehensive loss (44,665) (26,562) (71,227) Balance as of December 31, 2022 (116,474) (23,858) (140,332) Other comprehensive income 18,439 26,563 45,002 Balance as of December 31, 2023 $ (98,035) $ 2,705 $ (95,330) |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 U.S. $ 1,968,779 $ 1,902,051 $ 1,837,508 International 1,843,141 1,714,603 1,623,715 Total revenue $ 3,811,920 $ 3,616,654 $ 3,461,223 2023 2022 2021 Security $ 1,765,267 $ 1,541,941 $ 1,334,836 Delivery 1,542,434 1,669,257 1,873,243 Compute 504,219 405,456 253,144 Total revenue $ 3,811,920 $ 3,616,654 $ 3,461,223 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Expense | Components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Cost of revenue $ 43,802 $ 28,354 $ 27,143 Research and development 123,896 78,116 65,950 Sales and marketing 66,453 47,789 46,342 General and administrative 94,316 62,926 63,324 Total stock-based compensation 328,467 217,185 202,759 Provision for income taxes (59,359) (46,829) (56,084) Total stock-based compensation, net of taxes $ 269,108 $ 170,356 $ 146,675 |
Schedule of Employee Stock Purchase Plan Activity | The following summarizes the activity under the 1999 ESPP (in thousands, except per share amounts): 2023 2022 2021 Shares issued 797 688 649 Weighted average purchase price of shares issued, per share $ 78.29 $ 82.83 $ 92.05 Issuance of common stock $ 62,365 $ 56,570 $ 59,714 |
Schedule of Assumptions Used | The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2023, 2022 and 2021 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: 2023 2022 2021 Expected term (in years) 0.5 0.5 0.5 Risk-free interest rate 5.2 % 1.9 % 0.1 % Expected volatility 29.1 % 26.0 % 32.2 % Dividend yield — % — % — % 2023 2022 2021 Expected term (in years) 3.0 3.0 3.0 Risk-free interest rate 4.5 % 1.7 % 0.3 % Akamai historical share price volatility 28.8 % 30.3 % 32.7 % Average volatility of peer-company share price 33.6 % 40.7 % 39.6 % |
Schedule of Restricted Stock Units by Type | The RSUs, restricted stock and DSUs granted by the Company during the year ended December 31, 2023 were as follows (in thousands): December 31, 2023 Service-based (1) 5,767 Market-based 199 Performance-based 284 Total 6,250 (1) Includes DSU grants of 30,953 shares |
Schedule of Restricted Stock Units Activity | RSUs, restricted stock and DSUs award activity for the year ended December 31, 2023 was as follows: Units Weighted Average Grant Date Fair Value Outstanding at January 1, 2023 5,278 $ 121.92 Granted 6,250 74.89 Vested (1) (2,531) 102.70 Forfeited (920) 99.07 Outstanding at December 31, 2023 8,077 $ 83.12 |
Schedule of Total Fair Value of Stock Activity | The pre-tax intrinsic value and fair value of RSUs, restricted stock and DSUs were as follows (in thousands, except per share amounts): 2023 2022 2021 Pre-tax intrinsic value of awards vested $ 254,686 $ 227,143 $ 226,414 Fair value of awards vested $ 259,919 $ 231,708 $ 233,027 Weighted average fair value of awards granted, per share (1) $ 74.89 $ 107.17 $ 99.09 (1) The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Tax | The components of income before provision for income taxes were as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 U.S. $ 20,146 $ 61,383 $ 70,300 Foreign 632,381 596,620 657,921 Income before provision for income taxes $ 652,527 $ 658,003 $ 728,221 |
Schedule of Provision for Income Tax | The provision for income taxes consisted of the following for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 Current tax provision: Federal $ 23,406 $ 49,808 $ 11,824 State 6,731 9,214 8,515 Foreign 99,223 172,645 90,026 Deferred tax benefit: Federal (18,213) (73,826) (33,366) State (6,692) (18,657) (14,611) Foreign (2,536) (16,595) (4,358) Change in valuation allowance 4,454 4,107 4,541 Total $ 106,373 $ 126,696 $ 62,571 |
Schedule of Difference Between Effective and Statutory | The Company’s effective tax rate differed from the U.S. federal statutory tax rate as follows for the years ended December 31, 2023, 2022 and 2021: 2023 2022 2021 U.S. federal income tax rate 21.0 % 21.0 % 21.0 % State taxes 1.0 0.7 0.7 Stock-based compensation 3.6 2.0 0.1 U.S. federal, state and foreign research and development credits (4.7) (5.1) (3.7) Foreign earnings (6.5) (6.6) (7.3) Nondeductible (nontaxable) foreign items (0.2) 0.7 — Global intangible low-taxed income 1.1 2.5 0.5 Release of uncertain tax position reserve (0.4) (0.7) (1.0) Intercompany sale of intellectual property 0.6 4.0 — Valuation allowance 0.7 0.6 0.6 Foreign-derived intangible income (1.1) (0.8) (0.5) Other 1.2 1.0 (1.8) 16.3 % 19.3 % 8.6 % |
Net Deferred Tax and Valuation Allowance | The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2023 and 2022 were as follows (in thousands): 2023 2022 Accrued bonus $ 3,716 $ 21,181 Deferred revenue 14,223 11,925 Operating lease liabilities 116,752 125,567 Stock-based compensation 42,856 19,874 NOLs 19,791 18,172 Tax credit carryforwards 96,020 93,672 Capitalized research and development costs 108,592 43,215 Convertible senior notes interest 111,509 75,603 Depreciation and amortization 66,053 79,595 Other 21,856 28,879 Deferred tax assets 601,368 517,683 Acquired intangible assets (12,126) (530) Operating lease right-of-use assets (103,392) (113,118) Deferred commissions (14,752) (12,949) Capitalized internal-use software development costs (31,719) (30,559) Deferred tax liabilities (161,989) (157,156) Valuation allowance (45,704) (41,250) Net deferred tax assets $ 393,675 $ 319,277 |
Summary of Valuation Allowance | As summary of activity in the valuation allowance on deferred tax assets for the years ended December 31, 2023, 2022 and 2021 is as follows (in thousands): 2023 2022 2021 Beginning balance $ 41,250 $ 37,143 $ 32,602 Charges to income tax expense 4,814 4,392 4,707 Release of valuation allowance (360) (285) (166) Ending balance $ 45,704 $ 41,250 $ 37,143 |
Schedule of Operating Loss Carryforwards | The Company's NOL and tax credit carryforwards in U.S. federal, state and foreign jurisdictions as of December 31, 2023 and 2022 were as follows (in thousands, except years): 2023 2022 Expirations at Various Dates Through: NOL carryforwards: Federal $ 32,700 $ 30,100 2037 State 33,100 22,400 2043 Foreign 42,600 40,100 2039 Federal and state research and development tax credit and other credit carryforwards 125,200 121,300 2038 |
Unrecognized Tax Benefits | The changes in the Company’s unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Balance at beginning of year $ 67,958 $ 22,563 $ 24,105 Gross increases – tax positions of prior periods 2,074 3,880 4,293 Gross increases – current period tax positions 4,091 45,975 3,607 Gross decreases – tax positions of prior periods (3,685) (688) (816) Gross decreases – lapse of applicable statute of limitations (1,780) (3,772) (8,626) Balance at end of year $ 68,658 $ 67,958 $ 22,563 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Components Used in Diluted and Basic Income Per Common Share | The components used in the computation of basic and diluted net income per share for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands, except per share data): 2023 2022 2021 Numerator: Net income $ 547,629 $ 523,672 $ 651,642 Denominator: Shares used for basic net income per share 152,510 159,089 162,665 Effect of dilutive securities: Stock awards 2,312 658 1,539 Convertible senior notes 575 720 1,600 Warrants related to issuance of convertible senior notes — — — Shares used for diluted net income per share 155,397 160,467 165,804 Basic net income per share $ 3.59 $ 3.29 $ 4.01 Diluted net income per share $ 3.52 $ 3.26 $ 3.93 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands): 2023 2022 2021 Service-based stock awards 2,947 2,211 776 Market- and performance-based stock awards 1,371 1,030 1,199 Convertible senior notes — — 9,898 Warrants related to issuance of convertible senior notes 26,998 21,991 21,991 Total shares excluded from computation 31,316 25,232 33,864 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Long-lived Assets by Geographic Areas | Net property and equipment, excluding internal-use software, and operating lease right-of-use assets, located in the U.S. and international locations, as of December 31, 2023 and 2022 was as follows (in thousands): December 31, 2023 December 31, 2022 Property and equipment, net, excluding internal-use software, located in the U.S. $ 639,816 $ 568,590 Property and equipment, net, excluding internal-use software, located internationally 616,750 516,127 Operating lease right-of-use assets located in the U.S. 624,489 608,854 Operating lease right-of-use assets located internationally 284,145 204,518 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2023 location segment country city | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of locations (more than) | location | 4,100 |
Number of countries with networks | country | 130 |
Number of cities with networks | city | 750 |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Incremental Costs to Obtain a Contract with a Customer (Details) | Dec. 31, 2023 |
Customer Arrangement | |
Capitalized Contract Cost [Line Items] | |
Expected life of customer arrangement | 3 years |
Customer Contract | |
Capitalized Contract Cost [Line Items] | |
Expected life of customer arrangement | 16 months |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer Concentration Risk | Accounts Receivable | One Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percent (more than) | 10% | 10% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment per unit value, minimum | $ 1,000 | $ 1,000 | ||
Property, plant and equipment, estimated useful life | 1 year | |||
Depreciation | $ (504,000,000) | $ (527,800,000) | $ (502,600,000) | |
Net income | $ 547,629,000 | $ 523,672,000 | $ 651,642,000 | |
Basic (in dollars per share) | $ 3.59 | $ 3.29 | $ 4.01 | |
Diluted (in dollars per share) | $ 3.52 | $ 3.26 | $ 3.93 | |
Software And Hardware | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated Useful Life (in years) | 6 years | 6 years | 5 years | |
Service Life | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 62,700,000 | |||
Net income | $ 52,300,000 | |||
Basic (in dollars per share) | $ 0.34 | |||
Diluted (in dollars per share) | $ 0.34 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Equity Method Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Gain (loss) from equity method investment | $ 1,475 | $ (7,635) | $ (14,008) |
Revenue | $ 3,811,920 | 3,616,654 | 3,461,223 |
GO-NET | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 20% | ||
Gain (loss) from equity method investment | $ 1,500 | $ (14,000) | |
Impairment loss | 7,500 | ||
GO-NET | Related Party | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenue | $ 4,000 | $ 10,100 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Goodwill, Acquired Intangible Assets and Long-Lived Assets (Details) | 12 Months Ended |
Dec. 31, 2023 reporting_unit | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reporting units | 1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||
Increase to retained earnings | $ 4,597,155 | $ 4,360,187 | $ 4,530,014 | $ 4,251,296 |
Retained Earnings | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Increase to retained earnings | $ 2,467,980 | $ 1,920,351 | 1,256,692 | $ 605,050 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Increase to retained earnings | (235,427) | |||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Increase to retained earnings | $ 139,987 |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,777,812 | $ 896,185 |
Gross unrealized gains | 8,891 | 0 |
Gross unrealized losses | (5,185) | (31,420) |
Aggregate Fair Value | 1,781,518 | 864,765 |
Short-Term Marketable Securities | 372,014 | 562,308 |
Long-Term Marketable Securities | 1,409,504 | 302,457 |
Time deposits | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 14,426 | 19,530 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Aggregate Fair Value | 14,426 | 19,530 |
Short-Term Marketable Securities | 14,426 | 19,530 |
Long-Term Marketable Securities | 0 | 0 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,249 | |
Gross unrealized gains | 0 | |
Gross unrealized losses | (5) | |
Aggregate Fair Value | 6,244 | |
Short-Term Marketable Securities | 6,244 | |
Long-Term Marketable Securities | 0 | |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,328,980 | 624,082 |
Gross unrealized gains | 6,429 | 0 |
Gross unrealized losses | (4,201) | (21,029) |
Aggregate Fair Value | 1,331,208 | 603,053 |
Short-Term Marketable Securities | 276,975 | 362,458 |
Long-Term Marketable Securities | 1,054,233 | 240,595 |
U.S. government agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 428,157 | 252,573 |
Gross unrealized gains | 2,462 | 0 |
Gross unrealized losses | (979) | (10,391) |
Aggregate Fair Value | 429,640 | 242,182 |
Short-Term Marketable Securities | 74,369 | 180,320 |
Long-Term Marketable Securities | $ 355,271 | $ 61,862 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Corporate bonds $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | $ 313.5 |
Unrealized loss from available-for-sale marketable securities | $ 4.9 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | $ 1,781,518 | $ 864,765 |
Total Fair Value | 2,006,944 | 1,150,809 |
Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents | 177,240 | 999 |
Time deposits | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 39,670 | 285,830 |
Available-for-sale securities | 14,426 | 19,530 |
Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 6,244 | |
Available-for-sale securities | 6,244 | |
Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | 1,331,208 | 603,053 |
U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 429,640 | 242,182 |
Available-for-sale securities | 429,640 | 242,182 |
Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | 22,942 | 18,745 |
Level 1 | ||
Cash Equivalents and Marketable Securities: | ||
Total Fair Value | 200,182 | 19,744 |
Level 1 | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents | 177,240 | 999 |
Level 1 | Time deposits | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 0 | |
Level 1 | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | 0 | 0 |
Level 1 | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | 22,942 | 18,745 |
Level 2 | ||
Cash Equivalents and Marketable Securities: | ||
Total Fair Value | 1,806,762 | 1,131,065 |
Level 2 | Money market funds | ||
Cash Equivalents and Marketable Securities: | ||
Cash equivalents | 0 | 0 |
Level 2 | Time deposits | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 39,670 | 285,830 |
Level 2 | Commercial paper | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 6,244 | |
Level 2 | Corporate bonds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | 1,331,208 | 603,053 |
Level 2 | U.S. government agency obligations | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities and cash equivalents | 429,640 | 242,182 |
Level 2 | Mutual funds | ||
Cash Equivalents and Marketable Securities: | ||
Available-for-sale securities | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 372,014 | $ 562,308 |
Due after 1 year through 5 years | 1,409,504 | 302,457 |
Aggregate Fair Value | $ 1,781,518 | $ 864,765 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 727,771 | $ 685,123 | ||
Allowances for current expected credit losses and other reserves | (3,469) | (5,917) | $ (1,397) | $ (1,822) |
Accounts receivable, net | 724,302 | 679,206 | ||
Trade accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | 516,175 | 490,162 | ||
Unbilled accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 211,596 | $ 194,961 |
Accounts Receivable - Activity
Accounts Receivable - Activity in Allowance for Expected Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 5,917 | $ 1,397 | $ 1,822 |
Charges to income from operations | 13,431 | 9,292 | 4,576 |
Collections from customers previously reserved and other | (15,879) | (4,772) | (5,001) |
Ending balance | $ 3,469 | $ 5,917 | $ 1,397 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid income taxes | $ 33,448 | $ 33,898 |
Prepaid sales and other taxes | 40,843 | 31,285 |
Prepaid software and related service costs | 29,155 | 28,022 |
Deferred commissions | 44,383 | 37,316 |
Other prepaid expenses | 26,316 | 39,520 |
Other current assets | 41,969 | 14,999 |
Total | $ 216,114 | $ 185,040 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets - Deferred Cost (Details) - Commission and Incentive Payments - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 87,121 | $ 66,385 |
Deferred costs included in prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | 44,383 | 37,316 |
Deferred costs included in other assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 42,738 | $ 29,069 |
Prepaid Expenses and Other Cu_5
Prepaid Expenses and Other Current Assets - Incremental Customer Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Amortization expense related to deferred costs | $ 50,414 | $ 52,691 | $ 58,433 |
Incremental costs capitalized | $ 70,072 | $ 47,416 | $ 56,509 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,706,297 | $ 4,100,807 |
Accumulated depreciation and amortization | (2,880,353) | (2,560,625) |
Property and equipment, net | 1,825,944 | 1,540,182 |
Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,456,470 | 2,139,518 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 96,979 | 89,695 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 67,657 | 71,427 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 40,546 | 41,866 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 214,712 | 229,037 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,829,933 | $ 1,529,264 |
Minimum | Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Minimum | Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Minimum | Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 1 year | |
Minimum | Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | |
Minimum | Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 1 year | |
Minimum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 2 years | |
Maximum | Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 7 years | |
Maximum | Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 10 years | |
Maximum | Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 7 years | |
Maximum | Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Maximum | Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 15 years | |
Maximum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 10 years |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Property, software and equipment depreciation, amortization expense | $ 504 | $ 527.8 | $ 502.6 |
Capitalization of stock-based compensation | 81.8 | 32.3 | $ 35 |
Disposal of property plant and equipment | 174.3 | 210.2 | |
Write off of internal-use software | $ 13.8 | $ 9.1 |
Acquired Intangible Assets an_3
Acquired Intangible Assets and Goodwill - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,020,275 | $ 858,361 |
Accumulated Amortization | (484,132) | (416,645) |
Net Carrying Amount | 536,143 | 441,716 |
Completed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 354,539 | 327,848 |
Accumulated Amortization | (196,572) | (162,323) |
Net Carrying Amount | 157,967 | 165,525 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 616,267 | 480,817 |
Accumulated Amortization | (273,758) | (244,158) |
Net Carrying Amount | 342,509 | 236,659 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0 | 244 |
Accumulated Amortization | 0 | (183) |
Net Carrying Amount | 0 | 61 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14,659 | 14,642 |
Accumulated Amortization | (9,117) | (7,585) |
Net Carrying Amount | 5,542 | 7,057 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34,810 | 34,810 |
Accumulated Amortization | (4,685) | (2,396) |
Net Carrying Amount | $ 30,125 | $ 32,414 |
Acquired Intangible Assets an_4
Acquired Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of acquired intangible assets | $ 66,751 | $ 64,983 | $ 48,019 |
2024 | 84,800 | ||
2025 | 80,500 | ||
2026 | 76,100 | ||
2027 | 62,000 | ||
2028 | $ 49,600 |
Acquired Intangible Assets an_5
Acquired Intangible Assets and Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in the carrying amount of goodwill | ||
Beginning balance | $ 2,763,838 | $ 2,156,254 |
Measurement period adjustments related to acquisitions completed in prior years | 0 | 724 |
Foreign currency translation | 5,704 | (10,432) |
Ending balance | 2,850,470 | 2,763,838 |
StorageOS | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 14,046 | 0 |
Neosec, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 66,882 | 0 |
Linode | ||
Changes in the carrying amount of goodwill | ||
Acquisition | $ 0 | $ 617,292 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Oct. 31, 2023 | Aug. 31, 2023 | May 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Oct. 31, 2021 | Feb. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||||||
Acquisition related costs | $ 2,700 | $ 10,700 | $ 13,300 | ||||||||
Goodwill | $ 2,850,470 | $ 2,850,470 | $ 2,763,838 | $ 2,156,254 | |||||||
Lumen | Customer-related intangible assets | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire assets | $ 81,800 | ||||||||||
Asset acquisition, useful life | 12 years 2 months 12 days | ||||||||||
StackPath | Customer-related intangible assets | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire assets | $ 51,400 | ||||||||||
Asset acquisition, useful life | 13 years 4 months 24 days | ||||||||||
Payments to acquire intangible assets | $ 41,000 | ||||||||||
Neosec, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 91,400 | ||||||||||
Identifiable intangible assets | 19,900 | ||||||||||
Goodwill | $ 66,900 | ||||||||||
Weighted average useful life | 9 years 8 months 12 days | ||||||||||
Goodwill expected tax deductible amount | $ 33,800 | ||||||||||
StorageOS | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 20,600 | ||||||||||
Identifiable intangible assets | 4,500 | ||||||||||
Goodwill | $ 14,000 | ||||||||||
Weighted average useful life | 8 years 9 months 18 days | ||||||||||
Linode | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 898,500 | ||||||||||
Identifiable intangible assets | 196,020 | ||||||||||
Goodwill | $ 617,292 | ||||||||||
Weighted average useful life | 12 years 2 months 12 days | ||||||||||
Revenue of acquiree since acquisition | $ 103,500 | ||||||||||
Linode | Customer-related intangible assets | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Weighted average useful life | 16 years 9 months 18 days | ||||||||||
Guardicore Ltd. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 610,700 | ||||||||||
Identifiable intangible assets | 123,600 | ||||||||||
Goodwill | $ 479,834 | ||||||||||
Weighted average useful life | 14 years 7 months 6 days | ||||||||||
Guardicore Ltd. | Customer-related intangible assets | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Weighted average useful life | 14 years | ||||||||||
Inverse, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 17,100 | ||||||||||
Identifiable intangible assets | 7,600 | ||||||||||
Goodwill | $ 10,700 | ||||||||||
Weighted average useful life | 14 years | ||||||||||
Goodwill expected tax deductible amount | $ 10,700 |
Acquisitions - Schedule of Purc
Acquisitions - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Mar. 31, 2022 | Oct. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 2,850,470 | $ 2,763,838 | $ 2,156,254 | ||
Linode | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | $ 898,516 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Cash | 26,678 | ||||
Accounts receivable | 7,171 | ||||
Prepaid expenses and other current assets | 4,478 | ||||
Property and equipment | 56,268 | ||||
Operating lease right-of-use assets | 17,000 | ||||
Identifiable intangible assets | 196,020 | ||||
Deferred income tax assets | 2,528 | ||||
Other assets | 292 | ||||
Total assets acquired | 310,435 | ||||
Accounts payable | (5,767) | ||||
Accrued expenses | (1,958) | ||||
Operating lease liabilities | (17,235) | ||||
Other liabilities | (4,251) | ||||
Total liabilities assumed | (29,211) | ||||
Net assets acquired | 281,224 | ||||
Goodwill | $ 617,292 | ||||
Guardicore Ltd. | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration | $ 610,693 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Cash | 27,252 | ||||
Accounts receivable | 10,179 | ||||
Prepaid expenses and other current assets | 1,307 | ||||
Property and equipment | 1,211 | ||||
Operating lease right-of-use assets | 2,657 | ||||
Identifiable intangible assets | 123,600 | ||||
Deferred income tax assets | 9,686 | ||||
Other assets | 890 | ||||
Total assets acquired | 176,782 | ||||
Accounts payable | (1,523) | ||||
Accrued liabilities | (7,742) | ||||
Deferred revenue | (35,658) | ||||
Operating lease liabilities | (1,000) | ||||
Total liabilities assumed | (45,923) | ||||
Net assets acquired | 130,859 | ||||
Goodwill | $ 479,834 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Oct. 31, 2021 | Dec. 31, 2022 | |
Linode | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 196,020 | ||
Weighted average useful life | 12 years 2 months 12 days | ||
Linode | Customer-related intangible assets | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 84,200 | ||
Weighted average useful life | 16 years 9 months 18 days | ||
Linode | Completed technologies | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 70,900 | ||
Weighted average useful life | 5 years 9 months 18 days | ||
Linode | Acquired license rights | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 34,320 | ||
Weighted average useful life | 15 years | ||
Linode | Trademarks and trade name | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 6,600 | ||
Weighted average useful life | 8 years 9 months 18 days | ||
Guardicore Ltd. | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 123,600 | ||
Weighted average useful life | 14 years 7 months 6 days | ||
Guardicore Ltd. | Customer-related intangible assets | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 44,200 | ||
Weighted average useful life | 14 years | ||
Guardicore Ltd. | Completed technologies | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 79,000 | ||
Weighted average useful life | 15 years | ||
Guardicore Ltd. | Trademarks and trade name | |||
Business Acquisition [Line Items] | |||
Gross carrying amount of intangible assets | $ 400 | ||
Weighted average useful life | 1 year 10 months 24 days |
Accrued Expenses - Accrued Expe
Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and other related benefits | $ 143,010 | $ 172,670 |
Income taxes payable | 70,017 | 76,459 |
Bandwidth and co-location expenses | 78,210 | 79,937 |
Property, use and other taxes | 38,270 | 30,711 |
Convertible senior notes | 6,807 | 1,613 |
Other accrued expenses | 15,867 | 5,627 |
Total | $ 352,181 | $ 367,017 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge (benefit) | $ 56,643 | $ 13,529 | $ 10,737 |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge (benefit) | 20,700 | ||
GO-NET | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment loss | 7,500 | ||
2021 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge (benefit) | $ 27,700 | $ 3,600 | $ 3,800 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Accrual (Details) - Employee Severance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 541 | $ 1,188 | $ 22,051 |
Costs incurred | 21,085 | 747 | 6,600 |
Cash disbursements | (20,748) | (1,209) | (27,095) |
Translation adjustments and other | (41) | (185) | (368) |
Ending balance | $ 837 | $ 541 | $ 1,188 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Convertible Debt | 12 Months Ended | |
Dec. 31, 2023 USD ($) day senior_note | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||
Number of convertible senior notes | senior_note | 3 | |
Principal | $ | $ 3,565,000,000 | $ 2,300,000,000 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ | 3,565,000,000 | |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ | $ 1,150,000,000 | 1,150,000,000 |
Repurchase price (as a percent) | 100% | |
2025 Notes | Debt Conversion Terms One | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 20 | |
Threshold consecutive trading days exceeding price | 30 | |
Threshold greater than percentage of stock price trigger | 130% | |
2025 Notes | Debt Conversion Terms Two | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 5 | |
Threshold consecutive trading days exceeding price | 5 | |
Threshold greater than percentage of stock price trigger | 98% | |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ | $ 1,150,000,000 | 1,150,000,000 |
Repurchase price (as a percent) | 100% | |
2027 Notes | Debt Conversion Terms One | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 20 | |
Threshold consecutive trading days exceeding price | 30 | |
Threshold greater than percentage of stock price trigger | 130% | |
2027 Notes | Debt Conversion Terms Two | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 5 | |
Threshold consecutive trading days exceeding price | 5 | |
Threshold greater than percentage of stock price trigger | 98% | |
2029 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ | $ 1,265,000,000 | $ 0 |
Repurchase price (as a percent) | 100% | |
2029 Notes | Debt Conversion Terms One | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 20 | |
Threshold consecutive trading days exceeding price | 30 | |
Threshold greater than percentage of stock price trigger | 130% | |
2029 Notes | Debt Conversion Terms Two | ||
Debt Instrument [Line Items] | ||
Threshold trading days exceeding price | 5 | |
Threshold consecutive trading days exceeding price | 5 | |
Threshold greater than percentage of stock price trigger | 98% |
Debt - Schedule of Conversions
Debt - Schedule of Conversions of Stock (Details) - Convertible Debt | 12 Months Ended | |
Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||
Principal | $ 3,565,000,000 | $ 2,300,000,000 |
2029 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,265,000,000 | 0 |
Coupon Interest Rate | 1.125% | |
Effective Interest Rate | 1.388% | |
Conversion rate | 0.0079170 | |
Conversion price (in dollars per share) | $ / shares | $ 126.31 | |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,150,000,000 | 1,150,000,000 |
Coupon Interest Rate | 0.375% | |
Effective Interest Rate | 0.539% | |
Conversion rate | 0.0086073 | |
Conversion price (in dollars per share) | $ / shares | $ 116.18 | |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,150,000,000 | $ 1,150,000,000 |
Coupon Interest Rate | 0.125% | |
Effective Interest Rate | 0.35% | |
Conversion rate | 0.010515 | |
Conversion price (in dollars per share) | $ / shares | $ 95.10 |
Debt- Schedule of Convertible S
Debt- Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Principal | $ 3,565,000,000 | $ 2,300,000,000 |
Less: issuance costs, net of amortization | (26,771,000) | (14,742,000) |
Net carrying amount | 3,538,229,000 | 2,285,258,000 |
Estimated fair value | 4,133,408,000 | 2,320,114,000 |
2029 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,265,000,000 | 0 |
Less: issuance costs, net of amortization | (16,478,000) | 0 |
Net carrying amount | 1,248,522,000 | 0 |
Estimated fair value | 1,376,915,000 | 0 |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,150,000,000 | 1,150,000,000 |
Less: issuance costs, net of amortization | (6,831,000) | (8,707,000) |
Net carrying amount | 1,143,169,000 | 1,141,293,000 |
Estimated fair value | 1,289,219,000 | 1,111,038,000 |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,150,000,000 | 1,150,000,000 |
Less: issuance costs, net of amortization | (3,462,000) | (6,035,000) |
Net carrying amount | 1,146,538,000 | 1,143,965,000 |
Estimated fair value | $ 1,467,274,000 | $ 1,209,076,000 |
Debt - Schedule of Note Hedges
Debt - Schedule of Note Hedges and Warrants (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Note hedge transaction cost | $ 236,555 | $ 0 | $ 0 |
Proceeds from sale of warrants | 90,195 | $ 0 | $ 0 |
2029 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Note hedge transaction cost | $ 236,555 | ||
Shares covered by note hedge transaction (in shares) | 10,015 | ||
Shares related to warrant transaction (in shares) | 10,015 | ||
Strike price per share related to warrant transaction (in dollars per share) | $ 180.44 | ||
Proceeds from sale of warrants | $ 90,195 | ||
2027 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Note hedge transaction cost | $ 312,225 | ||
Shares covered by note hedge transaction (in shares) | 9,898 | ||
Shares related to warrant transaction (in shares) | 9,898 | ||
Strike price per share related to warrant transaction (in dollars per share) | $ 178.74 | ||
Proceeds from sale of warrants | $ 185,150 | ||
2025 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Note hedge transaction cost | $ 261,740 | ||
Shares covered by note hedge transaction (in shares) | 12,093 | ||
Shares related to warrant transaction (in shares) | 12,093 | ||
Strike price per share related to warrant transaction (in dollars per share) | $ 149.18 | ||
Proceeds from sale of warrants | $ 119,945 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Narrative) (Details) | 1 Months Ended | ||
Nov. 30, 2022 USD ($) extension | May 31, 2018 USD ($) | Dec. 31, 2023 USD ($) | |
2018 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 500,000,000 | ||
Debt term | 5 years | ||
2018 Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.075% | ||
2018 Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.15% | ||
2018 Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0% | ||
2018 Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.25% | ||
2018 Credit Agreement | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.875% | ||
2018 Credit Agreement | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
2022 Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 500,000,000 | ||
Debt term | 5 years | ||
Maximum borrowing capacity under specific conditions | $ 1,000,000,000 | ||
Line of credit facility, number of extensions | extension | 2 | ||
Line of credit facility, extension term | 1 year | ||
Outstanding borrowings | $ 0 | ||
2022 Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.07% | ||
2022 Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.125% | ||
2022 Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0% | ||
2022 Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.125% | ||
2022 Credit Agreement | Benchmark Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
2022 Credit Agreement | Benchmark Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.125% | ||
2022 Credit Agreement | Reference Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
2022 Credit Agreement | Reference Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.125% |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Amortization of debt issuance costs | $ 5,803 | $ 4,688 | $ 69,697 |
Capitalization of interest expense | (462) | (293) | (3,672) |
Total interest expense | 17,709 | 11,096 | 72,332 |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | 1,402 | 952 | 557 |
Convertible Debt | 2029 Notes | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | 1,436 | 1,437 | 1,437 |
Convertible Debt | 2027 Notes | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | 4,312 | 4,312 | 4,313 |
Convertible Debt | 2025 Notes | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | $ 5,218 | $ 0 | $ 0 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | $ 253,606 | $ 234,976 | $ 220,773 |
Short-term lease cost | 23,698 | 21,793 | 17,718 |
Variable lease cost | 87,944 | 60,192 | 53,444 |
Sublease income | (32,024) | (25,743) | (21,033) |
Total operating lease costs | 333,224 | 291,218 | 270,902 |
Real Estate Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | 74,054 | 82,761 | 84,100 |
Short-term lease cost | 133 | 52 | 58 |
Variable lease cost | 25,860 | 25,167 | 22,016 |
Sublease income | (32,024) | (25,743) | (21,033) |
Total operating lease costs | 68,023 | 82,237 | 85,141 |
Co-location Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | 179,552 | 152,215 | 136,673 |
Short-term lease cost | 23,565 | 21,741 | 17,660 |
Variable lease cost | 62,084 | 35,025 | 31,428 |
Sublease income | 0 | 0 | 0 |
Total operating lease costs | $ 265,201 | $ 208,981 | $ 185,761 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Real Estate Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 9 years 10 months 24 days | 10 years 3 months 18 days |
Weighted average discount rate | 3.50% | 3.60% |
Co-location Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 4 years 7 months 6 days | 3 years 10 months 24 days |
Weighted average discount rate | 4.20% | 2.80% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease not yet commenced | $ 195 |
Future sublease income | 207.4 |
Outstanding letter of credit | $ 4.9 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of operating lease not yet commenced | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of operating lease not yet commenced | 10 years |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Real Estate Arrangements | |
Lessee, Lease, Description [Line Items] | |
2023 | $ 68,713 |
2024 | 68,522 |
2025 | 64,607 |
2026 | 58,988 |
2027 | 54,725 |
Thereafter | 313,506 |
Total lease payments | 629,061 |
Less: imputed interest | 97,716 |
Total lease liabilities | 531,345 |
Co-location Arrangements | |
Lessee, Lease, Description [Line Items] | |
2023 | 155,505 |
2024 | 100,765 |
2025 | 80,545 |
2026 | 64,765 |
2027 | 46,010 |
Thereafter | 67,519 |
Total lease payments | 515,109 |
Less: imputed interest | 48,704 |
Total lease liabilities | $ 466,405 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Oct. 31, 2021 | Nov. 30, 2018 |
Class of Stock [Line Items] | |||
Amount of common stock repurchases authorized | $ 1,800 | $ 1,100 | |
Remaining amount available for future purchases of shares under approved repurchase program. | $ 537.9 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchased Activity (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||
Repurchases of common stock | $ 658,187 | $ 608,010 | $ 522,255 |
Common Stock | |||
Class of Stock [Line Items] | |||
Repurchases of common stock | $ 654,046 | $ 608,010 | $ 522,255 |
Repurchases of common stock (in shares) | 7,802 | 6,403 | 4,749 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 4,360,187 | $ 4,530,014 | $ 4,251,296 |
Other comprehensive income (loss) | 45,002 | (71,227) | (48,904) |
Ending Balance | 4,597,155 | 4,360,187 | 4,530,014 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (140,332) | (69,105) | (20,201) |
Ending Balance | (95,330) | (140,332) | (69,105) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (116,474) | (71,809) | |
Other comprehensive income (loss) | 18,439 | (44,665) | |
Ending Balance | (98,035) | (116,474) | (71,809) |
Net Unrealized Gains (Losses) on Investments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (23,858) | 2,704 | |
Other comprehensive income (loss) | 26,563 | (26,562) | |
Ending Balance | $ 2,705 | $ (23,858) | $ 2,704 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 3,811,920 | $ 3,616,654 | $ 3,461,223 |
Security | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,765,267 | 1,541,941 | 1,334,836 |
Delivery | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,542,434 | 1,669,257 | 1,873,243 |
Compute | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 504,219 | 405,456 | 253,144 |
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,968,779 | 1,902,051 | 1,837,508 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,843,141 | $ 1,714,603 | $ 1,623,715 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Performance Obligation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue recognized | $ 105.9 | $ 105.1 | $ 78.8 |
Remaining performance obligation | $ 3,400 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligations, percentage | 65% | ||
Remaining performance obligation, expected timing | 12 months |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Compensation Related Costs [Abstract] | |||
Contributions by employer | $ 19.7 | $ 18.8 | $ 17.7 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax unrecognized compensation cost | $ 462.1 | |||
Weighted average period for recognizing compensation cost (in years) | 1 year 7 months 6 days | |||
Dividend yield | 0% | |||
Weighted average fair value of equity instruments other than options granted (in dollars per share) | $ 74.89 | $ 107.17 | $ 99.09 | |
Outstanding (in shares) | 0 | |||
Vested or expected to vest (in shares) | 0 | 0 | 0 | |
Liability classified awards outstanding | $ 16.3 | $ 3 | ||
Capitalized Internal Use Software | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional stock based compensation | $ 32.5 | $ 31.3 | $ 32.4 | |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Total pre-tax intrinsic value of options exercised | $ 0.6 | |||
Stock options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Stock options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 0% | 0% | 0% | |
Weighted average fair value of equity instruments other than options granted (in dollars per share) | $ 23.12 | $ 33.26 | $ 36.17 | |
Deferred Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Each DSU receives this number of shares of common stock upon vesting (in whole numbers) | 1 | |||
Holder elect to defer vested shares period, minimum (in years) | 1 year | |||
Holder elect to defer vested shares period, maximum (in years) | 10 years | |||
The amount typically vested by anniversary grant date (percentage) | 100% | |||
Director's minimum period of service before vesting accelerates (in years) | 1 year | |||
Deferred Stock Units | Director Vesting Acceleration | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 100% | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Each RSU receives this number of shares of common stock upon vesting | 1 | |||
Restricted stock unit vesting provision, minimum (in years) | 3 years | |||
Restricted stock unit vesting provision, maximum (in years) | 4 years | |||
Aggregate intrinsic value | $ 955.9 | |||
Weighted average contractual remaining life (in years) | 1 year 7 months 6 days | |||
2013 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock approved for issuance under plan (in shares) | 33,800,000 | |||
Common stock available for grant (in shares) | 7,400,000 | 0 | ||
1999 ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum amount of shares available for issuance (in shares) | 1,500,000 | |||
Aggregate amount of shares available, maximum (in shares) | 20,000,000 | |||
Discount on fair market value for purchase of stock (in percentage) | 15% | |||
Share purchase interval term (in months) | 6 months | |||
Amount withheld from employees for future purchases | $ 6.3 | |||
Non-Executive Short-Term Incentive Program | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Non-Executive Incentive Program, Migrate Applications From Third-Party Cloud Platforms | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 2 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 328,467 | $ 217,185 | $ 202,759 |
Provision for income taxes | (59,359) | (46,829) | (56,084) |
Total stock-based compensation, net of taxes | 269,108 | 170,356 | 146,675 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 43,802 | 28,354 | 27,143 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 123,896 | 78,116 | 65,950 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 66,453 | 47,789 | 46,342 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 94,316 | $ 62,926 | $ 63,324 |
Stock-Based Compensation - ESPP
Stock-Based Compensation - ESPP Activity (Details) - 1999 ESPP - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuance of common stock under employee stock purchase plan (in shares) | 797 | 688 | 649 |
Weighted average purchase price (in dollars per share) | $ 78.29 | $ 82.83 | $ 92.05 |
Issuance of common stock | $ 62,365 | $ 56,570 | $ 59,714 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | ||
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 5.20% | 1.90% | 0.10% |
Expected volatility | 29.10% | 26% | 32.20% |
Dividend yield | 0% | 0% | 0% |
Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 years | 3 years | 3 years |
Risk-free interest rate | 4.50% | 1.70% | 0.30% |
Expected volatility | 28.80% | 30.30% | 32.70% |
Average volatility of peer-company share price | 33.60% | 40.70% | 39.60% |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Stock Units by Type (Details) | 12 Months Ended |
Dec. 31, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 6,250,000 |
Service-based stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 5,767,000 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 199,000 |
Market- and performance-based stock awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 284,000 |
Deferred Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | 30,953 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Units | |||
Outstanding (in shares) | 5,278,000 | ||
Granted (in shares) | 6,250,000 | ||
Vested (in shares) | (2,531,000) | ||
Forfeited (in shares) | (920,000) | ||
Outstanding (in shares) | 8,077,000 | 5,278,000 | |
Weighted Average Grant Date Fair Value | |||
Outstanding (in dollars per share) | $ 121.92 | ||
Granted (in dollars per share) | 74.89 | $ 107.17 | $ 99.09 |
Vested (in dollars per share) | 102.70 | ||
Forfeited (in dollars per share) | 99.07 | ||
Outstanding (in dollars per share) | $ 83.12 | $ 121.92 | |
Deferred Stock Units | |||
Units | |||
Granted (in shares) | 30,953 | ||
Vested (in shares) | (24,422,000) |
Stock-Based Compensation - Pre-
Stock-Based Compensation - Pre-Tax Intrinsic Value And Fair Value of Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Pre-tax intrinsic value of awards vested | $ 254,686 | $ 227,143 | $ 226,414 |
Fair value of awards vested | $ 259,919 | $ 231,708 | $ 233,027 |
Weighted average fair value of awards granted, per share (in dollars per share) | $ 74.89 | $ 107.17 | $ 99.09 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 20,146 | $ 61,383 | $ 70,300 |
Foreign | 632,381 | 596,620 | 657,921 |
Income before provision for income taxes | $ 652,527 | $ 658,003 | $ 728,221 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax provision: | |||
Federal | $ 23,406 | $ 49,808 | $ 11,824 |
State | 6,731 | 9,214 | 8,515 |
Foreign | 99,223 | 172,645 | 90,026 |
Deferred tax benefit: | |||
Federal | (18,213) | (73,826) | (33,366) |
State | (6,692) | (18,657) | (14,611) |
Foreign | (2,536) | (16,595) | (4,358) |
Change in valuation allowance | 4,454 | 4,107 | 4,541 |
Total | $ 106,373 | $ 126,696 | $ 62,571 |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference Between Effective and Statutory (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax rate | 21% | 21% | 21% |
State taxes | 1% | 0.70% | 0.70% |
Stock-based compensation | 3.60% | 2% | 0.10% |
U.S. federal, state and foreign research and development credits | (4.70%) | (5.10%) | (3.70%) |
Foreign earnings | (6.50%) | (6.60%) | (7.30%) |
Nondeductible (nontaxable) foreign items | (0.20%) | 0.70% | 0% |
Global intangible low-taxed income | 1.10% | 2.50% | 0.50% |
Release of uncertain tax position reserve | (0.40%) | (0.70%) | (1.00%) |
Intercompany sale of intellectual property | 0.60% | 4% | 0% |
Valuation allowance | 0.70% | 0.60% | 0.60% |
Foreign-derived intangible income | (1.10%) | (0.80%) | (0.50%) |
Other | 1.20% | 1% | (1.80%) |
Effective income tax rate | 16.30% | 19.30% | 8.60% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax and Related Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||||
Accrued bonus | $ 3,716 | $ 21,181 | ||
Deferred revenue | 14,223 | 11,925 | ||
Operating lease liabilities | 116,752 | 125,567 | ||
Stock-based compensation | 42,856 | 19,874 | ||
NOLs | 19,791 | 18,172 | ||
Tax credit carryforwards | 96,020 | 93,672 | ||
Capitalized research and development costs | 108,592 | 43,215 | ||
Convertible senior notes interest | 111,509 | 75,603 | ||
Depreciation and amortization | 66,053 | 79,595 | ||
Other | 21,856 | 28,879 | ||
Deferred tax assets | 601,368 | 517,683 | ||
Acquired intangible assets | (12,126) | (530) | ||
Operating lease right-of-use assets | (103,392) | (113,118) | ||
Deferred commissions | (14,752) | (12,949) | ||
Capitalized internal-use software development costs | (31,719) | (30,559) | ||
Deferred tax liabilities | (161,989) | (157,156) | ||
Valuation allowance | (45,704) | (41,250) | $ (37,143) | $ (32,602) |
Net deferred tax assets | $ 393,675 | $ 319,277 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance [Roll Forward] | |||
Beginning balance | $ 41,250 | $ 37,143 | $ 32,602 |
Charges to income tax expense | 4,814 | 4,392 | 4,707 |
Release of valuation allowance | (360) | (285) | (166) |
Ending balance | $ 45,704 | $ 41,250 | $ 37,143 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Valuation allowance | $ 45,704 | $ 41,250 | $ 37,143 | $ 32,602 |
Increase in valuation allowance | 4,500 | |||
Foreign earnings repatriated | 2,100,000 | |||
Unrecognized tax benefits including accrued interest and penalties | 39,100 | 38,300 | 23,100 | |
Unrecognized tax benefits, income tax penalties and interest accrued | 11,000 | 8,600 | 7,200 | |
Income tax interest and penalties expense | 2,400 | $ 2,000 | $ 500 | |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 36,000 | |||
Unrecognized tax benefits that may be recognized | $ 3,800 |
Income Taxes - Schedule of NOL
Income Taxes - Schedule of NOL Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Federal and state research and development tax credit and other credit carryforwards | $ 125,200 | $ 121,300 |
Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2038 | 2038 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 32,700 | $ 30,100 |
Federal | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2037 | 2037 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 33,100 | $ 22,400 |
State | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2043 | 2043 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 42,600 | $ 40,100 |
Foreign | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2039 | 2039 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 67,958 | $ 22,563 | $ 24,105 |
Gross increases – tax positions of prior periods | 2,074 | 3,880 | 4,293 |
Gross increases – current period tax positions | 4,091 | 45,975 | 3,607 |
Gross decreases – tax positions of prior periods | (3,685) | (688) | (816) |
Gross decreases – lapse of applicable statute of limitations | (1,780) | (3,772) | (8,626) |
Balance at end of year | $ 68,658 | $ 67,958 | $ 22,563 |
Net Income per Share - Schedule
Net Income per Share - Schedule of Components (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income | $ 547,629 | $ 523,672 | $ 651,642 |
Denominator: | |||
Shares used for basic net income per share (in shares) | 152,510 | 159,089 | 162,665 |
Effect of dilutive securities: | |||
Equity and liability classified stock awards (in shares) | 2,312 | 658 | 1,539 |
Convertible senior notes (in shares) | 575 | 720 | 1,600 |
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 | 0 |
Shares used for diluted net income per share (in shares) | 155,397 | 160,467 | 165,804 |
Basic net income per share (in dollars per share) | $ 3.59 | $ 3.29 | $ 4.01 |
Diluted net income per share (in dollars per share) | $ 3.52 | $ 3.26 | $ 3.93 |
Net Income per Share - Schedu_2
Net Income per Share - Schedule of Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 31,316 | 25,232 | 33,864 |
Service-based stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 2,947 | 2,211 | 776 |
Market- and performance-based stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 1,371 | 1,030 | 1,199 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 0 | 0 | 9,898 |
Warrants related to issuance of convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from computation | 26,998 | 21,991 | 21,991 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 1 | |
Number of reportable segments | segment | 1 | |
Property and equipment, net | $ 1,825,944 | $ 1,540,182 |
Operating lease right-of-use assets | 908,634 | 813,372 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Operating lease right-of-use assets | 624,489 | 608,854 |
U.S. | Property, Plant, and Equipment, Excluding Internal-Use Software | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 639,816 | 568,590 |
Non-U.S. | ||
Segment Reporting Information [Line Items] | ||
Operating lease right-of-use assets | 284,145 | 204,518 |
Non-U.S. | Property, Plant, and Equipment, Excluding Internal-Use Software | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 616,750 | $ 516,127 |