Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-27275 | |
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 $0.01 per share | |
Trading Symbol | AKAM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 152,316,548 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001086222 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 467,717 | $ 489,468 |
Marketable securities | 1,206,971 | 374,971 |
Accounts receivable, net of reserves of $2,775 and $3,469 at March 31, 2024, and December 31, 2023, respectively | 716,638 | 724,302 |
Prepaid expenses and other current assets | 233,853 | 216,114 |
Total current assets | 2,625,179 | 1,804,855 |
Marketable securities | 582,023 | 1,431,354 |
Property and equipment, net | 1,864,307 | 1,825,944 |
Operating lease right-of-use assets | 947,049 | 908,634 |
Acquired intangible assets, net | 512,554 | 536,143 |
Goodwill | 2,846,535 | 2,850,470 |
Deferred income tax assets | 430,428 | 418,297 |
Other assets | 127,531 | 124,340 |
Total assets | 9,935,606 | 9,900,037 |
Current liabilities: | ||
Accounts payable | 134,677 | 146,927 |
Accrued expenses | 291,986 | 352,181 |
Deferred revenue | 142,527 | 107,544 |
Operating lease liabilities | 232,731 | 222,944 |
Other current liabilities | 7,017 | 6,442 |
Total current liabilities | 808,938 | 836,038 |
Deferred revenue | 20,929 | 23,006 |
Deferred income tax liabilities | 24,977 | 24,622 |
Convertible senior notes | 3,540,120 | 3,538,229 |
Operating lease liabilities | 800,107 | 774,806 |
Other liabilities | 106,768 | 106,181 |
Total liabilities | 5,301,839 | 5,302,882 |
Commitments and contingencies | ||
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; 153,553,975 shares issued and 152,411,363 shares outstanding at March 31, 2024, and 151,232,908 shares issued and outstanding at December 31, 2023 | 1,536 | 1,512 |
Additional paid-in capital | 2,230,875 | 2,222,993 |
Accumulated other comprehensive loss | (116,593) | (95,330) |
Treasury stock, at cost, 1,142,612 shares at March 31, 2024, and no shares at December 31, 2023 | (125,449) | 0 |
Retained earnings | 2,643,398 | 2,467,980 |
Total stockholders’ equity | 4,633,767 | 4,597,155 |
Total liabilities and stockholders’ equity | $ 9,935,606 | $ 9,900,037 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 2,775 | $ 3,469 |
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) | 153,553,975 | 151,232,908 |
Common stock, shares outstanding (in shares) | 152,411,363 | 151,232,908 |
Treasury stock (in shares) | 1,142,612 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 986,970 | $ 915,698 |
Costs and operating expenses: | ||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 394,743 | 361,316 |
Research and development | 116,932 | 91,863 |
Sales and marketing | 134,570 | 129,107 |
General and administrative | 152,430 | 146,139 |
Amortization of acquired intangible assets | 21,023 | 15,912 |
Restructuring charge | 544 | 44,723 |
Total costs and operating expenses | 820,242 | 789,060 |
Income from operations | 166,728 | 126,638 |
Interest and marketable securities income, net | 27,841 | 5,292 |
Interest expense | (6,818) | (2,681) |
Other income (expense), net | 511 | (2,363) |
Income before provision for income taxes | 188,262 | 126,886 |
Provision for income taxes | (12,844) | (29,780) |
Net income | $ 175,418 | $ 97,106 |
Net income per share: | ||
Basic (in dollars per share) | $ 1.16 | $ 0.62 |
Diluted (in dollars per share) | $ 1.11 | $ 0.62 |
Shares used in per share calculations: | ||
Basic (in shares) | 151,628 | 155,637 |
Diluted (in shares) | 157,466 | 156,135 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 175,418 | $ 97,106 |
Other comprehensive (loss) gain: | ||
Foreign currency translation adjustments | (16,447) | 11,722 |
Change in unrealized (loss) gain on investments, net of income tax benefit (expense) of $1,562 and $(2,399) for the three months ended March 31, 2024 and 2023, respectively | (4,816) | 7,449 |
Other comprehensive (loss) gain | (21,263) | 19,171 |
Comprehensive income | $ 154,155 | $ 116,277 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Income tax (provision) benefit | $ 1,562 | $ (2,399) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 175,418 | $ 97,106 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 156,183 | 135,457 |
Stock-based compensation | 93,260 | 61,883 |
(Benefit) provision for deferred income taxes | (10,467) | 4,925 |
Amortization of debt issuance costs | 1,682 | 1,098 |
Gain on investments | 0 | (174) |
Other non-cash reconciling items, net | 2,062 | 21,602 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (736) | (25,251) |
Prepaid expenses and other current assets | (26,016) | (26,009) |
Accounts payable and accrued expenses | (66,949) | (97,263) |
Deferred revenue | 34,316 | 36,449 |
Other current liabilities | 356 | 25,834 |
Other non-current assets and liabilities | (7,231) | (2,158) |
Net cash provided by operating activities | 351,878 | 233,499 |
Cash flows from investing activities: | ||
Cash paid for business acquisition, net of cash acquired | 0 | (20,070) |
Purchases of property and equipment | (93,751) | (141,700) |
Capitalization of internal-use software development costs | (80,003) | (80,545) |
Purchases of short- and long-term marketable securities | (170,019) | (134,191) |
Proceeds from sales of short- and long-term marketable securities | 15,144 | 185,249 |
Proceeds from maturities and redemptions of short- and long-term marketable securities | 167,111 | 91,637 |
Other, net | 9,935 | (20,268) |
Net cash used in investing activities | (151,583) | (119,888) |
Cash flows from financing activities: | ||
Proceeds related to the issuance of common stock under stock plans | 20,310 | 21,257 |
Employee taxes paid related to net share settlement of stock awards | (109,333) | (29,894) |
Repurchases of common stock | (125,449) | (348,600) |
Other, net | (1,509) | (52) |
Net cash used in financing activities | (215,981) | (357,289) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (4,013) | 2,297 |
Net decrease in cash, cash equivalents and restricted cash | (19,699) | (241,381) |
Cash, cash equivalents and restricted cash at beginning of period | 490,470 | 543,022 |
Cash, cash equivalents and restricted cash at end of period | 470,771 | 301,641 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes, net of refunds received of $525 and $225 for the three months ended March 31, 2024 and 2023, respectively | 74,940 | 86,066 |
Cash paid for interest expense | 9,153 | 2,156 |
Cash paid for operating lease liabilities | 64,795 | 55,167 |
Non-cash activities: | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 100,167 | 102,952 |
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | 43,065 | 101,196 |
Capitalization of stock-based compensation | 26,596 | 14,611 |
Reconciliation of cash and cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 467,717 | 298,800 |
Restricted cash | 3,054 | 2,841 |
Cash, cash equivalents and restricted cash | $ 470,771 | $ 301,641 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Cash Flows [Abstract] | ||
Proceeds from income tax refunds | $ 525 | $ 225 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2022 | 156,494,816 | |||||
Beginning balance at Dec. 31, 2022 | $ 4,360,187 | $ 1,565 | $ 2,578,603 | $ (140,332) | $ 0 | $ 1,920,351 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 804,553 | |||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (31,336) | $ 8 | (31,344) | |||
Stock-based compensation | 77,985 | 77,985 | ||||
Repurchases of common stock (in shares) | (4,555,541) | |||||
Repurchases of common stock | (351,772) | (351,772) | ||||
Net income | 97,106 | 97,106 | ||||
Foreign currency translation adjustments | 11,722 | 11,722 | ||||
Change in unrealized gain (loss) on available-for-sale investments, net of tax | 7,449 | 7,449 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 152,743,828 | |||||
Ending balance at Mar. 31, 2023 | $ 4,171,341 | $ 1,573 | 2,625,244 | (121,161) | (351,772) | 2,017,457 |
Beginning balance (in shares) at Dec. 31, 2023 | 151,232,908 | 151,232,908 | ||||
Beginning balance at Dec. 31, 2023 | $ 4,597,155 | $ 1,512 | 2,222,993 | (95,330) | 0 | 2,467,980 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 2,321,067 | |||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (126,996) | $ 24 | (127,020) | |||
Stock-based compensation | 134,902 | 134,902 | ||||
Repurchases of common stock (in shares) | (1,142,612) | |||||
Repurchases of common stock | (125,449) | (125,449) | ||||
Net income | 175,418 | 175,418 | ||||
Foreign currency translation adjustments | (16,447) | (16,447) | ||||
Change in unrealized gain (loss) on available-for-sale investments, net of tax | $ (4,816) | (4,816) | ||||
Ending balance (in shares) at Mar. 31, 2024 | 152,411,363 | 152,411,363 | ||||
Ending balance at Mar. 31, 2024 | $ 4,633,767 | $ 1,536 | $ 2,230,875 | $ (116,593) | $ (125,449) | $ 2,643,398 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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 interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation in the accompanying interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed in, or omitted from, these interim financial statements. Accordingly, the unaudited interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 28, 2024. The December 31, 2023 condensed consolidated balance sheet included herein is derived from the Company's audited consolidated financial statements. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited interim condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of the results of all interim periods reported herein. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("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
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Available-for-sale marketable securities held as of March 31, 2024 and December 31, 2023 were as follows (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Short-Term Long-Term As of March 31, 2024 Commercial paper $ 5,318 $ — $ (14) $ 5,304 $ 5,304 $ — Corporate bonds 1,361,982 1,247 (3,467) 1,359,762 856,550 503,212 U.S. government agency obligations 396,152 354 (789) 395,717 339,325 56,392 $ 1,763,452 $ 1,601 $ (4,270) $ 1,760,783 $ 1,201,179 $ 559,604 As of December 31, 2023 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 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 equity securities. Additionally, the Company holds certain money market funds that are classified as equity securities. These securities are not included in the available-for-sale securities table above but are included in marketable securities in the interim condensed 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 interim condensed consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest and marketable securities income, net in the interim condensed consolidated statements of income. As of March 31, 2024, the Company held for investment corporate bonds and U.S. government agency obligations with a fair value of $179.9 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 $2.6 million and are included in accumulated other comprehensive loss as of March 31, 2024. 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 March 31, 2024 and December 31, 2023 were as follows (in thousands): Total Fair Value Fair Value Measurements at Level 1 Level 2 As of March 31, 2024 Cash Equivalents and Marketable Securities: Money market funds $ 147,089 $ 147,089 $ — Time deposits 38,623 — 38,623 Commercial paper 8,282 — 8,282 Corporate bonds 1,359,762 — 1,359,762 U.S. government agency obligations 395,717 — 395,717 Mutual funds 24,101 24,101 — $ 1,973,574 $ 171,190 $ 1,802,384 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 March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, 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 three months ended March 31, 2024. 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 March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, December 31, Due in 1 year or less $ 1,201,179 $ 372,014 Due after 1 year through 5 years 559,604 1,409,504 $ 1,760,783 $ 1,781,518 |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2024 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Trade accounts receivable $ 503,466 $ 516,175 Unbilled accounts receivable 215,947 211,596 Gross accounts receivable 719,413 727,771 Allowances for current expected credit losses and other reserves (2,775) (3,469) Accounts receivable, net $ 716,638 $ 724,302 A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the three months ended March 31, 2024 and 2023 was as follows (in thousands): March 31, March 31, Beginning balance $ 3,469 $ 5,917 Charges to income from operations 1,700 1,397 Collections from customers previously reserved and other (2,394) (1,757) Ending balance $ 2,775 $ 5,557 Charges to income from operations primarily represents charges to provision for doubtful accounts for increases in the allowance for current expected credit losses. |
Incremental Costs to Obtain a C
Incremental Costs to Obtain a Contract with a Customer | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Incremental Costs to Obtain a Contract with a Customer | Incremental Costs to Obtain a Contract with a Customer Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, December 31, Deferred costs included in prepaid expenses and other current assets $ 47,764 $ 44,383 Deferred costs included in other assets 43,240 42,738 Total deferred costs $ 91,004 $ 87,121 Information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Amortization expense related to deferred costs $ 14,363 $ 12,175 Incremental costs capitalized 19,342 12,417 Amortization expense related to deferred costs is primarily included in sales and marketing expense in the interim condensed consolidated statements of income. 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 U.S. $ 512,347 $ 473,833 International 474,623 441,865 Total revenue $ 986,970 $ 915,698 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 Security $ 490,681 $ 405,552 Delivery 351,758 394,384 Compute 144,531 115,762 Total revenue $ 986,970 $ 915,698 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 three months ended March 31, 2024 and 2023, the Company recognized $60.5 million and $57.5 million of revenue that was included in deferred revenue as of December 31, 2023 and 2022, respectively. As of March 31, 2024, 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 |
Acquired Intangible Assets and
Acquired Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Gross Accumulated Amortization Net Gross Accumulated Net Completed technologies $ 354,223 $ (203,676) $ 150,547 $ 354,539 $ (196,572) $ 157,967 Customer-related intangible assets 613,369 (286,130) 327,239 616,267 (273,758) 342,509 Trademarks and trade names 14,652 (9,437) 5,215 14,659 (9,117) 5,542 Acquired license rights 34,810 (5,257) 29,553 34,810 (4,685) 30,125 Total $ 1,017,054 $ (504,500) $ 512,554 $ 1,020,275 $ (484,132) $ 536,143 Aggregate expense related to amortization of acquired intangible assets for the three months ended March 31, 2024 and 2023 was $21.0 million and $15.9 million, respectively. Based on the Company’s acquired intangible assets as of March 31, 2024, aggregate expense related to amortization of acquired intangible assets is expected to be $63.3 million for the remainder of 2024, and $80.3 million, $76.0 million, $61.9 million and $49.5 million for 2025, 2026, 2027 and 2028, respectively. The changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows (in thousands): Balance as of January 1, 2024 $ 2,850,470 Measurement period adjustments related to acquisitions completed in prior years 18 Foreign currency translation (3,953) Balance as of March 31, 2024 $ 2,846,535 The Company tests goodwill for impairment at least annually. Through the date the interim condensed consolidated financial statements were issued, no triggering events have occurred that would indicate that a potential impairment exists. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisition Noname Security In May 2024, the Company announced its intention to acquire Noname Gate Ltd. ("Noname Security"), for approximately $450.0 million, subject to cash acquired and post-closing adjustments. Noname Security is intended to enhance Akamai’s existing API Security solution and accelerate its ability to meet growing customer demand and market requirements as the use of APIs continues to expand. The acquisition is expected to close in the second quarter of 2024. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023 (in thousands): 2029 Notes 2027 Notes 2025 Notes Total As of March 31, 2024 Principal $ 1,265,000 $ 1,150,000 $ 1,150,000 $ 3,565,000 Less: issuance costs, net of amortization (15,701) (6,361) (2,818) (24,880) Net carrying amount $ 1,249,299 $ 1,143,639 $ 1,147,182 $ 3,540,120 Estimated fair value (1) $ 1,300,837 $ 1,215,665 $ 1,359,473 $ 3,875,975 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 (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 month. 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 interim condensed 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 interim condensed 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 cost $ 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 November 2022, the Company entered into a $500.0 million five-year, revolving credit agreement (the “2022 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 on November, 22, 2027, and any amounts outstanding thereunder will become due and payable, 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. As of March 31, 2024, the Company was in compliance with all covenants. 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 March 31, 2024. 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 Amortization of debt issuance costs $ 1,946 $ 1,166 Coupon interest payable on 2029 Notes 3,558 — Coupon interest payable on 2027 Notes 1,078 1,078 Coupon interest payable on 2025 Notes 359 359 Interest payable and commitment fees under the 2022 credit agreement 141 146 Capitalization of interest expense (264) (68) Total interest expense $ 6,818 $ 2,681 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2024 | |
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 has incurred $20.7 million related to this action through March 31, 2024. During the three months ended March 31, 2023, $23.6 million was incurred related to this action. There were no material charges incurred during the three months ended March 31, 2024, and the Company 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 leasehold improvements were recognized. The Company has incurred $35.9 million of restructuring charges related to this action, of which $0.9 million and $18.5 million were incurred during the three months ended March 31, 2024 and 2023, respectively. As the Company continues to execute its FlexBase program, additional charges related to this action are expected to occur through the first half of 2024, however, the Company does not expect to incur any material additional restructuring charges related to this action. The Company also recognizes restructuring charges for redundant employees, facilities and contracts associated with completed acquisitions. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Repurchase Program Effective January 2022, the board of directors of the Company authorized a $1.8 billion share repurchase program through December 2024, of which $412.5 million remains available for repurchase as of March 31, 2024. In May 2024, the board of directors authorized a new $2.0 billion share repurchase program, effective May 2024 through June 2027. 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. During the three months ended March 31, 2024, the Company repurchased 1.1 million shares of its common stock for $125.4 million. Stock-Based Compensation Components of total stock-based compensation included in the Company’s interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Cost of revenue $ 12,618 $ 9,329 Research and development 38,045 21,844 Sales and marketing 18,811 13,545 General and administrative 23,786 17,165 Total stock-based compensation 93,260 61,883 Provision for income taxes (40,340) (11,413) Total stock-based compensation, net of income taxes $ 52,920 $ 50,470 In addition to the amounts of stock-based compensation reported in the table above, the Company’s interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 also include stock-based compensation reflected as a component of amortization primarily consisting of capitalized internal-use software; the additional stock-based compensation was $9.7 million and $7.5 million, respectively, before taxes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2024 | |
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 three months ended March 31, 2024 were as follows (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2024 $ (98,035) $ 2,705 $ (95,330) Other comprehensive loss (16,447) (4,816) (21,263) Balance as of March 31, 2024 $ (114,482) $ (2,111) $ (116,593) There were no amounts reclassified from accumulated other comprehensive loss to net income for the three months ended March 31, 2024. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Incremental Costs to Obtain a Contract with a Customer Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, December 31, Deferred costs included in prepaid expenses and other current assets $ 47,764 $ 44,383 Deferred costs included in other assets 43,240 42,738 Total deferred costs $ 91,004 $ 87,121 Information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Amortization expense related to deferred costs $ 14,363 $ 12,175 Incremental costs capitalized 19,342 12,417 Amortization expense related to deferred costs is primarily included in sales and marketing expense in the interim condensed consolidated statements of income. 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 U.S. $ 512,347 $ 473,833 International 474,623 441,865 Total revenue $ 986,970 $ 915,698 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 Security $ 490,681 $ 405,552 Delivery 351,758 394,384 Compute 144,531 115,762 Total revenue $ 986,970 $ 915,698 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 three months ended March 31, 2024 and 2023, the Company recognized $60.5 million and $57.5 million of revenue that was included in deferred revenue as of December 31, 2023 and 2022, respectively. As of March 31, 2024, 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 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective income tax rate is based on estimated income for the year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable quarterly periods. Potential discrete adjustments include tax charges or benefits related to stock-based compensation, changes in tax legislation, settlements of tax audits or assessments, uncertain tax positions and acquisitions, among other items. The Company’s effective income tax rate was 6.8% and 23.5% for the three months ended March 31, 2024 and 2023, respectively. The lower effective tax rate for the three months ended March 31, 2024 was primarily due to an increase in the excess tax benefit related to stock-based compensation, a decrease in tax on global intangible low-taxed income and a decrease in the valuation allowance recorded against state and foreign credits. These amounts were partially offset by a decrease in foreign income taxed at lower rates and the impact of the enactment of a 15% global minimum corporate income tax that the Organisation for Economic Co-operation and Development ("OECD") and OECD member countries have begun implementing and which impacted the Company beginning January 1, 2024. For the three months ended March 31, 2024, the effective income tax rate was lower than the federal statutory tax rate due to the excess tax benefit related to stock-based compensation, foreign income taxed at lower rates and the benefit of U.S. federal, state and foreign research and development credits. These amounts were partially offset by non-deductible stock-based compensation and the 15% global minimum corporate income tax. For the three months ended March 31, 2023, the effective income tax rate was higher than the federal statutory tax rate due to tax on global intangible low-taxed income, non-deductible stock-based compensation, a shortfall related to stock-based compensation and an increase in the valuation allowance recorded against tax credits and foreign net operating losses. These amounts were partially offset by foreign income taxed at lower rates and the benefit of U.S. federal, state and foreign research and development credits. |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share Reconciliation [Abstract] | |
Net Income per Share | Net Income per Share Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock awards, convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding 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. The components used in the computation of basic and diluted net income per share for the three months ended March 31, 2024 and 2023 were as follows (in thousands, except per share data): For the Three Months 2024 2023 Numerator: Net income $ 175,418 $ 97,106 Denominator: Shares used for basic net income per share 151,628 155,637 Effect of dilutive securities: Stock awards 3,724 498 Convertible senior notes 2,114 — Warrants related to issuance of convertible senior notes — — Shares used for diluted net income per share 157,466 156,135 Basic net income per share $ 1.16 $ 0.62 Diluted net income per share $ 1.11 $ 0.62 For the three months ended March 31, 2024 and 2023, certain potential outstanding shares from service-based stock awards 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 three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Service-based stock awards 4,161 7,867 Market- and performance-based stock awards 1,328 1,580 Warrants related to issuance of convertible senior notes 32,006 21,991 Total shares excluded from computation 37,495 31,438 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 175,418 | $ 97,106 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | The following table describes, for the quarterly period covered by this report, 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 Robert Blumofe (Executive Vice President and Chief Technology Officer) Adoption (03/10/2024) Rule 10b5-1 trading arrangement Sales Until March 11, 2025, or such earlier date upon which all transactions are completed or expire without execution Up to 23,219 shares of common stock Kimberly Salem-Jackson (Chief Marketing Officer) Adoption (02/20/2024) Rule 10b5-1 trading arrangement Sales Until November 29, 2024, or such earlier date upon which all transactions are completed or expire without execution Up to 12,275 shares of common stock William R. Wagner (Director) Adoption (02/26/2024) Rule 10b5-1 trading arrangement Sales Until November 27, 2024, or such earlier date upon which all transactions are completed or expire without execution Up to 3,000 shares of common stock |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Robert Blumofe [Member] | |
Trading Arrangements, by Individual | |
Name | Robert Blumofe |
Title | Executive Vice President and Chief Technology Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 03/10/2024 |
Arrangement Duration | 368 days |
Aggregate Available | 23,219 |
Kimberly Salem-Jackson [Member] | |
Trading Arrangements, by Individual | |
Name | Kimberly Salem-Jackson |
Title | Chief Marketing Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 02/20/2024 |
Arrangement Duration | 288 days |
Aggregate Available | 12,275 |
William R. Wagner [Member] | |
Trading Arrangements, by Individual | |
Name | William R. Wagner |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 02/26/2024 |
Arrangement Duration | 275 days |
Aggregate Available | 3,000 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation in the accompanying interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed in, or omitted from, these interim financial statements. Accordingly, the unaudited interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 28, 2024. The December 31, 2023 condensed consolidated balance sheet included herein is derived from the Company's audited consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("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) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available-for-Sale Marketable Securities Held | Available-for-sale marketable securities held as of March 31, 2024 and December 31, 2023 were as follows (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Short-Term Long-Term As of March 31, 2024 Commercial paper $ 5,318 $ — $ (14) $ 5,304 $ 5,304 $ — Corporate bonds 1,361,982 1,247 (3,467) 1,359,762 856,550 503,212 U.S. government agency obligations 396,152 354 (789) 395,717 339,325 56,392 $ 1,763,452 $ 1,601 $ (4,270) $ 1,760,783 $ 1,201,179 $ 559,604 As of December 31, 2023 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 |
Schedule of Fair Value Measurements within Fair Value Hierarchy | The fair value measurements within the fair value hierarchy of the Company’s financial assets as of March 31, 2024 and December 31, 2023 were as follows (in thousands): Total Fair Value Fair Value Measurements at Level 1 Level 2 As of March 31, 2024 Cash Equivalents and Marketable Securities: Money market funds $ 147,089 $ 147,089 $ — Time deposits 38,623 — 38,623 Commercial paper 8,282 — 8,282 Corporate bonds 1,359,762 — 1,359,762 U.S. government agency obligations 395,717 — 395,717 Mutual funds 24,101 24,101 — $ 1,973,574 $ 171,190 $ 1,802,384 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 |
Schedule of Contractual Maturities of Available-for-Sale Marketable Securities Held | Contractual maturities of the Company’s available-for-sale marketable securities held as of March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, December 31, Due in 1 year or less $ 1,201,179 $ 372,014 Due after 1 year through 5 years 559,604 1,409,504 $ 1,760,783 $ 1,781,518 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Net Accounts Receivable | Net accounts receivable consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Trade accounts receivable $ 503,466 $ 516,175 Unbilled accounts receivable 215,947 211,596 Gross accounts receivable 719,413 727,771 Allowances for current expected credit losses and other reserves (2,775) (3,469) Accounts receivable, net $ 716,638 $ 724,302 |
Schedule of Activity in the Accounts Receivable Allowance for Current Expected Credit Losses and Other Reserves | A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the three months ended March 31, 2024 and 2023 was as follows (in thousands): March 31, March 31, Beginning balance $ 3,469 $ 5,917 Charges to income from operations 1,700 1,397 Collections from customers previously reserved and other (2,394) (1,757) Ending balance $ 2,775 $ 5,557 |
Incremental Costs to Obtain a_2
Incremental Costs to Obtain a Contract with a Customer (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Costs and Incremental Costs Related to Contract with Customer | Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, December 31, Deferred costs included in prepaid expenses and other current assets $ 47,764 $ 44,383 Deferred costs included in other assets 43,240 42,738 Total deferred costs $ 91,004 $ 87,121 Information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Amortization expense related to deferred costs $ 14,363 $ 12,175 Incremental costs capitalized 19,342 12,417 |
Acquired Intangible Assets an_2
Acquired Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Gross Accumulated Amortization Net Gross Accumulated Net Completed technologies $ 354,223 $ (203,676) $ 150,547 $ 354,539 $ (196,572) $ 157,967 Customer-related intangible assets 613,369 (286,130) 327,239 616,267 (273,758) 342,509 Trademarks and trade names 14,652 (9,437) 5,215 14,659 (9,117) 5,542 Acquired license rights 34,810 (5,257) 29,553 34,810 (4,685) 30,125 Total $ 1,017,054 $ (504,500) $ 512,554 $ 1,020,275 $ (484,132) $ 536,143 |
Schedule of the Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2024 were as follows (in thousands): Balance as of January 1, 2024 $ 2,850,470 Measurement period adjustments related to acquisitions completed in prior years 18 Foreign currency translation (3,953) Balance as of March 31, 2024 $ 2,846,535 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023 (in thousands): 2029 Notes 2027 Notes 2025 Notes Total As of March 31, 2024 Principal $ 1,265,000 $ 1,150,000 $ 1,150,000 $ 3,565,000 Less: issuance costs, net of amortization (15,701) (6,361) (2,818) (24,880) Net carrying amount $ 1,249,299 $ 1,143,639 $ 1,147,182 $ 3,540,120 Estimated fair value (1) $ 1,300,837 $ 1,215,665 $ 1,359,473 $ 3,875,975 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 (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 cost $ 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 interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 Amortization of debt issuance costs $ 1,946 $ 1,166 Coupon interest payable on 2029 Notes 3,558 — Coupon interest payable on 2027 Notes 1,078 1,078 Coupon interest payable on 2025 Notes 359 359 Interest payable and commitment fees under the 2022 credit agreement 141 146 Capitalization of interest expense (264) (68) Total interest expense $ 6,818 $ 2,681 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Components of Total Stock-Based Compensation | Components of total stock-based compensation included in the Company’s interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Cost of revenue $ 12,618 $ 9,329 Research and development 38,045 21,844 Sales and marketing 18,811 13,545 General and administrative 23,786 17,165 Total stock-based compensation 93,260 61,883 Provision for income taxes (40,340) (11,413) Total stock-based compensation, net of income taxes $ 52,920 $ 50,470 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the three months ended March 31, 2024 were as follows (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2024 $ (98,035) $ 2,705 $ (95,330) Other comprehensive loss (16,447) (4,816) (21,263) Balance as of March 31, 2024 $ (114,482) $ (2,111) $ (116,593) |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Geographical and Solution Category | Revenue by geography included in the Company’s interim condensed consolidated statements of income for the three months ended March 31, 2024 and 2023 was as follows (in thousands): For the Three Months 2024 2023 U.S. $ 512,347 $ 473,833 International 474,623 441,865 Total revenue $ 986,970 $ 915,698 For the Three Months 2024 2023 Security $ 490,681 $ 405,552 Delivery 351,758 394,384 Compute 144,531 115,762 Total revenue $ 986,970 $ 915,698 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share Reconciliation [Abstract] | |
Schedule of Components Used in Computation of Basic and Diluted Net Income Per Share | The components used in the computation of basic and diluted net income per share for the three months ended March 31, 2024 and 2023 were as follows (in thousands, except per share data): For the Three Months 2024 2023 Numerator: Net income $ 175,418 $ 97,106 Denominator: Shares used for basic net income per share 151,628 155,637 Effect of dilutive securities: Stock awards 3,724 498 Convertible senior notes 2,114 — Warrants related to issuance of convertible senior notes — — Shares used for diluted net income per share 157,466 156,135 Basic net income per share $ 1.16 $ 0.62 Diluted net income per share $ 1.11 $ 0.62 |
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 three months ended March 31, 2024 and 2023 were as follows (in thousands): For the Three Months 2024 2023 Service-based stock awards 4,161 7,867 Market- and performance-based stock awards 1,328 1,580 Warrants related to issuance of convertible senior notes 32,006 21,991 Total shares excluded from computation 37,495 31,438 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 segment location city country | |
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 | city | 750 |
Number of reportable segments | 1 |
Number of operating segments | 1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Available-for-Sale Marketable Securities Held (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 1,763,452 | $ 1,777,812 |
Gross unrealized gains | 1,601 | 8,891 |
Losses | (4,270) | (5,185) |
Aggregate Fair Value | 1,760,783 | 1,781,518 |
Short-Term Marketable Securities | 1,201,179 | 372,014 |
Long-Term Marketable Securities | 559,604 | 1,409,504 |
Time deposits | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 14,426 | |
Gross unrealized gains | 0 | |
Losses | 0 | |
Aggregate Fair Value | 14,426 | |
Short-Term Marketable Securities | 14,426 | |
Long-Term Marketable Securities | 0 | |
Commercial paper | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 5,318 | 6,249 |
Gross unrealized gains | 0 | 0 |
Losses | (14) | (5) |
Aggregate Fair Value | 5,304 | 6,244 |
Short-Term Marketable Securities | 5,304 | 6,244 |
Long-Term Marketable Securities | 0 | 0 |
Corporate bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,361,982 | 1,328,980 |
Gross unrealized gains | 1,247 | 6,429 |
Losses | (3,467) | (4,201) |
Aggregate Fair Value | 1,359,762 | 1,331,208 |
Short-Term Marketable Securities | 856,550 | 276,975 |
Long-Term Marketable Securities | 503,212 | 1,054,233 |
U.S. government agency obligations | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 396,152 | 428,157 |
Gross unrealized gains | 354 | 2,462 |
Losses | (789) | (979) |
Aggregate Fair Value | 395,717 | 429,640 |
Short-Term Marketable Securities | 339,325 | 74,369 |
Long-Term Marketable Securities | $ 56,392 | $ 355,271 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Corporate bonds $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | $ 179.9 |
Unrealized loss from available-for-sale marketable securities | $ 2.6 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value Measurements within Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 1,760,783 | $ 1,781,518 |
Total Fair Value | 1,973,574 | 2,006,944 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 147,089 | 177,240 |
Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 38,623 | 39,670 |
Available-for-sale securities | 14,426 | |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 8,282 | 6,244 |
Available-for-sale securities | 5,304 | 6,244 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,359,762 | 1,331,208 |
U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 395,717 | 429,640 |
Available-for-sale securities | 395,717 | 429,640 |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 24,101 | 22,942 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value | 171,190 | 200,182 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 147,089 | 177,240 |
Level 1 | Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Level 1 | U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 24,101 | 22,942 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Fair Value | 1,802,384 | 1,806,762 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 38,623 | 39,670 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 8,282 | 6,244 |
Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 1,359,762 | 1,331,208 |
Level 2 | U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 395,717 | 429,640 |
Level 2 | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 0 | $ 0 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Contractual Maturities of Available-for-Sale Marketable Securities Held (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 1,201,179 | $ 372,014 |
Due after 1 year through 5 years | 559,604 | 1,409,504 |
Aggregate Fair Value | $ 1,760,783 | $ 1,781,518 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Net Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 719,413 | $ 727,771 | ||
Allowances for current expected credit losses and other reserves | (2,775) | (3,469) | $ (5,557) | $ (5,917) |
Accounts receivable, net | 716,638 | 724,302 | ||
Trade accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | 503,466 | 516,175 | ||
Unbilled accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 215,947 | $ 211,596 |
Accounts Receivable - Schedul_2
Accounts Receivable - Schedule of Activity in the Accounts Receivable Allowance for Current Expected Credit Losses and Other Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 3,469 | $ 5,917 |
Charges to income from operations | 1,700 | 1,397 |
Collections from customers previously reserved and other | (2,394) | (1,757) |
Ending balance | $ 2,775 | $ 5,557 |
Incremental Costs to Obtain a_3
Incremental Costs to Obtain a Contract with a Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Capitalized Contract Cost [Line Items] | |||
Amortization expense related to deferred costs | $ 14,363 | $ 12,175 | |
Incremental costs capitalized | 19,342 | $ 12,417 | |
Commission and incentive payments | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | 91,004 | $ 87,121 | |
Commission and incentive payments | Deferred costs included in prepaid expenses and other current assets | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | 47,764 | 44,383 | |
Commission and incentive payments | Deferred costs included in other assets | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | $ 43,240 | $ 42,738 |
Acquired Intangible Assets an_3
Acquired Intangible Assets and Goodwill - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,017,054 | $ 1,020,275 |
Accumulated Amortization | (504,500) | (484,132) |
Net Carrying Amount | 512,554 | 536,143 |
Completed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 354,223 | 354,539 |
Accumulated Amortization | (203,676) | (196,572) |
Net Carrying Amount | 150,547 | 157,967 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 613,369 | 616,267 |
Accumulated Amortization | (286,130) | (273,758) |
Net Carrying Amount | 327,239 | 342,509 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14,652 | 14,659 |
Accumulated Amortization | (9,437) | (9,117) |
Net Carrying Amount | 5,215 | 5,542 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34,810 | 34,810 |
Accumulated Amortization | (5,257) | (4,685) |
Net Carrying Amount | $ 29,553 | $ 30,125 |
Acquired Intangible Assets an_4
Acquired Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of acquired intangible assets | $ 21,023 | $ 15,912 |
Remainder of 2024 | 63,300 | |
2025 | 80,300 | |
2026 | 76,000 | |
2027 | 61,900 | |
2028 | $ 49,500 |
Acquired Intangible Assets an_5
Acquired Intangible Assets and Goodwill - Schedule of the Changes in the Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Schedule of Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 2,850,470 |
Measurement period adjustments related to acquisitions completed in prior years | 18 |
Foreign currency translation | (3,953) |
Goodwill, ending balance | $ 2,846,535 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 1 Months Ended |
May 31, 2024 USD ($) | |
Noname Security | Subsequent Event | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Expected purchase price | $ 450 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Convertible Debt | 3 Months Ended | |
Mar. 31, 2024 USD ($) day senior_note | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
Number of convertible senior notes | senior_note | 3 | |
Principal | $ | $ 3,565,000,000 | $ 3,565,000,000 |
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 | $ 1,265,000,000 |
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 | 3 Months Ended | |
Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
Principal | $ 3,565,000,000 | $ 3,565,000,000 |
2029 Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 1,265,000,000 | 1,265,000,000 |
Coupon Interest Rate | 1.125% | |
Effective Interest Rate | 1.388% | |
Conversion rate | 0.0079170 | |
Conversion price per share (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 per share (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 per share (in dollars per share) | $ / shares | $ 95.10 |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Principal | $ 3,565,000,000 | $ 3,565,000,000 |
Less: issuance costs, net of amortization | (24,880,000) | (26,771,000) |
Net carrying amount | 3,540,120,000 | 3,538,229,000 |
Estimated fair value | 3,875,975,000 | 4,133,408,000 |
2029 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,265,000,000 | 1,265,000,000 |
Less: issuance costs, net of amortization | (15,701,000) | (16,478,000) |
Net carrying amount | 1,249,299,000 | 1,248,522,000 |
Estimated fair value | 1,300,837,000 | 1,376,915,000 |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,150,000,000 | 1,150,000,000 |
Less: issuance costs, net of amortization | (6,361,000) | (6,831,000) |
Net carrying amount | 1,143,639,000 | 1,143,169,000 |
Estimated fair value | 1,215,665,000 | 1,289,219,000 |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Principal | 1,150,000,000 | 1,150,000,000 |
Less: issuance costs, net of amortization | (2,818,000) | (3,462,000) |
Net carrying amount | 1,147,182,000 | 1,146,538,000 |
Estimated fair value | $ 1,359,473,000 | $ 1,467,274,000 |
Debt - Schedule of Note Hedges
Debt - Schedule of Note Hedges and Warrants (Details) - Convertible Debt $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
2029 Notes | |
Debt Instrument [Line Items] | |
Note hedge transaction cost | $ | $ 236,555 |
Shares covered by note hedge transaction (in shares) | shares | 10,015 |
Shares related to warrant transaction (in shares) | shares | 10,015 |
Strike price per share related to warrant transaction (in dollars per share) | $ / shares | $ 180.44 |
Aggregate proceeds from sale of warrants | $ | $ 90,195 |
2027 Notes | |
Debt Instrument [Line Items] | |
Note hedge transaction cost | $ | $ 312,225 |
Shares covered by note hedge transaction (in shares) | shares | 9,898 |
Shares related to warrant transaction (in shares) | shares | 9,898 |
Strike price per share related to warrant transaction (in dollars per share) | $ / shares | $ 178.74 |
Aggregate proceeds from sale of warrants | $ | $ 185,150 |
2025 Notes | |
Debt Instrument [Line Items] | |
Note hedge transaction cost | $ | $ 261,740 |
Shares covered by note hedge transaction (in shares) | shares | 12,093 |
Shares related to warrant transaction (in shares) | shares | 12,093 |
Strike price per share related to warrant transaction (in dollars per share) | $ / shares | $ 149.18 |
Aggregate proceeds from sale of warrants | $ | $ 119,945 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Narrative) (Details) - 2022 Credit Agreement | 1 Months Ended | |
Nov. 30, 2022 USD ($) extension | Mar. 31, 2024 USD ($) | |
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 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.07% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.125% | |
Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0% | |
Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.125% | |
Benchmark Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.75% | |
Benchmark Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.125% | |
Reference Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.75% | |
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 | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 1,946 | $ 1,166 |
Capitalization of interest expense | (264) | (68) |
Total interest expense | 6,818 | 2,681 |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Interest payable | 141 | 146 |
Convertible Debt | 2029 Notes | ||
Debt Instrument [Line Items] | ||
Interest payable | 3,558 | 0 |
Convertible Debt | 2027 Notes | ||
Debt Instrument [Line Items] | ||
Interest payable | 1,078 | 1,078 |
Convertible Debt | 2025 Notes | ||
Debt Instrument [Line Items] | ||
Interest payable | $ 359 | $ 359 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | $ 544 | $ 44,723 |
Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, cost incurred to date | 20,700 | |
Restructuring charge | 23,600 | |
2021 Restructuring Plan | Lease Impairment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, cost incurred to date | 35,900 | |
Restructuring charge | $ 900 | $ 18,500 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | May 31, 2024 | Jan. 31, 2022 | |
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 1,800,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 412,500 | |||
Repurchase of common stock | 125,449 | $ 348,600 | ||
Amortization expense from capitalized stock-based compensation | $ 9,700 | $ 7,500 | ||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 2,000,000 | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Shares repurchased during period (in shares) | 1.1 | |||
Repurchase of common stock | $ 125,400 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Components of Total Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 93,260 | $ 61,883 |
Provision for income taxes | (40,340) | (11,413) |
Total stock-based compensation, net of income taxes | 52,920 | 50,470 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 12,618 | 9,329 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 38,045 | 21,844 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 18,811 | 13,545 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 23,786 | $ 17,165 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 4,597,155,000 | $ 4,360,187,000 |
Other comprehensive loss | (21,263,000) | 19,171,000 |
Ending balance | 4,633,767,000 | 4,171,341,000 |
Reclassification from accumulated other comprehensive income (loss) | 0 | |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (95,330,000) | (140,332,000) |
Ending balance | (116,593,000) | $ (121,161,000) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (98,035,000) | |
Other comprehensive loss | (16,447,000) | |
Ending balance | (114,482,000) | |
Net Unrealized Gains (Losses) on Investments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 2,705,000 | |
Other comprehensive loss | (4,816,000) | |
Ending balance | $ (2,111,000) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) solution_category | Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of solutions | solution_category | 3 | |
Revenue recognized | $ | $ 60.5 | $ 57.5 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Revenue by Geographical and Solution Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 986,970 | $ 915,698 |
Security | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 490,681 | 405,552 |
Delivery | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 351,758 | 394,384 |
Compute | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 144,531 | 115,762 |
U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 512,347 | 473,833 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 474,623 | $ 441,865 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Performance Obligations (Narrative) (Details) $ in Billions | Mar. 31, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 3.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, percentage | 65% |
Remaining performance obligation, expected timing | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing | 3 years |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 6.80% | 23.50% |
Net Income per Share - Schedule
Net Income per Share - Schedule of Components Used in Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net income | $ 175,418 | $ 97,106 |
Denominator: | ||
Shares used for basic net income per share (in shares) | 151,628 | 155,637 |
Effect of dilutive securities: | ||
Stock awards (in shares) | 3,724 | 498 |
Convertible senior notes (in shares) | 2,114 | 0 |
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 |
Shares used for diluted net income per share (in shares) | 157,466 | 156,135 |
Basic net income per share (in dollars per share) | $ 1.16 | $ 0.62 |
Diluted net income per share (in dollars per share) | $ 1.11 | $ 0.62 |
Net Income per Share - Schedu_2
Net Income per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from computation | 37,495 | 31,438 |
Service-based stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from computation | 4,161 | 7,867 |
Market- and performance-based stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from computation | 1,328 | 1,580 |
Warrants related to issuance of convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from computation | 32,006 | 21,991 |