Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Stock Based Compensation Expense

The following table summarizes the components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2019, 2018 and 2017 (in thousands):

	2019			2018			2017
Cost of revenue	$	22,479		$	21,892		$	20,314
Research and development	49,685			44,034			38,864
Sales and marketing	62,150			64,373			60,246
General and administrative	52,826			53,514			44,884
Total stock-based compensation	187,140			183,813			164,308
Provision for income taxes	(51,177		)	(48,502		)	(56,237		)
Total stock-based compensation, net of taxes	$	135,963		$	135,311		$	108,071

Schedule of Assumptions Used

The grant-date fair values of the TSR-based RSUs granted during the years ended December 31, 2019, 2018 and 2017 were estimated using a Monte Carlo simulation model with the following assumptions:

	2019		2018		2017
Expected term (in years)	3.0		3.0		3.0
Risk-free interest rate	2.5	%	2.3	%	1.4	%
Akamai historical share price volatility	32.8	%	35.5	%	33.2	%
Average volatility of peer-company share price	27.0	%	26.3	%	27.1	%

The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2019, 2018 and 2017 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2019		2018		2017
Expected term (in years)	0.5		0.5		0.5
Risk-free interest rate	2.3	%	1.9	%	1.0	%
Expected volatility	29.6	%	31.2	%	35.8	%
Dividend yield	—	%	—	%	—	%

Schedule of Summary of Stock Option Activity

The following table summarizes stock option activity during the year ended December 31, 2019:

	Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019	120		$	37.33
Exercised	(93	)	39.23
Forfeited	(7	)	44.88
Outstanding at December 31, 2019	20		$	26.23	1.21	$	1,230
Exercisable at December 31, 2019	20		$	26.23	1.21	$	1,230
Vested or expected to vest December 31, 2019	20		$	26.23	1.21	$	1,230

Schedule Of Deferred Stock Units Activity

The following table summarizes the DSU activity for the year ended December 31, 2019:

	Units (in thousands)		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	171		$	49.54
Granted	25		76.62
Vested and distributed	(97	)	48.51
Outstanding at December 31, 2019	99		$	57.50

Schedule of Restricted Stock Units by Type

The following table summarizes the different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2019 (in thousands):

 

	December 31, 2019
RSUs with service-based vesting conditions	2,769
RSUs with market-based vesting conditions	105
RSUs with performance-based vesting conditions	327
Total	3,201

Schedule of Restricted Stock Units Activity

The following table summarizes the RSU activity for the year ended December 31, 2019:

	Units (in thousands)		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	5,612		$	62.25
Granted	3,201		72.30
Vested	(3,086	)	63.36
Forfeited	(654	)	67.34
Outstanding at December 31, 2019	5,073		$	70.43