ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
PART I | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
PART III | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
PART IV | ||||||||
Item 15. | ||||||||
Item 16. | ||||||||
Period(1) | Total Number of Shares Purchased(2) | Average Price Paid per Share(3) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(4) | Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs(4) | ||||||||||||||||||||||
October 1, 2020 – October 31, 2020 | 76,169 | $ | 109.16 | 76,169 | $ | 636,088 | ||||||||||||||||||||
November 1, 2020 – November 30, 2020 | 303,703 | 100.18 | 303,703 | 605,664 | ||||||||||||||||||||||
December 1, 2020 – December 31, 2020 | 321,946 | 104.90 | 321,946 | 571,892 | ||||||||||||||||||||||
Total | 701,818 | $ | 103.32 | 701,818 | $ | 571,892 |
Year ended December 31, | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||
Revenue | $ | 3,198,149 | $ | 2,893,617 | $ | 2,714,474 | $ | 2,489,035 | $ | 2,347,988 | ||||||||||||||||||||||
Total costs and operating expenses | 2,539,615 | 2,344,699 | 2,351,975 | 2,174,746 | 1,881,478 | |||||||||||||||||||||||||||
Income from operations | 658,534 | 548,918 | 362,499 | 314,289 | 466,510 | |||||||||||||||||||||||||||
Net income | 557,054 | 478,035 | 298,373 | 222,766 | 320,727 | |||||||||||||||||||||||||||
Basic net income per share | 3.43 | 2.94 | 1.78 | 1.30 | 1.83 | |||||||||||||||||||||||||||
Diluted net income per share | 3.37 | 2.90 | 1.76 | 1.29 | 1.82 | |||||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | 2,496,875 | 2,372,378 | 2,101,171 | 1,279,528 | 1,616,329 | |||||||||||||||||||||||||||
Total assets | 7,764,130 | 7,006,886 | 5,461,770 | 4,648,916 | 4,432,190 | |||||||||||||||||||||||||||
Convertible senior notes – due 2019 | — | — | 686,552 | 662,913 | 640,087 | |||||||||||||||||||||||||||
Convertible senior notes – due 2025 | 953,066 | 912,719 | 874,080 | — | — | |||||||||||||||||||||||||||
Convertible senior notes – due 2027 | 953,641 | 927,072 | — | — | — | |||||||||||||||||||||||||||
Long-term operating lease liabilities | 715,404 | 692,181 | ||||||||||||||||||||||||||||||
Other long-term liabilities | 132,553 | 123,620 | 185,121 | 166,840 | 156,329 | |||||||||||||||||||||||||||
Total stockholders’ equity | 4,251,296 | 3,657,958 | 3,191,860 | 3,362,469 | 3,270,218 |
2020 | 2019 | 2018 | |||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Costs and operating expenses: | |||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 35.4 | 34.1 | 35.1 | ||||||||||||||
Research and development | 8.4 | 9.0 | 9.1 | ||||||||||||||
Sales and marketing | 16.0 | 18.1 | 19.1 | ||||||||||||||
General and administrative | 17.1 | 17.8 | 21.1 | ||||||||||||||
Amortization of acquired intangible assets | 1.3 | 1.3 | 1.2 | ||||||||||||||
Restructuring charge | 1.2 | 0.6 | 1.0 | ||||||||||||||
Total costs and operating expenses | 79.4 | 80.9 | 86.6 | ||||||||||||||
Income from operations | 20.6 | 19.1 | 13.4 | ||||||||||||||
Interest income | 0.9 | 1.2 | 1.0 | ||||||||||||||
Interest expense | (2.2) | (1.7) | (1.6) | ||||||||||||||
Other expense, net | (0.1) | — | (0.1) | ||||||||||||||
Income before provision for income taxes | 19.2 | 18.6 | 12.7 | ||||||||||||||
Provision for income taxes | (1.4) | (1.8) | (1.6) | ||||||||||||||
Loss from equity method investment | (0.4) | — | — | ||||||||||||||
Net income | 17.4 | % | 16.8 | % | 11.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | % Change at Constant Currency | 2019 | 2018 | % Change | % Change at Constant Currency | ||||||||||||||||||||||||||||||||||||||||
Web Division | $ | 1,666,305 | $ | 1,556,252 | 7.1 | % | 7.2 | % | $ | 1,556,252 | $ | 1,439,772 | 8.1 | % | 9.4 | % | |||||||||||||||||||||||||||||||
Media and Carrier Division | 1,531,844 | 1,337,365 | 14.5 | 14.5 | 1,337,365 | 1,274,702 | 4.9 | 6.1 | |||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 3,198,149 | $ | 2,893,617 | 10.5 | % | 10.6 | % | $ | 2,893,617 | $ | 2,714,474 | 6.6 | % | 7.8 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | % Change at Constant Currency | 2019 | 2018 | % Change | % Change at Constant Currency | ||||||||||||||||||||||||||||||||||||||||
U.S. | $ | 1,777,435 | $ | 1,694,211 | 4.9 | % | 4.9 | % | $ | 1,694,211 | $ | 1,683,272 | 0.6 | % | 0.6 | % | |||||||||||||||||||||||||||||||
International | 1,420,714 | 1,199,406 | 18.4 | 18.5 | 1,199,406 | 1,031,202 | 16.3 | 19.6 | |||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 3,198,149 | $ | 2,893,617 | 10.5 | % | 10.6 | % | $ | 2,893,617 | $ | 2,714,474 | 6.6 | % | 7.8 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||||||||||||||
Bandwidth fees | $ | 200,167 | $ | 165,335 | 21.1 | % | $ | 165,335 | $ | 154,853 | 6.8 | % | |||||||||||||||||||||||
Co-location fees | 156,275 | 127,024 | 23.0 | 127,024 | 128,082 | (0.8) | |||||||||||||||||||||||||||||
Network build-out and supporting services | 134,952 | 101,135 | 33.4 | 101,135 | 88,543 | 14.2 | |||||||||||||||||||||||||||||
Payroll and related costs | 262,972 | 248,146 | 6.0 | 248,146 | 238,920 | 3.9 | |||||||||||||||||||||||||||||
Stock-based compensation, including amortization of prior capitalized amounts | 52,863 | 51,607 | 2.4 | 51,607 | 45,765 | 12.8 | |||||||||||||||||||||||||||||
Depreciation of network equipment | 167,017 | 125,589 | 33.0 | 125,589 | 150,458 | (16.5) | |||||||||||||||||||||||||||||
Amortization of internal-use software | 158,426 | 168,788 | (6.1) | 168,788 | 146,864 | 14.9 | |||||||||||||||||||||||||||||
Total cost of revenue | $ | 1,132,672 | $ | 987,624 | 14.7 | % | $ | 987,624 | $ | 953,485 | 3.6 | % | |||||||||||||||||||||||
As a percentage of revenue | 35.4 | % | 34.1 | % | 34.1 | % | 35.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 410,568 | $ | 382,084 | 7.5 | % | $ | 382,084 | $ | 365,713 | 4.5 | % | |||||||||||||||||||||||
Stock-based compensation | 48,854 | 49,685 | (1.7) | 49,685 | 44,034 | 12.8 | |||||||||||||||||||||||||||||
Capitalized salaries and related costs | (200,143) | (183,282) | 9.2 | (183,282) | (174,373) | 5.1 | |||||||||||||||||||||||||||||
Other expenses | 10,036 | 12,878 | (22.1) | 12,878 | 10,791 | 19.3 | |||||||||||||||||||||||||||||
Total research and development | $ | 269,315 | $ | 261,365 | 3.0 | % | $ | 261,365 | $ | 246,165 | 6.2 | % | |||||||||||||||||||||||
As a percentage of revenue | 8.4 | % | 9.0 | % | 9.0 | % | 9.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 393,800 | $ | 382,570 | 2.9 | % | $ | 382,570 | $ | 388,320 | (1.5) | % | |||||||||||||||||||||||
Stock-based compensation | 65,257 | 62,149 | 5.0 | 62,149 | 64,372 | (3.5) | |||||||||||||||||||||||||||||
Marketing programs and related costs | 39,272 | 52,787 | (25.6) | 52,787 | 41,796 | 26.3 | |||||||||||||||||||||||||||||
Other expenses | 12,076 | 26,377 | (54.2) | 26,377 | 22,865 | 15.4 | |||||||||||||||||||||||||||||
Total sales and marketing | $ | 510,405 | $ | 523,883 | (2.6) | % | $ | 523,883 | $ | 517,353 | 1.3 | % | |||||||||||||||||||||||
As a percentage of revenue | 16.0 | % | 18.1 | % | 18.1 | % | 19.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 199,992 | $ | 194,232 | 3.0 | % | $ | 194,232 | $ | 188,635 | 3.0 | % | |||||||||||||||||||||||
Stock-based compensation | 58,470 | 52,826 | 10.7 | 52,826 | 53,514 | (1.3) | |||||||||||||||||||||||||||||
Depreciation and amortization | 82,862 | 78,587 | 5.4 | 78,587 | 80,014 | (1.8) | |||||||||||||||||||||||||||||
Facilities-related costs | 98,805 | 90,674 | 9.0 | 90,674 | 86,107 | 5.3 | |||||||||||||||||||||||||||||
Provision for doubtful accounts | 2,881 | 1,924 | 49.7 | 1,924 | 2,672 | (28.0) | |||||||||||||||||||||||||||||
Acquisition-related costs | 5,579 | 1,920 | 190.6 | 1,920 | 2,868 | (33.1) | |||||||||||||||||||||||||||||
License of patent | — | (8,855) | (100.0) | (8,855) | (17,146) | (48.4) | |||||||||||||||||||||||||||||
Legal and stockholder matter costs | 275 | 10,000 | (97.3) | 10,000 | 23,091 | (56.7) | |||||||||||||||||||||||||||||
Endowment of Akamai Foundation | 20,000 | — | 100.0 | — | 50,000 | (100.0) | |||||||||||||||||||||||||||||
Professional fees and other expenses | 79,024 | 94,785 | (16.6) | 94,785 | 104,312 | (9.1) | |||||||||||||||||||||||||||||
Total general and administrative | $ | 547,888 | $ | 516,093 | 6.2 | % | $ | 516,093 | $ | 574,067 | (10.1) | % | |||||||||||||||||||||||
As a percentage of revenue | 17.1 | % | 17.8 | % | 17.8 | % | 21.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||
2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||||||
Global functions | $193,719 | $ | 198,077 | (2.2) | % | $ | 198,077 | $ | 197,377 | 0.4 | % | |||||||||||||||||||||||||||
As a percentage of revenue | 6.1 | % | 6.8 | % | 6.8 | % | 7.3 | % | ||||||||||||||||||||||||||||||
Infrastructure | 325,434 | 307,500 | 5.8 | 307,500 | 308,915 | (0.5) | ||||||||||||||||||||||||||||||||
As a percentage of revenue | 10.2 | % | 10.6 | % | 10.6 | % | 11.4 | % | ||||||||||||||||||||||||||||||
Other | 28,735 | 10,516 | 173.3 | 10,516 | 67,775 | (84.5) | ||||||||||||||||||||||||||||||||
Total general and administrative expenses | $ | 547,888 | $ | 516,093 | 6.2 | % | $ | 516,093 | $ | 574,067 | (10.1) | % | ||||||||||||||||||||||||||
As a percentage of revenue | 17.1 | % | 17.8 | % | 17.8 | % | 21.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||
Amortization of acquired intangible assets | $ | 42,049 | $ | 38,581 | 9.0 | % | $ | 38,581 | $ | 33,311 | 15.8 | % | |||||||||||||||||||||||
As a percentage of revenue | 1.3 | % | 1.3 | % | 1.3 | % | 1.2 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||
Restructuring charge | $ | 37,286 | $ | 17,153 | 117.4 | % | $ | 17,153 | $ | 27,594 | (37.8) | % | |||||||||||||||||||||||
As a percentage of revenue | 1.2 | % | 0.6 | % | 0.6 | % | 1.0 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||
Interest income | $ | 29,122 | $ | 34,355 | (15.2) | % | $ | 34,355 | $ | 26,940 | 27.5 | % | |||||||||||||||||||||||
As a percentage of revenue | 0.9 | % | 1.2 | % | 1.2 | % | 1.0 | % | |||||||||||||||||||||||||||
Interest expense | $ | (69,120) | $ | (49,364) | 40.0 | % | $ | (49,364) | $ | (43,202) | 14.3 | % | |||||||||||||||||||||||
As a percentage of revenue | (2.2) | % | (1.7) | % | (1.7) | % | (1.6) | % | |||||||||||||||||||||||||||
Other expense, net | $ | (2,454) | $ | (1,428) | 71.8 | % | $ | (1,428) | $ | (3,148) | (54.6) | % | |||||||||||||||||||||||
As a percentage of revenue | (0.1) | % | — | % | — | % | (0.1) | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||
Provision for income taxes | $ | 45,922 | $ | 53,350 | (13.9) | % | $ | 53,350 | $ | 44,716 | 19.3 | % | |||||||||||||||||||||||
As a percentage of revenue | 1.4 | % | 1.8 | % | 1.8 | % | 1.6 | % | |||||||||||||||||||||||||||
Effective income tax rate | 7.5 | % | 10.0 | % | 10.0 | % | 13.0 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2020 | 2019 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||
Loss from equity method investment | $ | 13,106 | $ | 1,096 | 1,095.8 | % | $ | 1,096 | $ | — | 100.0 | % | |||||||||||||||||||||||
As a percentage of revenue | 0.4 | % | — | % | — | % | — | % |
2020 | 2019 | 2018 | |||||||||||||||
Income from operations | $ | 658,534 | $ | 548,918 | 362,499 | ||||||||||||
Amortization of acquired intangible assets | 42,049 | 38,581 | 33,311 | ||||||||||||||
Stock-based compensation | 197,411 | 187,140 | 183,813 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 33,202 | 34,438 | 28,603 | ||||||||||||||
Restructuring charge | 37,286 | 17,153 | 27,594 | ||||||||||||||
Acquisition-related costs | 5,579 | 1,920 | 2,868 | ||||||||||||||
Legal and stockholder matter costs | 275 | 10,000 | 23,091 | ||||||||||||||
Endowment of Akamai Foundation | 20,000 | — | 50,000 | ||||||||||||||
Transformation costs | — | 5,527 | 7,730 | ||||||||||||||
Non-GAAP income from operations | $ | 994,336 | $ | 843,677 | $ | 719,509 | |||||||||||
GAAP operating margin | 21 | % | 19 | % | 13 | % | |||||||||||
Non-GAAP operating margin | 31 | % | 29 | % | 27 | % |
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | 557,054 | $ | 478,035 | $ | 298,373 | |||||||||||
Amortization of acquired intangible assets | 42,049 | 38,581 | 33,311 | ||||||||||||||
Stock-based compensation | 197,411 | 187,140 | 183,813 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 33,202 | 34,438 | 28,603 | ||||||||||||||
Restructuring charge | 37,286 | 17,153 | 27,594 | ||||||||||||||
Acquisition-related costs | 5,579 | 1,920 | 2,868 | ||||||||||||||
Legal and stockholder matter costs | 275 | 10,000 | 23,091 | ||||||||||||||
Endowment of Akamai Foundation | 20,000 | — | 50,000 | ||||||||||||||
Transformation costs | — | 5,527 | 7,730 | ||||||||||||||
Amortization of debt discount and issuance costs | 62,823 | 45,857 | 41,958 | ||||||||||||||
(Gain) loss on investments | (7,228) | 60 | 1,481 | ||||||||||||||
Loss from equity method investment | 13,106 | 1,096 | — | ||||||||||||||
Income tax effect of above non-GAAP adjustments and certain discrete tax items | (103,280) | (80,488) | (86,391) | ||||||||||||||
Non-GAAP net income | $ | 858,277 | $ | 739,319 | $ | 612,431 |
2020 | 2019 | 2018 | |||||||||||||||
GAAP net income per diluted share | $ | 3.37 | $ | 2.90 | $ | 1.76 | |||||||||||
Adjustments to net income: | |||||||||||||||||
Amortization of acquired intangible assets | 0.25 | 0.23 | 0.20 | ||||||||||||||
Stock-based compensation | 1.19 | 1.14 | 1.09 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 0.20 | 0.21 | 0.17 | ||||||||||||||
Restructuring charge | 0.23 | 0.10 | 0.16 | ||||||||||||||
Acquisition-related costs | 0.03 | 0.01 | 0.02 | ||||||||||||||
Legal and stockholder matter costs | — | 0.06 | 0.14 | ||||||||||||||
Endowment of Akamai Foundation | 0.12 | — | 0.30 | ||||||||||||||
Transformation costs | — | 0.03 | 0.05 | ||||||||||||||
Amortization of debt discount and issuance costs | 0.38 | 0.28 | 0.25 | ||||||||||||||
(Gain) loss on investments | (0.04) | — | 0.01 | ||||||||||||||
Loss from equity method investment | 0.08 | 0.01 | — | ||||||||||||||
Income tax effect of above non-GAAP adjustments and certain discrete tax items | (0.63) | (0.49) | (0.51) | ||||||||||||||
Adjustment for shares (1) | 0.04 | — | — | ||||||||||||||
Non-GAAP net income per diluted share (2) | $ | 5.22 | $ | 4.49 | $ | 3.62 | |||||||||||
Shares used in GAAP diluted per share calculations | 165,213 | 164,573 | 169,188 | ||||||||||||||
Impact of benefit from note hedge transactions (1) | (873) | — | — | ||||||||||||||
Shares used in non-GAAP diluted per share calculations (1) | 164,340 | 164,573 | 169,188 |
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | 557,054 | $ | 478,035 | $ | 298,373 | |||||||||||
Amortization of acquired intangible assets | 42,049 | 38,581 | 33,311 | ||||||||||||||
Stock-based compensation | 197,411 | 187,140 | 183,813 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 33,202 | 34,438 | 28,603 | ||||||||||||||
Restructuring charge | 37,286 | 17,153 | 27,594 | ||||||||||||||
Acquisition-related costs | 5,579 | 1,920 | 2,868 | ||||||||||||||
Legal and stockholder matter costs | 275 | 10,000 | 23,091 | ||||||||||||||
Interest income | (29,122) | (34,355) | (26,940) | ||||||||||||||
Endowment of Akamai Foundation | 20,000 | — | 50,000 | ||||||||||||||
Transformation costs | — | 5,527 | 7,730 | ||||||||||||||
Amortization of debt discount and issuance costs | 69,120 | 49,364 | 43,202 | ||||||||||||||
Provision for income taxes | 45,922 | 53,350 | 44,716 | ||||||||||||||
Depreciation and amortization | 403,160 | 367,655 | 372,606 | ||||||||||||||
(Gain) loss on investments | (7,228) | 60 | 1,481 | ||||||||||||||
Loss from equity method investment | 13,106 | 1,096 | — | ||||||||||||||
Other expense, net | 9,682 | 1,368 | 1,667 | ||||||||||||||
Adjusted EBITDA | $ | 1,397,496 | $ | 1,211,332 | $ | 1,092,115 | |||||||||||
Adjusted EBITDA margin | 44 | % | 42 | % | 40 | % |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Net income | $ | 557,054 | $ | 478,035 | $ | 298,373 | |||||||||||
Non-cash reconciling items included in net income | 727,829 | 683,132 | 679,648 | ||||||||||||||
Changes in operating assets and liabilities | (69,883) | (102,863) | 30,306 | ||||||||||||||
Net cash flows provided by operating activities | $ | 1,215,000 | $ | 1,058,304 | $ | 1,008,327 |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Cash paid for acquired businesses, net of cash acquired | $ | (127,999) | $ | (165,329) | $ | (79) | |||||||||||
Cash paid for asset acquisition | (36,376) | — | — | ||||||||||||||
Cash paid for equity method investment | — | (36,008) | — | ||||||||||||||
Purchases of property and equipment and capitalization of internal-use software development costs | (731,872) | (562,077) | (405,741) | ||||||||||||||
Net marketable securities activity | (154,848) | (904,919) | (98,647) | ||||||||||||||
Other investing activities | 8,121 | 399 | (2,066) | ||||||||||||||
Net cash used in investing activities | $ | (1,042,974) | $ | (1,667,934) | $ | (506,533) |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Activity related to convertible senior notes | $ | — | $ | 318,554 | $ | 990,390 | |||||||||||
Activity related to stock-based compensation | (30,053) | (18,154) | (1,697) | ||||||||||||||
Repurchases of common stock | (193,588) | (334,519) | (750,000) | ||||||||||||||
Other financing activities | — | (1,558) | (5,085) | ||||||||||||||
Net cash (used in) provided by financing activities | $ | (223,641) | $ | (35,677) | $ | 233,608 |
Payments Due by Period | |||||||||||||||||||||||||||||
Total | Less than 12 Months | 12 to 36 Months | 36 to 60 Months | More than 60 Months | |||||||||||||||||||||||||
Operating lease obligations: (1) | |||||||||||||||||||||||||||||
Real estate arrangements | $ | 854,829 | $ | 80,787 | $ | 163,308 | $ | 137,176 | $ | 473,558 | |||||||||||||||||||
Co-location arrangements | 186,539 | 73,540 | 60,201 | 27,590 | 25,208 | ||||||||||||||||||||||||
Bandwidth agreements | 119,495 | 95,923 | 23,232 | 240 | 100 | ||||||||||||||||||||||||
Open vendor purchase orders | 266,644 | 231,059 | 31,654 | 3,931 | — | ||||||||||||||||||||||||
Convertible senior notes | 2,300,000 | — | — | 1,150,000 | 1,150,000 | ||||||||||||||||||||||||
Total contractual obligations | $ | 3,727,507 | $ | 481,309 | $ | 278,395 | $ | 1,318,937 | $ | 1,648,866 |
(in thousands, except share data) | December 31, 2020 | December 31, 2019 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable, net of reserves of $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Marketable securities | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Acquired intangible assets, net | |||||||||||
Goodwill | |||||||||||
Deferred income tax assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Deferred revenue | |||||||||||
Operating lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Deferred revenue | |||||||||||
Deferred income tax liabilities | |||||||||||
Convertible senior notes | |||||||||||
Operating lease liabilities | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
(in thousands, except per share data) | For the Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Costs and operating expenses: | |||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | |||||||||||||||||
Research and development | |||||||||||||||||
Sales and marketing | |||||||||||||||||
General and administrative | |||||||||||||||||
Amortization of acquired intangible assets | |||||||||||||||||
Restructuring charge | |||||||||||||||||
Total costs and operating expenses | |||||||||||||||||
Income from operations | |||||||||||||||||
Interest income | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
Other expense, net | ( | ( | ( | ||||||||||||||
Income before provision for income taxes | |||||||||||||||||
Provision for income taxes | ( | ( | ( | ||||||||||||||
Loss from equity method investment | ( | ( | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Shares used in per share calculations: | |||||||||||||||||
Basic | |||||||||||||||||
Diluted |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||
Change in unrealized gain on investments, net of income tax provision of $ | |||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||
Comprehensive income | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Stock-based compensation | |||||||||||||||||
(Benefit) provision for deferred income taxes | ( | ||||||||||||||||
Amortization of debt discount and issuance costs | |||||||||||||||||
Other non-cash reconciling items, net | |||||||||||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||||||||
Accounts receivable | ( | ( | ( | ||||||||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||||||||
Accounts payable and accrued expenses | |||||||||||||||||
Deferred revenue | ( | ( | ( | ||||||||||||||
Other current liabilities | ( | ||||||||||||||||
Other non-current assets and liabilities | ( | ( | |||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Cash paid for acquisitions, net of cash acquired | ( | ( | ( | ||||||||||||||
Cash paid for asset acquisition | ( | ||||||||||||||||
Cash paid for equity method investment | ( | ||||||||||||||||
Purchases of property and equipment | ( | ( | ( | ||||||||||||||
Capitalization of internal-use software development costs | ( | ( | ( | ||||||||||||||
Purchases of short-and long-term marketable securities | ( | ( | ( | ||||||||||||||
Proceeds from sales of short-and long-term marketable securities | |||||||||||||||||
Proceeds from maturities of short-and long-term marketable securities | |||||||||||||||||
Other non-current assets and liabilities | ( | ||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from the issuance of convertible senior notes | |||||||||||||||||
Proceeds from the issuance of warrants | |||||||||||||||||
Purchase of note hedge related to convertible senior notes | ( | ( | |||||||||||||||
Repayment of convertible senior notes | ( | ||||||||||||||||
Proceeds related to the issuance of common stock under stock plans | |||||||||||||||||
Employee taxes paid related to net share settlement of stock-based awards | ( | ( | ( | ||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||
Other non-current assets and liabilities | ( | ( | |||||||||||||||
Net cash (used in) provided by financing activities | ( | ( | |||||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ( | |||||||||||||||
Cash, cash equivalents and restricted cash at beginning of year | |||||||||||||||||
Cash, cash equivalents and restricted cash at end of year | $ | $ | $ | ||||||||||||||
(in thousands) | For the Years Ended December 31, | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||
Cash paid for income taxes, net of refunds received in the years ended December 31, 2020, 2019 and 2018 of $ | $ | $ | $ | ||||||||||||||
Cash paid for interest expense | |||||||||||||||||
Cash paid for operating lease liabilities | |||||||||||||||||
Non-cash activities: | |||||||||||||||||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | |||||||||||||||||
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | |||||||||||||||||
Capitalization of stock-based compensation | |||||||||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Restricted cash | |||||||||||||||||
Cash, cash equivalents and restricted cash | $ | $ | $ |
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Cumulative-effect adjustment to accumulated deficit related to adoption of new accounting pronouncement | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||
Equity component of convertible senior notes, net of deferred tax of $ | |||||||||||||||||||||||||||||||||||||||||
Issuance of warrants related to convertible senior notes | |||||||||||||||||||||||||||||||||||||||||
Purchase of note hedge related to convertible senior notes | ( | ( | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Treasury stock retirement | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrealized gain on investments, net of tax | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ |
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Cumulative-effect adjustment to accumulated deficit related to adoption of new accounting pronouncement | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||
Equity component of convertible senior notes, net of deferred tax of $ | |||||||||||||||||||||||||||||||||||||||||
Issuance of warrants related to convertible senior notes | |||||||||||||||||||||||||||||||||||||||||
Purchase of note hedge related to convertible senior notes | ( | ( | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Treasury stock retirement | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrealized gain on investments, net of tax | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | ( | ||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Treasury stock retirement | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | |||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain on investments, net of tax | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | $ |
Gross Unrealized | Aggregate Fair Value | Classification on Balance Sheet | |||||||||||||||||||||||||||||||||
Amortized Cost | Short-Term Marketable Securities | Long-Term Marketable Securities | |||||||||||||||||||||||||||||||||
As of December 31, 2020 | Gains | Losses | |||||||||||||||||||||||||||||||||
Commercial paper | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||||||||||||||
U.S. government agency obligations | ( | ||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||||||||||||||
Certificates of deposit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial paper | ( | ||||||||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
U.S. government agency obligations | ( | ||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ |
Total Fair Value | Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||
Cash Equivalents and Marketable Securities: | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. government agency obligations | |||||||||||||||||||||||
Mutual funds | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||
Cash Equivalents and Marketable Securities: | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
U.S. government agency obligations | |||||||||||||||||||||||
Mutual funds | |||||||||||||||||||||||
$ | $ | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Due in 1 year or less | $ | $ | |||||||||
Due after 1 year through 5 years | |||||||||||
$ | $ |
2020 | 2019 | ||||||||||
Liability: | |||||||||||
Beginning balance | $ | $ | ( | ||||||||
Cash paid upon achievement of milestone | |||||||||||
Ending balance | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Trade accounts receivable | $ | $ | |||||||||
Unbilled accounts receivable | |||||||||||
Gross accounts receivable | |||||||||||
Allowance for current expected credit losses and other reserves | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Beginning balance | $ | $ | $ | ||||||||||||||
Charges to income from operations | |||||||||||||||||
Collections from customers previously reserved and other | ( | ( | ( | ||||||||||||||
Ending balance | $ | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Prepaid income taxes | $ | $ | |||||||||
Prepaid sales and other taxes | |||||||||||
Prepaid equipment and software maintenance | |||||||||||
Deferred commissions | |||||||||||
Other prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Deferred costs included in prepaid and other current assets | $ | $ | |||||||||
Deferred costs included in other assets | |||||||||||
Total deferred costs | $ | $ |
December 31, 2020 | December 31, 2019 | Estimated Useful Life (in years) | |||||||||||||||
Computer and networking equipment | $ | $ | 3-7 | ||||||||||||||
Purchased software | 3-10 | ||||||||||||||||
Furniture and fixtures | 1-7 | ||||||||||||||||
Office equipment | 3-5 | ||||||||||||||||
Leasehold improvements | 1-15 | ||||||||||||||||
Internal-use software | 2-7 | ||||||||||||||||
Property and equipment, gross | |||||||||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||||||||
Property and equipment, net | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
Completed technologies | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer-related intangible assets | ( | ( | |||||||||||||||||||||||||||||||||
Non-compete agreements | ( | ( | |||||||||||||||||||||||||||||||||
Trademarks and trade names | ( | ( | |||||||||||||||||||||||||||||||||
Acquired license rights | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
2020 | 2019 | ||||||||||
Beginning balance | $ | $ | |||||||||
Acquisition of Asavie Technologies Limited | |||||||||||
Acquisition of Janrain, Inc. | |||||||||||
Acquisition of Exceda | |||||||||||
Acquisition of ChameleonX, Ltd. | |||||||||||
Measurement period adjustments related to acquisitions completed in prior years | ( | ||||||||||
Foreign currency translation | ( | ||||||||||
Ending balance | $ | $ |
Total purchase consideration | $ | |||||||
Allocation of the purchase consideration: | ||||||||
Cash | $ | |||||||
Accounts receivable | ||||||||
Prepaid expenses and other current assets | ||||||||
Property and equipment | ||||||||
Operating lease right-of-use assets | ||||||||
Identifiable intangible assets | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Accounts payable | ( | |||||||
Accrued liabilities | ( | |||||||
Deferred revenue | ( | |||||||
Operating lease liabilities | ( | |||||||
Deferred income tax liabilities | ( | |||||||
Other liabilities | ( | |||||||
Total liabilities assumed | ( | |||||||
Net assets acquired | $ |
Gross Carrying Amount | Weighted Average Useful Life (in years) | ||||||||||
Completed technologies | $ | ||||||||||
Customer-related intangible assets | |||||||||||
Trademarks | |||||||||||
Non-compete agreements | |||||||||||
Total | $ |
Total purchase consideration | $ | |||||||
Allocation of the purchase consideration: | ||||||||
Cash | $ | |||||||
Accounts receivable | ||||||||
Prepaid expenses and other current assets | ||||||||
Identifiable intangible assets | ||||||||
Goodwill | ||||||||
Deferred tax asset | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Accounts payable | ( | |||||||
Accrued liabilities | ( | |||||||
Deferred revenue | ( | |||||||
Total liabilities assumed | ( | |||||||
Net assets acquired | $ |
Gross Carrying Amount | Weighted Average Useful Life (in years) | ||||||||||
Completed technologies | $ | ||||||||||
Customer-related intangible assets | |||||||||||
Trademarks | |||||||||||
Non-compete agreements | |||||||||||
Total | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Payroll and other related benefits | $ | $ | |||||||||
Bandwidth and co-location | |||||||||||
Income tax payable | |||||||||||
Property, use and other taxes | |||||||||||
Professional service fees | |||||||||||
Other accrued expenses | |||||||||||
Total | $ | $ |
Employee Severance and Related Benefits | Software Charges | Other | Total | ||||||||||||||||||||
Balance January 1, 2018 | $ | $ | $ | $ | |||||||||||||||||||
Costs incurred | |||||||||||||||||||||||
Cash disbursements | ( | ( | ( | ||||||||||||||||||||
Software and other non-cash charges | ( | ( | ( | ||||||||||||||||||||
Translation adjustments and other | ( | ||||||||||||||||||||||
Balance December 31, 2018 | |||||||||||||||||||||||
Costs incurred | |||||||||||||||||||||||
Cash disbursements | ( | ( | ( | ( | |||||||||||||||||||
Software and other non-cash charges | ( | ( | |||||||||||||||||||||
Translation adjustments and other | |||||||||||||||||||||||
Balance December 31, 2019 | |||||||||||||||||||||||
Costs incurred | |||||||||||||||||||||||
Cash disbursements | ( | ( | ( | ( | |||||||||||||||||||
Software and other non-cash charges | ( | ( | |||||||||||||||||||||
Translation adjustments and other | |||||||||||||||||||||||
Balance December 31, 2020 | $ | $ | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Liability component: | |||||||||||
Principal | $ | $ | |||||||||
Less: debt discount and issuance costs, net of amortization | ( | ( | |||||||||
Net carrying amount | $ | $ | |||||||||
Equity component: | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Liability component: | |||||||||||
Principal | $ | $ | |||||||||
Less: debt discount and issuance costs, net of amortization | ( | ( | |||||||||
Net carrying amount | $ | $ | |||||||||
Equity component: | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Amortization of debt discount and issuance costs | $ | $ | $ | ||||||||||||||
Coupon interest payable on 2025 Notes | |||||||||||||||||
Coupon interest payable on 2027 Notes | |||||||||||||||||
Revolving credit facility contractual interest expense | |||||||||||||||||
Capitalization of interest expense | ( | ( | ( | ||||||||||||||
Total interest expense | $ | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Real Estate Arrangements | Co-location Arrangements | Total | Real Estate Arrangements | Co-location Arrangements | Total | ||||||||||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Short-term lease cost | |||||||||||||||||||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||||||||||||||
Sublease income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total operating lease costs | $ | $ | $ | $ | $ | $ |
Real Estate Arrangements | Co-location Arrangements | ||||||||||
2021 | $ | $ | |||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less: imputed interest | |||||||||||
Total lease liabilities | $ | $ |
Bandwidth Commitments | Purchase Order Commitments | ||||||||||
2021 | $ | $ | |||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
Thereafter | |||||||||||
Total | $ | $ |
Foreign Currency Translation | Net Unrealized Gains on Investments | Total | |||||||||||||||
Balance as of January 1, 2019 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive (loss) income | ( | ||||||||||||||||
Balance as of December 31, 2019 | ( | ( | |||||||||||||||
Other comprehensive income | |||||||||||||||||
Balance as of December 31, 2020 | $ | ( | $ | $ | ( |
2020 | 2019 | 2018 | |||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
Total revenue | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Web Division | $ | $ | $ | ||||||||||||||
Media and Carrier Division | |||||||||||||||||
Total revenue | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Cost of revenue | $ | $ | $ | ||||||||||||||
Research and development | |||||||||||||||||
Sales and marketing | |||||||||||||||||
General and administrative | |||||||||||||||||
Total stock-based compensation | |||||||||||||||||
Provision for income taxes | ( | ( | ( | ||||||||||||||
Total stock-based compensation, net of taxes | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Expected term (in years) | |||||||||||||||||
Risk-free interest rate | % | % | % | ||||||||||||||
Expected volatility | % | % | % | ||||||||||||||
Dividend yield | % | % | % |
Shares (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at January 1, 2020 | $ | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Outstanding at December 31, 2020 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2020 | $ | $ | |||||||||||||||||||||
Vested or expected to vest December 31, 2020 | $ | $ |
Units (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2020 | $ | ||||||||||
Granted | |||||||||||
Vested and distributed | ( | ||||||||||
Outstanding at December 31, 2020 | $ |
December 31, 2020 | |||||
RSUs with service-based vesting conditions | |||||
RSUs with market-based vesting conditions | |||||
RSUs with performance-based vesting conditions | |||||
Total |
2020 | 2019 | 2018 | |||||||||||||||
Expected term (in years) | |||||||||||||||||
Risk-free interest rate | % | % | % | ||||||||||||||
Akamai historical share price volatility | % | % | % | ||||||||||||||
Average volatility of peer-company share price | % | % | % |
Units (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2020 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at December 31, 2020 | $ |
2020 | 2019 | 2018 | |||||||||||||||
U.S. | $ | $ | $ | ( | |||||||||||||
Foreign | |||||||||||||||||
Income before provision for income taxes | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Current tax (benefit) provision: | |||||||||||||||||
Federal | $ | ( | $ | ( | $ | ( | |||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Deferred tax (benefit) provision: | |||||||||||||||||
Federal | ( | ( | |||||||||||||||
State | ( | ( | |||||||||||||||
Foreign | ( | ( | |||||||||||||||
Change in valuation allowance | |||||||||||||||||
Total | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
U.S. federal income tax rate | % | % | % | ||||||||||||||
State taxes | |||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||
U.S. federal, state and foreign research and development credits | ( | ( | ( | ||||||||||||||
Foreign earnings | ( | ( | ( | ||||||||||||||
Nondeductible (nontaxable) foreign items | ( | ||||||||||||||||
Impact of U.S. Tax Cuts and Jobs Act, net | ( | ||||||||||||||||
Release of uncertain tax position reserve | ( | ( | ( | ||||||||||||||
Intercompany sale of intellectual property | |||||||||||||||||
Valuation allowance | |||||||||||||||||
Other | ( | ( | |||||||||||||||
% | % | % |
2020 | 2019 | ||||||||||
Accrued bonus | $ | $ | |||||||||
Deferred revenue | |||||||||||
Operating lease liability | |||||||||||
Stock-based compensation | |||||||||||
NOLs | |||||||||||
Unrealized losses | |||||||||||
Tax credit carryforwards | |||||||||||
Convertible senior notes interest | |||||||||||
Other | |||||||||||
Deferred tax assets | |||||||||||
Depreciation and amortization | ( | ( | |||||||||
Acquired intangible assets | ( | ( | |||||||||
Operating lease right-of-use asset | ( | ( | |||||||||
Deferred commissions | ( | ( | |||||||||
Internal-use software development costs capitalized | ( | ( | |||||||||
Deferred tax liabilities | ( | ( | |||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | $ | $ |
2020 | 2019 | Expirations at Various Dates Through: | |||||||||||||||
NOL carryforwards: | |||||||||||||||||
Federal | $ | $ | 2037 | ||||||||||||||
State | 2040 | ||||||||||||||||
Foreign | — | ||||||||||||||||
Federal and state research and development tax credit and other credit carryforwards | 2034 |
2020 | 2019 | 2018 | |||||||||||||||
Balance at beginning of year | $ | $ | $ | ||||||||||||||
Gross increases – tax positions of prior periods | |||||||||||||||||
Gross increases – current period tax positions | |||||||||||||||||
Gross decreases – tax positions of prior periods | ( | ( | ( | ||||||||||||||
Gross decreases – lapse of applicable statute of limitations | ( | ( | ( | ||||||||||||||
Gross decreases – settlements | ( | ( | |||||||||||||||
Balance at end of year | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Numerator: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Denominator: | |||||||||||||||||
Shares used for basic net income per share | |||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options | |||||||||||||||||
RSUs and DSUs | |||||||||||||||||
Convertible senior notes | |||||||||||||||||
Warrants related to issuance of convertible senior notes | |||||||||||||||||
Shares used for diluted net income per share | |||||||||||||||||
Basic net income per share | $ | $ | $ | ||||||||||||||
Diluted net income per share | $ | $ | $ |
2020 | 2019 | 2018 | |||||||||||||||
Service-based RSUs | |||||||||||||||||
Market-and performance-based RSUs | |||||||||||||||||
Convertible senior notes | |||||||||||||||||
Warrants related to issuance of convertible senior notes | |||||||||||||||||
Total shares excluded from computation |
(in thousands, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||
Year ended December 31, 2020: | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets) | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Basic net income per share | |||||||||||||||||||||||
Diluted net income per share | |||||||||||||||||||||||
Year ended December 31, 2019: | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets) | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Basic net income per share | |||||||||||||||||||||||
Diluted net income per share |
Name | Position | |||||||
F. Thomson Leighton | Chief Executive Officer and Director (Principal Executive Officer) | |||||||
Edward McGowan | Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||
Aaron Ahola | Executive Vice President and General Counsel | |||||||
Robert Blumofe | Executive Vice President Platform and GM Enterprise Division | |||||||
Monique Bonner | Executive Vice President and Chief Marketing Officer | |||||||
Adam Karon | Executive Vice President and GM Media and Carrier Divisions | |||||||
Rick McConnell | President and GM Web Division | |||||||
Mani Sundaram | Executive Vice President Global Services and Support and Chief Information Officer | |||||||
Anthony Williams | Executive Vice President and Chief Human Resources Officer | |||||||
Marianne Brown | Director | |||||||
Monte Ford | Director | |||||||
Jill Greenthal | Director | |||||||
Daniel Hesse | Director | |||||||
Tom Killalea | Director | |||||||
Jonathan Miller | Director | |||||||
Madhu Ranganathan | Director | |||||||
Frederic Salerno | Director | |||||||
Bernardus Verwaayen | Director | |||||||
William Wagner | Director |
3.1(A) | |||||
3.2(B) | |||||
4.1(C) | |||||
4.2(D) | |||||
4.3(E) | |||||
4.4(B) | |||||
10.1(F)@ | |||||
10.2(G)@ | |||||
10.3(H)@ | |||||
10.4(I)@ | |||||
10.5(J) | |||||
10.6(K) | |||||
10.7(L)@ | |||||
10.8(M)@ | |||||
10.9(M)@ | |||||
10.10(M) | |||||
10.11(N)@ | |||||
10.12(O)@ | |||||
10.13 (L)@ | |||||
10.14@ | |||||
10.15(P)@ | |||||
10.16(R)@ | |||||
10.17(S)@ | |||||
10.18(T)@ | |||||
10.19(U)@ | |||||
10.20(V)@ | |||||
10.21(S)@ | |||||
10.22(W) | |||||
10.23(W) | |||||
10.24(X) | |||||
10.25(Y)† | |||||
10.26(Z) | |||||
10.27(D) | |||||
10.28(D) | |||||
10.29(E) | |||||
10.30(E) | |||||
21.1 | |||||
23.1 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.* | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | ||||
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document* | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | ||||
101.LAB | Inline XBRL Taxonomy Label Linkbase Document* | ||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document* | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101.INS) |
February 26, 2021 | AKAMAI TECHNOLOGIES, INC. | |||||||
By: | /s/ EDWARD MCGOWAN | |||||||
Edward McGowan Chief Financial Officer |
Signature | Title | Date | ||||||||||||
/s/ F. THOMSON LEIGHTON | Chief Executive Officer and Director (Principal Executive Officer) | February 26, 2021 | ||||||||||||
F. Thomson Leighton | ||||||||||||||
/s/ EDWARD MCGOWAN | Chief Financial Officer (Principal Financial and Accounting Officer) | February 26, 2021 | ||||||||||||
Edward McGowan | ||||||||||||||
/s/ MARIANNE BROWN | Director | February 26, 2021 | ||||||||||||
Marianne Brown | ||||||||||||||
/s/ MONTE E. FORD | Director | February 26, 2021 | ||||||||||||
Monte E. Ford | ||||||||||||||
/s/ JILL A. GREENTHAL | Director | February 26, 2021 | ||||||||||||
Jill A. Greenthal | ||||||||||||||
/s/ DANIEL R. HESSE | Director | February 26, 2021 | ||||||||||||
Daniel R. Hesse | ||||||||||||||
/s/ PETER T. KILLALEA | Director | February 26, 2021 | ||||||||||||
Peter T. Killalea | ||||||||||||||
/s/ JONATHAN F. MILLER | Director | February 26, 2021 | ||||||||||||
Jonathan F. Miller | ||||||||||||||
/s/ MADHU RANGANATHAN | Director | February 26, 2021 | ||||||||||||
Madhu Ranganathan | ||||||||||||||
/s/ FREDERIC V. SALERNO | Director | February 26, 2021 | ||||||||||||
Frederic V. Salerno | ||||||||||||||
/s/ BERNARDUS VERWAAYEN | Director | February 26, 2021 | ||||||||||||
Bernardus Verwaayen | ||||||||||||||
/s/ WILLIAM R. WAGNER | Director | February 26, 2021 | ||||||||||||
William R. Wagner |
Name and Title | Base Salary for 2020 | |||||||
F. Thomson Leighton Chief Executive Officer | $1 | |||||||
Edward McGowan Chief Financial Officer | $475,000 | |||||||
Robert Blumofe EVP - Platform & General Manager Enterprise Division | $505,000 | |||||||
Adam Karon EVP and General Manager Media Division | $475,000 | |||||||
Rick McConnell President and General Manager Web Division | $580,000 |
AKAMAI TECHNOLOGIES LTD. | Incorporated in the United Kingdom | |||||||
AKAMAI TECHNOLOGIES GMBH | Incorporated in Germany | |||||||
AKAMAI TECHNOLOGIES SARL | Incorporated in France | |||||||
AKAMAI TECHNOLOGIES NETHERLANDS BV | Incorporated in the Netherlands | |||||||
AKAMAI INTERNATIONAL BV | Incorporated in the Netherlands | |||||||
AKAMAI TECHNOLOGIES SECURITIES CORPORATION | Incorporated in Massachusetts | |||||||
K STREAMING LLC | Organized in Delaware | |||||||
AKAMAI SALES LLC | Organized in Delaware | |||||||
AKAMAI JAPAN G.K. | Incorporated in Japan | |||||||
AKAMAI TECHNOLOGIES INDIA PRIVATE LTD. | Incorporated in India | |||||||
AKAMAI TECHNOLOGIES SPAIN SL | Incorporated in Spain | |||||||
AKAMAI TECHNOLOGIES SINGAPORE PVT. LTD. | Incorporated in Singapore | |||||||
AJ TECHNOLOGIES LTD | Incorporated in the Cayman Islands | |||||||
AKAMAI (BEIJING) TECHNOLOGIES, CO. LTD. | Incorporated in the People's Republic of China | |||||||
AKAMAI TECHNOLOGIES AB | Incorporated in Sweden | |||||||
AKAMAI TECHNOLOGIES SOLUTIONS (INDIA) PRIVATE LTD. | Incorporated in India | |||||||
AKAMAI INDIA NETWORKS PRIVATE LTD. | Incorporated in India | |||||||
AKAMAI TECHNOLOGIES YUHAN HOESA | Incorporated in South Korea | |||||||
AKAMAI TECHNOLOGIES S.R.I. | Incorporated in Italy | |||||||
AKAMAI TECHNOLOGIES INTERNATIONAL AG | Incorporated in Switzerland | |||||||
AKAMAI TECHNOLOGIES HONG KONG LIMITED | Incorporated in Hong Kong | |||||||
AKAMAI TECHNOLOGIES POLAND SP. Z.O.O. | Incorporated in Poland | |||||||
AKAMAI TECHNOLOGIES S.R.O. | Incorporated in the Czech Republic | |||||||
AKAMAI TECHNOLOGIES E SERVICOS DO BRASIL LTDA. | Incorporated in Brazil | |||||||
AKAMAI TECHNOLOGIES APJ PTE LTD. | Incorporated in Singapore | |||||||
AKAMAI TECHNOLOGIES ISRAEL LIMITED | Incorporated in Israel | |||||||
AKAMAI TECHNOLOGIES CANADA | Incorporated in Canada | |||||||
AKAMAI TECHNOLOGIES COSTA RICA SRL | Incorporated in Costa Rica | |||||||
AKAMI TEKNOLOGI HIZMETLERI LIMIITED SIKRETI | Incorporated in Turkey | |||||||
AKAMAI TECHNOLOGIES LIMITED | Incorporated in Taiwan | |||||||
AKAMAI TECHNOLOGIES MALAYSIA SDN BHD | Incorporated in Malaysia | |||||||
AKAMAI TECHNOLOGIES BELGIUM SPRL | Incorporated in Belgium | |||||||
AKAMAI TECHNOLOGIES LLC | Organized in Russia | |||||||
AKAMAI TECHNOLOGIES DENMARK APS | Incorporated in Denmark | |||||||
AKAMAI TECHNOLOGIES LUXEMBOURGH SARL | Incorporated in Luxembourg | |||||||
CODEMATE APS | Incorporated in Denmark | |||||||
OCTOSHAPE APS | Incorporated in Denmark | |||||||
SOHA SYSTEMS INDIA PRIVATE LTD. | Incorporated in India | |||||||
AKAM TECHNOLOGIES MEXICO | Incorporated in Mexico | |||||||
AKAMAI TECHNOLOGIES ARGENTINA SRL | Incorporated in Argentina | |||||||
BEIJING JANRAIN TECHNOLOGY CO. LTD. | Incorporated in the People's Republic of China | |||||||
CHAMELEONX LTD. | Incorporated in Israel | |||||||
JANRAIN LTD. | Incorporated in the United Kingdom | |||||||
PT. AKAMAI TECKNOLOGI INDONESIA | Incorporated in Indonesia | |||||||
AKAMAI IRELAND LIMITED | Incorporated in Ireland | |||||||
ASAVIE TECHNOLOGIES LIMITED | Incorporated in Ireland | |||||||
ASAVIE TECHNOLOGIES SALES LIMITED | Incorporated in Ireland |
ASAVIE R&D LIMITED | Incorporated in Ireland | |||||||
ASAVIE TECHNOLOGIES, INC. | Incorporated in Delaware | |||||||
ASAVIE UK LIMITED | Incorporated in the United Kingdom | |||||||
ASAVIE GMBH | Incorporated in Germany | |||||||
ASAVIE PTE LIMITED | Incorporated in Singapore | |||||||
INVERSE SOFTWARE INC. | Incorporated in Canada |
Date: | February 26, 2021 | /s/ F. Thomson Leighton | |||||||||
F. Thomson Leighton, Chief Executive Officer |
Date: | February 26, 2021 | /s/ Edward McGowan | |||||||||
Edward McGowan, Chief Financial Officer |
Date | February 26, 2021 | /s/ F. Thomson Leighton | |||||||||
F. Thomson Leighton, Chief Executive Officer | |||||||||||
Date: | February 26, 2021 | /s/ Edward McGowan | |||||||||
Edward McGowan | |||||||||||
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 1,822 | $ 1,880 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares designated as Series A Junior Participating Preferred Stock | 700,000 | 700,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 162,709,720 | 162,000,843 |
Common stock, shares outstanding | 162,709,720 | 162,000,843 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Statement [Abstract] | |||
Revenue | $ 3,198,149 | $ 2,893,617 | $ 2,714,474 |
Costs and operating expenses: | |||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 1,132,672 | 987,624 | 953,485 |
Research and development | 269,315 | 261,365 | 246,165 |
Sales and marketing | 510,405 | 523,883 | 517,353 |
General and administrative | 547,888 | 516,093 | 574,067 |
Amortization of acquired intangible assets | 42,049 | 38,581 | 33,311 |
Restructuring charge | 37,286 | 17,153 | 27,594 |
Total costs and operating expenses | 2,539,615 | 2,344,699 | 2,351,975 |
Income from operations | 658,534 | 548,918 | 362,499 |
Interest income | 29,122 | 34,355 | 26,940 |
Interest expense | (69,120) | (49,364) | (43,202) |
Other expense, net | (2,454) | (1,428) | (3,148) |
Income before provision for income taxes | 616,082 | 532,481 | 343,089 |
Provision for income taxes | (45,922) | (53,350) | (44,716) |
Loss from equity method investment | (13,106) | (1,096) | 0 |
Net income | $ 557,054 | $ 478,035 | $ 298,373 |
Net income per share: | |||
Basic (in dollars per share) | $ 3.43 | $ 2.94 | $ 1.78 |
Diluted (in dollars per share) | $ 3.37 | $ 2.90 | $ 1.76 |
Shares used in per share calculations: | |||
Basic (in shares) | 162,490 | 162,706 | 167,312 |
Diluted (in shares) | 165,213 | 164,573 | 169,188 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 557,054 | $ 478,035 | $ 298,373 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 19,629 | (1,020) | (27,585) |
Change in unrealized gain on investments, net of income tax provision of $2,720, $666 and $200 for the years ended December 31, 2020, 2019 and 2018, respectively | 5,314 | 4,788 | 603 |
Other comprehensive income (loss) | 24,943 | 3,768 | (26,982) |
Comprehensive income | $ 581,997 | $ 481,803 | $ 271,391 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||
Tax expense on change in unrealized gain on investments | $ 2,720 | $ 666 | $ 200 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Cash Flows [Abstract] | |||
Income tax refund received | $ 17,491 | $ 3,731 | $ 18,501 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 352,917 | 393,745 | 1,036,455 |
Restricted cash | 549 | 401 | 532 |
Cash, cash equivalents and restricted cash | $ 353,466 | $ 394,146 | $ 1,036,987 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | ||
Deferred Tax | $ 23,170 | $ 4,971 |
Issuance Costs | $ 2,880 | $ 4,418 |
Nature of Business and Basis of Presentation |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
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 for securing, delivering and optimizing content and business applications over the internet. Its globally-distributed platform comprises more than 325,000 servers across more than 130 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company currently operates in one industry segment: providing cloud services for delivering, optimizing and securing content and business applications over the internet. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements.
|
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its debt securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in an incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately 2.5 years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Amortization of the costs is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2020, its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2020, 2019 and 2018, no customer accounted for more than 10% of total revenue. As of December 31, 2020 and 2019, no customer had an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2020, its concentration of credit risk related to accounts receivable was not significant. Fair Value of Financial Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities that have been classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability. Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred. The Company has implemented software and hardware initiatives to manage its global network more efficiently and, as a result, the expected average useful life of its network assets, primarily servers, increased from four years to five years, effective January 1, 2019. These changes decreased depreciation expense by $22.9 million and increased net income by $19.2 million, or $0.12 per share, for the year ended December 31, 2020 and decreased depreciation expense by $31.5 million and increased net income by $26.1 million, or $0.16 per share, for the year ended December 31, 2019. Operating Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued guidance that requires companies to present assets and liabilities arising from leases on the consolidated balance sheet. The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize right of use ("ROU") assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. The Company adopted this standard on January 1, 2019 on a modified retrospective basis by applying the new standard to its lease portfolio as of January 1, 2019, while continuing to apply legacy guidance in the comparative periods. The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset. Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the Company’s leases do not provide an implicit rate, an incremental borrowing rate has been applied based on the Company's credit-adjusted risk-free rate. The Company often enters into contracts that contain both lease and non-lease components. Real estate non-lease components include real estate taxes, insurance, maintenance, parking and other operating costs. Co-location non-lease components include utilities and other operating costs. The Company includes both lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities based on actual usage, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The Company’s lease terms often include renewal options and, particularly in the case of co-location arrangements, may include evergreen provisions. The Company’s right-of-use assets and lease liabilities generally do not include the options to extend, or terminate, unless it is reasonably certain that the Company will exercise these options. The Company has elected to exclude leases for certain networking equipment with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term. Equity Method Investments The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses. In February 2019, the Company and Mitsubishi UFJ Financial Group ("MUFG") announced the establishment of a joint venture, the Global Open Network, Inc. ("GO-NET"), and their plans to offer a new blockchain-based online payment network. The Company's 20% stake in GO-NET is accounted for using the equity method. As of December 31, 2020, the Company's $21.6 million investment is included in other assets on the consolidated balance sheet. The Company recorded a loss of $13.1 million during the year ended December 31, 2020, comprised of $2.1 million to record its share of operating losses incurred by GO-NET during the year and an $11.0 million impairment to reduce the Company's investment to its fair value due to a modified business plan and continued negative projected cash flows. The valuation technique used to measure fair value of the Company's equity method investment in GO-NET was primarily an adjusted net asset value model based on labor costs and the amount of time required to develop a similar technology for use in the planned payment processing service. The Company recorded a loss of $1.1 million during the year ended December 31, 2019, which reflects its share of the losses incurred by GO-NET during the year. Subsequent to the establishment of the joint venture, the Company recorded revenue of $11.1 million and $11.6 million for the years ended December 31, 2020 and 2019, respectively, for services provided to GO-NET. Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2020, 2019 and 2018, the fair value of the Company's reporting unit was substantially in excess of the carrying value. The tests did not result in an impairment to goodwill during the years ended December 31, 2020, 2019 and 2018. Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Long-lived assets, including property and equipment and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the internet – as well as security solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting, and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most content delivery and security services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. Any bursting over given commitments is recognized in the period in which the traffic was served. For services that involve traffic consumption, revenue is recognized in an amount that reflects the level of traffic served to a customer in a given period. For custom arrangements, other methods may be used as a measure of progress towards satisfying the performance obligations. Some of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost. Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life. Accounting for Stock-Based Compensation The Company recognizes compensation costs for all stock-based payment awards made to employees based upon the awards’ grant-date fair value. The stock-based payment awards include stock options, restricted stock units, deferred stock units and employee stock purchases related to the Company’s employee stock purchase plan. For stock options, the Company has selected the Black-Scholes option-pricing model to determine the fair value of stock option awards. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock options, restricted stock units and deferred stock units that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance condition-based vesting feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other expense, net. The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other expense, net. As of December 31, 2020 and 2019, the fair value of the forward currency contracts and the underlying net gains for the years ended December 31, 2020, 2019 and 2018 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating. Income Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. Newly-Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance that introduces a new methodology for accounting for credit losses on financial instruments. The guidance establishes a new "expected credit loss model" that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances. The Company prospectively adopted this standard on January 1, 2020. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued guidance that addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance for capitalizing costs associated with developing or obtaining internal-use software. The Company prospectively adopted this standard on January 1, 2020. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements In August 2020, the FASB issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This guidance will be effective for the Company on January 1, 2022. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements related to the accounting for convertible debt arrangements.
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following is a summary of available-for-sale marketable securities held as of December 31, 2020 and 2019 (in thousands):
The Company offers certain eligible employees the ability to participate in a non-qualified deferred compensation plan. The mutual funds held by the Company that are associated with this plan are classified as restricted trading securities. These securities are not included in the available-for-sale securities table above but are included in marketable securities in the consolidated balance sheets. Unrealized gains and unrealized temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive loss in the consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive income to interest income in the consolidated statements of income. As of December 31, 2020, the Company held for investment corporate bonds with a fair value of $2.0 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 corporate bonds were insignificant and are included in accumulated other comprehensive income as of December 31, 2020. The unrealized losses are attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments. The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of December 31, 2020 and 2019 (in thousands):
As of December 31, 2020 and 2019, the Company grouped money market and mutual funds using a Level 1 valuation because market prices for such investments are readily available in active markets. As of December 31, 2020 and 2019, the Company grouped commercial paper, U.S. government agency obligations, corporate bonds and municipal securities using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. As of December 31, 2019, the Company also included bank certificates of deposit using Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. The Company did not have any transfers of assets or liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2020 and 2019. 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. The valuation technique used to measure the fair value of the Company's Level 3 liability, which consists of contingent consideration related to the acquisition of Cyberfend, Inc. in 2016, and which was paid upon achievement of milestones in 2019, was primarily an income-based approach. The significant unobservable input used in the fair value measurement of the contingent consideration is the likelihood of achieving development milestones to integrate the acquired technology into the Company's technology as well as achieving certain post-closing financial results. Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2020 and 2019 were as follows (in thousands):
The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2020 and 2019 (in thousands):
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Accounts Receivable |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of December 31, 2020 and 2019 (in thousands):
A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):
Charges to income from operations primarily represents charges to bad debt expense for increases in the allowance for current expected credit losses.
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Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2020 and 2019 (in thousands):
Incremental Costs to Obtain a Contract with a Customer The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2020 and 2019 (in thousands):
During the years ended December 31, 2020, 2019 and 2018, the Company recognized $61.7 million, $44.3 million and $45.0 million, respectively, of amortization expense related to deferred commissions.
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands except years):
Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2020, 2019 and 2018 was $436.3 million, $402.1 million and $401.2 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company capitalized $38.0 million, $35.9 million and $34.8 million, respectively, of stock-based compensation related to employees who developed and enhanced internal-use software applications. During the years ended December 31, 2020 and 2019, the Company wrote off $279.9 million and $166.7 million, respectively, of property and equipment, gross, along with the associated accumulated depreciation and amortization. The write- offs were primarily related to leasehold improvements, computer and networking equipment and internal-use software no longer in use. These assets had been substantially depreciated and amortized. In addition, the Company wrote off $0.8 million and $3.8 million, primarily of internal-use software as a result of certain restructuring efforts during the year ended December 31, 2020 and December 31, 2019, respectively.
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Goodwill and Acquired Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2020 and 2019 (in thousands):
Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2020, 2019 and 2018 was $42.0 million, $38.6 million and $33.3 million, respectively. Based on the Company's acquired intangible assets as of December 31, 2020, aggregate expense related to amortization of acquired intangible assets is expected to be $47.4 million, $43.8 million, $36.3 million, $28.4 million and $22.9 million for the years ending December 31, 2021, 2022, 2023, 2024 and 2025, respectively. The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 were as follows (in thousands):
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Business Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | Acquisitions Acquisition-related costs were $5.6 million, $1.9 million and $1.0 million during the years ended December 31, 2020, 2019 and 2018, respectively, and are included in general and administrative expense in the consolidated statements of income. Pro forma results of operations for the acquisitions completed in the years ended December 31, 2020 and 2019 have not been presented because the effects of the acquisitions, individually and in the aggregate, are not material to the Company's consolidated financial results. Revenue and earnings attributable to acquired operations since the dates of their acquisitions are included in the Company's consolidated statements of income and not presented separately because they are not material. Inverse In February 2021, the Company acquired Inverse, Inc., a Montreal-based company, for approximately $20.0 million. The allocation of the purchase price has not been finalized as of the filing of these financial statements. The acquisition is intended to enhance the Company's enterprise security capabilities and expand its portfolio of zero trust and secure access service edge solutions for the internet of things. 2020 Acquisitions Asavie In October 2020, the Company acquired all outstanding stock of Asavie Technologies Limited ("Asavie"), a privately-funded company headquartered in Dublin, Ireland, for $155.0 million in cash. The allocation of the purchase price has not been finalized as of the filing of these financial statements. Asavie operates a global platform for managing the security, performance and access policies for mobile and internet-connected devices; its solutions will become part of Akamai’s security and personalization services product line. The following table presents the preliminary allocation of the purchase price for Asavie (in thousands):
The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. None of goodwill related to the acquisition of Asavie is expected to be deductible for tax purposes. The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
The total weighted average amortization period for the intangible assets acquired from Asavie is 10.8 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Instart Logic In February 2020, the Company acquired certain assets from Instart Logic, Inc., a provider of cloud solutions for improving web and mobile application performance, for $36.4 million in cash. The purchase price was primarily allocated to a customer-related intangible asset that will be amortized over 17 years in a pattern that matches expense with expected economic benefits. 2019 Acquisitions ChameleonX In November 2019, the Company acquired ChameleonX, Ltd. ("ChameleonX"), an Israel-based company with a solution designed to detect when a website contains or links to malware that causes end user data to be compromised, for $11.9 million in cash. The acquisition is expected to further strengthen the Company's security solutions portfolio. The Company allocated $7.1 million of the cost of the acquisition to goodwill and $6.1 million to a technology-related identifiable intangible asset with an average useful life of 7.1 years. The value of the goodwill is primarily attributable to synergies related to the integration of ChameleonX technology onto the Company's platform as well as a trained technical workforce. The total amount of goodwill related to the acquisition of ChameleonX expected to be deductible for tax purposes is $7.1 million. The Company finalized its allocation of purchase price in the fourth quarter of 2020, which did not result in a material change to the preliminary allocation. Exceda On November 1, 2019, in a series of stock and asset purchase transactions, the Company acquired the operations of a group of companies known as Exceda, a vendor of content delivery network and web security services and, collectively, the Company's largest channel partner in Latin America, for $32.7 million in cash. The acquisition is expected to enable the Company to expand its Latin America business more quickly, better support existing and new partners and improve experiences for more customers. The Company allocated $14.7 million of the cost of the acquisition to goodwill and $16.5 million to identifiable intangible assets, primarily customer-related. The total weighted average useful life of the intangible assets acquired from Exceda is 8.1 years. The value of the goodwill is primarily attributable to synergies related to the scale of the combined teams as well as Exceda's trained technical workforce. The total amount of goodwill related to the acquisition of Exceda expected to be deductible for tax purposes is $14.7 million. The Company acquired various obligations as part of the acquisition for which it is indemnified. The total obligations recorded, with corresponding indemnification asset, totaled $20.0 million. The Company finalized its allocation of purchase price in the fourth quarter of 2020, which did not result in a material change to the preliminary allocation. Janrain In January 2019, the Company acquired Janrain, Inc. ("Janrain"), a provider of customer identity and access management solutions, for $123.6 million in cash. The Company incorporated the Janrain technology into its Intelligent Edge Platform. The Company finalized its allocation of purchase price in the fourth quarter of 2019. The following table presents the final allocation of the purchase price for Janrain (in thousands):
The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The total amount of goodwill related to the acquisition of Janrain expected to be deductible for tax purposes is $45.7 million. The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
The total weighted average amortization period for the intangible assets acquired from Janrain is 11.8 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized.
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Accrued Expenses |
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Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following as of December 31, 2020 and 2019 (in thousands):
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring During the fourth quarter of 2020, management committed to an action to restructure certain parts of the Company to better position us to become more agile in delivering our solutions. As a result, certain headcount reductions were necessary and certain capitalized internal-use software charges were realized for software not yet placed into service that will not be completed and implemented due to this action. The Company incurred expenses of $23.6 million for the year ended December 31, 2020 and expects to incur up to $7.0 million in 2021 for severance and related benefits related to this action. During the fourth quarter of 2019, management committed to an action to restructure certain parts of the Company to focus on investments with the potential to accelerate revenue growth. As a result, certain headcount reductions were necessary and certain capitalized internal-use software charges were realized for software not yet placed into service that will not be completed and implemented due to this action. The Company incurred expenses of $23.4 million related to this action, of which $13.2 million were incurred during the year ended December 31, 2020 and $10.2 million were incurred during the year ended December 31, 2019. Also included within the 2020 charge is $8.7 million for lease related assets that were incurred to exit the leased facilities. The Company does not expect any additional restructuring charges related to this action. During the fourth quarter of 2018, management committed to an action to restructure certain parts of the Company with the intent of re-balancing investments to ensure long-term growth and scale. As a result, certain headcount reductions were necessary and certain capitalized internal-use software charges were realized for software not yet placed into service that will not be completed and implemented due to this action. The Company incurred expenses of $19.0 million related to this action, of which $6.7 million were incurred during the year ended December 31, 2019 and $12.3 million were incurred during the year ended December 31, 2018. The Company does not expect any additional restructuring charges related to this action. The Company also recognizes restructuring charges for redundant employees, facilities and contracts associated with completed acquisitions. Restructuring charges related to acquisitions were not material in any of the years ended December 31, 2020, 2019 and 2018. The following table summarizes the activity of the Company's restructuring accrual during the years ended December 31, 2020, 2019 and 2018 (in thousands):
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Convertible Notes – Due 2027 In August 2019, the Company issued $1,150.0 million in par value of convertible senior notes due 2027 (the "2027 Notes"). The 2027 Notes are senior unsecured obligations of the Company, bear regular interest of 0.375%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2020, and mature on September 1, 2027, unless repurchased or converted in accordance with their terms prior to maturity. At their option, holders may convert their 2027 Notes prior to the close of business on the business day immediately preceding May 1, 2027, only under the following circumstances: •during any calendar quarter commencing after the calendar quarter ended December 31, 2019 (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 business day period after any consecutive trading day period in which the trading price per $1,000 principal amount of 2027 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 May 1, 2027, holders may convert all or any portion of their 2027 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company, at its election, may pay or deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The initial conversion rate is 8.6073 shares of the Company's common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $116.18 per share, subject to adjustments in certain events, and represents a potential conversion into 9.9 million shares. In accounting for the issuance of the 2027 Notes, the Company separated the 2027 Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar debt obligation that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2027 Notes. The difference between the principal amount of the 2027 Notes and the proceeds allocated to the liability component (“debt discount”) is amortized to interest expense using the effective interest method over the term of the 2027 Notes. The equity component is recorded in additional paid-in capital in the consolidated balance sheet and will not be remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the 2027 Notes, the Company allocated the total transaction costs incurred to the liability and equity components based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the 2027 Notes, and transaction costs attributable to the equity component are netted against the equity component of the 2027 Notes in stockholders’ equity. The 2027 Notes consisted of the following components as of December 31, 2020 and 2019 (in thousands):
The estimated fair value of the 2027 Notes at December 31, 2020 was $1,277.8 million. The fair value was determined based on the quoted price of the 2027 Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 within the fair value hierarchy. Based on the closing price of the Company's common stock of $104.99 on December 31, 2020, the value of the 2027 Notes if converted to common stock was less than the principal amount of $1,150.0 million. The Company used $100.0 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the 2027 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the board of directors. Additionally, $127.1 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The net proceeds are intended to be used for working capital, share repurchases, potential acquisitions and strategic transactions, and other corporate purposes. Note Hedge To minimize the impact of potential dilution upon conversion of the 2027 Notes, the Company entered into convertible note hedge transactions with respect to its common stock in August 2019. The Company paid $312.2 million for the note hedge transactions. The note hedge transactions cover approximately 9.9 million shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2027 Notes, also subject to adjustment, and are exercisable upon conversion of the 2027 Notes. The note hedge transactions are intended to reduce dilution in the event of conversion of the 2027 Notes. Warrants Separately, in August 2019, the Company entered into warrant transactions, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, up to 9.9 million shares of the Company’s common stock at a strike price of approximately $178.74 per share. The Company received aggregate proceeds of $185.2 million from the sale of the warrants. The convertible note hedge and warrant transactions will generally have the effect of increasing the conversion price of the 2027 Notes to approximately $178.74 per share. Convertible Notes – Due 2025 In May 2018, the Company issued $1,150.0 million in par value of convertible senior notes due 2025 (the "2025 Notes"). The 2025 Notes are senior unsecured obligations of the Company, bear regular interest of 0.125%, payable semi-annually on May 1 and November 1 of each year, and mature on May 1, 2025, unless repurchased or converted prior to maturity. At their option, holders may convert their 2025 Notes prior to the close of business on the business day immediately preceding January 1, 2025, only under the following circumstances: •during any calendar quarter commencing after the calendar quarter ended June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; •during the business day period after any consecutive trading day period in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or •upon the occurrence of specified corporate events. On or after January 1, 2025, holders may convert all or any portion of their 2025 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. Upon conversion, the Company, at its election, may pay or deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The initial conversion rate is 10.5150 shares of the Company's common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $95.10 per share, subject to adjustments in certain events, and represents a potential conversion into 12.1 million shares. In accounting for the issuance of the 2025 Notes, the Company separated the 2025 Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar debt obligation that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2025 Notes. The difference between the principal amount of the 2025 Notes and the proceeds allocated to the liability component (“debt discount”) is amortized to interest expense using the effective interest method over the term of the 2025 Notes. The equity component is recorded in additional paid-in capital in the consolidated balance sheet and will not be remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the 2025 Notes, the Company allocated the total transaction costs incurred to the liability and equity components based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the 2025 Notes, and transaction costs attributable to the equity component are netted against the equity component of the 2025 Notes in stockholders’ equity. The 2025 Notes consist of the following components as of December 31, 2020 and December 31, 2019 (in thousands):
The estimated fair value of the 2025 Notes at December 31, 2020 was $1,422.8 million. The fair value was determined based on the quoted price of the 2025 Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 within the fair value hierarchy. Based on the closing price of the Company's common stock of $104.99 on December 31, 2020, the value of the 2025 Notes if converted to common stock was more than the principal amount of $1,150.0 million. The Company used $46.2 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the 2025 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the board of directors. Additionally, $141.8 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The Company also used a portion of the net proceeds to repay at maturity the $690.0 million in par value of convertible senior notes due in 2019. Note Hedge To minimize the impact of potential dilution upon conversion of the 2025 Notes, the Company entered into convertible note hedge transactions with respect to its common stock in May 2018. The Company paid $261.7 million for the note hedge transactions. The note hedge transactions cover approximately 12.1 million shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2025 Notes, also subject to adjustment, and are exercisable upon conversion of the 2025 Notes. The note hedge transactions are intended to reduce dilution in the event of conversion of the 2025 Notes. Warrants Separately, in May 2018, the Company entered into warrant transactions, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, up to 12.1 million shares of the Company’s common stock at a strike price of approximately $149.18 per share. The Company received aggregate proceeds of $119.9 million from the sale of the warrants. The convertible note hedge and warrant transactions will generally have the effect of increasing the conversion price of the 2025 Notes to approximately $149.18 per share. Convertible Notes – Due 2019 In February 2014, the Company issued $690.0 million in par value of convertible senior notes due 2019 (the "2019 Notes"). The 2019 Notes were senior unsecured obligations of the Company and did not bear regular interest. The 2019 Notes matured and were repaid in full on February 15, 2019 as no repurchases or conversions occurred prior to maturity. Revolving Credit Facility In May 2018, the Company entered into a $500.0 million five-year, revolving credit agreement (the “Credit Agreement”). Borrowings under the Credit Agreement may be used to finance working capital needs and for general corporate purposes. The Credit Agreement provides for an initial $500.0 million in revolving loans. Under specified circumstances, the facility can be increased to up to $1.0 billion in aggregate principal amount. The Credit Agreement expires in May 2023. Borrowings under the Credit Agreement bear interest, at the Company's option, at a base rate plus a spread of 0.00% to 0.25% or an adjusted LIBOR rate plus a spread of 0.875% to 1.25%, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the Credit Agreement. Regardless of what amounts, if any, are outstanding under the Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.075% to 0.15%, with such rate being based on the Company's consolidated leverage ratio specified in the Credit Agreement. The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. Principal covenants include a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. There were no outstanding borrowings under the Credit Agreement as of December 31, 2020. Interest Expense The 2027 Notes bear interest at a fixed rate of 0.375%. The interest is payable semi-annually on March 1 and September 1 of each year, commencing in March 2020. The 2027 Notes have an effective interest rate of 3.1% attributable to the conversion feature. The 2025 Notes bear interest at a fixed rate of 0.125%. The interest is payable semi-annually on May 1 and November 1 of each year, commencing in November 2018. The 2025 Notes have an effective interest rate of 4.26% attributable to the conversion feature. The 2019 Notes did not bear regular interest, but had an effective interest rate of 3.2% attributable to the conversion feature. The Company is also obligated to pay ongoing commitment fees under the terms of the Credit Agreement. The following table sets forth total interest expense included in the consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has entered into various operating lease agreements for its offices and co-location assets and related equipment. The Company has also entered into sublease agreements with tenants of various offices previously vacated by the Company. These operating leases have lease periods expiring between 2021 and 2034. The following table is a summary of the Company’s operating lease costs for the years ended December 31, 2020 and 2019 (in thousands):
Real estate rent expense and sublease income for the year ended December 31, 2018 were $63.2 million and $3.8 million, respectively. Lease costs for real estate arrangements are included in general and administrative expenses in the consolidated statements of income. Lease costs for co-location arrangements are primarily included in cost of revenue. At December 31, 2020 and 2019, the real estate arrangements' weighted average remaining lease term was 11.8 years and 12.8 years, respectively, and the weighted average discount rate for operating leases was 3.4% and 3.5%, respectively. At December 31, 2020 and 2019, the co-location arrangements' weighted average remaining lease term was 4.3 years and 3.9 years, respectively, and the weighted average discount rate for operating leases was 1.8% and 2.2%, respectively. Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands):
As of December 31, 2020, the Company had additional operating leases, primarily for co-location arrangements, that had not yet commenced of $13.6 million, which will commence in 2021 and 2022, with lease terms of one year to seven years. The table above excludes approximately $216.7 million of future sublease income that is expected to be recognized through 2034. As of December 31, 2020, the Company had outstanding letters of credit in the amount of $5.8 million, primarily related to operating leases. The letters of credit remain in effect until the Company fulfills its obligations under these leases or as such obligations expire under the terms of the letters of credit.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies As of December 31, 2020, the Company had long-term commitments for bandwidth usage with various networks and ISPs. Additionally, as of December 31, 2020, the Company had entered into purchase orders with various vendors. The minimum future commitments as of December 31, 2020 were as follows (in thousands):
Legal Matters The Company is party to various litigation matters that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material effect on the Company’s business, results of operations, financial condition or cash flows. In July 2016, as part of the resolution of a patent infringement lawsuit filed by the Company against Limelight Networks, Inc. (“Limelight”) in 2006, the Company entered into an agreement that requires Limelight to pay the Company $54.0 million in 12 equal installments over three years, beginning in August 2016. During the years ended December 31, 2019 and 2018, the Company received $9.0 million and $18.0 million, respectively, under this agreement. Substantially all of the amounts received were recorded as a gain contingency in the year the cash was received, which reduced general and administrative expenses in the consolidated statements of income, with the remaining as interest income. In April 2018, as part of the resolution of multiple existing lawsuits between Limelight and the Company, including in the U.S. District Court for the Eastern District of Virginia and in the U.S. District Court for the District of Massachusetts, the parties entered into an agreement to settle the cases and request that the U.S. Patent Trial and Appeal Board terminate certain proceedings related to patents at issue in the litigation. The Company recorded a $14.9 million charge in the second quarter of 2018, which is included in general and administrative expenses in the consolidated statement of income for the year ended December 31, 2018, related to this settlement. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's business partners, vendors or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright or other intellectual property right or the Company’s negligence, willful misconduct or violation of law. Subject to applicable statutes of limitation, the term of each of these indemnification agreements is generally perpetual from the time of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to its services and activities and that could limit the Company’s exposure in that respect. The Company has agreed to indemnify each of its officers and directors, or employees who serve as officers or directors of our subsidiaries at management's request, during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is or was or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable the Company to recover a portion of certain future amounts paid. To date, the Company has not encountered material costs as a result of such indemnification obligations and has not accrued any related liabilities in its financial statements. In assessing whether to establish an accrual, the Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss.
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Stockholders' Equity |
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Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program In February 2016, the board of directors authorized a $1.0 billion share repurchase program that was effective from February 2016 through December 2018. In March 2018, the Company announced that its board of directors had increased its share repurchase authorization by $416.7 million, such that the amount that was authorized and available for repurchase in 2018 was $750.0 million. Subsequently, effective November 2018, the board of directors authorized a $1.1 billion repurchase program through December 2021. The Company's goals for the share repurchase programs are to offset some or all of the dilution created by its employee equity compensation programs and provide the flexibility to return capital to shareholders as business and market conditions warrant. During the years ended December 31, 2020, 2019 and 2018, the Company repurchased 2.0 million, 4.0 million and 10.2 million shares, respectively, of its common stock for $193.6 million, $334.5 million and $750.0 million, respectively, pursuant to the repurchase programs described above. As of December 31, 2020, the Company had $571.9 million available for future purchases of shares under the current repurchase program. The board of directors authorized the retirement of all the outstanding shares of its treasury stock as of each of December 31, 2020, 2019 and 2018. The retired shares were returned to the number of authorized but unissued shares of the Company's common stock, and the retirement was recorded to additional paid-in capital.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders' equity, for the years ended December 31, 2020 and 2019 (in thousands):
Amounts reclassified from accumulated other comprehensive loss to net income were insignificant for the years ended December 31, 2020 and 2019.
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company sells its services through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
While the Company sells its services through a geographically dispersed sales force, it manages its customer relationships in two divisions: the Web Division and the Media and Carrier Division. Revenue by division is a customer-focused reporting view that reflects revenue from customers that are managed by the division. Customers are assigned to a division for relationship management purposes according to their predominant purchasing activity; however, customers may purchase solutions managed by the other division as well. The following table summarizes revenue by division included in the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
As the purchasing patterns and required account expertise of customers change over time, the Company may reassign a customer from one division to another. In 2020, the Company reassigned some customers between the Media and Carrier Division and the Web Division and revised historical results in order to reflect the most recent categorization and to provide a comparable view for all periods presented. Most content delivery and security services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. A small percentage of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation. During the years ended December 31, 2020 and 2019, the Company recognized $69.9 million and $64.1 million of revenue that was included in deferred revenue as of December 31, 2019 and 2018, respectively. As of December 31, 2020, the aggregate amount of remaining performance obligations from contracts with customers was $2.9 billion. The Company expects to recognize approximately 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated contract renewals.
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Employee Benefit Plan |
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Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company has established a savings plan for its employees that is designed to be qualified under Section 401(k) of the Internal Revenue Code. Eligible employees are permitted to contribute to this plan through payroll deductions within statutory and plan limits. The Company contributed approximately $17.5 million, $16.6 million and $16.7 million of cash to the savings plan for the years ended December 31, 2020, 2019 and 2018, respectively, under a matching program. |
Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation Equity Plans In May 2013, the Company's stockholders approved the Akamai Technologies, Inc. 2013 Stock Incentive Plan (as amended in 2015, 2017 and 2019, the "2013 Plan"). The 2013 Plan replaced the Akamai Technologies, Inc. 2009 Stock Incentive Plan (the "2009 Plan"), which in turn replaced the Akamai Technologies, Inc. 2006 Stock Incentive Plan, the Akamai Technologies, Inc. 2001 Stock Incentive Plan and the Akamai Technologies, Inc. 1998 Stock Incentive Plan (together with the 2009 Plan, the "Previous Plans"). The Company no longer issues equity awards under the Previous Plans, and they solely exist to satisfy outstanding equity awards previously granted under those plans. The 2013 Plan allows for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash-based awards up to 21.5 million shares of common stock to employees, officers, directors, consultants and advisers of the Company. Additionally, the Company may grant up to 3.8 million shares of common stock thereunder that were available for grant under the 2009 Plan immediately prior to stockholder approval of the 2013 Plan. Any shares of common stock that are currently outstanding under the Previous Plans that are terminated, canceled, surrendered or forfeited will become available to grant under the 2013 Plan. As of December 31, 2020, the Company had reserved approximately 6.5 million shares of common stock available for future issuance of equity awards under the 2013 Plan. The Company has assumed certain stock option plans and the outstanding stock options of companies that it has acquired (“Assumed Plans”). Stock options outstanding as of the date of acquisition under the Assumed Plans were exchanged for the Company’s stock options and adjusted to reflect the appropriate conversion ratio as specified by the applicable acquisition agreement, but are otherwise administered in accordance with the terms of the Assumed Plans. Stock options under the Assumed Plans generally vest over four years and expire ten years from the date of grant. The 1999 Employee Stock Purchase Plan ("1999 ESPP") permits eligible employees to purchase up to 1.5 million shares each June 1 and December 1, provided that the aggregate number of shares issued shall not exceed 20.0 million. The 1999 ESPP allows participants to purchase shares of common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six-month intervals. During the years ended December 31, 2020, 2019 and 2018, the Company issued 0.7 million, 0.9 million and 1.0 million shares under the 1999 ESPP, respectively, with a weighted average purchase price per share of $80.71, $61.04 and $52.04, respectively. Total cash proceeds from the purchase of shares under the 1999 ESPP in the years ended December 31, 2020, 2019 and 2018 were $58.4 million, $53.7 million and $50.7 million, respectively. As of December 31, 2020, approximately $5.9 million had been withheld from employees for future purchases under the 1999 ESPP. Stock-Based Compensation Expense The following table summarizes the components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
In addition to the amounts of stock-based compensation reported in the table above, the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 also include stock-based compensation reflected as a component of amortization of capitalized internal-use software; the additional stock-based compensation was $29.6 million, $30.6 million and $25.2 million, respectively, before taxes. The Company uses the Black-Scholes option pricing model to determine the fair value of the Company’s stock option awards. This model requires the input of subjective assumptions, including expected stock price volatility and the estimated term of each award. The estimated fair value of the Company's stock-based awards, less expected forfeitures, is amortized over the awards’ vesting period on a straight-line basis. Expected volatilities are based on the Company’s historical stock price volatility and implied volatility from traded options in its stock. The Company uses historical data to estimate the expected term of options granted within the valuation model. The risk-free interest rate for periods commensurate with the expected term of the option is based on the U.S. Treasury yield rate in effect at the time of grant. The expected dividend yield is zero, as the Company currently does not pay a dividend and does not anticipate doing so in the future. The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2020, 2019 and 2018 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
For the years ended December 31, 2020, 2019 and 2018, the weighted average fair value of awards granted under the 1999 ESPP was $32.30 per share, $20.90 per share and $15.29 per share, respectively. As of December 31, 2020, total pre-tax unrecognized compensation cost for stock options, restricted stock units, deferred stock units and shares of common stock issued under the 1999 ESPP was $274.5 million. The expense is expected to be recognized through 2024 over a weighted average period of 1.6 years. Stock Options The following table summarizes stock option activity during the year ended December 31, 2020:
The total pre-tax intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $1.0 million, $3.9 million and $8.2 million, respectively. The total fair value of options vested for the years ended December 31, 2020 and 2019 was insignificant. The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $104.99 on December 31, 2020, that would have been received by the option holders had all option holders exercised their “in-the-money” options as of that date. The total number of shares issuable upon the exercise of “in-the-money” options exercisable as of December 31, 2020 was 6,371. Deferred Stock Units The Company has granted deferred stock units ("DSUs") to non-employee members of its board of directors. Each DSU represents the right to receive one share of the Company’s common stock upon vesting. The holder may elect to defer receipt of the vested shares of stock represented by the DSU for a period of at least one year but not more than ten years from the grant date. DSUs vest 100% on the first anniversary of the grant date. If a director has completed one year of Board service, vesting of 100% of the DSUs held by such director will accelerate at the time of his or her departure from the Board. The following table summarizes the DSU activity for the year ended December 31, 2020:
The total pre-tax intrinsic value of DSUs that were vested and distributed during the years ended December 31, 2020, 2019 and 2018 was $0.9 million, $7.7 million and $3.0 million, respectively. The total fair value of DSUs that were vested and distributed during the years ended December 31, 2020, 2019 and 2018 was $0.7 million, $4.9 million and $1.8 million, respectively. The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant. As of December 31, 2020, 23,908 DSUs were unvested, with an aggregate intrinsic value of approximately $2.5 million and a weighted average remaining contractual life of approximately 0.3 years. These units are expected to vest in May 2021. Restricted Stock Units The following table summarizes the different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2020 (in thousands):
RSUs represent the right to receive one share of the Company’s common stock upon vesting. RSUs are granted at the discretion of the board of directors, a committee thereof or, subject to defined limitations, the Chief Executive Officer of the Company, acting as a committee of one director, to whom such authority has been delegated. The Company has issued RSUs that vest based on the passage of time assuming continued service with the Company, RSUs that vest only upon the achievement of defined performance metrics tied primarily to revenue and earnings targets, and RSUs that vest based upon total shareholder return ("TSR") measured against the benchmark TSR of a peer group. For RSUs with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant, and the stock-based compensation expense is being recognized over the vesting period. Most RSUs with service-based vesting provisions vest in installments over a - or four-year period following the grant date. The Company uses the Monte Carlo simulation model to determine the fair value of the Company's RSUs based on TSR. This model requires the input of assumptions, including the estimated term of each award, the risk-free interest rate, historical stock price volatility of the Company's shares and historical stock price volatility of peer-company shares. The grant-date fair values of the TSR-based RSUs granted during the years ended December 31, 2020, 2019 and 2018 were estimated using a Monte Carlo simulation model with the following assumptions:
For the years ended December 31, 2020, 2019 and 2018, management measured compensation expense for performance-based RSUs based upon a review of the Company’s expected achievement against specified financial performance targets. Such compensation cost is being recorded using a graded-vesting method for each series of grants of performance-based RSUs, to the extent management has deemed that such awards are probable of vesting based upon the expected achievement against the specified targets. On a periodic basis, management reviews the Company’s expected performance and adjusts the compensation cost, if needed, at such time. The following table summarizes the RSU activity for the year ended December 31, 2020:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of income before provision for income taxes were as follows for the years ended December 31, 2020, 2019 and 2018 (in thousands):
The provision for income taxes consisted of the following for the years ended December 31, 2020, 2019 and 2018 (in thousands):
The Company’s effective tax rate differed from the U.S. federal statutory tax rate as follows for the years ended December 31, 2020, 2019 and 2018:
The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2020 and 2019 were as follows (in thousands):
Valuation allowances will be recognized on deferred tax assets if it is more-likely-than-not that some or all of the deferred tax assets will not be utilized. In measuring deferred tax assets, the Company considers all available evidence, both positive and negative, to determine whether a valuation allowance is needed. As of December 31, 2020, the Company recorded a $32.6 million valuation allowance against deferred tax assets related to tax credits and state and foreign NOLs in which it is more-likely-than-not that such attributes will expire prior to utilization. The change in the valuation allowance during 2020 was $6.6 million. The table below summarizes the Company's NOL and tax credit carryforwards in federal, state and foreign jurisdictions as of December 31, 2020 and 2019 (in thousands, except for years):
The Company's U.S. federal and state NOL carryforwards relate to acquisitions completed in 2019, 2017 and 2012. Foreign NOL carryforwards relate to losses due to the difference in local tax laws. As of December 31, 2020, accumulated earnings outside the U.S. totaled $985.7 million, the majority of which have been taxed due to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings and the tax on global intangible low taxed income required by the U.S. Tax Cuts and Jobs Act ("TCJA"). No provision for U.S. income and foreign withholding taxes has been provided for any remaining undistributed foreign earnings not subject to tax under the TCJA, or any additional basis differences inherent in these entities, as these amounts continue to be indefinitely reinvested. Determination of the amount of the unrecognized deferred tax liability on outside basis differences is not practicable because of the complexity of laws and regulations, the varying tax treatment of alternative repatriation scenarios and the variation due to multiple potential assumptions relating to the timing of any future repatriation. The following is a roll forward of the Company’s unrecognized tax benefits for the years ended December 31, 2020, 2019 and 2018 (in thousands):
As of December 31, 2020, 2019 and 2018, the Company had $29.5 million, $32.6 million and $67.8 million of unrecognized tax benefits, respectively. Total interest and penalties for unrecognized tax benefits include $7.7 million, $7.8 million and $11.8 million as of December 31, 2020, 2019 and 2018, respectively. Interest and penalties related to unrecognized tax benefits are recorded in the provision for income taxes and were $1.2 million, $1.1 million and $1.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. The amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate is approximately $29.5 million. As of December 31, 2020, it is reasonably possible that $9.6 million of unrecognized tax benefits may be recognized within the next 12 months due to the expiration of local statutes of limitations. Certain U.S. state and foreign income tax returns from 2011 through 2019 are currently under audit. The Company has reserved for those positions that are not more-likely-than-not to be sustained. The Company is also involved in litigation related to certain adverse audit determinations. In the second quarter of 2018, the Company filed an appeal with the Massachusetts Appellate Tax Board contesting the adverse audit findings related to certain tax benefits and exemptions. The appeal hearing was held in late 2019. In July 2020, the Massachusetts Appellate Tax Board ruled in the Company's favor; however the decision is eligible for appeal by the Massachusetts Department of Revenue. The Company has determined that it is more-likely-than-not that it will prevail, and no reserve has been recorded related to these controversies. However, over the next 12 months, the Company's current assumptions and positions could change based on potential appeal decisions and other events impacting its analysis. Such events, if resolved unfavorably, could significantly impact the Company’s effective income tax rate and results of operations. The Company has estimated that an adverse ruling related to its Massachusetts controversy could result in an gross income tax charge of approximately $41.0 million, which could be partially offset by certain state tax credits of $27.0 million which are not currently benefited as a result of the Company's valuation allowance assessment.
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Net Income per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Share | Net Income per ShareBasic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock options, RSUs, DSUs, convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the components used in the computation of basic and diluted net income per share for the years ended December 31, 2020, 2019 and 2018 (in thousands, except per share data):
For the years ended December 31, 2020, 2019 and 2018, certain potential outstanding shares from stock options, service-based RSUs, convertible notes and warrants were excluded from the computation of diluted net income per share because the effect of including these items was anti-dilutive. Additionally, certain performance-based RSUs were excluded from the computation of diluted net income per share because the underlying performance conditions for such RSUs had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2020, 2019 and 2018 (in thousands):
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Akamai Foundation |
12 Months Ended |
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Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Akamai Foundation | Akamai FoundationThe Akamai Foundation is a private non-profit organization founded by certain current and former employees of the Company in 2000 (the “Foundation”). The Company has the right to appoint the directors of the Foundation, but receives no economic benefit from the Foundation’s initiatives, therefore the Foundation is not consolidated. The Foundation's initiatives are to support youth education, with a focus on mathematics and science, as well as other charitable causes. In 2020, the Foundation expanded its initiatives to include supporting increased diversity in the technology industry. In 2018, the Company contributed $50.0 million to establish a permanent endowment for the Foundation. In 2020, the Company contributed an additional $20.0 million in support of the Foundation's expanded initiatives. These expenses are included in general and administrative expenses in the consolidated statements of income in the years in which they were contributed. |
Segment and Geographic Information |
12 Months Ended |
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Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic InformationThe Company’s chief operating decision-maker is the chief executive officer and the executive management team. As of December 31, 2020, the Company operated in one industry segment: providing cloud services for securing, delivering and optimizing content and business applications over the internet. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments. The Company deploys its servers into networks worldwide. As of December 31, 2020, the Company had approximately $572.4 million and $487.2 million of net property and equipment, excluding internal-use software, located in the U.S. and foreign locations, respectively. As of December 31, 2019, the Company had approximately $482.7 million and $303.7 million of net property and equipment, excluding internal-use software, located in the U.S. and foreign locations, respectively. As of December 31, 2020, the Company had approximately $612.0 million and $182.0 million of operating lease right-of-use assets located in the U.S. and foreign locations, respectively. As of December 31, 2019, the Company had approximately $597.9 million and $160.6 million of operating lease right-of-use assets located in the U.S. and foreign locations, respectively. The Company sells its services and licenses through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated and was $1,420.7 million, $1,199.4 million and $1,031.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period.
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Quarterly Financial Results (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Results (unaudited) | Quarterly Financial Results (unaudited)
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate.
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Newly-Adopted Accounting Pronouncements and Recent Accounting Pronouncements | Newly-Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance that introduces a new methodology for accounting for credit losses on financial instruments. The guidance establishes a new "expected credit loss model" that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances. The Company prospectively adopted this standard on January 1, 2020. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued guidance that addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance for capitalizing costs associated with developing or obtaining internal-use software. The Company prospectively adopted this standard on January 1, 2020. Adoption of the standard did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements In August 2020, the FASB issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This guidance will be effective for the Company on January 1, 2022. The Company is evaluating the potential impact of adopting this new accounting guidance on its consolidated financial statements related to the accounting for convertible debt arrangements.
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Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its debt securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment.
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Accounts Receivable and Related Reserves | Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers.
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Revenue Recognition, Incremental Costs to Obtain a Contract with a Customer, Contract Liabilities and Cost of Revenue | Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in an incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately 2.5 years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Amortization of the costs is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the internet – as well as security solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting, and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most content delivery and security services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly traffic commitments that expire each period. Any bursting over given commitments is recognized in the period in which the traffic was served. For services that involve traffic consumption, revenue is recognized in an amount that reflects the level of traffic served to a customer in a given period. For custom arrangements, other methods may be used as a measure of progress towards satisfying the performance obligations. Some of the Company's services are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost.
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Concentrations of Credit Risk | Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2020, its concentration of credit risk related to cash equivalents and marketable securities was not significant. Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2020, 2019 and 2018, no customer accounted for more than 10% of total revenue. As of December 31, 2020 and 2019, no customer had an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2020, its concentration of credit risk related to accounts receivable was not significant.
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Fair Value of Financial Measurements | Fair Value of Financial Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities that have been classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability.
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $1,000 and an estimated useful life greater than one year. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred.
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Operating Leases | Operating Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued guidance that requires companies to present assets and liabilities arising from leases on the consolidated balance sheet. The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize right of use ("ROU") assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. The Company adopted this standard on January 1, 2019 on a modified retrospective basis by applying the new standard to its lease portfolio as of January 1, 2019, while continuing to apply legacy guidance in the comparative periods. The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset. Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the Company’s leases do not provide an implicit rate, an incremental borrowing rate has been applied based on the Company's credit-adjusted risk-free rate. The Company often enters into contracts that contain both lease and non-lease components. Real estate non-lease components include real estate taxes, insurance, maintenance, parking and other operating costs. Co-location non-lease components include utilities and other operating costs. The Company includes both lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities based on actual usage, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. The Company’s lease terms often include renewal options and, particularly in the case of co-location arrangements, may include evergreen provisions. The Company’s right-of-use assets and lease liabilities generally do not include the options to extend, or terminate, unless it is reasonably certain that the Company will exercise these options. The Company has elected to exclude leases for certain networking equipment with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheet. Lease expense is recognized on a straight-line basis over the expected lease term.
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Equity Method Investments | Equity Method Investments The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses.
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Goodwill, Acquired Intangible Assets and Long-Lived Assets | Goodwill, Acquired Intangible Assets and Long-Lived Assets Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2020, 2019 and 2018, the fair value of the Company's reporting unit was substantially in excess of the carrying value. The tests did not result in an impairment to goodwill during the years ended December 31, 2020, 2019 and 2018. Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, non-compete agreements and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Long-lived assets, including property and equipment and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset.
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Research and Development Costs and Capitalized Internal-Use Software | Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life.
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Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company recognizes compensation costs for all stock-based payment awards made to employees based upon the awards’ grant-date fair value. The stock-based payment awards include stock options, restricted stock units, deferred stock units and employee stock purchases related to the Company’s employee stock purchase plan. For stock options, the Company has selected the Black-Scholes option-pricing model to determine the fair value of stock option awards. For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock options, restricted stock units and deferred stock units that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance condition-based vesting feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations.
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Foreign Currency Translation and Forward Currency Contracts | Foreign Currency Translation and Forward Currency Contracts The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other expense, net. The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other expense, net. As of December 31, 2020 and 2019, the fair value of the forward currency contracts and the underlying net gains for the years ended December 31, 2020, 2019 and 2018 were immaterial. The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating.
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Income Taxes | Income Taxes The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized. The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized. The Company has recorded certain tax reserves to address potential exposures involving its income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated. Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The following is a summary of available-for-sale marketable securities held as of December 31, 2020 and 2019 (in thousands):
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Fair Value Measurement Within Fair Value Hierarchy | The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities as of December 31, 2020 and 2019 (in thousands):
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Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets | Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2020 and 2019 were as follows (in thousands):
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Schedule of Activity of Major Classes of Assets Measured at Fair Value Using Level 3 Inputs | The following table reflects the activity for the Company’s major classes of liabilities measured at fair value using Level 3 inputs for the years ended December 31, 2020 and 2019 (in thousands):
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Accounts Receivable (Tables) |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Net accounts receivable consisted of the following as of December 31, 2020 and 2019 (in thousands):
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Schedule of Activity in the Accounts Receivable Reserves | A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):
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Prepaid Expenses and Other Current Assets (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expense and other current assets | Prepaid expenses and other current assets consisted of the following as of December 31, 2020 and 2019 (in thousands):
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Schedule of deferred costs associated with obtaining customer contracts | The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2020 and 2019 (in thousands):
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Property and Equipment (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands except years):
|
Goodwill and Acquired Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2020 and 2019 (in thousands):
The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
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Schedule of the Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 were as follows (in thousands):
|
Business Acquisitions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The following table presents the preliminary allocation of the purchase price for Asavie (in thousands):
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Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2020 and 2019 (in thousands):
The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years):
|
Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2020 and 2019 (in thousands):
|
Restructuring (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Accrual | The following table summarizes the activity of the Company's restructuring accrual during the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Convertible Senior Notes | The 2027 Notes consisted of the following components as of December 31, 2020 and 2019 (in thousands):
The 2025 Notes consist of the following components as of December 31, 2020 and December 31, 2019 (in thousands):
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Schedule of Interest Expense | The following table sets forth total interest expense included in the consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The following table is a summary of the Company’s operating lease costs for the years ended December 31, 2020 and 2019 (in thousands):
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Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands):
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Commitments | The minimum future commitments as of December 31, 2020 were as follows (in thousands):
|
Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders' equity, for the years ended December 31, 2020 and 2019 (in thousands):
|
Revenue from Contracts with Customers (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table summarizes revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020, 2019 and 2018 (in thousands):
|
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Schedule of Assumptions Used | The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2020, 2019 and 2018 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summary of Stock Option Activity | The following table summarizes stock option activity during the year ended December 31, 2020:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Deferred Stock Units Activity | The following table summarizes the DSU activity for the year ended December 31, 2020:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 (in thousands):
|
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Schedule of Restricted Stock Units Activity | The following table summarizes the RSU activity for the year ended December 31, 2020:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Before Tax | The components of income before provision for income taxes were as follows for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
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Schedule of Provision for Income Tax | The provision for income taxes consisted of the following for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
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Schedule of Difference Between Effective and Statutory | The Company’s effective tax rate differed from the U.S. federal statutory tax rate as follows for the years ended December 31, 2020, 2019 and 2018:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Deferred Tax and Valuation Allowance | The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2020 and 2019 were as follows (in thousands):
|
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Schedule of Operating Loss Carryforwards | The table below summarizes the Company's NOL and tax credit carryforwards in federal, state and foreign jurisdictions as of December 31, 2020 and 2019 (in thousands, except for years):
|
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Unrecognized Tax Benefits | The following is a roll forward of the Company’s unrecognized tax benefits for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
Net Income per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components Used in Diluted and Basic Income Per Common Share | The following table sets forth the components used in the computation of basic and diluted net income per share for the years ended December 31, 2020, 2019 and 2018 (in thousands, except per share data):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2020, 2019 and 2018 (in thousands):
|
Quarterly Financial Results (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited Quarterly Financial Results |
|
Nature of Business and Basis of Presentation (Details) server in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
country
server
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of servers (more than) | server | 325 |
Number of countries with networks | country | 130 |
Number of operating segments | segment | 1 |
Summary of Significant Accounting Policies - Concentration Risk (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Concentration Risk [Line Items] | |
Expected life of customer arrangement | 2 years 6 months |
Customer Concentration Risk | Sales | |
Concentration Risk [Line Items] | |
Concentration risk percent (more than) | 10.00% |
Customer Concentration Risk | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration risk percent (more than) | 10.00% |
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | |||||||||||
Property and equipment per unit value, minimum | $ 1,000 | $ 1,000 | |||||||||
Property, plant and equipment, estimated useful life | 1 year | ||||||||||
Property, software and equipment depreciation, amortization expense | $ (436,300,000) | $ (402,100,000) | $ (401,200,000) | ||||||||
Net income | $ 113,370,000 | $ 158,623,000 | $ 161,915,000 | $ 123,146,000 | $ 119,100,000 | $ 137,890,000 | $ 113,915,000 | $ 107,130,000 | $ 557,054,000 | $ 478,035,000 | $ 298,373,000 |
Basic (in dollars per share) | $ 0.70 | $ 0.97 | $ 1.00 | $ 0.76 | $ 0.74 | $ 0.85 | $ 0.70 | $ 0.66 | $ 3.43 | $ 2.94 | $ 1.78 |
Network Assets | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Estimated Useful Life (in years) | 5 years | 4 years | |||||||||
Network Assets | Change In Average Useful Lives | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Property, software and equipment depreciation, amortization expense | $ 22,900,000 | $ 31,500,000 | |||||||||
Net income | $ 19,200,000 | $ 26,100,000 | |||||||||
Basic (in dollars per share) | $ 0.12 | $ 0.16 |
Summary of Significant Accounting Policies - Equity Method Investments (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Schedule of Equity Method Investments [Line Items] | |||
Loss from equity method investment | $ (13,106) | $ (1,096) | $ 0 |
Operating Income (Loss) | $ (658,534) | (548,918) | $ (362,499) |
GO-NET | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 20.00% | ||
Equity method investment | $ 21,600 | ||
Loss from equity method investment | (13,100) | (1,100) | |
Impairment loss | 11,000 | ||
Revenue from related party | 11,100 | $ 11,600 | |
GO-NET | GO-NET | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating Income (Loss) | $ 2,100 |
Fair Value Measurements - Narrative (Details) $ in Millions |
Dec. 31, 2020
USD ($)
|
---|---|
Corporate bonds | |
Debt Securities, Available-for-sale [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | $ 2.0 |
Fair Value Measurements - Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 744,290 | $ 1,143,006 |
Due after 1 year through 5 years | 1,379,736 | 820,450 |
Aggregate Fair Value | $ 2,124,026 | $ 1,963,456 |
Fair Value Measurements - Schedule of Activity of Major Classes of Assets Measured at Fair Value Using Level 3 Inputs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 0 | $ (6,300) |
Cash paid upon achievement of milestone | 0 | 6,300 |
Ending balance | $ 0 | $ 0 |
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 661,874 | $ 553,823 | ||
Allowance for current expected credit losses and other reserves | (1,822) | (1,880) | $ (1,534) | $ (1,281) |
Accounts receivable, net | 660,052 | 551,943 | ||
Trade accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | 473,474 | 396,204 | ||
Unbilled accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 188,400 | $ 157,619 |
Accounts Receivable - Activity in Allowance for Expected Credit Loss (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 1,880 | $ 1,534 | $ 1,281 |
Charges to income from operations | 12,347 | 5,116 | 3,824 |
Collections from customers previously reserved and other | (12,405) | (4,770) | (3,571) |
Ending balance | $ 1,822 | $ 1,880 | $ 1,534 |
Prepaid Expenses and Other Current Assets - Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid income taxes | $ 30,682 | $ 26,143 |
Prepaid sales and other taxes | 24,034 | 16,213 |
Prepaid equipment and software maintenance | 15,526 | 18,114 |
Deferred commissions | 54,516 | 45,009 |
Other prepaid expenses | 26,187 | 19,593 |
Other current assets | 20,461 | 17,604 |
Total | $ 171,406 | $ 142,676 |
Prepaid Expenses and Other Current Assets - Deferred Cost (Details) - Commission and Incentive Payments - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 77,716 | $ 70,707 |
Other Current Assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | 54,516 | 45,009 |
Other Assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 23,200 | $ 25,698 |
Prepaid Expenses and Other Current Assets - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Deferred Commissions | |||
Capitalized Contract Cost [Line Items] | |||
Amortization expense related to deferred commissions | $ 61.7 | $ 44.3 | $ 45.0 |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Abstract] | |||
Property, software and equipment depreciation, amortization expense | $ 436.3 | $ 402.1 | $ 401.2 |
Capitalization of stock-based compensation | 38.0 | 35.9 | $ 34.8 |
Disposal of property plant and equipment | 279.9 | 166.7 | |
Write off of internal-use software | $ 0.8 | $ 3.8 |
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of acquired intangible assets | $ 42,049 | $ 38,581 | $ 33,311 |
2021 | 47,400 | ||
2022 | 43,800 | ||
2023 | 36,300 | ||
2024 | 28,400 | ||
2025 | $ 22,900 |
Goodwill and Acquired Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Changes in the carrying amount of goodwill | ||
Beginning balance | $ 1,600,265 | $ 1,487,404 |
Measurement period adjustments related to acquisitions completed in prior years | (1,056) | 0 |
Foreign currency translation | 4,962 | (1,108) |
Ending balance | 1,674,371 | 1,600,265 |
Janrain, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 0 | 92,188 |
Exceda | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 0 | 14,712 |
ChameleonX | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 0 | 7,069 |
Asavie | ||
Changes in the carrying amount of goodwill | ||
Acquisition | $ 70,200 | $ 0 |
Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and other related benefits | $ 218,588 | $ 190,721 |
Bandwidth and co-location | 67,170 | 65,213 |
Income tax payable | 50,812 | 40,337 |
Property, use and other taxes | 35,390 | 30,904 |
Professional service fees | 2,245 | 1,775 |
Other accrued expenses | 6,263 | 5,911 |
Total | $ 380,468 | $ 334,861 |
Debt - Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
Aug. 31, 2019 |
May 31, 2018 |
Feb. 28, 2014 |
---|---|---|---|---|---|
2027 Notes | |||||
Liability component: | |||||
Principal | $ 1,150,000,000 | $ 1,150,000,000 | $ 1,150,000,000.0 | ||
Less: debt discount and issuance costs, net of amortization | (196,359,000) | (222,928,000) | |||
Net carrying amount | 953,641,000 | 927,072,000 | |||
Equity component: | 220,529,000 | 220,529,000 | |||
2025 Notes | |||||
Liability component: | |||||
Principal | 1,150,000,000 | 1,150,000,000 | $ 1,150,000,000.0 | ||
Less: debt discount and issuance costs, net of amortization | (196,934,000) | (237,281,000) | |||
Net carrying amount | 953,066,000 | 912,719,000 | |||
Equity component: | $ 285,225,000 | $ 285,225,000 | |||
2019 Notes | |||||
Liability component: | |||||
Principal | $ 690,000,000.0 |
Debt - Revolving Credit Facility (Details) - Credit Agreement - USD ($) |
1 Months Ended | 12 Months Ended |
---|---|---|
May 31, 2018 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 500,000,000.0 | |
Debt term | 5 years | |
Maximum borrowing capacity under specific conditions | $ 1,000,000,000.0 | |
Outstanding borrowings | $ 0 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.075% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.15% | |
Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.00% | |
Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.25% | |
LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.875% | |
LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.25% |
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Debt Instrument [Line Items] | |||
Amortization of debt discount and issuance costs | $ 67,153 | $ 52,059 | $ 46,493 |
Capitalization of interest expense | (4,330) | (6,201) | (4,533) |
Total interest expense | 69,120 | 49,364 | 43,202 |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | 548 | 513 | 368 |
Convertible Debt | 2025 Notes | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | 1,437 | 1,436 | 874 |
Convertible Debt | 2027 Notes | |||
Debt Instrument [Line Items] | |||
Interest on debt instruments | $ 4,312 | $ 1,557 | $ 0 |
Leases - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2018 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | |||
Rent expense | $ 63.2 | ||
Sublease income | $ 3.8 | ||
Operating lease not yet commenced | $ 13.6 | ||
Future sublease income | 216.7 | ||
Outstanding letter of credit | $ 5.8 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of operating lease not yet commenced | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of operating lease not yet commenced | 7 years | ||
Real Estate Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term (in years) | 11 years 9 months 18 days | 12 years 9 months 18 days | |
Weighted average discount rate | 3.40% | 3.50% | |
Co-location Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term (in years) | 4 years 3 months 18 days | 3 years 10 months 24 days | |
Weighted average discount rate | 1.80% | 2.20% |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 197,128 | $ 159,913 |
Short-term lease cost | 15,849 | 14,412 |
Variable lease cost | 55,494 | 39,134 |
Sublease income | (22,064) | (5,119) |
Total operating lease costs | 246,407 | 208,340 |
Real Estate Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 83,574 | 63,893 |
Short-term lease cost | 229 | 111 |
Variable lease cost | 21,235 | 15,610 |
Sublease income | (22,064) | (5,119) |
Total operating lease costs | 82,974 | 74,495 |
Co-location Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 113,554 | 96,020 |
Short-term lease cost | 15,620 | 14,301 |
Variable lease cost | 34,259 | 23,524 |
Sublease income | 0 | 0 |
Total operating lease costs | $ 163,433 | $ 133,845 |
Leases - Lease Maturity (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Real Estate Arrangements | |
Lessee, Lease, Description [Line Items] | |
2021 | $ 80,787 |
2022 | 83,863 |
2023 | 79,445 |
2024 | 70,967 |
2025 | 66,209 |
Thereafter | 473,558 |
Total lease payments | 854,829 |
Less: imputed interest | 162,588 |
Total lease liabilities | 692,241 |
Co-location Arrangements | |
Lessee, Lease, Description [Line Items] | |
2021 | 73,540 |
2022 | 36,805 |
2023 | 23,396 |
2024 | 16,815 |
2025 | 10,775 |
Thereafter | 25,208 |
Total lease payments | 186,539 |
Less: imputed interest | 8,575 |
Total lease liabilities | $ 177,964 |
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Bandwidth Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2021 | $ 95,923 |
2022 | 19,046 |
2023 | 4,186 |
2024 | 120 |
2025 | 120 |
Thereafter | 100 |
Total | 119,495 |
Purchase Order Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2021 | 231,059 |
2022 | 22,014 |
2023 | 9,640 |
2024 | 3,931 |
2025 | 0 |
Thereafter | 0 |
Total | $ 266,644 |
Commitments and Contingencies - Narrative (Details) - Settled Litigation $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jul. 31, 2016
USD ($)
installment
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Patent Infringement Case Against Limelight | ||||
Gain and Loss Contingencies [Line Items] | ||||
Settlement amount | $ 54.0 | |||
Number of installments in settlement | installment | 12 | |||
Settlement payment term | 3 years | |||
Proceeds from settlements | $ 9.0 | $ 18.0 | ||
Multiple Existing Lawsuits Between Limelight Networks, Inc. and the Company | ||||
Gain and Loss Contingencies [Line Items] | ||||
Settlement amount | $ 14.9 |
Stockholders' Equity (Details) - USD ($) $ in Thousands, shares in Millions |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Nov. 30, 2018 |
Feb. 29, 2016 |
|
Class of Stock [Line Items] | ||||||
Amount of common stock repurchases authorized | $ 1,100,000 | $ 1,000,000 | ||||
Stock repurchase authorized amount increase | $ 416,700 | |||||
Remaining amount available for future purchases of shares under approved repurchase program. | $ 750,000 | $ 571,900 | ||||
Value of shares repurchased during period | $ 193,588 | $ 334,519 | $ 750,000 | |||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Repurchases of common stock (in shares) | 2.0 | 4.0 | 10.2 | |||
Value of shares repurchased during period | $ 193,600 | $ 334,500 | $ 750,000 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 3,657,958 | $ 3,191,860 | $ 3,362,469 |
Other comprehensive income | 24,943 | 3,768 | (26,982) |
Ending Balance | 4,251,296 | 3,657,958 | 3,191,860 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (45,144) | (48,912) | (21,930) |
Ending Balance | (20,201) | (45,144) | (48,912) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (52,924) | (51,904) | |
Other comprehensive income | 19,629 | (1,020) | |
Ending Balance | (33,295) | (52,924) | (51,904) |
Net Unrealized Gains on Investments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 7,780 | 2,992 | |
Other comprehensive income | 5,314 | 4,788 | |
Ending Balance | $ 13,094 | $ 7,780 | $ 2,992 |
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
division
|
Sep. 30, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2020
USD ($)
division
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 846,287 | $ 792,845 | $ 794,715 | $ 764,302 | $ 772,123 | $ 709,912 | $ 705,074 | $ 706,508 | $ 3,198,149 | $ 2,893,617 | $ 2,714,474 |
Number of divisions | division | 2 | 2 | |||||||||
Web Division | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 1,666,305 | 1,556,252 | 1,439,772 | ||||||||
Media and Carrier Division | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,531,844 | 1,337,365 | 1,274,702 | ||||||||
U.S. | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,777,435 | 1,694,211 | 1,683,272 | ||||||||
International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 1,420,714 | $ 1,199,406 | $ 1,031,202 |
Revenue from Contracts with Customers - Performance Obligation (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 69.9 | $ 64.1 |
Remaining performance obligation | 2,900.0 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized | 69.9 | $ 64.1 |
Remaining performance obligation | $ 2,900.0 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, percentage | 70.00% | |
Remaining performance obligation, expected timing | 12 months |
Employee Benefit Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Compensation Related Costs [Abstract] | |||
Contributions by employer | $ 17.5 | $ 16.6 | $ 16.7 |
Stock-Based Compensation - Schedule of Assumptions Used (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.70% | 2.30% | 1.90% |
Expected volatility | 30.40% | 29.60% | 31.20% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 3 years | 3 years | 3 years |
Risk-free interest rate | 0.70% | 2.50% | 2.30% |
Expected volatility | 28.20% | 32.80% | 35.50% |
Average volatility of peer-company share price | 28.90% | 27.00% | 26.30% |
Stock-Based Compensation - Schedule of Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
$ / shares
shares
| |
Shares | |
Outstanding (in shares) | shares | 20 |
Exercised (in shares) | shares | (14) |
Outstanding (in shares) | shares | 6 |
Exercisable (in shares) | shares | 6 |
Vested or expected to vest (in shares) | shares | 6 |
Weighted Average Exercise Price | |
Outstanding (in dollars per share) | $ / shares | $ 26.23 |
Exercised (in dollars per share) | $ / shares | 32.85 |
Outstanding (in dollars per share) | $ / shares | 11.60 |
Exercisable (in dollars per share) | $ / shares | 11.60 |
Vested or expected to vest (in dollars per share) | $ / shares | $ 11.60 |
Weighted Average Remaining Contractual Term & Aggregate Intrinsic Value | |
Outstanding | 1 year 1 month 2 days |
Exercisable | 1 year 1 month 2 days |
Vested or expected to vest | 1 year 1 month 2 days |
Outstanding | $ | $ 595 |
Exercisable | $ | 595 |
Vested or expected to vest | $ | $ 595 |
Stock-Based Compensation - Schedule of Restricted Stock Units by Type (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total restricted stock units vesting conditions granted (in shares) | 2,710 |
Service-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units vesting conditions granted (in shares) | 2,223 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted with performance based vesting (in shares) | 91 |
Market-and performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted with performance based vesting (in shares) | 396 |
Income Taxes - Components of Income Tax Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 45,074 | $ 24,253 | $ (27,379) |
Foreign | 571,008 | 508,228 | 370,468 |
Income before provision for income taxes | $ 616,082 | $ 532,481 | $ 343,089 |
Income Taxes - Provision for Income Tax Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Current tax (benefit) provision: | |||
Federal | $ (1,765) | $ (22,704) | $ (29,982) |
State | 5,346 | 3,835 | 8,085 |
Foreign | 76,162 | 71,286 | 64,274 |
Deferred tax (benefit) provision: | |||
Federal | (19,845) | (13,987) | 5,954 |
State | (14,509) | (12,212) | 701 |
Foreign | (6,023) | 4,968 | (7,140) |
Change in valuation allowance | 6,556 | 22,164 | 2,824 |
Total | $ 45,922 | $ 53,350 | $ 44,716 |
Income Taxes - Schedule of Difference Between Effective and Statutory (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax rate | 21.00% | 21.00% | 21.00% |
State taxes | 1.00% | 1.00% | 1.20% |
Stock-based compensation | (0.60%) | 0.30% | 1.00% |
U.S. federal, state and foreign research and development credits | (4.40%) | (6.00%) | (7.60%) |
Foreign earnings | (7.70%) | (6.10%) | (6.00%) |
Nondeductible (nontaxable) foreign items | (0.40%) | 0.70% | 0.40% |
Impact of U.S. Tax Cuts and Jobs Act, net | 0 | 0 | (0.008) |
Release of uncertain tax position reserve | (0.90%) | (5.90%) | (1.90%) |
Intercompany sale of intellectual property | 0.20% | 1.90% | 3.30% |
Valuation allowance | 1.10% | 4.20% | 0.80% |
Other | (1.80%) | (1.10%) | 1.60% |
Effective income tax rate | 7.50% | 10.00% | 13.00% |
Income Taxes - Schedule of Deferred Tax and Related Valuation Allowance (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Accrued bonus | $ 25,480 | $ 25,487 |
Deferred revenue | 11,146 | 3,874 |
Operating lease liability | 141,212 | 147,375 |
Stock-based compensation | 23,629 | 20,606 |
NOLs | 25,255 | 25,851 |
Unrealized losses | 0 | 1,529 |
Tax credit carryforwards | 110,254 | 87,305 |
Convertible senior notes interest | 20,953 | 22,506 |
Other | 11,531 | 12,501 |
Deferred tax assets | 369,460 | 347,034 |
Depreciation and amortization | (6,974) | (16,896) |
Acquired intangible assets | (59,128) | (51,758) |
Operating lease right-of-use asset | (127,524) | (132,949) |
Deferred commissions | (14,952) | (14,843) |
Internal-use software development costs capitalized | (58,820) | (57,201) |
Deferred tax liabilities | (267,398) | (273,647) |
Valuation allowance | (32,602) | (26,046) |
Net deferred tax assets | $ 69,460 | $ 47,341 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 32,602 | $ 26,046 | |
Increase in valuation allowance | 6,600 | ||
Foreign earnings repatriated | 985,700 | ||
Unrecognized tax benefits including accrued interest and penalties | 29,500 | 32,600 | $ 67,800 |
Unrecognized tax benefits, income tax penalties and interest accrued | 7,700 | 7,800 | 11,800 |
Income tax interest and penalties expense | 1,200 | $ 1,100 | $ 1,300 |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 29,500 | ||
Unrecognized tax benefits that may be recognized | 9,600 | ||
Estimate of possible charge | 41,000 | ||
Stat tax credits | $ 27,000 |
Income Taxes - Schedule of NOL Carryforwards (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Federal and state research and development tax credit and other credit carryforwards | $ 132,800 | $ 88,570 |
Domestic country | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | 59,200 | 87,500 |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | 24,800 | 20,500 |
Foreign country | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 40,800 | $ 11,600 |
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 27,359 | $ 64,892 | $ 85,845 |
Gross increases – tax positions of prior periods | 2,539 | 74 | 2,704 |
Gross increases – current period tax positions | 1,946 | 2,006 | 3,021 |
Gross decreases – tax positions of prior periods | (3,540) | (5,201) | (15,287) |
Gross decreases – lapse of applicable statute of limitations | (4,199) | (28,672) | (6,186) |
Gross decreases – settlements | 0 | (5,740) | (5,205) |
Balance at end of year | $ 24,105 | $ 27,359 | $ 64,892 |
Net Income per Share - Schedule of Components (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Numerator: | |||||||||||
Net income | $ 113,370 | $ 158,623 | $ 161,915 | $ 123,146 | $ 119,100 | $ 137,890 | $ 113,915 | $ 107,130 | $ 557,054 | $ 478,035 | $ 298,373 |
Denominator: | |||||||||||
Shares used for basic net income per share (in shares) | 162,490 | 162,706 | 167,312 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options (in shares) | 31 | 68 | 132 | ||||||||
RSUs and deferred stock units (in shares) | 1,819 | 1,799 | 1,744 | ||||||||
Convertible senior notes (in shares) | 873 | 0 | 0 | ||||||||
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 | 0 | ||||||||
Shares used for diluted net income per share (in shares) | 165,213 | 164,573 | 169,188 | ||||||||
Basic net income per share (in dollars per share) | $ 0.70 | $ 0.97 | $ 1.00 | $ 0.76 | $ 0.74 | $ 0.85 | $ 0.70 | $ 0.66 | $ 3.43 | $ 2.94 | $ 1.78 |
Diluted net income per share (in dollars per share) | $ 0.68 | $ 0.95 | $ 0.98 | $ 0.75 | $ 0.73 | $ 0.84 | $ 0.69 | $ 0.65 | $ 3.37 | $ 2.90 | $ 1.76 |
Akamai Foundation (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2018 |
|
The Akamai Foundation | One-Time Charitable Endowment | ||
Related Party Transaction [Line Items] | ||
Contribution amount | $ 20.0 | $ 50.0 |
Segment and Geographic Information (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2020
USD ($)
segment
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Property and equipment, net | $ 1,478,272 | $ 1,152,153 | $ 1,478,272 | $ 1,152,153 | |||||||
Operating lease right-of-use assets | 793,945 | 758,450 | 793,945 | 758,450 | |||||||
Revenue | 846,287 | $ 792,845 | $ 794,715 | $ 764,302 | 772,123 | $ 709,912 | $ 705,074 | $ 706,508 | 3,198,149 | 2,893,617 | $ 2,714,474 |
U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Property and equipment, net | 572,400 | 482,700 | 572,400 | 482,700 | |||||||
Operating lease right-of-use assets | 612,000 | 597,900 | 612,000 | 597,900 | |||||||
Revenue | 1,777,435 | 1,694,211 | 1,683,272 | ||||||||
Non-U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Property and equipment, net | 487,200 | 303,700 | 487,200 | 303,700 | |||||||
Operating lease right-of-use assets | $ 182,000 | $ 160,600 | 182,000 | 160,600 | |||||||
Revenue | $ 1,420,700 | $ 1,199,400 | $ 1,031,200 |
Quarterly Financial Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 846,287 | $ 792,845 | $ 794,715 | $ 764,302 | $ 772,123 | $ 709,912 | $ 705,074 | $ 706,508 | $ 3,198,149 | $ 2,893,617 | $ 2,714,474 |
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 303,847 | 283,439 | 276,804 | 268,582 | 257,750 | 246,938 | 242,193 | 240,743 | 1,132,672 | 987,624 | 953,485 |
Net income | $ 113,370 | $ 158,623 | $ 161,915 | $ 123,146 | $ 119,100 | $ 137,890 | $ 113,915 | $ 107,130 | $ 557,054 | $ 478,035 | $ 298,373 |
Basic net income per share (in dollars per share) | $ 0.70 | $ 0.97 | $ 1.00 | $ 0.76 | $ 0.74 | $ 0.85 | $ 0.70 | $ 0.66 | $ 3.43 | $ 2.94 | $ 1.78 |
Diluted net income per share (in dollars per share) | $ 0.68 | $ 0.95 | $ 0.98 | $ 0.75 | $ 0.73 | $ 0.84 | $ 0.69 | $ 0.65 | $ 3.37 | $ 2.90 | $ 1.76 |
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