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 |
Auditor name: | Auditor location: | PCAOB ID: |
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. | ||||||||
Item 9C. | ||||||||
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, 2022 – October 31, 2022 | 749,861 | $ | 83.10 | 749,861 | $ | 1,307,415 | ||||||||||||||||||||
November 1, 2022 – November 30, 2022 | 639,122 | 89.21 | 639,122 | 1,250,398 | ||||||||||||||||||||||
December 1, 2022 – December 31, 2022 | 665,811 | 87.72 | 665,811 | 1,191,990 | ||||||||||||||||||||||
Total | 2,054,794 | $ | 86.50 | 2,054,794 |
2022 | 2021 | 2020 | |||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Costs and operating expenses: | |||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 38.3 | 36.7 | 35.4 | ||||||||||||||
Research and development | 10.8 | 9.7 | 8.4 | ||||||||||||||
Sales and marketing | 13.9 | 13.3 | 16.0 | ||||||||||||||
General and administrative | 16.2 | 16.0 | 17.1 | ||||||||||||||
Amortization of acquired intangible assets | 1.8 | 1.4 | 1.3 | ||||||||||||||
Restructuring charge | 0.4 | 0.3 | 1.2 | ||||||||||||||
Total costs and operating expenses | 81.4 | 77.4 | 79.4 | ||||||||||||||
Income from operations | 18.6 | 22.6 | 20.6 | ||||||||||||||
Interest and marketable securities income, net | 0.1 | 0.5 | 0.9 | ||||||||||||||
Interest expense | (0.3) | (2.1) | (2.2) | ||||||||||||||
Other (expense) income, net | (0.3) | 0.1 | (0.1) | ||||||||||||||
Income before provision for income taxes | 18.1 | 21.1 | 19.2 | ||||||||||||||
Provision for income taxes | (3.5) | (1.8) | (1.4) | ||||||||||||||
Loss from equity method investment | (0.2) | (0.4) | (0.4) | ||||||||||||||
Net income | 14.4 | % | 18.9 | % | 17.4 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | % Change at Constant Currency | 2021 | 2020 | % Change | % Change at Constant Currency | ||||||||||||||||||||||||||||||||||||||||
Security | $ | 1,541,941 | $ | 1,334,836 | 15.5 | % | 19.7 | % | $ | 1,334,836 | $ | 1,061,622 | 25.7 | % | 24.6 | % | |||||||||||||||||||||||||||||||
Delivery | 1,669,257 | 1,873,243 | (10.9) | (7.8) | 1,873,243 | 1,929,810 | (2.9) | (3.7) | |||||||||||||||||||||||||||||||||||||||
Compute | 405,456 | 253,144 | 60.2 | 64.0 | 253,144 | 206,717 | 22.4 | 21.4 | |||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 3,616,654 | $ | 3,461,223 | 4.5 | % | 8.0 | % | $ | 3,461,223 | $ | 3,198,149 | 8.2 | % | 7.3 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | % Change at Constant Currency | 2021 | 2020 | % Change | % Change at Constant Currency | ||||||||||||||||||||||||||||||||||||||||
U.S. | $ | 1,902,051 | $ | 1,837,508 | 3.5 | % | 3.5 | % | $ | 1,837,508 | $ | 1,777,435 | 3.4 | % | 3.4 | % | |||||||||||||||||||||||||||||||
International | 1,714,603 | 1,623,715 | 5.6 | 13.2 | 1,623,715 | 1,420,714 | 14.3 | 12.3 | |||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 3,616,654 | $ | 3,461,223 | 4.5 | % | 8.0 | % | $ | 3,461,223 | $ | 3,198,149 | 8.2 | % | 7.3 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Bandwidth fees | $ | 205,268 | $ | 209,288 | (1.9) | % | $ | 209,288 | $ | 200,167 | 4.6 | % | |||||||||||||||||||||||
Co-location fees | 197,375 | 177,950 | 10.9 | 177,950 | 156,275 | 13.9 | |||||||||||||||||||||||||||||
Network build-out and supporting services | 195,669 | 157,234 | 24.4 | 157,234 | 134,952 | 16.5 | |||||||||||||||||||||||||||||
Payroll and related costs | 298,269 | 276,544 | 7.9 | 276,544 | 262,972 | 5.2 | |||||||||||||||||||||||||||||
Acquisition-related costs | 4,982 | — | 100.0 | — | — | — | |||||||||||||||||||||||||||||
Stock-based compensation, including amortization of prior capitalized amounts | 57,146 | 57,390 | (0.4) | 57,390 | 52,863 | 8.6 | |||||||||||||||||||||||||||||
Depreciation of network equipment | 259,359 | 226,384 | 14.6 | 226,384 | 167,017 | 35.5 | |||||||||||||||||||||||||||||
Amortization of internal-use software | 165,751 | 164,166 | 1.0 | 164,166 | 158,426 | 3.6 | |||||||||||||||||||||||||||||
Total cost of revenue | $ | 1,383,819 | $ | 1,268,956 | 9.1 | % | $ | 1,268,956 | $ | 1,132,672 | 12.0 | % | |||||||||||||||||||||||
As a percentage of revenue | 38.3 | % | 36.7 | % | 36.7 | % | 35.4 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 468,928 | $ | 456,138 | 2.8 | % | $ | 456,138 | $ | 410,568 | 11.1 | % | |||||||||||||||||||||||
Stock-based compensation | 78,116 | 65,951 | 18.4 | 65,951 | 48,854 | 35.0 | |||||||||||||||||||||||||||||
Capitalized salaries and related costs | (183,540) | (200,530) | (8.5) | (200,530) | (200,143) | 0.2 | |||||||||||||||||||||||||||||
Acquisition-related costs | 2,832 | — | 100.0 | — | — | — | |||||||||||||||||||||||||||||
Other expenses | 25,098 | 13,813 | 81.7 | 13,813 | 10,036 | 37.6 | |||||||||||||||||||||||||||||
Total research and development | $ | 391,434 | $ | 335,372 | 16.7 | % | $ | 335,372 | $ | 269,315 | 24.5 | % | |||||||||||||||||||||||
As a percentage of revenue | 10.8 | % | 9.7 | % | 9.7 | % | 8.4 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 374,110 | $ | 366,501 | 2.1 | % | $ | 366,501 | $ | 393,800 | (6.9) | % | |||||||||||||||||||||||
Stock-based compensation | 47,789 | 46,342 | 3.1 | 46,342 | 65,257 | (29.0) | |||||||||||||||||||||||||||||
Marketing programs and related costs | 55,033 | 40,553 | 35.7 | 40,553 | 39,272 | 3.3 | |||||||||||||||||||||||||||||
Acquisition-related costs | 2,166 | — | 100.0 | — | — | — | |||||||||||||||||||||||||||||
Other expenses | 23,311 | 8,571 | 172.0 | 8,571 | 12,076 | (29.0) | |||||||||||||||||||||||||||||
Total sales and marketing | $ | 502,409 | $ | 461,967 | 8.8 | % | $ | 461,967 | $ | 510,405 | (9.5) | % | |||||||||||||||||||||||
As a percentage of revenue | 13.9 | % | 13.3 | % | 13.3 | % | 16.0 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Payroll and related costs | $ | 213,772 | $ | 223,238 | (4.2) | % | $ | 223,238 | $ | 199,992 | 11.6 | % | |||||||||||||||||||||||
Stock-based compensation | 62,926 | 63,324 | (0.6) | 63,324 | 58,470 | 8.3 | |||||||||||||||||||||||||||||
Depreciation and amortization | 74,225 | 81,934 | (9.4) | 81,934 | 82,862 | (1.1) | |||||||||||||||||||||||||||||
Facilities-related costs | 103,473 | 100,769 | 2.7 | 100,769 | 98,805 | 2.0 | |||||||||||||||||||||||||||||
Provision for doubtful accounts | 7,042 | 763 | 822.9 | 763 | 2,881 | (73.5) | |||||||||||||||||||||||||||||
Acquisition-related costs | 19,071 | 13,317 | 43.2 | 13,317 | 5,579 | 138.7 | |||||||||||||||||||||||||||||
Software and related service costs | 50,320 | 40,861 | 23.1 | 40,861 | 41,392 | (1.3) | |||||||||||||||||||||||||||||
Legal settlements | — | — | — | — | 275 | (100.0) | |||||||||||||||||||||||||||||
Endowment of Akamai Foundation | — | — | — | — | 20,000 | (100.0) | |||||||||||||||||||||||||||||
Other expenses | 53,377 | 28,818 | 85.2 | 28,818 | 37,632 | (23.4) | |||||||||||||||||||||||||||||
Total general and administrative | $ | 584,206 | $ | 553,024 | 5.6 | % | $ | 553,024 | $ | 547,888 | 0.9 | % | |||||||||||||||||||||||
As a percentage of revenue | 16.2 | % | 16.0 | % | 16.0 | % | 17.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||
Global functions | $ | 212,674 | $ | 212,456 | 0.1 | % | $ | 212,456 | $ | 193,719 | 9.7 | % | |||||||||||||||||||||||
As a percentage of revenue | 5.9 | % | 6.1 | % | 6.1 | % | 6.1 | % | |||||||||||||||||||||||||||
Infrastructure | 345,391 | 326,480 | 5.8 | 326,480 | 325,434 | 0.3 | |||||||||||||||||||||||||||||
As a percentage of revenue | 9.6 | % | 9.4 | % | 9.4 | % | 10.2 | % | |||||||||||||||||||||||||||
Other | 26,141 | 14,088 | 85.6 | 14,088 | 28,735 | (51.0) | |||||||||||||||||||||||||||||
Total general and administrative expenses | $ | 584,206 | $ | 553,024 | 5.6 | % | $ | 553,024 | $ | 547,888 | 0.9 | % | |||||||||||||||||||||||
As a percentage of revenue | 16.2 | % | 16.0 | % | 16.0 | % | 17.1 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||||||||||||
Amortization of acquired intangible assets | $ | 64,983 | $ | 48,019 | 35.3 | % | $ | 48,019 | $ | 42,049 | 14.2 | % | |||||||||||||||||||||||
As a percentage of revenue | 1.8 | % | 1.4 | % | 1.4 | % | 1.3 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||||||||||||
Restructuring charge | $ | 13,529 | $ | 10,737 | 26.0 | % | $ | 10,737 | $ | 37,286 | (71.2) | % | |||||||||||||||||||||||
As a percentage of revenue | 0.4 | % | 0.3 | % | 0.3 | % | 1.2 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||||||||||||
Interest and marketable securities income, net | $ | 3,258 | $ | 15,620 | (79.1) | % | $ | 15,620 | $ | 29,122 | (46.4) | % | |||||||||||||||||||||||
As a percentage of revenue | 0.1 | % | 0.5 | % | 0.5 | % | 0.9 | % | |||||||||||||||||||||||||||
Interest expense | $ | (11,096) | $ | (72,332) | (84.7) | % | $ | (72,332) | $ | (69,120) | 4.6 | % | |||||||||||||||||||||||
As a percentage of revenue | (0.3) | % | (2.1) | % | (2.1) | % | (2.2) | % | |||||||||||||||||||||||||||
Other (expense) income, net | $ | (10,433) | $ | 1,785 | (684.5) | % | $ | 1,785 | $ | (2,454) | (172.7) | % | |||||||||||||||||||||||
As a percentage of revenue | (0.3) | % | 0.1 | % | 0.1 | % | (0.1) | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||||||||||||
Provision for income taxes | $ | 126,696 | $ | 62,571 | 102.5 | % | $ | 62,571 | $ | 45,922 | 36.3 | % | |||||||||||||||||||||||
As a percentage of revenue | 3.5 | % | 1.8 | % | 1.8 | % | 1.4 | % | |||||||||||||||||||||||||||
Effective income tax rate | 19.3 | % | 8.6 | % | 8.6 | % | 7.5 | % |
For the Years Ended December 31, | For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||||||||||||
Loss from equity method investment | $ | 7,635 | $ | 14,008 | (45.5) | % | $ | 14,008 | $ | 13,106 | 6.9 | % | |||||||||||||||||||||||
As a percentage of revenue | 0.2 | % | 0.4 | % | 0.4 | % | 0.4 | % |
2022 | 2021 | 2020 | |||||||||||||||
Income from operations | $ | 676,274 | $ | 783,148 | $ | 658,534 | |||||||||||
Amortization of acquired intangible assets | 64,983 | 48,019 | 42,049 | ||||||||||||||
Stock-based compensation | 217,185 | 202,759 | 197,411 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 31,768 | 35,894 | 33,202 | ||||||||||||||
Restructuring charge | 13,529 | 10,737 | 37,286 | ||||||||||||||
Acquisition-related costs | 29,049 | 13,317 | 5,579 | ||||||||||||||
Legal settlements | — | — | 275 | ||||||||||||||
Endowment of Akamai Foundation | — | — | 20,000 | ||||||||||||||
Non-GAAP income from operations | $ | 1,032,788 | $ | 1,093,874 | $ | 994,336 | |||||||||||
GAAP operating margin | 19 | % | 23 | % | 21 | % | |||||||||||
Non-GAAP operating margin | 29 | % | 32 | % | 31 | % |
2022 | 2021 | 2020 | |||||||||||||||
Net income | $ | 523,672 | $ | 651,642 | $ | 557,054 | |||||||||||
Amortization of acquired intangible assets | 64,983 | 48,019 | 42,049 | ||||||||||||||
Stock-based compensation | 217,185 | 202,759 | 197,411 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 31,768 | 35,894 | 33,202 | ||||||||||||||
Restructuring charge | 13,529 | 10,737 | 37,286 | ||||||||||||||
Acquisition-related costs | 29,049 | 13,317 | 5,579 | ||||||||||||||
Legal settlements | — | — | 275 | ||||||||||||||
Endowment of Akamai Foundation | — | — | 20,000 | ||||||||||||||
Amortization of debt discount and issuance costs | 4,395 | 66,025 | 62,823 | ||||||||||||||
Loss (gain) on investments | 8,260 | (3,680) | (7,228) | ||||||||||||||
Loss from equity method investment | 7,635 | 14,008 | 13,106 | ||||||||||||||
Income tax effect of above non-GAAP adjustments and certain discrete tax items | (42,768) | (96,164) | (103,280) | ||||||||||||||
Non-GAAP net income | $ | 857,708 | $ | 942,557 | $ | 858,277 |
2022 | 2021 | 2020 | |||||||||||||||
GAAP net income per diluted share | $ | 3.26 | $ | 3.93 | $ | 3.37 | |||||||||||
Adjustments to net income: | |||||||||||||||||
Amortization of acquired intangible assets | 0.40 | 0.29 | 0.25 | ||||||||||||||
Stock-based compensation | 1.35 | 1.22 | 1.19 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 0.20 | 0.22 | 0.20 | ||||||||||||||
Restructuring charge | 0.08 | 0.06 | 0.23 | ||||||||||||||
Acquisition-related costs | 0.18 | 0.08 | 0.03 | ||||||||||||||
Legal settlements | — | — | — | ||||||||||||||
Endowment of Akamai Foundation | — | — | 0.12 | ||||||||||||||
Amortization of debt discount and issuance costs | 0.03 | 0.40 | 0.38 | ||||||||||||||
Loss (gain) on investments | 0.05 | (0.02) | (0.04) | ||||||||||||||
Loss from equity method investment | 0.05 | 0.08 | 0.08 | ||||||||||||||
Income tax effect of above non-GAAP adjustments and certain discrete tax items | (0.27) | (0.58) | (0.63) | ||||||||||||||
Adjustment for shares (1) | 0.02 | 0.06 | 0.04 | ||||||||||||||
Non-GAAP net income per diluted share (2) | $ | 5.37 | $ | 5.74 | $ | 5.22 | |||||||||||
Shares used in GAAP per diluted share calculations | 160,467 | 165,804 | 165,213 | ||||||||||||||
Impact of benefit from note hedge transactions (1) | (720) | (1,600) | (873) | ||||||||||||||
Shares used in non-GAAP per diluted share calculations (1) | 159,747 | 164,204 | 164,340 |
2022 | 2021 | 2020 | |||||||||||||||
Net income | $ | 523,672 | $ | 651,642 | $ | 557,054 | |||||||||||
Amortization of acquired intangible assets | 64,983 | 48,019 | 42,049 | ||||||||||||||
Stock-based compensation | 217,185 | 202,759 | 197,411 | ||||||||||||||
Amortization of capitalized stock-based compensation and capitalized interest expense | 31,768 | 35,894 | 33,202 | ||||||||||||||
Restructuring charge | 13,529 | 10,737 | 37,286 | ||||||||||||||
Acquisition-related costs | 29,049 | 13,317 | 5,579 | ||||||||||||||
Legal settlements | — | — | 275 | ||||||||||||||
Interest and marketable securities income, net | (3,258) | (15,620) | (29,122) | ||||||||||||||
Endowment of Akamai Foundation | — | — | 20,000 | ||||||||||||||
Interest expense | 11,096 | 72,332 | 69,120 | ||||||||||||||
Provision for income taxes | 126,696 | 62,571 | 45,922 | ||||||||||||||
Depreciation and amortization | 496,909 | 467,048 | 403,160 | ||||||||||||||
Loss (gain) on investments | 8,260 | (3,680) | (7,228) | ||||||||||||||
Loss from equity method investment | 7,635 | 14,008 | 13,106 | ||||||||||||||
Other expense, net | 2,173 | 1,895 | 9,682 | ||||||||||||||
Adjusted EBITDA | $ | 1,529,697 | $ | 1,560,922 | $ | 1,397,496 | |||||||||||
Net income margin | 14 | % | 19 | % | 17 | % | |||||||||||
Adjusted EBITDA margin | 42 | % | 45 | % | 44 | % |
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 | $ | 715,112 | $ | 78,714 | $ | 151,323 | $ | 126,737 | $ | 358,338 | |||||||||||||||||||
Co-location arrangements | 310,605 | 119,527 | 113,277 | 59,217 | 18,584 | ||||||||||||||||||||||||
Bandwidth agreements | 118,066 | 82,949 | 34,006 | 1,111 | — | ||||||||||||||||||||||||
Open vendor purchase orders | 434,996 | 378,816 | 53,207 | 2,973 | — | ||||||||||||||||||||||||
Convertible senior notes | 2,300,000 | — | 1,150,000 | 1,150,000 | — | ||||||||||||||||||||||||
Total contractual obligations | $ | 3,878,779 | $ | 660,006 | $ | 1,501,813 | $ | 1,340,038 | $ | 376,922 |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2022 | 2021 | 2020 | ||||||||||||||
Net income | $ | 523,672 | $ | 651,642 | $ | 557,054 | |||||||||||
Non-cash reconciling items included in net income | 756,321 | 793,445 | 727,829 | ||||||||||||||
Changes in operating assets and liabilities | (5,317) | (40,524) | (69,883) | ||||||||||||||
Net cash flows provided by operating activities | $ | 1,274,676 | $ | 1,404,563 | $ | 1,215,000 |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2022 | 2021 | 2020 | ||||||||||||||
Cash paid for acquired businesses, net of cash acquired | $ | (872,091) | $ | (598,825) | $ | (127,999) | |||||||||||
Cash paid for asset acquisition | — | — | (36,376) | ||||||||||||||
Purchases of property and equipment and capitalization of internal-use software development costs | (458,302) | (545,230) | (731,872) | ||||||||||||||
Net marketable securities activity | 714,205 | 501,478 | (154,848) | ||||||||||||||
Other, net | (6,122) | (4,322) | 8,121 | ||||||||||||||
Net cash used in investing activities | $ | (622,310) | $ | (646,899) | $ | (1,042,974) |
For the Years Ended December 31, | |||||||||||||||||
(in thousands) | 2022 | 2021 | 2020 | ||||||||||||||
Activity related to stock-based compensation | $ | (25,774) | $ | (39,480) | $ | (30,053) | |||||||||||
Repurchases of common stock | (608,010) | (522,255) | (193,588) | ||||||||||||||
Other, net | (393) | (268) | — | ||||||||||||||
Net cash used in financing activities | $ | (634,177) | $ | (562,003) | $ | (223,641) |
(in thousands, except share data) | December 31, 2022 | December 31, 2021 | |||||||||
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, | ||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
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 and marketable securities income, net | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
Other (expense) income, 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) | 2022 | 2021 | 2020 | ||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||
Change in unrealized (loss) gain on investments, net of income tax benefit (provision) of $ | ( | ( | |||||||||||||||
Other comprehensive (loss) income | ( | ( | |||||||||||||||
Comprehensive income | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | ||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
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 for deferred income taxes | ( | ( | ( | ||||||||||||||
Amortization of debt discount and issuance costs | |||||||||||||||||
Loss on investments | |||||||||||||||||
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 | ( | ||||||||||||||||
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 and redemptions of short-and long-term marketable securities | |||||||||||||||||
Other, net | ( | ( | |||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from 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, net | ( | ( | |||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||||||||
Net increase (decrease) 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, | ||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||
Cash paid for income taxes, net of refunds received in the years ended December 31, 2022, 2021 and 2020 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 | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | ( | $ | $ |
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
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 loss on investments, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | ||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment from 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 | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Treasury stock retirement | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||||||||||||||||||||
Change in unrealized loss on investments, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | $ |
Gross Unrealized | Aggregate Fair Value | Classification on Balance Sheet | |||||||||||||||||||||||||||||||||
Amortized Cost | Short-Term Marketable Securities | Long-Term Marketable Securities | |||||||||||||||||||||||||||||||||
As of December 31, 2022 | Gains | Losses | |||||||||||||||||||||||||||||||||
Time deposits | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
U.S. government agency obligations | ( | ||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||
As of December 31, 2021 | |||||||||||||||||||||||||||||||||||
Commercial paper | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||||||||||||||
U.S. government agency obligations | ( | ||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | $ | $ |
Total Fair Value | Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Level 1 | Level 2 | ||||||||||||||||
As of December 31, 2022 | |||||||||||||||||
Cash Equivalents and Marketable Securities: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Time deposits | |||||||||||||||||
Corporate bonds | |||||||||||||||||
U.S. government agency obligations | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ | |||||||||||||||
As of December 31, 2021 | |||||||||||||||||
Cash Equivalents and Marketable Securities: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate bonds | |||||||||||||||||
U.S. government agency obligations | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Due in 1 year or less | $ | $ | |||||||||
Due after 1 year through 5 years | |||||||||||
$ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Trade accounts receivable | $ | $ | |||||||||
Unbilled accounts receivable | |||||||||||
Gross accounts receivable | |||||||||||
Allowance for current expected credit losses and other reserves | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Beginning balance | $ | $ | $ | ||||||||||||||
Charges to income from operations | |||||||||||||||||
Collections from customers previously reserved and other | ( | ( | ( | ||||||||||||||
Ending balance | $ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Prepaid income taxes | $ | $ | |||||||||
Prepaid sales and other taxes | |||||||||||
Prepaid equipment and software maintenance | |||||||||||
Deferred commissions | |||||||||||
Other prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Deferred costs included in prepaid expenses and other current assets | $ | $ | |||||||||
Deferred costs included in other assets | |||||||||||
Total deferred costs | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Amortization expense related to deferred costs | $ | $ | $ | ||||||||||||||
Incremental costs capitalized |
December 31, 2022 | December 31, 2021 | Estimated Useful Life (in years) | |||||||||||||||
Computer and networking equipment | $ | $ | |||||||||||||||
Purchased software | |||||||||||||||||
Furniture and fixtures | |||||||||||||||||
Office equipment | |||||||||||||||||
Leasehold improvements | |||||||||||||||||
Internal-use software | |||||||||||||||||
Property and equipment, gross | |||||||||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||||||||
Property and equipment, net | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | $ | ( | $ |
2022 | 2021 | ||||||||||
Beginning balance | $ | $ | |||||||||
Acquisition of Linode Limited Liability Company | |||||||||||
Acquisition of Guardicore Ltd. | |||||||||||
Acquisition of Inverse, Inc. | |||||||||||
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 | ||||||||
Deferred income tax assets | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Accounts payable | ( | |||||||
Accrued expenses | ( | |||||||
Operating lease liabilities | ( | |||||||
Other liabilities | ( | |||||||
Total liabilities assumed | ( | |||||||
Net assets acquired | $ |
Gross Carrying Amount | Weighted Average Useful Life (in years) | ||||||||||
Customer-related intangible assets | $ | ||||||||||
Completed technologies | |||||||||||
Acquired license rights | |||||||||||
Trademarks and trade name | |||||||||||
Total | $ |
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 | ||||||||
Deferred income tax assets | ||||||||
Other assets | ||||||||
Total assets acquired | ||||||||
Accounts payable | ( | |||||||
Accrued liabilities | ( | |||||||
Deferred revenue | ( | |||||||
Operating lease liabilities | ( | |||||||
Total liabilities assumed | ( | |||||||
Net assets acquired | $ |
Gross Carrying Amount | Weighted Average Useful Life (in years) | ||||||||||
Completed technologies | $ | ||||||||||
Customer-related intangible assets | |||||||||||
Trademarks | |||||||||||
Total | $ |
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 | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Payroll and other related benefits | $ | $ | |||||||||
Income taxes payable | |||||||||||
Bandwidth and co-location expenses | |||||||||||
Property, use and other taxes | |||||||||||
Professional service fees | |||||||||||
Other accrued expenses | |||||||||||
Total | $ | $ |
Employee Severance and Related Benefits | |||||
Balance January 1, 2020 | $ | ||||
Costs incurred | |||||
Cash disbursements | ( | ||||
Translation adjustments and other | |||||
Balance December 31, 2020 | |||||
Costs incurred | |||||
Cash disbursements | ( | ||||
Translation adjustments and other | ( | ||||
Balance December 31, 2021 | |||||
Costs incurred | |||||
Cash disbursements | ( | ||||
Translation adjustments and other | ( | ||||
Balance December 31, 2022 | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Liability component: | |||||||||||
Principal | $ | $ | |||||||||
Less: debt discount and issuance costs, net of amortization | ( | ( | |||||||||
Net carrying amount | $ | $ | |||||||||
Equity component: | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Liability component: | |||||||||||
Principal | $ | $ | |||||||||
Less: debt discount and issuance costs, net of amortization | ( | ( | |||||||||
Net carrying amount | $ | $ | |||||||||
Equity component: | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Amortization of debt discount and issuance costs | $ | $ | $ | ||||||||||||||
Coupon interest payable on 2025 Notes | |||||||||||||||||
Coupon interest payable on 2027 Notes | |||||||||||||||||
Interest payable under credit agreements | |||||||||||||||||
Capitalization of interest expense | ( | ( | ( | ||||||||||||||
Total interest expense | $ | $ | $ |
Real Estate Arrangements | Co-location Arrangements | Total | |||||||||||||||
2022 | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Short-term lease cost | |||||||||||||||||
Variable lease cost | |||||||||||||||||
Sublease income | ( | ( | |||||||||||||||
Total operating lease costs | $ | $ | $ | ||||||||||||||
2021 | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Short-term lease cost | |||||||||||||||||
Variable lease cost | |||||||||||||||||
Sublease income | ( | ( | |||||||||||||||
Total operating lease costs | $ | $ | $ | ||||||||||||||
2020 | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Short-term lease cost | |||||||||||||||||
Variable lease cost | |||||||||||||||||
Sublease income | ( | ( | |||||||||||||||
Total operating lease costs | $ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Real Estate Arrangements | Co-location Arrangements | Real Estate Arrangements | Co-location Arrangements | ||||||||||||||||||||
Weighted average remaining lease term (in years) | |||||||||||||||||||||||
Weighted average discount rate | % | % | % | % |
Real Estate Arrangements | Co-location Arrangements | ||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less: imputed interest | |||||||||||
Total lease liabilities | $ | $ |
Bandwidth Commitments | Purchase Order Commitments | ||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Total | $ | $ |
Foreign Currency Translation | Net Unrealized Gains (Losses) on Investments | Total | |||||||||||||||
Balance as of January 1, 2021 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||
Balance as of December 31, 2021 | ( | ( | |||||||||||||||
Other comprehensive loss | ( | ( | ( | ||||||||||||||
Balance as of December 31, 2022 | $ | ( | $ | ( | $ | ( |
2022 | 2021 | 2020 | |||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
International | |||||||||||||||||
Total revenue | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Security | $ | $ | $ | ||||||||||||||
Delivery | |||||||||||||||||
Compute | |||||||||||||||||
Total revenue | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
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 | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
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, 2022 | $ | ||||||||||||||||||||||
Exercised | |||||||||||||||||||||||
Outstanding at December 31, 2022 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2022 | $ | $ | |||||||||||||||||||||
Vested or expected to vest December 31, 2022 | $ | $ |
Units (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested and distributed | ( | ||||||||||
Outstanding at December 31, 2022 | $ |
December 31, 2022 | |||||
RSUs with service-based vesting conditions | |||||
RSUs with market-based vesting conditions | |||||
RSUs with performance-based vesting conditions | |||||
Total |
2022 | 2021 | 2020 | |||||||||||||||
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, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at December 31, 2022 | $ |
2022 | 2021 | 2020 | |||||||||||||||
U.S. | $ | $ | $ | ||||||||||||||
Foreign | |||||||||||||||||
Income before provision for income taxes | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Current tax provision (benefit): | |||||||||||||||||
Federal | $ | $ | $ | ( | |||||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Deferred tax benefit: | |||||||||||||||||
Federal | ( | ( | ( | ||||||||||||||
State | ( | ( | ( | ||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
Change in valuation allowance | |||||||||||||||||
Total | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
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 | ( | ||||||||||||||||
Global intangible low-taxed income | |||||||||||||||||
Release of uncertain tax position reserve | ( | ( | ( | ||||||||||||||
Intercompany sale of intellectual property | |||||||||||||||||
Valuation allowance | |||||||||||||||||
Other | ( | ( | |||||||||||||||
% | % | % |
2022 | 2021 | ||||||||||
Accrued bonus | $ | $ | |||||||||
Deferred revenue | |||||||||||
Operating lease liabilities | |||||||||||
Stock-based compensation | |||||||||||
NOLs | |||||||||||
Tax credit carryforwards | |||||||||||
Capitalized research and development costs | |||||||||||
Convertible senior notes interest | |||||||||||
Depreciation and amortization | |||||||||||
Other | |||||||||||
Deferred tax assets | |||||||||||
Acquired intangible assets | ( | ( | |||||||||
Operating lease right-of-use assets | ( | ( | |||||||||
Deferred commissions | ( | ( | |||||||||
Capitalized internal-use software development costs | ( | ( | |||||||||
Deferred tax liabilities | ( | ( | |||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Beginning balance | $ | $ | $ | ||||||||||||||
Charges to income tax expense | |||||||||||||||||
Release of valuation allowance | ( | ( | ( | ||||||||||||||
Ending balance | $ | $ | $ |
2022 | 2021 | Expirations at Various Dates Through: | |||||||||||||||
NOL carryforwards: | |||||||||||||||||
Federal | $ | $ | |||||||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Federal and state research and development tax credit and other credit carryforwards |
2022 | 2021 | 2020 | |||||||||||||||
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 | ( | ( | ( | ||||||||||||||
Balance at end of year | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
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 | $ | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
Service-based RSUs | |||||||||||||||||
Market- and performance-based RSUs | |||||||||||||||||
Convertible senior notes | |||||||||||||||||
Warrants related to issuance of convertible senior notes | |||||||||||||||||
Total shares excluded from computation |
December 31, 2022 | December 31, 2021 | ||||||||||
Property and equipment, net, excluding internal-use software, located in the U.S. | $ | $ | |||||||||
Property and equipment, net, excluding internal-use software, located in foreign locations | |||||||||||
Operating lease right-of-use assets located in the U.S. | |||||||||||
Operating lease right-of-use assets located in foreign locations |
(in thousands, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||
Year ended December 31, 2022 | |||||||||||||||||||||||
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, 2021 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue (exclusive of amortization of acquired intangible assets) | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Basic net income per share | |||||||||||||||||||||||
Diluted net income per share |
As Previously Reported | Adjustment | As Revised | |||||||||||||||
March 31, 2022 | |||||||||||||||||
Deferred income tax assets | $ | $ | $ | ||||||||||||||
Total assets | |||||||||||||||||
Deferred income tax liabilities | ( | ||||||||||||||||
Total liabilities | ( | ||||||||||||||||
Retained earnings | |||||||||||||||||
Total stockholders’ equity | |||||||||||||||||
Total liabilities and stockholders’ equity | |||||||||||||||||
June 30, 2022 | |||||||||||||||||
Deferred income tax assets | $ | $ | $ | ||||||||||||||
Total assets | |||||||||||||||||
Deferred income tax liabilities | ( | ||||||||||||||||
Total liabilities | ( | ||||||||||||||||
Retained earnings | |||||||||||||||||
Total stockholders’ equity | |||||||||||||||||
Total liabilities and stockholders’ equity | |||||||||||||||||
September 30, 2022 | |||||||||||||||||
Deferred income tax assets | $ | $ | $ | ||||||||||||||
Total assets | |||||||||||||||||
Deferred income tax liabilities | ( | ||||||||||||||||
Total liabilities | ( | ||||||||||||||||
Retained earnings | |||||||||||||||||
Total stockholders’ equity | |||||||||||||||||
Total liabilities and stockholders’ equity |
For the Three Months Ended March 31, 2022 | |||||||||||||||||
As Previously Reported | Adjustment | As Revised | |||||||||||||||
Provision for income taxes | $ | ( | $ | $ | ( | ||||||||||||
Net income | |||||||||||||||||
Net income per share: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ |
For the Three Months Ended June 30, 2022 | For the Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||||||||||||||
Provision for income taxes | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | $ | $ |
For the Three Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | ||||||||||||||||||||||||||||||
Provision for income taxes | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Diluted | $ | $ | $ | $ | $ | $ |
Name | Position | |||||||
F. Thomson Leighton | Chief Executive Officer, President and Director (Principal Executive Officer) | |||||||
Edward McGowan | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | |||||||
Aaron Ahola | Executive Vice President, General Counsel and Corporate Secretary | |||||||
Robert Blumofe | Executive Vice President and Chief Technology Officer | |||||||
Adam Karon | Chief Operating Officer and General Manager of the Cloud Technology Group | |||||||
Kim Salem-Jackson | Executive Vice President and Chief Marketing Officer | |||||||
Paul Joseph | Executive Vice President, Global Sales and Services | |||||||
Mani Sundaram | Executive Vice President and General Manager of the Security Technology Group | |||||||
Anthony Williams | Executive Vice President and Chief Human Resources Officer | |||||||
Sharon Bowen | Director | |||||||
Marianne Brown | Director | |||||||
Monte Ford | Director | |||||||
Daniel Hesse | Director | |||||||
Tom Killalea | Director | |||||||
Jonathan Miller | Director | |||||||
Madhu Ranganathan | Director | |||||||
Bernardus Verwaayen | Director | |||||||
William Wagner | Director |
3.1(A) | |||||
3.2(B) | |||||
4.1(C) | |||||
4.2(D) | |||||
4.3(E) | |||||
4.4(F) | |||||
4.5(F) | |||||
4.6(B) | |||||
10.1(G)@ | |||||
10.2(H)@ | |||||
10.3(I)@ | |||||
10.4(J)@ | |||||
10.5(K) | |||||
10.6(L) | |||||
10.7(M) | |||||
10.8(N)@ | |||||
10.9@ | |||||
10.10(O)@ | |||||
10.11(O) | |||||
10.12@ | |||||
10.13@ | |||||
10.14(N)@ | |||||
10.15(P)@ | |||||
10.16(Q)@ | |||||
10.17(R)@ | |||||
10.18(S)@ | |||||
10.19(T)@ | |||||
10.20(U)@ | |||||
10.21(R)@ | |||||
10.22(V) | |||||
10.23(V) | |||||
10.24(W) | |||||
10.25(X)† | |||||
10.26(Y) | |||||
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) |
(A) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 18884226) filed with the Commission on June 6, 2018. | |||||||
(B) | Incorporated by reference to the Registrant’s Annual Report on Form 8-K (File No. 000-27275, 221467934) filed with the Commission on December 16, 2022. | |||||||
(C) | Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-85679, 99727819), as amended, filed with the Commission on October 13, 1999. | |||||||
(D) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 18852548) filed with the Commission on May 22, 2018. | |||||||
(E) | Incorporated by reference to the Registration's Current Report on Form 8-K (File No. 000-27275, 191033874) filed with the Commission on August 16, 2019. | |||||||
(F) | Incorporated by reference to the Registrant’s Annual Report Current Report on Form 8-K (File No. 000-27275, 211497782) filed with the Commission on December 16, 2021. | |||||||
(G) | Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 06691330) filed with the Commission on March 16, 2006. | |||||||
(H) | Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 08823347) filed with the Commission on May 12, 2008. | |||||||
(I) | Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 11865051) filed with the Commission on May 23, 2011. | |||||||
(J) | Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 22922830) filed with the Commission on May 13, 2022. | |||||||
(K) | Incorporated by reference to the Registrant’s Registration Statement on Form S-8 (File No. 333-194278, 14660564) filed with the Commission on March 3, 2014. | |||||||
(L) | Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed (File No. 333-180088, 12689764) filed with the Commission on March 14, 2012. | |||||||
(M) | Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 21, 2022. | |||||||
(N) | Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 19810440) filed with the Commission on May 9, 2019. | |||||||
(O) | Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-27275, 131025074) filed with the Commission on August 9, 2013. | |||||||
(P) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 23668192) filed with the Commission on February 24, 2023. | |||||||
(Q) | Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 191132693) filed with the Commission on October 2, 2019. | |||||||
(R) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 22680595) filed with the Commission on February 25, 2022. | |||||||
(S) | Incorporated by reference to the Registrant's Annual Report on form 10-K (File No. 000-27275, 17647667) filed with the Commission on February 28, 2017. | |||||||
(T) | Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-27275, 15850176) filed with the Commission on May 11, 2015. | |||||||
(U) | Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-27275, 13657899) filed with the Commission on March 1, 2013. | |||||||
(V) | Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 161988699) filed with the Commission on November 10, 2016. | |||||||
(W) | Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-27275, 18654889) filed with the Commission on March 1, 2018. | |||||||
(X) | Incorporated by reference to the Registrant's Registration Statement on Form S-1/A filed with the Commission on October 28, 1999. | |||||||
(Y) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 221416292) filed with the Commission on November 23, 2022. |
@ | Management contract or compensatory plan or arrangement filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of this Annual Report. | |||||||
† | Confidential Treatment has been granted as to certain portions of this Exhibit. Such portions have been omitted and filed separately with the Securities and Exchange Commission. | |||||||
* | Submitted electronically herewith. | |||||||
(c) | Not applicable. |
February 28, 2023 | AKAMAI TECHNOLOGIES, INC. | |||||||
By: | /s/ EDWARD MCGOWAN | |||||||
Edward McGowan Executive Vice President, Chief Financial Officer and Treasurer |
Signature | Title | Date | ||||||||||||
/s/ F. THOMSON LEIGHTON | Chief Executive Officer, President and Director (Principal Executive Officer) | February 28, 2023 | ||||||||||||
F. Thomson Leighton | ||||||||||||||
/s/ EDWARD MCGOWAN | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | February 28, 2023 | ||||||||||||
Edward McGowan | ||||||||||||||
/s/ LAURA HOWELL | Chief Accounting Officer (Principal Accounting Officer) | February 28, 2023 | ||||||||||||
Laura Howell | ||||||||||||||
/s/ SHARON Y. BOWEN | Director | February 28, 2023 | ||||||||||||
Sharon Y. Bowen | ||||||||||||||
/s/ MARIANNE C. BROWN | Director | February 28, 2023 | ||||||||||||
Marianne C. Brown | ||||||||||||||
/s/ MONTE E. FORD | Director | February 28, 2023 | ||||||||||||
Monte E. Ford | ||||||||||||||
/s/ DANIEL R. HESSE | Director | February 28, 2023 | ||||||||||||
Daniel R. Hesse | ||||||||||||||
/s/ PETER T. KILLALEA | Director | February 28, 2023 | ||||||||||||
Peter T. Killalea | ||||||||||||||
/s/ JONATHAN F. MILLER | Director | February 28, 2023 | ||||||||||||
Jonathan F. Miller | ||||||||||||||
/s/ MADHU RANGANATHAN | Director | February 28, 2023 | ||||||||||||
Madhu Ranganathan | ||||||||||||||
/s/ BERNARDUS VERWAAYEN | Director | February 28, 2023 | ||||||||||||
Bernardus Verwaayen | ||||||||||||||
/s/ WILLIAM R. WAGNER | Director | February 28, 2023 | ||||||||||||
William R. Wagner |
By signing or electronically agreeing to this Agreement, the Participant explicitly declares his or her consent to the data processing operations described in Section 9 of this Agreement. This includes, without limitation, the transfer of his or her Data to, and the processing of such data by, the Company, Charles Schwab or, as the case may be, the Company's other third-party service providers in the United States. The Participant may withdraw his or her consent at any time, with future effect and for any or no reason as described in Section 9(e) above. |
By signing or electronically agreeing to this Agreement, the Participant explicitly declares his or her consent to the data processing operations described in Section 9 of this Agreement. This includes, without limitation, the transfer of his or her Data to, and the processing of such data by, the Company, Charles Schwab or, as the case may be, the Company's other third-party service providers in the United States. The Participant may withdraw his or her consent at any time, with future effect and for any or no reason as described in Section 9(e) above. |
Compensation for Continuing Directors | Cash1 | Equity (DSUs)2 | |||||||||
Chairman of Board | $450,000 | $100,000 | $350,000 | ||||||||
Audit Committee Chair, TL&C Chair and Finance Committee chair | $385,000 | $80,000 | $305,000 | ||||||||
N&G Committee Chair | $375,000 | $80,000 | $295,000 | ||||||||
Standard Outside director retainer | $350,000 | $75,000 | $275,000 | ||||||||
Employee Director | No Additional Compensation | N/A | N/A |
AKAMAI TECHNOLOGIES LIMITED | Incorporated in the United Kingdom | |||||||
AKAMAI TECHNOLOGIES GMBH | Incorporated in Germany | |||||||
AKAMAI TECHNOLOGIES SARL | Incorporated in France | |||||||
AKAMAI TECHNOLOGIES NETHERLANDS B.V. | Incorporated in the Netherlands | |||||||
AKAMAI INTERNATIONAL B.V. | Incorporated in the Netherlands | |||||||
AKAMAI TECHNOLOGIES SECURITIES CORPORATION INC. | Incorporated in Massachusetts | |||||||
AKAMAI TECHNOLOGIES GK | Incorporated in Japan | |||||||
AKAMAI TECHNOLOGIES INDIA PRIVATE LTD. | Incorporated in India | |||||||
AKAMAI TECHNOLOGIES SPAIN S.L.U | Incorporated in Spain | |||||||
AKAMAI TECHNOLOGIES SINGAPORE PTE. 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.L. | 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 TECNOLOGIAS 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 INC. | Incorporated in Canada | |||||||
AKAMAI TECHNOLOGIES COLOMBIA S.A.S. | Incorporated in Colombia | |||||||
AKAMAI TECHNOLOGIES COSTA RICA S.R.L. | Incorporated in Costa Rica | |||||||
AKAMAI TEKNOLOJI HIZMETLERI LIMIITED SIRKETI | Incorporated in Turkey | |||||||
AKAMAI TECHNOLOGIES IRELAND LIMITED | Incorporated in Ireland | |||||||
AKAMAI TECHNOLOGIES LIMITED | Incorporated in Taiwan | |||||||
AKAMAI TECHNOLOGIES MALAYSIA SDN BHD | Incorporated in Malaysia | |||||||
AKAMAI TECHNOLOGIES NEW ZEALAND LIMITED | Incorporated in New Zealand | |||||||
AKAMAI TECHNOLOGIES BELGIUM SRL | Incorporated in Belgium | |||||||
AKAMAI TECHNOLOGIES LLC | Incorporated in Russia | |||||||
AKAMAI TECHNOLOGIES DENMARK APS | Incorporated in Denmark | |||||||
AKAMAI TECHNOLOGIES LUXEMBOURG S.A.R.L. | Incorporated in Luxembourg | |||||||
AKAM MEXICO TECHNOLOGIES, S. DE R.L. DE C.V. | Incorporated in Mexico | |||||||
AKAMAI TECHNOLOGIES ARGENTINA S.R.L. | Incorporated in Argentina | |||||||
PT. AKAMAI TEKNOLOGI INDONESIA | Incorporated in Indonesia | |||||||
AKAMAI IRELAND LIMITED | Incorporated in Ireland | |||||||
ASAVIE TECHNOLOGIES INC. | Incorporated in Delaware | |||||||
GUARDICORE LTD. | Incorporated in Israel | |||||||
GUARDICORE INC. | Incorporated in Delaware | |||||||
GUARDICORE INDIA PRIVATE LTD. | Incorporated in India | |||||||
GUARDICORE UK LIMITED | Incorporated in the United Kingdom | |||||||
LINDIA LLC | Incorporated in Pennsylvania | |||||||
LINODE AUSTRALIA PTY. LIMITED | Incorporated in Australia |
LINODE CANADA ULC | Incorporated in Canada | |||||||
LINODE HOSTING INDIA PRIVATE LIMITED | Incorporated in India | |||||||
LINODE INTERNATIONAL SERVICES, COMPANY | Incorporated in Delaware | |||||||
LINODE LIMITED LIABILITY COMPANY | Incorporated in New Jersey | |||||||
LINODIANS LLC | Incorporated in Delaware |
Date: | February 28, 2023 | /s/ F. Thomson Leighton | |||||||||
F. Thomson Leighton, Chief Executive Officer |
Date: | February 28, 2023 | /s/ Edward McGowan | |||||||||
Edward McGowan, Executive Vice President, Chief Financial Officer and Treasurer |
Date | February 28, 2023 | /s/ F. Thomson Leighton | |||||||||
F. Thomson Leighton, Chief Executive Officer | |||||||||||
Date: | February 28, 2023 | /s/ Edward McGowan | |||||||||
Edward McGowan, Executive Vice President, Chief Financial Officer and Treasurer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Boston, Massachusetts |
Auditor Firm ID | 238 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 5,917 | $ 1,397 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares designated as Series A Junior Participating Preferred Stock (in shares) | 700,000 | 700,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 156,494,816 | 160,512,111 |
Common stock, shares outstanding (in shares) | 156,494,816 | 160,512,111 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Statement of Comprehensive Income [Abstract] | |||
Net income | $ 523,672 | $ 651,642 | $ 557,054 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustment | (44,665) | (38,514) | 19,629 |
Change in unrealized (loss) gain on investments, net of income tax benefit (provision) of $6,589, $3,412 and $(2,720) for the years ended December 31, 2022, 2021 and 2020, respectively | (26,562) | (10,390) | 5,314 |
Other comprehensive (loss) income | (71,227) | (48,904) | 24,943 |
Comprehensive income | $ 452,445 | $ 602,738 | $ 581,997 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | |||
Tax expense on change in unrealized gain on investments | $ 6,589 | $ 3,412 | $ (2,720) |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Cash Flows [Abstract] | |||
Income tax refund received | $ 15,458 | $ 14,808 | $ 17,491 |
Nature of Business and Basis of Presentation |
12 Months Ended |
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Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Akamai Technologies, Inc. (the “Company”) provides solutions to power and protect life online. Its massively distributed edge and cloud platform comprises more than 4,100 locations across more than 130 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company is currently organized and operates as one reportable and operating segment. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements.
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Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and useful lives of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate. Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its fixed income securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment. Accounts Receivable and Related Reserves The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers. Incremental Costs to Obtain a Contract with a Customer The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in an incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately three years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Amortization of the costs is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Concentrations of Credit Risk The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2022, 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, 2022, 2021 and 2020, no customer accounted for more than 10% of total revenue. As of December 31, 2022 and 2021, there was one customer with an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2022 and 2021, 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. Operating Leases The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset. Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the 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 and leases assumed through acquisitions with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. 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 was accounted for using the equity method. During the first quarter of 2022, MUFG, the majority owner of GO-NET, announced its intention to suspend the operations of GO-NET and to eventually liquidate it. As a result of MUFG's intention to suspend operations, the Company impaired its remaining investment of $7.5 million. The Company recorded a loss of $14.0 million during the year ended December 31, 2021, which reflects its share of the losses incurred by GO-NET during that year. During the year ended December 31, 2020, the Company recorded a loss of $13.1 million, which included 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. Subsequent to the establishment of the joint venture, the Company recorded revenue of $4.0 million, $10.1 million, and $11.1 million for the years ended December 31, 2022, 2021 and 2020, respectively, for services provided to GO-NET. The Company no longer provided services after June 30, 2022 due to the intention to suspend operations and to eventually liquidate it. 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, 2022, 2021 and 2020, the Company concluded that it has one reporting unit and that its chief operating decision maker is its chief executive officer and the executive management team. The Company has assigned the entire balance of goodwill to one reporting unit. The fair value of the reporting unit was based on the Company's market capitalization as of each of December 31, 2022 and 2021, and it was substantially in excess of the carrying value of the reporting unit at each date. The fair value of the Company's reporting unit was determined by the Company's enterprise value as of the years ended December 31, 2022, 2021 and 2020. 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. Significant judgment is used in determining fair values of acquired intangibles assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. Long-lived assets, including property and equipment, operating lease right-of-use assets and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the internet – as well as security and cloud computing solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting, and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most 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 usage 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 contracts are satisfied at a point in time, such as one-time professional services, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost. Research and Development Costs and Capitalized Internal-Use Software Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s 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, 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 income (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 income (expense), net. As of December 31, 2022 and 2021, the fair value of the forward currency contracts and the underlying gains and losses for the years ended December 31, 2022, 2021 and 2020 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 August 2020, the Financial Accounting Standards Board ("FASB") issued guidance that was expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. The convertible senior notes included on the Company's consolidated balance sheet more closely reflect the principal amounts. Prior to the adoption of this guidance, the Company separated its convertible senior notes into a liability and an equity component. The equity portion is now eliminated. The cumulative effect of the changes was an increase to convertible senior notes of $304.7 million, an increase to deferred income tax liabilities of $0.7 million, an increase to deferred income tax assets of $77.7 million, a decrease to property and equipment of $7.7 million and a decrease to additional paid-in capital of $375.4 million on the consolidated balance sheet. The net effect of these adjustments was recorded as an increase to retained earnings as of January 1, 2022. Additionally, the new guidance eliminates the use of the treasury stock method for convertible instruments that can be settled in whole or in part with equity, when calculating diluted earnings per share. Instead, it requires application of the if-converted method. Under that method, diluted earnings per share would generally be calculated assuming that all the convertible senior notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be antidilutive. The application of the if-converted method reduces the Company’s reported diluted earnings per share after the adoption date. However, in December 2021, the Company made an irrevocable election to settle the principal portion of the convertible senior notes with cash. Accordingly, the if-converted method is only impacted by any potential shares to be delivered for the amount in excess of the principal portion. The changes to the diluted earnings per share guidance did not materially impact the Company's results of operations. With the elimination of the debt discount created by the equity component, amortization of the debt discount is eliminated, which decreases interest expense, and therefore increases net income and earnings per share, from the period of adoption. This had the effect of increasing basic and diluted earnings per share for the year ended 2022 by $0.32.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Available-for-sale marketable securities held as of December 31, 2022 and 2021 were as follows (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 loss to interest and marketable securities income, net in the consolidated statements of income. As of December 31, 2022, the Company held for investment corporate bonds with a fair value of $835.4 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 $31.3 million and are included in accumulated other comprehensive loss as of December 31, 2022. The unrealized losses are attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments. The fair value measurements within the fair value hierarchy of the Company’s financial assets as of December 31, 2022 and 2021 were as follows (in thousands):
As of December 31, 2022 and 2021, 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, 2022 and 2021, the Company grouped time deposits, commercial paper, U.S. government agency obligations and corporate bonds using a Level 2 valuation because quoted prices for similar assets in active markets (or identical assets in an inactive market) are available. The Company did not have any transfers of assets or liabilities between Level 1 or Level 2 of the fair value measurement hierarchy during the years ended December 31, 2022 and 2021. When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure fair value. The valuation technique used to measure fair value for the Company's Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, the Company is required to make judgments about the assumptions market participants would use to estimate the fair value of a financial instrument. Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2022 and 2021 were as follows (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, 2022 and 2021 (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, 2022, 2021 and 2020 was as follows (in thousands):
Charges to income from operations primarily represents charges to provision for doubtful accounts 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, 2022 and 2021 (in thousands):
Incremental Costs to Obtain a Contract with a Customer Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2022 and 2021 were as follows (in thousands):
Information related to incremental costs to obtain a contract with a customer for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
Amortization expense related to deferred costs is primarily included in sales and marketing expense in the consolidated statements of income.
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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, 2022 and 2021 (in thousands, except years):
Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2022, 2021 and 2020 was $527.8 million, $502.6 million and $436.3 million, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company capitalized $32.3 million, $35.0 million and $38.0 million, respectively, of stock-based compensation related to employees who developed and enhanced internal-use software applications. During the years ended December 31, 2022 and 2021, the Company wrote off $210.2 million and $283.4 million, respectively, of property and equipment, gross, along with the associated accumulated depreciation and amortization. The write-offs were primarily related to computer and networking equipment and internal-use software no longer in use. These assets had been substantially depreciated and amortized. In addition, the Company wrote off $9.1 million and $3.4 million during the years ended December 31, 2022 and 2021, respectively, related to internal-use software and facility-related property and equipment as a result of certain restructuring actions.
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Acquired Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Intangible Assets and Goodwill | Acquired Intangible Assets and Goodwill Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2022 and 2021 (in thousands):
Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2022, 2021 and 2020 was $65.0 million, $48.0 million and $42.0 million, respectively. Based on the Company's acquired intangible assets as of December 31, 2022, aggregate expense related to amortization of acquired intangible assets is expected to be $63.5 million, $59.2 million, $61.2 million, $56.3 million and $43.7 million for the years ending December 31, 2023, 2024, 2025, 2026 and 2027, respectively. The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021 were as follows (in thousands):
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Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Acquisition-related costs were $10.7 million, $13.3 million and $5.6 million during the years ended December 31, 2022, 2021 and 2020, 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, 2022, 2021 and 2020 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's consolidated financial results. 2022 Acquisition Linode In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode") for $898.5 million in cash. Linode is an infrastructure-as-a-service platform provider that allows for developer-friendly cloud computing capabilities. The acquisition is intended to enhance the Company’s computing services by enabling it to create a unique cloud platform to build, run and secure applications from the cloud to the edge. Revenue attributable to Linode since the date of the acquisition, included in the Company's consolidated statements of income, for 2022 was $103.5 million. Earnings included in the Company's consolidated statements of income since the date of the acquisition are not material. The preliminary allocation of the purchase price for Linode was as follows (in thousands):
As of December 31, 2022, the purchase price allocation was substantially complete except for the finalization of certain income tax matters. Measurement period adjustments to goodwill recognized during 2022 related to the acquisition of Linode were $28.9 million and primarily related to property and equipment and intangible asset adjustments. These measurement period adjustments did not have a material effect on the Company's results of operations. The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and cost synergies expected to be realized. The Company expects that all of the goodwill related to the acquisition of Linode will be deductible for tax purposes. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks and the multi-period excess earnings method under the income approach to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates, cost of revenue, operating expenses, contributory asset charges and discount rates. The Company used readily available market data to estimate the fair values of the acquired license rights. The total weighted average amortization period for the intangible assets acquired from Linode is 12.2 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. 2021 Acquisitions Guardicore In October 2021, the Company acquired all the outstanding equity interests of Guardicore Ltd. ("Guardicore"), for $610.7 million in cash. Guardicore's micro-segmentation solution is designed to limit user access to only those applications that are authorized to communicate with each other, thereby limiting the spread of malware and protecting the flow of enterprise data across the network. The acquisition is intended to enhance the Company's security portfolio with the addition of Guardicore's micro-segmentation technology. Revenue and earnings attributable to acquired operations since the date of acquisition are included in the Company's consolidated statements of income and not presented separately because they are not material. The Company finalized its allocation of the purchase price in the fourth quarter of 2022. The allocation of the purchase price for Guardicore was as follows (in thousands):
The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce and cost synergies expected to be realized. The Company expects that most of the goodwill related to the acquisition of Guardicore will be deductible for tax purposes. Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks, and the excess earnings method to estimate the fair values of the customer-related acquired intangible assets. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates and discount rates. The total weighted average amortization period for the intangible assets acquired from Guardicore is 14.6 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. Inverse In February 2021, the Company acquired all the outstanding equity interests of Inverse, Inc. ("Inverse"), for $17.1 million. Inverse provides a data repository and algorithms capable of identifying device types accessing the internet. The acquisition enhances the Company's enterprise security capabilities. The Company allocated $10.7 million of the cost of the acquisition to goodwill and $7.6 million to a technology-related identifiable intangible asset with an average useful life of 14.0 years. The acquired goodwill and intangible assets are partially offset by acquired negative working capital balances. The value of the goodwill is primarily attributable to synergies related to the integration of Inverse technology onto the Company's platform as well as a trained technical workforce. The total amount of goodwill related to the acquisition of Inverse expected to be deductible for tax purposes is $10.7 million. Revenue and earnings attributable to acquired operations since the date of acquisition are included in the Company's consolidated statements of income and not presented separately because they are not material. The Company finalized its allocation of purchase price in the fourth quarter of 2021. 2020 Acquisitions Asavie In October 2020, the Company acquired all the outstanding equity interests of Asavie Technologies Limited ("Asavie"), a privately-funded company headquartered in Dublin, Ireland, for $155.0 million in cash. Asavie operates a global platform for managing the security, performance and access policies for mobile and internet-connected devices and has become part of Akamai’s security solutions. Revenue and earnings attributable to acquired operations since the date of acquisition are included in the Company's consolidated statements of income and not presented separately because they are not material. The Company finalized its allocation of the purchase price in the fourth quarter of 2021. The allocation of the purchase price for Asavie was as follows (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 the goodwill related to the acquisition of Asavie is expected to be deductible for tax purposes. Identified intangible assets acquired and their respective weighted average useful lives were as follows (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 is being amortized over 17.0 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 | Accrued Expenses Accrued expenses consisted of the following as of December 31, 2022 and 2021 (in thousands):
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Restructuring | Restructuring As a result of MUFG's intention to suspend operations, the Company recorded as a restructuring charge an impairment of $7.5 million during the year ended December 31, 2022, primarily related to certain capitalized internal-use software assets that will no longer be used in operations or will not generate sufficient future cash flows to support their values. The Company does not expect to incur material additional charges related to this action. Additionally, the Company launched its FlexBase program in May 2022, which is a flexible workspace arrangement that allows employees to choose to work from their home office, a Company office or a combination of both. This is a significant change to the way employees worked prior to the program, and prior to office shutdowns as part of the COVID-19 pandemic. Planning for the program commenced in 2021, and in the fourth quarter of 2021, the Company began to identify certain facilities that were no longer needed. As a result, impairments of right-of-use assets and leasehold improvements were recognized. The Company has incurred expenses of $3.6 million and $3.8 million during the years ended December 31, 2022 and 2021, respectively, related to this action. Management is still evaluating the Company's office utilization, and additional charges related to such type of action may occur in 2023. During the fourth quarter of 2020, management committed to an action to restructure certain parts of the Company to better position itself to become more agile in delivering its 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 has incurred expenses of $7.9 million and $23.6 million during the years ended December 31, 2021 and 2020, respectively, related to this action. The Company does not expect to incur any additional 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, 2022, 2021 and 2020. The activity of the Company's accrual for employee severance and related benefits for all restructuring actions during the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
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Debt | Debt Convertible Senior 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, and mature on September 1, 2027, unless repurchased or converted in accordance with their terms prior to maturity. Each $1,000 principal amount of the notes will be convertible into 8.6073 shares of the Company's common stock, which is equivalent to a conversion price of approximately $116.18 per share, subject to adjustments in certain events. 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. In December 2021, the Company made an irrevocable election to settle the principal amount of the 2027 Notes only in cash. Accordingly, upon conversion, the Company will pay the principal amount in cash and will pay, or deliver, as the case may be, any amount in excess of the principal amount in cash, shares of common stock or a combination of cash and shares of the Company stock, at the Company's election. Prior to this election, upon conversion, the Company, could have elected to deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock for the principal amount. Prior to January 1, 2022, 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 to meet the conditions for equity classification. On January 1, 2022, the Company adopted the new guidance for accounting for convertible instruments, which eliminated the equity component. Refer to Note 2 to the consolidated financial statements included elsewhere in this report for details on the new guidance for accounting for convertible instruments. Initially, the Company allocated the total transaction costs incurred to the liability and equity components based on their relative values. However, subsequent to the adoption of the new guidance for accounting for convertible instruments, all transaction costs are presented as a reduction to the 2027 Notes. Prior to January 1, 2022, transaction costs attributable to the liability component were being amortized to interest expense over the term of the 2027 Notes, and subsequent to the adoption of the new guidance, all transaction costs are being amortized to interest expense over the term of the 2027 Notes. The 2027 Notes consisted of the following components as of December 31, 2022 and 2021 (in thousands):
The estimated fair value of the 2027 Notes at December 31, 2022 and 2021 was $1,111.0 million and $1,359.3 million, respectively. 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 $84.30 on December 31, 2022, 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 the convertible note hedge and warrant transactions. The remaining net proceeds are intended to be used for share repurchases, working capital and general corporate purposes, including potential acquisitions and other strategic transactions. 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 Company determined that the note hedge meets the definition of a derivative and is classified in stockholders’ equity, as the note hedge is indexed to the Company's common stock, and the Company, at its election, may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the purchase of the hedge as a decrease to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the note hedge in its consolidated financial statements. 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. The Company determined that the warrants meet the definition of a derivative and are classified in stockholders’ equity, as the warrants are indexed to the Company's common stock, and the Company, at its election, may pay or deliver to holders cash or shares of the Company's common stock. The Company recorded the proceeds from issuance of the warrants as an increase to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the warrants in its consolidated financial statements. Convertible Senior 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. Each $1,000 principal amount of the notes will be convertible into 10.5150 shares of the Company's common stock, which is equivalent to a conversion price of approximately $95.10 per share, subject to adjustments in certain events. 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. In December 2021, the Company made an irrevocable election to settle the principal amount of the 2025 Notes only in cash. Accordingly, upon conversion, the Company will pay the principal amount in cash and will pay, or deliver, as the case may be, any amount in excess of the principal amount in cash, shares of common stock or a combination of cash and shares of the Company stock, at the Company's election. Prior to this election, upon conversion, the Company, could have elected to deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock for the principal amount. Prior to January 1, 2022, 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 to meet the conditions for equity classification. On January 1, 2022, the Company adopted the new guidance for accounting for convertible instruments, which eliminated the equity component. Refer to Note 2 to the consolidated financial statements included elsewhere in this report for details on the new guidance for accounting for convertible instruments. Initially, the Company allocated the total transaction costs incurred to the liability and equity components based on their relative values. However, subsequent to the adoption of the new guidance for accounting for convertible instruments, all transaction costs are presented as a reduction to the 2025 Notes. Prior to January 1, 2022, transaction costs attributable to the liability component were being amortized to interest expense over the term of the 2025 Notes, and subsequent to the adoption of the new guidance, all transaction costs are being amortized to interest expense over the term of the 2025 Notes. The 2025 Notes consisted of the following components as of December 31, 2022 and 2021 (in thousands):
The estimated fair value of the 2025 Notes at December 31, 2022 and 2021 was $1,209.1 million and $1,510.4 million, respectively. 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 $84.30 on December 31, 2022, the value of the 2025 Notes if converted to common stock was less than the principal amount of $1,150.0 million. The Company used $46.2 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the 2025 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the board of directors. Additionally, $141.8 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The Company also used a portion of the net proceeds to repay at maturity $690.0 million in par value of convertible senior notes due in 2019. The remaining net proceeds are intended to be used for share repurchases, working capital and general corporate purposes, including potential acquisitions and other strategic transactions. 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 Company determined that the note hedge meets the definition of a derivative and is classified in stockholders’ equity, as the note hedge is indexed to the Company's common stock, and the Company, at its election, may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the purchase of the hedge as a decrease to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the note hedge in its consolidated financial statements. 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. The Company determined that the warrants meet the definition of a derivative and are classified in stockholders’ equity, as the warrants are indexed to the Company's common stock, and the Company, at its election, may pay or deliver to holders cash or shares of the Company's common stock. The Company recorded the proceeds from issuance of the warrants as an increase to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the warrants in its consolidated financial statements. Revolving Credit Facility In May 2018, the Company entered into a $500.0 million five-year, revolving credit agreement (the “2018 Credit Agreement”). Borrowings under the 2018 Credit Agreement bore interest, at the Company's option, at a base rate plus a spread of 0.00% to 0.25% or an adjusted LIBOR rate plus a spread of 0.875% to 1.25%, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the 2018 Credit Agreement. Regardless of what amounts, if any, outstanding under the 2018 Credit Agreement, the Company was also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.075% to 0.15%, with such rate being based on the Company's consolidated leverage ratio specified in the 2018 Credit Agreement. In November 2022, the Company entered into a $500.0 million five-year, revolving credit agreement (the “2022 Credit Agreement”). The 2022 Credit Agreement replaces the 2018 Credit Agreement. Borrowings under the 2022 Credit Agreement may be used to finance working capital needs and for general corporate purposes. The 2022 Credit Agreement provides for an initial $500.0 million in revolving loans. Under specified circumstances, the facility can be increased to up to $1.0 billion in aggregate principal amount. The 2022 Credit Agreement expires, and any amounts outstanding thereunder will become due and payable, on November 22, 2027, subject to up to two one-year extensions at the Company's request and with the consent of the lenders party thereto. Borrowings under the 2022 Credit Agreement bear interest, at the Company's option, and subject to a credit spread adjustment, at a term benchmark rate plus a spread of 0.75% to 1.125%, a reference rate plus a spread of 0.75% to 1.125%, or a base rate plus a spread of 0.00% to 0.125%, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement. Regardless of what amounts, if any, are outstanding under the 2022 Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.07% to 0.125%, with such rate being based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement. The 2022 Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The negative covenants include restrictions on subsidiary indebtedness, liens and fundamental changes. These covenants are subject to a number of important exceptions and qualifications. The principal financial covenant requires a maximum consolidated leverage ratio. There were no outstanding borrowings under the 2022 Credit Agreement as of December 31, 2022. Interest Expense The 2027 Notes bear interest at a fixed rate of 0.375%, with interest is payable semi-annually on March 1 and September 1 of each year. The 2025 Notes bear interest at a fixed rate of 0.125%, with interest is payable semi-annually on May 1 and November 1 of each year. The Company is also obligated to pay ongoing commitment fees under the terms of its credit agreements, in addition to interest payable on outstanding borrowings. Prior to the adoption of the new guidance for accounting for convertible instruments on January 1, 2022, the Company also amortized as interest expense the value of debt discounts of the 2027 Notes and the 2025 Notes. Interest expense included in the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 was as follows (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 sites and related equipment. The Company has also entered into sublease agreements with tenants of various offices previously vacated by the Company. These operating leases have lease periods expiring between 2023 and 2034. The Company’s operating lease costs for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
Lease costs for real estate arrangements are included in general and administrative expenses in the consolidated statements of income. Lease costs for co-location arrangements are primarily included in cost of revenue. Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2022 and 2021 were as follows:
Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands):
As of December 31, 2022, the Company had additional operating leases for co-location sites that had not yet commenced of $141.7 million, of which a majority will commence in 2023, with lease terms of one year to eight years. The table above excludes $223.6 million of future sublease income that is expected to be recognized through 2034. As of December 31, 2022, the Company had outstanding letters of credit in the amount of $5.0 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, 2022, the Company had long-term commitments for bandwidth usage with various networks and ISPs. Additionally, as of December 31, 2022, the Company had entered into purchase orders with various vendors. The minimum future commitments as of December 31, 2022 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. Indemnification The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company agrees to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's business partners, vendors or customers, in connection with its provision of its services. Generally, these obligations are limited to claims relating to infringement of a patent, copyright or other intellectual property right or the Company’s negligence, willful misconduct or violation of law. Subject to applicable statutes of limitation, the term of each of these indemnification agreements is generally perpetual from the time of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company carries insurance that covers certain third-party claims relating to its services and activities and that could limit the Company’s exposure in that respect. The Company has agreed to indemnify each of its officers and directors, or employees who serve as officers or directors of its subsidiaries at management's request, during his or her lifetime for certain events or occurrences that happen by reason of the fact that the officer or director is or was or has agreed to serve as an officer or director of the Company. The Company has director and officer insurance policies that may limit its exposure and may enable the Company to recover a portion of certain future amounts paid. 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 |
12 Months Ended |
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Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program In November 2018, the board of directors authorized a $1.1 billion repurchase program through December 2021. In October 2021, the board of directors authorized a new $1.8 billion share repurchase program, effective January 2022 through December 2024. The Company's goals for the share repurchase programs are to offset the dilution created by its employee equity compensation programs over time and provide the flexibility to return capital to shareholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities. During the years ended December 31, 2022, 2021 and 2020, the Company repurchased 6.4 million, 4.7 million and 2.0 million shares, respectively, of its common stock for $608.0 million, $522.3 million and $193.6 million, respectively, pursuant to the repurchase programs described above. As of December 31, 2022, the Company had $1.2 billion 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, 2022, 2021 and 2020. 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 Changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the years ended December 31, 2022 and 2021 were as follows (in thousands):
Amounts reclassified from accumulated other comprehensive loss to net income were immaterial for the years ended December 31, 2022 and 2021.
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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. Revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
The Company reports its revenue in three solution categories: security, delivery and compute. Prior to January 1, 2022, revenue by solution was reported by product group: Security Technology Group and Edge Technology Group. Revenue from security solutions was previously presented as Security Technology Group revenue and revenue from delivery and compute solutions was previously presented as Edge Technology Group revenue. The periods presented prior to January 1, 2022 have been revised to reflect this new presentation. Security includes solutions that are designed to protect business online by keeping infrastructure, websites, applications and users safe. Delivery includes solutions that are designed to enable business online, including media delivery and web performance. Compute includes cloud computing, edge applications, cloud optimization and storage. Revenue by solution category included in the Company’s consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
Most security, delivery and compute services represent obligations that are satisfied over time as the customer simultaneously receives and consumes the services provided by the Company. Accordingly, the majority of the Company's revenue is recognized over time, generally ratably over the term of the arrangement due to consistent monthly usage commitments that expire each period. Any usage over a given commitment is recognized in the period in which the units are served. A small percentage of the Company's contracts are satisfied at a point in time, such as one-time professional services contracts, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at a point in time of delivery or satisfaction of the performance obligation. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $105.1 million, $78.8 million and $69.9 million of revenue that was included in deferred revenue as of December 31, 2021, 2020 and 2019, respectively. As of December 31, 2022, the aggregate amount of remaining performance obligations from contracts with customers was $3.5 billion. The Company expects to recognize approximately 65% of its remaining performance obligations as revenue over the next 12 months, with the remainder recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts. Revenue recognized during the years ended December 31, 2022, 2021 and 2020, related to performance obligations satisfied in previous periods was not material.
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Employee Benefit Plan |
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Dec. 31, 2022 | |
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 $18.8 million, $17.7 million and $17.5 million of cash to the savings plan for the years ended December 31, 2022, 2021 and 2020, respectively, under a matching program. |
Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Equity Plans In May 2013, the Company's stockholders approved the Akamai Technologies, Inc. 2013 Stock Incentive Plan, which was amended with Company shareholder approval in each of 2015, 2017 and 2019 and was amended and restated with Company shareholder approval in each of 2021 and 2022 (as amended and restated, the "2013 Plan"). The 2013 Plan replaced the Akamai Technologies, Inc. 2009 Stock Incentive Plan (the "2009 Plan"), which in turn replaced the Akamai Technologies, Inc. 2006 Stock Incentive Plan, the Akamai Technologies, Inc. 2001 Stock Incentive Plan and the Akamai Technologies, Inc. 1998 Stock Incentive Plan (such plans, together with the 2009 Plan, the "Previous Plans"). The Company no longer issues equity awards under the Previous Plans, and 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 for up to 26.5 million shares of common stock, subject to certain adjustments, 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, 2022, the Company had reserved 6.2 million shares of common stock available for future issuance of equity awards under the 2013 Plan. The Company has assumed certain stock incentive plans and the outstanding stock incentives of companies that it has acquired (“Assumed Plans”). Stock incentive awards outstanding as of the date of acquisition under the Assumed Plans were exchanged for the Company’s stock incentive awards and adjusted to reflect the appropriate conversion ratio as specified by the applicable acquisition agreement, but are otherwise administered in accordance with the terms of the Assumed Plans. Stock incentive awards under the Assumed Plans generally vest over three years to four years, and outstanding stock options under the Assumed Plans expire ten years from the date of grant. 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, 2022, 2021 and 2020, the Company issued 0.7 million, 0.6 million and 0.7 million shares under the 1999 ESPP, respectively, with a weighted average purchase price per share of $82.83, $92.05 and $80.71, respectively. Total cash proceeds from the purchase of shares under the 1999 ESPP in the years ended December 31, 2022, 2021 and 2020 were $56.6 million, $59.7 million and $58.4 million, respectively. As of December 31, 2022, approximately $5.8 million had been withheld from employees for future purchases under the 1999 ESPP. Stock-Based Compensation Expense Components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 were as follows (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, 2022, 2021 and 2020 also include stock-based compensation reflected as a component of amortization primarily consisting of capitalized internal-use software; the additional stock-based compensation was $31.3 million, $32.4 million and $29.6 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, 2022, 2021 and 2020 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
For the years ended December 31, 2022, 2021 and 2020, the weighted average fair value of awards granted under the 1999 ESPP was $33.26 per share, $36.17 per share and $32.30 per share, respectively. As of December 31, 2022, 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 $399.3 million. The expense is expected to be recognized through 2025 over a weighted average period of 2.0 years. Stock Options Stock option activity during the year ended December 31, 2022 was as follows:
The total pre-tax intrinsic value of options exercised during the year ended December 31, 2022 was insignificant. The total pre-tax intrinsic value of options exercised during the years ended December 31, 2021 and 2020 were $0.6 million and $1.0 million, respectively. No options vested during the years ended December 31, 2022, 2021 and 2020. The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $84.30 on December 31, 2022, 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, 2022 was 1,002. 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 service, vesting of 100% of the DSUs held by such director will accelerate at the time of his or her departure from the board. DSU activity for the year ended December 31, 2022 was as follows:
The total pre-tax intrinsic value of DSUs that were vested and distributed during the years ended December 31, 2022, 2021 and 2020 was $4.9 million, $4.1 million and $0.9 million, respectively. The total fair value of DSUs that were vested and distributed during the years ended December 31, 2022, 2021 and 2020 was $3.3 million, $2.7 million and $0.7 million, respectively. The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant. For the years ended December 31, 2022, 2021 and 2020, the weighted average fair value of DSU awards granted was $97.40 per share, $114.56 per share and $100.58 per share, respectively. As of December 31, 2022, 27,306 DSUs were unvested, with an aggregate intrinsic value of approximately $2.3 million and a weighted average remaining contractual life of approximately 0.4 years. These units are expected to vest in May 2023. Restricted Stock and Restricted Stock Units Different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2022 were as follows (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 based upon total shareholder return ("TSR") measured against the benchmark TSR of a peer group and RSUs that vest only upon the achievement of defined performance metrics tied primarily to revenue and earnings targets. 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, 2022, 2021 and 2020 were estimated using a Monte Carlo simulation model with the following assumptions:
For the years ended December 31, 2022, 2021 and 2020, 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. RSU activity for the year ended December 31, 2022 was as follows:
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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, 2022, 2021 and 2020 (in thousands):
The provision for income taxes consisted of the following for the years ended December 31, 2022, 2021 and 2020 (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, 2022, 2021 and 2020:
The components of the net deferred tax assets and liabilities and the related valuation allowance as of December 31, 2022 and 2021 were as follows (in thousands):
As summary of activity in the valuation allowance on deferred tax assets for the years ended December 31, 2022, 2021 and 2020 is 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, 2022, the Company recorded a $41.3 million valuation allowance against deferred tax assets related to state tax credits and state and foreign NOLs in which it is more-likely-than-not that such attributes will expire prior to utilization. The increase in the valuation allowance during 2022 was $4.1 million. The increase in the valuation allowance is primarily related to state tax credits. The Company's NOL and tax credit carryforwards in U.S. federal, state and foreign jurisdictions as of December 31, 2022 and 2021 were as follows (in thousands, except years):
The Company's U.S. federal and state NOL carryforwards relate to acquisitions completed in 2022, 2021, 2019, 2017 and 2012. As of December 31, 2022, accumulated earnings outside the U.S. totaled $1.9 billion, the majority of which have been taxed due to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings and the tax on global intangible low taxed income required by the U.S. Tax Cuts and Jobs Act ("TCJA"). No provision for U.S. state income taxes and foreign withholding taxes has been provided for any remaining undistributed foreign earnings not subject to tax under the TCJA, or any additional basis differences inherent in the Company's international subsidiaries, as these amounts continue to be indefinitely reinvested. Determination of the amount of the unrecognized deferred tax liability on outside basis differences is not practicable because of the complexity of laws and regulations, the varying tax treatment of alternative repatriation scenarios and the variation due to multiple potential assumptions relating to the timing of any future repatriation. The changes in the Company’s unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
As of December 31, 2022, 2021 and 2020, the Company had $38.3 million, $23.1 million and $29.5 million of unrecognized tax benefits, respectively. Total interest and penalties for unrecognized tax benefits includes $8.6 million, $7.2 million and $7.7 million as of December 31, 2022, 2021 and 2020, respectively. Interest and penalties related to unrecognized tax benefits are recorded in the provision for income taxes and were $2.0 million, $0.5 million and $1.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. The amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate is $38.3 million. As of December 31, 2022, it is reasonably possible that $3.6 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 2013 through 2022 are currently under audit. The Company has reserved for those positions that are not more-likely-than-not to be sustained.
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Net Income per Share |
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Net Income per Share | Net Income per Share Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock options, RSUs, DSUs, convertible senior notes and warrants issued by the Company. For the year ended December 31, 2022, the dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method and the dilutive effect of the convertible securities is reflected in diluted earnings per share by application of the if-converted method. For the years ended December 31, 2021 and 2020, the dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. The components used in the computation of basic and diluted net income per share for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands, except per share data):
For the years ended December 31, 2022, 2021 and 2020, certain potential outstanding shares from 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, 2022, 2021 and 2020 were as follows (in thousands):
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Akamai Foundation |
12 Months Ended |
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Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Akamai Foundation | Akamai FoundationThe Akamai Foundation is a private non-profit organization founded in 2000 by certain current and former employees of the Company (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. The Company contributed $20.0 million in that year in support of the Foundation's expanded initiatives. This expense is included in general and administrative expenses in the consolidated statements of income for the year ended December 31, 2020. |
Segment and Geographic Information |
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Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision-maker is the chief executive officer and the executive management team. As of December 31, 2022, the Company is currently organized and operates as one reportable and operating segment. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate entities and does not have separate operating or reportable segments. The Company deploys its servers into networks worldwide. Net property and equipment, excluding internal-use software and operating lease right-of-use assets, located in the U.S. and foreign locations, as of December 31, 2022 and 2021 was as follows (in thousands):
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Quarterly Financial Results (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Results (unaudited) | Quarterly Financial Data (Unaudited) Revision of Previously Issued Financial Statements During the preparation of the financial statements for the year ended December 31, 2022, an error was identified in the Company’s accounting for an intercompany sale of intellectual property that occurred during 2022. During each of the first three quarters of 2022, the Company failed to record a deferred tax asset in the jurisdiction where the intellectual property was sold for the step up in tax basis that was achieved with the sale. This caused net deferred taxes to be understated in the interim condensed consolidated balance sheets, the provision for income taxes to be overstated and net income and earnings per share to be understated in the interim condensed consolidated statements of income. Management evaluated the error and determined that the related impact was not material to any of the Company's previously issued financial statements. The financial data below has been derived from the Company’s quarterly reports on Form 10-Q filed for the respective periods, with 2022 periods adjusted to reflect the impact of the error. The Company will also correct previously reported financial information for this error in its future filings, as applicable.
The changes to the condensed consolidated balance sheets as a result of the error were as follows (in thousands):
Changes to the condensed consolidated statements of income as a result of the error were as follows (in thousands, except per share data):
The condensed consolidated statements of shareholders' equity, condensed consolidated statements of cash flows and condensed consolidated statements of comprehensive income for the quarterly and year-to-date periods ended March 31, 2022, June 30, 2022 and September 30, 2022 were also revised to reflect the impact to net income as stated in the tables above. The benefit for deferred income tax line was also adjusted in the condensed consolidated statement of cash flows, however, the error had no net impact on cash flows from operating, investing or financing activities in these periods.
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2022 | |
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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Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its fixed income securities with readily determinable market values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature and reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of income. Gains and losses on investments are calculated on the basis of specific identification. Marketable securities are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health and business outlook of the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends; and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Assessing the above factors involves inherent uncertainty. Write-downs, if recorded, could be materially different from the actual market performance of marketable securities in the Company’s portfolio if, among other things, relevant information related to the marketable securities was not publicly available or other factors not considered by the Company would have been relevant to the determination of impairment.
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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 three years. Additionally, the Company may pay commissions and incentives based upon contract value, rather than incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period of 16 months. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no incremental costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized. Amortization of the costs is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets. Contract Liabilities Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets. Revenue Recognition The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of its core services – the delivery of content, applications and software over the internet – as well as security and cloud computing solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time. The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period. Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting, and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price (“SSP”) basis. Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Most 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 usage 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 contracts are satisfied at a point in time, such as one-time professional services, integration services and most license sales where the primary obligation is delivery of the license at the start of the term. In these cases, revenue is recognized at the point in time of delivery or satisfaction of the performance obligation. From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Cost of Revenue Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network storage costs; cost of software licenses; depreciation of network equipment used to deliver the Company’s services; amortization of network-related internal-use software; and costs for the production of live events streamed by the Company for customers. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to five years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost.
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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, 2022, 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, 2022, 2021 and 2020, no customer accounted for more than 10% of total revenue. As of December 31, 2022 and 2021, there was one customer with an accounts receivable balance greater than 10% of total accounts receivable. The Company believes that, as of December 31, 2022 and 2021, 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 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 and leases assumed through acquisitions with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term.
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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, 2022, 2021 and 2020, the Company concluded that it has one reporting unit and that its chief operating decision maker is its chief executive officer and the executive management team. The Company has assigned the entire balance of goodwill to one reporting unit. The fair value of the reporting unit was based on the Company's market capitalization as of each of December 31, 2022 and 2021, and it was substantially in excess of the carrying value of the reporting unit at each date. The fair value of the Company's reporting unit was determined by the Company's enterprise value as of the years ended December 31, 2022, 2021 and 2020. 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. Significant judgment is used in determining fair values of acquired intangibles assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. Long-lived assets, including property and equipment, operating lease right-of-use assets and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset.
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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, 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 income (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 income (expense), net. As of December 31, 2022 and 2021, the fair value of the forward currency contracts and the underlying gains and losses for the years ended December 31, 2022, 2021 and 2020 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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Newly-Adopted Accounting Pronouncements and Recent Accounting Pronouncements | Newly-Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued guidance that was expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. The convertible senior notes included on the Company's consolidated balance sheet more closely reflect the principal amounts. Prior to the adoption of this guidance, the Company separated its convertible senior notes into a liability and an equity component. The equity portion is now eliminated. The cumulative effect of the changes was an increase to convertible senior notes of $304.7 million, an increase to deferred income tax liabilities of $0.7 million, an increase to deferred income tax assets of $77.7 million, a decrease to property and equipment of $7.7 million and a decrease to additional paid-in capital of $375.4 million on the consolidated balance sheet. The net effect of these adjustments was recorded as an increase to retained earnings as of January 1, 2022. Additionally, the new guidance eliminates the use of the treasury stock method for convertible instruments that can be settled in whole or in part with equity, when calculating diluted earnings per share. Instead, it requires application of the if-converted method. Under that method, diluted earnings per share would generally be calculated assuming that all the convertible senior notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be antidilutive. The application of the if-converted method reduces the Company’s reported diluted earnings per share after the adoption date. However, in December 2021, the Company made an irrevocable election to settle the principal portion of the convertible senior notes with cash. Accordingly, the if-converted method is only impacted by any potential shares to be delivered for the amount in excess of the principal portion. The changes to the diluted earnings per share guidance did not materially impact the Company's results of operations. With the elimination of the debt discount created by the equity component, amortization of the debt discount is eliminated, which decreases interest expense, and therefore increases net income and earnings per share, from the period of adoption. This had the effect of increasing basic and diluted earnings per share for the year ended 2022 by $0.32.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | Available-for-sale marketable securities held as of December 31, 2022 and 2021 were as follows (in thousands):
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Fair Value Measurement Within Fair Value Hierarchy | The fair value measurements within the fair value hierarchy of the Company’s financial assets as of December 31, 2022 and 2021 were as follows (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, 2022 and 2021 were as follows (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, 2022 and 2021 (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, 2022, 2021 and 2020 was 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, 2022 and 2021 (in thousands):
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Schedule of deferred costs associated with obtaining customer contracts | Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2022 and 2021 were as follows (in thousands):
Information related to incremental costs to obtain a contract with a customer for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
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Property and Equipment (Tables) |
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Schedule of Property and Equipment | Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands, except years):
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Acquired Intangible Assets and Goodwill (Tables) |
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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, 2022 and 2021 (in thousands):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (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, 2022 and 2021 were as follows (in thousands):
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Acquisitions (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The preliminary allocation of the purchase price for Linode was as follows (in thousands):
The allocation of the purchase price for Guardicore was as follows (in thousands):
The allocation of the purchase price for Asavie was as follows (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, 2022 and 2021 (in thousands):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
Identified intangible assets acquired and their respective weighted average useful lives were as follows (in thousands, except years):
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Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of December 31, 2022 and 2021 (in thousands):
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Restructuring (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Accrual | The activity of the Company's accrual for employee severance and related benefits for all restructuring actions during the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Convertible Senior Notes | The 2027 Notes consisted of the following components as of December 31, 2022 and 2021 (in thousands):
The 2025 Notes consisted of the following components as of December 31, 2022 and 2021 (in thousands):
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Schedule of Interest Expense | Interest expense included in the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The Company’s operating lease costs for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
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Weighted Average Remaining Lease Terms and Discount Rates | Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2022 and 2021 were as follows:
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Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands):
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Commitments | The minimum future commitments as of December 31, 2022 were as follows (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the years ended December 31, 2022 and 2021 were as follows (in thousands):
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Revenue from Contracts with Customers (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Revenue by geography included in the Company’s consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 was as follows (in thousands):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Based Compensation Expense | Components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 were as follows (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, 2022, 2021 and 2020 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
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Schedule of Summary of Stock Option Activity | Stock option activity during the year ended December 31, 2022 was as follows:
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Schedule Of Deferred Stock Units Activity | DSU activity for the year ended December 31, 2022 was as follows:
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Schedule of Restricted Stock Units by Type | Different types of restricted stock units ("RSUs") granted by the Company during the year ended December 31, 2022 were as follows (in thousands):
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Schedule of Restricted Stock Units Activity | RSU activity for the year ended December 31, 2022 was as follows:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2022, 2021 and 2020 (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, 2022, 2021 and 2020 (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, 2022, 2021 and 2020:
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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, 2022 and 2021 were as follows (in thousands):
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Summary of Valuation Allowance | As summary of activity in the valuation allowance on deferred tax assets for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands):
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Schedule of Operating Loss Carryforwards | The Company's NOL and tax credit carryforwards in U.S. federal, state and foreign jurisdictions as of December 31, 2022 and 2021 were as follows (in thousands, except years):
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Unrecognized Tax Benefits | The changes in the Company’s unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands):
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Net Income per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components Used in Diluted and Basic Income Per Common Share | The components used in the computation of basic and diluted net income per share for the years ended December 31, 2022, 2021 and 2020 were as follows (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, 2022, 2021 and 2020 were as follows (in thousands):
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Segment and Geographic Information (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-lived Assets by Geographic Areas | et property and equipment, excluding internal-use software and operating lease right-of-use assets, located in the U.S. and foreign locations, as of December 31, 2022 and 2021 was as follows (in thousands):
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Quarterly Financial Results (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited Quarterly Financial Results |
The changes to the condensed consolidated balance sheets as a result of the error were as follows (in thousands):
Changes to the condensed consolidated statements of income as a result of the error were as follows (in thousands, except per share data):
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Nature of Business and Basis of Presentation (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
segment
location
country
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of locations (more than) | location | 4,100 |
Number of countries with networks | country | 130 |
Number of operating segments | segment | 1 |
Summary of Significant Accounting Policies - Incremental Costs to Obtain a Contract with a Customer (Details) |
Dec. 31, 2022 |
---|---|
Customer Arrangement | |
Capitalized Contract Cost [Line Items] | |
Expected life of customer arrangement | 3 years |
Customer Contract | |
Capitalized Contract Cost [Line Items] | |
Expected life of customer arrangement | 16 months |
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
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Customer Concentration Risk | Accounts Receivable | One Customer | ||
Concentration Risk [Line Items] | ||
Concentration risk percent (more than) | 10.00% | 10.00% |
Summary of Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Accounting Policies [Abstract] | |
Property and equipment per unit value, minimum | $ 1,000 |
Property, plant and equipment, estimated useful life | 1 year |
Summary of Significant Accounting Policies - Equity Method Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Loss from equity method investment | $ 7,635 | $ 14,008 | $ 13,106 | |
GO-NET | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 20.00% | |||
Equity method investment | $ 7,500 | |||
Loss from equity method investment | 14,000 | 13,100 | ||
Impairment loss | $ 7,500 | 11,000 | ||
Revenue from related party | $ 4,000 | $ 10,100 | $ 11,100 |
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Jan. 01, 2022 |
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Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Convertible senior notes | $ 2,285,258 | $ 1,976,167 | $ 2,285,258 | $ 1,976,167 | ||||||||||
Deferred income tax liabilities | 18,400 | $ 19,202 | $ 26,549 | $ 35,528 | 40,974 | $ 26,549 | $ 19,202 | 18,400 | 40,974 | |||||
Deferred income tax assets | 337,677 | $ 314,834 | $ 312,515 | $ 274,556 | 168,342 | $ 312,515 | $ 314,834 | 337,677 | 168,342 | |||||
Property and equipment, net | (1,540,182) | (1,534,329) | (1,540,182) | (1,534,329) | ||||||||||
Additional paid-in capital | $ (2,578,603) | $ (3,340,822) | $ (2,578,603) | $ (3,340,822) | ||||||||||
Basic (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.86 | $ 0.83 | $ 0.99 | $ 1.10 | $ 0.96 | $ 0.95 | $ 1.69 | $ 2.47 | $ 3.29 | $ 4.01 | $ 3.43 | |
Diluted (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.85 | $ 0.82 | $ 0.97 | $ 1.08 | $ 0.94 | $ 0.94 | $ 1.67 | $ 2.45 | 3.26 | $ 3.93 | $ 3.37 | |
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Convertible senior notes | $ 304,700 | |||||||||||||
Deferred income tax liabilities | 700 | |||||||||||||
Deferred income tax assets | 77,700 | |||||||||||||
Property and equipment, net | 7,700 | |||||||||||||
Additional paid-in capital | $ 375,400 | |||||||||||||
Basic (in dollars per share) | 0.32 | |||||||||||||
Diluted (in dollars per share) | $ 0.32 |
Fair Value Measurements - Narrative (Details) - Corporate bonds $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Debt Securities, Available-for-sale [Line Items] | |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | $ 835.4 |
Unrealized loss from available-for-sale marketable securities | $ 31.3 |
Fair Value Measurements - Schedule of Contractual Maturities of Marketable Securities and Other Investment Related Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 562,308 | $ 540,574 |
Due after 1 year through 5 years | 302,457 | 1,065,815 |
Aggregate Fair Value | $ 864,765 | $ 1,606,389 |
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 685,123 | $ 677,323 | ||
Allowance for current expected credit losses and other reserves | (5,917) | (1,397) | $ (1,822) | $ (1,880) |
Accounts receivable, net | 679,206 | 675,926 | ||
Trade accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | 490,162 | 501,959 | ||
Unbilled accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross accounts receivable | $ 194,961 | $ 175,364 |
Accounts Receivable - Activity in Allowance for Expected Credit Loss (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 1,397 | $ 1,822 | $ 1,880 |
Charges to income from operations | 9,292 | 4,576 | 12,347 |
Collections from customers previously reserved and other | (4,772) | (5,001) | (12,405) |
Ending balance | $ 5,917 | $ 1,397 | $ 1,822 |
Prepaid Expenses and Other Current Assets - Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid income taxes | $ 33,898 | $ 32,021 |
Prepaid sales and other taxes | 31,285 | 28,300 |
Prepaid equipment and software maintenance | 16,348 | 10,661 |
Deferred commissions | 37,316 | 43,562 |
Other prepaid expenses | 51,194 | 35,109 |
Other current assets | 14,999 | 16,660 |
Total | $ 185,040 | $ 166,313 |
Prepaid Expenses and Other Current Assets - Deferred Cost (Details) - Commission and Incentive Payments - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 66,385 | $ 73,998 |
Deferred costs included in prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | 37,316 | 43,562 |
Deferred costs included in other assets | ||
Capitalized Contract Cost [Line Items] | ||
Deferred costs associated with obtaining customer contracts | $ 29,069 | $ 30,436 |
Prepaid Expenses and Other Current Assets - Incremental Customer Contract Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Amortization expense related to deferred costs | $ 52,691 | $ 58,433 | $ 61,682 |
Incremental costs capitalized | $ 47,416 | $ 56,509 | $ 67,058 |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Abstract] | |||
Property, software and equipment depreciation, amortization expense | $ 527.8 | $ 502.6 | $ 436.3 |
Capitalization of stock-based compensation | 32.3 | 35.0 | $ 38.0 |
Disposal of property plant and equipment | 210.2 | 283.4 | |
Write off of internal-use software | $ 9.1 | $ 3.4 |
Acquired Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of acquired intangible assets | $ 64,983 | $ 48,019 | $ 42,049 |
2023 | 63,500 | ||
2024 | 59,200 | ||
2025 | 61,200 | ||
2026 | 56,300 | ||
2027 | $ 43,700 |
Acquired Intangible Assets and Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Changes in the carrying amount of goodwill | ||
Beginning balance | $ 2,156,254 | $ 1,674,371 |
Measurement period adjustments related to acquisitions completed in prior years | 724 | (267) |
Foreign currency translation | (10,432) | (7,701) |
Ending balance | 2,763,838 | 2,156,254 |
Linode | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 617,292 | 0 |
Measurement period adjustments related to acquisitions completed in prior years | 28,900 | |
Guardicore Ltd. | ||
Changes in the carrying amount of goodwill | ||
Acquisition | 0 | 479,110 |
Inverse, Inc. | ||
Changes in the carrying amount of goodwill | ||
Acquisition | $ 0 | $ 10,741 |
Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and other related benefits | $ 172,670 | $ 222,535 |
Income taxes payable | 76,459 | 72,946 |
Bandwidth and co-location expenses | 79,937 | 72,904 |
Property, use and other taxes | 30,711 | 33,883 |
Professional service fees | 3,054 | 2,929 |
Other accrued expenses | 4,186 | 6,393 |
Total | $ 367,017 | $ 411,590 |
Restructuring - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charge (benefit) | $ 13,529 | $ 10,737 | $ 37,286 | |
GO-NET | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment loss | $ 7,500 | 11,000 | ||
2021 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charge (benefit) | $ 3,600 | 3,800 | ||
2020 Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charge (benefit) | $ 7,900 | $ 23,600 |
Restructuring - Schedule of Restructuring Accrual (Details) - Employee Severance and Related Benefits - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 1,188 | $ 22,051 | $ 5,707 |
Costs incurred | 747 | 6,600 | 26,332 |
Cash disbursements | (1,209) | (27,095) | (10,118) |
Translation adjustments and other | (185) | (368) | 130 |
Ending balance | $ 541 | $ 1,188 | $ 22,051 |
Debt - Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
Aug. 31, 2019 |
May 31, 2018 |
---|---|---|---|---|
2027 Notes | ||||
Liability component: | ||||
Principal | $ 1,150,000,000 | $ 1,150,000,000 | $ 1,150,000,000 | |
Less: debt discount and issuance costs, net of amortization | (8,707,000) | (169,030,000) | ||
Net carrying amount | 1,141,293,000 | 980,970,000 | ||
Equity component: | 0 | 220,529,000 | ||
2025 Notes | ||||
Liability component: | ||||
Principal | 1,150,000,000 | 1,150,000,000 | $ 1,150,000,000 | |
Less: debt discount and issuance costs, net of amortization | (6,035,000) | (154,803,000) | ||
Net carrying amount | 1,143,965,000 | 995,197,000 | ||
Equity component: | $ 0 | $ 285,225,000 |
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Aug. 31, 2019 |
May 31, 2018 |
|
Debt Instrument [Line Items] | |||||
Amortization of debt discount and issuance costs | $ 4,688 | $ 69,697 | $ 67,153 | ||
Capitalization of interest expense | (293) | (3,672) | (4,330) | ||
Total interest expense | 11,096 | 72,332 | 69,120 | ||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Interest on debt instruments | $ 952 | 557 | 548 | ||
Convertible Debt | 2025 Notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.125% | 0.125% | |||
Interest on debt instruments | $ 1,437 | 1,437 | 1,437 | ||
Convertible Debt | 2027 Notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.375% | 0.375% | |||
Interest on debt instruments | $ 4,312 | $ 4,313 | $ 4,312 |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | $ 234,976 | $ 220,773 | $ 197,128 |
Short-term lease cost | 21,793 | 17,718 | 15,849 |
Variable lease cost | 60,192 | 53,444 | 55,494 |
Sublease income | (25,743) | (21,033) | (22,064) |
Total operating lease costs | 291,218 | 270,902 | 246,407 |
Real Estate Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | 82,761 | 84,100 | 83,574 |
Short-term lease cost | 52 | 58 | 229 |
Variable lease cost | 25,167 | 22,016 | 21,235 |
Sublease income | (25,743) | (21,033) | (22,064) |
Total operating lease costs | 82,237 | 85,141 | 82,974 |
Co-location Arrangements | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease cost | 152,215 | 136,673 | 113,554 |
Short-term lease cost | 21,741 | 17,660 | 15,620 |
Variable lease cost | 35,025 | 31,428 | 34,259 |
Sublease income | 0 | 0 | 0 |
Total operating lease costs | $ 208,981 | $ 185,761 | $ 163,433 |
Leases - Lease Term and Discount Rate (Details) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Real Estate Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 10 years 3 months 18 days | 11 years 1 month 6 days |
Weighted average discount rate | 3.60% | 3.60% |
Co-location Arrangements | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 3 years 10 months 24 days | 3 years 10 months 24 days |
Weighted average discount rate | 2.80% | 1.30% |
Leases - Narrative (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Operating lease not yet commenced | $ 141.7 |
Future sublease income | 223.6 |
Outstanding letter of credit | $ 5.0 |
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 | 8 years |
Leases - Lease Maturity (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Real Estate Arrangements | |
Lessee, Lease, Description [Line Items] | |
2023 | $ 78,714 |
2024 | 79,081 |
2025 | 72,242 |
2026 | 66,020 |
2027 | 60,717 |
Thereafter | 358,338 |
Total lease payments | 715,112 |
Less: imputed interest | 119,106 |
Total lease liabilities | 596,006 |
Co-location Arrangements | |
Lessee, Lease, Description [Line Items] | |
2023 | 119,527 |
2024 | 67,081 |
2025 | 46,196 |
2026 | 34,871 |
2027 | 24,346 |
Thereafter | 18,584 |
Total lease payments | 310,605 |
Less: imputed interest | 17,252 |
Total lease liabilities | $ 293,353 |
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Bandwidth Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2023 | $ 82,949 |
2024 | 23,487 |
2025 | 10,519 |
2026 | 1,065 |
2027 | 46 |
Total | 118,066 |
Purchase Order Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2023 | 378,816 |
2024 | 45,113 |
2025 | 8,094 |
2026 | 2,427 |
2027 | 546 |
Total | $ 434,996 |
Stockholders' Equity (Details) - USD ($) $ in Thousands, shares in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Oct. 31, 2021 |
Nov. 30, 2018 |
|
Class of Stock [Line Items] | |||||
Amount of common stock repurchases authorized | $ 1,800,000 | $ 1,100,000 | |||
Value of shares repurchased during period | $ 608,010 | $ 522,255 | $ 193,588 | ||
Remaining amount available for future purchases of shares under approved repurchase program. | $ 1,200,000 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Repurchases of common stock (in shares) | 6.4 | 4.7 | 2.0 | ||
Value of shares repurchased during period | $ 608,000 | $ 522,300 | $ 193,600 |
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 4,530,014 | $ 4,251,296 | $ 3,657,958 |
Other comprehensive loss | (71,227) | (48,904) | 24,943 |
Ending Balance | 4,360,187 | 4,530,014 | 4,251,296 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (69,105) | (20,201) | (45,144) |
Ending Balance | (140,332) | (69,105) | (20,201) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (71,809) | (33,295) | |
Other comprehensive loss | (44,665) | (38,514) | |
Ending Balance | (116,474) | (71,809) | (33,295) |
Net Unrealized Gains (Losses) on Investments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 2,704 | 13,094 | |
Other comprehensive loss | (26,562) | (10,390) | |
Ending Balance | $ (23,858) | $ 2,704 | $ 13,094 |
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 927,779 | $ 881,896 | $ 903,332 | $ 903,647 | $ 905,358 | $ 860,333 | $ 852,824 | $ 842,708 | $ 3,616,654 | $ 3,461,223 | $ 3,198,149 |
Security | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,541,941 | 1,334,836 | 1,061,622 | ||||||||
Delivery | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,669,257 | 1,873,243 | 1,929,810 | ||||||||
Compute | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 405,456 | 253,144 | 206,717 | ||||||||
U.S. | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,902,051 | 1,837,508 | 1,777,435 | ||||||||
International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 1,714,603 | $ 1,623,715 | $ 1,420,714 |
Revenue from Contracts with Customers - Performance Obligation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue recognized | $ 105.1 | $ 78.8 | $ 69.9 |
Remaining performance obligation | $ 3,500.0 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligations, percentage | 65.00% | ||
Remaining performance obligation, expected timing | 12 months |
Employee Benefit Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Compensation Related Costs [Abstract] | |||
Contributions by employer | $ 18.8 | $ 17.7 | $ 17.5 |
Stock-Based Compensation - Schedule of Assumptions Used (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | ||
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 | 1.90% | 0.10% | 0.70% |
Expected volatility | 26.00% | 32.20% | 30.40% |
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 | 1.70% | 0.30% | 0.70% |
Expected volatility | 30.30% | 32.70% | 28.20% |
Average volatility of peer-company share price | 40.70% | 39.60% | 28.90% |
Stock-Based Compensation - Schedule of Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
$ / shares
shares
| |
Shares | |
Outstanding (in shares) | shares | 1 |
Exercised (in shares) | shares | 0 |
Outstanding (in shares) | shares | 1 |
Exercisable (in shares) | shares | 1 |
Vested or expected to vest (in shares) | shares | 1 |
Weighted Average Exercise Price | |
Outstanding (in dollars per share) | $ / shares | $ 41.08 |
Exercised (in dollars per share) | $ / shares | 40.44 |
Outstanding (in dollars per share) | $ / shares | 41.28 |
Exercisable (in dollars per share) | $ / shares | 41.28 |
Vested or expected to vest (in dollars per share) | $ / shares | $ 41.28 |
Weighted Average Remaining Contractual Term & Aggregate Intrinsic Value | |
Outstanding | 7 months 6 days |
Exercisable | 7 months 6 days |
Vested or expected to vest | 7 months 6 days |
Outstanding | $ | $ 43 |
Exercisable | $ | 43 |
Vested or expected to vest | $ | $ 43 |
Stock-Based Compensation - Schedule of Restricted Stock Units by Type (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2022
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total restricted stock units vesting conditions granted (in shares) | 3,563 |
Service-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units vesting conditions granted (in shares) | 3,243 |
Market-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock units granted with performance based vesting (in shares) | 81 |
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) | 239 |
Income Taxes - Components of Income Tax Schedule (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
U.S. | $ 61,383 | $ 70,300 | $ 45,074 |
Foreign | 596,620 | 657,921 | 571,008 |
Income before provision for income taxes | $ 658,003 | $ 728,221 | $ 616,082 |
Income Taxes - Provision for Income Tax Schedule (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current tax provision (benefit): | ||||||||
Federal | $ 49,808 | $ 11,824 | $ (1,765) | |||||
State | 9,214 | 8,515 | 5,346 | |||||
Foreign | 172,645 | 90,026 | 76,162 | |||||
Deferred tax benefit: | ||||||||
Federal | (73,826) | (33,366) | (19,845) | |||||
State | (18,657) | (14,611) | (14,509) | |||||
Foreign | (16,595) | (4,358) | (6,023) | |||||
Change in valuation allowance | 4,107 | 4,541 | 6,556 | |||||
Total | $ 34,466 | $ 32,755 | $ 19,837 | $ 52,592 | $ 87,058 | $ 126,696 | $ 62,571 | $ 45,922 |
Income Taxes - Schedule of Difference Between Effective and Statutory (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
U.S. federal income tax rate | 21.00% | 21.00% | 21.00% |
State taxes | 0.70% | 0.70% | 1.00% |
Stock-based compensation | 2.00% | 0.10% | (0.60%) |
U.S. federal, state and foreign research and development credits | (5.10%) | (3.70%) | (4.40%) |
Foreign earnings | (6.60%) | (7.30%) | (7.70%) |
Nondeductible (nontaxable) foreign items | 0.70% | 0.00% | (0.40%) |
Global intangible low-taxed income | 2.50% | 0.50% | 0.60% |
Release of uncertain tax position reserve | (0.70%) | (1.00%) | (0.90%) |
Intercompany sale of intellectual property | 4.00% | 0.00% | 0.20% |
Valuation allowance | 0.60% | 0.60% | 1.10% |
Other | 0.20% | (2.30%) | (2.40%) |
Effective income tax rate | 19.30% | 8.60% | 7.50% |
Income Taxes - Schedule of Deferred Tax and Related Valuation Allowance (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Income Tax Disclosure [Abstract] | ||||
Accrued bonus | $ 21,181 | $ 26,261 | ||
Deferred revenue | 11,925 | 6,683 | ||
Operating lease liabilities | 125,567 | 133,298 | ||
Stock-based compensation | 19,874 | 21,507 | ||
NOLs | 18,172 | 53,088 | ||
Tax credit carryforwards | 93,672 | 88,710 | ||
Capitalized research and development costs | 43,215 | 0 | ||
Convertible senior notes interest | 75,603 | 18,552 | ||
Depreciation and amortization | 79,595 | 85,438 | ||
Other | 28,879 | 15,679 | ||
Deferred tax assets | 517,683 | 449,216 | ||
Acquired intangible assets | (530) | (86,567) | ||
Operating lease right-of-use assets | (113,118) | (124,833) | ||
Deferred commissions | (12,949) | (13,468) | ||
Capitalized internal-use software development costs | (30,559) | (59,837) | ||
Deferred tax liabilities | (157,156) | (284,705) | ||
Valuation allowance | (41,250) | (37,143) | $ (32,602) | $ (26,046) |
Net deferred tax assets | $ 319,277 | $ 127,368 |
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Valuation Allowance [Roll Forward] | |||
Beginning balance | $ 37,143 | $ 32,602 | $ 26,046 |
Charges to income tax expense | 4,392 | 4,707 | 6,588 |
Release of valuation allowance | (285) | (166) | (32) |
Ending balance | $ 41,250 | $ 37,143 | $ 32,602 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Valuation allowance | $ 41,250 | $ 37,143 | $ 32,602 | $ 26,046 |
Increase in valuation allowance | 4,100 | |||
Foreign earnings repatriated | 1,900,000 | |||
Unrecognized tax benefits including accrued interest and penalties | 38,300 | 23,100 | 29,500 | |
Unrecognized tax benefits, income tax penalties and interest accrued | 8,600 | 7,200 | 7,700 | |
Income tax interest and penalties expense | 2,000 | $ 500 | $ 1,200 | |
Unrecognized tax benefits that, if recognized, would impact the effective income tax rate | 38,300 | |||
Unrecognized tax benefits that may be recognized | $ 3,600 |
Income Taxes - Schedule of NOL Carryforwards (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Operating Loss Carryforwards [Line Items] | ||
Federal and state research and development tax credit and other credit carryforwards | $ 121,300 | $ 113,500 |
Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2037 | 2037 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 30,100 | $ 44,000 |
Federal | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2037 | 2037 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 22,400 | $ 15,500 |
State | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2042 | 2042 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carryforwards: | $ 40,100 | $ 180,100 |
Foreign | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Expirations at Various Dates Through: | 2037 | 2037 |
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 22,563 | $ 24,105 | $ 27,359 |
Gross increases – tax positions of prior periods | 3,880 | 4,293 | 2,539 |
Gross increases – current period tax positions | 45,975 | 3,607 | 1,946 |
Gross decreases – tax positions of prior periods | (688) | (816) | (3,540) |
Gross decreases – lapse of applicable statute of limitations | (3,772) | (8,626) | (4,199) |
Balance at end of year | $ 67,958 | $ 22,563 | $ 24,105 |
Net Income per Share - Schedule of Components (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Numerator: | |||||||||||||
Net income | $ 128,762 | $ 123,694 | $ 137,840 | $ 133,376 | $ 160,534 | $ 178,916 | $ 156,497 | $ 155,695 | $ 271,216 | $ 394,910 | $ 523,672 | $ 651,642 | $ 557,054 |
Denominator: | |||||||||||||
Shares used for basic net income per share (in shares) | 159,089 | 162,665 | 162,490 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options (in shares) | 21 | 21 | 31 | ||||||||||
RSUs and deferred stock units (in shares) | 637 | 1,518 | 1,819 | ||||||||||
Convertible senior notes (in shares) | 720 | 1,600 | 873 | ||||||||||
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 | 0 | ||||||||||
Shares used for diluted net income per share (in shares) | 160,467 | 165,804 | 165,213 | ||||||||||
Basic net income per share (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.86 | $ 0.83 | $ 0.99 | $ 1.10 | $ 0.96 | $ 0.95 | $ 1.69 | $ 2.47 | $ 3.29 | $ 4.01 | $ 3.43 |
Diluted net income per share (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.85 | $ 0.82 | $ 0.97 | $ 1.08 | $ 0.94 | $ 0.94 | $ 1.67 | $ 2.45 | $ 3.26 | $ 3.93 | $ 3.37 |
Akamai Foundation (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
The Akamai Foundation | One-Time Charitable Endowment | |
Related Party Transaction [Line Items] | |
Contribution amount | $ 20.0 |
Segment and Geographic Information (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
USD ($)
segment
|
Dec. 31, 2021
USD ($)
|
|
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 1 | |
Property and equipment, net | $ 1,540,182 | $ 1,534,329 |
Operating lease right-of-use assets | 813,372 | 815,754 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Operating lease right-of-use assets | 608,854 | 625,424 |
U.S. | Property, Plant, and Equipment, Excluding Internal-Use Software | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 568,590 | 568,040 |
Non-U.S. | ||
Segment Reporting Information [Line Items] | ||
Operating lease right-of-use assets | 204,518 | 190,330 |
Non-U.S. | Property, Plant, and Equipment, Excluding Internal-Use Software | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 516,127 | $ 510,695 |
Quarterly Financial Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Revenue | $ 927,779 | $ 881,896 | $ 903,332 | $ 903,647 | $ 905,358 | $ 860,333 | $ 852,824 | $ 842,708 | $ 3,616,654 | $ 3,461,223 | $ 3,198,149 | ||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 357,968 | 346,450 | 346,649 | 332,752 | 325,403 | 316,866 | 320,000 | 306,687 | 1,383,819 | 1,268,956 | 1,132,672 | ||
Net income | $ 128,762 | $ 123,694 | $ 137,840 | $ 133,376 | $ 160,534 | $ 178,916 | $ 156,497 | $ 155,695 | $ 271,216 | $ 394,910 | $ 523,672 | $ 651,642 | $ 557,054 |
Basic net income per share (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.86 | $ 0.83 | $ 0.99 | $ 1.10 | $ 0.96 | $ 0.95 | $ 1.69 | $ 2.47 | $ 3.29 | $ 4.01 | $ 3.43 |
Diluted net income per share (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.85 | $ 0.82 | $ 0.97 | $ 1.08 | $ 0.94 | $ 0.94 | $ 1.67 | $ 2.45 | $ 3.26 | $ 3.93 | $ 3.37 |
Quarterly Financial Results (unaudited) - Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Deferred income tax assets | $ 337,677 | $ 314,834 | $ 312,515 | $ 274,556 | $ 168,342 | ||
Total assets | 8,303,400 | 8,136,481 | 8,230,752 | 8,312,389 | 8,138,673 | ||
Deferred income tax liabilities | 18,400 | 19,202 | 26,549 | 35,528 | 40,974 | ||
Total liabilities | 3,943,213 | 3,855,241 | 3,917,758 | 3,997,654 | 3,608,659 | ||
Retained earnings | 1,920,351 | 1,791,589 | 1,667,895 | 1,530,055 | 1,256,692 | ||
Total stockholders’ equity | 4,360,187 | 4,281,240 | 4,312,994 | 4,314,735 | 4,530,014 | $ 4,251,296 | $ 3,657,958 |
Total liabilities and stockholders’ equity | $ 8,303,400 | 8,136,481 | 8,230,752 | 8,312,389 | $ 8,138,673 | ||
As Previously Reported | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Deferred income tax assets | 285,722 | 292,817 | 265,946 | ||||
Total assets | 8,107,369 | 8,211,054 | 8,303,779 | ||||
Deferred income tax liabilities | 38,146 | 39,367 | 41,131 | ||||
Total liabilities | 3,874,185 | 3,930,576 | 4,003,257 | ||||
Retained earnings | 1,743,533 | 1,635,379 | 1,515,842 | ||||
Total stockholders’ equity | 4,233,184 | 4,280,478 | 4,300,522 | ||||
Total liabilities and stockholders’ equity | 8,107,369 | 8,211,054 | 8,303,779 | ||||
Adjustment | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Deferred income tax assets | 29,112 | 19,698 | 8,610 | ||||
Total assets | 29,112 | 19,698 | 8,610 | ||||
Deferred income tax liabilities | (18,944) | (12,818) | (5,603) | ||||
Total liabilities | (18,944) | (12,818) | (5,603) | ||||
Retained earnings | 48,056 | 32,516 | 14,213 | ||||
Total stockholders’ equity | 48,056 | 32,516 | 14,213 | ||||
Total liabilities and stockholders’ equity | $ 29,112 | $ 19,698 | $ 8,610 |
Quarterly Financial Results (unaudited) - Condensed Consolidated Statements of Income (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Provision for income taxes | $ (34,466) | $ (32,755) | $ (19,837) | $ (52,592) | $ (87,058) | $ (126,696) | $ (62,571) | $ (45,922) | |||||
Net income | $ 128,762 | $ 123,694 | $ 137,840 | $ 133,376 | $ 160,534 | $ 178,916 | $ 156,497 | $ 155,695 | $ 271,216 | $ 394,910 | $ 523,672 | $ 651,642 | $ 557,054 |
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.86 | $ 0.83 | $ 0.99 | $ 1.10 | $ 0.96 | $ 0.95 | $ 1.69 | $ 2.47 | $ 3.29 | $ 4.01 | $ 3.43 |
Diluted (in dollars per share) | $ 0.82 | $ 0.78 | $ 0.85 | $ 0.82 | $ 0.97 | $ 1.08 | $ 0.94 | $ 0.94 | $ 1.67 | $ 2.45 | $ 3.26 | $ 3.93 | $ 3.37 |
As Previously Reported | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Provision for income taxes | $ (50,006) | $ (51,058) | $ (34,050) | $ (85,108) | $ (135,114) | ||||||||
Net income | $ 108,154 | $ 119,537 | $ 119,163 | $ 238,700 | $ 346,854 | ||||||||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 0.68 | $ 0.75 | $ 0.74 | $ 1.49 | $ 2.17 | ||||||||
Diluted (in dollars per share) | $ 0.68 | $ 0.74 | $ 0.73 | $ 1.47 | $ 2.15 | ||||||||
Adjustment | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Provision for income taxes | $ 15,540 | $ 18,303 | $ 14,213 | $ 32,516 | $ 48,056 | ||||||||
Net income | $ 15,540 | $ 18,303 | $ 14,213 | $ 32,516 | $ 48,056 | ||||||||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 0.10 | $ 0.11 | $ 0.09 | $ 0.20 | $ 0.30 | ||||||||
Diluted (in dollars per share) | $ 0.10 | $ 0.11 | $ 0.09 | $ 0.20 | $ 0.30 |
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