Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Share Repurchase Program

Effective January 2022, the board of directors of the Company authorized a $1.8 billion share repurchase program through December 2024. During the three and nine months ended September 30, 2023, the Company repurchased 1.1 million and 7.3 million shares of its common stock, respectively, for $113.2 million and $599.2 million, respectively. The Company's goals for

the share repurchase program are to offset the dilution created by its employee equity compensation programs over time and provide the flexibility to return capital to stockholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities.

Stock-Based Compensation

Components of total stock-based compensation included in the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

 

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of revenue	$	11,236	$	7,237	$	31,904	$	20,604
Research and development	33,366		18,698		87,468		56,338
Sales and marketing	17,290		11,375		48,558		35,153
General and administrative	25,125		13,392		68,414		46,716
Total stock-based compensation	87,017		50,702		236,344		158,811
Provision for income taxes	(10,028)		(10,076)		(40,249)		(36,980)
Total stock-based compensation, net of income taxes	$	76,989	$	40,626	$	196,095	$	121,831

During 2023, the Company redesigned one of its non-executive short-term incentive compensation programs from a cash-based to a stock-based program that vests in one year. The Company also introduced a non-executive incentive program tied to its initiative to migrate certain applications from third-party cloud platforms onto the Akamai Connected Cloud that vests over two years. These programs, headcount growth, an increase in equity award sizes to some new hires and existing employees due to market conditions and expected achievement of executive performance-based compensation plans increased stock-based compensation for the three and nine months ended September 30, 2023.

In addition to the amounts of stock-based compensation reported in the table above, the Company’s interim condensed consolidated statements of income for the three and nine months ended September 30, 2023 include stock-based compensation reflected as a component of amortization primarily consisting of capitalized internal-use software of $8.7 million and $24.1 million, respectively, before taxes, and for the three and nine months ended September 30, 2022 include stock-based compensation reflected as a component of amortization of capitalized internal-use software of $7.6 million and $22.9 million, respectively, before taxes.