Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

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, 2023, 2022 and 2021 were as follows (in thousands):

	2023		2022		2021
Cost of revenue	$	43,802	$	28,354	$	27,143
Research and development	123,896		78,116		65,950
Sales and marketing	66,453		47,789		46,342
General and administrative	94,316		62,926		63,324
Total stock-based compensation	328,467		217,185		202,759
Provision for income taxes	(59,359)		(46,829)		(56,084)
Total stock-based compensation, net of taxes	$	269,108	$	170,356	$	146,675

Schedule of Employee Stock Purchase Plan Activity

The following summarizes the activity under the 1999 ESPP (in thousands, except per share amounts):

	2023		2022		2021
Shares issued	797		688		649
Weighted average purchase price of shares issued, per share	$	78.29	$	82.83	$	92.05
Issuance of common stock	$	62,365	$	56,570	$	59,714

Schedule of Assumptions Used

The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2023, 2022 and 2021 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

	2023		2022		2021
Expected term (in years)	0.5		0.5		0.5
Risk-free interest rate	5.2	%	1.9	%	0.1	%
Expected volatility	29.1	%	26.0	%	32.2	%
Dividend yield	—	%	—	%	—	%

The grant-date fair values of the TSR-based RSUs granted during the years ended December 31, 2023, 2022 and 2021 were estimated using a Monte Carlo simulation model with the following assumptions:

	2023		2022		2021
Expected term (in years)	3.0		3.0		3.0
Risk-free interest rate	4.5	%	1.7	%	0.3	%
Akamai historical share price volatility	28.8	%	30.3	%	32.7	%
Average volatility of peer-company share price	33.6	%	40.7	%	39.6	%

Schedule of Restricted Stock Units by Type

The RSUs, restricted stock and DSUs granted by the Company during the year ended December 31, 2023 were as follows (in thousands):

	December 31, 2023
Service-based (1)	5,767
Market-based	199
Performance-based	284
Total	6,250

(1) Includes DSU grants of 30,953 shares

Schedule of Restricted Stock Units Activity

RSUs, restricted stock and DSUs award activity for the year ended December 31, 2023 was as follows:

	Units (in thousands)	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023	5,278	$	121.92
Granted	6,250	74.89
Vested (1)	(2,531)	102.70
Forfeited	(920)	99.07
Outstanding at December 31, 2023	8,077	$	83.12

(1) Includes DSUs of 24,422 shares which have vested and been distributed. Excludes DSUs which have vested, but have not yet been distributed

Schedule of Total Fair Value of Stock Activity

The pre-tax intrinsic value and fair value of RSUs, restricted stock and DSUs were as follows (in thousands, except per share amounts):

	2023		2022		2021
Pre-tax intrinsic value of awards vested	$	254,686	$	227,143	$	226,414
Fair value of awards vested	$	259,919	$	231,708	$	233,027
Weighted average fair value of awards granted, per share (1)	$	74.89	$	107.17	$	99.09

(1) The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant.