Financial Analysis

"Acquisitions Asset Acquisitions The Company acquired certain customer contracts from Edgio, Inc. (""Edgio""), Lumen Technologies, Inc. (""Lumen"") and StackPath, LLC (""StackPath""), and certain of their affiliates. The acquisitions are intended to further strengthen the Company's existing delivery and security businesses by integrating the acquired customers onto its platform and offering them the Companys broader portfolio of services. Substantially all of the purchase price related to these acquisitions has been ascribed to customer-related acquired intangible assets. The following table summarizes the details of the asset acquisitions: Asset Acquisition Acquisition Date Purchase Price (1) (in thousands) Weighted Average Amortization Period (in years) Edgio December 2024 $ 158,341 9.0 Lumen October 2023 $ 79,682 12.2 StackPath August 2023 $ 51,211 13.4 (1) Includes capitalized transaction costs and a portion of the transition services agreement costs. Business Acquisitions Business acquisition-related costs were $3.2 million, $7.5 million and $2.7 million during the years ended December 31, 2025, 2024 and 2023, 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, 2025, 2024 and 2023 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's consol …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies Purchase Commitments The Company enters into long-term agreements with network and internet service providers for bandwidth, as well as executes purchase orders for the purchase of goods or services in the ordinary course of business, which may contain minimum commitments. These minimum commitments may vary from period to period depending on the timing and length of contract renewals with vendors, and on the Company's plans for network expansion, including expansion plans related to the Company's compute business. Minimum commitments are not recorded as liabilities on the consolidated balance sheet until the Company has received the related good or service. 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 Companys 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, copyr …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Employee Benefit Plans Defined Contribution Plans The Company has a savings plan for its U.S. 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. During 2025, the Company's matching program related to this plan was redesigned to be settled in shares of the Company's common stock instead of cash and the percentage match was increased. The Company contributed $28.2 million of the Company's common stock to the savings plan for the year ended December 31, 2025 under the matching program. The Company contributed $19.1 million and $19.7 million of cash to the savings plan for the years ended December 31, 2024 and 2023, respectively, under a matching program. The Company also maintains defined contribution benefit plans covering eligible foreign employees. The expense for these plans was not material in any period presented. Deferred Compensation Plan The Company offers certain eligible employees the ability to participate in a non-qualified deferred compensation plan, under which certain executives may elect to defer a portion of their compensation. Deferrals of cash compensation are invested by the Company in restricted mutual funds that mirror hypothetical investments elected by the plan participants and deferrals of stock awards remain in the Companys common stock. As of December 31, 2025 and 2024, the total cash oblig …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

"Debt Convertible Senior Notes In May 2025, the Company issued $1,725.0 million in principal amount of convertible senior notes due 2033 and entered into related convertible note hedge and warrant transactions. The Company intends to use a portion of the net proceeds to repay at maturity its $1,150.0 million outstanding aggregate principal amount of convertible senior notes due in 2027. Including the May 2025 issuance of $1,725.0 million in principal amount of convertible senior notes, the Company has three convertible senior notes (""2033 Notes"", ""2029 Notes"" and ""2027 Notes"") outstanding with a par value totaling $4,140.0 million (collectively, the ""Notes"") that are senior unsecured obligations of the Company and bear interest payable semi-annually in arrears. The following table summarizes further details of the Notes: Notes Issuance Date Maturity Date Principal Amount (in thousands) Coupon Interest Rate Effective Interest Rate 2033 Notes May 19, 2025 May 15, 2033 (1) $ 1,725,000 0.250 % 0.484 % 2029 Notes August 18, 2023 February 15, 2029 $ 1,265,000 1.125 % 1.388 % 2027 Notes August 16, 2019 September 1, 2027 $ 1,150,000 0.375 % 0.539 % (1) Holders of the 2033 Notes have the right to require the Company to repurchase for cash all or a portion of their 2033 Notes on May 15, 2031 if the last reported sale price of the Companys common stock on the trading day immediately preceding the business day immediately preceding May 15, 2031 is less than the conversion price p …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Revenue by geography included in the Companys consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): 2025 2024 2023 U.S. $ 2,139,173 $ 2,075,533 $ 1,968,779 International 2,069,002 1,915,635 1,843,141 Total revenue $ 4,208,175 $ 3,991,168 $ 3,811,920 Revenue by solution category included in the Companys consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): 2025 2024 2023 Security $ 2,243,404 $ 2,042,661 $ 1,765,267 Delivery 1,256,721 1,318,131 1,542,434 Cloud computing 708,050 630,376 504,219 Total revenue $ 4,208,175 $ 3,991,168 $ 3,811,920 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"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, 2019, 2021, 2022, 2023, 2024 and 2025 (as amended and restated, the ""2013 Plan""). 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 46.8 million shares of common stock, subject to certain adjustments, to employees, officers, directors, consultants and advisers of the Company. As of December 31, 2025, the Company had reserved 9.3 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 awards outstanding as of the date of acquisition under the Assumed Plans were exchanged for the Companys stock 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 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. Additionally, the Company has the 1999 …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Investments and Fair Value Measurements Available-for-sale marketable securities held as of December 31, 2025 and 2024 were as follows (in thousands): Gross Unrealized Aggregate Fair Value Classification on Balance Sheet Amortized Cost Short-Term Marketable Securities Long-Term Marketable Securities As of December 31, 2025 Gains Losses Time deposits $ 31,035 $ $ $ 31,035 $ 31,035 $ Corporate bonds 920,142 3,921 (127) 923,936 217,139 706,797 $ 951,177 $ 3,921 $ (127) $ 954,971 $ 248,174 $ 706,797 As of December 31, 2024 Time deposits $ 11,330 $ $ $ 11,330 $ 11,330 $ Corporate bonds 1,003,915 1,369 (307) 1,004,977 808,800 196,177 U.S. government agency obligations 303,816 567 (36) 304,347 249,318 55,029 $ 1,319,061 $ 1,936 $ (343) $ 1,320,654 $ 1,069,448 $ 251,206 The Company holds money market funds and mutual funds, which are classified as equity 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 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, 2025, the Company did not hold any available-for-sale marketable securities in a cont …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Acquired Intangible Assets and Goodwill Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Completed technologies $ 465,832 $ (250,436) $ 215,396 $ 463,766 $ (223,480) $ 240,286 Customer-related intangible assets 725,494 (363,724) 361,770 758,817 (313,991) 444,826 Trademarks and trade names 15,247 (12,080) 3,167 15,318 (10,579) 4,739 Acquired license rights 44,810 (10,601) 34,209 44,810 (7,076) 37,734 Total $ 1,251,383 $ (636,841) $ 614,542 $ 1,282,711 $ (555,126) $ 727,585 Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2025, 2024 and 2023 was $111.1 million, $92.1 million and $66.8 million, respectively. Based on the Company's acquired intangible assets as of December 31, 2025, aggregate expense related to amortization of acquired intangible assets is expected to be $100.2 million, $85.6 million, $79.0 million, $74.0 million and $66.7 million for the years ending December 31, 2026, 2027, 2028, 2029 and 2030, respectively. The Company recorded restructuring charges related to the impairment of acquired completed technologies and customer-related intangible assets whose values were no longer supported by future cash flows of $22.2 million and $23.7 million for the years …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Income Taxes The components of income before provision for income taxes were as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands): 2025 2024 2023 U.S. $ 26,232 $ 54,465 $ 20,146 Foreign 576,173 532,548 632,381 Income before provision for income taxes $ 602,405 $ 587,013 $ 652,527 The provision for income taxes consisted of the following for the years ended December 31, 2025, 2024 and 2023 (in thousands): 2025 2024 2023 Current tax provision (benefit): Federal $ 13,625 $ 23,870 $ 23,406 State (3,637) 6,998 6,731 Foreign 113,733 121,495 99,223 Deferred tax provision (benefit): Federal 9,791 (43,695) (18,213) State 9,048 (17,313) (3,759) Foreign 7,814 (9,260) (1,015) Total $ 150,374 $ 82,095 $ 106,373 In July 2025, the One Big Beautiful Bill Act (""OBBBA"") was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. The OBBBA did not have a material impact on the Company's consolidated financial statements for the year ended December 31, 2025. The Companys effective tax rate differed from the U.S. federal statutory tax rate as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands) …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 2026 and 2046. Additionally, the Company entered into an operating lease with a data center operator for space in the Virginia area. Contemporaneously, the Company entered into a sublease with the affiliate of a large social media customer for the use of the space on substantially similar terms. Both the lease and sublease for the data center expire in 2037. The Companys operating lease costs for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): Real Estate Arrangements Co-location Arrangements Data Center Sublease Total 2025 Operating lease cost $ 66,545 $ 260,243 $ 6,959 $ 333,747 Short-term lease cost 381 25,590 25,971 Variable lease cost 26,218 73,375 1,074 100,667 Sublease income (31,459) (8,187) (39,646) Total operating lease costs (income) $ 61,685 $ 359,208 $ (154) $ 420,739 2024 Operating lease cost $ 67,757 $ 225,145 $ $ 292,902 Short-term lease cost 660 25,288 25,948 Variable lease cost 26,122 67,728 93,850 Sublease income (31,722) (31,722) Total operating lease costs $ 62,817 $ 318,161 $ $ 380,978 2023 Operating lease cost $ 74,054 $ 179,552 $ $ 253,606 Short-term lease cost 133 23,565 23,698 Variable lease cost 25,860 62,084 8 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Adopted Accounting Pronouncements For the annual period ending December 31, 2025, the Company adopted guidance issued by the Financial Accounting Standards Board (FASB) to improve income tax disclosures, primarily through enhanced disclosures of the effective tax rate and cash paid for income taxes, in addition to the modification or elimination of other disclosures, on a retrospective basis. Other than additional required disclosures, adoption of the standard did not have an impact on the Company's consolidated financial statements. Recent Accounting Pronouncements In September 2025, the FASB issued guidance which modernizes the accounting for internal-use software by removing all references to software development stages given the evolution of software development. The targeted improvements aim to increase the operability of the recognition guidance for internal-use software. The guidance also seeks to clarify the disclosure requirements for internal-use software. This guidance will be effective for the Company on January 1, 2028, and is to be applied prospectively, modified prospectively or retrospectively. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements. In July 2025, the FASB issued guidance which provides targeted improvements and clarifications related to the recognition and measurement of expected credit losses, particularly for off-balance-sheet credit exposures and certain practical expedient …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Restructuring During the fourth quarter of 2025, manage ment committed to an action to restructure certain parts of the Company to align investments and simplify organizational structure to long-term growth priorities (Q4 2025 Action) . As a result, certain headcount reductions were necessary. Additionally, the Company planned for the end of life of certain solutions which resulted in impairments to completed technologies and customer-related acquired intangible assets, as well as capitalized internal-use software. The Company does not expect to incur material additional charges related to this action. During the third quarter of 2024, management committed to an action to restructure certain parts of the Company with the primary intent of redeploying resources to support the Company's strategic investments (""Q3 2024 Action""). As a result, certain headcount reductions were necessary. Additionally, the Company planned for the end of life of certain solutions which resulted in impairments to capitalized internal-use software, as well as completed technologies and customer-related acquired intangible assets. The Company does not expect to incur material additional charges related to this action. During the first quarter of 2023, management committed to an action to restructure certain parts of the Company to enable it to prioritize investments in the fastest growing areas of the business (""Q1 2023 Action""). As a result, certain headcount reductions were necessary. The Compan …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Revenue from Contracts with Customers The Company sells its services through a sales force located both domestically and internationally. 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 Companys total revenue for any reported period. Revenue by geography included in the Companys consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): 2025 2024 2023 U.S. $ 2,139,173 $ 2,075,533 $ 1,968,779 International 2,069,002 1,915,635 1,843,141 Total revenue $ 4,208,175 $ 3,991,168 $ 3,811,920 The Company reports its revenue in three solution categories: security, delivery and cloud computing. Security includes solutions that are designed to protect business online by keeping infrastructure, websites, applications, APIs, networks and users safe. Delivery includes solutions that are designed to enable business online, including media delivery and web and mobile performance. Cloud computing is comprised of Cloud Infrastructure Services, which includes compute and storage solutions, EdgeWorkers product and the partner solutions running on the Company's compute platform, and other cloud applications. Revenue by solution category included in the Companys consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): 2025 2024 2023 Security …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Segment and Geographic Information The Companys chief operating decision-maker (""CODM"") is the chief executive officer and the executive management team. As of December 31, 2025, the Company is currently organized and operates as one operating and reportable 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. The CODM assesses performance and makes decisions on optimizing the allocation of resources across functions and strategic investments using consolidated net income. Segment assets represent total assets as reported on the consolidated balance sheets. Information regarding the Company's one operating segment for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): 2025 2024 2023 Revenue $ 4,208,175 $ 3,991,168 $ 3,811,920 Less: Co-location costs 349,191 308,314 256,062 Bandwidth fees 192,875 233,100 228,038 Network build-out and supporting services 236,644 193,607 215,557 Payroll and related costs 1,565,108 1,511,272 1,408,866 Capitalized salaries and related costs (322,703) (302,830) (261,728) Facilities-related costs 86,081 86,671 90,061 Software and r …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"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 managements 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 amortization periods 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 …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Stockholders Equity Stock Repurchase Program In October 2021, the board of directors authorized a $1.8 billion share repurchase program, effective January 2022 through December 2024. In May 2024, the board of directors authorized a new $2.0 billion share repurchase program, effective May 2024 through June 2027. 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 stockholders as business and market conditions warrant, while still preserving its ability to pursue other strategic opportunities. The following summarizes the share repurchase activity pursuant to the share repurchase programs described above (in thousands): 2025 2024 2023 Repurchases of common stock $ 799,963 $ 557,468 $ 654,046 Number of shares repurchased 10,029 5,623 7,802 As of December 31, 2025, 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 10.3 million shares and 7.8 million shares of its treasury stock at December 31, 2025 and December 31, 2023, respectively, and no shares at December 31, 2024. 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. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing