Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-27275 | |
Entity Registrant Name | Akamai Technologies, Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3432319 | |
Entity Address, Address Line One | 145 Broadway | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02142 | |
City Area Code | 617 | |
Local Phone Number | 444-3000 | |
Title of 12(b) Security | Common Stock - par value $0.01 per share | |
Trading Symbol | AKAM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 160,305,193 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001086222 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 377,811 | $ 536,725 |
Marketable securities | 129,058 | 541,470 |
Accounts receivable, net of reserves of $3,279 and $1,397 at March 31, 2022, and December 31, 2021, respectively | 718,793 | 675,926 |
Prepaid expenses and other current assets | 238,821 | 166,313 |
Total current assets | 1,464,483 | 1,920,434 |
Marketable securities | 786,712 | 1,088,048 |
Property and equipment, net | 1,579,833 | 1,534,329 |
Operating lease right-of-use assets | 819,880 | 815,754 |
Acquired intangible assets, net | 512,188 | 313,225 |
Goodwill | 2,745,882 | 2,156,254 |
Deferred income tax assets | 265,946 | 168,342 |
Other assets | 128,855 | 142,287 |
Total assets | 8,303,779 | 8,138,673 |
Current liabilities: | ||
Accounts payable | 122,934 | 109,928 |
Accrued expenses | 342,802 | 411,590 |
Deferred revenue | 139,725 | 86,517 |
Revolving credit facility | 75,000 | 0 |
Operating lease liabilities | 183,762 | 175,683 |
Other current liabilities | 5,042 | 6,623 |
Total current liabilities | 869,265 | 790,341 |
Deferred revenue | 30,098 | 25,342 |
Deferred income tax liabilities | 41,131 | 40,974 |
Convertible senior notes | 2,281,927 | 1,976,167 |
Operating lease liabilities | 703,605 | 707,087 |
Other liabilities | 77,231 | 68,748 |
Total liabilities | 4,003,257 | 3,608,659 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 700,000 shares designated as Series A Junior Participating Preferred Stock; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 700,000,000 shares authorized; 160,513,059 shares issued and 160,512,135 shares outstanding at March 31, 2022, and 160,512,111 shares issued and outstanding at December 31, 2021 | 1,615 | 1,605 |
Additional paid-in capital | 2,974,529 | 3,340,822 |
Accumulated other comprehensive loss | (88,611) | (69,105) |
Treasury stock, at cost, 924,492 shares at March 31, 2022, and no shares at December 31, 2021 | (102,853) | 0 |
Retained earnings | 1,515,842 | 1,256,692 |
Total stockholders’ equity | 4,300,522 | 4,530,014 |
Total liabilities and stockholders’ equity | $ 8,303,779 | $ 8,138,673 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowances for current expected credit losses and other reserves | $ 3,279 | $ 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) | 161,460,261 | 160,512,111 |
Common stock, shares outstanding (in shares) | 160,535,769 | 160,512,111 |
Treasury stock (in shares) | 924,492 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 903,647 | $ 842,708 |
Costs and operating expenses: | ||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) | 332,752 | 306,687 |
Research and development | 99,935 | 82,045 |
Sales and marketing | 122,719 | 116,354 |
General and administrative | 153,262 | 136,715 |
Amortization of acquired intangible assets | 13,644 | 11,427 |
Restructuring charge | 8,016 | 7,116 |
Total costs and operating expenses | 730,328 | 660,344 |
Income from operations | 173,319 | 182,364 |
Interest and marketable securities (loss) income, net | (211) | 4,578 |
Interest expense | (2,695) | (17,834) |
Other expense, net | (9,565) | (817) |
Income before provision for income taxes | 160,848 | 168,291 |
Provision for income taxes | (34,050) | (11,898) |
Loss from equity method investment | (7,635) | (698) |
Net income | $ 119,163 | $ 155,695 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.74 | $ 0.95 |
Diluted (in dollars per share) | $ 0.73 | $ 0.94 |
Shares used in per share calculations: | ||
Basic (in shares) | 160,494 | 163,061 |
Diluted (in shares) | 163,637 | 165,688 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 119,163 | $ 155,695 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | 2,036 | (24,265) |
Change in unrealized loss on investments, net of income tax benefit of $4,948 and $937 for the three months ended March 31, 2022 and 2021, respectively | (21,542) | (2,881) |
Other comprehensive loss | (19,506) | (27,146) |
Comprehensive income | $ 99,657 | $ 128,549 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Income tax benefit | $ 4,948 | $ 937 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 119,163 | $ 155,695 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 142,595 | 131,471 |
Stock-based compensation | 56,227 | 54,305 |
(Benefit) provision for deferred income taxes | (13,579) | 1,764 |
Amortization of debt discount and issuance costs | 1,119 | 16,257 |
Loss on investments | 16,536 | 698 |
Other non-cash reconciling items, net | 12,598 | 528 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (39,198) | (15,580) |
Prepaid expenses and other current assets | (64,695) | (35,388) |
Accounts payable and accrued expenses | (66,938) | (72,986) |
Deferred revenue | 55,394 | 25,439 |
Other current liabilities | (1,441) | (716) |
Other non-current assets and liabilities | 4,670 | (11,694) |
Net cash provided by operating activities | 222,451 | 249,793 |
Cash flows from investing activities: | ||
Cash paid for acquisitions, net of cash acquired | (872,099) | (15,638) |
Purchases of property and equipment | (51,005) | (87,222) |
Capitalization of internal-use software development costs | (80,354) | (77,497) |
Purchases of short- and long-term marketable securities | 0 | (90,279) |
Proceeds from sales of short- and long-term marketable securities | 571,369 | 7,154 |
Proceeds from maturities and redemptions of short- and long-term marketable securities | 120,433 | 226,995 |
Other, net | (5,242) | 179 |
Net cash used in investing activities | (316,898) | (36,308) |
Cash flows from financing activities: | ||
Proceeds from borrowings under revolving credit facility | 75,000 | 0 |
Proceeds related to the issuance of common stock under stock plans | 21,941 | 21,410 |
Employee taxes paid related to net share settlement of stock-based awards | (54,819) | (63,946) |
Repurchases of common stock | (102,853) | (58,241) |
Other, net | (104) | 0 |
Net cash used in financing activities | (60,835) | (100,777) |
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (1,462) | (7,151) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (156,744) | 105,557 |
Cash, cash equivalents and restricted cash at beginning of period | 537,751 | 353,466 |
Cash, cash equivalents and restricted cash at end of period | 381,007 | 459,023 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net of refunds received of $1,025 and $1,846 for the three months ended March 31, 2022 and 2021, respectively | 50,533 | 17,736 |
Cash paid for interest expense | 2,156 | 2,156 |
Cash paid for operating lease liabilities | 54,285 | 63,673 |
Non-cash activities: | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 38,582 | 82,125 |
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses | 48,326 | 60,193 |
Capitalization of stock-based compensation | 7,803 | 9,459 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 377,811 | 456,799 |
Restricted cash | 3,196 | 2,224 |
Cash, cash equivalents and restricted cash | $ 381,007 | $ 459,023 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | ||
Proceeds from income tax refunds | $ 1,025 | $ 1,846 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative-effect adjustment from adoption of new accounting pronouncement | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalCumulative-effect adjustment from adoption of new accounting pronouncement | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings | Retained EarningsCumulative-effect adjustment from adoption of new accounting pronouncement |
Beginning balance (in shares) at Dec. 31, 2020 | 162,709,720 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 4,251,296 | $ 1,627 | $ 3,664,820 | $ (20,201) | $ 0 | $ 605,050 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 1,128,184 | ||||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (64,006) | $ 11 | (64,017) | ||||||
Stock-based compensation | 63,765 | 63,765 | |||||||
Repurchases of common stock (in shares) | (591,963) | ||||||||
Repurchases of common stock | (58,241) | (58,241) | |||||||
Net income | 155,695 | 155,695 | |||||||
Foreign currency translation adjustments | (24,265) | (24,265) | |||||||
Change in unrealized loss on investments, net of tax | (2,881) | (2,881) | |||||||
Ending balance (in shares) at Mar. 31, 2021 | 163,245,941 | ||||||||
Ending balance at Mar. 31, 2021 | 4,321,363 | $ 1,638 | 3,664,568 | (47,347) | (58,241) | 760,745 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 160,512,111 | ||||||||
Beginning balance at Dec. 31, 2021 | 4,530,014 | $ (235,427) | $ 1,605 | 3,340,822 | $ (375,414) | (69,105) | 0 | 1,256,692 | $ 139,987 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes (in shares) | 948,150 | ||||||||
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes | (54,639) | $ 10 | (54,649) | ||||||
Stock-based compensation | 63,770 | 63,770 | |||||||
Repurchases of common stock (in shares) | (924,492) | ||||||||
Repurchases of common stock | (102,853) | (102,853) | |||||||
Net income | 119,163 | 119,163 | |||||||
Foreign currency translation adjustments | 2,036 | 2,036 | |||||||
Change in unrealized loss on investments, net of tax | (21,542) | (21,542) | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 160,535,769 | ||||||||
Ending balance at Mar. 31, 2022 | $ 4,300,522 | $ 1,615 | $ 2,974,529 | $ (88,611) | $ (102,853) | $ 1,515,842 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 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 globally-distributed platform is comprised of more than 350,000 servers in over 130 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company currently operates in one reportable and operating segment: providing solutions to power and protect life online. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed in, or omitted from, these interim financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 28, 2022. The December 31, 2021 consolidated balance sheet included herein is derived from the Company's audited consolidated financial statements. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of the results of all interim periods reported herein. N ewly-Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. The convertible senior notes included on the Company's condensed consolidated balance sheet more closely reflects 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 condensed 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 our 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 our basic and diluted earnings per share by $0.08 for the three months ended March 31, 2022. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following is a summary of available-for-sale marketable securities held as of March 31, 2022 and December 31, 2021 (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Short-Term Long-Term As of March 31, 2022 Corporate bonds $ 645,755 $ — $ (17,750) $ 628,005 $ 108,981 $ 519,024 U.S. government agency obligations 272,133 — (7,009) 265,124 19,306 245,818 $ 917,888 $ — $ (24,759) $ 893,129 $ 128,287 $ 764,842 As of December 31, 2021 Commercial paper $ 25,056 $ — $ (24) $ 25,032 $ 25,032 $ — Corporate bonds 1,268,991 1,191 (4,275) 1,265,907 459,012 806,895 U.S. government agency obligations 316,728 3 (1,281) 315,450 56,530 258,920 $ 1,610,775 $ 1,194 $ (5,580) $ 1,606,389 $ 540,574 $ 1,065,815 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 condensed 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 condensed consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest income in the condensed consolidated statements of income. As of March 31, 2022, the Company held for investment corporate bonds with a fair value of $43.8 million, which were classified as available-for-sale marketable securities that had been in a continuous unrealized loss position for more than 12 months. The unrealized loss related to these corporate bonds was $1.1 million and is included in accumulated other comprehensive loss as of March 31, 2022. The unrealized loss is attributable to changes in interest rates. Based on the evaluation of available evidence, the Company does not believe any unrealized losses represent other than temporary impairments. The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets as of March 31, 2022 and December 31, 2021 (in thousands): Total Fair Value Fair Value Measurements at Level 1 Level 2 As of March 31, 2022 Cash Equivalents and Marketable Securities: Money market funds $ 1,428 $ 1,428 $ — Corporate bonds 628,005 — 628,005 U.S. government agency obligations 265,124 — 265,124 Mutual funds 22,641 22,641 — $ 917,198 $ 24,069 $ 893,129 As of December 31, 2021 Cash Equivalents and Marketable Securities: Money market funds $ 109,313 $ 109,313 $ — Commercial paper 39,031 — 39,031 Corporate bonds 1,265,907 — 1,265,907 U.S. government agency obligations 315,450 — 315,450 Mutual funds 23,129 23,129 — $ 1,752,830 $ 132,442 $ 1,620,388 As of March 31, 2022 and December 31, 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 March 31, 2022 and December 31, 2021, the Company grouped 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 between Level 1 or Level 2 of the fair value measurement hierarchy during the three months ended March 31, 2022. 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 March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, December 31, Due in 1 year or less $ 128,287 $ 540,574 Due after 1 year through 5 years 764,842 1,065,815 $ 893,129 $ 1,606,389 |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Accounts Receivable | Accounts Receivable Net accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Trade accounts receivable $ 511,584 $ 501,959 Unbilled accounts receivable 210,488 175,364 Gross accounts receivable 722,072 677,323 Allowances for current expected credit losses and other reserves (3,279) (1,397) Accounts receivable, net $ 718,793 $ 675,926 A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the three months ended March 31, 2022 and 2021 is as follows (in thousands): March 31, March 31, Beginning balance $ 1,397 $ 1,822 Charges to income from operations 1,951 923 Collections from customers previously reserved and other (69) (1,091) Ending balance $ 3,279 $ 1,654 Charges to income from operations primarily represents charges to bad debt expense for increases in the allowance for current expected credit losses. |
Incremental Costs to Obtain a C
Incremental Costs to Obtain a Contract with a Customer | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Incremental Costs to Obtain a Contract with a Customer | Incremental Costs to Obtain a Contract with a Customer The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Deferred costs included in prepaid and other current assets $ 39,948 $ 43,562 Deferred costs included in other assets 28,290 30,436 Total deferred costs $ 68,238 $ 73,998 The following table summarizes additional information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Amortization expense related to deferred costs $ 15,022 $ 13,727 Incremental costs capitalized 9,484 9,872 Amortization expense related to deferred costs is primarily included in sales and marketing expense in the condensed consolidated statements of income. The Company sells its solutions through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 U.S. $ 481,007 $ 463,180 International 422,640 379,528 Total revenue $ 903,647 $ 842,708 The Company reports its revenue in three solution categories: security, delivery and compute. Revenue by solution was previously reported by 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. 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 edge cloud optimization solutions and net storage. The following table summarizes revenue by solution category included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Security $ 381,567 $ 310,219 Delivery 444,148 473,669 Compute 77,932 58,820 Total revenue $ 903,647 $ 842,708 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. Any bursting over given commitments is recognized in the period in which the traffic is 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 three months ended March 31, 2022 and 2021, the Company recognized $56.2 million and $43.3 million of revenue that was included in deferred revenue as of December 31, 2021 and 2020, respectively. As of March 31, 2022, the aggregate amount of remaining performance obligations from contracts with customers was $3.2 billion. The Company expects to recognize approximately 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts. Revenue recognized during each of the three months ended March 31, 2022 and 2021, related to performance obligations satisfied in previous periods was not material. |
Acquired Intangible Assets and
Acquired Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Gross Accumulated Amortization Net Gross Accumulated Net Completed technology $ 328,516 $ (134,891) $ 193,625 $ 257,857 $ (128,715) $ 129,142 Customer-related intangible assets 499,945 (224,061) 275,884 398,182 (216,192) 181,990 Non-compete agreements 254 (127) 127 258 (107) 151 Trademarks and trade names 14,663 (6,365) 8,298 8,039 (6,097) 1,942 Acquired license rights 34,810 (556) 34,254 490 (490) — Total $ 878,188 $ (366,000) $ 512,188 $ 664,826 $ (351,601) $ 313,225 Aggregate expense related to amortization of acquired intangible assets for the three months ended March 31, 2022 and 2021 was $13.6 million and $11.4 million, respectively. Based on the Company’s acquired intangible assets as of March 31, 2022, aggregate expense related to amortization of acquired intangible assets is expected to be $50.4 million for the remainder of 2022, and $61.3 million, $65.8 million, $66.2 million and $59.9 million for 2023, 2024, 2025 and 2026, respectively. The change in the carrying amount of goodwill for the three months ended March 31, 2022 was as follows (in thousands): Balance as of January 1, 2022 $ 2,156,254 Acquisition of Linode Limited Liability Company 588,440 Measurement period adjustments related to acquisitions completed in prior years 1,884 Foreign currency translation (696) Balance as of March 31, 2022 $ 2,745,882 The Company tests goodwill for impairment at least annually. Through the date the interim condensed consolidated financial statements were issued, no triggering events had occurred that would indicate that a potential impairment exists. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Acquisition-related costs during the three months ended March 31, 2022 were $10.3 million and are included in general and administrative expense in the condensed consolidated statements of income. Pro forma results of operations for the acquisition completed during the three months ended March 31, 2022 have not been presented because the effects of the acquisition were not material to the Company's consolidated financial results. Revenue and earnings of the acquired company since the date of the acquisition that are included in the Company's condensed consolidated statements of income are also not presented separately because they are not material. Linode In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode"), for $898.8 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 edge computing services by creating a unique cloud platform to build, run and secure applications from the cloud to the edge. As of March 31, 2022, the purchase price allocation is preliminary, pending finalization of the fair value of the tangible and intangible assets acquired, certain income tax matters and net working capital. The following table presents the preliminary allocation of the purchase price for Linode (in thousands): Total purchase consideration $ 898,777 Allocation of the purchase consideration: Cash $ 26,678 Accounts receivable 7,220 Prepaid expenses and other current assets 6,288 Property and equipment 60,670 Operating lease right-of-use assets 16,970 Identifiable intangible assets 212,520 Goodwill 588,440 Deferred income tax assets 2,901 Other assets 652 Total assets acquired 922,339 Accounts payable (5,387) Accrued expenses (970) Operating lease liabilities (17,205) Total liabilities assumed (23,562) Net assets acquired $ 898,777 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. The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 100,700 11 Completed technologies 70,900 6 Acquired license rights 34,320 15 Trademarks 6,600 9 Total $ 212,520 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 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 9.7 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible Notes – Due 2027 In August 2019, the Company issued $1,150.0 million in par value of convertible senior notes due 2027 (the "2027 Notes"). The 2027 Notes are senior unsecured obligations of the Company, bear regular interest of 0.375%, payable semi-annually in arrears on March 1 and September 1 of each year and mature on September 1, 2027, unless repurchased or converted in accordance with their terms prior to maturity. At their option, holders may convert their 2027 Notes prior to the close of business on the business day immediately preceding May 1, 2027, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ended December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five five • upon the occurrence of specified corporate events. On or after May 1, 2027, holders may convert all or any portion of their 2027 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company 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 the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election. The initial conversion rate is 8.6073 shares of the Company's common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $116.18 per share, subject to adjustments in certain events, and represents a potential conversion into 9.9 million shares. 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 condensed consolidated balance sheet to meet the conditions for equity classification. On January 1, 2022, the Company adopted the revised guidance for accounting for convertible instruments, which eliminated the equity component. Refer to Note 1 to the condensed consolidated financial statements included elsewhere in this report for details on the revised guidance for accounting for convertible instruments adoption. 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 revised 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 revised 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 March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Liability component: Principal $ 1,150,000 $ 1,150,000 Less: debt discount and issuance costs, net of amortization (10,113) (169,030) Net carrying amount $ 1,139,887 $ 980,970 Equity component: $ — $ 220,529 The estimated fair value of the 2027 Notes at March 31, 2022 and December 31, 2021 was $1,327.0 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 $119.39 on March 31, 2022, the value of the 2027 Notes if converted to common stock was more 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 pay or deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The 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 condensed 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, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the proceeds from the 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 condensed consolidated financial statements. Convertible Notes – Due 2025 In May 2018, the Company issued $1,150.0 million in par value of convertible senior notes due 2025 (the "2025 Notes"). The 2025 Notes are senior unsecured obligations of the Company, bear regular interest of 0.125%, payable semi-annually on May 1 and November 1 of each year, and mature on May 1, 2025, unless repurchased or converted prior to maturity. At their option, holders may convert their 2025 Notes prior to the close of business on the business day immediately preceding January 1, 2025, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ended June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five five • upon the occurrence of specified corporate events. On or after January 1, 2025, holders may convert all or any portion of their 2025 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. Upon conversion, the Company 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. The initial conversion rate is 10.5150 shares of the Company's common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $95.10 per share, subject to adjustments in certain events, and represents a potential conversion into 12.1 million shares. 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 condensed consolidated balance sheet to meet the conditions for equity classification. On January 1, 2022, the Company adopted the new revised guidance for accounting for convertible instruments, which eliminated the equity component. Refer to Note 1 to the condensed consolidated financial statements included elsewhere in this report for details on the revised guidance for accounting for convertible instruments adoption. 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 revised 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 revised 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 March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Liability component: Principal $ 1,150,000 $ 1,150,000 Less: debt discount and issuance costs, net of amortization (7,960) (154,803) Net carrying amount $ 1,142,040 $ 995,197 Equity component: $ — $ 285,225 The estimated fair value of the 2025 Notes at March 31, 2022 and December 31, 2021 was $1,518.8 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 w ithin the fair value hierarchy. Based on the closing price of the Company's common stock of $119.39 on March 31, 2022, the value of the 2025 Notes if converted to common stock was more than the principal amount of $1,150.0 million. The Company used $46.2 million of the proceeds from the offering to repurchase shares of its common stock, concurrent with the issuance of the 2025 Notes. The repurchase was made in accordance with a share repurchase program previously approved by the board of directors. Additionally, $141.8 million of the proceeds was used for the net cost of convertible note hedge and warrant transactions. The Company also used a portion of the net proceeds to repay at maturity the $690.0 million in par value of convertible senior notes due in 2019. 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 pay or deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The 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 condensed 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, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the proceeds from the 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 condensed consolidated financial statements. Revolving Credit Facility In May 2018, the Company entered into a $500.0 million five-year, revolving credit agreement (the “Credit Agreement”). Borrowings under the Credit Agreement may be used to finance working capital needs and for general corporate purposes. The Credit Agreement provides for an initial $500.0 million in revolving loans. Under specified circumstances, the facility can be increased to up to $1.0 billion in aggregate principal amount. The Credit Agreement expires in May 2023. Borrowings under the Credit Agreement bear interest, at the Company's option, at a base rate plus a spread of 0.00% to 0.25% or an adjusted LIBOR rate plus a spread of 0.875% to 1.25%, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the Credit Agreement. Regardless of what amounts, if any, are outstanding under the Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.075% to 0.15%, with such rate being based on the Company's consolidated leverage ratio specified in the Credit Agreement. The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. Principal covenants include a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio. In March 2022, the Company borrowed $75.0 million under the Credit Agreement, and as of March 31, 2022, $75.0 million remained outstanding. The Company plans to repay amounts outstanding in less than 12 months. Interest Expense The 2027 Notes bear interest at a fixed rate of 0.375%, with interest 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 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 the Credit Agreement, in addition to interest payable on outstanding borrowings. Prior to the adoption of the revised 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. The following table sets forth total interest expense included in the condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Amortization of debt discounts and issuance costs $ 1,168 $ 17,182 Coupon interest payable on 2025 Notes 359 359 Coupon interest payable on 2027 Notes 1,078 1,078 Interest payable under the Credit Agreement 139 140 Capitalization of interest expense (49) (925) Total interest expense $ 2,695 $ 17,834 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the first quarter of 2022, Mitsubishi UFJ Financial Group ("MUFG"), the majority owner of Global Open Network, Inc. (“GO-NET"), announced its intention to suspend the operations of GO-NET and to eventually liquidate it. The Company has a 20% stake in GO-NET and also provides services to GO-NET. As a result of MUFG's intention to suspend operations, during the three months ended March 31, 2022, the Company recorded as a restructuring charge the impairment of $7.5 million primarily related to certain capitalized internal-use software assets that will no longer be used in operations or will not generate sufficient future cash 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 or a Company office. 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 identified certain facilities that were no longer needed. As a result, an impairment of right-of-use assets and leasehold improvements was recognized. The Company has incurred expenses of $3.7 million related to this program, of which a benefit of $0.1 million was incurred in the first quarter of 2022. Management is still evaluating the Company's future work environment and additional charges related to such type of action may occur in 2022. 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 incurred expenses of $31.5 million as part of this action, of which $7.0 million was incurred during the three months ended March 31, 2021 and was comprised of $6.3 million of employee severance and related benefits and $0.7 million of internal-use software charges. The Company did not incur any charges related to this action during the three months ended March 31, 2022, nor does it expect to incur material additional charges related to this action. The Company also recognizes restructuring charges for redundant employees, facilities and contracts associated with completed acquisitions. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
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 31, 2024. During the three months ended March 31, 2022, the Company repurchased 0.9 million shares of its common stock for $102.9 million. 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 The following table summarizes stock-based compensation included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Cost of revenue $ 6,233 $ 7,096 Research and development 20,232 18,369 Sales and marketing 12,326 12,478 General and administrative 17,436 16,362 Total stock-based compensation 56,227 54,305 Provision for income taxes (14,043) (13,044) Total stock-based compensation, net of income taxes $ 42,184 $ 41,261 In addition to the amounts of stock-based compensation reported in the table above, the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021, include stock-based compensation reflected as a component of amortization of capitalized internal-use software of $7.6 million, and $7.7 million, respectively, before taxes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the three months ended March 31, 2022 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2022 $ (71,809) $ 2,704 $ (69,105) Other comprehensive income (loss) 2,036 (21,542) (19,506) Balance as of March 31, 2022 $ (69,773) $ (18,838) $ (88,611) Amounts reclassified from accumulated other comprehensive loss to net income were immaterial for the three months ended March 31, 2022. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Incremental Costs to Obtain a Contract with a Customer The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Deferred costs included in prepaid and other current assets $ 39,948 $ 43,562 Deferred costs included in other assets 28,290 30,436 Total deferred costs $ 68,238 $ 73,998 The following table summarizes additional information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Amortization expense related to deferred costs $ 15,022 $ 13,727 Incremental costs capitalized 9,484 9,872 Amortization expense related to deferred costs is primarily included in sales and marketing expense in the condensed consolidated statements of income. The Company sells its solutions through a sales force located both domestically and abroad. Revenue derived from operations outside of the U.S. is determined based on the country in which the sale originated. Other than the U.S., no single country accounted for 10% or more of the Company’s total revenue for any reported period. The following table summarizes revenue by geography included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 U.S. $ 481,007 $ 463,180 International 422,640 379,528 Total revenue $ 903,647 $ 842,708 The Company reports its revenue in three solution categories: security, delivery and compute. Revenue by solution was previously reported by 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. 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 edge cloud optimization solutions and net storage. The following table summarizes revenue by solution category included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Security $ 381,567 $ 310,219 Delivery 444,148 473,669 Compute 77,932 58,820 Total revenue $ 903,647 $ 842,708 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. Any bursting over given commitments is recognized in the period in which the traffic is 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 three months ended March 31, 2022 and 2021, the Company recognized $56.2 million and $43.3 million of revenue that was included in deferred revenue as of December 31, 2021 and 2020, respectively. As of March 31, 2022, the aggregate amount of remaining performance obligations from contracts with customers was $3.2 billion. The Company expects to recognize approximately 70% of its remaining performance obligations as revenue over the next 12 months, with the remaining recognized thereafter. Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. This consists of future committed revenue for monthly, quarterly or annual periods within current contracts with customers, as well as deferred revenue arising from consideration invoiced in prior periods for which the related performance obligations have not been satisfied. It excludes estimates of variable consideration such as usage-based contracts with no committed contract as well as anticipated renewed contracts. Revenue recognized during each of the three months ended March 31, 2022 and 2021, related to performance obligations satisfied in previous periods was not material. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective income tax rate is based on estimated income for the year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable quarterly periods. Potential discrete adjustments include tax charges or benefits related to stock-based compensation, changes in tax legislation, settlements of tax audits or assessments, uncertain tax positions and acquisitions, among other items. In the second quarter of 2018, the Company filed an appeal with the Massachusetts Appellate Tax Board (“MATB”) contesting the adverse audit findings related to certain tax benefits and exemptions. In July 2020, the MATB ruled in the Company’s favor; however, the Massachusetts Department of Revenue appealed the decision in January 2022. The Company has determined that it is more-likely-than-not that it will prevail and no reserve has been recorded related to these controversies. The Company’s effective income tax rate was 21.2% and 7.1% for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022, the effective income tax rate was higher than the federal statutory tax rate due to an intercompany sale of intellectual property, tax on global intangible low taxed income and non-deductible stock-based compensation. These amounts were partially offset by foreign income taxed at lower rates, the excess tax benefit related to stock-based compensation and the benefit of U.S. federal, state and foreign research and development credits. For the three months ended March 31, 2021, the effective income tax rate was lower than the federal statutory tax rate due to foreign income taxed at lower rates, the excess tax benefit related to stock-based compensation, the revaluation of certain foreign income tax liabilities due to foreign exchange rate fluctuations and the benefit of U.S. federal, state and foreign research and development credits. These amounts were partially offset by non-deductible stock-based compensation, the valuation allowance recorded against deferred tax assets related to state tax credits and state taxes. |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share Reconciliation [Abstract] | |
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, restricted stock units ("RSUs"), deferred stock units ("DSUs"), convertible senior notes and warrants issued by the Company. For the three months ended March 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 three months ended March 31, 2021, the dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the components used in the computation of basic and diluted net income per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): For the Three Months 2022 2021 Numerator: Net income $ 119,163 $ 155,695 Denominator: Shares used for basic net income per share 160,494 163,061 Effect of dilutive securities: Stock options 1 5 RSUs and DSUs 1,320 1,667 Convertible senior notes 1,822 955 Warrants related to issuance of convertible senior notes — — Shares used for diluted net income per share 163,637 165,688 Basic net income per share $ 0.74 $ 0.95 Diluted net income per share $ 0.73 $ 0.94 For the three months ended March 31, 2022 and 2021, certain potential outstanding common shares issuable in respect of stock options, service-based RSUs, convertible notes and warrants were excluded from the computation of diluted net income per share because the effect of including these items was anti-dilutive. Additionally, certain performance-based RSUs were excluded from the computation of diluted net income per share because the underlying performance conditions for such RSUs had not been met as of these dates. The number of potentially outstanding common shares excluded from the computation of diluted net income per share for the three months ended March 31, 2022 and 2021 are as follows (in thousands): For the Three Months 2022 2021 Service-based RSUs 2,234 2,070 Market- and performance-based RSUs 1,054 1,338 Convertible senior notes — 9,898 Warrants related to issuance of convertible senior notes 21,991 21,991 Total shares excluded from computation 25,279 35,297 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed in, or omitted from, these interim financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 28, 2022. The December 31, 2021 consolidated balance sheet included herein is derived from the Company's audited consolidated financial statements. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of the results of all interim periods reported herein. |
Newly-Adopted Accounting Pronouncements | N ewly-Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The Company adopted this guidance on January 1, 2022 on a modified retrospective basis. The convertible senior notes included on the Company's condensed consolidated balance sheet more closely reflects 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 condensed 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 our 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 our basic and diluted earnings per share by $0.08 for the three months ended March 31, 2022. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following is a summary of available-for-sale marketable securities held as of March 31, 2022 and December 31, 2021 (in thousands): Gross Unrealized Classification on Balance Sheet Amortized Cost Gains Losses Aggregate Short-Term Long-Term As of March 31, 2022 Corporate bonds $ 645,755 $ — $ (17,750) $ 628,005 $ 108,981 $ 519,024 U.S. government agency obligations 272,133 — (7,009) 265,124 19,306 245,818 $ 917,888 $ — $ (24,759) $ 893,129 $ 128,287 $ 764,842 As of December 31, 2021 Commercial paper $ 25,056 $ — $ (24) $ 25,032 $ 25,032 $ — Corporate bonds 1,268,991 1,191 (4,275) 1,265,907 459,012 806,895 U.S. government agency obligations 316,728 3 (1,281) 315,450 56,530 258,920 $ 1,610,775 $ 1,194 $ (5,580) $ 1,606,389 $ 540,574 $ 1,065,815 |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets as of March 31, 2022 and December 31, 2021 (in thousands): Total Fair Value Fair Value Measurements at Level 1 Level 2 As of March 31, 2022 Cash Equivalents and Marketable Securities: Money market funds $ 1,428 $ 1,428 $ — Corporate bonds 628,005 — 628,005 U.S. government agency obligations 265,124 — 265,124 Mutual funds 22,641 22,641 — $ 917,198 $ 24,069 $ 893,129 As of December 31, 2021 Cash Equivalents and Marketable Securities: Money market funds $ 109,313 $ 109,313 $ — Commercial paper 39,031 — 39,031 Corporate bonds 1,265,907 — 1,265,907 U.S. government agency obligations 315,450 — 315,450 Mutual funds 23,129 23,129 — $ 1,752,830 $ 132,442 $ 1,620,388 |
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 March 31, 2022 and December 31, 2021 were as follows (in thousands): March 31, December 31, Due in 1 year or less $ 128,287 $ 540,574 Due after 1 year through 5 years 764,842 1,065,815 $ 893,129 $ 1,606,389 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of Accounts Receivable | Net accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Trade accounts receivable $ 511,584 $ 501,959 Unbilled accounts receivable 210,488 175,364 Gross accounts receivable 722,072 677,323 Allowances for current expected credit losses and other reserves (3,279) (1,397) Accounts receivable, net $ 718,793 $ 675,926 |
Summary of Allowance for Credit Loss Activity | A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the three months ended March 31, 2022 and 2021 is as follows (in thousands): March 31, March 31, Beginning balance $ 1,397 $ 1,822 Charges to income from operations 1,951 923 Collections from customers previously reserved and other (69) (1,091) Ending balance $ 3,279 $ 1,654 |
Incremental Costs to Obtain a_2
Incremental Costs to Obtain a Contract with a Customer (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of deferred costs associated with obtaining customer contracts | The following table summarizes the deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Deferred costs included in prepaid and other current assets $ 39,948 $ 43,562 Deferred costs included in other assets 28,290 30,436 Total deferred costs $ 68,238 $ 73,998 The following table summarizes additional information related to incremental costs to obtain a contract with a customer for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Amortization expense related to deferred costs $ 15,022 $ 13,727 Incremental costs capitalized 9,484 9,872 |
Acquired Intangible Assets an_2
Acquired Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Gross Accumulated Amortization Net Gross Accumulated Net Completed technology $ 328,516 $ (134,891) $ 193,625 $ 257,857 $ (128,715) $ 129,142 Customer-related intangible assets 499,945 (224,061) 275,884 398,182 (216,192) 181,990 Non-compete agreements 254 (127) 127 258 (107) 151 Trademarks and trade names 14,663 (6,365) 8,298 8,039 (6,097) 1,942 Acquired license rights 34,810 (556) 34,254 490 (490) — Total $ 878,188 $ (366,000) $ 512,188 $ 664,826 $ (351,601) $ 313,225 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 100,700 11 Completed technologies 70,900 6 Acquired license rights 34,320 15 Trademarks 6,600 9 Total $ 212,520 |
Schedule of Goodwill | The change in the carrying amount of goodwill for the three months ended March 31, 2022 was as follows (in thousands): Balance as of January 1, 2022 $ 2,156,254 Acquisition of Linode Limited Liability Company 588,440 Measurement period adjustments related to acquisitions completed in prior years 1,884 Foreign currency translation (696) Balance as of March 31, 2022 $ 2,745,882 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Allocation of the Purchase Price | The following table presents the preliminary allocation of the purchase price for Linode (in thousands): Total purchase consideration $ 898,777 Allocation of the purchase consideration: Cash $ 26,678 Accounts receivable 7,220 Prepaid expenses and other current assets 6,288 Property and equipment 60,670 Operating lease right-of-use assets 16,970 Identifiable intangible assets 212,520 Goodwill 588,440 Deferred income tax assets 2,901 Other assets 652 Total assets acquired 922,339 Accounts payable (5,387) Accrued expenses (970) Operating lease liabilities (17,205) Total liabilities assumed (23,562) Net assets acquired $ 898,777 |
Schedule of Acquired Intangible Assets | Acquired intangible assets that are subject to amortization consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Gross Accumulated Amortization Net Gross Accumulated Net Completed technology $ 328,516 $ (134,891) $ 193,625 $ 257,857 $ (128,715) $ 129,142 Customer-related intangible assets 499,945 (224,061) 275,884 398,182 (216,192) 181,990 Non-compete agreements 254 (127) 127 258 (107) 151 Trademarks and trade names 14,663 (6,365) 8,298 8,039 (6,097) 1,942 Acquired license rights 34,810 (556) 34,254 490 (490) — Total $ 878,188 $ (366,000) $ 512,188 $ 664,826 $ (351,601) $ 313,225 The following were the identified intangible assets acquired and their respective weighted average useful lives (in thousands, except years): Gross Carrying Amount Weighted Average Useful Life (in years) Customer-related intangible assets $ 100,700 11 Completed technologies 70,900 6 Acquired license rights 34,320 15 Trademarks 6,600 9 Total $ 212,520 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Senior Notes | The 2027 Notes consisted of the following components as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Liability component: Principal $ 1,150,000 $ 1,150,000 Less: debt discount and issuance costs, net of amortization (10,113) (169,030) Net carrying amount $ 1,139,887 $ 980,970 Equity component: $ — $ 220,529 The 2025 Notes consisted of the following components as of March 31, 2022 and December 31, 2021 (in thousands): March 31, December 31, Liability component: Principal $ 1,150,000 $ 1,150,000 Less: debt discount and issuance costs, net of amortization (7,960) (154,803) Net carrying amount $ 1,142,040 $ 995,197 Equity component: $ — $ 285,225 |
Schedule of Interest Expense | The following table sets forth total interest expense included in the condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Amortization of debt discounts and issuance costs $ 1,168 $ 17,182 Coupon interest payable on 2025 Notes 359 359 Coupon interest payable on 2027 Notes 1,078 1,078 Interest payable under the Credit Agreement 139 140 Capitalization of interest expense (49) (925) Total interest expense $ 2,695 $ 17,834 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes stock-based compensation included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 Cost of revenue $ 6,233 $ 7,096 Research and development 20,232 18,369 Sales and marketing 12,326 12,478 General and administrative 17,436 16,362 Total stock-based compensation 56,227 54,305 Provision for income taxes (14,043) (13,044) Total stock-based compensation, net of income taxes $ 42,184 $ 41,261 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated other comprehensive loss, net of tax, which is reported as a component of stockholders' equity, for the three months ended March 31, 2022 (in thousands): Foreign Currency Translation Net Unrealized Gains (Losses) on Investments Total Balance as of January 1, 2022 $ (71,809) $ 2,704 $ (69,105) Other comprehensive income (loss) 2,036 (21,542) (19,506) Balance as of March 31, 2022 $ (69,773) $ (18,838) $ (88,611) |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue by geography included in the Company’s condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 (in thousands): For the Three Months 2022 2021 U.S. $ 481,007 $ 463,180 International 422,640 379,528 Total revenue $ 903,647 $ 842,708 For the Three Months 2022 2021 Security $ 381,567 $ 310,219 Delivery 444,148 473,669 Compute 77,932 58,820 Total revenue $ 903,647 $ 842,708 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share Reconciliation [Abstract] | |
Schedule of Components Used in Diluted and Basic Income Per Common Share | The following table sets forth the components used in the computation of basic and diluted net income per share for the three months ended March 31, 2022 and 2021 (in thousands, except per share data): For the Three Months 2022 2021 Numerator: Net income $ 119,163 $ 155,695 Denominator: Shares used for basic net income per share 160,494 163,061 Effect of dilutive securities: Stock options 1 5 RSUs and DSUs 1,320 1,667 Convertible senior notes 1,822 955 Warrants related to issuance of convertible senior notes — — Shares used for diluted net income per share 163,637 165,688 Basic net income per share $ 0.74 $ 0.95 Diluted net income per share $ 0.73 $ 0.94 |
Schedule of Shares Excluded from Computation of Diluted Net Income Per Share | The number of potentially outstanding common shares excluded from the computation of diluted net income per share for the three months ended March 31, 2022 and 2021 are as follows (in thousands): For the Three Months 2022 2021 Service-based RSUs 2,234 2,070 Market- and performance-based RSUs 1,054 1,338 Convertible senior notes — 9,898 Warrants related to issuance of convertible senior notes 21,991 21,991 Total shares excluded from computation 25,279 35,297 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022USD ($)segmentcountryserver$ / shares | Mar. 31, 2021$ / shares | Jan. 01, 2022USD ($) | Dec. 31, 2021USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of servers (more than) | server | 350,000 | |||
Number of countries in which servers are located (more than) | country | 130 | |||
Number of reportable segments | segment | 1 | |||
Number of operating segments | segment | 1 | |||
Convertible senior notes | $ 2,281,927 | $ 1,976,167 | ||
Deferred income tax liabilities | 41,131 | 40,974 | ||
Deferred income tax assets | 265,946 | 168,342 | ||
Property and equipment, net | (1,579,833) | (1,534,329) | ||
Additional paid-in capital | $ (2,974,529) | $ (3,340,822) | ||
Basic net income per share (in dollars per share) | $ / shares | $ 0.74 | $ 0.95 | ||
Diluted net income per share (in dollars per share) | $ / shares | 0.73 | $ 0.94 | ||
Cumulative-effect adjustment from adoption of new accounting pronouncement | ||||
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 net income per share (in dollars per share) | $ / shares | 0.08 | |||
Diluted net income per share (in dollars per share) | $ / shares | $ 0.08 |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 917,888 | $ 1,610,775 |
Gross Unrealized Gains | 0 | 1,194 |
Gross Unrealized Losses | (24,759) | (5,580) |
Aggregate Fair Value | 893,129 | 1,606,389 |
Short-Term Marketable Securities | 128,287 | 540,574 |
Long-Term Marketable Securities | 764,842 | 1,065,815 |
Commercial paper | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 25,056 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (24) | |
Aggregate Fair Value | 25,032 | |
Short-Term Marketable Securities | 25,032 | |
Long-Term Marketable Securities | 0 | |
Corporate bonds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 645,755 | 1,268,991 |
Gross Unrealized Gains | 0 | 1,191 |
Gross Unrealized Losses | (17,750) | (4,275) |
Aggregate Fair Value | 628,005 | 1,265,907 |
Short-Term Marketable Securities | 108,981 | 459,012 |
Long-Term Marketable Securities | 519,024 | 806,895 |
Available-for-sale marketable securities, continuous unrealized loss position for more than 12 months | 43,800 | |
Unrealized loss related to corporate bonds | 1,100 | |
U.S. government agency obligations | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 272,133 | 316,728 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (7,009) | (1,281) |
Aggregate Fair Value | 265,124 | 315,450 |
Short-Term Marketable Securities | 19,306 | 56,530 |
Long-Term Marketable Securities | $ 245,818 | $ 258,920 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurement (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | $ 893,129 | $ 1,606,389 |
Cash equivalents and marketable securities | 917,198 | 1,752,830 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 1,428 | 109,313 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | 628,005 | 1,265,907 |
U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 265,124 | 315,450 |
Aggregate Fair Value | 265,124 | 315,450 |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | 22,641 | 23,129 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 39,031 | |
Aggregate Fair Value | 25,032 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents and marketable securities | 24,069 | 132,442 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 1,428 | 109,313 |
Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | 0 | 0 |
Level 1 | U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 0 | 0 |
Level 1 | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | 22,641 | 23,129 |
Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents and marketable securities | 893,129 | 1,620,388 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | 628,005 | 1,265,907 |
Level 2 | U.S. government agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | 265,124 | 315,450 |
Level 2 | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | $ 0 | 0 |
Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities and cash equivalents | $ 39,031 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 128,287 | $ 540,574 |
Due after 1 year through 5 years | 764,842 | 1,065,815 |
Aggregate Fair Value | $ 893,129 | $ 1,606,389 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 722,072 | $ 677,323 |
Allowances for current expected credit losses and other reserves | (3,279) | (1,397) |
Accounts receivable, net | 718,793 | 675,926 |
Unbilled accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | 210,488 | 175,364 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 511,584 | $ 501,959 |
Accounts Receivables - Allowanc
Accounts Receivables - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 1,397 | $ 1,822 |
Charges to income from operations | 1,951 | 923 |
Collections from customers previously reserved and other | (69) | (1,091) |
Ending balance | $ 3,279 | $ 1,654 |
Incremental Costs to Obtain a_3
Incremental Costs to Obtain a Contract with a Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | |||
Amortization expense related to deferred costs | $ 15,022 | $ 13,727 | |
Incremental costs capitalized | 9,484 | $ 9,872 | |
Commission and incentive payments | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | 68,238 | $ 73,998 | |
Commission and incentive payments | Deferred costs included in prepaid and other current assets | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | 39,948 | 43,562 | |
Commission and incentive payments | Deferred costs included in other assets | |||
Capitalized Contract Cost [Line Items] | |||
Total deferred costs | $ 28,290 | $ 30,436 |
Acquired Intangible Assets an_3
Acquired Intangible Assets and Goodwill - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 878,188 | $ 664,826 |
Accumulated Amortization | (366,000) | (351,601) |
Net Carrying Amount | 512,188 | 313,225 |
Completed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 328,516 | 257,857 |
Accumulated Amortization | (134,891) | (128,715) |
Net Carrying Amount | 193,625 | 129,142 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 499,945 | 398,182 |
Accumulated Amortization | (224,061) | (216,192) |
Net Carrying Amount | 275,884 | 181,990 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 254 | 258 |
Accumulated Amortization | (127) | (107) |
Net Carrying Amount | 127 | 151 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14,663 | 8,039 |
Accumulated Amortization | (6,365) | (6,097) |
Net Carrying Amount | 8,298 | 1,942 |
Acquired license rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34,810 | 490 |
Accumulated Amortization | (556) | (490) |
Net Carrying Amount | $ 34,254 | $ 0 |
Acquired Intangible Assets an_4
Acquired Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of acquired intangible assets | $ 13,644 | $ 11,427 |
Future amortization expense to be recognized in remainder of 2022 | 50,400 | |
Future amortization expense 2023 | 61,300 | |
Future amortization expense 2024 | 65,800 | |
Future amortization expense 2025 | 66,200 | |
Future amortization expense 2026 | $ 59,900 |
Acquired Intangible Assets an_5
Acquired Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Schedule of Goodwill [Roll Forward] | |
Balance as of January 1, 2022 | $ 2,156,254 |
Acquisition of Linode Limited Liability Company | 588,440 |
Measurement period adjustments related to acquisitions completed in prior years | 1,884 |
Foreign currency translation | (696) |
Balance as of March 31, 2022 | $ 2,745,882 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Mar. 31, 2022 | Mar. 31, 2022 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||
Acquisition-related costs | $ 10.3 | |
Linode | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Cash paid to acquire business | $ 898.8 | |
Weighted Average Useful Life (in years) | 9 years 8 months 12 days |
Acquisitions - Schedule of Prel
Acquisitions - Schedule of Preliminary Allocation of the Purchase Price (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Allocation of the purchase consideration: | ||
Goodwill | $ 2,745,882 | $ 2,156,254 |
Linode | ||
Business Combination, Separately Recognized Transactions [Line Items] | ||
Total purchase consideration | 898,777 | |
Allocation of the purchase consideration: | ||
Cash | 26,678 | |
Accounts receivable | 7,220 | |
Prepaid expenses and other current assets | 6,288 | |
Property and equipment | 60,670 | |
Operating lease right-of-use assets | 16,970 | |
Identifiable intangible assets | 212,520 | |
Goodwill | 588,440 | |
Deferred income tax assets | 2,901 | |
Other assets | 652 | |
Total assets acquired | 922,339 | |
Accounts payable | (5,387) | |
Accrued expenses | (970) | |
Operating lease liabilities | (17,205) | |
Total liabilities assumed | (23,562) | |
Net assets acquired | $ 898,777 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquired Intangible Assets (Details) - Linode $ in Thousands | 1 Months Ended |
Mar. 31, 2022USD ($) | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Gross Carrying Amount | $ 212,520 |
Weighted Average Useful Life (in years) | 9 years 8 months 12 days |
Customer-related intangible assets | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Gross Carrying Amount | $ 100,700 |
Weighted Average Useful Life (in years) | 11 years |
Completed technologies | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Gross Carrying Amount | $ 70,900 |
Weighted Average Useful Life (in years) | 6 years |
Acquired license rights | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Gross Carrying Amount | $ 34,320 |
Weighted Average Useful Life (in years) | 15 years |
Trademarks | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Gross Carrying Amount | $ 6,600 |
Weighted Average Useful Life (in years) | 9 years |
Debt - Narrative (Details)
Debt - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | ||||
Aug. 31, 2019USD ($)d$ / sharesshares | May 31, 2018USD ($)d$ / sharesshares | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Feb. 28, 2014USD ($) | |
Debt Instrument [Line Items] | ||||||
Repurchases of common stock | $ 102,853,000 | $ 58,241,000 | ||||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Debt term | 5 years | |||||
Maximum borrowing capacity under specific conditions | $ 1,000,000,000 | |||||
Outstanding borrowings | 75,000,000 | |||||
Credit Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee | 0.075% | |||||
Credit Agreement | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.00% | |||||
Credit Agreement | Minimum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.875% | |||||
Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee | 0.15% | |||||
Credit Agreement | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
Credit Agreement | Maximum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
2027 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 1,150,000,000 | 1,150,000,000 | $ 1,150,000,000 | |||
Interest rate | 0.375% | |||||
Threshold trading days exceeding price | d | 20 | |||||
Threshold consecutive trading days exceeding price | d | 30 | |||||
Threshold greater than percentage of stock price trigger | 130.00% | |||||
Threshold trading days not exceeding price | 5 days | |||||
Threshold less than percentage of stock price trigger | 98.00% | |||||
Conversion price (in dollars per share) | $ / shares | $ 116.18 | |||||
Potential conversion shares of convertible debt (in shares) | shares | 9.9 | |||||
Fair value of convertible senior notes | $ 1,327,000,000 | 1,359,300,000 | ||||
Closing price of common stock (in dollars per share) | $ / shares | $ 119.39 | |||||
Repurchases of common stock | $ 100,000,000 | |||||
Payments for purchase of convertible note hedge and warrant transactions | 127,100,000 | |||||
Payments for note hedge transactions | $ 312,200,000 | |||||
Warrants outstanding (in shares) | shares | 9.9 | |||||
Warrant strike price (in dollars per share) | $ / shares | $ 178.74 | |||||
Proceeds from sale of warrants | $ 185,200,000 | |||||
Conversion rate | 0.0086073 | |||||
2025 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 1,150,000,000 | $ 1,150,000,000 | 1,150,000,000 | |||
Interest rate | 0.125% | |||||
Threshold trading days exceeding price | d | 20 | |||||
Threshold consecutive trading days exceeding price | d | 30 | |||||
Threshold greater than percentage of stock price trigger | 130.00% | |||||
Threshold trading days not exceeding price | 5 days | |||||
Threshold less than percentage of stock price trigger | 98.00% | |||||
Conversion price (in dollars per share) | $ / shares | $ 95.10 | |||||
Potential conversion shares of convertible debt (in shares) | shares | 12.1 | |||||
Fair value of convertible senior notes | $ 1,518,800,000 | $ 1,510,400,000 | ||||
Closing price of common stock (in dollars per share) | $ / shares | $ 119.39 | |||||
Repurchases of common stock | $ 46,200,000 | |||||
Payments for purchase of convertible note hedge and warrant transactions | 141,800,000 | |||||
Payments for note hedge transactions | $ 261,700,000 | |||||
Warrants outstanding (in shares) | shares | 12.1 | |||||
Warrant strike price (in dollars per share) | $ / shares | $ 149.18 | |||||
Proceeds from sale of warrants | $ 119,900,000 | |||||
Threshold consecutive trading days not exceeding price | 5 days | |||||
Conversion rate | 0.010515 | |||||
2019 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 690,000,000 |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Senior Notes (Details) - Convertible Debt - USD ($) | Mar. 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 | (10,113,000) | (169,030,000) | ||
Net carrying amount | 1,139,887,000 | 980,970,000 | ||
Equity component: | 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 | (7,960,000) | (154,803,000) | ||
Net carrying amount | $ 1,142,040,000 | 995,197,000 | ||
Equity component: | $ 285,225,000 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Amortization of debt discounts and issuance costs | $ 1,168 | $ 17,182 |
Capitalization of interest expense | (49) | (925) |
Total interest expense | 2,695 | 17,834 |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Interest on debt instruments | 139 | 140 |
Convertible Debt | 2025 Notes | ||
Debt Instrument [Line Items] | ||
Interest on debt instruments | 359 | 359 |
Convertible Debt | 2027 Notes | ||
Debt Instrument [Line Items] | ||
Interest on debt instruments | $ 1,078 | $ 1,078 |
Restructuring (Details)
Restructuring (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | $ 8,016,000 | $ 7,116,000 |
2022 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | 7,500,000 | |
2021 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | (100,000) | |
Restructuring and related cost, cost incurred to date | 3,700,000 | |
2020 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | 0 | 7,000,000 |
Restructuring and related cost, cost incurred to date | $ 31,500,000 | |
2020 Restructuring Plan | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | 6,300,000 | |
2020 Restructuring Plan | Internal-Use Software Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charge | $ 700,000 | |
GO-NET | ||
Restructuring Cost and Reserve [Line Items] | ||
Ownership percent | 20.00% |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Jan. 31, 2022 | |
Class of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 1,800,000 | ||
Repurchases of common stock | $ 102,853 | $ 58,241 | |
Amortization expense from capitalized stock-based compensation | $ 7,600 | $ 7,700 | |
Common Stock | |||
Class of Stock [Line Items] | |||
Shares repurchased during period (in shares) | 0.9 | ||
Repurchases of common stock | $ 102,900 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 56,227 | $ 54,305 |
Provision for income taxes | (14,043) | (13,044) |
Total stock-based compensation, net of income taxes | 42,184 | 41,261 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 6,233 | 7,096 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 20,232 | 18,369 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 12,326 | 12,478 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 17,436 | $ 16,362 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Income Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 4,530,014 | $ 4,251,296 |
Other comprehensive income (loss) | (19,506) | (27,146) |
Ending balance | 4,300,522 | 4,321,363 |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (69,105) | (20,201) |
Ending balance | (88,611) | $ (47,347) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (71,809) | |
Other comprehensive income (loss) | 2,036 | |
Ending balance | (69,773) | |
Net Unrealized Gains (Losses) on Investments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 2,704 | |
Other comprehensive income (loss) | (21,542) | |
Ending balance | $ (18,838) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 903,647 | $ 842,708 |
Security | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 381,567 | 310,219 |
Delivery | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 444,148 | 473,669 |
Compute | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 77,932 | 58,820 |
U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 481,007 | 463,180 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 422,640 | $ 379,528 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)solution_category | Mar. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of solutions | solution_category | 3 | |
Revenue recognized | $ 56.2 | $ 43.3 |
Remaining performance obligation | $ 3,200 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, percentage | 70.00% | |
Remaining performance obligation, expected timing | 12 months |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.20% | 7.10% |
Net Income per Share - Schedule
Net Income per Share - Schedule of Components Used in Diluted and Basic Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 119,163 | $ 155,695 |
Denominator: | ||
Shares used for basic net income per share (in shares) | 160,494 | 163,061 |
Effect of dilutive securities: | ||
Stock options (in shares) | 1 | 5 |
RSUs and DSU (in shares) | 1,320 | 1,667 |
Convertible senior notes (in shares) | 1,822 | 955 |
Warrants related to issuance of convertible senior notes (in shares) | 0 | 0 |
Shares used for diluted net income per share | 163,637 | 165,688 |
Basic net income per share (in dollars per share) | $ 0.74 | $ 0.95 |
Diluted net income per share (in dollars per share) | $ 0.73 | $ 0.94 |
Net Income per Share - Schedu_2
Net Income per Share - Schedule of Shares Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 25,279 | 35,297 |
Service-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 2,234 | 2,070 |
Market- and performance-based RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 1,054 | 1,338 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0 | 9,898 |
Warrants related to issuance of convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 21,991 | 21,991 |