10-K – 2026-02-20 – akam-20251231.htm

• Growth in our international operations incrementally increases our exposure to foreign currency fluctuations. Because we publicly report in U.S. dollars, our expenses are positively impacted when the U.S. dollar strengthens and are negatively impacted when the U.S. dollar weakens.

Recent Acquisitions

We acquired Fermyon in November 2025. With this acquisition we plan to deepen the integration between the edge functions platform and our performance and security products. The resulting cloud computing platform aims to make it even faster and easier for developers to build, deploy and secure applications at the edge that outperform cloud-native applications, for less money, the same way they can in core data centers today.

We acquired certain customer contracts from Edgio, Inc. ("Edgio") in December 2024 as part of a bankruptcy process. This acquisition is intended to further strengthen our existing delivery and other businesses as we transition the acquired customers to our platform and offer our portfolio of other services to them. We also acquired Noname Security in June 2024. Noname Security is intended to expand our existing API Security offering by providing more flexible deployment options, extensive vendor integrations and enhanced attack analysis. We believe this acquisition will accelerate our ability to meet increasing customer and market demand.

We acquired certain customer contracts from Lumen Technologies, Inc. ("Lumen") in October 2023 and from StackPath, LLC ("StackPath") in August 2023. These acquisitions are intended to further strengthen our existing delivery and other businesses as we transition the acquired customers to our platform and offer our portfolio of other services to them. We also acquired Neosec in May 2023, which is intended to complement our application and API security portfolio by extending its visibility into the rapidly growing API threat landscape, and StorageOS, Inc. ("StorageOS"), also known as Ondat, in March 2023, which is intended to strengthen our compute offerings.

Revenue and earnings generated from these acquisitions are included in our financial results since the dates of the acquisitions, but were not material. However, delivery revenue was positively impacted by customer contracts acquired from Edgio, Lumen and Stackpath. Additionally, of note, we added approximately 200 employees from the acquisition of Noname Security.

30

Table of Contents

Global Economic Conditions

Global macroeconomic and geopolitical conditions continue to impact our customers, as well as our business and revenue growth rates. We, along with our customers, continue to manage through an uncertain period of fluctuating inflation, regulatory policies and resources that may negatively impact business, economic and political uncertainty, decreased consumer confidence and pressure on prices during contract renewals, uncertain energy supplies, heightened geopolitical tensions and conflict, potential for supply chain disruptions, changes in legislation and regulations, including U.S. and international tax laws, volatility and increasing tensions related to changing trade policies, including announced or expected tariffs, fluctuations in foreign exchange rates and elevated interest rates. To the extent these macroeconomic conditions continue, the impact may adversely affect our business, operations and financial results.

Results of Operations

The following sets forth, as a percentage of revenue, consolidated statements of income data for the years indicated:  

2025 2024 2023
Revenue 100  % 100  % 100  %
Costs and operating expenses:
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) 41  41  40 
Research and development 12  12  11 
Sales and marketing 14  14  14 
General and administrative 16  16  16 
Amortization of acquired intangible assets 3  2  2 
Restructuring charge 1  2  1 
Total costs and operating expenses (1)
87  87  83 
Income from operations (1)
13  13  17 
Interest and marketable securities income, net 2  3  1 
Interest expense (1) (1) — 
Other expense, net —  —  — 
Income before provision for income taxes (1)
14  15  17 
Provision for income taxes (4) (2) (3)
Gain from equity method investment
—  —  — 
Net income (1)
11  % 13  % 14  %

(1) Amounts may not foot due to rounding.

Revenue

Revenue by solution category during the periods presented was as follows (in thousands):

For the Years Ended December 31, For the Years Ended December 31,
2025 2024 % Change % Change at Constant Currency 2024 2023 % Change % Change at Constant Currency
Security $ 2,243,404  $ 2,042,661  10  % 9  % $ 2,042,661  $ 1,765,267  16  % 16  %
Delivery 1,256,721  1,318,131  (5) (5) 1,318,131  1,542,434  (15) (14)
Cloud computing
708,050  630,376  12  12  630,376  504,219  25  25 
Total revenue $ 4,208,175  $ 3,991,168  5  % 5  % $ 3,991,168  $ 3,811,920  5  % 5  %

31

Table of Contents

The increases in our revenue in 2025 as compared to 2024, and 2024 as compared to 2023, were primarily the result of continued growth in sales of our security and cloud computing solutions, partially offset by a decline in revenue from our delivery solutions due to downward pricing of renewals.

The increases in security solutions revenue for 2025 as compared to 2024, and 2024 as compared to 2023, were due to growth of sales in key products in our security solutions portfolio, including our API security, web application and Guardicore segmentation solutions.

The decreases in delivery solutions revenue for 2025 as compared to 2024, and 2024 as compared to 2023, were due to downward pricing of contract renewals. Additionally, we believe macroeconomic headwinds are causing some customers to increase their focus on cost optimization, which negatively impacted traffic on our network and had a negative impact on delivery revenue. In 2024, these headwinds caused a large social media customer to increase their focus on cost optimization and "do-it-yourself" solutions, which additionally reduced traffic on our network. The decrease for 2025 as compared to 2024 was partially offset by incremental revenue from contracts acquired as part of our asset acquisitions, such as Edgio in December 2024.

The increase in cloud computing solutions revenue in 2025 as compared to 2024 was due to growth in Cloud Infrastructure Services, which includes compute, storage, cloud-native and networking solutions, along with the Akamai EdgeWorkers serverless products and partner solutions running on our compute platform. The increase in cloud computing revenue in 2024 as compared to 2023 was due to growth in sales of Cloud Infrastructure Services, as well as cloud optimization solutions, to new and existing customers.

Revenue derived in the U.S. and internationally during the periods presented is as follows (in thousands):

For the Years Ended December 31, For the Years Ended December 31,
2025 2024 % Change % Change at Constant Currency 2024 2023 % Change % Change at Constant Currency
U.S. $ 2,139,173  $ 2,075,533  3  % 3  % $ 2,075,533  $ 1,968,779  5  % 5  %
As a percentage of revenue 51  % 52  % 52  % 52  %
International 2,069,002  1,915,635  8  7  1,915,635  1,843,141  4  % 5 
As a percentage of revenue 49  % 48  % 48  % 48  %
Total revenue $ 4,208,175  $ 3,991,168  5  % 5  % $ 3,991,168  $ 3,811,920  5  % 5  %

For each of the years ended December 31, 2025, 2024 and 2023, no single country outside of the U.S. accounted for 10% or more of revenue. Changes in foreign currency exchange rates positively impacted our revenue by $13.7 million in 2025 as compared to 2024, and negatively impacted our revenue by $22.5 million in 2024 as compared to 2023.

32

Table of Contents

Cost of Revenue

Cost of revenue consisted of the following for the periods presented (in thousands):

  For the Years Ended December 31, For the Years Ended December 31,
  2025 2024 % Change 2024 2023 % Change
Co-location costs
$ 349,191 $ 308,314 13  % $ 308,314 $ 256,062 20  %
Bandwidth fees 192,875 233,100 (17) 233,100 228,038 2 
Network build-out and supporting services 236,644 193,607 22  193,607 215,557 (10)
Payroll and related costs 340,991 334,215 2  334,215 325,851 3 
Acquisition-related costs — — —  — 3,190 (100)
Stock-based compensation, including amortization of prior capitalized amounts 123,617 100,705 23  100,705 73,786 36 
Depreciation of network equipment 328,221 282,106 16  282,106 231,500 22 
Amortization of internal-use software 155,974 168,746 (8) 168,746 177,079 (5)
Total cost of revenue $ 1,727,513 $ 1,620,793 7  % $ 1,620,793 $ 1,511,063 7  %
As a percentage of revenue 41  % 41  % 41  % 40  %

The increase in cost of revenue for 2025 as compared to 2024 was primarily due to:

• co-location costs and depreciation of network equipment as a result of investment in our network, particularly as we build out our compute platform to support future growth and scalability;
• network build-out and supporting services, particularly due to our partner program costs related to our cloud computing solutions; and
• payroll and related costs, including stock-based compensation, as a result of headcount growth, annual merit increases and increased achievement of our performance-based compensation plans; additionally, stock-based compensation increased due to the shift in some of our compensation programs from cash-based to stock-based for certain employees, including our employer 401(k) match program, effective in 2025, which partially offset the increase in payroll and related costs.

These increases were partially offset by lower bandwidth fees, resulting from improved pricing and operational efficiencies on our network.

The increase in cost of revenue for 2024 as compared to 2023 was primarily due to:

• co-location costs and depreciation of network equipment as a result of investment in our network, particularly as we are building out our compute platform to support future growth and scalability; and
• payroll and related costs, including stock-based compensation, as a result of headcount growth from our strategic initiatives and annual merit increases, as well as the shift in timing of our performance-based compensation. Additionally, stock-based compensation increased due to a shift in our compensation programs from cash-based to stock-based for certain employees.

The increase in cost of revenue for 2024 as compared to 2023 was partially offset by lower network build-out and supporting services due to a decrease in third-party cloud costs as we have migrated third-party cloud services onto our own compute platform and have focused on optimizing third-party cloud spending.

During 2026, we expect our cost of revenue to increase as compared to 2025. In particular, our co-location costs, bandwidth fees, depreciation of network equipment and amortization of internal-use software is expected to increase as we continue to invest in our compute platform to provide us the ability to scale. Due to the market dynamics driven by the hyperscalers, we are also experiencing price increases for co-location, server and memory costs, which will increase our co-location costs and depreciation of network equipment. Additionally, we expect network build-out and supporting services to increase due to our partner programs to support the growth of our cloud computing solutions.

33

Table of Contents

Research and Development Expenses

Research and development expenses consisted of the following for the periods presented (in thousands):

For the Years Ended December 31, For the Years Ended December 31,
  2025 2024 % Change 2024 2023 % Change
Payroll and related costs $ 601,288  $ 562,286  7  % $ 562,286  $ 494,803  14  %
Stock-based compensation 169,404  152,114  11  152,114  123,896  23 
Capitalized salaries and related costs (286,816) (272,320) 5  (272,320) (239,928) 14 
Acquisition-related costs —  —  —  —  721  (100)
Other expenses 29,684  28,796  3  28,796  26,556  8 
Total research and development $ 513,560  $ 470,876  9  % $ 470,876  $ 406,048  16  %
As a percentage of revenue 12  % 12  % 12  % 11  %

The increase in research and development expenses for 2025 as compared to 2024 was primarily due to higher payroll and related costs, including stock-based compensation, as a result of headcount growth from our strategic initiatives, annual merit increases and the increased achievement of our performance-based compensation plans. Additionally, stock-based compensation increased due to a shift in our employer 401(k) match program from cash-based to stock-based, effective in 2025, which partially offset the increase in payroll and related costs.

The increase in research and development expenses for 2024 as compared to 2023 was primarily due to higher payroll and related costs, including stock-based compensation, as a result of headcount growth from our strategic initiatives and annual merit increases, as well as the shift in timing of our performance-based compensation. These increases were partially offset by increases in capitalized salaries and related costs as we had additional resources focused on development activities related to our platform and solutions.

Research and development costs are expensed as incurred, other than certain internal-use software development costs eligible for capitalization. Capitalized development costs consist of payroll and related costs for personnel and external consulting expenses involved in the development of internal-use software used to deliver our services and operate our network. For the years ended December 31, 2025, 2024 and 2023, we capitalized $114.8 million, $99.6 million and $77.0 million, respectively, of stock-based compensation. These capitalized internal-use software development costs are amortized to cost of revenue over their estimated useful lives, ranging from two to ten years based on the software developed and its expected useful life.

We expect our research and development costs to increase in 2026, in particular payroll and related costs, including stock-based compensation, in support of our faster growing security and cloud computing solutions. We also expect stock-based compensation to increase in 2026 as a result of a new stock-based retirement program effective in 2026. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

34

Table of Contents

Sales and Marketing Expenses

Sales and marketing expenses consisted of the following for the periods presented (in thousands):

For the Years Ended December 31, For the Years Ended December 31,
  2025 2024 % Change 2024 2023 % Change
Payroll and related costs $ 388,555  $ 393,584  (1) % $ 393,584  $ 376,305  5  %
Stock-based compensation 90,198  77,593  16  77,593  66,453  17 
Marketing programs and related costs 57,202  53,893  6  53,893  59,151  (9)
Acquisition-related costs —  —  —  —  1,387  (100)
Other expenses 38,347  31,711  21  31,711  29,930  6 
Total sales and marketing $ 574,302  $ 556,781  3  % $ 556,781  $ 533,226  4  %
As a percentage of revenue 14  % 14  % 14  % 14  %

The increase in sales and marketing expenses for 2025 as compared to 2024 was primarily due to higher stock-based compensation as a result of the increased achievement of our performance-based compensation plans and a shift in our employer 401(k) match program from cash-based to stock-based, effective in 2025. Other expenses also increased as a result of professional service fees associated with our go-to-market transformation initiative.

The increase in sales and marketing expenses for 2024 as compared to 2023 was due to higher payroll and related costs, including stock-based compensation, as a result of annual merit increases and employees acquired through the Noname Security acquisition, as well as the shift in timing of our performance-based compensation. These increases were partially offset by a reduction in marketing programs and related costs as a result of the timing of events and advertising campaigns.

During 2026, we expect our sales and marketing expenses to increase as compared to 2025, in particular payroll and related costs, including stock-based compensation, primarily due to our reinvestment in headcount as part of our go-to-market strategy to drive acquisition of new customers for our faster growing security and cloud computing solutions. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

General and Administrative Expenses

General and administrative expenses consisted of the following for the periods presented (in thousands):

For the Years Ended December 31, For the Years Ended December 31,
  2025 2024 % Change 2024 2023 % Change
Payroll and related costs $ 232,671  $ 225,687  3  % $ 225,687  $ 218,272  3  %
Stock-based compensation 122,624  102,494  20  102,494  94,316  9 
Depreciation and amortization 66,909  66,184  1  66,184  65,817  1 
Facilities-related costs 86,081  86,671  (1) 86,671  90,061  (4)
Provision for doubtful accounts 6,324  3,919  61  3,919  1,649  138 
Acquisition-related costs 3,247  7,502  (57) 7,502  8,050  (7)
Software and related service costs 70,361  56,557  24  56,557  55,714  2 

Other expenses 68,522  72,771  (6) 72,771  66,972  9 
Total general and administrative $ 656,739  $ 621,785  6  % $ 621,785  $ 600,851  3  %
As a percentage of revenue 16  % 16  % 16  % 16  %

The increase in general and administrative expenses for 2025 as compared to 2024 was primarily due to higher stock-based compensation as a result of the increased achievement of our performance-based compensation plans, an increase in the number of participants in the equity compensation program, as well as a shift in our employer 401(k) match program from cash-based to stock-based effective in 2025, which increased stock-based compensation and partially offset the increase in payroll and related costs. Additionally, software and related service costs increased as we transition to and expand usage of cloud-based

35

Table of Contents

applications to support our operations.

The increase in general and administrative expenses for 2024 as compared to 2023 was primarily due to higher payroll and related costs, including stock-based compensation, as a result of annual merit increases and the shift in timing of our performance-based compensation. Additionally, other expenses increased due to professional service fees to support our business. These increases were partially offset by decreased facilities-related costs as we exited certain facilities in connection with our FlexBase program.

During 2026, we expect our general and administrative expenses to increase as compared to 2025, to support the operations of the business. In particular, we expect stock-based compensation to increase in 2026 as a result of a new stock-based retirement program effective in 2026. However, we plan to continue to carefully manage costs in an effort to manage our operating margins.

Amortization of Acquired Intangible Assets

For the Years Ended December 31, For the Years Ended December 31,
(in thousands) 2025 2024 % Change 2024 2023 % Change
Amortization of acquired intangible assets $ 111,066  $ 92,081  21  % $ 92,081  $ 66,751  38  %
As a percentage of revenue 3  % 2  % 2  % 2  %

The increase in amortization of acquired intangible assets for 2025 as compared to 2024, and 2024 as compared to 2023, was the result of amortization of acquired intangible assets related to our recent acquisitions. Based on acquired intangible assets as of December 31, 2025, future amortization is expected to be $100.2 million, $85.6 million, $79.0 million, $74.0 million and $66.7 million for the years ending December 31, 2026, 2027, 2028, 2029 and 2030, respectively.

Restructuring Charge

For the Years Ended December 31, For the Years Ended December 31,
(in thousands) 2025 2024 % Change 2024 2023 % Change
Restructuring charge $ 58,051  $ 95,441  (39) % $ 95,441  $ 56,643  68  %
As a percentage of revenue 1  % 2  % 2  % 1  %

The restructuring charge in 2025 was primarily driven by management's commitment to an action to restructure certain parts of the company to align investments and simplify organizational structure to long-term growth priorities. The charge included severance and related expenses for certain headcount reductions, as well as impairments of acquired intangible assets and capitalized internal-use software. We do not expect to incur material additional charges related to this action.

The restructuring charge in 2024 was primarily driven by management's commitment to an action with the primary intent to redeploy resources to support our strategic investments and as a result of our completed acquisitions. The restructuring charge included severance and related expenses for certain headcount reductions, as well as impairments of acquired intangible assets and capitalized internal-use software. We do not expect to incur material additional charges related to this action.

The restructuring charge in 2023 was primarily driven by our FlexBase program as we exited certain facilities that were no longer needed, resulting in impairments of right-of-use-assets and leasehold improvements. We do not expect to incur material additional charges related to the FlexBase program. Additionally, the restructuring charge in 2023 included the result of certain actions initiated in the first quarter of 2023. Management's commitment to an action to restructure certain parts of the company was to enable the prioritization of investments in the fastest growing areas of the business. The restructuring charge for this action includes severance and related expenses for certain headcount reductions. We do not expect to incur material additional charges related to these actions.

36

Table of Contents

Non-Operating Income (Expense)

For the Years Ended December 31, For the Years Ended December 31,
(in thousands) 2025 2024 % Change 2024 2023 % Change
Interest and marketable securities income, net $ 70,808  $ 100,280  (29) % $ 100,280  $ 45,194  122  %
As a percentage of revenue 2  % 3  % 3  % 1  %
Interest expense $ (30,759) $ (27,117) 13  % $ (27,117) $ (17,709) 53  %
As a percentage of revenue (1) % (1) % (1) % —  %
Other expense, net $ (4,588) $ (19,561) (77) % $ (19,561) $ (12,296) 59  %
As a percentage of revenue —  % —  % —  % —  %

Interest and marketable securities income, net primarily consists of interest earned on invested cash and marketable securities balances and income and losses on mutual funds that are associated with our employee non-qualified deferred compensation plan. The decrease to interest and marketable securities income, net for 2025 as compared to 2024, was due to a reduction of cash and marketable securities balances and re-positioning our investments to cash equivalents, yielding lower interest, in 2025 in order to repay our $1,150.0 million convertible senior notes that became due in May 2025. This decrease was partially offset by interest earned as a result of purchases of new marketable securities with the proceeds of our convertible senior notes that were issued in May 2025. The increase to interest and marketable securities income, net for 2024 as compared to 2023, was the result of increased cash, cash equivalents and marketable securities balances received from our August 2023 issuance of $1,265.0 million in par value of convertible senior notes due 2029 and higher interest rates, as well as increased gains associated with the non-qualified deferred compensation plan.

Interest expense is related to our debt transactions, which are described in Note 11 to the consolidated financial statements included elsewhere in this annual report on Form 10-K. The increase to interest expense for 2025 as compared to 2024 was primarily due to the May 2025 issuance of $1,725.0 million in par value of convertible senior notes due 2033. The increase to interest expense for 2024 as compared to 2023 was primarily due to the August 2023 issuance of $1,265.0 million in par value of convertible senior notes due 2029.

Other expense, net primarily represents net foreign exchange gains and losses mainly due to foreign exchange rate fluctuations on the remeasurement of monetary assets and liabilities that are not denominated in the functional currency as well as other non-operating expense and income items. Other expense, net for 2025 and 2024 also includes a net gain of $9.4 million and impairments of $5.1 million, respectively, from cost method investments. Other expense, net may fluctuate in the future based on changes in foreign currency exchange rates or other events.

Provision for Income Taxes

For the Years Ended December 31, For the Years Ended December 31,
(in thousands) 2025 2024 % Change 2024 2023 % Change
Provision for income taxes $ 150,374  $ 82,095  83  % $ 82,095  $ 106,373  (23) %
As a percentage of revenue 4  % 2  % 2  % 3  %
Effective income tax rate 25  % 14  % 14  % 16  %

The increase in the provision for income taxes for 2025 as compared to 2024 was mainly due to a shortfall in the tax benefit related to stock-based compensation, the benefit from an intercompany sale of intellectual property in 2024 that did not recur in 2025, revaluation of deferred tax assets and a decrease in the benefit of U.S. federal and state research and development credits.

The decrease in the provision for income taxes for 2024 as compared to 2023 was mainly due to the benefit from an intercompany sale of intellectual property, an increase in the excess tax benefit related to stock-based compensation, lower profitability and an increase in the benefit of U.S. federal and state research and development credits. These amounts were partially offset by a decrease in foreign income taxed at lower rates, an increase in non-deductible transfer pricing and an increase in certain tax reserves.

For the year ended December 31, 2025, our effective income tax rate was higher than the federal statutory tax rate due to non-deductible stock-based compensation, revaluation of deferred tax assets and a shortfall in the tax benefit related to stock-

37

Table of Contents

based compensation. These amounts were partially offset by foreign income taxed at lower rates and the benefit of U.S. federal, state and foreign research and development credits.

For the year ended December 31, 2024, our effective income tax rate was lower than the federal statutory tax rate due to the benefit of U.S. federal, state and foreign research and development credits, an intercompany sale of intellectual property, foreign income taxed at lower rates and the excess tax benefit related to stock-based compensation. These amounts were partially offset by non-deductible stock-based compensation and non-deductible transfer pricing.

For the year ended December 31, 2023, our effective income tax rate was lower than the federal statutory tax rate due to foreign income taxed at lower rates 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 and the tax on global intangible low-taxed income.

Our effective income tax rate may fluctuate between fiscal years and from quarter to quarter due to items arising from discrete events, such as tax benefits from the settlement of employee equity awards, tax law changes and settlements of tax audits and assessments. Our effective income tax rate is also impacted by, and may fluctuate in any given period because of, the composition of income in foreign jurisdictions where tax rates differ depending on the local statutory rates. The OECD and participating OECD member countries continue to work toward the enactment of a 15% global minimum corporate tax rate for large multinational enterprise groups, also known as "Pillar Two." Many of the participating countries have enacted legislation that became effective beginning in 2024, while other countries continue to work on defining the underlying rules and administrative procedures. Although the enactment and effective legislation in many countries was applicable to us beginning on January 1, 2024, and increased our effective income tax rate, the increase did not have a material impact on our overall results of operations or cash flows.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. The OBBBA did not have a material impact on our consolidated financial statements for the annual period ending December 31, 2025.

Gain from Equity Method Investment

For the Years Ended December 31, For the Years Ended December 31,
(in thousands) 2025 2024 % Change 2024 2023 % Change
Gain from equity method investment $ —  $ —  —  % $ —  $ (1,475) 100  %
As a percentage of revenue —  % —  % —  % —  %

The gain from equity method investment relates to our investment with MUFG in a joint venture, GO-NET. GO-NET intended to operate a blockchain-based online payment network. However, GO-NET operations were suspended in February 2022, and ultimately liquidated in August 2023. The gain from equity method investment in 2023 was related to the liquidation and disbursement of our portion of GO-NET's remaining assets, which were previously impaired. We do not expect additional activity related to this investment.

Use of Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America ("GAAP") we provide additional financial metrics that are not prepared in accordance with GAAP ("non-GAAP financial measures"). Management uses non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, to measure executive compensation and to evaluate our financial performance. These non-GAAP financial measures are non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and impact of foreign currency exchange rates, as discussed below.

Management believes that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business, as they facilitate comparison of financial results across accounting periods and to those of our peer companies. Management also believes that these non-GAAP financial measures enable investors to evaluate our operating results and future prospects in the same manner as management. These non-GAAP

38

Table of Contents

financial measures may exclude expenses and gains that may be unusual in nature, infrequent or not reflective of our ongoing operating results.

The non-GAAP financial measures do not replace the presentation of our GAAP financial measures and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

The non-GAAP adjustments, and our basis for excluding them from non-GAAP financial measures, are outlined below:

• Amortization of acquired intangible assets – We have incurred amortization of intangible assets, included in our GAAP financial statements, related to various acquisitions we have made. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and is unique to each acquisition; therefore, we exclude amortization of acquired intangible assets from our non-GAAP financial measures to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.

• Stock-based compensation and amortization of capitalized stock-based compensation  – Stock-based compensation is an important aspect of the compensation paid to our employees which includes long-term incentive plans to encourage retention, performance-based plans to encourage achievement of specified financial targets, short-term incentive awards with a one year vest and shares issued as part of a retirement savings program. The grant date fair value of the stock-based compensation awards varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of our current financial results to previous and future periods difficult to interpret; therefore, we believe it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from our non-GAAP financial measures in order to highlight the performance of our core business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies.

• Acquisition-related costs – Acquisition-related costs include transaction fees, advisory fees, due diligence costs and other direct costs associated with strategic activities, as well as certain additional compensation costs payable to employees acquired from the Linode acquisition if employed for a certain period of time. The additional compensation cost was initiated by and determined by the seller and is in addition to normal levels of compensation, including retention programs, offered by Akamai. Acquisition-related costs are impacted by the timing and size of the acquisitions, and we exclude acquisition-related costs from our non-GAAP financial measures to provide a useful comparison of operating results to prior periods and to peer companies because such amounts vary significantly based on the magnitude of our acquisition transactions and do not reflect our core operations.

• Restructuring charge – We have incurred restructuring charges from programs that have significantly changed either the scope of the business undertaken by us or the manner in which that business is conducted. These charges include severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including acquired intangible assets, right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs. We exclude these items from our non-GAAP financial measures when evaluating our continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of our business.

• Amortization of debt issuance costs and capitalized interest expense – The issuance costs of our convertible senior notes are amortized to interest expense and are excluded from our non-GAAP results because management believes the non-cash amortization expense is not representative of ongoing operating performance.

• Gains and losses on cost method investments – We have recorded gains and losses from the disposition, changes to fair value and impairment of cost method investments. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to these gains and losses are not representative of our core business operations and ongoing operating performance.

• Legal settlements – We have incurred losses related to the settlement of legal matters. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations.

39

Table of Contents

• Gains and losses from equity method investment – We record income or losses on our share of earnings and losses from our equity method investment, and any gains from returns of investments or impairments. We exclude such income and losses because we do not have direct control over the operations of the investment and the related income and losses are not representative of our core business operations.

• Income tax effect of non-GAAP adjustments and certain discrete tax items – The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as the impact of intercompany sales of intellectual property related to our acquisitions), if any. We believe that applying the non-GAAP adjustments and their related income tax effect allows us to highlight income attributable to our core operations.

The following table reconciles GAAP income from operations to non-GAAP income from operations and non-GAAP operating margin for the years ended December 31, 2025, 2024 and 2023 (in thousands):

  2025 2024 2023
Income from operations $ 566,944  $ 533,411  $ 637,338 
Amortization of acquired intangible assets 111,066  92,081  66,751 
Stock-based compensation 459,402  393,378  328,467 
Amortization of capitalized stock-based compensation and capitalized interest expense 50,890  42,910  32,981 
Restructuring charge 58,051  95,441  56,643 
Acquisition-related costs 3,247  7,502  13,345 
Legal settlements 4,000  2,500  — 

Non-GAAP income from operations $ 1,253,600  $ 1,167,223  $ 1,135,525 

GAAP operating margin 13  % 13  % 17  %
Non-GAAP operating margin 30  % 29  % 30  %

The following table reconciles GAAP net income to non-GAAP net income for the years ended December 31, 2025, 2024 and 2023 (in thousands):

  2025 2024 2023
Net income $ 452,031  $ 504,918  $ 547,629 
Amortization of acquired intangible assets 111,066  92,081  66,751 
Stock-based compensation 459,402  393,378  328,467 
Amortization of capitalized stock-based compensation and capitalized interest expense 50,890  42,910  32,981 
Restructuring charge 58,051  95,441  56,643 
Acquisition-related costs 3,247  7,502  13,345 
Legal settlements 4,000  2,500  — 

Amortization of debt issuance costs 7,053  6,521  5,341 
(Gain) loss on cost method investments, net
(9,370) 5,066  (311)
Gain from equity method investment —  —  (1,475)
Income tax effect of above non-GAAP adjustments and certain discrete tax items (89,945) (154,735) (89,364)
Non-GAAP net income $ 1,046,425  $ 995,582  $ 960,007 

40

Table of Contents

The following table reconciles GAAP net income per diluted share to non-GAAP net income per diluted share for the years ended December 31, 2025, 2024 and 2023 (in thousands, except per share data):

  2025 2024 2023

GAAP net income per diluted share $ 3.07  $ 3.27  $ 3.52 
Adjustments to net income:
Amortization of acquired intangible assets 0.76  0.60  0.43 
Stock-based compensation 3.12  2.55  2.11 
Amortization of capitalized stock-based compensation and capitalized interest expense 0.35  0.28  0.21 
Restructuring charge 0.39  0.62  0.36 
Acquisition-related costs 0.02  0.05  0.09 
Legal settlements 0.03  0.02  — 

Amortization of debt issuance costs 0.05  0.04  0.03 
(Gain) loss on cost method investments, net
(0.06) 0.03  — 
Gain from equity method investment —  —  (0.01)
Income tax effect of above non-GAAP adjustments and certain discrete tax items (0.61) (1.00) (0.58)
Adjustment for shares (1)
—  0.03  0.02 
Non-GAAP net income per diluted share (2)
$ 7.12  $ 6.48  $ 6.20 

Shares used in GAAP per diluted share calculations 147,023  154,346  155,397 
Impact of benefit from note hedge transactions (1)
—  (744) (574)
Shares used in non-GAAP per diluted share calculations (1)
147,023  153,602  154,823 

(1) Shares used in non-GAAP per diluted share calculations have been adjusted for the years ended December 31, 2024 and 2023, for the benefit of our note hedge transactions. During these periods, our average stock price was in excess of $95.10, which is the initial conversion price of our convertible senior notes which matured in May 2025. See further definition below.

(2) Amounts may not foot due to rounding.

Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by weighted average diluted common shares outstanding. Diluted weighted average common shares outstanding are adjusted in non-GAAP per share calculations for the shares that would be delivered to us pursuant to the note hedge transactions entered into in connection with the issuances of our convertible senior notes. Under GAAP, shares delivered under hedge transactions are not considered offsetting shares in the fully-diluted share calculation until they are delivered. However, we would receive a benefit from the note hedge transactions and would not allow the dilution to occur, so management believes that adjusting for this benefit provides a meaningful view of operating performance. With respect to the convertible senior notes due in each of 2033, 2029 and 2027, and those that matured in 2025, unless our weighted average stock price is greater than $93.01, $126.31, $116.18 and $95.10, respectively, the initial conversion prices, there will be no difference between GAAP and non-GAAP diluted weighted average common shares outstanding.

We consider Adjusted EBITDA to be another important indicator of the operational strength and performance of our business and a good measure of our historical operating trends. Adjusted EBITDA eliminates items that we do not consider to be part of our core operations. We define Adjusted EBITDA as GAAP net income excluding the following items: interest and marketable securities income and losses; income taxes; depreciation and amortization of tangible and intangible assets; stock-based compensation; amortization of capitalized stock-based compensation; acquisition-related costs; restructuring charges; legal settlements; foreign exchange gains and losses; interest expense; amortization of capitalized interest expense; gains and losses on cost method investments; gains and losses from equity method investments; and other non-recurring or unusual items that may arise from time to time. Adjusted EBITDA margin represents Adjusted EBITDA stated as a percentage of revenue.

41

Table of Contents

The following table reconciles GAAP net income to Adjusted EBITDA and Adjusted EBITDA margin for the years ended December 31, 2025, 2024 and 2023 (in thousands):

  2025 2024 2023
Net income $ 452,031  $ 504,918  $ 547,629 
Amortization of acquired intangible assets 111,066  92,081  66,751 
Stock-based compensation 459,402  393,378  328,467 
Amortization of capitalized stock-based compensation and capitalized interest expense 50,890  42,910  32,981 
Restructuring charge 58,051  95,441  56,643 
Acquisition-related costs 3,247  7,502  13,345 
Legal settlements 4,000  2,500  — 
Interest and marketable securities income, net (70,808) (100,280) (45,194)

Interest expense 30,759  27,117  17,709 
Provision for income taxes 150,374  82,095  106,373 
Depreciation and amortization 548,012  514,455  472,035 
(Gain) loss on cost method investments, net
(9,370) 5,066  (311)
Gain from equity method investment —  —  (1,475)
Other expense, net 13,958  14,495  12,607 
Adjusted EBITDA $ 1,801,612  $ 1,681,678  $ 1,607,560 

Net income margin 11  % 13  % 14  %
Adjusted EBITDA margin 43  % 42  % 42  %

Impact of Foreign Currency Exchange Rates

Revenue and earnings from our international operations have historically been an important contributor to our financial results. Consequently, our financial results have been impacted, and management expects they will continue to be impacted, by fluctuations in foreign currency exchange rates. For example, when the local currencies of our international subsidiaries weaken, generally our consolidated results stated in U.S. dollars are negatively impacted.

Because exchange rates are a meaningful factor in understanding period-to-period comparisons, management believes the presentation of the impact of foreign currency exchange rates on revenue and earnings enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. The dollar impact of changes in foreign currency exchange rates presented is calculated by translating current period results using monthly average foreign currency exchange rates from the comparative period and comparing them to the reported amount. The percentage change at constant currency presented is calculated by comparing the prior period amounts as reported and the current period amounts translated using the same monthly average foreign currency exchange rates from the comparative period.

Liquidity and Capital Resources

To date, we have financed our operations primarily through public and private sales of debt and equity securities and cash generated by operations. As of December 31, 2025, our cash, cash equivalents and marketable securities, which are detailed in Note 3 to the consolidated financial statements included elsewhere in this annual report on Form 10-K, totaled $1.9 billion. We place our cash investments in instruments that meet high-quality credit standards, as specified in our investment policy. Our investment policy is also designed to limit the amount of our credit exposure to any one issue or issuer and seeks to manage these assets to achieve our goals of preserving principal and maintaining adequate liquidity at all times.

Changes in cash, cash equivalents and marketable securities are dependent upon changes in, among other things, working capital items such as accounts receivable, deferred revenue, accounts payable, various accrued expenses and operating lease obligations, as well as changes in our capital and financial structure due to common stock repurchases, debt repayments and issuances, purchases and sales of marketable securities, cash paid for acquisitions and similar events. We believe our strong balance sheet, cash position and access to funds available under our revolving credit facilities are important competitive

42

Table of Contents

differentiators that provide the financial stability and flexibility to enable us to continue to make investments at opportune times. We expect to continue to evaluate strategic investments to strengthen our business.

As of December 31, 2025, we had cash and cash equivalents of $382.7 million held in accounts outside the U.S. The U.S. Tax Cuts and Jobs Act establishes a territorial tax system in the U.S., which provides companies with the potential ability to repatriate earnings with minimal U.S. federal income tax impact. As a result, our liquidity is not expected to be materially impacted by the amount of cash and cash equivalents held in accounts outside the U.S.

Cash Provided by Operating Activities

For the Years Ended December 31,
(in thousands) 2025 2024 2023
Net income $ 452,031  $ 504,918  $ 547,629 
Non-cash reconciling items included in net income 1,239,811  1,048,595  931,507 
Changes in operating assets and liabilities (173,077) (34,342) (130,697)
Net cash provided by operating activities $ 1,518,765  $ 1,519,171  $ 1,348,439 

The decrease in cash provided by operating activities for 2025 as compared to 2024 was due to timing of customer collections and severance payments occurring in 2025 related to our restructuring action in the third quarter of 2024, as well as higher income tax payments driven by intercompany sales of intellectual property. These decreases were partially offset by the shift of our employer 401(k) match program from cash-based to stock-based effective in 2025.

The increase in cash provided by operating activities for 2024 as compared to 2023 was due to increased collections from customers as a result of increased revenue and timing of customer collections. The increase was also due to the shift in our performance-based compensation program from cash-based to stock-based, which led to cash performance-based program payments in 2023 that did not recur in 2024.

Cash Used in Investing Activities

For the Years Ended December 31,
(in thousands) 2025 2024 2023
Cash paid for business acquisitions, net of cash acquired $ (55,112) $ (434,066) $ (106,171)
Cash paid for asset acquisitions
(29,930) (132,835) (120,985)

Purchases of property and equipment and capitalization of internal-use software development costs (819,500) (685,267) (730,040)
Net marketable securities activity 369,093  449,516  (884,973)
Other, net (5,294) 3,973  (6,069)
Net cash used in investing activities $ (540,743) $ (798,679) $ (1,848,238)

The decrease in cash used in investing activities in 2025 as compared to 2024 was due to:

• the acquisitions of Noname Security and Edgio in 2024; and
• a decrease in net marketable securities activity, primarily due to higher purchases compared to maturities and sales, which resulted from net proceeds from our convertible senior notes activities.

These decreases were partially offset by higher purchases of property and equipment related to network expansion, primarily for our compute infrastructure.

The decrease in cash used in investing activities in 2024 as compared to 2023 was due to an increase in cash proceeds from net marketable securities activity to fund the acquisition of Noname Security in 2024 and a reduction of purchases of property and equipment related to our compute platform build-out. Additionally, cash used in investing activities in 2023 included an increase in purchases of marketable securities with the proceeds from our August 2023 issuance of convertible senior notes. These decreases were partially offset by cash paid for the acquisition of Noname Security.

43

Table of Contents

Cash (Used in) Provided by Financing Activities

For the Years Ended December 31,
(in thousands) 2025 2024 2023
Net convertible senior notes activity $ 276,245  $ —  $ 1,101,028 
Activity related to stock-based compensation (61,320) (111,663) (3,243)
Repurchases of common stock (799,963) (557,468) (654,046)
Other, net (2,998) (10,504) (360)
Net cash (used in) provided by financing activities $ (588,036) $ (679,635) $ 443,379 

The decrease in cash used in financing activities in 2025 as compared to 2024 was primarily due to net convertible senior notes activity and decreased employee taxes paid in 2025 driven by a reduction in stock price. During 2025, we issued $1,725.0 million in par value of convertible senior notes and repaid $1,150.0 million in convertible senior notes which were due in May 2025. These decreases were partially offset by the increase in repurchases of our common stock as part of our share repurchase program.

The increase in cash used in financing activities in 2024 as compared to 2023 was due to the net proceeds received in 2023 from our convertible senior notes due 2029 that did not recur in 2024 and increased employee taxes paid in 2024 related to vesting of stock awards driven by the shift in our performance-based compensation program from cash-based to stock-based and an increase in stock price. These increases were partially offset by a reduction in repurchases of our common stock as part of our share repurchase program.

In October 2021, our board of directors authorized a $1.8 billion share repurchase program that was effective from January 2022 through December 2024. In May 2024, our board of directors authorized a new $2.0 billion share repurchase program, effective May 2024 through June 2027, which was in addition to amounts remaining under the January 2022 program. As of December 31, 2025, the January 2022 program was fully utilized and $1.2 billion remains available for repurchase on the May 2024 program. During 2025, 2024 and 2023, we repurchased 10.0 million, 5.6 million and 7.8 million shares of our common stock, respectively, at an average price per share of $79.77, $99.14 and $83.83, respectively. Our goals for the share repurchase programs are to offset the dilution created by our employee equity compensation programs over time and provide the flexibility to return capital to stockholders as business and market conditions warrant, while still preserving our ability to pursue other strategic opportunities. The timing and amount of any future share repurchases will be determined by our management based on its evaluation of market conditions and other factors.

Convertible Senior Notes

In May 2025, we issued $1,725.0 million in principal amount of convertible senior notes due 2033 and entered into related convertible note hedge and warrant transactions. We intend to use a portion of the net proceeds to repay at maturity our $1,150.0 million outstanding aggregate principal amount of convertible senior notes due in 2027. Additionally, we used a portion of the net proceeds to repay $250.0 million in borrowings made in April 2025 under our revolving credit agreement entered into in November 2022 ("2022 Credit Agreement") and for share repurchases.

As of December 31, 2025, we had $4,140.0 million of convertible senior notes outstanding that are senior unsecured obligations and bear interest payable semi-annually in arrears. These notes mature between September 2027 and May 2033. The terms of the notes and hedge and warrant transactions are discussed more fully in Note 11 to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

Revolving Credit Facilities

In January 2025, we entered into a $150.0 million uncommitted revolving credit agreement ("2025 Credit Agreement"). Any outstanding borrowings are secured by collateral, consisting primarily of available-for-sale marketable securities. The 2025 Credit Agreement does not expire but is cancellable at any time and any borrowings can be due on demand. Borrowings under the 2025 Credit Agreement will bear a specified interest rate, based on the Secured Overnight Financing Rate, and interest period at the time of the confirmed borrowing. There were no outstanding borrowings under the 2025 Credit Agreement as of December 31, 2025.

In November 2022, we entered into a $500.0 million, five-year revolving credit agreement ("2022 Credit Agreement"), which allows us to borrow up to $500.0 million at various interest rates and contains customary representations and warranties,

44

Table of Contents

affirmative and negative covenants and events of default. The 2022 Credit Agreement was amended in May 2025 to increase the aggregate revolving commitments from $500.0 million to $1.0 billion and to extend the expiration one year to November 2028. As of December 31, 2025, we were in compliance with all covenants. There were no outstanding borrowings under the 2022 Credit Agreement as of December 31, 2025.

The terms of the revolving credit agreements are discussed more fully in Note 11 to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

Operating Leases

We have entered into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for our servers and other networking equipment. In addition, we have entered into an operating lease with a data center operator for space in the Virginia area that we contemporaneously subleased to an affiliate of a large social media customer. A portion of the space at the subleased data center commenced in 2025, with the remainder of the space commencing in January 2026. Both the lease payments and associated sublease income are expected to substantially offset each other.

As of December 31, 2025, the total obligation under these agreements was $1,865.9 million, of which $560.3 million is for the subleased data center. In the next 12 months, $342.5 million of the total obligation is payable, including $43.6 million for the subleased data center obligation. We have also executed additional operating leases of $465.1 million, of which substantially all are expected to commence in 2026, including $187.1 million for the subleased data center. The operating lease terms and maturities are discussed more fully in Note 12 to the consolidated financial statements included elsewhere in this annual report on Form 10-K.

Purchase Commitments

We enter into long-term agreements with network and internet service providers for bandwidth, as well as execute purchase orders for the purchase of goods or services in the ordinary course of business, which may contain minimum commitments. These minimum commitments may vary from period to period depending on the timing and length of contract renewals with our vendors, and on our plans for network expansion, including our expansion plans related to our compute locations.

Liquidity Outlook

Based on our present business plan, we expect our current cash, cash equivalents and marketable securities balances and our forecasted cash flows from operations to be sufficient to meet our foreseeable cash needs for at least the next 12 months. Our foreseeable cash needs, in addition to our recurring operating costs, include our expected capital expenditures, investments in information technology, potential strategic acquisitions, anticipated share repurchases, lease and purchase commitments and settlements of other liabilities.

Off-Balance Sheet Arrangements

We have entered into indemnification agreements with third parties, including vendors, customers, landlords, our officers and directors, stockholders of acquired companies, joint venture partners and third parties to which we license technology. Generally, these indemnification agreements require us to reimburse losses suffered by a third party due to various events, such as lawsuits arising from patent or copyright infringement or our negligence. These indemnification obligations are considered off-balance sheet arrangements in accordance with the authoritative guidance for guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others. See Note 13 to our consolidated financial statements included elsewhere in this annual report on Form 10-K for further discussion of these indemnification agreements. The fair value of guarantees issued or modified during 2025 and 2024 was determined to be immaterial.

Significant Accounting Policies and Estimates

See Note 2 to the consolidated financial statements included elsewhere in this annual report on Form 10-K for information regarding recent and newly adopted accounting pronouncements.

45

Table of Contents

Application of Critical Accounting Policies and Estimates

Overview

Our MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. These principles require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, cash flow and related disclosure of contingent assets and liabilities. Our estimates include those related to revenue recognition, accounts receivable and related reserves, valuation and impairment of marketable securities, capitalized internal-use software development costs, goodwill and acquired intangible assets, income tax reserves, impairment and useful lives of long-lived assets and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances at the time such estimates are made. Actual results may differ from these estimates. For a complete description of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this annual report on Form 10-K.

Definitions

We define our critical accounting policies as those policies that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our consolidated financial statements. Our estimates are based upon assumptions and judgments about matters that are highly uncertain at the time an accounting estimate is made and applied and require us to assess a range of potential outcomes.

Review of Critical Accounting Policies and Estimates

Revenue Recognition

Our contracts with customers sometimes include promises to transfer multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. Advanced features that enhance a main product or service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period.

Determination of the standalone selling price ("SSP") for each distinct performance obligation in a contract also requires the exercise of judgment by management. SSP is based on observable inputs such as the price we charge for the service when sold separately, or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP. Changes to SSP could result in differences in the allocation of transaction price among performance obligations, which could result in differences in the timing and amount of revenue recognized in a period.

From time to time, we enter into contracts to sell services or license technology to unrelated enterprises at or about the same time that we enter into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. Different determinations on whether a payment represents a distinct service could result in differences in the amount of revenue recognized.

We may also resell licenses or services of third parties. If we are acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which we will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation. Different determinations on whether we are acting as an agent or a principal could change the amount of revenue recognized.

Accounts Receivable and Related Reserves

Trade accounts receivable are recorded at the invoiced amounts and do not bear interest. In addition to trade accounts receivable, our accounts receivable balance includes unbilled accounts that represent revenue recorded for customers that is typically billed within one month. We record allowances against our accounts receivable balance, primarily for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income.

46

Table of Contents

Estimates are used in determining our allowance for current expected credit losses using historical loss rates for the previous twelve months as well as expectations about the future where we have been able to develop forecasts to supports our estimates. In addition, the allowance for current expected credit losses considers outstanding balances on a customer-specific, account-by-account basis. We assess collectability based upon a review of customer receivables from prior sales with collection issues where we no longer believe that the customer has the ability to pay for services previously provided. We also perform ongoing credit evaluations of our customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash basis reserve until we receive consistent payments.

Valuation and Impairment of Marketable Securities

We measure the fair value of our financial assets and liabilities at the end of each reporting period. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We have certain financial assets and liabilities recorded at fair value (principally cash equivalents and short- and long-term marketable securities) that have been classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we can access at the reporting date. Fair values determined by Level 2 inputs utilize data points other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability.

Marketable securities, which consist primarily of securities available-for-sale, are evaluated for impairment when the fair value declines below the cost basis. We periodically evaluate whether the decline is due to credit losses by considering available evidence regarding these investments including, among other factors, the extent to which, the fair value is less than the cost basis; the financial health of, and business outlook for, the issuer, including industry and sector performance and operational and financing cash flow factors. Additionally, we consider our intent and ability to retain our investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Assessing the above factors involves inherent uncertainty. If a portion of the unrealized loss is due to credit losses or we do not have the intent or ability to retain our investment in the security, an impairment will be recorded in interest and marketable securities income, net. Impairments, if recorded, could be materially different from the actual market performance of marketable securities in our portfolio if, among other things, relevant information related to our investments was not publicly available or other factors not considered by us would have been relevant to the determination of impairment.

Impairment of Long-Lived Assets

We review our long-lived assets, such as property and equipment, operating lease right-of-use assets and acquired intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Events that would trigger an impairment review include a change in the use of the asset or forecasted negative cash flows related to the asset. When such events occur, we compare the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. The estimates required to apply this accounting policy include forecasted usage of the long-lived assets, the useful lives of these assets and expected future cash flows. Changes in these estimates could materially impact results from operations.

Goodwill and Acquired Intangible Assets

We test goodwill for impairment on an annual basis, as of December 31, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We have concluded that we have one reporting unit and that our chief operating decision maker is our chief executive officer and the executive management team. We have assigned the entire balance of goodwill to our one reporting unit. The fair value of the reporting unit was based on our market capitalization as of each of December 31, 2025 and 2024, and it was substantially in excess of the carrying value of the reporting unit at each date.
    
Acquired intangible assets consist of completed technologies, customer relationships, trademarks and trade names, non-compete agreements and acquired license rights. We engage third party valuation specialists to assist us with the initial measurement of the fair value of acquired intangible assets. Fair value and amortization period determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. The value of our acquired intangible assets could be different if we had used different assumption. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated

47

Table of Contents

economic value derived from the related intangible assets.

Income Taxes

    Our provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated for the estimated future tax effects attributable to temporary differences and carryforwards by using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized.

We currently have net deferred tax assets, comprised of net operating loss ("NOL") carryforwards, tax credit carryforwards and deductible temporary differences. Our management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized. In determining our net deferred tax assets and valuation allowances, annualized effective tax rates and cash paid for income taxes, management is required to make judgments and estimates about domestic and foreign profitability, the timing and extent of the utilization of NOL carryforwards, applicable tax rates, transfer pricing methodologies and tax planning strategies. Judgments and estimates related to our projections and assumptions are inherently uncertain; therefore, actual results could differ materially from our projections.

We have recorded certain tax reserves to address potential exposures involving our income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. Our estimate of the value of our tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount that we estimated.

Uncertainty in income taxes is recognized in our consolidated financial statements using a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that we believe has a greater than 50% likelihood of being realized upon ultimate settlement.

Stock-Based Compensation

We issue stock awards as part of our compensation program which includes restricted stock, restricted stock units, deferred stock units and employee stock purchases related to our employee stock purchase plan. For equity classified awards, we measure the fair value of these awards at the grant date and recognize such fair value as expense over the vesting period. For liability classified awards, the fair value is determined each reporting period beginning at the grant date until final vesting. We have selected the Black-Scholes option pricing model to determine the fair value of stock awards issued under our 1999 Employee Stock Purchase Plan and the Monte Carlo simulation model to determine the fair value of market-based restricted stock unit awards. Determining the fair value of stock-based awards at the grant date requires judgment, including estimating the expected life of the stock awards and the volatility of the underlying common stock. Our assumptions may differ from those used in prior periods. Changes to the assumptions may have an impact on the fair value of stock awards, which could have an impact on our financial statements. Judgment is also required in estimating the number of stock awards that are expected to be forfeited. Should our actual forfeiture rates differ significantly from our estimates, our stock-based compensation expense and results of operations could be materially impacted. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, we make judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Changes to the estimates we make from time to time may have an impact on our stock-based compensation expense and our results of operations.

Capitalized Internal-Use Software Costs

We capitalize salaries and related costs, including stock-based compensation, of employees and consultants who devote time to the development of internal-use software development projects, as well as interest expense related to our outstanding debt. Capitalization begins during the application development stage, once the preliminary project stage has been completed. If a project constitutes an enhancement to previously-developed software, we assess whether the enhancement creates additional functionality to the software, thus qualifying the work incurred for capitalization. Once the project is available for general release, capitalization ceases and we estimate the useful life of the asset and begin amortization. We periodically assess whether triggering events are present to review internal-use software for impairment. Changes in our estimates related to internal-use software would increase or decrease operating expenses or amortization recorded during the period.

48

Table of Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our portfolio of cash equivalents and short- and long-term investments is maintained in a variety of securities that are detailed in Note 3 to the consolidated financial statements included elsewhere in this annual report on Form 10-K. The majority of our investments are classified as available-for-sale securities and carried at fair market value with cumulative unrealized gains or losses recorded as a component of accumulated other comprehensive loss within stockholders' equity. A sharp rise in interest rates could have an adverse impact on the fair market value of certain securities in our portfolio. We do not currently hedge our interest rate exposure and do not enter into financial instruments for trading or speculative purposes. If market interest rates were to increase by 100 basis points, reflected uniformly across the yield curve regardless of the duration to maturity, from December 31, 2025 levels, the fair value of our available-for-sale portfolio would decline by approximately $14.2 million.

As of December 31, 2025, we had $ 4,140.0 million in aggregate principal amount of convertible senior notes outstanding that are senior unsecured obligations with fixed annual interest rates. The terms of the notes are discussed more fully in Note 11 to our consolidated financial statements included elsewhere in this annual report on Form 10-K. Due to the fixed annual interest rate, these notes do not give rise to financial or economic interest exposure associated with changes in interest rates. However, the fair value of fixed rate debt instruments fluctuates when interest rates change. Additionally, the fair value can be affected when the market price of our common stock fluctuates. We carry the notes at face value less an unamortized discount on our consolidated balance sheet, and we present the fair value for required disclosure purposes only.

Our exposure to risk for changes in interest rates relates primarily to any borrowings under our credit agreements, which have variable rates of interest. There were no outstanding borrowings under the 2025 Credit Agreement or 2022 Credit Agreement as of December 31, 2025.

Foreign Currency Risk

Growth in our international operations will incrementally increase our exposure to foreign currency fluctuations as well as other risks typical of international operations that could impact our business, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures and other regulations and restrictions. Because we publicly report in U.S. dollars, our reported revenue results are negatively impacted when the U.S. dollar strengthens and benefit when the U.S. dollar weakens and has an opposite effect on our expenses where our expenses are positively impacted when the U.S. dollar strengthens and are negatively impacted when the U.S. dollar weakens. However, the impact to expenses only partially offsets the impact to our revenue.

Transaction Exposure

Foreign exchange rate fluctuations may adversely impact our consolidated results of operations as exchange rate fluctuations on transactions denominated in currencies other than functional currencies result in gains and losses that are reflected in our consolidated statements of income. We enter into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in our consolidated statements of income within other expense, net. Foreign currency transaction gains and losses from these forward contracts were determined to be immaterial during the years ended December 31, 2025, 2024 and 2023. We do not enter into derivative financial instruments for trading or speculative purposes.

Translation Exposure

To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency-denominated transactions will result in increased revenue and operating expenses. Conversely, our revenue and operating expenses will decrease when the U.S. dollar strengthens against foreign currencies. A hypothetical 10% strengthening or weakening in the value of the U.S. dollar relative to the foreign currencies in which our revenues and expenses are denominated would not result in a material impact to our consolidated financial statements.

Foreign exchange rate fluctuations may also adversely impact our consolidated financial condition as the assets and liabilities of our international operations are translated into U.S. dollars in preparing our consolidated balance sheet. These gains or losses are recorded as a component of accumulated other comprehensive loss within stockholders' equity.

49

Table of Contents

Credit Risk
Concentrations of credit risk with respect to accounts receivable are limited to certain customers to which we make substantial sales. Our customer base consists of a large number of geographically dispersed customers diversified across numerous industries. We believe that our accounts receivable credit risk exposure is limited. As of December 31, 2025, there was one customer with an accounts receivable balance greater than 10% of total accounts receivable. As of December 31, 2024, no customer had an accounts receivable balance greater than 10% of total accounts receivable. We believe that at December 31, 2025, the concentration of credit risk related to accounts receivable was insignificant.

50

Table of Contents

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Akamai Technologies, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Akamai Technologies, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

51

Table of Contents

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

As described in Notes 2 and 16 to the consolidated financial statements, the Company’s total revenue was $4.208 billion for the year ended December 31, 2025. The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company’s contracts consist of security solutions, the delivery of content, applications and software over the internet, cloud computing solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. Most security, delivery and cloud computing services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly usage commitments that expire each period. 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.

The principal considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter are a high degree of auditor effort involved in performing procedures and evaluating audit evidence related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to revenue recognition, including controls over the recording of revenue at the amount of consideration the Company expects to receive as the promised services are delivered to the customer. These procedures also included, among others, (i) evaluating and recalculating, on a sample basis, the revenue recognized by obtaining and inspecting source documents, such as executed contracts, invoices, and delivery documents; (ii) testing the delivery documents provided by management; and (iii) confirming a sample of outstanding customer invoice balances as of December 31, 2025, and for confirmations not returned, obtaining and inspecting source documents, such as executed contracts, invoices, delivery documents, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 20, 2026

We have served as the Company’s auditor since 1998.

52

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except share data) December 31, 2025 December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents $ 930,231   $ 517,707  
Marketable securities 256,302   1,078,876  
Accounts receivable, net of reserves of $ 7,706 and $ 3,522 at December 31, 2025 and 2024, respectively
793,666   727,687  
Prepaid expenses and other current assets 306,481   253,827  
Total current assets 2,286,680   2,578,097  
Marketable securities 733,228   275,592  
Property and equipment, net 2,333,462   1,995,071  
Operating lease right-of-use assets 1,469,700   1,006,738  
Acquired intangible assets, net 614,542   727,585  
Goodwill 3,206,525   3,151,077  
Deferred income tax assets 622,776   483,249  
Other assets 212,730   151,376  
Total assets $ 11,479,643   $ 10,368,785  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 125,054   $ 130,447  
Accrued expenses 319,622   370,888  
Deferred revenue 151,186   149,222  
Convertible senior notes —   1,149,116  
Operating lease liabilities 336,613   259,134  
Other current liabilities 35,043   32,516  
Total current liabilities 967,518   2,091,323  
Deferred revenue 17,088   26,314  
Deferred income tax liabilities 31,089   16,066  
Convertible senior notes 4,105,355   2,396,695  
Operating lease liabilities 1,233,420   829,660  
Other liabilities 147,802   130,370  
Total liabilities 6,502,272   5,490,428  
Commitments and contingencies (Note 13)
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
—   —  
Common stock, $ 0.01  par value; 700,000,000  shares authorized; 149,711,094 shares issued and 144,711,094 shares outstanding at December 31, 2025, and 155,647,988 shares issued and 150,025,096 outstanding at December 31, 2024
1,497   1,556  
Additional paid-in capital 2,080,487   2,618,384  
Accumulated other comprehensive loss ( 94,756 ) ( 155,993 )
Treasury stock, at cost; 5,000,000 shares at December 31, 2025, and 5,622,892 shares at December 31, 2024
( 434,786 ) ( 558,488 )
Retained earnings 3,424,929   2,972,898  
Total stockholders’ equity 4,977,371   4,878,357  
Total liabilities and stockholders’ equity $ 11,479,643   $ 10,368,785  

The accompanying notes are an integral part of the consolidated financial statements.

53

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data) For the Years Ended December 31,
2025 2024 2023
Revenue $ 4,208,175   $ 3,991,168   $ 3,811,920  
Costs and operating expenses:
Cost of revenue (exclusive of amortization of acquired intangible assets shown below) 1,727,513   1,620,793   1,511,063  
Research and development 513,560   470,876   406,048  
Sales and marketing 574,302   556,781   533,226  
General and administrative 656,739   621,785   600,851  
Amortization of acquired intangible assets 111,066   92,081   66,751  
Restructuring charge 58,051   95,441   56,643  
Total costs and operating expenses 3,641,231   3,457,757   3,174,582  
Income from operations 566,944   533,411   637,338  
Interest and marketable securities income, net 70,808   100,280   45,194  
Interest expense ( 30,759 ) ( 27,117 ) ( 17,709 )
Other expense, net ( 4,588 ) ( 19,561 ) ( 12,296 )
Income before provision for income taxes 602,405   587,013   652,527  
Provision for income taxes ( 150,374 ) ( 82,095 ) ( 106,373 )
Gain from equity method investment —   —   1,475  
Net income $ 452,031   $ 504,918   $ 547,629  
Net income per share:
Basic $ 3.11   $ 3.34   $ 3.59  
Diluted $ 3.07   $ 3.27   $ 3.52  
Shares used in per share calculations:
Basic 145,402   151,392   152,510  
Diluted 147,023   154,346   155,397  

The accompanying notes are an integral part of the consolidated financial statements.

54

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

  For the Years Ended December 31,
(in thousands) 2025 2024 2023
Net income $ 452,031   $ 504,918   $ 547,629  
Other comprehensive gain (loss):

Foreign currency translation adjustments 59,563   ( 59,064 ) 18,439  
Change in unrealized gain (loss) on investments, net of income tax (expense) benefit of $( 522 ), $ 515 and $( 8,562 ) for the years ended December 31, 2025, 2024 and 2023, respectively
1,674   ( 1,599 ) 26,563  
Other comprehensive gain (loss)
61,237   ( 60,663 ) 45,002  
Comprehensive income $ 513,268   $ 444,255   $ 592,631  

The accompanying notes are an integral part of the consolidated financial statements.

55

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) For the Years Ended December 31,
2025 2024 2023
Cash flows from operating activities:
Net income $ 452,031   $ 504,918   $ 547,629  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 708,611   648,410   570,776  
Stock-based compensation 459,402   393,378   328,467  
Provision (benefit) for deferred income taxes
26,653   ( 70,268 ) ( 22,987 )
Amortization of debt issuance costs 7,053   6,521   5,341  
(Gain) loss on investments ( 9,370 ) 5,066   ( 311 )
Other non-cash reconciling items, net 47,462   65,488   50,221  
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable ( 59,437 ) ( 22,300 ) ( 49,203 )
Prepaid expenses and other current assets ( 43,749 ) ( 46,094 ) ( 18,726 )
Accounts payable and accrued expenses ( 48,577 ) 344   ( 39,825 )
Deferred revenue ( 13,054 ) 20,687   48  
Other current liabilities 965   26,860   1,516  
Other non-current assets and liabilities ( 9,225 ) ( 13,839 ) ( 24,507 )
Net cash provided by operating activities 1,518,765   1,519,171   1,348,439  
Cash flows from investing activities:
Cash paid for business acquisitions, net of cash acquired ( 55,112 ) ( 434,066 ) ( 106,171 )
Cash paid for asset acquisitions ( 29,930 ) ( 132,835 ) ( 120,985 )

Purchases of property and equipment ( 507,786 ) ( 390,433 ) ( 457,909 )
Capitalization of internal-use software development costs ( 311,714 ) ( 294,834 ) ( 272,131 )
Purchases of short- and long-term marketable securities
( 964,590 ) ( 236,176 ) ( 1,461,890 )
Proceeds from sales of short- and long-term marketable securities
273,375   333,069   201,585  
Proceeds from maturities and redemptions of short- and long-term marketable securities
1,060,308   352,623   375,332  
Other, net ( 5,294 ) 3,973   ( 6,069 )
Net cash used in investing activities ( 540,743 ) ( 798,679 ) ( 1,848,238 )

56

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(in thousands) For the Years Ended December 31,
2025 2024 2023

Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility 250,000   —   90,000  
Repayment of borrowings under revolving credit facility ( 250,000 ) —   ( 90,000 )
Proceeds from the issuance of convertible senior notes, net of issuance costs 1,701,202   —   1,247,388  
Proceeds from the issuance of warrants related to convertible senior notes 330,855   —   90,195  
Purchases of note hedges related to convertible senior notes ( 605,820 ) —   ( 236,555 )
Repayment of convertible senior notes ( 1,149,992 ) —   —  
Proceeds related to the issuance of common stock under stock plans 62,450   61,513   62,979  
Employee taxes paid related to net share settlement of stock awards ( 123,770 ) ( 173,176 ) ( 66,222 )
Repurchases of common stock ( 799,963 ) ( 557,468 ) ( 654,046 )
Other, net ( 2,998 ) ( 10,504 ) ( 360 )
Net cash (used in) provided by financing activities ( 588,036 ) ( 679,635 ) 443,379  
Effects of exchange rate changes on cash, cash equivalents and restricted cash 22,238   ( 12,243 ) 3,868  
Net increase (decrease) in cash, cash equivalents and restricted cash 412,224   28,614   ( 52,552 )
Cash, cash equivalents and restricted cash at beginning of year 519,084   490,470   543,022  
Cash, cash equivalents and restricted cash at end of year $ 931,308   $ 519,084   $ 490,470  

Supplemental disclosure of cash flow information:

Cash paid for interest expense 23,293   20,420   6,328  
Cash paid for operating lease liabilities 329,674   288,067   257,961  
Non-cash activities:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities 742,969   356,912   333,590  
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses 55,479   55,515   65,048  
Capitalization of stock-based compensation 126,046   107,488   83,676  

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 930,231   $ 517,707   $ 489,468  
Restricted cash 1,077   1,377   1,002  
Cash, cash equivalents and restricted cash $ 931,308   $ 519,084   $ 490,470  

The accompanying notes are an integral part of the consolidated financial statements.

57

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data) Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders' Equity
Shares Amount
Balance at January 1, 2023
156,494,816   $ 1,565   $ 2,578,603   $ —   $ ( 140,332 ) $ 1,920,351   $ 4,360,187  

Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes 1,743,329   17   ( 69,621 ) ( 69,604 )
Issuance of common stock under employee stock purchase plan 796,541   8   62,357   62,365  
Stock-based compensation 398,495   398,495  
Issuance of warrants related to convertible senior notes 90,195   90,195  
Purchase of note hedge related to convertible senior notes, net of deferred taxes of $ 57,628
( 178,927 ) ( 178,927 )
Repurchases of common stock ( 7,801,778 ) ( 658,187 ) ( 658,187 )
Treasury stock retirement ( 78 ) ( 658,109 ) 658,187   —  
Net income 547,629   547,629  
Foreign currency translation adjustment 18,439   18,439  
Change in unrealized gain on investments, net of tax
26,563   26,563  
Balance at December 31, 2023
151,232,908   $ 1,512   $ 2,222,993   $ —   $ ( 95,330 ) $ 2,467,980   $ 4,597,155  
Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes
3,627,278   36   ( 172,560 ) ( 172,524 )
Issuance of common stock under employee stock purchase plan 787,802   8   61,123   61,131  
Stock-based compensation 506,828   506,828  
Repurchases of common stock ( 5,622,892 ) ( 558,488 ) ( 558,488 )
Net income 504,918   504,918  
Foreign currency translation adjustment ( 59,064 ) ( 59,064 )
Change in unrealized loss on investments, net of tax
( 1,599 ) ( 1,599 )
Balance at December 31, 2024
150,025,096   1,556   2,618,384   ( 558,488 ) ( 155,993 ) 2,972,898   4,878,357  

58

Table of Contents

AKAMAI TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY, continued

(in thousands, except share data) Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders' Equity
Shares Amount

Balance at December 31, 2024
150,025,096   1,556   2,618,384   ( 558,488 ) ( 155,993 ) 2,972,898   4,878,357  

Issuance of common stock upon the vesting of restricted and deferred stock units, net of shares withheld for employee taxes
3,405,612   35   ( 123,812 ) ( 123,777 )
Issuance of common stock under employee stock purchase plan 965,639   9   62,313   62,322  
Stock-based compensation 545,322   545,322  
Issuance of warrants related to convertible senior notes 330,855   330,855  
Purchase of note hedge related to convertible senior notes, net of deferred taxes of $ 149,509
( 456,311 ) ( 456,311 )
Repurchases of common stock ( 10,028,703 ) ( 804,077 ) ( 804,077 )
Re-issuance of treasury stock for 401(k) employer match 343,450   31,412   31,412  
Treasury stock retirement
( 103 ) ( 896,264 ) 896,367   —  
Net income 452,031   452,031  
Foreign currency translation adjustment 59,563   59,563  
Change in unrealized gain on investments, net of tax
1,674   1,674  
Balance at December 31, 2025
144,711,094   $ 1,497   $ 2,080,487   $ ( 434,786 ) $ ( 94,756 ) $ 3,424,929   $ 4,977,371  

The accompanying notes are an integral part of the consolidated financial statements.

59

Table of Contents

AKAMAI TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

1. Nature of Business and Basis of Presentation

Akamai Technologies, Inc. (the “Company”) develops and provides solutions for global enterprises to build, secure and accelerate their applications and digital experiences. Its massively distributed global infrastructure is comprised of core and distributed compute sites, more than 4,300 edge points-of-presence in over 130 countries and approximately 700 cities. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. The Company is currently organized and operates as one operating and reportable segment.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements.

2. Summary of Significant Accounting Policies

Use of Estimates

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Significant estimates, judgments and assumptions used in these financial statements include, but are not limited to, those related to revenue, accounts receivable and related reserves, valuation and impairment of investments and marketable securities, valuation and amortization periods of acquired intangible assets, useful lives and realizability of long-lived assets, capitalized internal-use software development costs, income tax reserves and accounting for stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the consolidated financial statements prospectively from the date of the change in estimate.

Cash, Cash Equivalents and Marketable Securities

Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase. Marketable securities consist of corporate, government and other securities. Securities having remaining maturities of less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets.

The Company classifies its fixed income securities with readily determinable fair values as available-for-sale. These investments are classified as marketable securities on the consolidated balance sheets and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive loss, a separate component of stockholders’ equity.

Available-for-sale securities are evaluated for impairment when the fair value declines below the cost basis. The Company periodically evaluates whether the decline is due to credit losses by considering available evidence regarding these investments including, among other factors, the extent to which, the fair value is less than the cost basis; the financial health of, and business outlook for, the issuer, including industry and sector performance and operational and financing cash flow factors. Additionally, the Company considers its intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Assessing the above factors involves inherent uncertainty. If a portion of the unrealized loss is due to credit losses, or if the Company does not have the intent or ability to retain its investment in the security, an impairment will be recorded in interest and marketable securities income, net. Impairments, if recorded, could materially differ from the actual market performance of marketable securities in the Company's portfolio if, among other things, relevant information related to the Company's investments was not publicly available, or other factors not considered by the Company would have been relevant to the determination of impairment.

Accounts Receivable and Related Reserves

The Company’s accounts receivable balance includes unbilled amounts that represent revenue recorded for customers that are typically billed monthly in arrears. The Company records reserves against its accounts receivable balance which primarily

60

Table of Contents

consists of allowances for current expected credit losses. Increases and decreases in the allowance for current expected credit losses are included as a component of general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses has been developed using historical loss rates for the previous twelve months as well as expectations about the future where the Company has been able to develop forecasts to support its estimates. In addition, the allowance considers outstanding balances on a customer-specific, account-by-account basis. The Company assesses collectibility based upon a review of customer receivables from prior sales with collection issues where the Company no longer believes that the customer has the ability to pay for services previously provided. The Company also performs ongoing credit evaluations of its customers. If such an evaluation indicates that payment is no longer reasonably assured for services provided, any future services provided to that customer will result in the creation of a cash-basis reserve until the Company receives consistent payments. The Company does not have any off-balance sheet credit exposure related to its customers.

Incremental Costs to Obtain a Contract with a Customer

The Company capitalizes incremental costs associated with obtaining customer contracts, specifically certain commission and incentive payments. The Company pays commissions and incentives up-front based on contract value upon signing a new arrangement with a customer and upon renewal and upgrades of existing contracts with customers if the renewal and upgrades result in a net incremental increase in contract value. To the extent commissions and incentives are earned, the expenses, including estimated payroll taxes, are deferred on the Company's consolidated balance sheet and amortized over the expected life of the customer arrangement on a straight-line basis. Based on the nature of the Company's unique technology and services, and the rate at which the Company continually enhances and updates its technology, the expected life of the customer arrangement is determined to be approximately four years . Additionally, the Company may pay commissions and incentives based upon contract value, rather than net incremental increase in contract value, to certain sales groups within the Company. For these commission arrangements, the Company amortizes capitalized costs for contract renewals over an average renewal contract period. The Company also incurs commission expense on an ongoing basis based upon revenue recognized. In these cases, no costs are deferred, as the commissions are earned and expensed in the same period for which the associated revenue is recognized.

Amortization of the costs is primarily included in sales and marketing expense in the consolidated statements of income. The current portion of deferred commission and incentive payments is included in prepaid expenses and other current assets, and the long-term portion is included in other assets on the Company's consolidated balance sheets.

Concentrations of Credit Risk

The amounts reflected in the consolidated balance sheets for accounts receivable, other current assets, accounts payable, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The Company maintains the majority of its cash, cash equivalents and marketable securities with major financial institutions that the Company believes to be of high credit standing. The Company believes that, as of December 31, 2025, its concentration of credit risk related to cash equivalents and marketable securities was not significant.

Concentrations of credit risk with respect to accounts receivable are primarily limited to certain customers to which the Company makes substantial sales. The Company’s customer base consists of a large number of geographically-dispersed customers diversified across several industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. For the years ended December 31, 2025, 2024 and 2023, no customer accounted for more than 10% of total revenue. As of December 31, 2025, there was one customer with an accounts receivable balance greater than 10 % of total accounts receivable. As of December 31, 2024, no customer had an accounts receivable balance greater than 10 % of total accounts receivable. The Company believes that, as of December 31, 2025 and 2024, its concentration of credit risk related to accounts receivable was not significant.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. When the Company has certain financial assets and liabilities recorded at fair value, principally cash equivalents and short- and long-term marketable securities, they are classified as Level 1, 2 or 3 within the fair value hierarchy. Fair values determined by Level 1 valuations are based upon the market prices for such investments that are readily available in active markets and Level 2 valuations are based upon the available quoted prices for similar assets in active markets (or

61

Table of Contents

identical assets in an inactive market). Fair values determined by Level 3 inputs are based on unobservable data points for the asset or liability.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment generally include purchases of items with a per-unit value greater than $ 1,000 and an estimated useful life greater than one year . Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the related lease terms or their estimated useful lives.

The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income from operations. Repairs and maintenance costs are expensed as incurred.

Operating Leases

The Company enters into operating leases for real estate assets related to office space and co-location assets related to space or racks at co-location facilities and related equipment for its servers and other networking equipment. The Company determines if an arrangement contains a lease at the inception of a contract by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration and the right to obtain the economic benefits from the use of the identified asset.

Upon commencement of a lease, the Company records a right-of-use asset that represents the Company’s right to use the underlying asset for the lease term and a lease liability that represents an obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Lease payments are discounted at the lease commencement date. As the implicit rates in the Company’s leases are not readily determinable, an incremental borrowing rate has been applied based on the Company's credit-adjusted risk-free rate.

The Company often enters into contracts that contain both lease and non-lease components. Real estate non-lease components include real estate taxes, insurance, maintenance, parking and other operating costs. Co-location non-lease components include utilities and other operating costs. The Company accounts for both lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, primarily utilities based on actual usage, common area maintenance and real estate taxes, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs.

The Company’s lease terms often include renewal options and, particularly in the case of co-location arrangements, may include evergreen provisions. The Company’s right-of-use assets and lease liabilities generally do not include the options to extend, or terminate, unless it is reasonably certain that the Company will exercise these options. The Company has elected to exclude leases for certain networking equipment and leases assumed through acquisitions with terms of 12 months or less from its right-of-use assets and lease liabilities on its consolidated balance sheets.

Lease expense is recognized on a straight-line basis over the expected lease term. Reductions in right-of-use assets and changes in lease liabilities are presented on a net basis within other non-current assets and liabilities within the operating section of the Company's consolidated statement of cash flows.

Cost Method Investments

The Company accounts for its cost method investments at cost, less impairment, and adjusts for subsequent observable price changes. The Company's cost method investments consist primarily of equity securities of companies which do not have readily determinable fair values, and in which the Company does not have the ability to exercise significant influence over the companies' operations. As of December 31, 2025 and 2024, the carrying amount of the Company's cost method investments was $ 31.7 million and $ 20.5 million, respectively, and are included in other assets in the consolidated balance sheets. During the years ended December 31, 2025, 2024 and 2023, the Company recorded a gain, net of impairments, of $ 9.4 million, an impairment of $ 5.1 million and a gain of $ 0.3 million, respectively, included in other expense, net within the Company's consolidated statements of income.

62

Table of Contents

Equity Method Investments

The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses.

The Company and Mitsubishi UFJ Financial Group ("MUFG") established Global Open Network, Inc. ("GO-NET") as a joint venture. The Company's 20 % stake in GO-NET was accounted for using the equity method. In 2022, MUFG announced its intention to suspend operations and liquidate GO-NET. The liquidation was finalized in 2023 resulting in no material impact to the Company's consolidated financial statements.

Goodwill, Acquired Intangible Assets and Long-Lived Assets

Goodwill is the amount by which the cost of acquired net assets in a business combination exceeds the fair value of the net identifiable assets on the date of purchase and is carried at its historical cost. The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company performs its impairment test of goodwill as of December 31 each year. As of December 31, 2025, 2024 and 2023, the Company concluded that it has one reporting unit and that its chief operating decision maker is its chief executive officer and the executive management team. The Company has assigned the entire balance of goodwill to one reporting unit. The fair value of the reporting unit was based on the Company's market capitalization as of each of December 31, 2025 and 2024, and it was substantially in excess of the carrying value of the reporting unit at each date.

Acquired intangible assets consist of completed technologies, customer-related intangible assets, trademarks and trade names and acquired license rights. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives based upon the estimated economic value derived from the related intangible asset. Significant judgment is used in determining fair values of acquired intangibles assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values.

Long-lived assets, including property and equipment, operating lease right-of-use assets and acquired intangible assets, are reviewed for impairment whenever events or changes in circumstances, such as service discontinuance, technological obsolescence, significant decreases in the Company’s market capitalization, facility closures or work-force reductions indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, the Company compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If this comparison indicates that an impairment is present, the amount of the impairment is calculated as the difference between the carrying amount and the fair value of the asset.

Contract Liabilities
    
Contract liabilities primarily represent payments received from customers for which the related performance obligations have not yet been satisfied. These balances consist of the unearned portion of monthly service fees and integration fees and prepayments made by customers for future periods. The current and long-term portions of the Company's contract liabilities are included in deferred revenue in the respective sections of the Company's consolidated balance sheets.

Revenue Recognition

The Company primarily derives revenue from the sale of services to customers executing contracts having terms of one year or longer. Services included in the Company's contracts consist of security solutions, the delivery of content, applications and software over the internet, cloud computing solutions and professional services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services.
    
The Company enters into contracts that may include various combinations of these services, which are generally capable of being distinct and accounted for as separate performance obligations. These contracts generally commit the customer to a minimum of monthly, quarterly or annual levels of usage and specify the rate at which the customer must pay for actual usage above the stated minimum. Based on the typical structure of the Company's contracts, which are generally for monthly recurring services that are essentially the same over time and have the same pattern of transfer to the customer, most performance obligations represent a promise to deliver a series of distinct services over time.

63

Table of Contents

The Company's contracts with customers sometimes include promises to deliver multiple services to a customer. Determining whether services are distinct performance obligations often requires the exercise of judgment by management. For example, advanced features that enhance a service and are highly interrelated are generally not considered distinct; rather, they are combined with the service they relate to into one performance obligation. Different determinations related to combining services into performance obligations could result in differences in the timing and amount of revenue recognized in a period.

Generally, the transaction price in a contract is equal to the committed price stated in the contract, less any discounts or rebates. The Company's typical contracts qualify for series accounting, and the pricing terms generally do not require estimation of the transaction price beyond the reporting period. As a result, any incremental fees generated as a result of usage or “bursting” over committed contract levels are recorded in the period to which the services relate. The amount of consideration recognized for usage above contract minimums is limited to the amount the Company expects to be entitled to receive in exchange for providing the services. Once the transaction price has been determined, the Company allocates such price among all performance obligations in the contract on a relative standalone selling price ("SSP") basis.

Determination of SSP requires the exercise of judgment by management. SSP is based on observable inputs such as the price the Company charges for the service when sold separately or the discounted list price per management’s approved price list. In cases where services are not sold separately or price list rates are not available, a cost-plus-margin approach or adjusted market approach is used to determine SSP.

Most security, delivery and cloud computing services represent stand-ready obligations that are satisfied over time as the customer simultaneously receives and consumes the benefits provided by the Company. Accordingly, revenue for those services is recognized over time, generally ratably over the term of the arrangement due to consistent monthly usage commitments that expire each period. Any bursting over given commitments is recognized in the period in which the usage was served. For services that involve traffic consumption, revenue is recognized in an amount that reflects the level of traffic served to a customer in a given period. For custom arrangements, other methods may be used as a measure of progress towards satisfying the performance obligations.

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 the point in time of delivery or satisfaction of the performance obligation.

From time to time, the Company enters into contracts to sell its services or license its technology to unrelated enterprises at or about the same time that it enters into contracts to purchase products or services from the same enterprises. Consideration payable to a customer is reviewed as part of the transaction price. If the payment to the customer does not represent payment for a distinct service, revenue is recognized only up to the net amount of consideration after customer payment obligations are considered. The Company may also resell the licenses or services of third parties. If the Company is acting as an agent in an arrangement with a customer to provide third party services, the transaction price reflects only the net amount to which the Company will be entitled, after accounting for payments made to the third party responsible for satisfying the performance obligation.

Cost of Revenue

Cost of revenue consists primarily of fees paid to network providers for bandwidth and to third-party network data centers for housing servers, also known as co-location costs. Cost of revenue also includes employee costs for services delivery and network operation, build-out and support of the Company's network; network build-out and supporting service costs, including network storage costs, cost of software licenses and partner program costs; depreciation of network equipment used to deliver the Company’s services; and amortization of network-related internal-use software. The Company enters into contracts for bandwidth with third-party network providers with terms typically ranging from several months to two years. These contracts generally commit the Company to pay minimum monthly fees plus additional fees for bandwidth usage above the committed level. In some circumstances, internet service providers (“ISPs”) make rack space available for the Company to locate its servers and provide access to their bandwidth at a discount or no cost. Although the Company does not provide any goods or services to the ISPs or the ISPs’ customers under these arrangements, the ISPs and their customers indirectly benefit by accessing content through a local Company server, resulting in better content delivery. The Company records the cost of these vendor relationships at their negotiated transaction price, which is either at a discount or no cost.

64

Table of Contents

Research and Development Costs and Capitalized Internal-Use Software

Research and development costs consist primarily of payroll and related personnel costs for the design, development, deployment, testing and enhancement of the Company’s solutions and global network. Costs incurred in the development of the Company’s services are expensed as incurred, except certain internal-use software development costs eligible for capitalization.

Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees in the Company’s engineering, research and development and information technology groups who are directly associated with, and who devote time to, the Company’s internal-use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage. Capitalization ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training and post-implementation stages of the software development life-cycle are expensed as incurred. The Company amortizes completed internal-use software that is used on its network to cost of revenue over its estimated useful life.

Restructuring Charges

The Company classifies certain expenses as restructuring charges that result from programs that have significantly changed either the scope of the business undertaken by management or the manner in which that business is conducted. These charges include employee severance and related expenses for workforce reductions, impairments of long-lived assets that will no longer be used in operations (including acquired intangible assets, operating lease right-of-use assets, other facility-related property and equipment and internal-use software) and termination fees for any contracts cancelled as part of these programs.

Employee severance and related expenses are recognized when the action giving rise to the expense is probable. Employee severance and related expenses are based upon contractual severance plans.

Stock-Based Compensation

The Company issues various forms of stock-based compensation, which includes restricted stock, restricted stock units and deferred stock units, and has an employee stock purchase plan (collectively referred to as "stock awards"). The Company’s stock awards are classified as equity and the fair value is determined at the time of grant, unless the number of shares to be granted is unknown. Stock awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares are known, at which time the stock awards are re-classified to equity. For liability-classified awards, the fair value is determined each reporting period beginning at the grant date until final vesting.

The Company has selected the Black-Scholes option-pricing model to determine the fair value of stock awards issued under the Company's 1999 Employee Stock Purchase Plan ("1999 ESPP"). For stock awards with market-based vesting conditions, the Company uses a Monte Carlo simulation to determine the fair value of the award. For stock awards that contain only a service-based vesting feature, the Company recognizes compensation cost on a straight-line basis over the award's vesting period. For awards with a performance-based vesting condition feature, the Company recognizes compensation cost on a graded-vesting basis over the award's expected vesting period, commencing when achievement of the performance condition is deemed probable. In addition, for awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved.

The Company excludes from stock-based compensation the fair value of stock awards it estimates will be forfeited. Forfeitures are estimated using historical forfeiture rates, adjusted for any non-recurring one-time events, and are revised in subsequent periods if actual forfeitures differ from those estimates.

Foreign Currency Translation and Forward Currency Contracts

The assets and liabilities of the Company's subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenue and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss, a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other expense, net.

The Company enters into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair

65

Table of Contents

value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other expense, net. As of December 31, 2025 and 2024, the fair value of the forward currency contracts and the underlying gains and losses for the years ended December 31, 2025, 2024 and 2023 were immaterial.

The Company's foreign currency forward contracts may be exposed to credit risk to the extent that its counterparties are unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating.

Income Taxes

The Company's provision for income taxes is comprised of a current and a deferred portion. The current income tax provision is calculated as the estimated taxes payable or refundable on tax returns for the current year. The deferred income tax provision is calculated as the estimated future tax effects attributable to temporary differences and carryforwards using expected tax rates in effect in the years during which the differences are expected to reverse or the carryforwards are expected to be realized.

    The Company currently has net deferred tax assets consisting of net operating loss (“NOL”) carryforwards, tax credit carryforwards and deductible temporary differences. Management periodically weighs the positive and negative evidence to determine if it is more-likely-than-not that some or all of the deferred tax assets will be realized.

    The Company has recorded certain tax reserves to address potential exposures involving its income tax positions. These potential tax liabilities result from the varying application of statutes, rules, regulations and interpretations by different taxing jurisdictions. The Company's estimate of the value of its tax reserves contains assumptions based on past experiences and judgments about the interpretation of statutes, rules and regulations by taxing jurisdictions. It is possible that the costs of the ultimate tax liability or benefit from these matters may be more or less than the amount the Company estimated.

    Uncertainty in income taxes is recognized in the Company's consolidated financial statements using a two-step process. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained based on technical merit, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

Recently Adopted Accounting Pronouncements

For the annual period ending December 31, 2025, the Company adopted guidance issued by the Financial Accounting Standards Board (“FASB”) to improve income tax disclosures, primarily through enhanced disclosures of the effective tax rate and cash paid for income taxes, in addition to the modification or elimination of other disclosures, on a retrospective basis. Other than additional required disclosures, adoption of the standard did not have an impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements

In September 2025, the FASB issued guidance which modernizes the accounting for internal-use software by removing all references to software development stages given the evolution of software development. The targeted improvements aim to increase the operability of the recognition guidance for internal-use software. The guidance also seeks to clarify the disclosure requirements for internal-use software. This guidance will be effective for the Company on January 1, 2028, and is to be applied prospectively, modified prospectively or retrospectively. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.

In July 2025, the FASB issued guidance which provides targeted improvements and clarifications related to the recognition and measurement of expected credit losses, particularly for off-balance-sheet credit exposures and certain practical expedients. This guidance was effective for the Company on January 1, 2026, and will be applied prospectively. The Company does not expect this guidance to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued guidance which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This guidance was effective for the Company on January 1, 2026, and will be applied prospectively. The Company has historically not had induced conversions of its convertible senior notes and does not anticipate this guidance to have an impact on its consolidated financial statements or its disclosures upon adoption.

66

Table of Contents

In November 2024, the FASB issued guidance to enhance income statement disclosures through additional disclosures of specified information about certain costs and expenses. This guidance will be effective for the Company's annual period ending December 31, 2027 and interim periods beginning on January 1, 2028, and is to be applied prospectively with the option to adopt retrospectively. The Company is evaluating the impact the update will have on its disclosures.

3. Investments and Fair Value Measurements

Available-for-sale marketable securities held as of December 31, 2025 and 2024 were as follows (in thousands):

  Gross Unrealized Aggregate
Fair Value Classification on Balance Sheet
  Amortized Cost Short-Term
Marketable
Securities Long-Term
Marketable
Securities
As of December 31, 2025 Gains Losses
Time deposits
$ 31,035   $ —   $ —   $ 31,035   $ 31,035   $ —  

Corporate bonds 920,142   3,921   ( 127 ) 923,936   217,139   706,797  

$ 951,177   $ 3,921   $ ( 127 ) $ 954,971   $ 248,174   $ 706,797  

As of December 31, 2024
Time deposits
$ 11,330   $ —   $ —   $ 11,330   $ 11,330   $ —  

Corporate bonds 1,003,915   1,369   ( 307 ) 1,004,977   808,800   196,177  

U.S. government agency obligations 303,816   567   ( 36 ) 304,347   249,318   55,029  
$ 1,319,061   $ 1,936   $ ( 343 ) $ 1,320,654   $ 1,069,448   $ 251,206  

The Company holds money market funds and mutual funds, which are classified as equity securities. These securities are not included in the available-for-sale securities table above, but are included in marketable securities in the consolidated balance sheets.

Unrealized gains and unrealized losses on investments classified as available-for-sale are included within accumulated other comprehensive loss in the consolidated balance sheets. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to interest and marketable securities income, net in the consolidated statements of income. As of December 31, 2025, the Company did no t hold any available-for-sale marketable securities in a continuous unrealized loss position for more than 12 months.

Contractual maturities of the Company’s available-for-sale marketable securities held as of December 31, 2025 and 2024 were as follows (in thousands):

  December 31, 2025 December 31, 2024
Due in 1 year or less $ 248,174   $ 1,069,448  
Due after 1 year through 5 years 706,797   251,206  
$ 954,971   $ 1,320,654  

67

Table of Contents

Fair Value Measurements

The fair value measurements within the fair value hierarchy of the Company’s financial assets as of December 31, 2025 and 2024 were as follows (in thousands):  

  Total Fair Value Fair Value Measurements at Reporting Date Using
  Level 1 Level 2
As of December 31, 2025
Cash Equivalents and Marketable Securities:
Money market funds $ 409,326   $ 409,326   $ —  
Time deposits
103,038   —   103,038  
Commercial paper
34,962   —   34,962  
Corporate bonds 923,936   —   923,936  

Mutual funds 28,981   28,981   —  
$ 1,500,243   $ 438,307   $ 1,061,936  

As of December 31, 2024
Cash Equivalents and Marketable Securities:
Money market funds $ 163,722   $ 163,722   $ —  
Time deposits
64,202   —   64,202  

Corporate bonds 1,004,977   —   1,004,977  

U.S. government agency obligations 304,347   —   304,347  
Mutual funds 26,580   26,580   —  
$ 1,563,828   $ 190,302   $ 1,373,526  

As of December 31, 2025 and 2024, the fair value of the Company's financial assets were determined utilizing a Level 1 or Level 2 valuation. Level 1 valuations are based upon the market prices for such investments that are readily available in active markets and Level 2 valuations are based upon the available quoted prices for similar assets in active markets (or identical assets in an inactive market). The Company did not have any transfers of assets or liabilities between Level 1 or Level 2 of the fair value measurement hierarchy during the years ended December 31, 2025 and 2024.

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.

68

Table of Contents

4. Accounts Receivable

Net accounts receivable consisted of the following as of December 31, 2025 and 2024 (in thousands):
 

December 31, 2025 December 31, 2024
Trade accounts receivable $ 577,914   $ 508,928  
Unbilled accounts receivable 223,458   222,281  
Gross accounts receivable 801,372   731,209  
Allowances for current expected credit losses and other reserves ( 7,706 ) ( 3,522 )
Accounts receivable, net $ 793,666   $ 727,687  

A summary of activity in the accounts receivable allowance for current expected credit losses and other reserves for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

2025 2024 2023
Beginning balance $ 3,522   $ 3,469   $ 5,917  
Charges to income from operations 16,109   6,954   13,431  
Collections from customers previously reserved and other ( 11,925 ) ( 6,901 ) ( 15,879 )
Ending balance $ 7,706   $ 3,522   $ 3,469  

Charges to income from operations primarily represents charges to provision for doubtful accounts for increases in the allowance for current expected credit losses.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of December 31, 2025 and 2024 (in thousands):

December 31, 2025 December 31, 2024
Prepaid income taxes $ 61,399   $ 36,822  
Prepaid sales and other taxes 48,989   39,069  
Prepaid software and related service costs 33,945   35,490  
Deferred commissions 69,983   72,391  
Other prepaid expenses 32,963   23,604  
Other current assets 59,202   46,451  
Total $ 306,481   $ 253,827  

Incremental Costs to Obtain a Contract with a Customer

Deferred costs associated with obtaining customer contracts, specifically commission and incentive payments, as of December 31, 2025 and 2024 were as follows (in thousands):

December 31, 2025 December 31, 2024
Deferred costs included in prepaid expenses and other current assets $ 69,983   $ 72,391  
Deferred costs included in other assets 92,525   58,996  
Total deferred costs $ 162,508   $ 131,387  

69

Table of Contents

Information related to incremental costs to obtain a contract with a customer for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

2025 2024 2023
Amortization expense related to deferred costs $ 64,895   $ 66,366   $ 50,414  
Incremental costs capitalized $ 90,945   $ 114,238   $ 70,072  

Amortization expense related to deferred costs is primarily included in sales and marketing expense in the consolidated statements of income.

6. Property and Equipment

Property and equipment consisted of the following as of December 31, 2025 and 2024 (in thousands, except years):
 

December 31, 2025 December 31, 2024 Estimated Useful Life
(in years)
Computer and networking equipment $ 3,058,517   $ 2,665,002   3 - 7

Purchased software 98,119   88,033   3 - 10

Furniture and fixtures 64,923   63,876   1 - 7

Office equipment 33,000   36,340   3 - 5

Leasehold improvements 198,377   197,663   1 - 15

Internal-use software 2,501,492   2,103,054   2 - 10

Property and equipment, gross 5,954,428   5,153,968  
Accumulated depreciation and amortization ( 3,620,966 ) ( 3,158,897 )
Property and equipment, net $ 2,333,462   $ 1,995,071  

Depreciation and amortization expense on property and equipment and capitalized internal-use software for the years ended December 31, 2025, 2024 and 2023 was $ 597.5 million, $ 556.0 million and $ 504.0 million, respectively. During the years ended December 31, 2025, 2024 and 2023, the Company capitalized $ 123.4 million, $ 105.3 million and $ 81.8 million, respectively, of stock-based compensation related to employees who developed and enhanced internal-use software applications.

During the years ended December 31, 2025 and 2024, the Company wrote off $ 143.5 million and $ 250.6 million, respectively, of property and equipment, gross, along with the associated accumulated depreciation and amortization. The write-offs were primarily related to computer and networking equipment and internal-use software no longer in use. These assets had been substantially depreciated and amortized. In addition, the Company recorded a restructuring charge of $ 9.4  million and $ 32.8  million during the years ended December 31, 2025 and 2024, respectively, related to the impairment of internal-use software and facility-related property and equipment.

70

Table of Contents

7. Acquired Intangible Assets and Goodwill

Acquired intangible assets that are subject to amortization consisted of the following as of December 31, 2025 and 2024 (in thousands):
 

  December 31, 2025 December 31, 2024
Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Completed technologies $ 465,832   $ ( 250,436 ) $ 215,396   $ 463,766   $ ( 223,480 ) $ 240,286  
Customer-related intangible assets 725,494   ( 363,724 ) 361,770   758,817   ( 313,991 ) 444,826  

Trademarks and trade names 15,247   ( 12,080 ) 3,167   15,318   ( 10,579 ) 4,739  
Acquired license rights 44,810   ( 10,601 ) 34,209   44,810   ( 7,076 ) 37,734  
Total $ 1,251,383   $ ( 636,841 ) $ 614,542   $ 1,282,711   $ ( 555,126 ) $ 727,585  

Aggregate expense related to amortization of acquired intangible assets for the years ended December 31, 2025, 2024 and 2023 was $ 111.1 million, $ 92.1 million and $ 66.8 million, respectively. Based on the Company's acquired intangible assets as of December 31, 2025, aggregate expense related to amortization of acquired intangible assets is expected to be $ 100.2 million, $ 85.6 million, $ 79.0 million, $ 74.0 million and $ 66.7 million for the years ending December 31, 2026, 2027, 2028, 2029 and 2030, respectively. The Company recorded restructuring charges related to the impairment of acquired completed technologies and customer-related intangible assets whose values were no longer supported by future cash flows of $ 22.2 million and $ 23.7 million for the years ended December 31, 2025 and 2024, respectively. There were no impairments for the year ended December 31, 2023.

The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 were as follows (in thousands):

  2025 2024
Beginning balance $ 3,151,077   $ 2,850,470  
Acquisition of Fermyon Technologies, Inc.
36,008   —  
Acquisition of Noname Gate Ltd. —   312,065  

Measurement period adjustments related to acquisitions completed in prior years ( 996 ) 18  
Foreign currency translation 20,436   ( 11,476 )
Ending balance $ 3,206,525   $ 3,151,077  

8. Acquisitions

Asset Acquisitions

The Company acquired certain customer contracts from Edgio, Inc. ("Edgio"), Lumen Technologies, Inc. ("Lumen") and StackPath, LLC ("StackPath"), and certain of their affiliates. The acquisitions are intended to further strengthen the Company's existing delivery and security businesses by integrating the acquired customers onto its platform and offering them the Company’s broader portfolio of services. Substantially all of the purchase price related to these acquisitions has been ascribed to customer-related acquired intangible assets.

71

Table of Contents

The following table summarizes the details of the asset acquisitions:

Asset Acquisition Acquisition Date
Purchase Price (1)
(in thousands)
Weighted Average Amortization Period
(in years)

Edgio December 2024 $ 158,341   9.0
Lumen October 2023 $ 79,682   12.2
StackPath August 2023 $ 51,211   13.4

(1) Includes capitalized transaction costs and a portion of the transition services agreement costs.

Business Acquisitions

Business acquisition-related costs were $ 3.2 million, $ 7.5 million and $ 2.7 million during the years ended December 31, 2025, 2024 and 2023, respectively, and are included in general and administrative expense in the consolidated statements of income. Pro forma results of operations for the acquisitions completed in the years ended December 31, 2025, 2024 and 2023 have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to the Company's consolidated financial results. Revenue and earnings of the acquired companies since the dates of the acquisitions are included in the Company's consolidated statements of income and are not presented separately because they are not material.

Fermyon

In November 2025, the Company acquired all the outstanding equity interests of Fermyon Technologies, Inc. ("Fermyon") for $ 56.6 million in cash, subject to post-closing adjustments. By acquiring Fermyon, a serverless WebAssembly company, the Company plans to deepen the integration between the edge functions platform and its performance and security products. The resulting cloud computing platform aims to make it even faster and easier for developers to build, deploy and secure applications at the edge that outperform cloud-native applications, for less money, the same way they can in core data centers today. The Company allocated $ 36.0 million of the purchase price to goodwill and $ 17.3 million to a completed technology identifiable intangible asset with a total weighted average amortization period of 9.1 years. The intangible asset is being amortized based upon the pattern in which the economic benefits of the intangible asset is being utilized. The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and revenue synergies expected to be realized. The Company expects that $ 16.9 million of the goodwill related to the acquisition of Fermyon will be deductible for tax purposes as a result of post-acquisition transactions. As of December 31, 2025, the purchase price allocation is preliminary, pending net working capital adjustments and the finalization of certain income tax matters.

Noname Security

In June 2024, the Company acquired all the outstanding equity interests of Noname Gate Ltd. ("Noname Security") for $ 451.5 million in cash. Noname Security is intended to expand the Company’s existing application programming interface ("API") security offering by providing more flexible deployment options, extensive vendor integrations and enhanced attack analysis. The Company believes this acquisition will accelerate its ability to meet increasing customer and market demand. The Company finalized its allocation of the purchase price in the second quarter of 2025.

72

Table of Contents

The allocation of the purchase price for Noname Security and fair values of the assets acquired and liabilities assumed were as follows (in thousands):

Total purchase consideration $ 451,529  

Allocation of the purchase consideration:
Cash $ 18,253  
Accounts receivable 5,984  
Prepaid expenses and other current assets 3,020  

Identifiable intangible assets 137,800  
Deferred income tax assets 2,526  

Total assets acquired 167,583  
Accounts payable ( 2,074 )
Accrued expenses ( 5,759 )
Deferred revenue ( 19,289 )

Total liabilities assumed ( 27,122 )
Identifiable net assets acquired
140,461  
Goodwill 311,068  
Total purchase price allocation
$ 451,529  

The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce, and revenue and cost synergies expected to be realized. The value of goodwill deductible for tax purposes as a result of post-acquisition transactions is $ 248.8 million.

Identified intangible assets acquired and their respective weighted average amortization period were as follows (in thousands, except years):

Gross Carrying Amount Weighted Average Amortization Period
(in years)

Completed technologies $ 132,300   10.5
Customer-related intangible assets 4,800   10.5
Trademarks 700   2.5
Total $ 137,800  

The Company applied the multi-period excess earnings method to estimate the fair values of the completed technologies and customer-related acquired intangible assets, and the relief-from-royalty method to estimate the fair values of the trademarks. The Company applied significant judgment in estimating the fair values of the acquired intangible assets, which involved significant estimates and assumptions with respect to forecasted revenue growth rates, forecasted operating margins, the technology obsolescence curve and discount rates. The total weighted average amortization period for the intangible assets acquired from Noname Security is 10.5 years. The intangible assets are amortized using a method that approximates their economic benefit over their estimated useful lives.

Neosec

In May 2023, the Company acquired all the outstanding equity interests of Neosec for $ 91.4  million in cash. Neosec is an API detection and response platform based on data and behavioral analytics. The acquisition is intended to complement the Company's application and API security portfolio by extending its visibility into the rapidly growing API threat landscape. The Company allocated $ 66.9  million of the purchase price to goodwill and $ 19.9  million to identifiable intangible assets, primarily consisting of completed technologies, with a total weighted average amortization period of 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. The value of the goodwill can be attributed to a number of business factors, including the expected impact from the ability to interface with the Company's platform. The value of goodwill deductible for tax purposes as a result of post-acquisition transactions is $ 33.8  million. The Company finalized its allocation of the purchase price in the second quarter of 2024.

73

Table of Contents

StorageOS

In March 2023, the Company acquired all the outstanding equity interests of StorageOS, Inc. ("StorageOS"), also known as Ondat, a cloud-based storage technology provider for $ 20.6  million in cash. The acquisition of StorageOS's cloud storage technology and its industry-recognized talent is intended to strengthen the Company's cloud computing offerings. Storage is a key component of any cloud computing offering, and this acquisition is expected to enhance the Company's storage capabilities, allowing the Company to offer a fundamentally different approach to cloud that integrates core and distributed compute sites with a massively scaled edge network. The Company allocated $ 14.0  million of the purchase price to goodwill and $ 4.5  million to a completed technology identifiable intangible asset with a total weighted average amortization period of 8.8 years. The intangible asset is being amortized based upon the pattern in which the economic benefit of the intangible asset is being utilized. The value of the goodwill is primarily attributable to synergies related to the integration of StorageOS technology onto the Company's platform as well as a trained technical workforce. All of the goodwill related to the acquisition of StorageOS is deductible for tax purposes as a result of post-acquisition transactions. The Company finalized its allocation of purchase price in the first quarter of 2024.

9. Accrued Expenses

Accrued expenses consisted of the following as of December 31, 2025 and 2024 (in thousands):
 

December 31, 2025 December 31, 2024
Payroll and other related benefits $ 171,314   $ 146,841  
Income taxes payable 53,257   76,375  
Bandwidth, co-location and network-related expenses
45,222   77,603  
Property, use and other taxes 34,515   31,357  

Convertible senior notes interest
7,229   6,926  
Other accrued expenses 8,085   31,786  
Total $ 319,622   $ 370,888  

10. Restructuring

During the fourth quarter of 2025, manage ment committed to an action to restructure certain parts of the Company to align investments and simplify organizational structure to long-term growth priorities (“Q4 2025 Action”) . As a result, certain headcount reductions were necessary. Additionally, the Company planned for the end of life of certain solutions which resulted in impairments to completed technologies and customer-related acquired intangible assets, as well as capitalized internal-use software. The Company does not expect to incur material additional charges related to this action.

During the third quarter of 2024, management committed to an action to restructure certain parts of the Company with the primary intent of redeploying resources to support the Company's strategic investments ("Q3 2024 Action"). As a result, certain headcount reductions were necessary. Additionally, the Company planned for the end of life of certain solutions which resulted in impairments to capitalized internal-use software, as well as completed technologies and customer-related acquired intangible assets. The Company does not expect to incur material additional charges related to this action.

During the first quarter of 2023, management committed to an action to restructure certain parts of the Company to enable it to prioritize investments in the fastest growing areas of the business ("Q1 2023 Action"). As a result, certain headcount reductions were necessary. The Company does not expect to incur material additional charges related to this action.

The Company launched its FlexBase program in May 2022, which is a flexible workplace arrangement that allows employees to choose to work from their home office, a Company office, an approved workspace, or a combination of all three, which is a significant change to the way employees worked prior to the program. As a result, impairments of right-of-use assets and property and equipment were recognized. The Company does not expect to incur material additional charges related to this action.

At times the Company also recognizes restructuring charges related to completed acquisitions for severance and related expenses paid to redundant employees, fees paid to terminate redundant contracts and impairments of redundant long-lived

74

Table of Contents

assets, primarily duplicative facility-related assets, acquired intangible assets and capitalized internal-use software. The Company does not expect to incur material additional charges related to past acquisitions.

The following table summarizes the Company's restructuring charges during the years ended December 31, 2025, 2024 and 2023 (in thousands):

2025 2024 2023
Q4 2025 Action
$ 51,260   $ —   $ —  
Q3 2024 Action 398   63,398   —  
Q1 2023 Action —   —   20,668  
FlexBase 13   1,717   27,654  

Acquisitions related and other
6,380   30,326   8,321  
Total restructuring charge
$ 58,051   $ 95,441   $ 56,643  

The liability for restructuring charges related to employee severance and associated expenses is substantially included in other current liabilities on the consolidated balance sheets. The changes in the liability for all restructuring actions for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

Q4 2025 Action Q3 2024 Action Q1 2023 Action Acquisitions Related and Other Total
Balance as of January 1, 2023 $ —   $ —   $ —   $ 541   $ 541  
Cost incurred
—   —   20,668   417   21,085  
Cash disbursements
—   —   ( 19,798 ) ( 950 ) ( 20,748 )
Translation adjustments and other
—   —   ( 51 ) 10   ( 41 )
Balance as of December 31, 2023 —   —   819   18   837  
Cost incurred —   34,447   —   2,360   36,807  
Cash disbursements —   ( 9,326 ) ( 60 ) ( 1,394 ) ( 10,780 )
Translation adjustments and other —   ( 515 ) ( 1 ) 3   ( 513 )
Balance as of December 31, 2024 —   24,606   758   987   26,351  
Cost incurred 20,695   398   —   1,972   23,065  
Cash disbursements —   ( 25,269 ) —   ( 2,183 ) ( 27,452 )
Translation adjustments and other 55   310   —   67   432  
Balance as of December 31, 2025 $ 20,750   $ 45   $ 758   $ 843   $ 22,396  

11. Debt

Convertible Senior Notes

In May 2025, the Company issued $ 1,725.0 million in principal amount of convertible senior notes due 2033 and entered into related convertible note hedge and warrant transactions. The Company intends to use a portion of the net proceeds to repay at maturity its $ 1,150.0 million outstanding aggregate principal amount of convertible senior notes due in 2027.

75

Table of Contents

Including the May 2025 issuance of $ 1,725.0 million in principal amount of convertible senior notes, the Company has three convertible senior notes ("2033 Notes", "2029 Notes" and "2027 Notes") outstanding with a par value totaling $ 4,140.0 million (collectively, the "Notes") that are senior unsecured obligations of the Company and bear interest payable semi-annually in arrears. The following table summarizes further details of the Notes:

Notes
Issuance Date
Maturity Date Principal Amount (in thousands)
Coupon Interest Rate Effective Interest Rate

2033 Notes May 19, 2025 May 15, 2033 (1)
$ 1,725,000   0.250   % 0.484   %
2029 Notes August 18, 2023 February 15, 2029 $ 1,265,000   1.125   % 1.388   %
2027 Notes August 16, 2019 September 1, 2027 $ 1,150,000   0.375   % 0.539   %

(1) Holders of the 2033 Notes have the right to require the Company to repurchase for cash all or a portion of their 2033 Notes on May 15, 2031 if the last reported sale price of the Company’s common stock on the trading day immediately preceding the business day immediately preceding May 15, 2031 is less than the conversion price per share. The repurchase price will be equal to 100% of the principal amount of the 2033 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the optional repurchase date.

Additionally, on May 1, 2025, the Company repaid $ 1,150.0 million in par value of convertible senior notes that matured (“2025 Notes”). The 2025 Notes were senior unsecured obligations of the Company and bore interest at 0.125 %.

Conversion Rights of the Notes

At their option, holders may exercise the conversion right of the respective Notes at the following specified times and rates to receive the principal amount in cash and receive 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.

Prior to the close of business on the business day immediately preceding the conversion date, as noted in the table below, under the following circumstances a holder may exercise their conversion right:

• during any calendar quarter commencing after the calendar quarter ended September 30, 2025 for the 2033 Notes, December 31, 2023 for the 2029 Notes and December 31, 2019 for the 2027 Notes (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 business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the respective Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or

• upon the occurrence of specified corporate events.

On or after the respective conversion date, as noted in the table below, holders may convert all or any portion of their respective Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

If the Company undergoes a fundamental change at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the fundamental change repurchase date.

76

Table of Contents

The conversion rights for the outstanding Notes as of December 31, 2025 are as follows:

Notes Conversion Date Conversion Rate (1)
Conversion Price per Share (1)

2033 Notes January 15, 2033 10.7513 $ 93.01  
2029 Notes October 15, 2028 7.9170 $ 126.31  
2027 Notes May 1, 2027 8.6073 $ 116.18  

(1) The conversion rate for the Notes is established as a number of shares of the Company's commons stock per $1,000 principal amount of the Notes, that is equivalent to the conversion price per share, subject to adjustments in certain events. Upon the occurrence of certain corporate events the Company will increase the conversion rate for a holder that elects to convert its Notes.

Components and Fair Value of the Notes

The Notes consisted of the following components as of December 31, 2025 and 2024 (in thousands):

2033 Notes 2029 Notes 2027 Notes
2025 Notes Total

As of December 31, 2025
Principal $ 1,725,000   $ 1,265,000   $ 1,150,000   $ —   $ 4,140,000  
Less: issuance costs, net of amortization ( 21,390 ) ( 10,187 ) ( 3,068 ) —   ( 34,645 )
Net carrying amount $ 1,703,610   $ 1,254,813   $ 1,146,932   $ —   $ 4,105,355  

Estimated fair value (1)
$ 1,918,062   $ 1,254,981   $ 1,158,407   $ —   $ 4,331,450  

As of December 31, 2024
Principal $ —   $ 1,265,000   $ 1,150,000   $ 1,150,000   $ 3,565,000  
Less: issuance costs, net of amortization —   ( 13,354 ) ( 4,951 ) ( 884 ) ( 19,189 )
Net carrying amount $ —   $ 1,251,646   $ 1,145,049   $ 1,149,116   $ 3,545,811  

Estimated fair value (1)
$ —   $ 1,239,068   $ 1,155,865   $ 1,219,345   $ 3,614,278  

(1) The fair values were determined based on the quoted prices of the Notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 within the fair value hierarchy.

Note Hedges and Warrants

To minimize the impact of potential dilution upon conversion of the Notes, the Company entered into convertible note hedge transactions with respect to its common stock concurrently with each respective note issuance month. The note hedge transactions cover an approximate number of shares of the Company’s common stock at a strike price that corresponds to the conversion prices for the Notes, also subject to adjustment, and are exercisable upon conversion of the Notes. The note hedge transactions expire upon the respective maturity dates of the Notes. The Company determined that the note hedges meet the definition of a derivative and are classified in stockholders’ equity, as the note hedges are indexed to the Company's common stock, and the Company, at its election, may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock. The Company recorded the purchase of the hedges as a decrease to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the note hedges in its consolidated financial statements.

Separately, the Company also entered into warrant transactions concurrently with each of the note issuances, whereby the Company sold warrants to acquire, subject to anti-dilution adjustments, shares of the Company’s common stock at a predetermined strike price per share. The convertible note hedge and warrant transactions will generally have the effect of increasing the conversion price of each of the Notes to the respective strike price related to the warrant transactions. The Company determined that the warrants meet the definition of a derivative and are classified in stockholders’ equity, as the warrants are indexed to the Company's common stock, and the Company, at its election, may pay or deliver to holders cash or shares of the Company's common stock. The Company recorded the proceeds from the issuance of the warrants as an increase

77

Table of Contents

to additional paid-in capital. The Company does not recognize subsequent changes in fair value of the warrants in its consolidated financial statements. The following table summarizes the main terms impacting the note hedges and warrants (in thousands, except per share data):

2033 Notes 2029 Notes 2027 Notes
Note hedge transaction costs
$ 605,820   $ 236,555   $ 312,225  
Shares covered by note hedge transactions
18,546   10,015   9,898  
Shares related to warrant transactions
18,546   10,015   9,898  
Strike price per share related to warrant transactions
$ 155.02   $ 180.44   $ 178.74  
Aggregate proceeds from sale of warrants $ 330,855   $ 90,195   $ 185,150  

Revolving Credit Facility

In January 2025, the Company entered into a $ 150.0  million uncommitted revolving credit agreement (the "2025 Credit Agreement"). Any outstanding borrowings are secured by collateral, consisting primarily of available-for-sale marketable securities. Borrowings under the 2025 Credit Agreement may be used to finance working capital needs and for general corporate purposes. The 2025 Credit Agreement does not expire but is cancellable at any time and any borrowings can be due on demand. Borrowings under the 2025 Credit Agreement will bear a specified interest rate, based on the Secured Overnight Financing Rate, and interest period at the time of the confirmed borrowing. There were no outstanding borrowings under the 2025 Credit Agreement as of December 31, 2025.

In November 2022, the Company entered into a $ 500.0  million revolving credit agreement (the “2022 Credit Agreement”). The 2022 Credit Agreement was amended in May 2025 to increase the aggregate revolving commitments under the 2022 Credit Agreement from $ 500.0  million to $ 1.0  billion and to extend the expiration one year. Borrowings under the 2022 Credit Agreement may be used to finance working capital needs and for general corporate purposes. The 2022 Credit Agreement expires on November 22, 2028, and any amounts outstanding thereunder will become due and payable, subject to up to a one-year extension at the Company's request and with the consent of the lenders party thereto.

Borrowings under the 2022 Credit Agreement bear interest, at the Company's option, at a term benchmark rate plus a spread of 0.75 % to 1.125 %, a reference rate plus a spread of 0.75 % to 1.125 %, or a base rate plus a spread of 0.00 % to 0.125 %, in each case with such spread being determined based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement. Regardless of what amounts, if any, are outstanding under the 2022 Credit Agreement, the Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate of 0.07 % to 0.125 %, with such rate being based on the Company's consolidated leverage ratio specified in the 2022 Credit Agreement.

The 2022 Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. As of December 31, 2025, the Company was in compliance with all covenants. The negative covenants include restrictions on subsidiary indebtedness, liens and fundamental changes. These covenants are subject to a number of important exceptions and qualifications. The principal financial covenant requires a maximum consolidated leverage ratio .  There were no outstanding borrowings under the 2022 Credit Agreement as of December 31, 2025. 

78

Table of Contents

Interest Expense

The Notes bear interest at fixed rates that are payable semi-annually in arrears on their respective interest payment dates each year. Interest expense, together with ongoing commitment fees under the terms of the Company's credit agreements, included in the consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):

2025 2024 2023
Amortization of debt issuance costs $ 8,696   $ 7,802   $ 5,803  
Coupon interest payable on 2033 Notes 2,647   —   —  
Coupon interest payable on 2029 Notes 14,232   14,232   5,218  
Coupon interest payable on 2027 Notes 4,312   4,312   4,312  
Coupon interest payable on 2025 Notes 483   1,436   1,436  
Interest payable and commitment fees under the credit agreements 2,032   616   1,402  
Capitalization of interest expense ( 1,643 ) ( 1,281 ) ( 462 )
Total interest expense $ 30,759   $ 27,117   $ 17,709  

12. Leases

The Company has entered into various operating lease agreements for its offices and co-location sites and related equipment. The Company has also entered into sublease agreements with tenants of various offices previously vacated by the Company. These operating leases have lease periods expiring between 2026 and 2046. Additionally, the Company entered into an operating lease with a data center operator for space in the Virginia area. Contemporaneously, the Company entered into a sublease with the affiliate of a large social media customer for the use of the space on substantially similar terms. Both the lease and sublease for the data center expire in 2037.

79

Table of Contents

The Company’s operating lease costs for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

Real Estate Arrangements Co-location Arrangements Data Center Sublease
Total
2025
Operating lease cost $ 66,545   $ 260,243   $ 6,959   $ 333,747  
Short-term lease cost 381   25,590   —   25,971  
Variable lease cost 26,218   73,375   1,074   100,667  
Sublease income ( 31,459 ) —   ( 8,187 ) ( 39,646 )
Total operating lease costs (income)
$ 61,685   $ 359,208   $ ( 154 ) $ 420,739  

2024
Operating lease cost $ 67,757   $ 225,145   $ —   $ 292,902  
Short-term lease cost 660   25,288   —   25,948  
Variable lease cost 26,122   67,728   —   93,850  
Sublease income ( 31,722 ) —   —   ( 31,722 )
Total operating lease costs $ 62,817   $ 318,161   $ —   $ 380,978  

2023
Operating lease cost $ 74,054   $ 179,552   $ —   $ 253,606  
Short-term lease cost 133   23,565   —   23,698  
Variable lease cost 25,860   62,084   —   87,944  
Sublease income ( 32,024 ) —   —   ( 32,024 )
Total operating lease costs $ 68,023   $ 265,201   $ —   $ 333,224  

Lease costs for real estate arrangements and the data center sublease are included in general and administrative expenses in the consolidated statements of income. Lease costs for co-location arrangements are primarily included in cost of revenue in the consolidated statements of income.

Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2025 and 2024 were as follows:

December 31, 2025 December 31, 2024
Real Estate Arrangements Co-location Arrangements Data Center Sublease
Real Estate Arrangements Co-location Arrangements Data Center Sublease

Weighted average remaining lease term (in years) 8.1 4.8 11.9 9.1 4.6 0.0
Weighted average discount rate 3.6   % 4.4   % 5.1   % 3.5   % 4.3   % —   %

80

Table of Contents

Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands):

Real Estate Arrangements Co-location Arrangements Data Center Sublease

2026 $ 69,605   $ 229,288   $ 43,580  
2027 67,183   160,536   41,793  
2028 61,593   124,197   42,838  
2029 59,376   102,560   43,909  
2030 58,666   63,985   45,007  
Thereafter 210,526   98,149   343,135  
Total lease payments 526,949   778,715   560,262  
Less: imputed interest 68,683   81,944   145,266  
Total lease liabilities $ 458,266   $ 696,771   $ 414,996  

The table above excludes future sublease income of $ 164.7 million from real estate arrangements and $ 566.5 million from the data center sublease that are expected to be recognized through 2034 and 2037, respectively. As of December 31, 2025, the Company had additional operating leases for co-location arrangements that had not yet commenced of $ 278.0 million, of which a majority will commence in 2026, with lease terms of one year to twenty years . Additionally, the final portion of the data center sublease commenced in January 2026, with a total commitment of $ 187.1 million and a lease term of twelve years . Both the lease cost and associated sublease income are expected to substantially offset each other.

As of December 31, 2025, the Company had outstanding letters of credit in the amount of $ 4.4 million, primarily related to operating leases. The letters of credit remain in effect until the Company fulfills its obligations under these leases or as such obligations expire under the terms of the letters of credit.

13. Commitments and Contingencies

Purchase Commitments