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Stock-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Schedule of Stock Based Compensation Expense | Components of total stock-based compensation expense included in the Company’s consolidated statements of income for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands):
| 2023 |  | 2022 |  | 2021
Cost of revenue | $ | 43,802 |  |  | $ | 28,354 |  |  | $ | 27,143 |
Research and development | 123,896 |  |  | 78,116 |  |  | 65,950 |
Sales and marketing | 66,453 |  |  | 47,789 |  |  | 46,342 |
General and administrative | 94,316 |  |  | 62,926 |  |  | 63,324 |
Total stock-based compensation | 328,467 |  |  | 217,185 |  |  | 202,759 |
Provision for income taxes | (59,359) |  |  | (46,829) |  |  | (56,084) |
Total stock-based compensation, net of taxes | $ | 269,108 |  |  | $ | 170,356 |  |  | $ | 146,675 |
Schedule of Employee Stock Purchase Plan Activity | The following summarizes the activity under the 1999 ESPP (in thousands, except per share amounts):
| 2023 |  | 2022 |  | 2021
Shares issued | 797 |  |  | 688 |  |  | 649 |
Weighted average purchase price of shares issued, per share | $ | 78.29 |  |  | $ | 82.83 |  |  | $ | 92.05 |
Issuance of common stock | $ | 62,365 |  |  | $ | 56,570 |  |  | $ | 59,714 |
Schedule of Assumptions Used | The grant-date fair values of awards granted under the 1999 ESPP during the years ended December 31, 2023, 2022 and 2021 were estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
| 2023 |  | 2022 |  | 2021
Expected term (in years) | 0.5 |  | 0.5 |  | 0.5
Risk-free interest rate | 5.2 | % |  | 1.9 | % |  | 0.1 | %
Expected volatility | 29.1 | % |  | 26.0 | % |  | 32.2 | %
Dividend yield | — | % |  | — | % |  | — | %
The grant-date fair values of the TSR-based RSUs granted during the years ended December 31, 2023, 2022 and 2021 were estimated using a Monte Carlo simulation model with the following assumptions:
| 2023 |  | 2022 |  | 2021
Expected term (in years) | 3.0 |  | 3.0 |  | 3.0
Risk-free interest rate | 4.5 | % |  | 1.7 | % |  | 0.3 | %
Akamai historical share price volatility | 28.8 | % |  | 30.3 | % |  | 32.7 | %
Average volatility of peer-company share price | 33.6 | % |  | 40.7 | % |  | 39.6 | %
Schedule of Restricted Stock Units by Type | The RSUs, restricted stock and DSUs granted by the Company during the year ended December 31, 2023 were as follows (in thousands):
| December 31, 2023
Service-based (1) | 5,767 |
Market-based | 199 |
Performance-based | 284 |
Total | 6,250 |
(1) Includes DSU grants of 30,953 shares
Schedule of Restricted Stock Units Activity | RSUs, restricted stock and DSUs award activity for the year ended December 31, 2023 was as follows:
| Units (in thousands) |  | Weighted Average Grant Date Fair Value
Outstanding at January 1, 2023 | 5,278 |  |  | $ | 121.92 |
Granted | 6,250 |  |  | 74.89 |
Vested (1) | (2,531) |  |  | 102.70 |
Forfeited | (920) |  |  | 99.07 |
Outstanding at December 31, 2023 | 8,077 |  |  | $ | 83.12 |
(1) Includes DSUs of 24,422 shares which have vested and been distributed. Excludes DSUs which have vested, but have not yet been distributed
Schedule of Total Fair Value of Stock Activity | The pre-tax intrinsic value and fair value of RSUs, restricted stock and DSUs were as follows (in thousands, except per share amounts):
| 2023 |  | 2022 |  | 2021
Pre-tax intrinsic value of awards vested | $ | 254,686 |  |  | $ | 227,143 |  |  | $ | 226,414 |
Fair value of awards vested | $ | 259,919 |  |  | $ | 231,708 |  |  | $ | 233,027 |
Weighted average fair value of awards granted, per share (1) | $ | 74.89 |  |  | $ | 107.17 |  |  | $ | 99.09 |
(1) The grant-date fair value is calculated based upon the Company’s closing stock price on the date of grant.

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