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Acquisitions
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions 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 to 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.
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)
EdgioDecember 2024$158,247 
 (2)(3)
9.0
LumenOctober 2023$79,682 12.2
StackPathAugust 2023$51,211 13.4

(1) Includes capitalized transaction costs and a portion of the transition services agreement costs.
(2) Purchase price is estimated and is subject to adjustment for certain post-closing activities expected to be completed in the first quarter of 2025.
(3) As of December 31, 2024, the Company paid the majority of the purchase price in cash to Edgio and expects to pay the remaining consideration, if any, by the end of the first quarter of 2025.

Business Acquisitions

Business acquisition-related costs were $7.5 million, $2.7 million and $10.7 million during the years ended December 31, 2024, 2023 and 2022, 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, 2024, 2023 and 2022 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.

Noname Security

In June 2024, the Company acquired all the outstanding equity interests of Noname Gate Ltd. ("Noname Security") for $452.3 million in cash, subject to post-closing adjustments. 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. As of December 31, 2024, the purchase price allocation is preliminary, pending finalization of net working capital and certain income tax matters.

The preliminary 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$452,319 
Allocation of the purchase consideration:
Cash$18,253 
Accounts receivable5,984 
Prepaid expenses and other current assets3,020 
Identifiable intangible assets 137,800 
Deferred income tax assets2,487 
Total assets acquired167,544 
Accounts payable(2,074)
Accrued expenses(5,926)
Deferred revenue(19,289)
Total liabilities assumed(27,289)
Identifiable net assets acquired
140,255 
Goodwill312,064 
Total purchase price allocation
$452,319 

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 Company expects that $248.8 million of the goodwill
related to the acquisition of Noname Security will be deductible for tax purposes as a result of post-acquisition transactions.

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 assets4,800 10.5
Trademarks700 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.

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 compute 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.

Linode

In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode") for $898.5 million in cash. Linode is an infrastructure-as-a-service platform provider that allows for developer-friendly cloud computing capabilities. The acquisition is intended to enhance the Company’s computing services by enabling it to create a unique cloud platform to build, run and secure applications from the cloud to the edge. Revenue attributable to Linode in the year of acquisition, included in the Company's consolidated statements of income, for 2022 was $103.5 million. The Company finalized its allocation of the purchase price in the first quarter of 2023.
The allocation of the purchase price for Linode was as follows (in thousands):

Total purchase consideration$898,516 
Allocation of the purchase consideration:
Cash$26,678 
Accounts receivable7,171 
Prepaid expenses and other current assets4,478 
Property and equipment56,268 
Operating lease right-of-use assets17,000 
Identifiable intangible assets 196,020 
Deferred income tax assets2,528 
Other assets292 
Total assets acquired310,435 
Accounts payable(5,767)
Accrued expenses(1,958)
Operating lease liabilities(17,235)
Other liabilities(4,251)
Total liabilities assumed(29,211)
Net assets acquired281,224 
Goodwill$617,292 

The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and cost synergies expected to be realized. All of the goodwill related to the acquisition of Linode was deductible for tax purposes as a result of post-acquisition transactions.

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)
Customer-related intangible assets$84,200 16.8
Completed technologies70,900 5.8
Acquired license rights34,320 15.0
Trademarks and trade name6,600 8.8
Total$196,020 

The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks and the multi-period excess earnings method under the income approach to estimate the fair values of the customer-related acquired intangible assets. 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, cost of revenue, operating expenses, contributory asset charges and discount rates. The Company used readily available market data to estimate the fair values of the acquired license rights. The total weighted average amortization period for the intangible assets acquired from Linode is 12.2 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized.
Acquisitions 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 to 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.
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)
EdgioDecember 2024$158,247 
 (2)(3)
9.0
LumenOctober 2023$79,682 12.2
StackPathAugust 2023$51,211 13.4

(1) Includes capitalized transaction costs and a portion of the transition services agreement costs.
(2) Purchase price is estimated and is subject to adjustment for certain post-closing activities expected to be completed in the first quarter of 2025.
(3) As of December 31, 2024, the Company paid the majority of the purchase price in cash to Edgio and expects to pay the remaining consideration, if any, by the end of the first quarter of 2025.

Business Acquisitions

Business acquisition-related costs were $7.5 million, $2.7 million and $10.7 million during the years ended December 31, 2024, 2023 and 2022, 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, 2024, 2023 and 2022 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.

Noname Security

In June 2024, the Company acquired all the outstanding equity interests of Noname Gate Ltd. ("Noname Security") for $452.3 million in cash, subject to post-closing adjustments. 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. As of December 31, 2024, the purchase price allocation is preliminary, pending finalization of net working capital and certain income tax matters.

The preliminary 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$452,319 
Allocation of the purchase consideration:
Cash$18,253 
Accounts receivable5,984 
Prepaid expenses and other current assets3,020 
Identifiable intangible assets 137,800 
Deferred income tax assets2,487 
Total assets acquired167,544 
Accounts payable(2,074)
Accrued expenses(5,926)
Deferred revenue(19,289)
Total liabilities assumed(27,289)
Identifiable net assets acquired
140,255 
Goodwill312,064 
Total purchase price allocation
$452,319 

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 Company expects that $248.8 million of the goodwill
related to the acquisition of Noname Security will be deductible for tax purposes as a result of post-acquisition transactions.

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 assets4,800 10.5
Trademarks700 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.

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 compute 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.

Linode

In March 2022, the Company acquired all the outstanding equity interests of Linode Limited Liability Company ("Linode") for $898.5 million in cash. Linode is an infrastructure-as-a-service platform provider that allows for developer-friendly cloud computing capabilities. The acquisition is intended to enhance the Company’s computing services by enabling it to create a unique cloud platform to build, run and secure applications from the cloud to the edge. Revenue attributable to Linode in the year of acquisition, included in the Company's consolidated statements of income, for 2022 was $103.5 million. The Company finalized its allocation of the purchase price in the first quarter of 2023.
The allocation of the purchase price for Linode was as follows (in thousands):

Total purchase consideration$898,516 
Allocation of the purchase consideration:
Cash$26,678 
Accounts receivable7,171 
Prepaid expenses and other current assets4,478 
Property and equipment56,268 
Operating lease right-of-use assets17,000 
Identifiable intangible assets 196,020 
Deferred income tax assets2,528 
Other assets292 
Total assets acquired310,435 
Accounts payable(5,767)
Accrued expenses(1,958)
Operating lease liabilities(17,235)
Other liabilities(4,251)
Total liabilities assumed(29,211)
Net assets acquired281,224 
Goodwill$617,292 

The value of the goodwill can be attributed to a number of business factors, including a trained technical workforce and cost synergies expected to be realized. All of the goodwill related to the acquisition of Linode was deductible for tax purposes as a result of post-acquisition transactions.

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)
Customer-related intangible assets$84,200 16.8
Completed technologies70,900 5.8
Acquired license rights34,320 15.0
Trademarks and trade name6,600 8.8
Total$196,020 

The Company applied the relief-from-royalty method to estimate the fair values of the completed technologies and trademarks and the multi-period excess earnings method under the income approach to estimate the fair values of the customer-related acquired intangible assets. 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, cost of revenue, operating expenses, contributory asset charges and discount rates. The Company used readily available market data to estimate the fair values of the acquired license rights. The total weighted average amortization period for the intangible assets acquired from Linode is 12.2 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized.