Akamai continues to invest in strategic acquisitions to bolster its security and compute offerings, including Noname Security and customer contracts from Edgio and Lumen. These acquisitions are aimed at expanding market presence and technological capabilities in key growth areas.

Akamai expanded its compute platform to 41 datacenters in 36 locations, including upgrades and new introductions in various regions globally. This expansion aims to improve application performance and attract new customers in underserved markets.

Akamai is investing in internal-use software development to improve network performance and efficiency, aiming to reduce bandwidth and co-location costs. This strategy reflects a focus on operational efficiency and cost management.

Management implemented restructuring activities, including headcount reductions, to prioritize investments in faster-growing areas and improve operational efficiencies. These actions are expected to result in significant expense and potential disruptions in the short term.

Akamai rolled out FlexBase, a flexible work arrangement allowing employees to choose their work location. While intended to increase productivity and attract talent, the program carries risks related to employee morale, training, and cybersecurity.

Akamai redesigned its non-executive short-term incentive compensation programs to shift from cash-based to stock-based, aiming to better align employee incentives with shareholder interests. This shift increased stock-based compensation expense.

The 10-K highlights the risk of slowing revenue growth, particularly in delivery solutions, due to pricing pressure, competition, and customer DIY initiatives. Inability to increase revenues could negatively impact profitability and stock price.

The company acknowledges the impact of global macroeconomic conditions, including inflation, foreign exchange rates, political instability, and warfare, on its business and customer spending. These conditions can lead to cost-saving measures by customers and impact revenues.

Akamai acknowledges the ongoing threat of cybersecurity breaches and attacks, including sophisticated methods using AI. These attacks can lead to significant costs, disruptions, and reputational damage, despite efforts to enhance security measures.

Akamai faces intense competition in security, delivery, and cloud computing solutions from a variety of competitors, ranging from startups to large technology and telecommunications companies. This competition could result in price reductions, loss of customers, and loss of market share.

The company relies on some of its larger customers to direct traffic to its network for a significant part of its revenues. At times, some of our customers have determined that it is better for them to employ a "do-it-yourself" or "DIY" strategy by putting in place equipment, software and other technology solutions for content and application delivery and security protection within their internal systems instead of using our solutions for some or all of their needs.

Smaller and more nimble competitors may be able to: attract customers by offering less sophisticated versions of products and services than we provide at lower prices than those we charge; develop new business models that are disruptive to us; and respond more quickly than we can to new or emerging technologies, changes in customer requirements and market and industry developments, resulting in superior offerings.

As we continue to build out our new compute locations to provide us with the ability to scale our platform, we have entered into, and expect to continue to enter into, longer term leases that include certain financial commitments in order to achieve more favorable unit economics.

Historically, we have been able to mitigate increases in these costs through investment in internal-use software development to improve the performance and efficiency of our network.

We continue to improve our internal-use software and remain disciplined in managing our hardware deployments, which enables us to use servers more efficiently. We will continue to effectively manage our co-location costs.

Innovation is important to our future success. In particular, as security and compute solutions have become, and are expected to continue to be, an important part of our business, we must be particularly adept at developing new security solutions that meet the constantly-changing threat landscape and compute and compute-to-edge solutions that meet the needs of professional users and enterprises looking to increase the utility of the internet for their business.

For example, we are investing significant resources in our compute solutions and platform, working on expanding the capacity of these facilities, adding additional sites and developing increased compute features and functionality. Success in these efforts is not guaranteed and will largely depend on our ability to create products that are competitive in the enterprise market, source additional co-location facilities, manage an uncertain supply chain for server related hardware and adapt our offerings to new or emerging technologies and changes in customer requirements, including those related to artificial intelligence workloads.

Artificial intelligence ("AI"), presents new risks and challenges that may affect our business. We have made, and expect to continue to make investments to integrate AI and machine learning technology into our products and solutions. Given the nature of AI technology, we face significant competition from other companies and an evolving regulatory landscape.

During the year ended December 31, 2024, we repurchased 5.6 million shares of our common stock for an aggregate purchase price of $557.5 million.

We plan to continue to make investments in capital expenditures, including to support recently acquired contracts, and focus investments on our faster growing compute solutions, including support for a new enterprise compute customer.

If we are unable to remain profitable or if we use more cash than we generate in the future, our level of indebtedness at such time could adversely affect our operations by increasing our vulnerability to adverse changes in general economic and industry conditions and by limiting or prohibiting our ability to obtain additional financing for additional capital expenditures, acquisitions and general corporate and other purposes.

Different aspects of our human capital management are overseen by our board of directors as well as its Talent, Leadership and Compensation Committee and Environmental, Social and Governance Committee.

Akamai rolled out FlexBase, a flexible work arrangement allowing employees to choose their work location. While intended to increase productivity and attract talent, the program carries risks related to employee morale, training, and cybersecurity.

We conduct annual internal pay equity analyses (with the assistance of a nationally-recognized outside consultant), and we take action to remedy identified discrepancies when we believe it is appropriate. To date, no widespread patterns of disparity have been identified.

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, regulations that may negatively impact business, economic and political uncertainty, uncertain energy supplies, heightened geopolitical tensions and conflict, potential for supply chain disruptions, changes in U.S. and international tax laws, changes in tariffs, fluctuations in foreign exchange rates and elevated interest rates.

Trading prices for our common stock may continue to fluctuate in response to a number of events and factors, including the following: quarterly variations in operating results; changes in guidance or failure to meet guidance; announcements by our customers related to their businesses that could be viewed as impacting their usage of our solutions; market speculation about whether we are a takeover target or considering a strategic transaction; announcements by us regarding acquisitions; announcements by competitors; activism by any single large stockholder or combination of stockholders or rumors about such activity; changes in financial estimates and recommendations by securities analysts; failure to meet the expectations of securities analysts; purchases or sales of our stock by our officers and directors; general economic conditions and other macroeconomic factors, such as inflationary pressures, foreign currency exchange rate fluctuations, energy prices, reduced consumer spending, elevated interest rates, imposition of tariffs, recessionary economic cycles, protracted economic slowdowns and overall market volatility; repurchases of shares of our common stock; the issuance of additional shares or securities convertible into, or exchangeable or exercisable for, shares of our common stock, including under our equity compensation plans; entry into, or termination of, relationships with material customers and partners; and performance by other companies in our industry.

Our current and potential competitors vary by size, product offerings and geographic region and range from start-ups that offer solutions competing with a discrete part of our business to large technology or telecommunications companies that offer, or may be planning to introduce, products and services that are broadly competitive with what we do. The primary competitive factors in our market are differentiation of technology, global presence, quality of solutions, reliability, long-term product roadmap, customer service, technical expertise, security, ease-of-use, breadth of services offered, price and financial strength.