AKAMAI TECHNOLOGIES INCAKAM

AKAMAI TECHNOLOGIES INC Earnings Per Share Disclosure

10-KFiled Feb 20, 20262 min read
Net Income per Share
Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock awards, convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding stock awards is reflected in diluted earnings per share by application of the treasury stock method and the dilutive effect of the convertible securities is reflected in diluted earnings per share by application of the if-converted method.
The components used in the computation of basic and diluted net income per share for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands, except per share data):
 
202520242023
Numerator:
Net income$452,031 $504,918 $547,629 
Denominator:
Shares used for basic net income per share145,402 151,392 152,510 
Effect of dilutive securities:
Stock awards1,621 2,210 2,312 
Convertible senior notes— 744 575 
Warrants related to issuance of convertible senior notes— — — 
Shares used for diluted net income per share147,023 154,346 155,397 
Basic net income per share$3.11 $3.34 $3.59 
Diluted net income per share$3.07 $3.27 $3.52 

For the years ended December 31, 2025, 2024 and 2023, certain potential outstanding shares from service-based stock awards and warrants were excluded from the computation of diluted net income per share because the effect of including these items was anti-dilutive. Additionally, certain market- and performance-based stock awards were excluded from the computation of diluted net income per share because the underlying market and performance conditions for such stock awards had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

202520242023
Service-based stock awards3,532 2,171 2,947 
Market- and performance-based stock awards1,583 1,316 1,371 
Warrants related to issuance of convertible senior notes40,776 32,006 26,998 
Total shares excluded from computation45,891 35,493 31,316 

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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