AKAMAI TECHNOLOGIES INCAKAM
AKAMAI TECHNOLOGIES INC Fair Value Disclosure
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 not 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 | ||||||||
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.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.