Akamai Announces Closing of $2.5 Billion Offering of Convertible Senior Notes

Rhea-AI Summary

Akamai Technologies (Nasdaq: AKAM) closed a $2.5 billion private offering of convertible senior notes, debt that can convert into shares. The offering comprises $1.25 billion of 1.00% notes due 2028 and $1.25 billion of 1.00% notes due 2031, each including a fully exercised $150.0 million purchase option. Net proceeds were approximately $2,459.7 million; approximately $284.4 million funded share-conversion hedges after warrant-sale proceeds.

Akamai plans to repay part of its $1.15 billion of 2027 convertible notes at their September 1, 2027 maturity and/or cover earlier conversions, and fund Cloud Infrastructure Services capital expenditures. It expects higher EBITDA margins and operating cash flow beginning in 2027, with further improvement in 2028 as committed cloud-contract revenue ramps. The hedges are expected to reduce conversion dilution or offset certain cash payments; warrants could separately dilute shareholders above their strike price.

5 points · 1 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

1 major · 3 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointOffering delivered approximately $2,459.7 million in net proceeds after purchaser discounts and estimated offering expenses. 20% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.Akamai expects EBITDA margins and operating cash flow to increase beginning in 2027, improving further in 2028.
• Minor point. Forward-looking: it has not happened yet and may not happen.Proceeds are intended to repay part of $1.15 billion in 2027 notes at maturity and/or cover earlier conversions.
• Minor point. Forward-looking: it has not happened yet and may not happen.Proceeds are intended to fund Cloud Infrastructure Services capital expenditures.
• Minor point. Forward-looking: it has not happened yet and may not happen.Conversion hedges are expected to reduce potential dilution and/or offset cash payments exceeding converted principal.

Negative

• Major pointNew convertible debt adds $1.25 billion at 1.00% due 2028 and $1.25 billion at 1.00% due 2031. 10% of market cap
• Minor pointConversion-hedge transactions cost approximately $284.4 million after partial offset from warrant-sale proceeds.
• Minor point. Forward-looking: it has not happened yet and may not happen.Warrants could dilute shareholders above their strike price, unless Akamai elects conditional cash settlement.

Key Figures

Offering principal: $2.5 billion Principal per series: $1.25 billion each Interest rate: 1.00% +4 more

Offering principal

$2.5 billion

Convertible senior notes; offering closed

Principal per series

$1.25 billion each

2028 Notes and 2031 Notes

Interest rate

1.00%

Each notes series

Additional notes issued

$150.0 million per series

Initial purchasers exercised their options in full

Net proceeds

Approximately $2,459.7 million

After initial purchasers’ discounts and estimated offering expenses

Hedge transaction cost

Approximately $284.4 million

Paid from net proceeds, partially offset by warrant-sale proceeds

Outstanding notes targeted for repayment

$1.15 billion

0.375% Convertible Senior Notes due 2027; repayment at maturity or cash upon earlier conversion

Previous Offering Reports

2 past events · Latest: Nov 09

Same Type 2 events

1. Nov 09

   Notes offering pricing

   24h Move

   +4.3%

   Priced the same two-series offering that this announcement reports as closed.

2. Nov 09

   Notes offering proposal

   24h Move

   -3.4%

   Proposed the same two-series financing, later priced and closed.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

convertible senior notes, rule 144a, convertible note hedge transactions, warrant transactions

4 terms

convertible senior notes financial

"aggregate principal amount of 1.00% convertible senior notes due 2028"

Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.

rule 144a regulatory

"pursuant to Rule 144A under the Securities Act of 1933"

Rule 144A is a regulation that makes it easier for companies to sell private bonds to large investors without going through all the usual rules that apply to public sales. It matters because it helps companies raise money more quickly and privately, often attracting big investors looking for special deals.

convertible note hedge transactions financial

"Akamai entered into convertible note hedge transactions"

Convertible note hedge transactions are agreements made alongside convertible debt that limit the market impact when those notes convert into shares by using separate contracts that offset or neutralize the new stock issuance (for example, arranging share sales, purchases, or option contracts). Investors care because these hedges can reduce or delay dilution and dampen price swings—think of them like insurance that limits how much a conversion can dilute existing owners or move the stock price.

warrant transactions financial

"and warrant transactions with one or more of the initial purchasers"

Warrant transactions are the issuance, sale, transfer, exercise or cancellation of warrants — contracts that give a holder the right to buy a company’s shares at a set price for a set period. Investors care because exercising warrants can raise cash for the company but also increase the number of shares outstanding, diluting existing ownership and potentially affecting the stock price; think of warrants like gift certificates that can be turned in later for a product at a fixed cost.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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CAMBRIDGE, Mass., Nov. 12, 2026 (GLOBE NEWSWIRE) -- Akamai Technologies, Inc. (Nasdaq: AKAM) (“Akamai”) today announced that it has closed its previously announced private offering of $1.25 billion in aggregate principal amount of 1.00% convertible senior notes due 2028 (the “2028 Notes”) and $1.25 billion in aggregate principal amount of 1.00% convertible senior notes due 2031 (the “2031 Notes” and, together with the 2028 Notes, the “notes”) to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The aggregate principal amount of each series of notes includes $150.0 million issued pursuant to the initial purchasers’ exercise in full of their option to purchase additional notes of that series.

“Securing this capital on attractive terms demonstrates the market’s confidence in our strategic direction and the durability of our business model,” said Ed McGowan, Akamai’s Executive Vice President and Chief Financial Officer. “With our balance sheet and substantial liquidity, we are well positioned to execute on our existing customer commitments, address our outstanding debt maturities, and prudently fund the continued expansion of our Cloud Infrastructure Services business while maintaining a disciplined approach to capital allocation.”

McGowan added, “As revenue from our committed Cloud Infrastructure Services contracts ramps, we expect to see a significant increase in EBITDA margins and cash from operations beginning in 2027, with further improvement expected in 2028. We believe this increased cash generation will enhance our ability to self-fund future investments from organic cash flow, reduce leverage over the long term, and support our investment-grade profile.”

The net proceeds from the offering were approximately $2,459.7 million, after deducting the initial purchasers’ discounts and estimated offering expenses payable by Akamai. Approximately $284.4 million of the net proceeds from the offering were used to pay the cost of the convertible note hedge transactions described below (after such cost was partially offset by the proceeds to Akamai from the sale of warrants pursuant to the related warrant transactions). Akamai intends to use the remaining net proceeds from the offering to repay at maturity a portion of Akamai’s $1.15 billion outstanding aggregate principal amount of 0.375% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”), which mature on September 1, 2027, and/or to pay cash amounts due upon any earlier conversion of the 2027 Convertible Notes, and to fund the capital expenditure requirements of its Cloud Infrastructure Services (CIS) business. In addition, Akamai intends to use any remaining net proceeds for general corporate purposes.

In connection with the pricing of the notes, Akamai entered into convertible note hedge transactions and warrant transactions with one or more of the initial purchasers of the notes and/or their respective affiliates and other financial institutions. The convertible note hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the same number of shares of Akamai’s common stock that initially underlie the notes. The convertible note hedge transactions are expected generally to reduce the potential dilution with respect to Akamai's common stock upon any conversion of the notes and/or offset any cash payments Akamai is required to make in excess of the principal amount of converted notes, as the case may be. The warrants cover, subject to customary anti-dilution adjustments, the same number of shares of Akamai's common stock. The warrant transactions could separately have a dilutive effect with respect to Akamai’s common stock to the extent that the market price per share of Akamai's common stock exceeds the strike price of the warrants, unless Akamai elects, subject to certain conditions, to settle the warrants in cash.

The notes and any shares of common stock issuable upon conversion of the notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the notes or any shares of common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.

The release contains information about future expectations, plans and prospects of Akamai’s management that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, including statements with respect to Akamai’s expectations regarding its use of proceeds from the offering and the effect of the convertible note hedge and warrant transactions, Akamai’s ability to meet its existing customer commitments and debt obligations, and the expected increase in operating cash flow. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, the terms of the notes and the offering, risks and uncertainties related to Akamai’s expected operating expenses and cash flow, Akamai’s ability to recognize anticipated revenue from existing CIS customer commitments, the timing and amount of capital expenditures for Akamai’s CIS business, the impact of general economic, industry, market or political conditions and other factors that are discussed in Akamai’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC.

In addition, the statements in this press release represent Akamai’s expectations and beliefs as of the date of this press release. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai’s expectations or beliefs as of any date subsequent to the date of this press release.

About Akamai

Akamai is the cloud company that powers and protects an AI-driven world. Our cloud platform extends high-performance cloud computing from the core to the edge, enabling organizations to build and scale next-generation AI applications and providing comprehensive, multilayered security to safeguard enterprises against evolving cyberthreats.

Contacts:
Johanna Schmitt		Mark Stoutenberg
Media Relations		Investor Relations
Akamai Technologies		Akamai Technologies
AkamaiPR@akamai.com		mstouten@akamai.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much did Akamai raise in its convertible notes offering, and what are the terms?

Akamai closed a $2.5 billion offering comprising $1.25 billion of 1.00% convertible senior notes due 2028 and $1.25 billion of 1.00% convertible senior notes due 2031. Each series includes $150.0 million issued through the initial purchasers’ full exercise of their additional-note purchase option.

How will Akamai use the convertible notes offering proceeds?

Akamai intends to use proceeds remaining after the hedge transactions to repay part of its $1.15 billion of 2027 convertible notes at maturity and/or pay cash due on earlier conversions, and fund Cloud Infrastructure Services capital expenditures. The existing notes mature September 1, 2027. Any remaining proceeds are intended for general corporate purposes.