Akamai Technologies Inc. completed a $2.5 billion convertible-note sale Nov. 12, raising approximately $2.4597 billion after discounts and estimated expenses for 2027 debt obligations and planned cloud infrastructure investment.
The closing exceeded the $2.2 billion base amount priced Nov. 9 after purchasers exercised options Nov. 10 to buy an additional $150 million in each series. Akamai’s earlier proposal outlined the possible increase. The completed sale included $1.25 billion of 1.00% senior unsecured notes due Nov. 15, 2028, and $1.25 billion of 1.00% notes due Nov. 15, 2031, according to the company’s filing with the Securities and Exchange Commission.
Akamai used about $284.4 million of the offering’s net proceeds for convertible-note hedges after offsetting their cost with warrant-sale proceeds. The company said it may use remaining funds to repay part of its $1.15 billion in 0.375% convertible notes due Sept. 1, 2027, at maturity and/or meet cash obligations if those notes convert earlier. It also plans capital spending for its Cloud Infrastructure Services business, with any balance going to general corporate purposes. The filing does not allocate specific amounts among those uses.
The 2028 notes have an initial conversion price of about $112.41 per share; the 2031 notes have a price of about $102.37. Those prices were approximately 40% and 27.5% above Akamai’s $80.29 closing share price on Nov. 9, respectively. The company expects the hedges to reduce potential dilution if holders convert. Associated warrants could create separate dilution if the share price exceeds their strike price, unless Akamai elects cash settlement, subject to conditions.
Akamai Executive Vice President and Chief Financial Officer Ed McGowan forecast significant increases in cash from operations and EBITDA margins beginning in 2027 as revenue from contracted Cloud Infrastructure Services grows. He expects further improvement in 2028; both are management projections. Interest payments on the notes are scheduled every six months, beginning May 15, 2027.
