Akamai Technologies, Inc. (Akamai) has proposed a $2.2 billion convertible senior note offering to help finance a multiyear cloud buildout and manage a $1.15 billion debt maturity in 2027.
The proposed financing includes $1.1 billion of notes due Nov. 15, 2028, and another $1.1 billion due Nov. 15, 2031. Initial purchasers may buy up to $150 million more of each series. If they exercise both options in full, the total offering would reach $2.5 billion.
After costs related to note hedges and warrant transactions, Akamai intends to use the remaining proceeds for capital expenditures in its Cloud Infrastructure Services business and to repay part of its $1.15 billion in 0.375% convertible senior notes due Sept. 1, 2027. The funds could cover repayment at maturity or cash obligations if those notes convert earlier. Any remaining money would go toward general corporate purposes.
Akamai’s latest quarterly filing estimates about $6.8 billion in capital expenditures over several years for cloud infrastructure arrangements. The company expects spending to begin in the fourth quarter of 2026, rise in 2027 and continue into 2028. It said a significant share of customer cash tied to the arrangements is expected after infrastructure is deployed and services scale up.
Cloud Infrastructure Services generated $109 million in revenue in the quarter ended Sept. 30, up 34% from a year earlier, according to Akamai’s third-quarter earnings release. In the company’s Nov. 5 earnings release, Chief Executive Officer Dr. Tom Leighton said Akamai had signed “more than $14 billion worth of multi-year commitments” so far this year.
The interest rate, initial conversion rate and offering price remain to be set at pricing. Payments are scheduled for May 15 and Nov. 15, beginning May 15, 2027. The notes would be senior unsecured obligations offered to qualified institutional buyers under Rule 144A.
Akamai expects note hedges to reduce potential dilution if holders convert. Related warrants could add shares if Akamai’s stock price exceeds their strike price, unless the company settles them in cash. Akamai said it may withdraw the proposal or change its terms.
