- Fourth Quarter Revenue of $1.08 billion, up 5%
reported and 8% organic year-over-year
- Full Year Revenue of $4.15 billion, up 9% reported and 10%
organic year-over-year
- Fourth Quarter and Full Year GAAP Loss from Operations of
$362 million and $877 million, respectively
- Fourth Quarter and Full Year Non-GAAP Income from Operations
of $173 million and $533 million, respectively
Twilio (NYSE: TWLO), the customer engagement platform that
drives real-time, personalized experiences for today’s leading
brands, reported financial results for its fourth quarter and full
year ended December 31, 2023.
“Twilio had a terrific fourth quarter to close out a strong
2023,” said Khozema Shipchandler, Twilio’s CEO. “It’s a privilege
to lead the Twilio team into its next chapter as we continue to
make strides on our path to GAAP profitability. We enter 2024 from
a position of strength and the team is focused on further
delivering on our customer engagement vision for our
customers.”
Fourth Quarter 2023 Financial Highlights
- Total revenue of $1.08 billion for the fourth quarter of 2023,
up 5% year-over-year. Communications revenue of $1.00 billion for
the fourth quarter of 2023, up 5% year-over-year. Segment (formerly
Data & Applications) revenue of $75.0 million for the fourth
quarter of 2023, up 4% year-over-year.
- Total organic revenue growth of 8% year-over-year for the
fourth quarter of 2023. Communications organic revenue growth of 8%
year-over-year for the fourth quarter of 2023.
- GAAP loss from operations of $361.7 million for the fourth
quarter of 2023, compared with GAAP loss from operations of $218.6
million for the fourth quarter of 2022.
- Non-GAAP income from operations of $172.6 million for the
fourth quarter of 2023, compared with non-GAAP income from
operations of $32.9 million for the fourth quarter of 2022.
- GAAP net loss per share attributable to common stockholders,
basic and diluted, of $2.01 based on 181.8 million weighted average
shares outstanding in the fourth quarter of 2023, compared with
GAAP net loss per share attributable to common stockholders, basic
and diluted, of $1.24 based on 185.1 million weighted average
shares outstanding in the fourth quarter of 2022.
- Non-GAAP net income per share attributable to common
stockholders, diluted, of $0.86 based on 184.0 million non-GAAP
weighted average shares outstanding in the fourth quarter of 2023,
compared with non-GAAP net income per share attributable to common
stockholders, diluted, of $0.22 based on 187.2 million non-GAAP
weighted average shares outstanding in the fourth quarter of
2022.
- Net Cash Provided by Operating Activities of $222.5 million and
Free Cash Flow of $210.9 million.
Full Year 2023 Financial Highlights
- Total revenue of $4.15 billion for the full year 2023, up 9%
year-over-year. Communications revenue of $3.86 billion for the
full year 2023, up 9% year-over-year. Segment (formerly Data &
Applications) revenue of $295.3 million for the full year 2023, up
7% year-over-year.
- Total organic revenue growth of 10% year-over-year for the full
year 2023. Communications organic revenue growth of 11%
year-over-year for the full year 2023.
- GAAP loss from operations of $876.5 million for the full year
2023, compared with GAAP loss from operations of $1.21 billion for
the full year 2022.
- Non-GAAP income from operations of $533.0 million for the full
year 2023, compared with non-GAAP loss from operations of $4.5
million for the full year 2022.
- GAAP net loss per share attributable to common stockholders,
basic and diluted, of $5.54 based on 183.3 million weighted average
shares outstanding in the full year 2023, compared with GAAP net
loss per share attributable to common stockholders, basic and
diluted, of $6.86 based on 183.0 million weighted average shares
outstanding in the full year 2022.
- Non-GAAP net income per share attributable to common
stockholders, diluted, of $2.45 based on 185.4 million non-GAAP
weighted average shares outstanding in the full year 2023, compared
with non-GAAP net loss per share attributable to common
stockholders, basic and diluted, of $0.15 based on 183.0 million
non-GAAP weighted average shares outstanding in the full year
2022.
- Net Cash Provided by Operating Activities of $414.8 million and
Free Cash Flow of $363.5 million.
Key Metrics
- More than 305,000 Active Customer Accounts as of December 31,
2023 compared to more than 290,000 Active Customer Accounts as of
December 31, 2022.
- Dollar-Based Net Expansion Rate of 102% for the fourth quarter
of 2023 compared to Dollar-Based Net Expansion Rate of 110% for the
fourth quarter of 2022. Dollar-Based Net Expansion Rate of 103% for
the full year 2023 compared to Dollar-Based Net Expansion Rate of
121% for the full year 2022.
- 5,867 employees as of December 31, 2023.
Share Repurchase Program
- In February 2023, Twilio authorized a share repurchase program
pursuant to which it may repurchase up to $1.0 billion of its
outstanding Class A common stock. As of today, Twilio has completed
over $730 million of repurchases, representing over 73% of the
total program amount. Twilio intends to continue making progress
against the balance of its share repurchase authorization in future
quarters. The program expires on December 31, 2024.
Executive Leadership Update
- On January 7, 2024, Jeff Lawson resigned as Twilio’s Chief
Executive Officer (“CEO”), as a member of Twilio’s Board of
Directors (the “Board”) and as Board Chair, in each case, effective
January 8, 2024.
- On January 7, 2024, the Board appointed Khozema Shipchandler,
Twilio’s President, Communications, as CEO of Twilio and as a
member of the Board, effective January 8, 2024.
Business Unit Update
- In the fourth quarter of 2023, Twilio moved its Flex and
Marketing Campaigns products from its Data & Applications
business unit to its Communications business unit. Twilio has also
renamed its Data & Applications business unit to Twilio
Segment, which includes both its Segment and Engage products. As a
result of these changes, all segment-level results and metrics have
been recast accordingly.
Segment Update
- Twilio announced that management is undergoing an operational
review of the Segment business unit in order to identify the
appropriate path forward for improved execution and profitable
growth. Twilio management will provide more details on the outcome
of this review upon its completion in March of 2024. During the
fourth quarter, Twilio recorded a $285.7 million impairment related
to the intangible assets acquired as part of the Segment
acquisition.
Outlook
Twilio plans to provide its full-year 2024 non-GAAP income from
operations outlook, as well as any updates to its financial
framework, following the completion of the Segment operational
review in March of 2024. At a minimum, Twilio expects to exceed its
2023 non-GAAP income from operations for the full-year 2024.
Twilio is initiating guidance for the first quarter ending March
31, 2024.
Q1 FY24
Guidance
Revenue (millions)
$1,025 - $1,035
Y/Y Revenue Growth
2% - 3%
Y/Y Organic Revenue Growth
5% - 6%
Non-GAAP income from operations
(millions)
$120 - $130
Non-GAAP diluted earnings per share
(1)
$0.56 - $0.60
Non-GAAP weighted average diluted shares
outstanding (millions)
185
(1) Non-GAAP diluted earnings per share
guidance assumes no impact from volatility of foreign exchange
rates.
Conference Call Information
Twilio posted prepared remarks on its investor relations website
at https://investors.twilio.com. Twilio is hosting a Q&A
conference call today, February 14, 2024, to discuss its fourth
quarter and full year 2023 financial results. The conference call
will begin at 2:00 p.m. (PT) / 5:00 p.m. (ET), and investors and
analysts should register for the webcast in advance by visiting
https://events.q4inc.com/attendee/764646733. The live webcast of
the conference call, as well as a replay, will be available on the
investor relations website.
Twilio uses its investor relations website and its X (formerly
Twitter) feed (@twilio), as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
About Twilio Inc.
Today’s leading companies trust Twilio’s Customer Engagement
Platform (CEP) to build direct, personalized relationships with
their customers everywhere in the world. Twilio enables companies
to use communications and data to add intelligence and security to
every step of the customer journey, from sales to marketing to
growth, customer service and many more engagement use cases in a
flexible, programmatic way. Across 180 countries and territories,
millions of developers and hundreds of thousands of businesses use
Twilio to create magical experiences for their customers. For more
information about Twilio (NYSE: TWLO) visit www.twilio.com.
Forward-Looking Statements
This press release and the accompanying conference call contain
forward-looking statements within the meaning of the federal
securities laws, which statements involve substantial risks and
uncertainties. Forward-looking statements generally relate to
future events or our future financial or operating performance. In
some cases, you can identify forward-looking statements because
they contain words such as “may,” “can,” “will,” “would,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“forecasts,” “potential” or “continue” or the negative of these
words or other similar terms or expressions that concern Twilio’s
expectations, strategy, plans or intentions. Forward-looking
statements contained in this press release and the accompanying
conference call include, but are not limited to, statements about:
Twilio’s future financial performance, including Twilio’s expected
financial results and guidance; Twilio’s expectations regarding
profitability, including when it will become profitable on GAAP and
non-GAAP bases; Twilio’s anticipated strategies and business plans,
including future strategic partnerships; Twilio’s expectations
regarding the operational review of Segment; the ongoing effects of
Twilio’s recent workforce reductions and other cost-saving
measures; the reorganization of Twilio’s business and the shift in
its segment reporting structure; Twilio’s expectations regarding
compensation programs; Twilio’s expectations regarding its sales
pipeline, the benefits of recently signed deals, new product
releases, increased investment and go-to-market focus to capture
market share, revenue growth, profit potential, anticipated cash
flows, strategy for streamlining the customer experience, the
effects of registering certain messaging traffic on Twilio’s
results of operations; Twilio’s ability to develop products related
to generative artificial intelligence and machine learning,
including CustomerAI and its use cases; Twilio’s ability to deliver
on its product roadmap; Twilio’s expectations regarding share
repurchases; and Twilio’s expectations regarding the impact of
macroeconomic and industry conditions, the impact of such
conditions on Twilio’s customers, and Twilio’s ability to operate
in such conditions. You should not rely upon forward-looking
statements as predictions of future events.
The outcome of the events described in these forward-looking
statements is subject to known and unknown risks, uncertainties,
and other factors that may cause Twilio’s actual results,
performance, or achievements to differ materially from those
described in the forward-looking statements, including, among other
things: Twilio’s ability to successfully implement its cost-saving
initiatives and to capture expected efficiencies; Twilio’s ability
to realize the anticipated benefits of changes to its operating
model and organizational structure; the impact of macroeconomic
uncertainties and market volatility; Twilio’s financial
performance, including expectations regarding its results of
operations and the assumptions underlying such expectations, and
ability to achieve and sustain profitability; Twilio’s ability to
attract and retain customers; Twilio’s ability to compete
effectively in an intensely competitive market; Twilio’s ability to
comply with modified or new industry standards, laws and
regulations applying to its business, and increased costs
associated with regulatory compliance; Twilio’s ability to manage
changes in network service provider fees and optimize its network
service provider coverage and connectivity; Twilio’s ability to
form and expand partnerships; and Twilio’s ability to successfully
enter into new markets and manage its international expansion.
The forward-looking statements contained in this press release
and the accompanying conference call are also subject to additional
risks, uncertainties, and factors, including those more fully
described in Twilio’s most recent filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. Further information on
potential risks that could affect actual results will be included
in the subsequent periodic and current reports and other filings
that Twilio makes with the Securities and Exchange Commission from
time to time. Moreover, Twilio operates in a very competitive and
rapidly changing environment, and new risks and uncertainties may
emerge that could have an impact on the forward-looking statements
contained in this press release and the accompanying conference
call.
Forward-looking statements represent Twilio’s management’s
beliefs and assumptions only as of the date such statements are
made. Twilio undertakes no obligation to update any forward-looking
statements made in this press release or the accompanying
conference call to reflect events or circumstances occurring after
this press release or accompanying conference call, as applicable,
or to reflect new information or the occurrence of unanticipated
events, except as required by law.
Non-GAAP Financial Measures
In addition to financial information presented in accordance
with U.S. generally accepted accounting principles (“GAAP”), this
press release and the accompanying conference call include certain
non-GAAP financial measures, including those listed below. Twilio
uses these non-GAAP financial measures to evaluate its ongoing
operations and for internal planning and forecasting purposes.
Twilio believes that these non-GAAP financial measures may be
helpful to investors because they provide consistency and
comparability with past financial performance, facilitate
period-to-period comparisons of results of operations and assist in
comparisons with other companies, many of which use similar
non-GAAP financial measures to supplement their GAAP results.
Twilio believes organic revenue, organic revenue growth,
Communications organic revenue and Communications organic revenue
growth are useful in understanding the ongoing results of its
operations on a consolidated basis and at the segment level. Twilio
believes free cash flow provides useful supplemental information to
help investors understand underlying trends in its business and its
liquidity.
These non-GAAP financial measures are presented for supplemental
informational purposes only, should not be considered substitutes
for financial information presented in accordance with GAAP, and
may be different from similarly-titled non-GAAP measures used by
other companies. A reconciliation of these measures to the most
directly comparable GAAP measures is included at the end of this
press release. Twilio has not provided the forward-looking GAAP
equivalents for certain forward-looking non-GAAP measures presented
in this press release and the accompanying conference call, or a
GAAP reconciliation, as a result of the uncertainty regarding, and
the potential variability of, reconciling items such as stock-based
compensation expense. Accordingly, a reconciliation of these
non-GAAP guidance metrics to their corresponding GAAP equivalents
is not available without unreasonable effort. However, it is
important to note that material changes to reconciling items could
have a significant effect on future GAAP results.
Non‑GAAP Gross Profit and Non‑GAAP Gross Margin.
For the periods presented, Twilio defines non‑GAAP gross profit and
non‑GAAP gross margin as GAAP gross profit and GAAP gross margin,
respectively, adjusted to exclude stock-based compensation,
amortization of acquired intangibles and payroll taxes related to
stock-based compensation. Segment-level non‑GAAP gross profit and
non‑GAAP gross margin are calculated using the same methodology,
but using (and excluding, as applicable) only revenue and expenses
attributable to the applicable segment.
Non-GAAP Gross Profit Growth. For the periods presented,
Twilio calculates non-GAAP gross profit growth by dividing (i)
non-GAAP gross profit for the period presented less non-GAAP gross
profit in the comparative period by (ii) non-GAAP gross profit in
the comparative period.
Non‑GAAP Operating Expenses. For the periods presented,
Twilio defines non‑GAAP operating expenses (including categories of
operating expenses) as GAAP operating expenses (and categories of
operating expenses) adjusted to exclude, as applicable, stock-based
compensation, amortization of acquired intangibles, loss on net
assets divested, acquisition and divestiture related expenses,
payroll taxes related to stock-based compensation, charitable
contributions, restructuring costs, and impairment of long-lived
assets.
Non‑GAAP Income (Loss) from Operations and Non‑GAAP
Operating Margin. For the periods presented, Twilio defines
non‑GAAP income (loss) from operations and non‑GAAP operating
margin as GAAP loss from operations and GAAP operating margin,
respectively, adjusted to exclude, as applicable, stock-based
compensation, amortization of acquired intangibles, loss on net
assets divested, acquisition and divestiture related expenses,
payroll taxes related to stock-based compensation, charitable
contributions, restructuring costs, and impairment of long-lived
assets. Segment-level non‑GAAP income (loss) from operations and
non‑GAAP operating margin are calculated using the same
methodology, but using (and excluding, as applicable) only revenue
and expenses attributable to the applicable segment.
Non-GAAP Stock-Based Compensation Expense and Non-GAAP
Stock-Based Compensation Expense as a Percentage of Revenue.
For the periods presented, Twilio defines non-GAAP stock-based
compensation expense as GAAP stock-based compensation expense,
adjusted to exclude stock-based compensation reflected in
restructuring costs.
Non‑GAAP Net Income (Loss) Attributable to Common
Stockholders and Non‑GAAP Net Income (Loss) Per Share
Attributable to Common Stockholders. For the periods presented,
Twilio defines non-GAAP net income (loss) attributable to common
stockholders and non‑GAAP net income (loss) per share attributable
to common stockholders, diluted (which is often referred to as
“non-GAAP diluted earnings per share”) as GAAP net loss
attributable to common stockholders and GAAP net loss per share
attributable to common stockholders, basic and diluted,
respectively, adjusted to exclude share-based compensation,
amortization of acquired intangibles, loss on net assets divested,
acquisition and divestiture related expenses, payroll taxes related
to stock-based compensation, amortization of debt discount and
issuance costs, income tax benefit related to acquisitions,
charitable contributions, share of losses from equity method
investment, restructuring costs, impairment of long-lived assets
and impairment of strategic investments.
Organic Revenue. For the periods presented, Twilio
defines organic revenue as GAAP revenue, excluding (i) revenue from
each acquired business and revenue from application-to-person
(“A2P”) 10DLC fees imposed by major U.S. carriers on our core
messaging business, in each case until the beginning of the first
full quarter following the one-year anniversary of the closing date
of such acquisition or the initial date such fees were charged and
(ii) revenue from each divested business beginning in the quarter
of the closing date of such divestiture; provided that (a) if an
acquisition closes or such fees are initially charged on the first
day of a quarter, such revenue will be included in organic revenue
beginning on the one-year anniversary of the closing date of such
acquisition or the initial date such fees were charged, and (b) if
a divestiture closes on the last day of a quarter, such revenue
will be included in organic revenue for that quarter. A2P 10DLC
fees are fees imposed by U.S. mobile carriers for A2P SMS messages
delivered to its subscribers, and we pass these fees to our
messaging customers at cost. Communications organic revenue is
calculated using the same methodology, but using (and excluding, as
applicable) only revenue attributable to the Communications
segment.
Organic Revenue Growth. For the periods presented, Twilio
calculates organic revenue growth by dividing (i) organic revenue
for the period presented less organic revenue in the comparative
period by (ii) organic revenue in the comparative period. If
revenue from certain acquisitions, divestitures or A2P 10DLC fees
is included or excluded in organic revenue in the period presented,
then revenue from the same acquisitions, divestitures and A2P 10DLC
fees is included or excluded in organic revenue in the comparative
period for purposes of the denominator in the organic revenue
growth calculation. As a result, the denominator used in this
calculation will not always equal the organic revenue reported for
the comparative period. Communications organic revenue growth is
calculated using the same methodology, but using (and excluding, as
applicable) only revenue attributable to the Communications
segment.
Free Cash Flow. For the periods presented, Twilio
calculates free cash flow as net cash provided by operating
activities, excluding capitalized software development costs and
purchases of long-lived and intangible assets.
Operating Metrics
Twilio reviews a number of operational and financial metrics,
including Active Customer Accounts and Dollar-Based Net Expansion
Rate, to evaluate its business, measure its performance, identify
trends affecting its business, formulate business plans and make
strategic decisions. These metrics are not based on any
standardized industry methodology and are not necessarily
calculated in the same manner or comparable to similarly titled
measures presented by other companies. Similarly, these metrics may
differ from estimates published by third parties or from similarly
titled metrics of Twilio’s competitors due to differences in
methodology. The numbers that Twilio uses to calculate Active
Customer Accounts and Dollar-Based Net Expansion Rate are based on
internal data. While these numbers are based on what Twilio
believes to be reasonable judgments and estimates for the
applicable period of measurement, there are inherent challenges in
measuring usage. Twilio regularly reviews and may adjust its
processes for calculating its internal metrics to improve their
accuracy. If investors or analysts do not perceive Twilio’s metrics
to be accurate representations of its business, or if Twilio
discovers material inaccuracies in its metrics, Twilio’s
reputation, business, results of operations, and financial
condition would be harmed.
Active Customer Accounts. Twilio defines an Active
Customer Account at the end of any period as an individual account,
as identified by a unique account identifier, for which Twilio has
recognized at least $5 of revenue in the last month of the period.
A single organization may constitute multiple unique Active
Customer Accounts if it has multiple account identifiers, each of
which is treated as a separate Active Customer Account. Active
Customer Accounts excludes customer accounts from Zipwhip, Inc.
Communications Active Customer Accounts and Segment Active Customer
Accounts are calculated using the same methodology, but using only
revenue recognized from accounts in the respective segment. The
number of consolidated and Communications Active Customer Accounts
is rounded down to the nearest thousand. The number of Segment
Active Customer Accounts is rounded down to the nearest
hundred.
Twilio believes that the number of Active Customer Accounts, on
an aggregate basis and at the segment level, is an important
indicator of the growth of its business, the market acceptance of
its platform and future revenue trends. Twilio believes that use of
its platform by customers at or above the $5 per month threshold is
a stronger indicator of potential future engagement than trial
usage of its platform or usage at levels below $5 per month.
Dollar-Based Net Expansion Rate. Twilio’s Dollar-Based
Net Expansion Rate compares the total revenue from all Active
Customer Accounts and customer accounts from Zipwhip, Inc. in a
quarter to the same quarter in the prior year. To calculate the
Dollar-Based Net Expansion Rate, Twilio first identifies the cohort
of Active Customer Accounts and customer accounts from Zipwhip,
Inc. that were Active Customer Accounts or customer accounts from
Zipwhip, Inc. in the same quarter of the prior year. The
Dollar-Based Net Expansion Rate is the quotient obtained by
dividing the revenue generated from that cohort in a quarter, by
the revenue generated from that same cohort in the corresponding
quarter in the prior year. When Twilio calculates Dollar-Based Net
Expansion Rate for periods longer than one quarter, it uses the
average of the applicable quarterly Dollar-Based Net Expansion
Rates for each of the quarters in such period. Revenue from
acquisitions does not impact the Dollar-Based Net Expansion Rate
calculation until the quarter following the one-year anniversary of
the applicable acquisition, unless the acquisition closing date is
the first day of a quarter. As a result, for the quarter ended
December 31, 2023, Twilio's Dollar-Based Net Expansion Rate
excludes the contributions from acquisitions made after October 1,
2022. Revenue from divestitures does not impact the Dollar-Based
Net Expansion Rate calculation beginning in the quarter the
divestiture closed, unless the divestiture closing date is the last
day of a quarter. As a result, for the quarter ended December 31,
2023, Twilio’s Dollar-Based Net Expansion Rate excludes the
contributions from divestitures made after December 31, 2022.
Communications Dollar-Based Net Expansion Rate and Segment
Dollar-Based Net Expansion Rate are calculated using the same
methodology, but using only revenue attributable to the respective
segment and Active Customer Accounts and customer accounts from
Zipwhip, Inc. for that respective segment. Revenue from customer
accounts from Zipwhip, Inc., which Twilio acquired on July 14,
2021, has been included in Twilio’s Dollar-Based Net Expansion Rate
beginning in the quarter ended December 31, 2022.
Twilio believes that measuring Dollar-Based Net Expansion Rate,
on an aggregate basis and at the segment level, provides an
important indication of the performance of Twilio’s efforts to
increase revenue from existing customers. Twilio’s ability to drive
growth and generate incremental revenue depends, in part, on
Twilio’s ability to maintain and grow its relationships with
existing Active Customer Accounts and to increase their use of the
platform. An important way in which Twilio has historically tracked
performance in this area is by measuring the Dollar-Based Net
Expansion Rate for Active Customer Accounts. Twilio’s Dollar-Based
Net Expansion Rate increases when such Active Customer Accounts
increase their usage of a product, extend their usage of a product
to new applications or adopt a new product. Twilio’s Dollar-Based
Net Expansion Rate decreases when such Active Customer Accounts
cease or reduce their usage of a product or when Twilio lowers
usage prices on a product. As Twilio’s customers grow their
businesses and extend the use of Twilio's platform, they sometimes
create multiple customer accounts with us for operational or other
reasons. As such, when Twilio identifies a significant customer
organization (defined as a single customer organization generating
more than 1% of revenue in a quarterly reporting period) that has
created a new Active Customer Account, this new Active Customer
Account is tied to, and revenue from this new Active Customer
Account is included with, the original Active Customer Account for
the purposes of calculating this metric.
Source: Twilio Inc.
TWILIO INC.
Condensed Consolidated Statements of
Operations
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended December
31,
2023
2022
Revenue
$
1,075,950
$
1,024,574
Cost of revenue
544,784
543,432
Gross profit
531,166
481,142
Operating expenses:
Research and development
235,645
274,094
Sales and marketing
238,602
296,335
General and administrative
106,968
125,095
Restructuring costs
25,452
4,185
Impairment of long-lived assets
286,226
—
Total operating expenses
892,893
699,709
Loss from operations
(361,727
)
(218,567
)
Other income (expenses), net:
Share of losses from equity method
investment
(28,059
)
(21,939
)
Other income, net
30,132
20,281
Total other income (expenses), net
2,073
(1,658
)
Loss before provision for income taxes
(359,654
)
(220,225
)
Provision for income taxes
(5,754
)
(9,197
)
Net loss attributable to common
stockholders
$
(365,408
)
$
(229,422
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(2.01
)
$
(1.24
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
181,786,135
185,120,702
TWILIO INC.
Condensed
Consolidated Statements of Operations
(In thousands, except share and per
share amounts)
(Unaudited)
Year Ended
December 31,
2023
2022
Revenue
$
4,153,945
$
3,826,321
Cost of revenue
2,110,015
2,012,744
Gross profit
2,043,930
1,813,577
Operating expenses:
Research and development
942,790
1,079,081
Sales and marketing
1,022,985
1,248,032
General and administrative
468,459
517,414
Restructuring costs
165,733
76,636
Impairment of long-lived assets
320,504
97,722
Total operating expenses
2,920,471
3,018,885
Loss from operations
(876,541
)
(1,205,308
)
Other expenses, net:
Share of losses from equity method
investment
(121,897
)
(35,315
)
Impairment of strategic investments
(46,154
)
—
Other income (expenses), net
47,863
(3,009
)
Total other expenses, net
(120,188
)
(38,324
)
Loss before provision for income taxes
(996,729
)
(1,243,632
)
Provision for income taxes
(18,712
)
(12,513
)
Net loss attributable to common
stockholders
$
(1,015,441
)
$
(1,256,145
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(5.54
)
$
(6.86
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
183,327,844
182,994,038
TWILIO INC.
Condensed
Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
655,931
$
651,752
Short-term marketable securities
3,356,064
3,503,317
Accounts receivable, net
562,773
547,507
Prepaid expenses and other current
assets
329,204
281,510
Total current assets
4,903,972
4,984,086
Property and equipment, net
209,639
263,979
Operating right-of-use assets
73,959
121,341
Equity method investment
593,582
699,911
Intangible assets, net
350,490
849,935
Goodwill
5,243,266
5,284,153
Other long-term assets
234,799
360,899
Total assets
$
11,609,707
$
12,564,304
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
119,615
$
124,605
Accrued expenses and other current
liabilities
424,311
490,221
Deferred revenue and customer deposits
144,499
139,110
Operating lease liability, current
49,872
54,222
Total current liabilities
738,297
808,158
Operating lease liability, noncurrent
120,770
164,551
Finance lease liability, noncurrent
9,191
21,290
Long-term debt, net
988,953
987,382
Other long-term liabilities
19,944
23,881
Total liabilities
1,877,155
2,005,262
Commitments and contingencies
Stockholders' equity:
Preferred stock
—
—
Common stock
182
186
Additional paid-in capital
14,797,723
14,055,853
Accumulated other comprehensive income
(loss)
619
(121,161
)
Accumulated deficit
(5,065,972
)
(3,375,836
)
Total stockholders’ equity
9,732,552
10,559,042
Total liabilities and stockholders’
equity
$
11,609,707
$
12,564,304
TWILIO INC.
Condensed
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Years Ended
December 31,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(1,015,441
)
$
(1,256,145
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
284,413
279,127
Non-cash reduction to the right-of-use
asset
26,971
47,160
Net amortization of investment premium and
discount
(44
)
33,165
Impairment of long-lived assets
320,504
97,722
Stock-based compensation including
restructuring
675,857
798,560
Amortization of deferred commissions
72,892
57,913
Realized and unrealized losses on equity
securities
8,043
—
Provision for doubtful accounts
51,859
35,012
Value of shares of Class A common stock
issued and donated to charity
5,346
9,541
Share of losses from equity method
investment
121,897
35,315
Impairment of strategic investments
46,154
—
Loss on net assets divested
32,277
—
Other adjustments
14,669
4,905
Changes in operating assets and
liabilities:
Accounts receivable
(85,093
)
(194,655
)
Prepaid expenses and other current
assets
(56,283
)
(94,326
)
Other long-term assets
(2,328
)
(146,458
)
Accounts payable
12,370
30,336
Accrued expenses and other current
liabilities
(51,816
)
75,430
Deferred revenue and customer deposits
5,371
(2,688
)
Operating lease liabilities
(56,340
)
(54,450
)
Other long-term liabilities
3,474
(9,832
)
Net cash provided by (used in) operating
activities
414,752
(254,368
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired and
payments related to prior period acquisitions
(5,770
)
(37,410
)
Divestitures, net of cash divested
38,194
—
Purchases of marketable securities and
other investments
(1,953,003
)
(1,938,337
)
Proceeds from sales and maturities of
marketable securities
2,200,417
1,439,477
Capitalized software development costs
(39,925
)
(45,761
)
Purchases of long-lived and intangible
assets
(11,310
)
(34,421
)
Net cash provided by (used in) investing
activities
228,603
(616,452
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of costs related to public
offerings
—
(35
)
Principal payments on debt and finance
leases
(16,134
)
(13,423
)
Value of equity awards withheld for tax
liabilities
(2,565
)
(1,098
)
Repurchases of shares of Class A common
stock and related costs
(668,751
)
—
Proceeds from exercises of stock options
and shares of Class A common stock issued under ESPP
43,840
59,563
Net cash (used in) provided by financing
activities
(643,610
)
45,007
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
108
60
NET DECREASE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
(147
)
(825,753
)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH—Beginning of period
656,078
1,481,831
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
—End of period
$
655,931
$
656,078
TWILIO INC.
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial
Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Three Months Ended December
31,
2023
2022
GAAP gross profit
$
531,166
$
481,142
GAAP gross margin
49
%
47
%
Non-GAAP adjustments:
Stock-based compensation
7,666
6,505
Amortization of acquired intangibles
24,591
30,052
Payroll taxes related to stock-based
compensation
200
82
Non-GAAP gross profit
$
563,623
$
517,781
Non-GAAP gross margin
52
%
51
%
GAAP research and development
$
235,645
$
274,094
Non-GAAP adjustments:
Stock-based compensation
(84,772
)
(95,166
)
Amortization of acquired intangibles
(653
)
(420
)
Payroll taxes related to stock-based
compensation
(979
)
(953
)
Non-GAAP research and development
$
149,241
$
177,555
Non-GAAP research and development as % of
revenue
14
%
17
%
GAAP sales and marketing
$
238,602
$
296,335
Non-GAAP adjustments:
Stock-based compensation
(41,046
)
(55,284
)
Amortization of acquired intangibles
(17,227
)
(20,429
)
Payroll taxes related to stock-based
compensation
(658
)
(781
)
Non-GAAP sales and marketing
$
179,671
$
219,841
Non-GAAP sales and marketing as % of
revenue
17
%
21
%
GAAP general and administrative
$
106,968
$
125,095
Non-GAAP adjustments:
Stock-based compensation
(31,087
)
(36,344
)
Acquisition and divestiture related
expenses
(40
)
—
Payroll taxes related to stock-based
compensation
(409
)
(207
)
Charitable contributions
(13,361
)
(1,025
)
Non-GAAP general and administrative
$
62,071
$
87,519
Non-GAAP general and administrative as %
of revenue
6
%
9
%
TWILIO INC.
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial
Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Three Months Ended December
31,
2023
2022
GAAP loss from operations
$
(361,727
)
$
(218,567
)
GAAP operating margin
(34
)%
(21
)%
Non-GAAP adjustments:
Stock-based compensation
164,571
193,299
Amortization of acquired intangibles
42,471
50,901
Acquisition and divestiture related
expenses
40
—
Payroll taxes related to stock-based
compensation
2,246
2,023
Charitable contributions
13,361
1,025
Restructuring costs
25,452
4,185
Impairment of long-lived assets
286,226
—
Non-GAAP income from operations
$
172,640
$
32,866
Non-GAAP operating margin
16
%
3
%
GAAP net loss attributable to common
stockholders
$
(365,408
)
$
(229,422
)
Non-GAAP adjustments:
Stock-based compensation
164,571
193,299
Amortization of acquired intangibles
42,471
50,901
Acquisition and divestiture related
expenses
40
—
Payroll taxes related to stock-based
compensation
2,246
2,023
Accretion of debt discount and issuance
costs
398
397
Income tax benefit related to
acquisitions
(631
)
(2,664
)
Provision of income tax effects related to
non-GAAP adjustments
(38,312
)
—
Charitable contributions
13,361
1,025
Share of losses of equity method
investment
28,059
21,939
Restructuring costs
25,452
4,185
Impairment of long-lived assets
286,226
—
Gains on strategic investments
—
(631
)
Non-GAAP net income attributable to common
stockholders
$
158,473
$
41,052
Non-GAAP net income attributable to common
stockholders as % of revenue
15
%
4
%
TWILIO INC.
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial
Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Three Months Ended December
31,
2023
2022
GAAP net loss per share attributable to
common stockholders, basic and diluted*
$
(2.01
)
$
(1.24
)
Non-GAAP adjustments:
Stock-based compensation
0.89
1.03
Amortization of acquired intangibles
0.23
0.27
Acquisition and divestiture related
expenses
—
—
Payroll taxes related to stock-based
compensation
0.01
0.01
Accretion of debt discount and issuance
costs
—
—
Income tax benefit related to
acquisitions
—
(0.01
)
Provision of income tax effects related to
non-GAAP adjustments
(0.21
)
—
Charitable contributions
0.07
0.01
Share of losses of equity method
investment
0.15
0.12
Restructuring costs
0.14
0.02
Impairment of long-lived assets
1.56
—
Other dilutive
0.03
0.01
Non-GAAP net income per share attributable
to common stockholders, diluted
$
0.86
$
0.22
GAAP weighted-average shares used to
compute net loss per share attributable to common stockholders,
basic
181,786,135
185,120,702
Weighted Average Diluted Shares
Outstanding
2,248,261
2,104,014
Non-GAAP weighted-average shares used
to compute non-GAAP net income per share attributable to common
stockholders, diluted
184,034,396
187,224,716
* Some columns may not add due to
rounding
TWILIO INC.
Reconciliation to
Non-GAAP Financial Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Year Ended December
31,
2023
2022
GAAP gross profit
$
2,043,930
$
1,813,577
GAAP gross margin
49
%
47
%
Non-GAAP adjustments:
Stock-based compensation
26,343
21,136
Amortization of acquired intangibles
113,266
122,653
Payroll taxes related to stock-based
compensation
699
539
Non-GAAP gross profit
$
2,184,238
$
1,957,905
Non-GAAP gross margin
53
%
51
%
GAAP research and development
$
942,790
$
1,079,081
Non-GAAP adjustments:
Stock-based compensation
(331,526
)
(374,846
)
Amortization of acquired intangibles
(1,913
)
(1,680
)
Acquisition and divestiture related
expenses
(488
)
—
Payroll taxes related to stock-based
compensation
(6,779
)
(11,274
)
Non-GAAP research and development
$
602,084
$
691,281
Non-GAAP research and development as a %
of revenue
14
%
18
%
GAAP sales and marketing
$
1,022,985
$
1,248,032
Non-GAAP adjustments:
Stock-based compensation
(183,389
)
(240,109
)
Amortization of acquired intangibles
(77,128
)
(81,841
)
Acquisition and divestiture related
expenses
(1,091
)
—
Payroll taxes related to stock-based
compensation
(3,715
)
(9,539
)
Non-GAAP sales and marketing
$
757,662
$
916,543
Non-GAAP sales and marketing as a % of
revenue
18
%
24
%
GAAP general and administrative
$
468,459
$
517,414
Non-GAAP adjustments:
Stock-based compensation
(121,584
)
(148,194
)
Amortization of acquired intangibles
—
(7
)
Acquisition and divestiture related
expenses
(3,976
)
(2,621
)
Loss on net assets divested
(32,277
)
—
Payroll taxes related to stock-based
compensation
(1,792
)
(2,480
)
Charitable contributions
(17,346
)
(9,541
)
Non-GAAP general and administrative
$
291,484
$
354,571
Non-GAAP general and administrative as a %
of revenue
7
%
9
%
TWILIO INC.
Reconciliation to
Non-GAAP Financial Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Year Ended December
31,
2023
2022
GAAP loss from operations
$
(876,541
)
$
(1,205,308
)
GAAP operating margin
(21
)%
(32
)%
Non-GAAP adjustments:
Stock-based compensation
662,842
784,285
Amortization of acquired intangibles
192,307
206,181
Acquisition and divestiture related
expenses
5,555
2,621
Loss on net assets divested
32,277
—
Payroll taxes related to stock-based
compensation
12,985
23,832
Charitable contributions
17,346
9,541
Restructuring costs
165,733
76,636
Impairment of long-lived assets
320,504
97,722
Non-GAAP income from operations
$
533,008
$
(4,490
)
Non-GAAP operating margin
13
%
—
%
GAAP net loss attributable to common
stockholders
$
(1,015,441
)
$
(1,256,145
)
Non-GAAP adjustments:
Stock-based compensation
662,842
784,285
Amortization of acquired intangibles
192,307
206,181
Acquisition and divestiture related
expenses
5,555
2,621
Loss on net assets divested
32,277
—
Payroll taxes related to stock-based
compensation
12,985
23,832
Accretion of debt discount and issuance
costs
1,571
1,490
Income tax benefit related to
acquisition
(1,382
)
(7,617
)
Provision of income tax effects related to
non-GAAP adjustments
(108,044
)
—
Charitable contributions
17,346
9,541
Share of losses of equity method
investment
121,897
35,315
Restructuring costs
165,733
76,636
Impairment of long-lived assets
320,504
97,722
Impairment of (gains on) strategic
investments
46,154
(631
)
Non-GAAP net income (loss) attributable to
common stockholders
$
454,304
$
(26,770
)
Non-GAAP net income (loss) attributable to
common stockholders as % of revenue
11
%
(1
)%
TWILIO INC.
Reconciliation to
Non-GAAP Financial Measures
(In thousands, except shares, per share
amounts and percentages)
(Unaudited)
Year Ended December
31,
2023
2022
GAAP net loss per share attributable to
common stockholders, basic and diluted*
$
(5.54
)
$
(6.86
)
Non-GAAP adjustments:
Stock-based compensation
3.58
4.29
Amortization of acquired intangibles
1.04
1.13
Acquisition and divestiture related
expenses
0.03
0.01
Loss on net assets divested
0.17
—
Payroll taxes related to stock-based
compensation
0.07
0.13
Accretion of debt discount and issuance
costs
0.01
0.01
Income tax benefit related to
acquisition
(0.01
)
(0.04
)
Provision for income tax effects related
to non-GAAP adjustments
(0.58
)
—
Charitable contributions
0.09
0.05
Share of losses of equity method
investment
0.66
0.19
Restructuring costs
0.89
0.42
Impairment of long-lived assets
1.73
0.53
Impairment of (gains on) strategic
investments
0.25
—
Other dilutive
0.06
—
Non-GAAP net income (loss) per share
attributable to common stockholders, diluted
$
2.45
$
(0.15
)
GAAP weighted-average shares used to
compute net loss per share attributable to common stockholders,
basic and diluted
183,327,844
182,994,038
Weighted average dilutive shares
outstanding
2,052,559
—
Non-GAAP weighted-average shares used
to compute Non-GAAP net income (loss) per share attributable to
common stockholders, diluted
185,380,403
182,994,038
* Some columns may not add due to
rounding.
TWILIO INC.
Reconciliation to
Non-GAAP Financial Measures
(In thousands, except
percentages)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2023
GAAP Revenue
$
1,075,950
$
4,153,945
Acquisition revenue
—
(2,088
)
Divestiture revenue
—
(6,142
)
Organic revenue
$
1,075,950
$
4,145,715
GAAP Revenue Y/Y Growth
5
%
9
%
Organic Revenue Y/Y Growth
8%1
10%2
1 Organic revenue for the three months
ended December 31, 2022, when used as the denominator for Organic
Revenue Growth for the three months ended December 31, 2023,
excludes $30.0 million of divestiture revenue. Revenue for the
three months ended December 31, 2022 was $1.02 billion.
2 Organic revenue for the year ended
December 31, 2022, when used as the denominator for Organic Revenue
Growth for the year ended December 31, 2023, excludes $0.6 million
of acquisition revenue and $65.8 million of divestiture revenue.
Revenue for the year ended December 31, 2022 was $3.83 billion.
Three Months Ended
December 31,
Year Ended
December 31,
2023
2023
GAAP Communications Revenue
$
1,000,920
$
3,858,693
Acquisition revenue
—
(2,088
)
Divestiture revenue
—
(6,142
)
Communications organic revenue
$
1,000,920
$
3,850,463
GAAP Communications Revenue Y/Y Growth
5
%
9
%
Communications Organic Revenue Y/Y
Growth
8%1
11%2
1 Communications organic revenue for the
three months ended December 31, 2022, when used as the denominator
for Communications Organic Revenue Growth for the three months
ended December 31, 2023, excludes $30.0 million of divestiture
revenue. Communications revenue for the three months ended December
31, 2022, was $952.5 million.
2 Communications organic revenue for the
year ended December 31, 2022, when used as the denominator for
Communications Organic Revenue Growth for the year ended December
31, 2023, excludes $0.6 million of acquisition revenue and $65.8
million of divestiture revenue. Communications revenue for the year
ended December 31, 2022, was $3.55 billion.
Three Months Ended
December 31,
Year Ended
December 31,
2023
2023
Free cash flow
Net cash provided by operating
activities
$
222,545
$
414,752
Capitalized software development costs
(9,399
)
(39,925
)
Purchase of long-lived and intangible
assets
(2,291
)
(11,310
)
Free cash flow
$
210,855
$
363,517
TWILIO INC.
Segment Operating
Results
(In thousands)
(Unaudited)
Three Months Ended December
31,
Year Ended
December 31,
2023
2023
Revenue:
Communications
$
1,000,920
$
3,858,693
Segment
75,030
295,252
Total
$
1,075,950
$
4,153,945
Non-GAAP income (loss) from
operations:
Communications
$
248,391
$
841,990
Segment
(18,493
)
(72,430
)
Corporate costs
(57,258
)
(236,552
)
Total
$
172,640
$
533,008
Reconciliation of non-GAAP income from
operations to loss from operations:
Total non-GAAP income from operations
$
172,640
$
533,008
Stock-based compensation
(164,571
)
(662,842
)
Amortization of acquired intangibles
(42,471
)
(192,307
)
Acquisition and divestiture related
expenses
(40
)
(5,555
)
Loss on net assets divested
—
(32,277
)
Payroll taxes related to stock-based
compensation
(2,246
)
(12,985
)
Charitable contributions
(13,361
)
(17,346
)
Restructuring costs
(25,452
)
(165,733
)
Impairment of long-lived assets
(286,226
)
(320,504
)
Loss from operations
(361,727
)
(876,541
)
Other income (expenses), net
2,073
(120,188
)
Loss before provision for income taxes
$
(359,654
)
$
(996,729
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214524395/en/
Investor Contact: Bryan Vaniman ir@Twilio.com or Media Contact:
Caitlin Epstein press@Twilio.com
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