- Revenue of $1.08 billion, up 4% reported and 7%
organic year-over-year
- GAAP Loss from Operations of $19 million, a $123 million
improvement year-over-year
- Non-GAAP Income from Operations of $175 million; raised full
year guidance to $650 to $675 million
Twilio (NYSE: TWLO), the customer engagement platform that
drives real-time, personalized experiences for today’s leading
brands, reported financial results for its second quarter ended
June 30, 2024.
“We are running the business with increased rigor and
discipline, as evidenced by a record quarter of revenue and
non-GAAP income from operations, as well as another quarter of
strong cash generation,” said Khozema Shipchandler, CEO of Twilio.
“By combining our leading communications capabilities, our rich and
contextual data, and the power of AI, we are uniquely positioned to
unlock smarter and more personalized interactions for brands that
drive more revenue for them at a lower cost.”
Second Quarter 2024 Financial Highlights
- Total revenue of $1.08 billion, up 4% year-over-year.
Communications revenue of $1.01 billion, up 4% year-over-year.
Segment revenue of $75.2 million, up 3% year-over-year.
- Total organic revenue growth of 7% year-over-year.
Communications organic revenue growth of 7% year-over-year.
- GAAP loss from operations of $19.0 million, compared with GAAP
loss from operations of $141.8 million for the second quarter of
2023.
- Non-GAAP income from operations of $175.3 million, compared
with non-GAAP income from operations of $120.1 million for the
second quarter of 2023.
- GAAP net loss per share attributable to common stockholders,
basic and diluted, of $0.19 based on 170.2 million weighted average
shares outstanding, compared with GAAP net loss per share
attributable to common stockholders, basic and diluted, of $0.91
based on 183.5 million weighted average shares outstanding in the
second quarter of 2023.
- Non-GAAP net income per share attributable to common
stockholders, diluted, of $0.87 based on 172.1 million non-GAAP
weighted average diluted shares outstanding, compared with non-GAAP
net income per share attributable to common stockholders, diluted,
of $0.54 based on 185.6 million non-GAAP weighted average diluted
shares outstanding in the second quarter of 2023.
- Net cash provided by operating activities of $213.3 million and
free cash flow of $197.6 million. Net cash provided by operating
activities of $83.6 million and free cash flow of $71.9 million for
the second quarter of 2023.
Key Metrics
- More than 316,000 Active Customer Accounts as of June 30, 2024,
compared to more than 304,000 Active Customer Accounts as of June
30, 2023.
- Dollar-Based Net Expansion Rate of 102% for the second quarter
of 2024 compared to Dollar-Based Net Expansion Rate of 103% for the
second quarter of 2023.
- 5,507 employees as of June 30, 2024.
Dollars in millions, except per share
amounts
Q2 2024 Results
Revenue
$1,083
Y/Y Revenue Growth
4%
Y/Y Organic Revenue Growth
7%
Amount
Margin
GAAP loss from operations
$(19)
(1.8)%
Non-GAAP income from operations
$175
16.2%
Cash provided by operating activities
$213
20%
Free cash flow
$198
18%
GAAP net loss attributable to common
stockholders
$(32)
Non-GAAP net income attributable to common
stockholders
$150
GAAP net loss per share attributable to
common stockholders, basic and diluted
$(0.19)
Non-GAAP net income per share attributable
to common stockholders, diluted
$0.87
Share Repurchase Program
In February 2023, Twilio’s Board of Directors authorized a share
repurchase program pursuant to which Twilio may repurchase up to
$1.0 billion of its outstanding Class A common stock. Subsequently,
in March 2024, Twilio’s Board of Directors authorized an additional
$2.0 billion of share repurchases. To date, Twilio has completed
over $2.2 billion of aggregate repurchases and is targeting to
complete the remaining $0.8 billion of repurchases before the end
of 2024.
Outlook
Twilio is initiating guidance for the third quarter ending
September 30, 2024 and raising its non-GAAP income from operations
range for fiscal year 2024 to $650 - $675 million, up from $585 -
$635 million previously. Twilio also expects its full year 2024
free cash flow to be in line with its full year 2024 non-GAAP
income from operations. Lastly, Twilio is narrowing its full year
2024 organic revenue growth guidance to 6% - 7%, compared with 5% -
10% previously.
Dollars in millions, except per share
amounts
Q3 2024
Guidance
Revenue
$1,085 - $1,095
Y/Y Revenue Growth and Organic Revenue
Growth (1)
5% - 6%
Non-GAAP income from operations
$160 - $170
Non-GAAP diluted earnings per share
(2)
$0.81 - $0.86
Non-GAAP weighted average diluted shares
outstanding
160
Dollars in millions
2024 Full Year
Guidance
Organic Revenue Growth
6% - 7%
Non-GAAP income from operations
$650 - $675
(1)
As a full year has elapsed since Twilio’s
2023 divestitures, starting in the third quarter of 2024, reported
and organic revenue growth rates will be equivalent.
(2)
Non-GAAP diluted earnings per share
guidance assumes no impact from volatility of foreign exchange
rates.
Conference Call Information
Twilio is hosting a Q&A conference call today, August 1,
2024, to discuss its second quarter 2024 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://edge.media-server.com/mmc/p/oaqrjgio. The live
webcast of the conference call, as well as a replay and transcript,
and Twilio’s supplemental earnings presentation, will be available
on the investor relations website at
https://investors.twilio.com.
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 our
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:
our future financial performance, including our expected financial
results and our guidance; our expectations regarding profitability,
including when we will become profitable on GAAP and non-GAAP
bases; our anticipated strategies and business plans; our
expectations regarding our relationships with ISVs, partners and
resellers, and our self-service and cross-sell efforts, and our
ability to expand into new markets, larger deal sizes and more
multi-year deals; our ability to execute on our announced plans and
targets for Segment following our operational review; our ability
to create synergies with our Communications and Segment products;
the ongoing effects of our previous workforce reductions and other
cost-saving measures; our expectations regarding compensation
programs; our expectations regarding levels of stock-based
compensation; the reorganization of our business and the shift in
our segment reporting structure; our expectations regarding our
sales pipeline, the benefits to us of recently signed deals, new
product releases, increased investment and go-to-market focus to
capture market share, our revenue growth, profit potential and
anticipated cash flows, and our strategy for streamlining the
customer experience; our ability to develop products related to
generative artificial intelligence and machine learning, including
CustomerAI and its use cases; our ability to deliver on our product
roadmap and our focus on innovation; our expectations regarding
share repurchases; and our expectations regarding the impact of
macroeconomic and industry conditions, the impact of such
conditions on our customers, and our 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 our actual results, performance,
or achievements to differ materially from those described in the
forward-looking statements, including, among other things: our
ability to successfully implement our cost-saving initiatives and
to capture expected efficiencies; our ability to realize the
anticipated benefits of changes to our operating model and
organizational structure; the impact of macroeconomic uncertainties
and market volatility; our financial performance, including
expectations regarding our results of operations and the
assumptions underlying such expectations, and ability to achieve
and sustain profitability; our ability to attract and retain
customers; our ability to compete effectively in an intensely
competitive market; our ability to comply with modified or new
industry standards, laws and regulations applying to our business,
and increased costs associated with regulatory compliance; our
ability to manage changes in network service provider fees and
optimize our network service provider coverage and connectivity;
our ability to form and expand partnerships; and our ability to
successfully enter into new markets and manage our 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 our most recent filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. Should any of these
risks materialize, or should our assumptions prove to be incorrect,
actual financial results could differ materially from our
projections or those implied by these forward-looking statements.
Further information on potential risks that could affect actual
results will be included in the subsequent periodic and current
reports and other filings that we make with the Securities and
Exchange Commission from time to time. Moreover, we operate 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 our management’s beliefs
and assumptions only as of the date such statements are made. We
undertake 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. We use
these non-GAAP financial measures to evaluate our ongoing
operations and for internal planning and forecasting purposes. We
believe 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. We believe organic revenue, organic
revenue growth, Communications organic revenue and Communications
organic revenue growth are useful in understanding the ongoing
results of our operations on a consolidated basis and at the
segment level. We believe free cash flow and free cash flow margin
provide useful supplemental information to help investors
understand underlying trends in our business and our 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. We have 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, we define 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,
we calculate 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,
we define 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, we define 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 Net Income (Loss) Attributable to Common
Stockholders and Non‑GAAP Net Income (Loss) Per Share
Attributable to Common Stockholders. For the periods presented,
we define non-GAAP net income (loss) attributable to common
stockholders and non‑GAAP net income (loss) per share attributable
to common stockholders, diluted (which we refer 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 gains on
or impairment of strategic investments.
Organic Revenue. For the periods presented, we define
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.
Organic Revenue Growth. For the periods presented, we
calculate 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. Organic revenue growth excluding crypto and
Zipwhip software customers is calculated using the same
methodology, but excluding revenue attributable to customers that
operate in the cryptocurrency space and customers of our Zipwhip
software business in each respective 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 and Free Cash Flow Margin. For the
periods presented, we define free cash flow and free cash flow
margin as net cash provided by (used in) operating activities and
operating cash flow margin, respectively, excluding capitalized
software development costs and purchases of long-lived and
intangible assets.
Operating Metrics
We review a number of operational and financial metrics,
including Active Customer Accounts and Dollar-Based Net Expansion
Rate, to evaluate our business, measure our performance, identify
trends affecting our 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 our competitors due to differences in
methodology. The numbers that we use to calculate Active Customer
Accounts and Dollar-Based Net Expansion Rate are based on internal
data. While these numbers are based on what we believe to be
reasonable judgments and estimates for the applicable period of
measurement, there are inherent challenges in measuring usage. We
regularly review and may adjust our processes for calculating our
internal metrics to improve their accuracy. If investors or
analysts do not perceive our metrics to be accurate representations
of our business, or if we discover material inaccuracies in our
metrics, our reputation, business, results of operations, and
financial condition would be harmed.
Active Customer Accounts. We define an Active Customer
Account at the end of any period as an individual account, as
identified by a unique account identifier, for which we have
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.
(“Zipwhip”). 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.
Our business and customer relationships have grown since we
began reporting the number of Active Customer Accounts using the
above definition, which is anchored to a minimum $5 monthly revenue
figure. We have a large number of Active Customer Accounts with
relatively low individual spend that in the aggregate do not drive
a significant portion of our revenue. Due to this dynamic, we
believe that the number of Active Customer Accounts, as currently
defined, is less informative now as an indicator of the growth of
our business and future revenue trends than it has been in prior
periods.
Dollar-Based Net Expansion Rate. Our Dollar-Based Net
Expansion Rate compares the total revenue from all Active Customer
Accounts and customer accounts from Zipwhip in a quarter to the
same quarter in the prior year. To calculate the Dollar-Based Net
Expansion Rate, we first identify the cohort of Active Customer
Accounts and customer accounts from Zipwhip that were Active
Customer Accounts or customer accounts from Zipwhip 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 we calculate
Dollar-Based Net Expansion Rate for periods longer than one
quarter, we use the average of the applicable quarterly
Dollar-Based Net Expansion Rates for each of the quarters in such
periods. 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 June 30, 2024, our Dollar-Based Net
Expansion Rate excludes the contributions from any acquisitions
made after April 1, 2023. 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
June 30, 2024, our Dollar-Based Net Expansion Rate excludes the
contributions from any divestitures made after June 30, 2023.
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 for that respective segment. Dollar-Based Net Expansion
Rate excluding crypto and Zipwhip software customers is calculated
using the same methodology described above, but excluding revenue
attributable to customers that operate in the cryptocurrency space
and customers of our Zipwhip software business in each respective
period. Revenue from customer accounts from Zipwhip, which we
acquired on July 14, 2021, has been included in our Dollar-Based
Net Expansion Rate beginning in the quarter ended December 31,
2022.
We believe that measuring Dollar-Based Net Expansion Rate, on an
aggregate basis and at the segment level, provides an important
indication of the performance of our efforts to increase revenue
from existing customers. Our ability to drive growth and generate
incremental revenue depends, in part, on our ability to maintain
and grow our relationships with existing Active Customer Accounts
and to increase their use of the platform. An important way in
which we have historically tracked performance in this area is by
measuring the Dollar-Based Net Expansion Rate for Active Customer
Accounts. Our 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. Our Dollar-Based Net Expansion Rate decreases when such
Active Customer Accounts cease or reduce their usage of a product
or when we lower usage prices on a product. As our customers grow
their businesses and extend the use of our platform, they sometimes
create multiple customer accounts with us for operational or other
reasons. As such, when we identify 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 June
30,
2024
2023
Revenue
$
1,082,502
$
1,037,761
Cost of revenue
526,657
532,006
Gross profit
555,845
505,755
Operating expenses:
Research and development
243,652
226,896
Sales and marketing
217,556
261,600
General and administrative
113,984
134,852
Restructuring costs
(310
)
14,902
Impairment of long-lived assets
—
9,332
Total operating expenses
574,882
647,582
Loss from operations
(19,037
)
(141,827
)
Other expenses, net:
Share of losses from equity method
investment
(23,940
)
(32,361
)
Impairment of strategic investments
(667
)
—
Other income, net
17,401
8,745
Total other expenses, net
(7,206
)
(23,616
)
Loss before provision for income taxes
(26,243
)
(165,443
)
Provision for income taxes
(5,615
)
(744
)
Net loss attributable to common
stockholders
$
(31,858
)
$
(166,187
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.19
)
$
(0.91
)
Weighted-average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
170,222,104
183,490,982
TWILIO INC.
Condensed
Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of June 30,
As of December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
755,065
$
655,931
Short-term marketable securities
2,361,063
3,356,064
Accounts receivable, net
537,313
562,773
Prepaid expenses and other current
assets
310,260
329,204
Total current assets
3,963,701
4,903,972
Property and equipment, net
198,562
209,639
Operating right-of-use assets
63,898
73,959
Equity method investment
541,120
593,582
Intangible assets, net
293,328
350,490
Goodwill
5,243,266
5,243,266
Other long-term assets
203,777
234,799
Total assets
$
10,507,652
$
11,609,707
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
61,831
$
119,615
Accrued expenses and other current
liabilities
467,472
424,311
Deferred revenue and customer deposits
138,745
144,499
Operating lease liability, current
43,451
49,872
Total current liabilities
711,499
738,297
Operating lease liability, noncurrent
102,562
120,770
Finance lease liability, noncurrent
4,964
9,191
Long-term debt, net
989,762
988,953
Other long-term liabilities
19,392
19,944
Total liabilities
1,828,179
1,877,155
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
164
182
Additional paid-in capital
15,136,786
14,797,723
Accumulated other comprehensive (loss)
income
(10,671
)
619
Accumulated deficit
(6,446,806
)
(5,065,972
)
Total stockholders’ equity
8,679,473
9,732,552
Total liabilities and stockholders’
equity
$
10,507,652
$
11,609,707
TWILIO INC.
Condensed
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended June
30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(87,207
)
$
(508,326
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
105,383
146,388
Non-cash reduction to the right-of-use
asset
10,064
16,074
Net amortization of investment premium and
discount
(12,572
)
5,392
Impairment of long-lived assets
—
31,116
Stock-based compensation including
restructuring
306,263
323,893
Amortization of deferred commissions
37,788
36,067
Provision for doubtful accounts
14,365
21,864
Share of losses from equity method
investment
53,515
62,780
Impairment of strategic investments
667
46,154
Loss on net assets divested
—
32,277
Other adjustments
7,924
13,275
Changes in operating assets and
liabilities:
Accounts receivable
11,094
(92,130
)
Prepaid expenses and other current
assets
19,752
(45,116
)
Other long-term assets
2,396
(19,180
)
Accounts payable
(59,027
)
(13,582
)
Accrued expenses and other current
liabilities
23,655
(44,365
)
Deferred revenue and customer deposits
(5,755
)
306
Operating lease liabilities
(24,177
)
(27,864
)
Other long-term liabilities
(662
)
757
Net cash provided by (used in) operating
activities
403,466
(14,220
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired and
payments related to prior period acquisitions
—
(170
)
Purchases of marketable securities and
other investments
(589,995
)
(511,734
)
Proceeds from sales and maturities of
marketable securities
1,592,970
1,050,010
Capitalized software development costs
(25,835
)
(20,075
)
Purchases of long-lived and intangible
assets
(2,756
)
(8,254
)
Net cash provided by investing
activities
974,384
509,777
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt and finance
leases
(7,060
)
(9,804
)
Value of equity awards withheld for tax
liabilities
(1,963
)
(2,509
)
Repurchases of shares of Class A common
stock and related costs
(1,273,699
)
(485,121
)
Proceeds from exercises of stock options
and shares of Class A common stock issued under ESPP
21,700
28,078
Net cash used in financing activities
(1,261,022
)
(469,356
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
—
108
NET INCREASE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, including cash classified as held for sale
116,828
26,309
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
CLASSIFIED AS HELD FOR SALE
—
(7,306
)
NET INCREASE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
116,828
19,003
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH—Beginning of period
655,931
656,078
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
—End of period
$
772,759
$
675,081
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 June
30,
2024
2023
GAAP gross profit
$
555,845
$
505,755
GAAP gross margin
51.3
%
48.7
%
Non-GAAP adjustments:
Stock-based compensation
5,503
6,334
Amortization of acquired intangibles
15,682
29,669
Payroll taxes related to stock-based
compensation
283
123
Non-GAAP gross profit
$
577,313
$
541,881
Non-GAAP gross margin
53.3
%
52.2
%
GAAP research and development
$
243,652
$
226,896
Non-GAAP adjustments:
Stock-based compensation
(80,790
)
(74,576
)
Amortization of acquired intangibles
(747
)
(420
)
Payroll taxes related to stock-based
compensation
(2,130
)
(1,295
)
Non-GAAP research and development
$
159,985
$
150,605
Non-GAAP research and development as % of
revenue
14.8
%
14.5
%
GAAP sales and marketing
$
217,556
$
261,600
Non-GAAP adjustments:
Stock-based compensation
(33,449
)
(42,869
)
Amortization of acquired intangibles
(11,755
)
(20,101
)
Acquisition and divestiture related
expenses
—
(33
)
Payroll taxes related to stock-based
compensation
(674
)
(476
)
Non-GAAP sales and marketing
$
171,678
$
198,121
Non-GAAP sales and marketing as % of
revenue
15.9
%
19.1
%
GAAP general and administrative
$
113,984
$
134,852
Non-GAAP adjustments:
Stock-based compensation
(27,915
)
(29,019
)
Acquisition and divestiture related
expenses
—
(3,064
)
Loss on net assets held for sale
—
(28,453
)
Payroll taxes related to stock-based
compensation
(423
)
(261
)
Charitable contributions
(15,315
)
(1,047
)
Non-GAAP general and administrative
$
70,331
$
73,008
Non-GAAP general and administrative as %
of revenue
6.5
%
7.0
%
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 June
30,
2024
2023
GAAP loss from operations
$
(19,037
)
$
(141,827
)
GAAP operating margin
(1.8
)%
(13.7
)%
Non-GAAP adjustments:
Stock-based compensation
147,657
152,798
Amortization of acquired intangibles
28,184
50,190
Acquisition and divestiture related
expenses
—
3,097
Loss on net assets held for sale
—
28,453
Payroll taxes related to stock-based
compensation
3,510
2,155
Charitable contributions
15,315
1,047
Restructuring costs
(310
)
14,902
Impairment of long-lived assets
—
9,332
Non-GAAP income from operations
$
175,319
$
120,147
Non-GAAP operating margin
16.2
%
11.6
%
GAAP net loss attributable to common
stockholders
$
(31,858
)
$
(166,187
)
GAAP net loss attributable to common
stockholders as % of revenue
(2.9
)%
(16.0
)%
Non-GAAP adjustments:
Stock-based compensation
147,657
152,798
Amortization of acquired intangibles
28,184
50,190
Acquisition and divestiture related
expenses
—
3,097
Loss on net assets held for sale
—
28,453
Payroll taxes related to stock-based
compensation
3,510
2,155
Accretion of debt discount and issuance
costs
407
391
Income tax benefit related to
acquisitions
—
(208
)
Provision of income tax effects related to
non-GAAP adjustments
(36,726
)
(27,490
)
Charitable contributions
15,315
1,047
Share of losses of equity method
investment
23,940
32,361
Restructuring costs
(310
)
14,902
Impairment of long-lived assets
—
9,332
Non-GAAP net income attributable to common
stockholders
$
150,119
$
100,841
Non-GAAP net income attributable to common
stockholders as % of revenue
13.9
%
9.7
%
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 June
30,
2024
2023
GAAP net loss per share attributable to
common stockholders, basic and diluted*
$
(0.19
)
$
(0.91
)
Non-GAAP adjustments:
Stock-based compensation
0.86
0.82
Amortization of acquired intangibles
0.16
0.27
Acquisition and divestiture related
expenses
—
0.02
Loss on net assets held for sale
—
0.15
Payroll taxes related to stock-based
compensation
0.02
0.01
Accretion of debt discount and issuance
costs
—
—
Income tax benefit related to
acquisitions
—
—
Provision of income tax effects related to
non-GAAP adjustments
(0.21
)
(0.15
)
Charitable contributions
0.09
0.01
Share of losses of equity method
investment
0.14
0.17
Restructuring costs
—
0.08
Impairment of long-lived assets
—
0.05
Other dilutive
—
0.02
Non-GAAP net income per share attributable
to common stockholders, diluted
$
0.87
$
0.54
GAAP weighted-average shares used to
compute net loss per share attributable to common stockholders,
basic
170,222,104
183,490,982
Weighted Average Diluted Shares
Outstanding
1,843,660
2,068,804
Non-GAAP weighted-average shares used
to compute non-GAAP net income per share attributable to common
stockholders, diluted
172,065,764
185,559,786
* Some columns may not add due to
rounding
TWILIO INC.
Reconciliation to
Non-GAAP Financial Measures
(In thousands, except
percentages)
(Unaudited)
Three Months Ended
June 30,
2024
GAAP Revenue
$
1,082,502
Organic Revenue
$
1,082,502
GAAP Revenue Y/Y Growth
4
%
Organic Revenue Y/Y Growth
7
%1
1
Organic revenue for the three months ended
June 30, 2023, when used as the denominator for Organic Revenue
Growth for the three months ended June 30, 2024, excludes $24.8
million of divestiture revenue. Revenue for the three months ended
June 30, 2023 was $1.04 billion.
Three Months Ended
June 30,
2024
GAAP Communications Revenue
$
1,007,302
Communications Organic Revenue
$
1,007,302
GAAP Communications Revenue Y/Y Growth
4
%
Communications Organic Revenue Y/Y
Growth
7
%1
1
Communications organic revenue for the
three months ended June 30, 2023, when used as the denominator for
Communications Organic Revenue Growth for the three months ended
June 30, 2024, excludes $24.8 million of divestiture revenue.
Communications revenue for the three months ended June 30, 2023 was
$964.5 million.
Three Months Ended
June 30,
2024
2023
Free cash flow
Net cash provided by operating
activities
$
213,343
$
83,646
Operating cash flow margin
20
%
8
%
Non-GAAP adjustments:
Capitalized software development costs
(14,681
)
(10,215
)
Purchases of long-lived and intangible
assets
(1,085
)
(1,503
)
Free cash flow
$
197,577
$
71,928
Free cash flow margin
18
%
7
%
TWILIO INC.
Operating Results
by Segment
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2024
Revenue:
Communications
$
1,007,302
Segment
75,200
Total
$
1,082,502
Non-GAAP income (loss) from
operations:
Communications
$
249,930
Segment
(15,815
)
Corporate costs
(58,796
)
Total
$
175,319
Reconciliation of non-GAAP income from
operations to loss from operations:
Total non-GAAP income from operations
$
175,319
Stock-based compensation
(147,657
)
Amortization of acquired intangibles
(28,184
)
Payroll taxes related to stock-based
compensation
(3,510
)
Charitable contributions
(15,315
)
Restructuring costs
310
Loss from operations
(19,037
)
Other expenses, net
(7,206
)
Loss before provision for income taxes
$
(26,243
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801186986/en/
Investor Contact: Bryan Vaniman ir@Twilio.com or Media Contact:
Caitlin Epstein press@Twilio.com
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