NYSE: TWLO 32.62 +1.18 +3.75% Volume: 3,086,135 View more October 20, 2017

Twilio Announces Fourth Quarter and Full Year 2016 Results

February 07, 2017

Q4 Total Revenue of $82.0 million, up 60% year-over-year

Q4 Base Revenue of $75.2 million, up 73% year-over-year

Q4 Dollar-Based Net Expansion Rate of 155%

SAN FRANCISCO--(BUSINESS WIRE)-- Twilio Inc. (NYSE: TWLO), the leading Cloud Communications Platform company, today reported financial results for its fourth quarter and full year ended December 31, 2016.

“Our fourth quarter and full year results demonstrate the power of our platform business model that starts with developers and extends to some of the largest enterprises in the world,” said Jeff Lawson, Twilio’s Co-Founder and Chief Executive Officer. “As we look into 2017, we will continue to invest in innovation and growth with the goal of powering the software-based future of communications.”

Fourth Quarter 2016 Financial Highlights

  • Total revenue of $82.0 million for the fourth quarter of 2016, up 60% from the fourth quarter of 2015 and 15% sequentially from the third quarter of 2016.
  • Base revenue of $75.2 million for the fourth quarter of 2016, up 73% from the fourth quarter of 2015 and 17% sequentially from the third quarter of 2016.
  • GAAP loss from operations of $12.8 million for the fourth quarter of 2016, compared with GAAP loss from operations of $8.2 million for the fourth quarter of 2015. Non-GAAP income from operations of $0.1 million for the fourth quarter of 2016, compared with non-GAAP loss from operations of $5.0 million for the fourth quarter of 2015.
  • GAAP net loss per share attributable to common stockholders of $0.15 based on 86.1 million weighted average shares outstanding in the fourth quarter of 2016, compared with GAAP net loss per share attributable to common stockholders of $0.48 based on 17.0 million weighted average shares outstanding in the fourth quarter of 2015.
  • Non-GAAP net income per share attributable to common stockholders of $0.00 based on 100.2 million non-GAAP weighted average diluted shares outstanding in the fourth quarter of 2016, compared with non-GAAP net loss per share attributable to common stockholders of $0.07 based on 70.9 million non-GAAP weighted average diluted shares outstanding in the fourth quarter of 2015.

Full Year 2016 Financial Highlights

  • Total revenue of $277.3 million for the full year 2016, up 66% from the full year 2015.
  • Base revenue of $245.5 million for the full year 2016, up 79% from the full year 2015.
  • GAAP loss from operations of $41.3 million for the full year 2016, compared with GAAP loss from operations of $35.4 million for the full year 2015. Non-GAAP loss from operations of $12.2 million for the full year 2016, compared with non-GAAP loss from operations of $22.9 million for the full year 2015.
  • GAAP net loss per share attributable to common stockholders of $0.78 based on 53.1 million weighted average shares outstanding for the full year 2016, compared with GAAP net loss per share attributable to common stockholders of $2.19 based on 17.7 million weighted average shares outstanding for the full year 2015.
  • Non-GAAP net loss per share attributable to common stockholders of $0.16 based on 78.6 million non-GAAP weighted average diluted shares outstanding for the full year 2016, compared with non-GAAP net loss per share attributable to common stockholders of $0.34 based on 67.8 million non-GAAP weighted average diluted shares outstanding for the full year 2015.

Key Metrics and Recent Business Highlights

  • 36,606 Active Customer Accounts as of December 31, 2016, compared to 25,347 Active Customer Accounts as of December 31, 2015.
  • Dollar-Based Net Expansion Rate was 155% for the fourth quarter of 2016, compared to 172% for the fourth quarter of 2015.
  • Released dual-channel recording, enabling high accuracy call transcription for sales and call center use cases.
  • Extended Twilio Interconnect to support Twilio Client, allowing customers to use private network connections to Twilio for WebRTC based calling.
  • Introduced the Twilio Porting API, making it easier for customers to port their existing phone numbers to our platform.
  • Announced a SIP Registration API, allowing SIP-enabled devices or softphones to connect directly to our Programmable Voice offerings.
  • Acquired Beepsend, a Sweden-based Application to Person (A2P) messaging provider, to enhance the capabilities of the Twilio Super Network.
  • Awarded ISO 27001 certification, a widely recognized and internationally accepted information security standard.

Outlook

Twilio is initiating guidance for the first quarter and full year ending December 31, 2017 as follows:

     
Quarter ending March 31, 2017:            
Total Revenue (millions) $ 82.0 to $ 84.0
Base Revenue (millions) $ 78.0 to $ 79.0
Non-GAAP loss from operations (millions) $ 6.5 to $ 5.5
Non-GAAP net loss per share $ 0.07 to $ 0.06
Weighted average shares outstanding 88.0
 
 
Full year ending December 31, 2017:            
Total Revenue (millions) $ 364.0 to $ 372.0
Base Revenue (millions) $ 351.0 to $ 355.0
Non-GAAP loss from operations (millions) $ 17.0 to $ 13.0
Non-GAAP net loss per share $ 0.19 to $ 0.15
Weighted average shares outstanding 90.0
 

Conference Call Information

Twilio will host a conference call today, February 7, 2017, to discuss fourth quarter and full year 2016 financial results at 2 p.m. Pacific Time, 5 p.m. Eastern Time. A live webcast of the conference call, as well as a replay of the call, will be available at https://investors.twilio.com. The conference call can also be accessed by dialing (877) 201-0168, or +1 (647) 788-4901 (outside the U.S. and Canada). The conference ID is 44789907. Following the completion of the call through 11:59 PM Eastern Time on February 14, 2017, a replay will be available by dialing (855) 859-2056 or +1 (404) 537-3406 (outside the U.S. and Canada) and entering passcode 44789907. Twilio has used, and intends to continue to use, its investor relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Twilio Inc.

Twilio's mission is to fuel the future of communications. Developers and businesses use Twilio to make communications relevant and contextual by embedding messaging, voice, and video capabilities directly into their software applications. Founded in 2008,Twilio has over 700 employees, with headquarters in San Francisco and other offices in Bogotá, Dublin, Hong Kong, London, Madrid, Malmö, Mountain View, Munich, New York City, Singapore and Tallinn.

Forward-Looking Statements

This press release contains 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,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “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 include, but are not limited to, statements about: Twilio’s outlook for the quarter ending March 31, 2017 and full year ending December 31, 2017; and Twilio’s expectations regarding its products and solutions. 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: adverse changes in general economic or market conditions; changes in the market for communications; Twilio’s ability to adapt its products to meet evolving market and customer demands and rapid technological change; Twilio’s ability to generate sufficient revenues to achieve or sustain profitability; Twilio’s limited operating history, which makes it difficult to evaluate its prospects and future operating results; Twilio’s ability to effectively manage its growth; and Twilio’s ability to compete effectively in an intensely competitive market.

The forward-looking statements contained in this press release 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 Form 10-Q for the quarterly period ended September 30, 2016 filed on November 7, 2016. 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.

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 to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Use of Non-GAAP Financial Measures

To provide investors and others with additional information regarding Twilio’s results, the following non-GAAP financial measures were disclosed: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP loss from operations and operating margin, non-GAAP net loss attributable to common stockholders, non-GAAP net loss per share attributable to common stockholders, basic and diluted, and non-GAAP weighted-average shares used to compute non-GAAP net loss per share attributable to common stockholders, basic and diluted.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. 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, and amortization of acquired intangibles.

Non-GAAP Operating Expenses. 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, expenses related to stock repurchases, acquisition-related expenses, release of tax liability upon obligation settlement, and payroll taxes related to stock-based compensation.

Non-GAAP Loss from Operations and Non-GAAP Operating Margin. Twilio defines non-GAAP loss from operations and non-GAAP operating margin as GAAP loss from operations and GAAP operating margin, respectively, adjusted to exclude stock-based compensation, amortization of acquired intangibles, expenses related to stock repurchases, release of tax liability upon obligation settlement, acquisition-related expenses, payroll taxes related to stock-based compensation, and charitable contribution.

Non-GAAP Net Loss Attributable to Common Stockholders and Non-GAAP Net Loss Per Share Attributable to Common Stockholders, Basic and Diluted. Twilio defines non-GAAP net loss attributable to common stockholders and non-GAAP net loss per share attributable to common stockholders, basic and diluted, 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 stock-based compensation, amortization of acquired intangibles, expenses related to stock repurchases, release of tax liability upon obligation settlement, acquisition-related expenses, payroll taxes related to stock-based compensation, charitable contribution, and deemed dividend to investors in relation to tender offer and, in the case of non-GAAP net loss per share attributable to common stockholders, basic and diluted, amounts attributable to convertible preferred stock.

In order to calculate non-GAAP net loss per share attributable to common stockholders, basic and diluted, Twilio uses a non-GAAP weighted-average share count. Twilio defines non-GAAP weighted-average shares used to compute non-GAAP net loss per share attributable to common stockholders, basic and diluted, as GAAP weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted, adjusted to reflect the conversion of convertible preferred stock outstanding into Class B common stock as if it had occurred at the beginning of the period.

Twilio’s management uses the foregoing non-GAAP financial information, collectively, to evaluate its ongoing operations and for internal planning and forecasting purposes. Twilio’s management believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance, facilitates period-to-period comparisons of results of operations, and assists in comparisons with other companies, many of which use similar non-GAAP financial information to supplement their GAAP results. Non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. Whenever Twilio uses a non-GAAP financial measure, a reconciliation is provided to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

With respect to Twilio’s guidance as provided under “Outlook” above, Twilio has not reconciled its expectations as to non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Operating Metrics

Twilio reviews a number of operating metrics to evaluate its business, measure performance, identify trends, formulate business plans, and make strategic decisions. These include the number of Active Customer Accounts, Base Revenue, and the Dollar-Based Net Expansion Rate.

Number of Active Customer Accounts. Twilio believes that the number of Active Customer Accounts is an important indicator of the growth of its business, the market acceptance of its platform and future revenue trends. 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. 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. 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.

Base Revenue. Twilio monitors Base Revenue as one of the more reliable indicators of future revenue trends. Base Revenue consists of all revenue other than revenue from large Active Customer Accounts that have never entered into 12-month minimum revenue commitment contracts with Twilio, which the Company refers to as Variable Customer Accounts. While almost all of Twilio’s customers exhibit some level of variability in the usage of its products, based on the experience of Twilio’s management, Twilio believes that Variable Customer Accounts are more likely to have significant fluctuations in usage of its products from period to period, and therefore that revenue from Variable Customer Accounts may also fluctuate significantly from period to period. This behavior is best evidenced by the decision of such customers not to enter into contracts with Twilio that contain minimum revenue commitments, even though they may spend significant amounts on the use of its products and they may be foregoing more favorable terms often available to customers that enter into committed contracts with Twilio. This variability adversely affects Twilio’s ability to rely upon revenue from Variable Customer Accounts when analyzing expected trends in future revenue.

For historical periods through March 31, 2016, Twilio defined a Variable Customer Account as an Active Customer Account that (i) had never signed a minimum revenue commitment contract with the Company for a term of at least 12 months and (ii) has met or exceeded 1% of the Company’s revenue in any quarter in the periods presented through March 31, 2016. To allow for consistent period-to-period comparisons, in the event a customer qualified as a Variable Customer Account as of March 31, 2016, or a previously Variable Customer Account ceased to be an Active Customer Account as of such date, Twilio included such customer as a Variable Customer Account in all periods presented. For reporting periods starting with the three months ended June 30, 2016, Twilio defines a Variable Customer Account as a customer account that (a) has been categorized as a Variable Customer Account in any prior quarter, as well as (b) any new customer account that (i) has never signed a minimum revenue commitment contract with Twilio for a term of at least 12 months and (ii) meets or exceeds 1% of the Company’s revenue in a quarter. Once a customer account is deemed to be a Variable Customer Account in any period, they remain a Variable Customer Account in subsequent periods unless they enter into a minimum revenue commitment contract with Twilio for a term of at least 12 months.

Dollar-Based Net Expansion Rate. Twilio’s ability to drive growth and generate incremental revenue depends, in part, on the Company’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 tracks its performance in this area is by measuring the Dollar-Based Net Expansion Rate for Active Customer Accounts, other than Variable 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 the Company lowers 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, for reporting periods starting with the three months ended December 31, 2016, 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. Twilio believes that measuring Dollar-Based Net Expansion Rate on revenue generated from Active Customer Accounts, other than Variable Customer Accounts, provides a more meaningful indication of the performance of the Company’s efforts to increase revenue from existing customer accounts.

Twilio’s Dollar-Based Net Expansion Rate compares the revenue from Active Customer Accounts, other than Variable Customer Accounts, in a quarter to the same quarter in the prior year. To calculate the Dollar-Based Net Expansion Rate, the Company first identifies the cohort of Active Customer Accounts, other than Variable Customer Accounts, that were Active Customer Accounts 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.

Source: Twilio Inc.

 
TWILIO INC.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
   
Three Months Ended
December 31,
2016   2015  
(Unaudited)
Revenue $ 81,952 $ 51,338
Cost of revenue 34,205   22,480  
Gross profit 47,747   28,858  
Operating expenses:
Research and development 24,587 13,089
Sales and marketing 17,816 13,208
General and administrative 14,304 10,756
Charitable contribution 3,860   -  
Total operating expenses 60,567   37,053  
Loss from operations (12,820 ) (8,195 )
Other income (expenses), net 225   69  
Loss before provision for income taxes (12,595 ) (8,126 )
Provision for income taxes (13 ) (134 )
Net loss attributable to common stockholders $ (12,608 ) $ (8,260 )
 
Net loss per share attributable to common stockholders, basic and diluted $ (0.15 ) $ (0.48 )
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 86,132,737   17,049,332  
 

 
TWILIO INC.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
   
Twelve Months Ended
December 31,
2016   2015  
 
Revenue $ 277,335 $ 166,919
Cost of revenue 120,520   74,454  
Gross profit 156,815   92,465  
Operating expenses:
Research and development 77,926 42,559
Sales and marketing 65,267 49,308
General and administrative 51,077 35,991
Charitable contribution 3,860   -  
Total operating expenses 198,130   127,858  
Loss from operations (41,315 ) (35,393 )
Other income (expenses), net 317   11  
Loss before provision for income taxes (40,998 ) (35,382 )
Provision for income taxes (326 ) (122 )
Net loss (41,324 ) (35,504 )
Deemed dividend to investors in relation to tender offer -   (3,392 )
Net loss attributable to common stockholders $ (41,324 ) $ (38,896 )
 
Net loss per share attributable to common stockholders, basic and diluted $ (0.78 ) $ (2.19 )
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 53,116,675   17,746,526  
 

   
TWILIO INC.
Consolidated Balance Sheets
(In thousands)
 
As of December 31,
 
Assets 2016 2015
Current assets:
Cash and cash equivalents $ 305,665 $ 108,835
Accounts receivable, net 26,203 19,094
Prepaid expenses and other current assets 21,512   8,546  
Total current assets 353,380 136,475
Restricted cash 7,445 1,170
Property and equipment, net 37,552 14,058
Intangible assets, net 10,268 2,292
Goodwill 3,565 3,165
Other long-term assets 484   356  
Total assets $ 412,694   $ 157,516  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 4,174 $ 2,299
Accrued expenses and other current liabilities 59,308 31,998
Deferred revenue 10,222   6,146  
Total current liabilities 73,704 40,443
Other long-term liabilities 9,543   448  
Total liabilities 83,247   40,891  
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock - 239,911
Common stock 87 17
Additional paid-in capital 516,090 22,103
Accumulated deficit (186,730 ) (145,406 )
Total stockholders’ equity 329,447   116,625  
Total liabilities and stockholders’ equity $ 412,694   $ 157,516  
 

   
TWILIO INC.
Consolidated Statements of Cash Flow
(In thousands)
 
Twelve Months Ended
December 31,
2016 2015
Operating Activities:
Net loss $ (41,324 ) $ (35,504 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 8,315 4,226
Stock-based compensation 24,225 8,877
Provision for doubtful accounts 1,145 705
Tax benefit related to acquisition - (108 )
Write-off of internally developed software 711 113
Loss on lease termination 94 -
Changes in assets and liabilities:
Accounts receivable (8,254 ) (10,506 )
Prepaid expenses and other current assets (13,755 ) (2,128 )
Other long-term assets (135 ) (162 )
Accounts payable 1,714 658
Accrued expenses and other current liabilities 24,182 13,202
Deferred revenue 4,076 1,974
Other long-term liabilities 9,097   (109 )
Net cash provided by (used in) operating activities 10,091   (18,762 )
 
Investing Activities:
Increase in restricted cash (7,439 ) -
Capitalized software development costs (11,527 ) (8,409 )
Purchases of property and equipment (14,174 ) (1,715 )
Purchases of intangible assets (785 ) (494 )
Acquisitions, net of cash acquired (8,500 ) (1,761 )
Net cash used in investing activities (42,425 ) (12,379 )
 
Financing Activities:
Proceeds from initial public offering, net of underwriting discounts 160,426 -
Proceeds from follow-on public offering, net of underwriting discounts 65,281 -
Payments of costs related to public offerings (4,606 ) (694 )
Net proceeds from issuance of convertible preferred stock - 125,448
Proceeds from exercises of vested options 8,392 3,128
Proceeds from exercises of nonvested options 710 277
Value of equity awards withheld for tax liabilities (1,037 ) -
Repurchases of common and preferred stock (2 ) (20,810 )
Net cash provided by financing activities 229,164   107,349  
 
Net increase in cash and cash equivalents 196,830 76,208
Cash and cash equivalents at beginning of period 108,835   32,627  
Cash and cash equivalents at end of period $ 305,665   $ 108,835  
 

 
TWILIO INC.
Reconciliation to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
   
Three Months Ended
December 31,
2016 2015
(Unaudited)
Gross profit $ 47,747 $ 28,858
Non-GAAP adjustments:
Stock-based compensation 156 20
Amortization of acquired intangibles 409   120  
Non-GAAP gross profit $ 48,312   $ 28,998  
 
Non-GAAP gross margin 59 % 56 %
 
Research and development $ 24,587 $ 13,089
Non-GAAP adjustments:
Stock-based compensation (5,310 ) (1,607 )
Amortization of acquired intangibles (37 ) 12
Payroll taxes related to stock-based compensation (61 ) -  
Non-GAAP research and development $ 19,179   $ 11,494  
 
Non-GAAP research and development as % of revenue 23 % 22 %
 
Sales and marketing $ 17,816 $ 13,208
Non-GAAP adjustments:
Stock-based compensation (1,690 ) (765 )
Payroll taxes related to stock-based compensation (169 ) -  
Non-GAAP sales and marketing $ 15,957   $ 12,443  
 
Non-GAAP sales and marketing as % of revenue 19 % 24 %
 
General and administrative $ 14,304 $ 10,756
Non-GAAP adjustments:
Stock-based compensation (1,420 ) (677 )
Amortization of acquired intangibles (27 ) (29 )
Acquisition related expenses (362 ) -
Release of tax liability upon obligation settlement 805 -
Payroll taxes related to stock-based compensation (204 ) -  
Non-GAAP general and administrative $ 13,096   $ 10,050  
 
Non-GAAP general and administrative as % of revenue 16 % 20 %
 
Loss from operations and margin $ (12,820 ) $ (8,195 )
Non-GAAP adjustments:
Stock-based compensation 8,576 3,069
Amortization of acquired intangibles 473 137
Release of tax liability upon obligation settlement (805 ) -
Acquisition related expenses 362 -
Payroll taxes related to stock-based compensation 434 -
Charitable contribution 3,860   -  
Non-GAAP income (loss) from operations $ 80   $ (4,989 )
 
Non-GAAP operating margin 0 % -10 %
 

 
TWILIO INC.
Reconciliation to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)   Three Months Ended
December 31,
2016   2015
(Unaudited)
Net loss attributable to common stockholders $ (12,608 ) $ (8,260 )
Non-GAAP adjustments:
Stock-based compensation 8,576 3,069
Amortization of acquired intangibles 473 137
Release of tax liability upon obligation settlement (805 ) -
Acquisition related expenses 362 -
Payroll taxes related to stock-based compensation 434 -
Charitable contribution 3,860   -  
Non-GAAP net loss attributable to common stockholders $ 292   $ (5,054 )
 
Non-GAAP net loss attributable to common stockholders as % of revenue 0 % -10 %
 
 
Net loss per share attributable to common stockholders, diluted $ (0.15 ) $ (0.48 )
Non-GAAP adjustments:
Stock-based compensation 0.10 0.18
Amortization of acquired intangibles 0.01 0.01
Release of tax liability upon obligation settlement (0.01 ) -
Acquisition related expenses 0.00 -
Payroll taxes related to stock-based compensation 0.01 -
Charitable contribution 0.04 -
Convertible preferred stock - 0.22
Dilutive securities

0.00

  -  
Non-GAAP net income (loss) per share attributable to common stockholders, diluted $ 0.00   $ (0.07 )
 
 

GAAP weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

86,132,737 17,049,332
 

Weighted-average shares of convertible preferred stock issued and outstanding

- 53,820,556
 
Effect of dilutive securities (stock options and restricted stock units) 14,073,935   -  
 
Non-GAAP weighted-average shares used to compute Non-GAAP net loss per share attributable to common stockholders, diluted 100,206,672   70,869,888  
 

 
TWILIO INC.
Reconciliation to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
   
Twelve Months Ended
December 31,
2016 2015
 
Gross profit $ 156,815 $ 92,465
Non-GAAP adjustments:
Stock-based compensation 291 65
Amortization of acquired intangibles 619   239  
Non-GAAP gross profit $ 157,725   $ 92,769  
 
Non-GAAP gross margin 57 % 56 %
 
Research and development $ 77,926 $ 42,559
Non-GAAP adjustments:
Stock-based compensation (12,946 ) (4,046 )
Amortization of acquired intangibles (151 ) (130 )
Stock repurchase - (834 )
Payroll taxes related to stock-based compensation (61 ) -  
Non-GAAP research and development $ 64,768   $ 37,549  
 
Non-GAAP research and development as % of revenue 23 % 22 %
 
Sales and marketing $ 65,267 $ 49,308
Non-GAAP adjustments:
Stock-based compensation (4,972 ) (2,389 )
Stock repurchase - (76 )
Payroll taxes related to stock-based compensation (169 ) -  
Non-GAAP sales and marketing $ 60,126   $ 46,843  
 
Non-GAAP sales and marketing as % of revenue 22 % 28 %
 
General and administrative $ 51,077 $ 35,991
Non-GAAP adjustments:
Stock-based compensation (6,016 ) (2,377 )
Amortization of acquired intangibles (110 ) (95 )
Stock repurchase - (1,055 )
Acquisition related expenses (499 ) (1,165 )
Release of tax liability upon obligation settlement 805 -
Payroll taxes related to stock-based compensation (204 ) -  
Non-GAAP general and administrative $ 45,053   $ 31,299  
 
Non-GAAP general and administrative as % of revenue 16 % 19 %
 
Loss from operations and margin $ (41,315 ) $ (35,393 )
Non-GAAP adjustments:
Stock-based compensation 24,225 8,877
Amortization of acquired intangibles 880 464
Stock repurchase - 1,965
Release of tax liability upon obligation settlement (805 ) -
Acquisition related expenses 499 1,165
Payroll taxes related to stock-based compensation 434 -
Charitable contribution 3,860   -  
Non-GAAP income (loss) from operations $ (12,222 ) $ (22,922 )
 
Non-GAAP operating margin -4 % -14 %
 

 
TWILIO INC.
Reconciliation to Non-GAAP Financial Measures
(In thousands, except share and per share amounts)   Twelve Months Ended
December 31,
2016   2015
 
Net loss attributable to common stockholders $ (41,324 ) $ (38,896 )
Non-GAAP adjustments:
Stock-based compensation 24,225 8,877
Amortization of acquired intangibles 880 464
Stock repurchase - 1,965
Release of tax liability upon obligation settlement (805 ) -
Acquisition related expenses 499 1,165
Payroll taxes related to stock-based compensation 434 -
Charitable contribution 3,860 -
Deemed dividend to investors in relation to tender offer -   3,392  
Non-GAAP net loss attributable to common stockholders $ (12,231 ) $ (23,033 )
 
Non-GAAP net loss attributable to common stockholders as % of revenue -4 % -14 %
 
 
Net loss per share attributable to common stockholders, diluted $ (0.78 ) $ (2.19 )
Non-GAAP adjustments:
Stock-based compensation 0.46 0.50
Amortization of acquired intangibles 0.02 0.03
Stock repurchase - 0.11
Release of tax liability upon obligation settlement (0.02 ) -
Acquisition related expenses 0.01 0.07
Payroll taxes related to stock-based compensation 0.01 -
Charitable contribution 0.07 -
Deemed dividend to investors in relation to tender offer - 0.19
Convertible preferred stock 0.07   0.95  
Non-GAAP net income (loss) per share attributable to common stockholders, diluted $ (0.16 ) $ (0.34 )
 
 

GAAP weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

53,116,675 17,746,526
 

Weighted-average shares of convertible preferred stock issued and outstanding

25,454,849 50,078,711
 
Non-GAAP weighted-average shares used to compute Non-GAAP net loss per share attributable to common stockholders, diluted 78,571,524   67,825,237  
 

               
TWILIO INC.
Key Metrics
(Unaudited)

 

Three Months Ended

March 31, June 30, Sept. 30, Dec. 31, March 31, June 30, Sept. 30, Dec. 31,
2015 2015 2015 2015 2016 2016 2016 2016
 
Number of Active Customers (as of end date of period) 19,340 21,226 23,822 25,347 28,648 30,780 34,457 36,606
Base Revenue (in thousands) $ 25,931 $ 30,694 $ 36,729 $ 43,497 $ 49,834 $ 56,370 $ 64,099 $ 75,245
Base Revenue Growth Rate 70 % 75 % 77 % 97 % 92 % 84 % 75 % 73 %
Dollar-Based Net Expansion Rate 145 % 149 % 156 % 172 % 170 % 164 % 155 % 155 %

Source: Twilio Inc.

Twilio Inc.

Investor Contact:

Greg Kleiner

ir@Twilio.com

or

Media Contact:

Kay Kinton

press@Twilio.com

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