Twilio Announces Fourth Quarter and Full Year 2022 Results

February 15, 2023
  • Fourth Quarter Revenue of $1.02 billion, up 22% Year-Over-Year
  • Moving to a Business Unit structure and announcing four executive updates
  • Authorized a $1.0 billion share repurchase program
  • Reduced workforce by 17% and further rationalizing cost base

 

Twilio (NYSE: TWLO), the customer engagement platform that drives real-time, personalized experiences for today’s leading brands, today reported financial results for its fourth quarter and full year ended December 31, 2022.

“This week, we announced meaningful changes to Twilio’s leadership group, organizational structure, team size and capital allocation strategy that will both accelerate our path to profitability and most importantly, improve our execution in delivering our Engagement Platform strategy for our customers,” said Jeff Lawson. “While our vision remains, the way we operate and execute has changed — all in service of driving better focus for the business and ultimately enhancing value creation for our shareholders.”

Fourth Quarter 2022 Financial Highlights

  • Revenue of $1.02 billion for the fourth quarter of 2022, up 22% year-over-year. Organic revenue grew 21% year-over-year.
  • GAAP loss from operations of $218.6 million for the fourth quarter of 2022, compared with GAAP loss from operations of $283.6 million for the fourth quarter of 2021.
  • Non-GAAP income from operations of $32.9 million for the fourth quarter of 2022, compared with non-GAAP loss from operations of $27.2 million for the fourth quarter of 2021.
  • 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, compared with GAAP net loss per share attributable to common stockholders, basic and diluted, of $1.63 based on 178.9 million weighted average shares outstanding in the fourth quarter of 2021.
  • 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, compared with non-GAAP net loss per share attributable to common stockholders, diluted, of $0.20 based on 178.9 million non-GAAP weighted average shares outstanding in the fourth quarter of 2021.

Full Year 2022 Financial Highlights

  • Revenue of $3.83 billion for the full year 2022, up 35% year-over-year. Organic revenue for the full year grew 30% year-over-year.
  • GAAP loss from operations of $1.2 billion for the full year 2022, compared with GAAP loss from operations of $915.6 million for the full year 2021.
  • Non-GAAP loss from operations of $4.5 million for the full year 2022 compared with non-GAAP income from operations of $2.5 million for the full year 2021.
  • 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, compared with GAAP net loss per share attributable to common stockholders, basic and diluted, of $5.45 based on 174.2 million weighted average shares outstanding in the full year 2021.
  • 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, compared with non-GAAP net loss per share attributable to common stockholders, basic and diluted, of $0.25 based on 174.2 million non-GAAP weighted average shares outstanding in the full year 2021.

Key Metrics

  • More than 290,000 Active Customer Accounts as of December 31, 2022, compared to more than 256,000 Active Customer Accounts as of December 31, 2021.
  • Dollar-Based Net Expansion Rate was 110% for the fourth quarter of 2022, compared to 126% for the fourth quarter of 2021. Results from acquisitions closed after October 1, 2021, do not impact the calculation of this metric in either period. For the full year 2022, Dollar-Based Net Expansion Rate was 121%.
  • 8,156 employees as of December 31, 2022.

Workforce Reduction

  • On Monday, February 13, Twilio announced the decision to reduce its workforce by approximately 17%, as well as pursue further expense rationalization. Leadership believes these changes will drive meaningful cost savings, and in conjunction with this announcement, Twilio has updated its Financial Framework to reflect a range for 2023 non-GAAP operating profit, as well as accelerated non-GAAP operating margin improvements and lowered stock-based compensation as a percentage of revenue in the medium term, which we define as fiscal years 2025 through 2027.

Organizational and Leadership Updates

  • Twilio also announced that moving forward, it will operate two separate business units: Twilio Communications, led by Khozema Shipchandler, and Twilio Data & Applications, led by Elena Donio. This strategic realignment enables Twilio to better execute on the key priorities for each business – driving efficiencies for Twilio Communications and accelerating growth for Twilio Data & Applications – while taking into consideration each business unit’s unique economic, customer, and product needs. Additionally, it was announced that Aidan Viggiano is being promoted to the role of Chief Financial Officer. Aidan joined Twilio in 2019 and has led the FP&A function for the past 1.5 years. She is a world-class leader and executive. These leadership changes will go into effect as of March 1, 2023. And finally, Eyal Manor has decided to leave Twilio, and will be stepping down from his position as Chief Product Officer effective February 28, 2023.

Share Repurchase Program

  • Twilio announced today that its Board of Directors has authorized a share repurchase program of up to $1.0 billion of Twilio’s outstanding Class A common stock. Under the program, Twilio may purchase shares from time to time through open market transactions, privately negotiated transactions, and other means in compliance with applicable securities laws, including through Rule 10b5-1 plans. The program is set to expire on December 31, 2024. The timing, manner, price and amount of any repurchases, are determined by Twilio at its discretion and depend on a variety of factors, including legal requirements, price and economic market conditions.

Outlook

Twilio is initiating guidance for the first quarter ending March 31, 2023 and fiscal year 2023.

 

 

Q1 FY23
Guidance

Revenue (millions)

 

$995 - $1,005

Y/Y Growth

 

14% - 15%

Organic Y/Y Growth

 

13% - 14%

Non-GAAP profit from operations (millions) (1)

 

$45 - $55

Non-GAAP profit per share (2)

 

$0.18 - $0.22

Non-GAAP weighted average diluted shares outstanding (millions)

 

188

     

 

 

FY23 Guidance

Non-GAAP profit from operations (millions) (1)

 

$250 - $350

(1)

 

Includes an estimated $10 million one-time, non-cash benefit for termination of the employee sabbatical program.

(2)

 

Non-GAAP profit 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 15, 2023, to discuss its fourth quarter and full year 2022 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 call in advance by visiting https://conferencingportals.com/event/unKcrkys. A 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, its Twitter feed (@twilio), and the Twitter feed of Twilio's Chief Executive Officer, Jeff Lawson (@jeffiel), 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, 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: Twilio’s future financial performance, including Twilio’s expected financial results, Twilio’s guidance, and Twilio’s Financial Framework and related commentary; Twilio’s expectations regarding when it will become profitable on GAAP and non-GAAP bases; Twilio’s anticipated strategies and business plans, including the expected costs and benefits of changes to Twilio’s operating model and organizational structure, Twilio’s recently announced workforce reduction, and Twilio’s plans to achieve profitability, increase operating leverage and decrease discretionary expenses, including reducing Twilio’s global office footprint; Twilio’s expectations regarding its Data & Applications business, including increased investment and go-to-market focus to capture market share and increase revenue growth; Twilio’s expectations regarding its Communications business, including anticipated cash flows and strategy for streamlining the customer experience, including increased focus on self-serve capabilities; Twilio’s expectations regarding share repurchases, including the timing and amount of repurchases and impact on its balance sheet; and Twilio’s expectations regarding the impact of macroeconomic and industry 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 most recent report on Form 10-Q, subsequent reports on Form 10-K and Form 10-Q, and any amendments to any of the foregoing. 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 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

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 have included organic revenue growth because we believe it is useful in understanding the ongoing results of our operations. 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.

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 stock-based compensation, amortization of acquired intangibles, acquisition 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 (which is often referred to as “non-GAAP operating profit” or “non-GAAP profit 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, acquisition related expenses, payroll taxes related to stock-based compensation, charitable contributions, restructuring costs, and impairment of long-lived assets.

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 earnings per share” or “non-GAAP loss 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, acquisition related expenses, payroll taxes related to stock-based compensation, amortization of debt discount and issuance costs, income tax benefit related to acquisition, charitable contribution, share of losses from equity method investment, restructuring costs, and gains on strategic investments.

Organic Revenue. For the periods presented, Twilio defines organic revenue as GAAP revenue, excluding (i) revenue from each acquired business and (ii) revenue from application-to-person (“A2P”) 10DLC fees imposed by major U.S. carriers on Twilio's 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; provided that 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. A2P 10DLC fees are fees imposed by U.S. mobile carriers for A2P SMS messages delivered to its subscribers and Twilio passes these fees to its messaging customers at cost.

Organic Revenue Y/Y Growth. For the periods presented, Twilio calculates organic revenue Y/Y growth by dividing (i) organic revenue for the period presented less organic revenue in the corresponding period in the prior year by (ii) organic revenue in the corresponding period in the prior year. If revenue from certain acquisitions or A2P 10DLC fees is included in organic revenue in the period presented, then revenue from the same acquisitions and A2P 10DLC fees is included in organic revenue in the corresponding period in the prior year for purposes of the denominator in the organic revenue Y/Y growth calculation. As a result, the denominator used in this calculation will not always equal the organic revenue reported for the prior period.

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 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. 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.

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 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 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 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. 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.

Twilio believes that measuring Dollar-Based Net Expansion Rate provides a more meaningful indication of the performance of the Company’s efforts to increase revenue from existing customers. 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 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 CustomerAccount 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,

 

 

2022

 

2021

Revenue

 

$

1,024,574

 

 

$

842,744

 

Cost of revenue

 

 

543,432

 

 

 

446,197

 

Gross profit

 

 

481,142

 

 

 

396,547

 

Operating expenses:

 

 

 

 

Research and development

 

 

274,094

 

 

 

223,249

 

Sales and marketing

 

 

296,335

 

 

 

331,422

 

General and administrative

 

 

125,095

 

 

 

125,502

 

Restructuring costs

 

 

4,185

 

 

 

 

Total operating expenses

 

 

699,709

 

 

 

680,173

 

Loss from operations

 

 

(218,567

)

 

 

(283,626

)

Other expenses, net:

 

 

 

 

Share of losses from equity method investment

 

 

(21,939

)

 

 

 

Other income (expenses), net

 

 

20,281

 

 

 

(6,126

)

Total other expenses, net

 

 

(1,658

)

 

 

(6,126

)

Loss before provision for income taxes

 

 

(220,225

)

 

 

(289,752

)

Provision for income taxes

 

 

(9,197

)

 

 

(1,644

)

Net loss attributable to common stockholders

 

$

(229,422

)

 

$

(291,396

)

 

 

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

 

$

(1.24

)

 

$

(1.63

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

 

185,120,702

 

 

 

178,934,692

 

TWILIO INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

     

 

 

Year Ended
December 31,

 

 

2022

 

2021

Revenue

 

$

3,826,321

 

 

$

2,841,839

 

Cost of revenue

 

 

2,012,744

 

 

 

1,451,126

 

Gross profit

 

 

1,813,577

 

 

 

1,390,713

 

Operating expenses:

 

 

 

 

Research and development

 

 

1,079,081

 

 

 

789,219

 

Sales and marketing

 

 

1,248,032

 

 

 

1,044,618

 

General and administrative

 

 

517,414

 

 

 

472,460

 

Restructuring costs

 

 

76,636

 

 

 

 

Impairment of long-lived assets

 

 

97,722

 

 

 

 

Total operating expenses

 

 

3,018,885

 

 

 

2,306,297

 

Loss from operations

 

 

(1,205,308

)

 

 

(915,584

)

Other expenses, net:

 

 

 

 

Share of losses from equity method investment

 

 

(35,315

)

 

 

 

Other expenses, net

 

 

(3,009

)

 

 

(45,345

)

Total other expenses, net

 

 

(38,324

)

 

 

(45,345

)

Loss before (provision for) benefit from income taxes

 

 

(1,243,632

)

 

 

(960,929

)

(Provision for) benefit from income taxes

 

 

(12,513

)

 

 

11,029

 

Net loss attributable to common stockholders

 

$

(1,256,145

)

 

$

(949,900

)

 

 

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

 

$

(6.86

)

 

$

(5.45

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

 

182,994,038

 

 

 

174,180,465

 

TWILIO INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

     

 

 

As of December 31,

 

 

2022

 

2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

651,752

 

 

$

1,479,452

 

Short-term marketable securities

 

 

3,503,317

 

 

 

3,878,430

 

Accounts receivable, net

 

 

547,507

 

 

 

388,215

 

Prepaid expenses and other current assets

 

 

281,510

 

 

 

186,131

 

Total current assets

 

 

4,984,086

 

 

 

5,932,228

 

Property and equipment, net

 

 

263,979

 

 

 

255,316

 

Operating right-of-use assets

 

 

121,341

 

 

 

234,584

 

Equity method investment

 

 

699,911

 

 

 

 

Intangible assets, net

 

 

849,935

 

 

 

1,050,012

 

Goodwill

 

 

5,284,153

 

 

 

5,263,166

 

Other long-term assets

 

 

360,899

 

 

 

263,292

 

Total assets

 

$

12,564,304

 

 

$

12,998,598

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

124,605

 

 

$

93,333

 

Accrued expenses and other current liabilities

 

 

490,221

 

 

 

417,503

 

Deferred revenue and customer deposits

 

 

139,110

 

 

 

140,389

 

Operating lease liability, current

 

 

54,222

 

 

 

52,325

 

Total current liabilities

 

 

808,158

 

 

 

703,550

 

Operating lease liability, noncurrent

 

 

164,551

 

 

 

211,253

 

Finance lease liability, noncurrent

 

 

21,290

 

 

 

25,132

 

Long-term debt, net

 

 

987,382

 

 

 

985,907

 

Other long-term liabilities

 

 

23,881

 

 

 

41,290

 

Total liabilities

 

 

2,005,262

 

 

 

1,967,132

 

Commitments and contingencies

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

186

 

 

 

180

 

Additional paid-in capital

 

 

14,055,853

 

 

 

13,169,118

 

Accumulated other comprehensive loss

 

 

(121,161

)

 

 

(18,141

)

Accumulated deficit

 

 

(3,375,836

)

 

 

(2,119,691

)

Total stockholders’ equity

 

 

10,559,042

 

 

 

11,031,466

 

Total liabilities and stockholders’ equity

 

$

12,564,304

 

 

$

12,998,598

 

TWILIO INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

     

 

 

Year Ended
December 31,

 

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

Net loss

 

$

(1,256,145

)

 

$

(949,900

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

279,127

 

 

 

258,378

 

Non-cash reduction to the right-of-use asset

 

 

47,160

 

 

 

48,786

 

Net amortization of investment premium and discount

 

 

33,165

 

 

 

36,158

 

Impairment of long-lived assets due to 2022 office closures

 

 

97,722

 

 

 

 

Stock-based compensation including restructuring

 

 

798,560

 

 

 

632,285

 

Amortization of deferred commissions

 

 

57,913

 

 

 

31,541

 

Allowance for credit losses

 

 

35,012

 

 

 

7,210

 

Value of shares of Class A common stock donated to charity

 

 

9,541

 

 

 

31,169

 

Loss on extinguishment of debt

 

 

 

 

 

28,965

 

Share of losses from equity method investment

 

 

35,315

 

 

 

 

Other adjustments

 

 

4,905

 

 

 

2,329

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(194,655

)

 

 

(117,943

)

Prepaid expenses and other current assets

 

 

(94,326

)

 

 

(78,012

)

Other long-term assets

 

 

(146,458

)

 

 

(121,225

)

Accounts payable

 

 

30,336

 

 

 

10,191

 

Accrued expenses and restructuring costs

 

 

75,430

 

 

 

127,554

 

Deferred revenue and customer deposits

 

 

(2,688

)

 

 

45,634

 

Operating lease liabilities

 

 

(54,450

)

 

 

(49,046

)

Other long-term liabilities

 

 

(9,832

)

 

 

(2,266

)

Net cash used in operating activities

 

 

(254,368

)

 

 

(58,192

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Acquisitions, net of cash acquired and other related payments

 

 

(37,410

)

 

 

(491,522

)

Purchases of marketable securities and other investments

 

 

(1,938,337

)

 

 

(3,523,232

)

Proceeds from sales and maturities of marketable securities

 

 

1,439,477

 

 

 

1,614,779

 

Capitalized software development costs

 

 

(45,761

)

 

 

(43,973

)

Purchases of long-lived and intangible assets

 

 

(34,421

)

 

 

(46,048

)

Net cash used in investing activities

 

 

(616,452

)

 

 

(2,489,996

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from public offerings, net of underwriters' discounts

 

 

 

 

 

1,766,400

 

Payments of costs related to public offerings

 

 

(35

)

 

 

(687

)

Proceeds from issuance of senior notes due 2029 and 2031, net of issuance costs

 

 

 

 

 

984,723

 

Proceeds from settlements of capped call, net of settlement costs

 

 

 

 

 

228,412

 

Principal payments on debt and finance leases

 

 

(13,423

)

 

 

(8,295

)

Value of equity awards withheld for tax liabilities

 

 

(1,098

)

 

 

(10,388

)

Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP

 

 

59,563

 

 

 

136,160

 

Net cash provided by financing activities

 

 

45,007

 

 

 

3,096,325

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

60

 

 

 

(191

)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(825,753

)

 

 

547,946

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

 

 

1,481,831

 

 

 

933,885

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period

 

$

656,078

 

 

$

1,481,831

 

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,

 

 

2022

 

2021

Gross profit

 

$

481,142

 

 

$

396,547

 

GAAP gross margin

 

 

47

%

 

 

47

%

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

6,505

 

 

 

4,613

 

Amortization of acquired intangibles

 

 

30,052

 

 

 

30,792

 

Payroll taxes related to stock-based compensation

 

 

82

 

 

 

 

Non-GAAP gross profit

 

$

517,781

 

 

$

431,952

 

Non-GAAP gross margin

 

 

51

%

 

 

51

%

GAAP research and development

 

$

274,094

 

 

$

223,249

 

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

(95,166

)

 

 

(73,600

)

Amortization of acquired intangibles

 

 

(420

)

 

 

(420

)

Payroll taxes related to stock-based compensation

 

 

(953

)

 

 

(3,338

)

Non-GAAP research and development

 

$

177,555

 

 

$

145,891

 

Non-GAAP research and development as % of revenue

 

 

17

%

 

 

17

%

 

 

 

 

 

GAAP sales and marketing

 

$

296,335

 

 

$

331,422

 

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

(55,284

)

 

 

(69,932

)

Amortization of acquired intangibles

 

 

(20,429

)

 

 

(21,296

)

Payroll taxes related to stock-based compensation

 

 

(781

)

 

 

(5,423

)

Non-GAAP sales and marketing

 

$

219,841

 

 

$

234,771

 

Non-GAAP sales and marketing as % of revenue

 

 

21

%

 

 

28

%

 

 

 

 

 

GAAP general and administrative

 

$

125,095

 

 

$

125,502

 

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

(36,344

)

 

 

(38,774

)

Amortization of acquired intangibles

 

 

 

 

 

(10

)

Acquisition related expenses

 

 

 

 

 

(229

)

Payroll taxes related to stock-based compensation

 

 

(207

)

 

 

(1,422

)

Charitable contribution

 

 

(1,025

)

 

 

(6,586

)

Non-GAAP general and administrative

 

$

87,519

 

 

$

78,481

 

Non-GAAP general and administrative as % of revenue

 

 

9

%

 

 

9

%

 

 

 

 

 

GAAP restructuring costs

 

$

4,185

 

 

$

 

Total restructuring costs

 

 

(4,185

)

 

 

 

Non-GAAP restructuring costs

 

$

 

 

$

 

Non-GAAP restructuring costs as % of revenue

 

 

%

 

 

%

 

 

 

 

 

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,

 

 

2022

 

2021

GAAP loss from operations

 

$

(218,567

)

 

$

(283,626

)

Operating margin

 

 

(21

) %

 

 

(34

) %

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

193,299

 

 

 

186,919

 

Amortization of acquired intangibles

 

 

50,901

 

 

 

52,518

 

Acquisition related expenses

 

 

 

 

 

229

 

Payroll taxes related to stock-based compensation

 

 

2,023

 

 

 

10,183

 

Charitable contribution

 

 

1,025

 

 

 

6,586

 

Restructuring costs

 

 

4,185

 

 

 

 

Non-GAAP operating income (loss)

 

$

32,866

 

 

$

(27,191

)

Non-GAAP operating margin

 

 

3

%

 

 

(3

) %

GAAP net loss attributable to common stockholders

 

$

(229,422

)

 

$

(291,396

)

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

193,299

 

 

 

186,919

 

Amortization of acquired intangibles

 

 

50,901

 

 

 

52,518

 

Acquisition related expenses

 

 

 

 

 

229

 

Payroll taxes related to stock-based compensation

 

 

2,023

 

 

 

10,183

 

Amortization of debt discount and issuance costs

 

 

397

 

 

 

370

 

Income tax benefit related to acquisition

 

 

(2,664

)

 

 

(1,667

)

Charitable contribution

 

 

1,025

 

 

 

6,586

 

Share of losses from equity method investment

 

 

21,939

 

 

 

 

Restructuring costs

 

 

4,185

 

 

 

 

Gains on strategic investments

 

 

(631

)

 

 

 

Non-GAAP net income (loss) attributable to common stockholders

 

$

41,052

 

 

$

(36,258

)

Non-GAAP net income (loss) attributable to common stockholders as % of revenue

 

 

4

%

 

 

(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,

 

 

2022

 

2021

GAAP net loss per share attributable to common stockholders, basic and diluted*

 

$

(1.24

)

 

$

(1.63

)

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

1.03

 

 

 

1.04

 

Amortization of acquired intangibles

 

 

0.27

 

 

 

0.29

 

Acquisition related expenses

 

 

 

 

 

 

Payroll taxes related to stock-based compensation

 

 

0.01

 

 

 

0.06

 

Accretion of debt discount and issuance costs

 

 

 

 

 

 

Income tax benefit related to acquisition

 

 

(0.01

)

 

 

(0.01

)

Charitable contribution

 

 

0.01

 

 

 

0.04

 

Share of losses from equity method investment

 

 

0.12

 

 

 

 

Restructuring costs

 

 

0.02

 

 

 

 

Gains on strategic investments

 

 

 

 

 

 

Other dilutive

 

 

0.01

 

 

 

 

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

 

$

0.22

 

 

$

(0.20

)

 

 

 

 

 

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

 

 

185,120,702

 

 

 

178,934,692

 

 

 

 

 

 

Weighted average dilutive shares outstanding

 

 

2,104,014

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average shares used to compute non-GAAP net (loss) income per share attributable to common stockholders, diluted

 

 

187,224,716

 

 

 

178,934,692

 

                 

* 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,

 

 

2022

 

2021

GAAP gross profit

 

$

1,813,577

 

 

$

1,390,713

 

GAAP gross margin

 

 

47

%

 

 

49

%

Non-GAAP adjustments:

 

 

 

 

Stock-based compensation

 

 

21,136

 

 

 

14,074

 

Amortization of acquired intangibles

 

 

122,653

 

 

 

114,896

 

Payroll taxes related to stock-based compensation

 

 

539

 

 

 

 

Non-GAAP gross profit

 

$

1,957,905

 

 

$

1,519,683

 

Non-GAAP gross margin

 

 

51

%

 

 

53

%

GAAP research and development

 

$

1,079,081

 

 

$

789,219

 

Non-GAAP adjustments:

 

 

 

 

Stock-based compensation

 

 

(374,846

)

 

 

(258,672

)

Amortization of acquired intangibles

 

 

(1,680

)

 

 

(1,260

)

Payroll taxes related to stock-based compensation

 

 

(11,274

)

 

 

(23,869

)

Non-GAAP research and development

 

$

691,281

 

 

$

505,418

 

Non-GAAP research and development as a % of revenue

 

 

18

%

 

 

18

%

 

 

 

 

 

GAAP sales and marketing

 

$

1,248,032

 

 

$

1,044,618

 

Non-GAAP adjustments:

 

 

 

 

Stock-based compensation

 

 

(240,109

)

 

 

(213,351

)

Amortization of acquired intangibles

 

 

(81,841

)

 

 

(82,493

)

Payroll taxes related to stock-based compensation

 

 

(9,539

)

 

 

(19,126

)

Non-GAAP sales and marketing

 

$

916,543

 

 

$

729,648

 

Non-GAAP sales and marketing as a % of revenue

 

 

24

%

 

 

26

%

 

 

 

 

 

GAAP general and administrative

 

$

517,414

 

 

$

472,460

 

Non-GAAP adjustments:

 

 

 

 

Stock-based compensation

 

 

(148,194

)

 

 

(146,188

)

Amortization of acquired intangibles

 

 

(7

)

 

 

(135

)

Acquisition-related expenses

 

 

(2,621

)

 

 

(7,449

)

Payroll taxes related to stock-based compensation

 

 

(2,480

)

 

 

(5,422

)

Charitable contributions

 

 

(9,541

)

 

 

(31,169

)

Non-GAAP general and administrative

 

$

354,571

 

 

$

282,097

 

Non-GAAP general and administrative as a % of revenue

 

 

9

%

 

 

10

%

 

 

 

 

 

GAAP restructuring costs

 

$

76,636

 

 

$

 

Total restructuring costs

 

 

(76,636

)

 

 

 

Non-GAAP restructuring costs

 

$

 

 

$

 

Non-GAAP restructuring costs as % of revenue

 

 

%

 

 

%

 

 

 

 

 

GAAP impairment of long-lived assets

 

$

97,722

 

 

$

 

Total impairment of long-lived assets

 

 

(97,722

)

 

 

 

Non-GAAP impairment of long-lived assets

 

$

 

 

$

 

TWILIO INC.

Reconciliation to Non-GAAP Financial Measures

(In thousands, except shares, per share amounts and percentages)

(Unaudited)

     

 

 

Year Ended December 31,

 

 

2022

 

2021

GAAP loss from operations

 

$

(1,205,308

)

 

$

(915,584

)

GAAP operating margin

 

 

(32

) %

 

 

(32

) %

Non-GAAP adjustments:

 

 

 

 

Stock-based compensation

 

 

784,285

 

 

 

632,285

 

Amortization of acquired intangibles

 

 

206,181

 

 

 

198,784

 

Acquisition-related expenses

 

 

2,621

 

 

 

7,449

 

Charitable contributions

 

 

9,541

 

 

 

31,169

 

Payroll taxes related to stock-based compensation

 

 

23,832

 

 

 

48,417

 

Restructuring costs

 

 

76,636

 

 

 

 

Impairment of long-lived assets

 

 

97,722

 

 

 

 

Non-GAAP (loss) income from operations

 

$

(4,490

)

 

$

2,520

 

Non-GAAP operating margin

 

 

%

 

 

%

GAAP net loss attributable to common stockholders

 

$

(1,256,145

)

 

$

(949,900

)

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

784,285

 

 

 

632,285

 

Amortization of acquired intangibles

 

 

206,181

 

 

 

198,784

 

Acquisition related expenses

 

 

2,621

 

 

 

7,449

 

Payroll taxes related to stock-based compensation

 

 

23,832

 

 

 

48,417

 

Amortization of debt discount and issuance costs

 

 

1,490

 

 

 

5,827

 

Income tax benefit related to acquisition

 

 

(7,617

)

 

 

(17,236

)

Charitable contribution

 

 

9,541

 

 

 

31,169

 

Share of losses from equity method investment

 

 

35,315

 

 

 

 

Restructuring costs

 

 

76,636

 

 

 

 

Impairment of long-lived assets

 

 

97,722

 

 

 

 

Gains on strategic investments

 

 

(631

)

 

 

 

Non-GAAP net loss attributable to common stockholders

 

$

(26,770

)

 

$

(43,205

)

Non-GAAP net loss attributable to common stockholders as a % of revenue

 

 

(1

) %

 

 

(2

) %

TWILIO INC.

Reconciliation to Non-GAAP Financial Measures

(In thousands, except shares, per share amounts and percentages)

(Unaudited)

     

 

 

Year Ended December 31,

 

 

2022

 

2021

GAAP net loss per share attributable to common stockholders, basic and diluted*

 

$

(6.86

)

 

$

(5.45

)

Non-GAAP adjustments:

 

 

 

 

Share-based compensation

 

 

4.29

 

 

 

3.63

 

Amortization of acquired intangibles

 

 

1.13

 

 

 

1.14

 

Acquisition related expenses

 

 

0.01

 

 

 

0.04

 

Payroll taxes related to stock-based compensation

 

 

0.13

 

 

 

0.28

 

Accretion of debt discount and issuance costs

 

 

0.01

 

 

 

0.03

 

Income tax benefit related to acquisition

 

 

(0.04

)

 

 

(0.10

)

Charitable contribution

 

 

0.05

 

 

 

0.18

 

Share of losses from equity method investment

 

 

0.19

 

 

 

 

Restructuring costs

 

 

0.42

 

 

 

 

Impairment of long-lived assets

 

 

0.53

 

 

 

 

Gains on strategic investments

 

 

 

 

 

 

Non-GAAP net loss per share attributable to common stockholders, basic and diluted

 

$

(0.15

)

 

$

(0.25

)

 

 

 

 

 

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

 

 

182,994,038

 

 

 

174,180,465

 

 

 

 

 

 

Weighted average dilutive shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average shares used to compute Non-GAAP net income per share attributable to common stockholders, diluted

 

 

182,994,038

 

 

 

174,180,465

 

                 

* 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,

 

 

2022

 

2022

GAAP Revenue

 

$

1,024,574

 

 

$

3,826,321

 

Less: Acquisition revenue

 

 

2,152

 

 

 

128,619

 

Less: A2P 10DLC revenue

 

 

 

 

 

86,338

 

Organic revenue

 

$

1,022,422

 

 

$

3,611,364

 

GAAP Revenue Y/Y Growth

 

 

22

%

 

 

35

%

Organic Revenue Y/Y Growth

 

 

21

%1

 

 

30

%2

1  

Organic revenue for the three months ended December 31, 2021, when used as the denominator for Y/Y growth for the three months ended December 31, 2022, is equal to reported revenue. Revenue for the three months ended December 31, 2021 was $842.7 million.

2  

Organic revenue for the year ended December 31, 2021, when used as the denominator for Y/Y growth for the year ended December 31, 2022, excludes $26.0 million of acquisition revenue and $31.0 million of A2P 10DLC fee revenue. Revenue for the year ended December 31, 2021 was $2,841.8 million.

 

Investor Contact:
Bryan Vaniman
ir@Twilio.com

or

Media Contact:
Caitlin Epstein
press@Twilio.com

Source: Twilio