# TWILIO INC (TWLO)

Informational only - not investment advice.

CIK: 0001447669
SIC: 7372 Services-Prepackaged Software
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/)
Latest 10-K filed: 2026-02-24
SEC page: https://www.sec.gov/edgar/browse/?CIK=1447669
Filing source: https://www.sec.gov/Archives/edgar/data/1447669/000144766926000021/twlo-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-24 · accession 0001447669-26-000021 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001447669.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 5,067,220,000 USD | 2025 | verified |
| Net income | 33,834,000 USD | 2025 | verified |
| Assets | 9,770,890,000 USD | 2025 | verified |
| Free cash flow | 997,396,000 USD | 2025 | computed |
| Net margin | 0.67% | 2025 | computed |
| Operating margin | 3.11% | 2025 | computed |
| Revenue YoY | +13.66% | 2025 | computed |
| ROE | 0.43% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | TWLO | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 0.7% | 1.5% | 47 | 122 |
| Operating margin | 3.1% | 1.3% | 53 | 121 |
| Revenue growth | 13.7% | 13.5% | 50 | 124 |
| FCF margin | 19.7% | 19.3% | 51 | 120 |
| ROE | 0.4% | 2.0% | 47 | 112 |
| ROA | 0.3% | 0.9% | 49 | 124 |
| Liabilities / equity | 0.25 | 0.91 | 9 | 113 |
| Current ratio | 4.03 | 1.57 | 90 | 124 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 7372 Services-Prepackaged Software, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 5067220000 | USD | 2025 | 2026-02-24 |
| Net income | 33834000 | USD | 2025 | 2026-02-24 |
| Assets | 9770890000 | USD | 2025 | 2026-02-24 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001447669.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 277,335,000 | 399,020,000 | 650,067,000 | 1,134,468,000 | 1,761,776,000 | 2,841,839,000 | 3,826,321,000 | 4,153,945,000 | 4,458,036,000 | 5,067,220,000 |
| Net income | -41,324,000 | -63,708,000 | -121,949,000 | -307,063,000 | -490,979,000 | -949,900,000 | -1,256,145,000 | -1,015,441,000 | -109,403,000 | 33,834,000 |
| Operating income | -41,315,000 | -66,074,000 | -115,235,000 | -369,785,000 | -492,901,000 | -915,584,000 | -1,205,308,000 | -876,541,000 | -53,708,000 | 157,802,000 |
| Gross profit | 156,815,000 | 216,125,000 | 349,226,000 | 608,917,000 | 915,661,000 | 1,390,713,000 | 1,813,577,000 | 2,043,930,000 | 2,278,212,000 | 2,478,734,000 |
| Diluted EPS |  |  |  | -2.36 | -3.35 | -5.45 | -6.86 | -5.54 | -0.66 | 0.21 |
| Operating cash flow | 10,097,000 | -3,255,000 | 7,983,000 | 14,048,000 | 32,654,000 | -58,192,000 | -254,368,000 | 414,752,000 | 716,241,000 | 1,003,244,000 |
| Capital expenditures |  |  |  |  | 25,805,000 | 46,048,000 | 34,421,000 | 11,310,000 | 6,978,000 | 5,848,000 |
| Share buybacks | 2,000 | 100,000 | 0.00 | 0.00 |  | 0.00 | 0.00 | 668,751,000 | 2,334,400,000 | 868,939,000 |
| Assets | 412,694,000 | 449,782,000 | 1,028,710,000 | 5,150,516,000 | 9,487,433,000 | 12,998,598,000 | 12,564,304,000 | 11,609,707,000 | 9,865,472,000 | 9,770,890,000 |
| Liabilities | 83,247,000 | 89,936,000 | 590,475,000 | 871,105,000 | 1,034,768,000 | 1,967,132,000 | 2,005,262,000 | 1,877,155,000 | 1,912,506,000 | 1,949,344,000 |
| Stockholders' equity | 329,447,000 | 359,846,000 | 438,235,000 | 4,279,411,000 | 8,452,665,000 | 11,031,466,000 | 10,559,042,000 | 9,732,552,000 | 7,952,966,000 | 7,821,546,000 |
| Cash and cash equivalents | 305,665,000 | 115,286,000 | 487,215,000 | 253,735,000 | 933,885,000 | 1,479,452,000 | 651,752,000 | 655,931,000 | 421,297,000 | 682,335,000 |
| Free cash flow |  |  |  |  | 6,849,000 | -104,240,000 | -288,789,000 | 403,442,000 | 709,263,000 | 997,396,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -14.90% | -15.97% | -18.76% | -27.07% | -27.87% | -33.43% | -32.83% | -24.45% | -2.45% | 0.67% |
| Operating margin | -14.90% | -16.56% | -17.73% | -32.60% | -27.98% | -32.22% | -31.50% | -21.10% | -1.20% | 3.11% |
| Return on equity | -12.54% | -17.70% | -27.83% | -7.18% | -5.81% | -8.61% | -11.90% | -10.43% | -1.38% | 0.43% |
| Return on assets | -10.01% | -14.16% | -11.85% | -5.96% | -5.18% | -7.31% | -10.00% | -8.75% | -1.11% | 0.35% |
| Liabilities / equity | 0.25 | 0.25 | 1.35 | 0.20 | 0.12 | 0.18 | 0.19 | 0.19 | 0.24 | 0.25 |
| Current ratio | 4.79 | 4.50 | 6.33 | 8.34 | 7.52 | 8.43 | 6.17 | 6.64 | 4.20 | 4.03 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001447669.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | -2.63 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -1.84 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | -0.91 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | -166,187,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 1,033,670,000 |  | -0.78 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 1,075,950,000 | -365,408,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 1,047,050,000 | -55,349,000 | -0.31 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 1,082,502,000 | -31,858,000 | -0.19 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 1,133,649,000 | -9,726,000 | -0.06 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 1,194,835,000 | -12,470,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 1,172,463,000 | 20,017,000 | 0.12 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 1,228,425,000 | 22,423,000 | 0.14 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 1,300,402,000 | 37,248,000 | 0.23 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 1,365,930,000 | -45,854,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 1,406,907,000 | 90,139,000 | 0.57 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 1,499,089,000 | 1,067,209,000 | 6.68 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from TWLO's latest 10-K: [/company/TWLO/business/](/company/TWLO/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from TWLO's latest 10-K: [/company/TWLO/risk-factors/](/company/TWLO/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1447669/000144766926000092/twlo-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-07
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

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Overview

We envision a world in which every digital interaction is amazing. The Twilio platform combines our communications channels and software solutions with contextual data and AI-powered orchestration, enabling businesses to deliver amazing customer engagement across the entire customer journey. Our platform provides a trusted, simple, and smart infrastructure foundation that customers can build on.

We offer highly customizable communications APIs that enable developers to embed numerous forms of messaging, voice, email, and video interactions into their customer-facing applications, as well as software products that target specific engagement needs, including our digital engagement centers, marketing campaigns, and user authentication and identity solutions. This combination of flexible APIs and software solutions, together with our customer data capabilities, helps businesses of all sizes and across numerous industries to benefit from smarter and more streamlined engagement at every step of the customer journey, including reduced customer acquisition costs, lasting loyalty, and increased customer value. The value proposition of our offerings has become stronger and our products have become more strategic to our customers as businesses are increasingly prioritizing building more personalized and differentiated customer engagement experiences through digital channels.

Factors Affecting Our Results of Operations

We are focused on innovation and durable, profitable growth. To increase revenue and grow market share, we intend to drive product innovation, leverage predictive and generative AI, further enhance our independent software vendor (“ISV”), reseller and other partner relationships, improve our self-service capabilities, cross-sell our products, and expand internationally. We also intend to optimize our business and take measures to reduce costs, including simplifying and further automating our business processes, modernizing our infrastructure, leveraging AI, enacting certain workforce planning initiatives, optimizing utilization of our distributed workforce and implementing other initiatives targeted at improving efficiencies in our business. We are focused on driving leverage through these cost savings and efficiency initiatives, as well as efforts to drive growth in higher margin products.

Our revenue is primarily derived from usage-based fees, which can lead to variability in our results of operations and at times create differences between our forecasts and actual results. Our usage-based revenue is also more immediately impacted by changes in consumer spending and macroeconomic conditions than our subscription-based revenue. We also experience seasonal trends due to increased consumer activity in the fourth quarter, which may result in lower sequential revenue in the first quarter.

Our gross profit and gross margin are impacted by a number of factors, including our product mix; our ability to manage our cloud infrastructure‑related and network service provider fees, including A2P messaging fees; changes in foreign exchange rates; the timing of amortization of capitalized software development costs and acquired intangibles; the extent to which we periodically choose to adjust prices of our products; and the timing and extent of our investments in our operations. Our gross margin is also impacted by the mix of U.S. messaging termination compared to international messaging termination, as international messaging has lower gross margins.

In recent quarters, major U.S. mobile carriers have increased network service provider fees for A2P messages delivered to their subscribers, and such fees may increase further over time. We pass these fees through to our customers at cost. As a result, we recognize an equal amount of revenue and cost of revenue related to these fees. The increased fees do not impact our gross profit, but they create a headwind to our gross margins.

In the second quarter of 2026, we determined that we would be unable to consume certain network services that we prepaid in previous periods due to operational and financial challenges experienced by two network service providers. This determination resulted in a $32.8 million impairment loss on prepaid assets that impacted our operating expenses and income from operations for the three and six months ended June 30, 2026. This impairment loss has no impact on our free cash flow and will not impact our results of operations in future periods.

We regularly assess the need for a valuation allowance on our deferred tax assets. As of June 30, 2026, based on our analysis of both positive and negative evidence, including the amount of pre-tax book income in the U.S. in recent periods and our expectation of future profits in the U.S., we concluded that it is more likely than not that the majority of our U.S. deferred tax assets are realizable. As a result, we released a significant portion of our valuation allowance on the net deferred tax assets in the U.S., resulting in the recognition of deferred tax assets and income tax benefit of $944.1 million during the three and six months ended June 30, 2026. For further detail refer to Note 14 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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Our results of operations have in the past been, and could in the future be, impacted by adverse macroeconomic conditions. We are continuing to monitor actual and potential effects of recent macroeconomic and political conditions and uncertainty on our business. For additional details, see Part II, Item 1A, “Risk Factors.”

Key Business Metrics

We review a number of operational and financial metrics, including Dollar-Based Net Expansion Rate (“DBNE”), to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

The following table summarizes our year-over-year revenue growth and DBNE for the three months ended June 30, 2026 and 2025.

[[GREPCENT_TABLE]]
[["","","Three Months Ended"],["","","June 30,"],["","","2026","","2025"],["Total Revenue (in thousands)","","$","1,499,089","","","$","1,228,425"],["Total Revenue Growth Rate","","22","%","","13","%"],["Dollar-Based Net Expansion Rate","","116","%","","108","%"]]
[[/GREPCENT_TABLE]]

Dollar‑Based Net Expansion Rate

Our DBNE compares the total revenue in a quarter from all individual customer accounts, as identified by a unique account identifier, for which we have recognized at least $5 of revenue in the last month of the quarter, to revenue from those same accounts in the same quarter in the prior year. A single customer organization may constitute multiple unique customer accounts if it has multiple account identifiers. To calculate DBNE, we first identify the cohort of such customer accounts in the same quarter of the prior year. DBNE 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 DBNE for periods longer than one quarter, we use the average of the applicable quarterly DBNEs for each of the quarters in such period. Revenue from acquisitions does not impact the DBNE 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. Revenue from divestitures does not impact the DBNE calculation beginning in the quarter the divestiture closed, unless the divestiture closing date is the last day of a quarter.

We believe that measuring DBNE 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 customers 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 DBNE for such customer accounts. Our DBNE increases when these customers increase their usage of a product, extend their usage of a product to new applications or adopt a new product. Our DBNE decreases when these customers 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 customer account, this new account is tied to, and revenue from this new account is included with, the original customer account for the purposes of calculating this metric.

Key Components of Statements of Operations

Revenue

Revenue. We recognize revenue from our products on either a usage basis or a subscription basis, depending on the nature of the product and the type of customer contract.

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The majority of our revenue is derived from usage-based fees. The usage-based fees are earned when customers access our cloud-based platform and start using our products. Examples of our primarily usage-based products are Messaging and Voice. For Messaging products, we primarily charge fees related to the number of text messages sent or received. For Voice products, we primarily charge fees for minutes of call duration. Examples of our primarily subscription-based products are Email and Segment. For subscription-based revenue derived from these products, we recognize revenue evenly over the contract term. When our usage-based products are embedded into our subscription-based products, or when multiple products are purchased together as a solution, we charge for each product separately on a usage or subscription basis, as applicable.

Most of our usage-based customers gain access to our platform through a self-service process, which requires an upfront prepayment via credit card that is drawn down as they use our products. Pricing is generally based on a publicly available, self-serve pricing matrix that generally allows customers to receive tiered discounts as their usage of our products increases. Many of our larger usage-based customers enter into contractual arrangements with us for a period of at least 12 months. These contracts may include negotiated terms and typically include minimum revenue commitments of varying durations. Usage-based customers subject to such contracts are typically invoiced monthly in arrears for products used. In the three months ended June 30, 2026 and 2025, we generated 75% and 74% of our revenue, respectively, from usage-based fees.

Subscription-based fees are earned in accordance with subscription pricing terms. For our subscription-based products, customers g

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1447669/000144766926000021/twlo-20251231.htm
Complete FY 2025 MD&A: /company/TWLO/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-02-24
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. This Item generally discusses our results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024. For a discussion of our results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 26, 2025, and incorporated herein by reference.

Overview

We envision a world in which every digital interaction is amazing. By combining our leading communications capabilities with rich contextual data and AI, we provide the infrastructure for businesses of all sizes to revolutionize how they engage with their customers by delivering seamless, trusted, and personalized customer experiences at scale.

We offer highly customizable communications APIs that enable developers to embed numerous forms of messaging, voice, email, and video interactions into their customer-facing applications, as well as software products that target specific engagement needs, including our digital engagement centers, marketing campaigns, and user authentication and identity solutions. This combination of flexible APIs and software solutions, together with our customer data capabilities, helps businesses of all sizes and across numerous industries to benefit from smarter and more streamlined engagement at every step of the customer journey, including reduced customer acquisition costs, lasting loyalty, and increased customer value. The value proposition of our offerings has become stronger and our products have become more strategic to our customers as businesses are increasingly prioritizing building more personalized and differentiated customer engagement experiences through digital channels.

On January 1, 2025, we realigned our business unit structure into a functional support model under one organization. We believe that operating as one organization best positions us as we seek to deliver one trusted, smart and integrated platform that enables more personalized communications and engagements for customers. In the third quarter of 2025, we modified the presentation of the financial information that is regularly reviewed by our Chief Executive Officer, who is also our Chief

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Operating Decision Maker (“CODM”), to reflect this realignment and the change in how management currently views and operates the business. These changes required us to re-evaluate our operating segment structure and resulted in the conclusion that starting with the third quarter of 2025 and as of December 31, 2025, we had one operating and reportable segment, which comprised all of the consolidated Company.

For a comprehensive overview of our business, our platform and our products refer to Part I, Item 1, “Business,” included elsewhere in this Annual Report on Form 10-K.

Factors Affecting Our Results of Operations

We are focused on innovation and durable, profitable growth. To increase revenue and grow market share, we intend to drive product innovation, leverage predictive and generative AI, further enhance our independent software vendor (“ISV”), reseller and other partner relationships, improve our self-service capabilities, cross-sell our products, and expand internationally. We also intend to optimize our business and take measures to reduce costs, including simplifying and further automating our business processes, modernizing our infrastructure, leveraging AI, enacting certain workforce planning initiatives, optimizing utilization of our distributed workforce and implementing other initiatives targeted at improving efficiencies in our business. We are focused on driving leverage through these cost savings and efficiency initiatives, as well as efforts to drive growth in higher margin products.

Our revenue is primarily derived from usage-based fees, which can lead to variability in our results of operations and at times create differences between our forecasts and actual results. Our usage-based revenue is also more immediately impacted by changes in consumer spending and macroeconomic conditions than our subscription-based revenue. We also experience seasonal trends due to increased consumer activity in the fourth quarter, which may result in lower sequential revenue in the first quarter.

Our gross profit and gross margin are impacted by a number of factors, including our product mix; our ability to manage our cloud infrastructure‑related and network service provider fees, including A2P messaging fees; changes in foreign exchange rates; the timing of amortization of capitalized software development costs and acquired intangibles; the extent to which we periodically choose to adjust prices of our products; and the timing and extent of our investments in our operations. Our gross margin is also impacted by the mix of U.S. messaging termination compared to international messaging termination, as international messaging has lower gross margins.

In June 2025, a major U.S. mobile carrier increased network service provider fees for A2P messages delivered to its subscribers. Other major U.S. carriers have since followed suit, with fee increases effective in January and April 2026. We pass these fees through to our customers at cost. As a result, we recognize an equal amount of revenue and cost of revenue related to these fees. The increased fees do not impact our gross profit, but they will create a modest headwind to our gross margins going forward. Such fees may increase further over time.

As of December 31, 2025, we had an accrued bonus liability of $136.2 million related to our company-wide bonus program recorded in accrued expenses and other current liabilities in our consolidated balance sheet included elsewhere in this Annual Report on Form 10-K. The bonus payout will be determined for each eligible recipient based on Company and individual performance metrics and paid in March 2026, which we expect to impact our cash flows in the first quarter of 2026.

Given our recent history of generating net income in the U.S., we believe that there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to allow us to determine that a significant portion of the valuation allowance recorded against our U.S. deferred tax assets should be released. The reversal would result in a significant income tax benefit for the period when we release the valuation allowance in the U.S. However, the exact timing and amount of the valuation allowance release are subject to change based on our actual operating results.

Our results of operations have in the past been, and could in the future be, impacted by adverse macroeconomic conditions. We are continuing to monitor actual and potential effects of recent macroeconomic and political conditions and uncertainty on our business. For additional details, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

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Key Business 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.

The following table summarizes our year-over-year revenue growth and Dollar-Based Net Expansion Rate for the years ended December 31, 2025, 2024 and 2023, and the number of Active Customer Accounts as of December 31, 2025, 2024 and 2023.

[[GREPCENT_TABLE]]
[["","","Year Ended"],["","","December 31,"],["","","2025","","2024","","2023"],["Active Customer Accounts","","402,000","","","325,000","","","305,000"],["Total Revenue (in thousands)","","$","5,067,220","","","$","4,458,036","","","$","4,153,945"],["Total Revenue Growth Rate","","14","%","","7","%","","9","%"],["Dollar-Based Net Expansion Rate","","108","%","","104","%","","103","%"]]
[[/GREPCENT_TABLE]]

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”). When presented in this Annual Report on Form 10-K, the number of Active Customer Accounts is rounded down to the nearest thousand.

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. In the three years ended December 31, 2025, 2024 and 2023, revenue from Active Customer Accounts represented over 99% of total revenue in each period.

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 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. 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.

We believe that measuring Dollar-Based Net Expansion Rate 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

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/TWLO/mda/fy2025/
All MD&A years: /company/TWLO/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/TWLO/mda/fy2024/): filed 2025-02-26; accession 0001447669-25-000035 (https://www.sec.gov/Archives/edgar/data/1447669/000144766925000035/twlo-20241231.htm)
- [FY 2023 MD&A](/company/TWLO/mda/fy2023/): filed 2024-02-27; accession 0001447669-24-000034 (https://www.sec.gov/Archives/edgar/data/1447669/000144766924000034/twlo-20231231.htm)
- [FY 2022 MD&A](/company/TWLO/mda/fy2022/): filed 2023-02-27; accession 0001447669-23-000049 (https://www.sec.gov/Archives/edgar/data/1447669/000144766923000049/twlo-20221231.htm)
- [FY 2021 MD&A](/company/TWLO/mda/fy2021/): filed 2022-02-22; accession 0001447669-22-000049 (https://www.sec.gov/Archives/edgar/data/1447669/000144766922000049/twlo-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 7372 Services-Prepackaged Software) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity

Macro-to-micro threads including this sector: [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/TWLO.md · JSON record: /company/TWLO.json · verified financials: /company/TWLO/financials.json / /company/TWLO/financials.csv · machine TOC for the whole site: /llms.txt