Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 27, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37806 | |
Entity Registrant Name | TWILIO INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2574840 | |
Entity Address, Address Line One | 101 Spear Street | |
Entity Address, Address Line Two | Fifth Floor | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 415 | |
Local Phone Number | 390-2337 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Trading Symbol | TWLO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001447669 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Common Stock Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 174,522,799 | |
Common Stock Class B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 9,817,605 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 632,794 | $ 1,479,452 |
Short-term marketable securities | 3,575,751 | 3,878,430 |
Accounts receivable, net | 487,750 | 388,215 |
Prepaid expenses and other current assets | 265,977 | 186,131 |
Total current assets | 4,962,272 | 5,932,228 |
Property and equipment, net | 263,862 | 255,316 |
Operating right-of-use assets | 127,567 | 234,584 |
Equity method investment | 732,490 | 0 |
Intangible assets, net | 901,155 | 1,050,012 |
Goodwill | 5,284,616 | 5,263,166 |
Other long-term assets | 340,694 | 263,292 |
Total assets | 12,612,656 | 12,998,598 |
Current liabilities: | ||
Accounts payable | 103,234 | 93,333 |
Accrued expenses and other current liabilities | 572,876 | 417,503 |
Deferred revenue and customer deposits | 135,610 | 140,389 |
Operating lease liability, current | 52,453 | 52,325 |
Total current liabilities | 864,173 | 703,550 |
Operating lease liability, noncurrent | 176,336 | 211,253 |
Finance lease liability, noncurrent | 24,842 | 25,132 |
Long-term debt, net | 986,985 | 985,907 |
Other long-term liabilities | 29,432 | 41,290 |
Total liabilities | 2,081,768 | 1,967,132 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock | 0 | 0 |
Class A and Class B common stock | 184 | 180 |
Additional paid-in capital | 13,842,301 | 13,169,118 |
Accumulated other comprehensive loss | (165,183) | (18,141) |
Accumulated deficit | (3,146,414) | (2,119,691) |
Total stockholders’ equity | 10,530,888 | 11,031,466 |
Total liabilities and stockholders’ equity | $ 12,612,656 | $ 12,998,598 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 983,030 | $ 740,176 | $ 2,801,747 | $ 1,999,095 |
Cost of revenue | 520,955 | 375,561 | 1,469,312 | 1,004,929 |
Gross profit | 462,075 | 364,615 | 1,332,435 | 994,166 |
Operating expenses: | ||||
Research and development | 284,735 | 209,890 | 804,987 | 565,970 |
Sales and marketing | 328,833 | 264,548 | 951,697 | 713,196 |
General and administrative | 135,331 | 122,522 | 392,319 | 346,958 |
Restructuring costs | 72,451 | 0 | 72,451 | 0 |
Impairment of long-lived assets | 97,722 | 0 | 97,722 | 0 |
Total operating expenses | 919,072 | 596,960 | 2,319,176 | 1,626,124 |
Loss from operations | (456,997) | (232,345) | (986,741) | (631,958) |
Other expenses, net: | ||||
Share of losses from equity method investment | (13,376) | 0 | (13,376) | 0 |
Other, net | (8,374) | (6,613) | (23,290) | (39,219) |
Total other expenses, net | (21,750) | (6,613) | (36,666) | (39,219) |
Loss before (provision for) benefit from income taxes | (478,747) | (238,958) | (1,023,407) | (671,177) |
(Provision for) benefit from income taxes | (3,580) | 14,849 | (3,316) | 12,673 |
Net loss attributable to common stockholders | $ (482,327) | $ (224,109) | $ (1,026,723) | $ (658,504) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (2.63) | $ (1.26) | $ (5.63) | $ (3.82) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (2.63) | $ (1.26) | $ (5.63) | $ (3.82) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 183,692,564 | 177,231,285 | 182,319,735 | 172,605,371 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 183,692,564 | 177,231,285 | 182,319,735 | 172,605,371 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (482,327) | $ (224,109) | $ (1,026,723) | $ (658,504) |
Other comprehensive loss: | ||||
Unrealized loss on marketable securities | (22,151) | (982) | (103,999) | (6,137) |
Foreign currency translation | (2,192) | 31 | (4,646) | (245) |
Net change in market value of effective foreign currency forward exchange contracts | (19,196) | (161) | (34,154) | (3,069) |
Share of other comprehensive loss from equity method investment | (4,243) | 0 | (4,243) | 0 |
Total other comprehensive loss | (47,782) | (1,112) | (147,042) | (9,451) |
Comprehensive loss attributable to common stockholders | $ (530,109) | $ (225,221) | $ (1,173,765) | $ (667,955) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock Class A | Common Stock Class B | Common Stock Common Stock Class A | Common Stock Common Stock Class B | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2020 | 153,496,222 | 10,551,302 | ||||||
Balance at Dec. 31, 2020 | $ 8,452,665 | $ 151 | $ 13 | $ 9,613,246 | $ 9,046 | $ (1,169,791) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (206,542) | (206,542) | ||||||
Exercises of vested stock options (in shares) | 248,008 | 211,371 | ||||||
Exercises of vested stock options | 11,564 | 11,564 | ||||||
Vesting of restricted stock units (in shares) | 913,966 | |||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (6,989) | |||||||
Value of equity awards withheld for tax liability | (2,774) | (2,774) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 419,371 | (419,371) | ||||||
Equity component from partial settlement of 2023 convertible senior notes (in shares) | 1,158,381 | |||||||
Equity component from partial settlement of 2023 convertible senior notes | 80,049 | $ 2 | 80,047 | |||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 9,405 | 9,405 | ||||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts (in shares) | 4,312,500 | |||||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts | 1,766,400 | $ 4 | 1,766,396 | |||||
Costs related to the follow-on public offering | (727) | (727) | ||||||
Issuance of restricted stock awards (in shares) | 24,697 | |||||||
Unrealized loss on marketable securities | (4,176) | (4,176) | ||||||
Foreign currency translation | (210) | (210) | ||||||
Stock-based compensation | 141,542 | 141,542 | ||||||
Balance (in shares) at Mar. 31, 2021 | 160,588,258 | 10,343,302 | ||||||
Balance at Mar. 31, 2021 | 10,247,196 | $ 158 | $ 13 | 11,618,698 | 4,660 | (1,376,333) | ||
Balance (in shares) at Dec. 31, 2020 | 153,496,222 | 10,551,302 | ||||||
Balance at Dec. 31, 2020 | 8,452,665 | $ 151 | $ 13 | 9,613,246 | 9,046 | (1,169,791) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (658,504) | |||||||
Unrealized loss on marketable securities | (6,137) | |||||||
Foreign currency translation | (245) | |||||||
Net change in market value of effective foreign currency forward exchange contracts | (3,069) | |||||||
Share of other comprehensive loss from equity method investment | 0 | |||||||
Balance (in shares) at Sep. 30, 2021 | 168,352,933 | 9,913,181 | ||||||
Balance at Sep. 30, 2021 | 11,081,749 | $ 166 | $ 12 | 12,910,271 | (405) | (1,828,295) | ||
Balance (in shares) at Mar. 31, 2021 | 160,588,258 | 10,343,302 | ||||||
Balance at Mar. 31, 2021 | 10,247,196 | $ 158 | $ 13 | 11,618,698 | 4,660 | (1,376,333) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (227,853) | (227,853) | ||||||
Exercises of vested stock options (in shares) | 294,430 | 63,164 | ||||||
Exercises of vested stock options | 20,351 | 20,351 | ||||||
Vesting of restricted stock units (in shares) | 839,472 | |||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (5,498) | |||||||
Value of equity awards withheld for tax liability | (1,882) | (1,882) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 188,044 | (188,044) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock | 0 | $ 1 | $ (1) | |||||
Equity component from partial settlement of 2023 convertible senior notes (in shares) | 3,688,584 | |||||||
Equity component from partial settlement of 2023 convertible senior notes | 255,594 | $ 4 | 255,590 | |||||
Settlement of capped call, net of related costs | 225,233 | 225,233 | ||||||
Shares issued under ESPP (in shares) | 100,107 | |||||||
Shares issued under ESPP | 23,699 | 23,699 | ||||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 6,789 | 6,789 | ||||||
Costs related to the follow-on public offering | (50) | (50) | ||||||
Unrealized loss on marketable securities | (979) | (979) | ||||||
Foreign currency translation | (66) | (66) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | (2,908) | (2,908) | ||||||
Stock-based compensation | 148,988 | 148,988 | ||||||
Balance (in shares) at Jun. 30, 2021 | 165,715,499 | 10,218,422 | ||||||
Balance at Jun. 30, 2021 | 10,694,112 | $ 164 | $ 12 | 12,297,415 | 707 | (1,604,186) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (224,109) | (224,109) | ||||||
Exercises of vested stock options (in shares) | 222,066 | 83,484 | ||||||
Exercises of vested stock options | 15,993 | 15,993 | ||||||
Vesting of restricted stock units (in shares) | 834,148 | |||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (5,530) | |||||||
Value of equity awards withheld for tax liability | (1,896) | (1,896) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 388,725 | (388,725) | ||||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 8,389 | 8,389 | ||||||
Costs related to the follow-on public offering | (90) | (90) | ||||||
Shares issued in acquisition (in shares) | 1,116,390 | |||||||
Shares issued in acquisition | 419,037 | $ 1 | 419,036 | |||||
Value of equity awards assumed in acquisition | 1,511 | 1,511 | ||||||
Shares issued in acquisition subject to future vesting (in shares) | 59,533 | |||||||
Unrealized loss on marketable securities | (982) | (982) | ||||||
Foreign currency translation | 31 | 31 | ||||||
Net change in market value of effective foreign currency forward exchange contracts | (161) | (161) | ||||||
Share of other comprehensive loss from equity method investment | 0 | |||||||
Stock-based compensation | 169,734 | 169,734 | ||||||
Balance (in shares) at Sep. 30, 2021 | 168,352,933 | 9,913,181 | ||||||
Balance at Sep. 30, 2021 | 11,081,749 | $ 166 | $ 12 | 12,910,271 | (405) | (1,828,295) | ||
Balance (in shares) at Dec. 31, 2021 | 170,625,994 | 9,842,105 | 170,625,994 | 9,842,105 | ||||
Balance at Dec. 31, 2021 | 11,031,466 | $ 168 | $ 12 | 13,169,118 | (18,141) | (2,119,691) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (221,627) | (221,627) | ||||||
Exercises of vested stock options (in shares) | 180,643 | 193,889 | ||||||
Exercises of vested stock options | 11,727 | 11,727 | ||||||
Vesting of restricted stock units (in shares) | 877,089 | |||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (5,804) | |||||||
Value of equity awards withheld for tax liability | (1,065) | (1,065) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 215,389 | (215,389) | ||||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 4,232 | 4,232 | ||||||
Shares returned from escrow (in shares) | (152,239) | |||||||
Shares returned from escrow | (387) | (387) | ||||||
Unrealized loss on marketable securities | (62,826) | (62,826) | ||||||
Foreign currency translation | (165) | (165) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | (3,852) | (3,852) | ||||||
Stock-based compensation | 159,930 | 159,930 | ||||||
Balance (in shares) at Mar. 31, 2022 | 171,763,174 | 9,820,605 | ||||||
Balance at Mar. 31, 2022 | 10,917,433 | $ 169 | $ 12 | 13,343,554 | (84,984) | (2,341,318) | ||
Balance (in shares) at Dec. 31, 2021 | 170,625,994 | 9,842,105 | 170,625,994 | 9,842,105 | ||||
Balance at Dec. 31, 2021 | 11,031,466 | $ 168 | $ 12 | 13,169,118 | (18,141) | (2,119,691) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (1,026,723) | |||||||
Unrealized loss on marketable securities | (103,999) | |||||||
Foreign currency translation | (4,646) | |||||||
Net change in market value of effective foreign currency forward exchange contracts | (34,154) | |||||||
Share of other comprehensive loss from equity method investment | (4,243) | |||||||
Balance (in shares) at Sep. 30, 2022 | 174,482,722 | 9,817,605 | 174,482,722 | 9,817,605 | ||||
Balance at Sep. 30, 2022 | 10,530,888 | $ 172 | $ 12 | 13,842,301 | (165,183) | (3,146,414) | ||
Balance (in shares) at Mar. 31, 2022 | 171,763,174 | 9,820,605 | ||||||
Balance at Mar. 31, 2022 | 10,917,433 | $ 169 | $ 12 | 13,343,554 | (84,984) | (2,341,318) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (322,769) | |||||||
Exercises of vested stock options (in shares) | 98,111 | 77,732 | ||||||
Exercises of vested stock options | 5,649 | 5,649 | ||||||
Vesting of restricted stock units (in shares) | 1,049,640 | |||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (38) | |||||||
Value of equity awards withheld for tax liability | (4) | (4) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 80,732 | (80,732) | ||||||
Shares issued under ESPP (in shares) | 258,221 | |||||||
Shares issued under ESPP | 24,318 | $ 1 | 24,317 | |||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 2,373 | 2,373 | ||||||
Unrealized loss on marketable securities | (19,022) | (19,022) | ||||||
Foreign currency translation | (2,289) | (2,289) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | (11,106) | (11,106) | ||||||
Stock-based compensation | 247,412 | 247,412 | ||||||
Balance (in shares) at Jun. 30, 2022 | 173,271,942 | 9,817,605 | ||||||
Balance at Jun. 30, 2022 | 10,841,995 | $ 171 | $ 12 | 13,623,300 | (117,401) | (2,664,087) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (482,327) | (482,327) | ||||||
Exercises of vested stock options (in shares) | 38,368 | 35,187 | ||||||
Exercises of vested stock options | 2,056 | 2,056 | ||||||
Vesting of restricted stock units (in shares) | 1,115,248 | 0 | ||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||
Value of equity awards withheld for tax liability (in shares) | (125) | |||||||
Value of equity awards withheld for tax liability | (11) | (11) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 35,187 | (35,187) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock | 0 | |||||||
Shares of Class A common stock donated to charity (in shares) | 22,102 | |||||||
Shares of Class A common stock donated to charity | 1,911 | 1,911 | ||||||
Unrealized loss on marketable securities | (22,151) | (22,151) | ||||||
Foreign currency translation | (2,192) | (2,192) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | (19,196) | (19,196) | ||||||
Share of other comprehensive loss from equity method investment | (4,243) | (4,243) | ||||||
Stock-based compensation | 199,772 | 199,772 | ||||||
Stock-based compensation - restructuring | 15,274 | 15,274 | ||||||
Balance (in shares) at Sep. 30, 2022 | 174,482,722 | 9,817,605 | 174,482,722 | 9,817,605 | ||||
Balance at Sep. 30, 2022 | $ 10,530,888 | $ 172 | $ 12 | $ 13,842,301 | $ (165,183) | $ (3,146,414) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,026,723) | $ (658,504) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 207,880 | 189,669 |
Non-cash reduction to the right-of-use asset | 38,669 | 36,249 |
Net amortization of investment premium and discount | 27,900 | 24,880 |
Impairment of long-lived assets | 100,681 | 4,936 |
Stock-based compensation including restructuring | 606,260 | 445,366 |
Amortization of deferred commissions | 41,322 | 20,798 |
Allowance for credit losses | 21,786 | 11,371 |
Value of shares of Class A common stock donated to charity | 8,516 | 24,583 |
Share of losses from equity method investment | 13,376 | 0 |
Loss on extinguishment of debt | 0 | 28,965 |
Other adjustments | 207 | (6,422) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (121,353) | (81,186) |
Prepaid expenses and other current assets | (81,071) | (59,929) |
Other long-term assets | (111,662) | (66,501) |
Accounts payable | 11,585 | (8,665) |
Accrued expenses and restructuring costs | 122,408 | 84,730 |
Deferred revenue and customer deposits | (6,206) | 27,004 |
Operating lease liabilities | (42,158) | (36,274) |
Other long-term liabilities | (7,330) | (1,019) |
Net cash used in operating activities | (195,913) | (19,949) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisitions, net of cash acquired and other related payments | (32,853) | (490,880) |
Purchases of marketable securities and other investments | (1,650,759) | (3,225,799) |
Proceeds from sales and maturities of marketable securities | 1,065,998 | 1,334,444 |
Capitalized software development costs | (35,905) | (35,926) |
Purchases of long-lived and intangible assets | (28,634) | (33,575) |
Net cash used in investing activities | (682,153) | (2,451,736) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from public offerings, net of underwriters' discounts | 0 | 1,766,400 |
Payments of costs related to public offerings | (35) | (464) |
Proceeds from issuance of senior notes due 2029 and 2031, net of issuance costs | 0 | 984,749 |
Proceeds from settlements of capped call, net of settlement costs | 0 | 228,412 |
Principal payments on debt and finance leases | (9,383) | (4,852) |
Value of equity awards withheld for tax liabilities | (1,080) | (6,552) |
Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP | 43,750 | 71,607 |
Net cash provided by financing activities | 33,252 | 3,039,300 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 146 | (157) |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (844,668) | 567,458 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period | 1,481,831 | 933,885 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period | 637,163 | 1,501,343 |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for income taxes, net | 5,481 | 4,439 |
Cash paid for interest | 37,500 | 19,545 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Value of common stock issued to settle convertible senior notes due 2023 | 0 | 1,704,969 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Cash and cash equivalents | 632,794 | 1,497,498 |
Restricted cash in other current assets | 4,357 | 2,733 |
Restricted cash in other long-term assets | 12 | 1,112 |
Total cash, cash equivalents and restricted cash | $ 637,163 | $ 1,501,343 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Twilio Inc. (the “Company”) was incorporated in the state of Delaware on March 13, 2008. 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 their customers’ journey, from sales to marketing to growth, customer service and many more engagement use cases in a flexible, programmatic way. The Company’s headquarters are located in San Francisco, California, and the Company has subsidiaries across North America, South America, Europe, Asia and Australia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2022 (“Annual Report”). The condensed consolidated balance sheet as of December 31, 2021, included herein, was derived from the audited financial statements as of that date, but may not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, stockholders’ equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2022 or any future period. (b) Principles of Consolidation The condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue allowances and sales credit reserves; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments, therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. (d) Remaining Performance Obligations Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $122.1 million as of September 30, 2022, of which 71% is expected to be recognized over the next 12 months and 95% is expected to be recognized over the next 24 months. (e) Deferred Revenue and Customer Deposits As of September 30, 2022 and December 31, 2021, the Company recorded $135.6 million and $141.5 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits and other long-term liabilities in the accompanying condensed consolidated balance sheets. During the three months ended September 30, 2022 and 2021, the Company recognized $17.5 million and $13.9 million of revenue, respectively, that was included in the deferred revenue and customer deposits balance as of the end of the previous year. During the nine months ended September 30, 2022 and 2021, the Company recognized $112.2 million and $58.2 million of revenue, respectively, that was included in the deferred revenue and customer deposits balance as of the end of the previous year. (f) Deferred Sales Commissions Total net capitalized commission costs as of September 30, 2022 and December 31, 2021, were $223.9 million and $193.4 million, respectively, and are included in prepaid expenses and other current assets and other long‑term assets in the accompanying condensed consolidated balance sheets. (g) Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities and accounts receivable. The Company maintains cash, restricted cash, cash equivalents and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure although the balances will exceed insured limits. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customer deteriorates substantially, operating results could be adversely affected. To reduce credit risk, management performs credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. During the three and nine months ended September 30, 2022 and 2021, no customer organization accounted for more than 10% of the Company’s total revenue. As of September 30, 2022 and December 31, 2021, no customer organization represented more than 10% of the Company’s gross accounts receivable. (h) Changes to Significant Accounting Policies Restructuring Costs The Company records a charge for restructuring when management commits to a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the plan are not likely and employees who are impacted have been notified of the pending involuntary termination. Restructuring charges are accrued in the period in which it is probable that the employees are entitled to the restructuring benefits and the amounts can be reasonably estimated. Equity Method Investments Equity investment holdings in which the Company does not have a controlling financial interest but can exercise significant influence over an investee are accounted for under the equity method. Equity method investments are originally recorded at cost and are subsequently increased or reduced to reflect the Company’s proportionate share of net earnings or losses of the investee as they occur. The Company records the investee losses up to the carrying amount of the investment plus any advances and loans made to the investee and any financial guarantees made on behalf of the investee. Investments are also increased by contributions made to and distributions from the investee. All costs directly associated with the acquisition of the investment are included in the carrying amount of the investment. Profits or losses related to intra-entity sales are eliminated until realized by the Company or the investee. The Company determines the difference between its purchase price and its proportionate share of the net assets of the investee, which results in an excess basis in the investment. This excess basis is allocated to the identifiable assets and liabilities of the investee utilizing purchase accounting principles and is used to calculate the amortization of basis differences every reporting period. Basis differences are generally amortized over the lives of the assets and liabilities that gave rise to the basis differences. The Company records its share in earnings and losses of its equity method investee along with adjustments for amortization of basis differences, investee capital transactions and other comprehensive income or loss in its consolidated statements of operations and comprehensive loss on a three-month lag. Equity method goodwill is not amortized or tested for impairment. Instead, the Company evaluates its equity method investments for impairment whenever events or changes in circumstance indicate that the carrying amounts of such investments may be in excess of their fair value. When such indicators exist, the other-than-temporary impairment model is utilized, which considers the severity and duration of a decline in fair value below book value and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in the current period. There have been no other changes to the Company’s significant accounting policies as described in its Annual Report. (i) Recently Adopted Accounting Guidance In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, "Revenue from Contracts with Customers." At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree's financial statements, assuming the acquirer is able to assess and rely on how the acquiree applied ASC 606. The Company adopted ASU 2021-08 in the first quarter of 2022 with no material impact to the Company's condensed consolidated financial statements. (j) Recently Issued Accounting Guidance, Not yet Adopted In June 2022, the FASB issued ASU No. 2022-03, "Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions," which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. The Company is evaluating the impact of the adoption of this guidance on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial Assets The following tables provide the financial assets measured at fair value on a recurring basis: Amortized Gross Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 39,117 $ — $ — $ 39,117 $ — $ — $ 39,117 Reverse repurchase agreements 200,000 — — — 200,000 — 200,000 Commercial paper 5,205 — — — 5,205 — 5,205 Total included in cash and cash equivalents 244,322 — — 39,117 205,205 — 244,322 Marketable securities: U.S. Treasury securities 519,609 — (15,009) 504,600 — — 504,600 Non-U.S. government securities 150,297 — (7,041) 143,256 — — 143,256 Corporate debt securities and commercial paper 3,028,685 13 (100,803) 7,000 2,920,895 — 2,927,895 Total marketable securities 3,698,591 13 (122,853) 654,856 2,920,895 — 3,575,751 Total financial assets $ 3,942,913 $ 13 $ (122,853) $ 693,973 $ 3,126,100 $ — $ 3,820,073 Amortized Gross Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 786,548 $ — $ — $ 786,548 $ — $ — $ 786,548 Commercial paper 46,076 — — — 46,076 — 46,076 Total included in cash and cash equivalents 832,624 — — 786,548 46,076 — 832,624 Marketable securities: U.S. Treasury securities 375,305 6 (2,561) 372,750 — — 372,750 Non-U.S. government securities 221,641 — (1,355) 220,286 — — 220,286 Corporate debt securities and commercial paper 3,300,326 960 (15,892) 31,000 3,254,394 — 3,285,394 Total marketable securities 3,897,272 966 (19,808) 624,036 3,254,394 — 3,878,430 Total financial assets $ 4,729,896 $ 966 $ (19,808) $ 1,410,584 $ 3,300,470 $ — $ 4,711,054 The Company's primary objective when investing excess cash is preservation of capital, hence the Company's marketable securities primarily consist of U.S. Treasury Securities, non-U.S government securities, high credit quality corporate debt securities, reverse repurchase agreements and commercial paper. Because the Company views its marketable securities as available to support current operations, it has classified all available for sale securities as short-term. As of September 30, 2022 and December 31, 2021, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of September 30, 2022 and December 31, 2021, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities before maturity. Interest earned on marketable securities was $16.3 million and $47.5 million in the three and nine months ended September 30, 2022, respectively, and $16.2 million and $39.5 million in the three and nine months ended September 30, 2021, respectively. The interest is recorded as other expenses, net, in the accompanying condensed consolidated statements of operations. The following table summarizes the contractual maturities of marketable securities: As of September 30, 2022 As of December 31, 2021 Amortized Aggregate Amortized Aggregate Financial Assets: (In thousands) Less than one year $ 1,992,157 $ 1,952,475 $ 1,084,751 $ 1,085,006 One to three years 1,706,434 1,623,276 2,812,521 2,793,424 Total $ 3,698,591 $ 3,575,751 $ 3,897,272 $ 3,878,430 Strategic Investments As of September 30, 2022 and December 31, 2021, the Company held strategic investments with a carrying value of $74.3 million and $68.3 million, respectively, recorded as other long-term assets in the accompanying condensed consolidated balance sheets. The carrying value of these securities is determined under the measurement alternative on a non-recurring basis and adjusted for observable changes in fair value. There were no impairments or other adjustments recorded in the three and nine months ended September 30, 2022 and 2021, related to these securities. Financial Liabilities The Company’s financial liabilities that are measured at fair value on a recurring basis consist of foreign currency derivative liabilities and are classified as Level 2 financial instruments in the fair value hierarchy. As of September 30, 2022, the aggregate fair value of these liabilities and the associated unrealized losses were $33.9 million. As of December 31, 2021, these balances were not significant. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) Capitalized internal-use software developments costs $ 248,158 $ 198,589 Data center equipment (1) 99,755 77,946 Leasehold improvements 89,234 85,297 Office equipment 67,808 58,636 Furniture and fixtures 15,030 15,360 Software 10,925 10,506 Total property and equipment 530,910 446,334 Less: accumulated depreciation and amortization (1) (267,048) (191,018) Total property and equipment, net $ 263,862 $ 255,316 ____________________________________ ( 1 ) Data center equipment contains $72.4 million and $63.0 million in assets held under finance leases as of September 30, 2022, and December 31, 2021, respectively. Accumulated depreciation and amortization contains $37.4 million and $26.8 million of accumulated depreciation for assets held under finance leases as of September 30, 2022, and December 31, 2021, respectively. Depreciation and amortization expense was $18.4 million and $14.5 million in the three months ended September 30, 2022 and 2021, respectively, and $52.5 million and $43.2 million in the nine months ended September 30, 2022 and 2021, respectively. |
Impairment
Impairment | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment | ImpairmentDuring the second quarter of 2022, the Company announced its decision to become a remote-first company whereby employees would have the flexibility to work remotely on a permanent basis. As part of the new operating strategy, in the third quarter of 2022, the Company permanently closed several of its office locations which triggered a reassessment of long-lived asset groupings and a test for impairment. The Company determined that the carrying amounts of the impacted ROU assets and the associated leasehold improvements and property and equipment exceeded their respective fair values. The Company engaged a third‑party expert to assist with the valuation analysis and selection of assumptions. In the three and nine months ended September 30, 2022, the Company recorded a $97.7 million impairment expense in the accompanying condensed consolidated statements of operations. |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities During the third quarter of 2022, the compensation and talent management committee of the Company’s board of directors approved a restructuring plan that was designed to reduce operating costs, improve operating margins and shift the Company’s selling capacity to accelerate software sales (the “Restructuring Plan”). The Restructuring Plan eliminated approximately 11% of the Company’s workforce. The Company estimated the aggregate restructuring costs associated with the Restructuring Plan to be approximately $70.0 million to $90.0 million, of which approximately $55.0 million to $70.0 million is expected to be paid in cash. In the three months ended September 30, 2022, the Company recorded restructuring charges of $72.5 million, which consisted of $57.2 million related to employee transition, notice period, severance payments, employee benefits and facilitation costs; and $15.3 million related to vesting of stock-based awards of the impacted employees. The Company expects to incur additional restructuring charges until the execution of this Restructuring Plan is substantially completed by the end of the fourth quarter of 2022. Since potential position eliminations in every country are subject to local law and consultation requirements, in certain countries this process may extend beyond the fourth quarter of 2022. The charges that the Company expects to incur throughout the completion of its Restructuring Plan are subject to a number of assumptions, including local law requirements in various jurisdictions, and the actual remaining expenses may differ materially from the original estimates. The following table summarizes the Company’s restructuring liability that is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet: Workforce Reduction Costs Facilitation Costs Total (In thousands) Balance as of June 30, 2022 $ — $ — $ — Restructuring charges 55,855 1,322 57,177 Cash payments (4,016) — (4,016) Balance as of September 30, 2022 $ 51,839 $ 1,322 $ 53,161 The $15.3 million vesting of the stock-based awards is recorded in the additional-paid-in capital in the accompanying condensed consolidated statement of shareholders equity. |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging As of September 30, 2022, the Company had outstanding foreign currency forward contracts designated as cash flow hedges with a total sell notional value of $370.3 million. The notional value represents the amount that will be sold upon maturity of the forward contract. As of September 30, 2022, these contracts had maturities of up to 9 months. Gains and losses associated with these foreign currency forward contracts were as follows: Condensed Consolidated Statement of Operations and Statement of Comprehensive Loss Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (In thousands) Losses recognized in OCI Net change in market value of effective foreign currency forward exchange contracts $ 19,196 $ 161 $ 34,154 $ 3,069 Losses recognized in income due to instruments maturing Cost of revenue $ 16,357 $ 2,464 $ 25,520 $ 2,931 |
Equity Method Investment
Equity Method Investment | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Equity Method Investment | Equity Method Investment In 2022, the Company acquired 44.55% equity interests in Syniverse Corporation (“Syniverse”) for $750.0 million in cash. The Company determined that it does not have a controlling financial interest in Syniverse but does exercise significant influence and therefore, the investment was accounted for under the equity method. The Company estimated that on the investment closing date there was a preliminary excess investment basis of $530.7 million related to its proportionate share of the identifiable intangible assets and $41.3 million related to the associated deferred tax liability. The equity method goodwill was estimated at $623.8 million. The preliminary estimated fair value of the intangible assets was determined by the Company. The Company engaged a third‑party expert to assist with the valuation analysis. While the Company used its best estimates and assumptions as part of this valuation process to determine the fair values of the investee’s assets and liabilities, these estimates are inherently uncertain and subject to refinement. The authoritative guidance allows a measurement period of up to one year from the date of investment to make adjustments to these preliminary allocations. The following table presents the preliminary estimated basis differences attributable to the identifiable assets and their respective useful lives: Total Estimated (In thousands) (In years) Developed technology $ 62,767 6 Customer relationships 439,152 9 Trademarks 28,822 Indefinite Total basis difference attributable to the identifiable intangible assets $ 530,741 The Company has elected to report its portion of equity method investee’s results of operations and other comprehensive income on a 90-day lag. Accordingly, in the three and nine months ended September 30, 2022, the Company recorded $13.4 million in its accompanying condensed consolidated statements of operations. The adjustment consisted of the Company’s proportionate share of the investee’s net operating results and the amortization of the basis difference for the period from the transaction closing date of May 13, 2022, through June 30, 2022. The Company also recorded $4.2 million of its proportionate share of the investee’s other comprehensive loss in the accompanying condensed consolidated statement of other comprehensive loss for the same period. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The goodwill balance as of September 30, 2022 and December 31, 2021 was as follows: Total (In thousands) Balance as of December 31, 2021 $ 5,263,166 Goodwill additions and adjustments 21,450 Balance as of September 30, 2022 $ 5,284,616 Intangible assets Intangible assets consisted of the following: As of September 30, 2022 Gross Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 795,836 $ (308,175) $ 487,661 Customer relationships 538,607 (185,310) 353,297 Supplier relationships 57,019 (17,225) 39,794 Trade names 30,393 (18,587) 11,806 Order backlog 10,000 (10,000) — Patent 4,028 (654) 3,374 Total amortizable intangible assets 1,435,883 (539,951) 895,932 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 303 — 303 Total $ 1,441,106 $ (539,951) $ 901,155 As of December 31, 2021 Gross Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 794,831 $ (222,765) $ 572,066 Customer relationships 538,264 (128,035) 410,229 Supplier relationships 51,671 (9,491) 42,180 Trade names 30,669 (13,874) 16,795 Order backlog 10,000 (10,000) — Patent 4,035 (508) 3,527 Total amortizable intangible assets 1,429,470 (384,673) 1,044,797 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 1,434,685 $ (384,673) $ 1,050,012 Amortization expense was $51.7 million and $55.7 million for the three months ended September 30, 2022 and 2021, respectively, and $155.4 million and $146.3 million for the nine months ended September 30, 2022 and 2021, respectively. Total estimated future amortization expense is as follows: As of September 30, 2022 Year Ended December 31, (In thousands) 2022 (remaining three months) $ 50,866 2023 202,792 2024 197,357 2025 193,783 2026 120,288 Thereafter 130,846 Total $ 895,932 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) Accrued payroll and related $ 76,415 $ 78,780 Accrued bonus and commission 32,388 64,665 Accrued cost of revenue 176,946 118,004 Sales and other taxes payable 86,019 61,975 ESPP contributions 12,170 10,284 Derivative liability 33,860 220 Finance lease liability 12,141 12,370 Restructuring liability 53,161 — Employee sabbatical benefit accrual 29,222 — Accrued other expense 60,554 71,205 Total accrued expenses and other current liabilities $ 572,876 $ 417,503 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Notes Payable | Long-Term Debt Long-term debt, net, consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) 2029 Senior Notes Principal $ 500,000 $ 500,000 Unamortized discount (5,179) (5,701) Unamortized issuance costs (1,172) (1,286) Net carrying amount 493,649 493,013 2031 Senior Notes Principal 500,000 500,000 Unamortized discount (5,434) (5,832) Unamortized issuance costs (1,230) (1,274) Net carrying amount 493,336 492,894 Total long-term debt, net $ 986,985 $ 985,907 |
Revenue by Geographic Area
Revenue by Geographic Area | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by Geographic Area | Revenue by Geographic Area Revenue by geographic area is based on the IP address or the mailing address at the time of registration. The following table sets forth revenue by geographic area: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue by geographic area: (In thousands) United States $ 650,531 $ 497,993 $ 1,837,325 $ 1,372,436 International 332,499 242,183 964,422 626,659 Total $ 983,030 $ 740,176 $ 2,801,747 $ 1,999,095 Percentage of revenue by geographic area: United States 66 % 67 % 66 % 69 % International 34 % 33 % 34 % 31 % As of September 30, 2022 and December 31, 2021, long-lived assets outside of the United States were $56.0 million and $41.0 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesLease and Other Commitments The Company has entered into various non-cancelable operating lease agreements for its facilities. In the nine months ended September 30, 2022, the Company did not enter into any significant new lease agreements. The Company has non-cancelable contractual commitments with its cloud infrastructure provider, network service providers and other vendors. In the three and nine months ended September 30, 2022, the Company entered into several such agreements with terms up to four years for a total purchase commitment of $127.1 million and $181.5 million, respectively. The City and County of San Francisco (“San Francisco”) has assessed the Company for additional Telephone Users Tax (“TUT”) and Access Line Tax (“ALT”) on certain of the Company’s services for the years 2009 through 2018. The assessments totaled $38.8 million, including interest and penalties. The Company paid the assessments under protest in the third quarter of 2020. On May 27, 2021, the Company filed a lawsuit against San Francisco in San Francisco Superior Court challenging the assessments. The Company raised numerous defenses to the assessments including that its services are not telecommunications services, application of the taxes to the Company’s services violates the Internet Tax Freedom Act and San Francisco does not have jurisdiction to impose tax on services provided outside of San Francisco. The Company is seeking refunds of the taxes paid, waivers of interest and penalties, cost of suit and reasonable attorneys’ fees, and other legal and equitable relief as the court deems appropriate. A trial date has been set for March 6, 2023. The Company believes it has strong arguments against the assessments, but litigation is uncertain and there is no assurance that it will prevail in court. Should the Company lose on one or more of its arguments, it could incur additional losses associated with taxes, interest, and penalties that together, in aggregate, could be material. The Company regularly assesses the likelihood of adverse outcomes resulting from tax disputes such as this and examines all open years to determine the necessity and adequacy of any tax reserves. The Company’s tax reserves are further discussed in Note 13(d) of these condensed consolidated financial statements. In addition to the litigation discussed above, from time to time, the Company may be subject to legal actions and claims in the ordinary course of business. The Company has received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights. Future litigation may be necessary to defend the Company, its partners and its customers by determining the scope, enforceability and validity of third‑party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Legal fees and other costs related to litigation and other legal proceedings are expensed as incurred and are included in general and administrative expenses in the accompanying condensed consolidated statements of operations. The Company has signed indemnification agreements with all of its board members and executive officers. The agreements indemnify the board members and executive officers from claims and expenses on actions brought against the individuals separately or jointly with the Company for certain indemnifiable events. Indemnifiable events generally mean any event or occurrence related to the fact that the board member or the executive officer was or is acting in his or her capacity as a board member or an executive officer for the Company or was or is acting or representing the interests of the Company. In the ordinary course of business and in connection with our financing and business combinations transactions, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to business partners, customers and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company’s various products, or its acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments. The terms of such obligations may vary. As of September 30, 2022 and December 31, 2021, no amounts were accrued related to any outstanding indemnification agreements. The Company conducts operations in many tax jurisdictions within and outside the United States. In many of these jurisdictions, non-income-based taxes, such as sales, use, telecommunications and other local taxes are assessed on the Company’s operations. The Company carries reserves for certain of its non-income-based tax exposures in certain jurisdictions when it is both probable that a liability was incurred and the amount of the exposure could be reasonably estimated. These reserves are based on estimates which include several key assumptions including, but not limited to, the taxability of the Company’s services, the jurisdictions in which its management believes it had nexus and the sourcing of revenues to those jurisdictions. The Company continues to remain in discussions with certain jurisdictions regarding its prior sales and other taxes that it may owe. In the event any of these jurisdictions disagree with management’s assumptions and analysis, the assessment of the Company’s tax exposure could differ materially from management’s current estimates. For example, as described in Note 13(b), the Company is currently involved in legal proceedings with the City and County of San Francisco challenging their assessment of the Company’s estimated tax liability for a specific period. The $38.8 million assessment of taxes, including interest and penalties, that the Company paid as required in 2020, net of the $11.5 million reserve the Company had accrued for the same period, was recorded as a deposit in other assets in the accompanying condensed consolidated balance sheets. As of September 30, 2022, the liabilities recorded for the non-income-based taxes were $27.7 million for domestic jurisdictions and $21.6 million for jurisdictions outside of the United States. As of December 31, 2021, these liabilities were $25.4 million and $17.7 million, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Preferred Stock As of September 30, 2022, and December 31, 2021, the Company had authorized 100,000,000 shares of preferred stock, par value $0.001, of which no shares were issued and outstanding. Common Stock As of September 30, 2022, and December 31, 2021, the Company had authorized 1,000,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each par value of $0.001 per share. As of September 30, 2022, 174,482,722 shares of Class A common stock and 9,817,605 shares of Class B common stock were issued and outstanding. As of December 31, 2021, 170,625,994 shares of Class A common stock and 9,842,105 shares of Class B common stock were issued and outstanding. The Company had reserved shares of common stock for issuance as follows: As of September 30, 2022 As of December 31, 2021 Stock options issued and outstanding 2,488,072 3,351,313 Unvested restricted stock units issued and outstanding 14,970,869 6,475,700 Class A common stock reserved for Twilio.org 552,551 618,857 Stock-based awards available for grant under 2016 Plan 20,483,275 24,650,104 Stock-based awards available for grant under ESPP 7,924,609 6,382,830 Total 46,419,376 41,478,804 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) provides for granting stock options, restricted stock units (“RSU”), restricted stock awards (“RSA”), stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards to its employees, directors and consultants. Certain of the Company’s outstanding equity awards were granted under equity incentive plans that are no longer active but continue to govern the outstanding equity awards granted thereunder. The Company also offers an Employee Stock Purchase Plan (“ESPP”) to eligible employees. The ESPP provides for separate six-month offering periods beginning in May and November of each year. In March 2022, the Company granted 919,289 shares of performance-based restricted stock unit awards to its executive employees with a grant date fair value per share of $157.44 and an aggregate grant date fair value of $144.7 million. Each award consists of three tranches, with each vesting over a separate service period if its respective performance targets, as defined in the grant agreements, are achieved. The first tranche will vest if the revenue growth targets are achieved with respect to fiscal year 2022. The second and third tranches will vest if both (a) revenue growth targets and (b) profitability targets are achieved with respect to each of fiscal years 2023 and 2024. If performance targets are not achieved, the related tranche will be forfeited. Vesting of these performance-based restricted stock unit awards will range up to 100% above the target based on levels of performance and will be recorded in stock-based compensation expense in the fiscal year during which each tranche vests. The Company estimated the fair value of these awards based on the closing price of its Class A common stock on the date of grant. As of September 30, 2022, total unrecognized compensation cost related to all outstanding equity awards excluding the awards impacted by the Restructuring Plan described in Note 6 was as follows: Unrecognized Compensation Cost Weighted-average remaining period (In thousands) (In years) Unvested stock options $ 62,340 2.1 Unvested restricted stock units and awards 2,000,933 3.1 ESPP 1,469 0.1 Class A shares in escrow subject to future vesting 13,298 1.8 Total $ 2,078,040 Stock-Based Compensation Expense The Company recorded total stock-based compensation expense as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (In thousands) Cost of revenue $ 6,114 $ 3,720 $ 14,631 $ 9,461 Research and development 90,787 69,242 279,680 185,072 Sales and marketing 58,747 53,843 184,825 143,419 General and administrative 37,973 37,238 111,850 107,414 Restructuring costs 15,274 — 15,274 — Total $ 208,895 $ 164,043 $ 606,260 $ 445,366 |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per common share is presented in conformity with the two-class method required for participating securities and is described in detail in the Company’s Annual Report. The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net loss attributable to common stockholders (in thousands) $ (482,327) $ (224,109) $ (1,026,723) $ (658,504) Weighted-average shares used to compute net loss per share attributable to 183,692,564 177,231,285 182,319,735 172,605,371 Net loss per share attributable to common stockholders, basic and diluted $ (2.63) $ (1.26) $ (5.63) $ (3.82) The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: As of September 30, 2022 2021 Stock options issued and outstanding 2,488,072 4,510,986 Unvested restricted stock units issued and outstanding 14,970,869 6,467,518 Class A common stock reserved for Twilio.org 552,551 640,959 Class A common stock committed under ESPP 191,558 107,815 Class A common stock in escrow 31,503 75,612 Class A common stock in escrow and restricted stock awards subject to future vesting 56,237 342,784 Total 18,290,790 12,145,674 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company computes its provision for income taxes for interim periods by applying an estimated annual effective tax rate to anticipated annual pretax income or loss. The estimated annual effective tax rate is applied to the Company’s year to date income or loss, and is adjusted for discrete items recorded in the period. The primary difference between the Company’s effective tax rate and the federal statutory rate is the full valuation allowance the Company has established on its federal, state and foreign net operating losses and credits. The Company recorded an income tax provision of $3.6 million and $3.3 million for the three and nine months ended September 30, 2022, respectively, and an income tax benefit of $14.8 million and $12.7 million for the three and nine months ended September 30, 2021. The provision for income taxes recorded in the three and nine months ended September 30, 2022 consists primarily of income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business, partially offset by an income tax benefit from the reversal of U.S. deferred tax liabilities related to the acquired intangibles from business combinations. The benefit for income taxes recorded in the three and nine months ended September 30, 2021 consists primarily of an income tax benefit from the reversal of U.S. valuation allowance related to acquired intangibles from business combinations, partially offset with income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business. The Company is subject to taxation in the U.S. and various other state and foreign jurisdictions. Because the Company has net operating loss carryforwards for U.S. federal and state jurisdictions, the statute of limitations is open for all tax years. A provision enacted as part of the 2017 Tax Cuts & Jobs Act requires companies to capitalize research and experimental expenditures for tax purposes in tax years beginning after December 31, 2021. The Company is currently assessing the impact of the provision, however a material impact to tax expense and cash taxes is not expected due to available net operating losses and tax credits. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2022 (“Annual Report”). The condensed consolidated balance sheet as of December 31, 2021, included herein, was derived from the audited financial statements as of that date, but may not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, stockholders’ equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2022 or any future period. |
Principles of Consolidation | Principles of ConsolidationThe condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue allowances and sales credit reserves; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments, therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. |
Concentration of Credit Risk | Concentration of Credit RiskFinancial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities and accounts receivable. The Company maintains cash, restricted cash, cash equivalents and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure although the balances will exceed insured limits.The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customer deteriorates substantially, operating results could be adversely affected. To reduce credit risk, management performs credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. |
Restructuring Costs | Restructuring Costs The Company records a charge for restructuring when management commits to a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the plan are not likely and employees who are impacted have been notified of the pending involuntary termination. Restructuring charges are accrued in the period in which it is probable that the employees are entitled to the restructuring benefits and the amounts can be reasonably estimated. |
Equity Method Investments | Equity Method Investments Equity investment holdings in which the Company does not have a controlling financial interest but can exercise significant influence over an investee are accounted for under the equity method. Equity method investments are originally recorded at cost and are subsequently increased or reduced to reflect the Company’s proportionate share of net earnings or losses of the investee as they occur. The Company records the investee losses up to the carrying amount of the investment plus any advances and loans made to the investee and any financial guarantees made on behalf of the investee. Investments are also increased by contributions made to and distributions from the investee. All costs directly associated with the acquisition of the investment are included in the carrying amount of the investment. Profits or losses related to intra-entity sales are eliminated until realized by the Company or the investee. The Company determines the difference between its purchase price and its proportionate share of the net assets of the investee, which results in an excess basis in the investment. This excess basis is allocated to the identifiable assets and liabilities of the investee utilizing purchase accounting principles and is used to calculate the amortization of basis differences every reporting period. Basis differences are generally amortized over the lives of the assets and liabilities that gave rise to the basis differences. The Company records its share in earnings and losses of its equity method investee along with adjustments for amortization of basis differences, investee capital transactions and other comprehensive income or loss in its consolidated statements of operations and comprehensive loss on a three-month lag. Equity method goodwill is not amortized or tested for impairment. Instead, the Company evaluates its equity method investments for impairment whenever events or changes in circumstance indicate that the carrying amounts of such investments may be in excess of their fair value. When such indicators exist, the other-than-temporary impairment model is utilized, which considers the severity and duration of a decline in fair value below book value and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in the current period. |
Recently Adopted Accounting Guidance and Recently Issued Accounting Guidance Not yet Adopted | Recently Adopted Accounting Guidance In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, "Revenue from Contracts with Customers." At the acquisition date, an acquirer should account for the related revenue contracts as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree's financial statements, assuming the acquirer is able to assess and rely on how the acquiree applied ASC 606. The Company adopted ASU 2021-08 in the first quarter of 2022 with no material impact to the Company's condensed consolidated financial statements. (j) Recently Issued Accounting Guidance, Not yet Adopted In June 2022, the FASB issued ASU No. 2022-03, "Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions," which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. The Company is evaluating the impact of the adoption of this guidance on its consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets measured at fair value on a recurring basis | The following tables provide the financial assets measured at fair value on a recurring basis: Amortized Gross Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 39,117 $ — $ — $ 39,117 $ — $ — $ 39,117 Reverse repurchase agreements 200,000 — — — 200,000 — 200,000 Commercial paper 5,205 — — — 5,205 — 5,205 Total included in cash and cash equivalents 244,322 — — 39,117 205,205 — 244,322 Marketable securities: U.S. Treasury securities 519,609 — (15,009) 504,600 — — 504,600 Non-U.S. government securities 150,297 — (7,041) 143,256 — — 143,256 Corporate debt securities and commercial paper 3,028,685 13 (100,803) 7,000 2,920,895 — 2,927,895 Total marketable securities 3,698,591 13 (122,853) 654,856 2,920,895 — 3,575,751 Total financial assets $ 3,942,913 $ 13 $ (122,853) $ 693,973 $ 3,126,100 $ — $ 3,820,073 Amortized Gross Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 786,548 $ — $ — $ 786,548 $ — $ — $ 786,548 Commercial paper 46,076 — — — 46,076 — 46,076 Total included in cash and cash equivalents 832,624 — — 786,548 46,076 — 832,624 Marketable securities: U.S. Treasury securities 375,305 6 (2,561) 372,750 — — 372,750 Non-U.S. government securities 221,641 — (1,355) 220,286 — — 220,286 Corporate debt securities and commercial paper 3,300,326 960 (15,892) 31,000 3,254,394 — 3,285,394 Total marketable securities 3,897,272 966 (19,808) 624,036 3,254,394 — 3,878,430 Total financial assets $ 4,729,896 $ 966 $ (19,808) $ 1,410,584 $ 3,300,470 $ — $ 4,711,054 |
Schedule of contractual maturities of marketable securities | The following table summarizes the contractual maturities of marketable securities: As of September 30, 2022 As of December 31, 2021 Amortized Aggregate Amortized Aggregate Financial Assets: (In thousands) Less than one year $ 1,992,157 $ 1,952,475 $ 1,084,751 $ 1,085,006 One to three years 1,706,434 1,623,276 2,812,521 2,793,424 Total $ 3,698,591 $ 3,575,751 $ 3,897,272 $ 3,878,430 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) Capitalized internal-use software developments costs $ 248,158 $ 198,589 Data center equipment (1) 99,755 77,946 Leasehold improvements 89,234 85,297 Office equipment 67,808 58,636 Furniture and fixtures 15,030 15,360 Software 10,925 10,506 Total property and equipment 530,910 446,334 Less: accumulated depreciation and amortization (1) (267,048) (191,018) Total property and equipment, net $ 263,862 $ 255,316 ____________________________________ ( 1 ) Data center equipment contains $72.4 million and $63.0 million in assets held under finance leases as of September 30, 2022, and December 31, 2021, respectively. Accumulated depreciation and amortization contains $37.4 million and $26.8 million of accumulated depreciation for assets held under finance leases as of September 30, 2022, and December 31, 2021, respectively. |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Activities | The following table summarizes the Company’s restructuring liability that is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet: Workforce Reduction Costs Facilitation Costs Total (In thousands) Balance as of June 30, 2022 $ — $ — $ — Restructuring charges 55,855 1,322 57,177 Cash payments (4,016) — (4,016) Balance as of September 30, 2022 $ 51,839 $ 1,322 $ 53,161 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) | Gains and losses associated with these foreign currency forward contracts were as follows: Condensed Consolidated Statement of Operations and Statement of Comprehensive Loss Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (In thousands) Losses recognized in OCI Net change in market value of effective foreign currency forward exchange contracts $ 19,196 $ 161 $ 34,154 $ 3,069 Losses recognized in income due to instruments maturing Cost of revenue $ 16,357 $ 2,464 $ 25,520 $ 2,931 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Preliminary Basis Difference Attributable to Identifiable Assets and Useful Lives | The following table presents the preliminary estimated basis differences attributable to the identifiable assets and their respective useful lives: Total Estimated (In thousands) (In years) Developed technology $ 62,767 6 Customer relationships 439,152 9 Trademarks 28,822 Indefinite Total basis difference attributable to the identifiable intangible assets $ 530,741 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill balance | The goodwill balance as of September 30, 2022 and December 31, 2021 was as follows: Total (In thousands) Balance as of December 31, 2021 $ 5,263,166 Goodwill additions and adjustments 21,450 Balance as of September 30, 2022 $ 5,284,616 |
Schedule of intangible assets | Intangible assets consisted of the following: As of September 30, 2022 Gross Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 795,836 $ (308,175) $ 487,661 Customer relationships 538,607 (185,310) 353,297 Supplier relationships 57,019 (17,225) 39,794 Trade names 30,393 (18,587) 11,806 Order backlog 10,000 (10,000) — Patent 4,028 (654) 3,374 Total amortizable intangible assets 1,435,883 (539,951) 895,932 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 303 — 303 Total $ 1,441,106 $ (539,951) $ 901,155 As of December 31, 2021 Gross Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 794,831 $ (222,765) $ 572,066 Customer relationships 538,264 (128,035) 410,229 Supplier relationships 51,671 (9,491) 42,180 Trade names 30,669 (13,874) 16,795 Order backlog 10,000 (10,000) — Patent 4,035 (508) 3,527 Total amortizable intangible assets 1,429,470 (384,673) 1,044,797 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 1,434,685 $ (384,673) $ 1,050,012 |
Schedule of total estimated future amortization expense | Total estimated future amortization expense is as follows: As of September 30, 2022 Year Ended December 31, (In thousands) 2022 (remaining three months) $ 50,866 2023 202,792 2024 197,357 2025 193,783 2026 120,288 Thereafter 130,846 Total $ 895,932 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) Accrued payroll and related $ 76,415 $ 78,780 Accrued bonus and commission 32,388 64,665 Accrued cost of revenue 176,946 118,004 Sales and other taxes payable 86,019 61,975 ESPP contributions 12,170 10,284 Derivative liability 33,860 220 Finance lease liability 12,141 12,370 Restructuring liability 53,161 — Employee sabbatical benefit accrual 29,222 — Accrued other expense 60,554 71,205 Total accrued expenses and other current liabilities $ 572,876 $ 417,503 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-term debt | Long-term debt, net, consisted of the following: As of September 30, 2022 As of December 31, 2021 (In thousands) 2029 Senior Notes Principal $ 500,000 $ 500,000 Unamortized discount (5,179) (5,701) Unamortized issuance costs (1,172) (1,286) Net carrying amount 493,649 493,013 2031 Senior Notes Principal 500,000 500,000 Unamortized discount (5,434) (5,832) Unamortized issuance costs (1,230) (1,274) Net carrying amount 493,336 492,894 Total long-term debt, net $ 986,985 $ 985,907 |
Revenue by Geographic Area (Tab
Revenue by Geographic Area (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by geographic area | Revenue by geographic area is based on the IP address or the mailing address at the time of registration. The following table sets forth revenue by geographic area: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Revenue by geographic area: (In thousands) United States $ 650,531 $ 497,993 $ 1,837,325 $ 1,372,436 International 332,499 242,183 964,422 626,659 Total $ 983,030 $ 740,176 $ 2,801,747 $ 1,999,095 Percentage of revenue by geographic area: United States 66 % 67 % 66 % 69 % International 34 % 33 % 34 % 31 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of reserved shares of common stock for issuance | The Company had reserved shares of common stock for issuance as follows: As of September 30, 2022 As of December 31, 2021 Stock options issued and outstanding 2,488,072 3,351,313 Unvested restricted stock units issued and outstanding 14,970,869 6,475,700 Class A common stock reserved for Twilio.org 552,551 618,857 Stock-based awards available for grant under 2016 Plan 20,483,275 24,650,104 Stock-based awards available for grant under ESPP 7,924,609 6,382,830 Total 46,419,376 41,478,804 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of unrecognized compensation cost of outstanding equity awards | As of September 30, 2022, total unrecognized compensation cost related to all outstanding equity awards excluding the awards impacted by the Restructuring Plan described in Note 6 was as follows: Unrecognized Compensation Cost Weighted-average remaining period (In thousands) (In years) Unvested stock options $ 62,340 2.1 Unvested restricted stock units and awards 2,000,933 3.1 ESPP 1,469 0.1 Class A shares in escrow subject to future vesting 13,298 1.8 Total $ 2,078,040 |
Schedule of stock based compensation expense | The Company recorded total stock-based compensation expense as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (In thousands) Cost of revenue $ 6,114 $ 3,720 $ 14,631 $ 9,461 Research and development 90,787 69,242 279,680 185,072 Sales and marketing 58,747 53,843 184,825 143,419 General and administrative 37,973 37,238 111,850 107,414 Restructuring costs 15,274 — 15,274 — Total $ 208,895 $ 164,043 $ 606,260 $ 445,366 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the calculation of basic and diluted net loss per share attributable to common stockholders | The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net loss attributable to common stockholders (in thousands) $ (482,327) $ (224,109) $ (1,026,723) $ (658,504) Weighted-average shares used to compute net loss per share attributable to 183,692,564 177,231,285 182,319,735 172,605,371 Net loss per share attributable to common stockholders, basic and diluted $ (2.63) $ (1.26) $ (5.63) $ (3.82) |
Schedule of common stock equivalents excluded from the computation of the diluted net loss per share attributable to common stockholders | The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: As of September 30, 2022 2021 Stock options issued and outstanding 2,488,072 4,510,986 Unvested restricted stock units issued and outstanding 14,970,869 6,467,518 Class A common stock reserved for Twilio.org 552,551 640,959 Class A common stock committed under ESPP 191,558 107,815 Class A common stock in escrow 31,503 75,612 Class A common stock in escrow and restricted stock awards subject to future vesting 56,237 342,784 Total 18,290,790 12,145,674 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 122.1 | $ 122.1 | |||
Deferred revenue | 135.6 | 135.6 | $ 141.5 | ||
Revenue recognized out of adjusted deferred revenue balance | 17.5 | $ 13.9 | 112.2 | $ 58.2 | |
Total net capitalized costs | $ 223.9 | $ 223.9 | $ 193.4 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | Revenue Recognition Period One | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Revenue, remaining performance obligation, percentage | 71% | 71% | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | Revenue Recognition Period Two | |||||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||||
Revenue, remaining performance obligation, percentage | 95% | 95% | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months | 24 months |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | $ 244,322 | $ 832,624 |
Amortized Cost or Carrying Value | 3,698,591 | 3,897,272 |
Gross Unrealized Gains | 13 | 966 |
Gross Unrealized Losses | (122,853) | (19,808) |
Marketable securities, aggregate fair value | 3,575,751 | 3,878,430 |
Total financial assets | 3,942,913 | 4,729,896 |
Total financial assets | 3,820,073 | 4,711,054 |
Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 39,117 | 786,548 |
Marketable securities, aggregate fair value | 654,856 | 624,036 |
Total financial assets | 693,973 | 1,410,584 |
Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 205,205 | 46,076 |
Marketable securities, aggregate fair value | 2,920,895 | 3,254,394 |
Total financial assets | 3,126,100 | 3,300,470 |
Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | 0 |
Marketable securities, aggregate fair value | 0 | 0 |
Total financial assets | 0 | 0 |
U.S. Treasury securities | ||
Fair Value Measurements, Financial Assets | ||
Amortized Cost or Carrying Value | 519,609 | 375,305 |
Gross Unrealized Gains | 0 | 6 |
Gross Unrealized Losses | (15,009) | (2,561) |
Marketable securities, aggregate fair value | 504,600 | 372,750 |
U.S. Treasury securities | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 504,600 | 372,750 |
U.S. Treasury securities | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 0 | 0 |
U.S. Treasury securities | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 0 | 0 |
Non-U.S. government securities | ||
Fair Value Measurements, Financial Assets | ||
Amortized Cost or Carrying Value | 150,297 | 221,641 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (7,041) | (1,355) |
Marketable securities, aggregate fair value | 143,256 | 220,286 |
Non-U.S. government securities | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 143,256 | 220,286 |
Non-U.S. government securities | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 0 | 0 |
Non-U.S. government securities | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 0 | 0 |
Corporate debt securities and commercial paper | ||
Fair Value Measurements, Financial Assets | ||
Amortized Cost or Carrying Value | 3,028,685 | 3,300,326 |
Gross Unrealized Gains | 13 | 960 |
Gross Unrealized Losses | (100,803) | (15,892) |
Marketable securities, aggregate fair value | 2,927,895 | 3,285,394 |
Corporate debt securities and commercial paper | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 7,000 | 31,000 |
Corporate debt securities and commercial paper | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 2,920,895 | 3,254,394 |
Corporate debt securities and commercial paper | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 0 | 0 |
Money market funds | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 39,117 | 786,548 |
Money market funds | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 39,117 | 786,548 |
Money market funds | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | 0 |
Reverse repurchase agreements | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 200,000 | |
Reverse repurchase agreements | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | |
Reverse repurchase agreements | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 200,000 | |
Reverse repurchase agreements | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | |
Commercial paper | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 5,205 | 46,076 |
Commercial paper | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 5,205 | 46,076 |
Commercial paper | Level 3 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest earned on marketable securities | $ 16,300,000 | $ 16,200,000 | $ 47,500,000 | $ 39,500,000 | |
Investment in equity securities, carrying value | 74,300,000 | 74,300,000 | $ 68,300,000 | ||
Impairments or other adjustments | 0 | $ 0 | 0 | $ 0 | |
Liabilities fair value | 33,900,000 | 33,900,000 | |||
2029 Senior Notes | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of the notes | 407,100,000 | 407,100,000 | 510,200,000 | ||
2031 Senior Notes | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of the notes | $ 394,400,000 | $ 394,400,000 | $ 512,800,000 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Less than one year, amortized cost | $ 1,992,157 | $ 1,084,751 |
One to three years, amortized cost | 1,706,434 | 2,812,521 |
Amortized Cost or Carrying Value | 3,698,591 | 3,897,272 |
Less than one year, aggregate fair value | 1,952,475 | 1,085,006 |
One to three years, aggregate fair value | 1,623,276 | 2,793,424 |
Total aggregate fair value | $ 3,575,751 | $ 3,878,430 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property and Equipment | ||
Total property and equipment | $ 530,910 | $ 446,334 |
Less: accumulated depreciation and amortization | (267,048) | (191,018) |
Total property and equipment, net | 263,862 | 255,316 |
Capitalized internal-use software developments costs | ||
Property and Equipment | ||
Total property and equipment | 248,158 | 198,589 |
Data center equipment | ||
Property and Equipment | ||
Total property and equipment | 99,755 | 77,946 |
Finance lease asset | 72,400 | 63,000 |
Finance lease asset, accumulated amortization | 37,400 | 26,800 |
Leasehold improvements | ||
Property and Equipment | ||
Total property and equipment | 89,234 | 85,297 |
Office equipment | ||
Property and Equipment | ||
Total property and equipment | 67,808 | 58,636 |
Furniture and fixtures | ||
Property and Equipment | ||
Total property and equipment | 15,030 | 15,360 |
Software | ||
Property and Equipment | ||
Total property and equipment | $ 10,925 | $ 10,506 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 18.4 | $ 14.5 | $ 52.5 | $ 43.2 |
Capitalized internal use software development costs | $ 19.3 | $ 18 | $ 51.2 | $ 49.5 |
Impairment (Details)
Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of long-lived assets | $ 97,722 | $ 0 | $ 97,722 | $ 0 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employees elimination percentage | 11% | 11% | ||
Restructuring charges | $ 72,451 | $ 0 | $ 72,451 | $ 0 |
Stock-based compensation - restructuring | 15,274 | |||
Employee Severance and Facilitation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 57,177 | |||
Stock-Based Awards | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 15,300 | |||
Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated restructuring costs | 70,000 | 70,000 | ||
Restructuring costs expected to be paid in cash | 55,000 | |||
Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated restructuring costs | 90,000 | $ 90,000 | ||
Restructuring costs expected to be paid in cash | $ 70,000 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Restructuring Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | $ 72,451 | $ 0 | $ 72,451 | $ 0 |
Employee Severance and Facilitation Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance of period | 0 | |||
Restructuring charges | 57,177 | |||
Cash payments | (4,016) | |||
Ending balance of period | 53,161 | 53,161 | ||
Workforce Reduction Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance of period | 0 | |||
Restructuring charges | 55,855 | |||
Cash payments | (4,016) | |||
Ending balance of period | 51,839 | 51,839 | ||
Facilitation Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance of period | 0 | |||
Restructuring charges | 1,322 | |||
Cash payments | 0 | |||
Ending balance of period | $ 1,322 | $ 1,322 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) - Foreign Currency Forward - Designated as Cash Flow Hedges - Cash Flow Hedge $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Maximum | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Derivative, term of contract | 9 months |
Buy | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Derivative, notional amount | $ 370.3 |
Derivatives and Hedging - Gains
Derivatives and Hedging - Gains (Losses) Associated With Foreign Currency Forward Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cost of revenue | ||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||||
Losses recognized in income due to instruments maturing | $ 16,357 | $ 2,464 | $ 25,520 | $ 2,931 |
Foreign Currency Forward | ||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||||
Losses recognized in OCI | $ 19,196 | $ 161 | $ 34,154 | $ 3,069 |
Equity Method Investment - Narr
Equity Method Investment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Marketable Securities [Line Items] | ||||||
Intangible assets | $ 901,155 | $ 901,155 | $ 901,155 | $ 1,050,012 | ||
Share of losses from equity method investment | 13,376 | $ 0 | 13,376 | $ 0 | ||
Share of other comprehensive loss from equity method investment | $ (4,243) | $ 0 | $ (4,243) | $ 0 | ||
Syniverse | ||||||
Marketable Securities [Line Items] | ||||||
Acquisition of voting stock (in percent) | 44.55% | 44.55% | 44.55% | |||
Payments to acquire equity method investments | $ 750,000 | |||||
Intangible assets | $ 530,741 | $ 530,741 | 530,741 | |||
Deferred tax liabilities | 41,300 | 41,300 | 41,300 | |||
Estimated goodwill | 623,800 | 623,800 | 623,800 | |||
Share of losses from equity method investment | 13,400 | 13,400 | ||||
Share of other comprehensive loss from equity method investment | 4,200 | $ 4,200 | ||||
Impact of transaction | $ 32,100 | $ 54,100 |
Equity Method Investment - Basi
Equity Method Investment - Basis Differences (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Marketable Securities [Line Items] | ||
Intangible assets | $ 901,155 | $ 1,050,012 |
Syniverse | ||
Marketable Securities [Line Items] | ||
Intangible assets | 530,741 | |
Syniverse | Trademarks | ||
Marketable Securities [Line Items] | ||
Intangible assets | 28,822 | |
Syniverse | Developed technology | ||
Marketable Securities [Line Items] | ||
Intangible assets | $ 62,767 | |
Estimated life | 6 years | |
Syniverse | Customer relationships | ||
Marketable Securities [Line Items] | ||
Intangible assets | $ 439,152 | |
Estimated life | 9 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill | |
Beginning balance of period | $ 5,263,166 |
Goodwill additions and adjustments | 21,450 |
Ending balance of period | $ 5,284,616 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortizable intangible assets: | ||
Gross | $ 1,435,883 | $ 1,429,470 |
Accumulated Amortization | (539,951) | (384,673) |
Net | 895,932 | 1,044,797 |
Intangible assets, gross | 1,441,106 | 1,434,685 |
Total | 901,155 | 1,050,012 |
Telecommunication licenses | ||
Amortizable intangible assets: | ||
Non-amortizable intangible assets: | 4,920 | 4,920 |
Trademarks and other | ||
Amortizable intangible assets: | ||
Non-amortizable intangible assets: | 303 | 295 |
Developed technology | ||
Amortizable intangible assets: | ||
Gross | 795,836 | 794,831 |
Accumulated Amortization | (308,175) | (222,765) |
Net | 487,661 | 572,066 |
Customer relationships | ||
Amortizable intangible assets: | ||
Gross | 538,607 | 538,264 |
Accumulated Amortization | (185,310) | (128,035) |
Net | 353,297 | 410,229 |
Supplier relationships | ||
Amortizable intangible assets: | ||
Gross | 57,019 | 51,671 |
Accumulated Amortization | (17,225) | (9,491) |
Net | 39,794 | 42,180 |
Trade names | ||
Amortizable intangible assets: | ||
Gross | 30,393 | 30,669 |
Accumulated Amortization | (18,587) | (13,874) |
Net | 11,806 | 16,795 |
Order backlog | ||
Amortizable intangible assets: | ||
Gross | 10,000 | 10,000 |
Accumulated Amortization | (10,000) | (10,000) |
Net | 0 | 0 |
Patent | ||
Amortizable intangible assets: | ||
Gross | 4,028 | 4,035 |
Accumulated Amortization | (654) | (508) |
Net | $ 3,374 | $ 3,527 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 51.7 | $ 55.7 | $ 155.4 | $ 146.3 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Total Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
2022 (remaining three months) | $ 50,866 | |
2023 | 202,792 | |
2024 | 197,357 | |
2025 | 193,783 | |
2026 | 120,288 | |
Thereafter | 130,846 | |
Net | $ 895,932 | $ 1,044,797 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued payroll and related | $ 76,415 | $ 78,780 |
Accrued bonus and commission | 32,388 | 64,665 |
Accrued cost of revenue | 176,946 | 118,004 |
Sales and other taxes payable | 86,019 | 61,975 |
ESPP contributions | 12,170 | 10,284 |
Derivative liability | 33,860 | 220 |
Finance lease liability | 12,141 | 12,370 |
Restructuring liability | 53,161 | 0 |
Employee sabbatical benefit accrual | 29,222 | 0 |
Accrued other expense | 60,554 | 71,205 |
Total accrued expenses and other current liabilities | $ 572,876 | $ 417,503 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total accrued expenses and other current liabilities | Total accrued expenses and other current liabilities |
Notes Payable - Summary of Long
Notes Payable - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total long-term debt, net | $ 986,985 | $ 985,907 |
2029 Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal | 500,000 | 500,000 |
Unamortized discount | (5,179) | (5,701) |
Unamortized issuance costs | (1,172) | (1,286) |
Total long-term debt, net | 493,649 | 493,013 |
2031 Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal | 500,000 | 500,000 |
Unamortized discount | (5,434) | (5,832) |
Unamortized issuance costs | (1,230) | (1,274) |
Total long-term debt, net | $ 493,336 | $ 492,894 |
Revenue by Geographic Area - Pe
Revenue by Geographic Area - Percentage of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue by geographic area: | ||||
Revenue | $ 983,030 | $ 740,176 | $ 2,801,747 | $ 1,999,095 |
United States | ||||
Revenue by geographic area: | ||||
Revenue | $ 650,531 | $ 497,993 | $ 1,837,325 | $ 1,372,436 |
United States | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||||
Percentage of revenue by geographic area: | ||||
Percentage of revenue | 66% | 67% | 66% | 69% |
International | ||||
Revenue by geographic area: | ||||
Revenue | $ 332,499 | $ 242,183 | $ 964,422 | $ 626,659 |
International | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||||
Percentage of revenue by geographic area: | ||||
Percentage of revenue | 34% | 33% | 34% | 31% |
Revenue by Geographic Area - Na
Revenue by Geographic Area - Narrative (Details) $ in Millions | Sep. 30, 2022 USD ($) |
International | |
Disaggregation of Revenue [Line Items] | |
Long-lived assets | $ 56 |
Commitments and Contingencies -
Commitments and Contingencies - Lease and Other Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Term of non-cancellable agreement | 4 years | 4 years |
Purchase commitment | $ 127.1 | $ 181.5 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Matters (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 30, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Taxes payable, jurisdictional estimate | $ 38.8 | $ 38.8 |
Commitments and Contingencies_3
Commitments and Contingencies - Indemnification Agreements (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Indemnification Agreement | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 0 | $ 0 |
Commitments and Contingencies_4
Commitments and Contingencies - Other Taxes (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Loss Contingencies [Line Items] | ||||
Taxes payable, jurisdictional estimate | $ 38.8 | $ 38.8 | ||
Accrued taxes | $ 11.5 | |||
Domestic Tax Authority | ||||
Loss Contingencies [Line Items] | ||||
Taxes payable | $ 27.7 | $ 25.4 | ||
Foreign Tax Authority | ||||
Loss Contingencies [Line Items] | ||||
Taxes payable | $ 21.6 | $ 17.7 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred Stock | ||
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Common Stock Class A | ||
Common Stock | ||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 174,482,722 | 170,625,994 |
Common stock, outstanding (in shares) | 174,482,722 | 170,625,994 |
Common Stock Class B | ||
Common Stock | ||
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 9,817,605 | 9,842,105 |
Common stock, outstanding (in shares) | 9,817,605 | 9,842,105 |
Stockholders' Equity - Common_2
Stockholders' Equity - Common Stock Shares Reserved (Details) - shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Total (in shares) | 46,419,376 | 41,478,804 |
2016 Stock Option and Incentive Plan | ||
Stockholders' Equity | ||
Stock-based awards available for grant under 2016 Plan and ESPP (in shares) | 20,483,275 | 24,650,104 |
Common Stock Class A | ||
Stockholders' Equity | ||
Class A common stock reserved for Twilio.org (in shares) | 552,551 | 618,857 |
Stock options issued and outstanding | ||
Stockholders' Equity | ||
Stock options issued and outstanding (in shares) | 2,488,072 | 3,351,313 |
Unvested restricted stock units issued and outstanding | ||
Stockholders' Equity | ||
Unvested restricted stock units issued and outstanding (in shares) | 14,970,869 | 6,475,700 |
Stock-based awards available for grant under ESPP | ||
Stockholders' Equity | ||
Stock-based awards available for grant under 2016 Plan and ESPP (in shares) | 7,924,609 | 6,382,830 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Mar. 31, 2022 USD ($) tranche $ / shares shares | Sep. 30, 2022 | |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock plan offering period | 6 months | |
Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | shares | 919,289 | |
Granted (in dollars per share) | $ / shares | $ 157.44 | |
Outstanding performance based options, aggregate intrinsic value | $ | $ 144.7 | |
Number of tranches | tranche | 3 | |
Performance-Based Restricted Stock Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage of target | 100% |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Cost (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total | $ 2,078,040 |
Unvested stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested stock options | $ 62,340 |
Weighted-average remaining period | 2 years 1 month 6 days |
Unvested restricted stock units and awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, other than options | $ 2,000,933 |
Weighted-average remaining period | 3 years 1 month 6 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, other than options | $ 1,469 |
Weighted-average remaining period | 1 month 6 days |
Class A shares in escrow subject to future vesting | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, other than options | $ 13,298 |
Weighted-average remaining period | 1 year 9 months 18 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 208,895 | $ 164,043 | $ 606,260 | $ 445,366 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 6,114 | 3,720 | 14,631 | 9,461 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 90,787 | 69,242 | 279,680 | 185,072 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 58,747 | 53,843 | 184,825 | 143,419 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 37,973 | 37,238 | 111,850 | 107,414 |
Restructuring costs | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 15,274 | $ 0 | $ 15,274 | $ 0 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Loss Per Share Attributable to Common Stockholders | ||||
Net loss attributable to common stockholders, basic | $ (482,327) | $ (224,109) | $ (1,026,723) | $ (658,504) |
Net loss attributable to common stockholders, diluted | $ (482,327) | $ (224,109) | $ (1,026,723) | $ (658,504) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 183,692,564 | 177,231,285 | 182,319,735 | 172,605,371 |
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted (in shares) | 183,692,564 | 177,231,285 | 182,319,735 | 172,605,371 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (2.63) | $ (1.26) | $ (5.63) | $ (3.82) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (2.63) | $ (1.26) | $ (5.63) | $ (3.82) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Anti-Dilutive Securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 18,290,790 | 12,145,674 |
Stock options issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,488,072 | 4,510,986 |
Unvested restricted stock units issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 14,970,869 | 6,467,518 |
Class A common stock reserved for Twilio.org | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 552,551 | 640,959 |
Class A common stock committed under ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 191,558 | 107,815 |
Class A common stock in escrow | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 31,503 | 75,612 |
Class A common stock in escrow and restricted stock awards subject to future vesting | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 56,237 | 342,784 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 3,580 | $ (14,849) | $ 3,316 | $ (12,673) |