Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 13.1 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 202 | ||
Entity Central Index Key | 0001447669 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Common Stock Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 177,657,156 | ||
Common Stock Class B | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (in shares) | 9,617,605 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 185 |
Auditor Name | KPMG LLP |
Auditor Location | Santa Clara, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 651,752 | $ 1,479,452 |
Short-term marketable securities | 3,503,317 | 3,878,430 |
Accounts receivable, net | 547,507 | 388,215 |
Prepaid expenses and other current assets | 281,510 | 186,131 |
Total current assets | 4,984,086 | 5,932,228 |
Property and equipment, net | 263,979 | 255,316 |
Operating right-of-use assets | 121,341 | 234,584 |
Equity method investment | 699,911 | 0 |
Intangible assets, net | 849,935 | 1,050,012 |
Goodwill | 5,284,153 | 5,263,166 |
Other long-term assets | 360,899 | 263,292 |
Total assets | 12,564,304 | 12,998,598 |
Current liabilities: | ||
Accounts payable | 124,605 | 93,333 |
Accrued expenses and other current liabilities | 490,221 | 417,503 |
Deferred revenue and customer deposits | 139,110 | 140,389 |
Operating lease liability, current | 54,222 | 52,325 |
Total current liabilities | 808,158 | 703,550 |
Operating lease liability, noncurrent | 164,551 | 211,253 |
Finance lease liability, noncurrent | 21,290 | 25,132 |
Long-term debt, net | 987,382 | 985,907 |
Other long-term liabilities | 23,881 | 41,290 |
Total liabilities | 2,005,262 | 1,967,132 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, none issued | 0 | 0 |
Class A and Class B common stock | 186 | 180 |
Additional paid-in capital | 14,055,853 | 13,169,118 |
Accumulated other comprehensive loss | (121,161) | (18,141) |
Accumulated deficit | (3,375,836) | (2,119,691) |
Total stockholders’ equity | 10,559,042 | 11,031,466 |
Total liabilities and stockholders’ equity | $ 12,564,304 | $ 12,998,598 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 1,100,000,000 | 1,100,000,000 |
Common stock, issued (in shares) | 185,975,709 | 180,468,099 |
Common stock, outstanding (in shares) | 185,975,709 | 180,468,099 |
Common Stock Class A | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 176,358,104 | 170,625,994 |
Common stock, outstanding (in shares) | 176,358,104 | 170,625,994 |
Common Stock Class B | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 9,617,605 | 9,842,105 |
Common stock, outstanding (in shares) | 9,617,605 | 9,842,105 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 3,826,321 | $ 2,841,839 | $ 1,761,776 |
Cost of revenue | 2,012,744 | 1,451,126 | 846,115 |
Gross profit | 1,813,577 | 1,390,713 | 915,661 |
Operating expenses: | |||
Research and development | 1,079,081 | 789,219 | 530,548 |
Sales and marketing | 1,248,032 | 1,044,618 | 567,407 |
General and administrative | 517,414 | 472,460 | 310,607 |
Restructuring costs | 76,636 | 0 | 0 |
Impairment of long-lived assets | 97,722 | 0 | 0 |
Total operating expenses | 3,018,885 | 2,306,297 | 1,408,562 |
Loss from operations | (1,205,308) | (915,584) | (492,901) |
Other expenses, net: | |||
Share of losses from equity method investment | (35,315) | 0 | 0 |
Other expenses, net | (3,009) | (45,345) | (11,525) |
Total other expenses, net | (38,324) | (45,345) | (11,525) |
Loss before (provision for) benefit from income taxes | (1,243,632) | (960,929) | (504,426) |
(Provision for) benefit from income taxes | (12,513) | 11,029 | 13,447 |
Net loss attributable to common stockholders | $ (1,256,145) | $ (949,900) | $ (490,979) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (6.86) | $ (5.45) | $ (3.35) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (6.86) | $ (5.45) | $ (3.35) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 182,994,038 | 174,180,465 | 146,708,663 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 182,994,038 | 174,180,465 | 146,708,663 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (1,256,145) | $ (949,900) | $ (490,979) |
Other comprehensive (loss) income: | |||
Unrealized (loss) gain on marketable securities | (83,049) | (27,215) | 3,674 |
Foreign currency translation | (5,587) | (266) | 286 |
Net change in market value of effective foreign currency forward exchange contracts | 556 | 294 | 0 |
Share of other comprehensive loss from equity method investment | (14,940) | 0 | 0 |
Total other comprehensive (loss) income | (103,020) | (27,187) | 3,960 |
Comprehensive loss attributable to common stockholders | $ (1,359,165) | $ (977,087) | $ (487,019) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - 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 |
Beginning balance (in shares) at Dec. 31, 2019 | 126,882,172 | 11,530,627 | ||||||
Balance at Dec. 31, 2019 | $ 4,279,411 | $ 124 | $ 14 | $ 4,952,999 | $ 5,086 | $ (678,812) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (490,979) | (490,979) | ||||||
Exercises of vested stock options (in shares) | 2,263,629 | 1,232,099 | ||||||
Exercises of vested stock options | 72,517 | $ 2 | $ 1 | 72,514 | ||||
Vesting of restricted stock units (in shares) | 3,525,401 | 29,007 | ||||||
Vesting of restricted stock units | 4 | $ 4 | ||||||
Value of equity awards withheld for tax liability (in shares) | (34,893) | (4,692) | ||||||
Value of equity awards withheld for tax liability | (8,778) | $ 0 | (8,778) | |||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 2,235,739 | (2,235,739) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock | 0 | $ 2 | $ (2) | |||||
Equity component from partial settlement and redemption of convertible senior notes due 2023 (in shares) | 2,902,434 | |||||||
Equity component from partial settlement and redemption of convertible senior notes due 2023 | 190,760 | $ 3 | 190,757 | |||||
Shares issued under ESPP (in shares) | 291,800 | |||||||
Shares issued under ESPP | 32,243 | $ 1 | 32,242 | |||||
Shares of Class A common stock issued and donated to charity (in shares) | 88,408 | |||||||
Shares of Class A common stock issued and donated to charity | 18,993 | $ 0 | 18,993 | |||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts and issuance costs (in shares) | 5,819,838 | |||||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts and issuance costs | 1,408,169 | $ 6 | 1,408,163 | |||||
Shares of Class A common stock issued in acquisition (in shares) | 9,263,140 | |||||||
Shares of Class A common stock issued in acquisition | 2,532,356 | $ 9 | 2,532,347 | |||||
Value of equity awards assumed in acquisition | 38,972 | 38,972 | ||||||
Shares issued in acquisition subject to future vesting (in shares) | 258,554 | |||||||
Unrealized (loss) gain on marketable securities | 3,674 | 3,674 | ||||||
Foreign currency translation | 286 | 286 | ||||||
Net change in market value of effective foreign currency forward exchange contracts | 0 | |||||||
Share of other comprehensive loss from equity method investment | 0 | |||||||
Stock-based compensation | 375,037 | 375,037 | ||||||
Ending 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 | (949,900) | (949,900) | ||||||
Exercises of vested stock options (in shares) | 1,779,320 | 509,499 | ||||||
Exercises of vested stock options | 87,695 | $ 2 | 87,693 | |||||
Vesting of restricted stock units (in shares) | 3,515,913 | |||||||
Vesting of restricted stock units | 0 | $ 4 | (4) | |||||
Value of equity awards withheld for tax liability (in shares) | 32,002 | |||||||
Value of equity awards withheld for tax liability | (10,388) | (10,388) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 1,218,696 | (1,218,696) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock | 0 | $ 1 | $ (1) | |||||
Equity component from partial settlement and redemption of convertible senior notes due 2023 (in shares) | 4,846,965 | |||||||
Equity component from partial settlement and redemption of convertible senior notes due 2023 | 335,642 | $ 5 | 335,637 | |||||
Settlement of capped call, net of related costs | 225,233 | 225,233 | ||||||
Shares issued under ESPP (in shares) | 198,926 | |||||||
Shares issued under ESPP | 48,465 | 48,465 | ||||||
Shares of Class A common stock issued and donated to charity (in shares) | 88,408 | |||||||
Shares of Class A common stock issued and donated to charity | 31,169 | 31,169 | ||||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts and issuance costs (in shares) | 4,312,500 | |||||||
Issuance of common stock in connection with a follow-on public offering, net of underwriter discounts and issuance costs | 1,765,713 | $ 4 | 1,765,709 | |||||
Shares of Class A common stock issued in acquisition (in shares) | 1,116,816 | |||||||
Shares of Class A common stock issued in acquisition | 419,170 | $ 1 | 419,169 | |||||
Value of equity awards assumed in acquisition | 1,511 | 1,511 | ||||||
Shares issued in acquisition subject to future vesting (in shares) | 84,230 | |||||||
Unrealized (loss) gain on marketable securities | (27,215) | (27,215) | ||||||
Foreign currency translation | (266) | (266) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | 294 | 294 | ||||||
Share of other comprehensive loss from equity method investment | 0 | |||||||
Stock-based compensation | $ 651,678 | 651,678 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 180,468,099 | 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 | (1,256,145) | (1,256,145) | ||||||
Exercises of vested stock options (in shares) | 373,793 | 392,231 | ||||||
Exercises of vested stock options | 22,500 | 22,500 | ||||||
Vesting of restricted stock units (in shares) | 4,277,266 | |||||||
Vesting of restricted stock units | 0 | $ 4 | (4) | |||||
Value of equity awards withheld for tax liability (in shares) | (6,250) | |||||||
Value of equity awards withheld for tax liability | (1,098) | (1,098) | ||||||
Conversion of shares of Class B common stock into shares of Class A common stock (in shares) | 616,731 | (616,731) | ||||||
Shares issued under ESPP (in shares) | 534,401 | |||||||
Shares issued under ESPP | 37,065 | $ 2 | 37,063 | |||||
Shares of Class A common stock issued and donated to charity (in shares) | 88,408 | |||||||
Shares of Class A common stock issued and donated to charity | 9,541 | 9,541 | ||||||
Shares returned from escrow (in shares) | (152,239) | |||||||
Shares returned from escrow | (387) | (387) | ||||||
Unrealized (loss) gain on marketable securities | (83,049) | (83,049) | ||||||
Foreign currency translation | (5,587) | (5,587) | ||||||
Net change in market value of effective foreign currency forward exchange contracts | 556 | 556 | ||||||
Share of other comprehensive loss from equity method investment | (14,940) | (14,940) | ||||||
Stock-based compensation | 804,845 | 804,845 | ||||||
Stock-based compensation - restructuring | $ 14,275 | 14,275 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 185,975,709 | 176,358,104 | 9,617,605 | 176,358,104 | 9,617,605 | |||
Balance at Dec. 31, 2022 | $ 10,559,042 | $ 174 | $ 12 | $ 14,055,853 | $ (121,161) | $ (3,375,836) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (1,256,145) | $ (949,900) | $ (490,979) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 279,127 | 258,378 | 149,660 |
Non-cash reduction to the right-of-use asset | 47,160 | 48,786 | 38,395 |
Net amortization of investment premium and discount | 33,165 | 36,158 | 6,789 |
Impairment of long-lived assets due to 2022 office closures | 97,722 | 0 | 0 |
Stock-based compensation including restructuring | 798,560 | 632,285 | 360,936 |
Amortization of deferred commissions | 57,913 | 31,541 | 13,322 |
Allowance for credit losses | 35,012 | 7,210 | 13,239 |
Value of shares of Class A common stock donated to charity | 9,541 | 31,169 | 18,993 |
Share of losses from equity method investment | 35,315 | 0 | 0 |
Loss on extinguishment of debt | 0 | 28,965 | 12,863 |
Other adjustments | 4,905 | 2,329 | 6,823 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (194,655) | (117,943) | (81,303) |
Prepaid expenses and other current assets | (94,326) | (78,012) | (11,636) |
Other long-term assets | (146,458) | (121,225) | (81,908) |
Accounts payable | 30,336 | 10,191 | 10,060 |
Accrued expenses and restructuring costs | 75,430 | 127,554 | 88,340 |
Deferred revenue and customer deposits | (2,688) | 45,634 | 13,824 |
Operating lease liabilities | (54,450) | (49,046) | (33,938) |
Other long-term liabilities | (9,832) | (2,266) | (826) |
Net cash used in operating activities | (254,368) | (58,192) | 32,654 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisitions, net of cash acquired and other related payments | (37,410) | (491,522) | (333,591) |
Purchases of marketable securities and other investments | (1,938,337) | (3,523,232) | (1,636,590) |
Proceeds from sales and maturities of marketable securities | 1,439,477 | 1,614,779 | 1,183,459 |
Capitalized software development costs | (45,761) | (43,973) | (33,328) |
Purchases of long-lived and intangible assets | (34,421) | (46,048) | (25,805) |
Net cash used in investing activities | (616,452) | (2,489,996) | (845,855) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from public offerings, net of underwriters' discounts | 0 | 1,766,400 | 1,408,750 |
Payments of costs related to public offerings | (35) | (687) | (637) |
Proceeds from issuance of senior notes due 2029 and 2031, net of issuance costs | 0 | 984,723 | 0 |
Proceeds from settlements of capped call, net of settlement costs | 0 | 228,412 | 0 |
Principal payments on debt and finance leases | (13,423) | (8,295) | (10,784) |
Value of equity awards withheld for tax liabilities | (1,098) | (10,388) | (8,778) |
Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP | 59,563 | 136,160 | 104,760 |
Net cash provided by financing activities | 45,007 | 3,096,325 | 1,493,311 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 60 | (191) | 40 |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (825,753) | 547,946 | 680,150 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period | 1,481,831 | 933,885 | 253,735 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period | 656,078 | 1,481,831 | 933,885 |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for income taxes, net | 7,413 | 6,147 | 3,092 |
Cash paid for interest | 37,500 | 20,637 | 2,139 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Value of common stock issued and equity awards assumed in acquisition | 0 | 420,681 | 2,571,328 |
Value of common stock issued to settle convertible senior notes due 2023 | 0 | 1,704,969 | 892,640 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS | |||
Cash and cash equivalents | 651,752 | 1,479,452 | 933,885 |
Restricted cash in other current assets | 4,314 | 1,536 | 0 |
Restricted cash in other long-term assets | 12 | 843 | 0 |
Total cash, cash equivalents and restricted cash | $ 656,078 | $ 1,481,831 | $ 933,885 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 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 | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). (b) Principles of Consolidation The 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) 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 new customers and periodic re-evaluations, as needed, of existing 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 years ended December 31, 2022, 2021 and 2020, no customer organization accounted for more than 10% of the Company’s total revenue. As of December 31, 2022 and 2021, no customer organization represented more than 10% of the Company’s gross accounts receivable. (e) Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and, • Recognition of revenue when, or as, the Company satisfies a performance obligation. Nature of Products and Services The majority of the Company's revenue is derived from usage-based fees earned from its communications products when customers access its cloud-based platform. Platform access is considered a monthly series comprising of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. In the years ended December 31, 2022, 2021 and 2020, the revenue from usage-based fees represented 73%, 72% and 76% of total revenue, respectively. Subscription-based fees are derived from non-usage-based products on the Company’s cloud-based platform, such as Twilio Segment, Twilio Engage, Twilio Flex, as well as from sales of other products such as short codes, customer support, email API and others. Non-usage-based contracts revenue is recognized on a ratable basis over the contractual term which is generally between one No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price. The Company's arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents unearned revenue and amounts that were and will be invoiced and recognized as revenue in future periods for non-cancelable multi-year subscription arrangements. The Company applies the optional exemption of not disclosing the transaction price allocated to the remaining performance obligations for its usage-based contracts and contracts with original duration of one year or less. Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $154.5 million as of December 31, 2022, of which 66% is expected to be recognized over the next 12 months and 94% is expected to be recognized over the next 24 months. (f) Deferred Revenue and Customer Deposits Deferred revenue is recorded when a non-cancellable contractual right to bill exists or when cash payments are received in advance of future usage on non-cancelable contracts. Customer refundable prepayments are recorded as customer deposits. As of December 31, 2022 and 2021, the Company recorded $139.1 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 consolidated balance sheets. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $124.9 million, $70.1 million and $19.5 million of revenue, respectively, that was included in the deferred revenue and customer deposits balance as of the end of the previous year. (g) Deferred Sales Commissions The Company records an asset for the incremental costs of obtaining a contract with a customer, for example, sales commissions that are earned upon execution of contracts. The Company uses the portfolio of data method to determine the estimated period of benefit of capitalized commissions which is generally determined to be up to five years. Amortization expense related to these capitalized costs related to initial contracts, upsells and renewals, is recognized on a straight line basis over the estimated period of benefit of the capitalized commissions. The Company applies the optional exemption of expensing these costs as incurred with amortization periods of one year or less. Total net capitalized commission costs as of December 31, 2022 and 2021, were $239.1 million and $193.4 million, respectively, and are included in prepaid expenses and other current assets and other long‑term assets in the accompanying consolidated balance sheets. Amortization of these assets was $57.9 million, $31.5 million and $13.3 million in the years ended December 31, 2022, 2021 and 2020, respectively, and is included in sales and marketing expense in the accompanying consolidated statements of operations. (h) Cost of Revenue Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes fees to support the Company's cloud infrastructure, direct costs of personnel, such as salaries and stock-based compensation for the customer care and support services employees, and non-personnel costs, such as amortization of capitalized internal-use software development costs and amortization of acquired intangibles. (i) Research and Development Expense Research and development expenses consist primarily of personnel costs, cloud infrastructure fees for staging and development of the Company’s products, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meets the criteria for capitalization. (j) Internal-Use Software Development Costs Certain costs of platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance, minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are also expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in operating expenses. (k) Advertising Costs Advertising costs are expensed as incurred and were $92.6 million, $78.8 million and $47.2 million in the years ended December 31, 2022, 2021 and 2020, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations. (l) 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. (m) Stock-Based Compensation All stock-based compensation to employees, including the purchase rights issued under the Company's 2016 Employee Stock Purchase Plan, as amended (the “2016 ESPP”), is measured on the grant date based on the fair value of the awards on the date of grant. These costs are recognized as an expense following straight-line attribution method over the requisite service period. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the purchase rights issued under the ESPP. The fair value of the restricted stock units is determined using the closing fair value of the Company's Class A common stock on the date of grant and recognized as an expense following straight-line attribution method over the requisite service period. Forfeitures are recorded in the period in which they occur. Compensation expense for stock options granted to nonemployees is calculated using the Black-Scholes option pricing model and is recognized in expense over the service period. The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock options and the purchase rights issued under ESPP. These assumptions include: • Fair value of the common stock. The Company uses the market closing price of its Class A common stock, as reported on the New York Stock Exchange, for the fair value. • Expected term. The expected term represents the period that the stock option or the purchase right is expected to be outstanding. The Company uses the simplified calculation of expected term, which reflects the weighted-average time-to-vest and the contractual life of the stock option or the purchase right; • Expected volatility. Prior to July 1, 2021, the expected volatility was derived from an average of the historical volatilities of the Class A common stock of the Company and several other entities with characteristics similar to those of the Company, such as the size and operational and economic similarities to the Company's principal business operations. Beginning with the third quarter 2021, the expected volatility was derived from the average of the historical volatilities of the Class A common stock of the Company. • Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; and • Expected dividend. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. If any of the assumptions used in the Black-Scholes model changes, stock-based compensation for future options may differ materially compared to that associated with previous grants. (n) Income Taxes The Company accounts for income taxes in accordance with authoritative guidance which requires the use of the asset and liability approach. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry-forwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the consolidated statements of operations. (o) Foreign Currency The functional currency of the Company's foreign subsidiaries is generally the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the month in which the transaction occurs. Remeasurement adjustments are recognized in the consolidated statements of operations as other expense, net, in the year of occurrence. Foreign currency transaction gains and losses were insignificant for all periods presented. For those entities where the functional currency is a foreign currency, adjustments resulting from translating the financial statements into U.S. dollars are recorded as a component of accumulated other comprehensive (loss) income as part of the total stockholders' equity. Monetary assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates in effect during the month in which a transaction occurs. Equity transactions are translated using historical exchange rates. Foreign currency transaction gains and losses are included in other expenses, net, in the accompanying consolidated statements of operations. (p) Comprehensive Loss Comprehensive loss refers to net loss and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders' equity but are excluded from the calculation of net loss. (q) Net Loss Per Share Attributable to Common Stockholders The Company calculates its basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. The Company has 100,000,000 shares of preferred stock that was authorized but never issued or outstanding. Class A and Class B common stock are the only outstanding equity securities of the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder on a one-for-one basis and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. The shares are also automatically converted upon reaching the final conversion date of June 28, 2023, as defined in the Company’s amended and restated certificate of incorporation. Shares of Class A common stock are not convertible. The Company also has dilutive securities, such as potential or restricted common shares or common stock equivalents, that were excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect was antidilutive in all periods presented. These securities are presented in Note 19 to these consolidated financial statements. (r) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of cash deposited into money market funds, reverse repurchase agreements and commercial paper. All credit and debit card transactions that process as of the last day of each month and settle within the first few days of the subsequent month are also classified as cash and cash equivalents as of the end of the month in which they were processed. (s) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company's assessment of its ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of accounts receivable balances and other known conditions that may affect a customer's ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer's ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believe will be collected. The Company writes-off accounts receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. As of December 31, 2022 and 2021, the allowance for doubtful accounts was not significant to the accompanying consolidated financial statements. (t) Costs Related to Public Offerings Costs related to public offerings, which consist of direct incremental legal, printing and accounting fees are deferred until the offering is completed. Upon completion of the offering, these costs are offset against the offering proceeds within the consolidated statements of stockholders' equity. (u) Property and Equipment Property and equipment, both owned and under finance leases, is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred. The useful lives of property and equipment are as follows: Capitalized internal-use software development costs 3 years Data center equipment 2 - 4 years Leasehold improvements 5 years or remaining lease term Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under financing lease 5 years or remaining lease term (v) Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are measured and recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease agreements may have lease and non-lease components, which the Company accounts for as a single lease component. When estimating the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain such options will be exercised. Operating lease costs are recognized in operating expenses in the accompanying consolidated statements of operations on a straight-line basis over the lease term and variable payments are recognized in the period they are incurred. The Company’s lease agreements do not contain any residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Within the consolidated statements of cash flows, the Company presents the lease payments made on the operating leases as cash flows from operations and principal payments made on the finance leases as part of financing activities. (w) 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 or decreased by contributions made to and distributions received 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. Basis differences related to finite-lived intangible assets are amortized on a straight-line basis. 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, as applicable, 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 period of such determination. The authoritative guidance allows a measurement period of up to one year from the date of acquisition of the investment to make adjustments to the preliminary determination and allocation of the excess basis in the investment. (x) Intangible Assets Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and trademarks, acquiring domain names and the fair value of identifiable intangible assets acquired in business combinations. Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment at least annually. The useful lives of the intangible assets are as follows: Developed technology 4 - 7 years Customer relationships 3 - 10 years Supplier relationships 5 years Trade names 3 - 5 years Patents 20 years Telecommunication licenses Indefinite Trademarks Indefinite Domain names Indefinite (y) Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected November 30 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company's business. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets. The Company has the option to first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. However, the Company may elect to bypass the qualitative assessment and proceed directly to the quantitative impairment tests. The impairment test involves comparing the fair value of the reporting unit to its carrying value, including goodwill. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value. The impairment is limited to the carrying amount of goodwill. No goodwill impairment charges have been recorded for any period presented. (z) Derivatives and Hedging The Company is exposed to a wide variety of risks arising from its business operations and overall economic conditions. These risks include exposure to fluctuations in various foreign currencies against its functional currency and can impact the value of cash receipts and payments. The Company minimizes its exposure to these risks through management of its core business activities, specifically, the amounts, sources and duration of its assets and liabilities, and the use of derivative financial instruments. During 2021, the Company started using foreign currency derivative forward contracts, and in the future may also use foreign currency option contacts. Foreign currency derivative forward contracts involve fixing the exchange rate for delivery of a specified amount of foreign currency on a specified date. These agreements are typically cash settled in U.S. dollars for their fair value at or close to their settlement date. Foreign currency option contracts will require the Company to pay a premium for the right to sell a specified amount of foreign currency prior to the maturity date of the option. The Company does not enter into derivative financial instruments trading for speculative purposes. Derivative instruments are carried at fair value and recorded as either an asset or a liability until they mature. Gains and losses resulting from changes in fair value of these instruments are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. For derivative instruments designated as cash flow hedges, gains or losses are initially recorded in other comprehensive income (“OCI”) in the balance sheet, then reclassified into the statement of operations in the period in which the derivative instruments mature. These realized gains and losses are recorded within the same financial statement line item as the hedged transaction. The Company’s foreign currency derivative contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. (aa) Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property, equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. (ab) Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of th |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 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 Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 46,610 $ — $ — $ — $ 46,610 $ — $ — $ 46,610 Reverse repurchase 200,000 — — — — 200,000 — 200,000 Commercial paper 2,249 — — — — 2,249 — 2,249 Total included in cash 248,859 — — — 46,610 202,249 — 248,859 Marketable securities: U.S. Treasury securities 481,463 — (1,269) (11,347) 468,847 — — 468,847 Non-U.S. government 149,901 — (33) (6,304) 143,564 — — 143,564 Corporate debt securities and 2,973,844 307 (12,202) (71,043) 5,000 2,885,906 — 2,890,906 Total marketable 3,605,208 307 (13,504) (88,694) 617,411 2,885,906 — 3,503,317 Total financial assets $ 3,854,067 $ 307 $ (13,504) $ (88,694) $ 664,021 $ 3,088,155 $ — $ 3,752,176 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 aggregate related fair value of corporate debt securities with unrealized losses is $2.66 billion as of December 31, 2022, of which $2.04 billion have been in an unrealized loss position for more than 12 months and $620.5 million have been in an unrealized loss position for less than 12 months. Unrealized losses related to other investments as of December 31, 2022, and for all investments as of December 31, 2021 were not significant. 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 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 December 31, 2022 and 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 December 31, 2022 and 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 $64.6 million, $55.7 million and $32.4 million in the years ended December 31, 2022, 2021 and 2020, respectively. The interest is recorded as other expenses, net, in the accompanying consolidated statements of operations. The following table summarizes the contractual maturities of marketable securities: As of December 31, 2022 As of December 31, 2021 Amortized Aggregate Amortized Aggregate Financial Assets: (In thousands) Less than one year $ 1,943,836 $ 1,909,218 $ 1,084,751 $ 1,085,006 One to three years 1,661,372 1,594,099 2,812,521 2,793,424 Total $ 3,605,208 $ 3,503,317 $ 3,897,272 $ 3,878,430 Strategic Investments As of December 31, 2022 and 2021, the Company held strategic investments with an aggregate carrying value of $76.9 million and $68.3 million, respectively, recorded as other long-term assets in the accompanying 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 significant adjustments related to these securities recorded in the three years ended December 31, 2022, 2021 and 2020. 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 December 31, 2022 and 2021, the aggregate fair value of these liabilities and the associated unrealized losses were not significant. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: As of December 31, 2022 2021 (In thousands) Capitalized internal-use software developments costs $ 257,983 $ 198,589 Data center equipment (1) 100,207 77,946 Leasehold improvements 91,660 85,297 Office equipment 70,815 58,636 Furniture and fixtures 14,935 15,360 Software 14,675 10,506 Total property and equipment 550,275 446,334 Less: accumulated depreciation and amortization (1) (286,296) (191,018) Total property and equipment, net $ 263,979 $ 255,316 ____________________________________ ( 1 ) Data center equipment contains $72.4 million and $63.0 million in assets held under finance leases as of December 31, 2022 and 2021, respectively. Accumulated depreciation and amortization contains $41.2 million and $26.8 million of accumulated depreciation for assets held under finance leases as of December 31, 2022 and 2021, respectively. Depreciation and amortization expense was $71.7 million , $59.6 million and $51.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company capitalized $65.4 million, $63.1 million and $47.1 million in internal‑use software development costs in the years ended December 31, 2022, 2021 and 2020, respectively. |
Impairment
Impairment | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment | ImpairmentIn 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 offices 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. In the year ended December 31, 2022, the Company recorded a $97.7 million impairment expense in its accompanying consolidated statement of operations related to these office closures. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 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 “September Plan”). The September Plan eliminated approximately 11% of the Company’s workforce. The Company recorded restructuring charges of $76.6 million for the year ended December 31, 2022, which consisted of $62.3 million related to employee transition, notice period, severance payments, employee benefits and facilitation costs; and $14.3 million related to vesting of the employee stock-based compensation awards. The execution of the September Plan was substantially completed as of December 31, 2022. However, potential employment position eliminations in certain jurisdictions outside of the United States are subject to extended consultation periods mandated by the local jurisdictions. The Company will record the restructuring charges related to the eliminated positions in those jurisdictions upon finalization of the respective consultation periods. The estimated remaining expenses are not expected to be significant but the actual amounts may differ materially from expectations. The following table summarizes the Company’s restructuring liability that is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheet: Workforce Reduction Costs Facilitation Costs Total (In thousands) Balance as of December 31, 2021 $ — $ — $ — Restructuring charges 60,553 1,808 62,361 Cash payments (60,053) (1,242) (61,295) Balance as of December 31, 2022 $ 500 $ 566 $ 1,066 The $14.3 million expense related to vesting of the employee stock-based compensation awards is recorded in the additional-paid-in capital in the accompanying consolidated statement of stockholders’ equity. |
Derivatives and Hedging
Derivatives and Hedging | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging As of December 31, 2022, the Company had outstanding foreign currency forward contracts designated as cash flow hedges with a total sell notional value of $219.8 million. The notional value represents the amount that will be sold upon maturity of the forward contract. As of December 31, 2022, these contracts had maturities of up to 6 months. Gains and losses associated with these foreign currency forward contracts were as follows: Consolidated Statement of Operations and Statement of Comprehensive Loss Year Ended 2022 2021 (In thousands) Gains recognized in OCI Net change in market value of effective foreign currency forward exchange contracts $ 556 $ 294 Losses recognized in income due to instruments maturing Cost of revenue $ 34,862 $ 7,545 |
Right-of-Use Assets and Lease L
Right-of-Use Assets and Lease Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Right-of-Use Assets and Lease Liabilities | Right-of-Use Assets and Lease Liabilities The Company has entered into various operating lease agreements for office space and data centers and finance lease agreements for data centers, office equipment and furniture. As of December 31, 2022, the Company had 30 leased properties with remaining lease terms from 0.1 years to 7.0 years, some of which include options to extend the leases for up to 5.0 years. As a result of the 2022 office closures described in Note 5, the Company impaired several of its office leases that will no longer be used to support its ongoing operations. In the year ended December 31, 2022, the Company recorded $97.7 million impairment expense related to these office closures, of which $72.8 million related to the affected ROU assets. The remaining impairment expense related to the associated assets in the property, plant and equipment categories. For the years ended December 31, 2022, 2021 and 2020, the Company did not have significant sublease income related to any of its subleased office leases. Operating lease costs recorded in the accompanying consolidated statements of operations were $57.8 million, $61.0 million and $49.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Lease costs associated with short-term leases, variable leases and finance leases were not significant. Supplemental cash flow and other information related to operating leases was as follows: Year Ended December 31, 2022 2021 Operating cash flows paid for amounts included in operating lease liabilities (in thousands) $ 64,473 $ 60,085 Weighted average remaining lease term (in years) 4.8 5.5 Weighted average discount rate 4.5 % 4.5 % Maturities of operating lease liabilities were as follows: As of December 31, 2022 Year Ended December 31, (In thousands) 2023 $ 62,696 2024 52,185 2025 38,262 2026 34,861 2027 26,818 Thereafter 28,100 Total lease payments 242,922 Less: imputed interest (24,149) Total operating lease obligations 218,773 Less: current obligations (54,222) Long-term operating lease obligations $ 164,551 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations 2022 Acquisitions During 2022, the Company completed a business combination for an aggregate accounting purchase price of $32.7 million, of which $25.7 million was allocated to goodwill and $8.2 million was allocated to intangible assets. Zipwhip, Inc. In July 2021, the Company acquired all outstanding shares of Zipwhip, Inc. (“Zipwhip”), a leading provider of toll-free messaging in the United States, for a purchase price, as adjusted, of $838.8 million. The purchase price included $418.1 million of cash, $419.2 million fair value of 1.1 million shares of the Company's Class A common stock and $1.5 million fair value of the pre-combination services of Zipwhip employees reflected in the unvested equity awards assumed by the Company at closing. Additionally, at closing, the Company issued 59,533 shares of its Class A common stock which were subject to vesting over a period of 3 years. Vesting of these shares is recorded in the stock-based compensation expense as the services are provided. Part of the cash consideration paid at closing was to settle the vested equity awards of Zipwhip employees. The Company assumed all unvested and outstanding equity awards of Zipwhip continuing employees, as converted into its own equity awards, at the conversion ratio provided in the Agreement and Plan of Merger and Reorganization (the “Zipwhip Merger Agreement”). This transaction also included $19.1 million of additional cash consideration for certain employees, which is vesting as these employees are providing services in the post-acquisition period. This amount is recorded in the operating expenses over the 3 year vesting period. The acquisition was accounted for as a business combination and the total purchase price of $838.8 million was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date with the excess recorded as goodwill. The fair value of the 1.2 million aggregate number of shares of the Company's Class A common stock issued at closing was determined based on the closing market price of the Company's Class A common stock on the acquisition date. The fair value of the $30.7 million unvested equity awards assumed on the acquisition closing date was determined (a) for options, by using the Black-Scholes option pricing model with the applicable assumptions as of the acquisition date; (b) for restricted stock units, by using the closing market price of the Company's Class A common stock on the acquisition date. These awards continue vesting as Zipwhip employees provide services in the post-acquisition period. The fair value of these awards is recorded in the stock-based compensation expense over the respective vesting period of each award. The purchase price components, as adjusted, are summarized in the following table: Total (In thousands) Fair value of Class A common stock transferred $ 419,197 Cash consideration 418,073 Fair value of the pre-combination service through equity awards 1,511 Total purchase price $ 838,781 The following table presents the purchase price allocation on the acquisition close date, as adjusted: Total (In thousands) Cash and cash equivalents $ 21,610 Accounts receivable and other current assets 11,481 Property and equipment, net 2,950 Operating right-of-use asset 23,545 Intangible assets (1) 244,500 Other assets 370 Goodwill 600,574 Accounts payable and other liabilities (20,239) Deferred revenue (4,526) Operating lease liability, noncurrent (23,169) Deferred tax liability (18,315) Total purchase price $ 838,781 ____________________________________ ( 1 ) Identifiable intangible assets are comprised of the following: Total Estimated (In thousands) (In years) Developed technology $ 56,800 7 Customer relationships 147,700 10 Supplier relationships 39,600 5 Trade names 400 5 Total intangible assets acquired $ 244,500 Goodwill generated from this acquisition primarily represented the value that was expected from the increased scale and synergies as a result of the integration of both businesses. Goodwill is not deductible for tax purposes. The estimated fair value of the intangible assets acquired was determined by the Company. The Company engaged a third‑party expert to assist with the valuation analysis. The Company used a relief-from-royalty method to estimate the fair values of the developed technology and trade names, a multi-period excess earnings method to estimate the fair values of customer relationships and a with-and-without method to estimate the fair value of the supplier relationships. Most of the net tangible assets were valued at their respective carrying amounts as of the acquisition date as the Company believes that these amounts approximate their current fair values, except for operating right-of-use assets. The value of the acquired operating right-of-use assets was reduced to its respective fair value on the acquisition date. The acquired entity's results of operations were included in the Company's consolidated financial statements from the date of acquisition, July 14, 2021. For the years ended December 31, 2022 and 2021, Zipwhip contributed net operating revenue of $139.5 million and $55.4 million, respectively, which is reflected in the accompanying consolidated statements of operations. Due to the integrated nature of the Company's operations, the Company believes that it is not practicable to separately identify earnings of Zipwhip on a stand-alone basis. Pro forma results of operations for this acquisition are not presented as the financial impact to the Company's consolidated financial statements is not significant. Costs incurred related to the acquisition were not significant. Other 2021 Acquisitions During 2021, the Company completed other business combinations for an aggregate purchase price of $105.0 million, of which $13.4 million was allocated to developed technology, $23.6 million was allocated to other intangible assets and $63.2 million was allocated to goodwill. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Equity Method Investment | Equity Method Investment In May 2022, the Company acquired 44.6% 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 an 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 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. The following table presents the estimated basis differences attributable to the identifiable intangible assets as of the date of investment 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 As of December 31, 2022, the Company held 44.5% equity interests in Syniverse and the carrying amount of its equity method investment recorded in the accompanying consolidated balance sheet was $700.0 million. As of December 31, 2022, the Company’s net excess investment basis was $508.9 million related to its proportionate share of the identifiable intangible assets of the investee, $41.3 million related to the associated deferred tax liability and $623.8 million related to the equity method goodwill. 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. The Company recorded its share of losses from its equity method investment of $35.3 million in its accompanying consolidated statement of operations for the year ended December 31, 2022. 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 September 30, 2022. The Company also recorded $14.9 million of its proportionate share of the investee’s other comprehensive loss in the accompanying consolidated statement of other comprehensive loss for the same period. In conjunction with this investment, the Company and Syniverse entered into a wholesale agreement, pursuant to which Syniverse will process, route and deliver application-to-person messages originating and/or terminating between the Company’s customers and mobile network operators. The value of the transactions that occurred between the Company and Syniverse were $89.6 million for the period from the investment closing date on May 13, 2022 through December 31, 2022. These transactions were recorded as cost of revenue in the accompanying consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The goodwill balance as of December 31, 2022 and 2021 was as follows: Total (In thousands) Balance as of December 31, 2020 $ 4,595,394 Goodwill additions related to 2021 acquisitions 663,599 Measurement period and other adjustments 4,173 Balance as of December 31, 2021 $ 5,263,166 Goodwill additions related to 2022 acquisitions 25,748 Measurement period and other adjustments (4,761) Balance as of December 31, 2022 $ 5,284,153 Intangible assets Intangible assets consisted of the following: As of December 31, 2022 Cost Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 795,753 $ (335,893) $ 459,860 Customer relationships 538,466 (204,241) 334,225 Supplier relationships 56,922 (19,846) 37,076 Trade names 30,342 (20,106) 10,236 Order backlog 10,000 (10,000) — Patent 4,028 (705) 3,323 Total amortizable intangible assets 1,435,511 (590,791) 844,720 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 1,440,726 $ (590,791) $ 849,935 As of December 31, 2021 Cost 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 $206.4 million, $198.8 million and $98.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Total estimated future amortization expense is as follows: As of December 31, 2022 Year Ended December 31, (In thousands) 2023 $ 202,708 2024 197,273 2025 193,699 2026 120,237 2027 72,218 Thereafter 58,585 Total $ 844,720 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 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 December 31, 2022 2021 (In thousands) Accrued payroll and related $ 79,703 $ 78,780 Accrued bonus and commission 35,449 64,665 Accrued cost of revenue 161,455 118,004 Sales and other taxes payable 92,319 61,975 Finance lease liability 11,871 12,370 Employee sabbatical benefit accrual 30,683 — Accrued other expense 78,741 81,709 Total accrued expenses and other current liabilities $ 490,221 $ 417,503 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt, net, consisted of the following: As of December 31, 2022 2021 (In thousands) 2029 Senior Notes Principal $ 500,000 $ 500,000 Unamortized discount (5,001) (5,701) Unamortized issuance costs (1,126) (1,286) Net carrying amount 493,873 493,013 2031 Senior Notes Principal 500,000 500,000 Unamortized discount (5,299) (5,832) Unamortized issuance costs (1,192) (1,274) Net carrying amount 493,509 492,894 Total long-term debt, net $ 987,382 $ 985,907 2029 and 2031 Senior Notes In March 2021, the Company issued $1.0 billion aggregate principal amount of senior notes, consisting of $500.0 million principal amount of 3.625% notes due 2029 (the “2029 Notes”) and $500.0 million principal amount of 3.875% notes due 2031 (the “2031 Notes” and together with the 2029 Notes, the “Notes”). Initially, none of the Company’s subsidiaries guaranteed the Notes. However, under certain circumstances in the future the Notes can be guaranteed by each of the Company’s material domestic subsidiaries. The 2029 Notes and 2031 Notes will mature on March 15, 2029 and March 15, 2031, respectively. Interest payments are payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2021. The aggregate net proceeds from offering of the Notes were approximately $984.7 million after deducting underwriting discounts and issuance costs paid by the Company. The Company may voluntarily redeem the 2029 Notes, in whole or in part, under the following circumstances: (1) at any time prior to March 15, 2024 with the net cash proceeds received by the Company from an equity offering at a redemption price equal to 103.625% of the principal amount, provided the aggregate principal amount of all such redemptions does not exceed 40% of the original aggregate principal amount of the 2029 Notes. Such redemption shall occur within 180 days after the closing of an equity offering and at least 50% of the then-outstanding aggregate principal amount of the 2029 Notes shall remain outstanding, unless all 2029 Notes are redeemed concurrently; (2) at any time prior to March 15, 2024 at 100% of the principal amount, plus a “make-whole” premium; (3) at any time on or after March 15, 2024 at a prepayment price equal to 101.813% of the principal amount; (4) at any time on or after March 15, 2025 at a prepayment price equal to 100.906% of the principal amount; and (5) at any time on or after March 15, 2026 at a prepayment price equal to 100.000% of the principal amount; in each case, the redemption will include the accrued and unpaid interest, as applicable. The Company may voluntarily redeem the 2031 Notes, in whole or in part, under the following circumstances: (1) at any time prior to March 15, 2024 with the net cash proceeds received by the Company from an equity offering at a redemption price equal to 103.875% of the principal amount, provided the aggregate principal amount of all such redemptions does not to exceed 40% of the original aggregate principal amount of the 2031 Notes. Such redemption shall occur within 180 days after the closing of an equity offering and at least 50% of the then-outstanding aggregate principal amount of the 2031 Notes shall remain outstanding, unless all 2031 Notes are redeemed concurrently; (2) at any time prior to March 15, 2026 at 100% of the principal amount, plus a “make-whole” premium; (3) at any time on or after March 15, 2026 at a prepayment price equal to 101.938% of the principal amount; (4) at any time on or after March 15, 2027 at a prepayment price equal to 101.292% of the principal amount; (5) at any time on or after March 15, 2028 at a prepayment price equal to 100.646% of the principal amount; and (6) at any time on or after March 15, 2029 at a prepayment price equal to 100.000% of the principal amount; in each case, the redemption will include accrued and unpaid interest, as applicable. The Notes are general unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes that the Company may incur in the future and equal in right of payment with the Company’s existing and future unsecured and unsubordinated liabilities. In certain circumstances involving a change of control event, the Company will be required to make an offer to repurchase the Notes of the applicable series at a repurchase price equal to 101% of the principal amount of the Notes of such series to be repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date. The indenture governing the Notes (the “Indenture”) contains restrictive covenants limiting the Company’s ability and the ability of its subsidiaries to: (i) create liens on certain assets to secure debt; (ii) grant a subsidiary guarantee of certain debt without also providing a guarantee of the Notes; and (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets to another person. These covenants are subject to a number of limitations and exceptions. Certain of these covenants will not apply during any period in which the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services. Convertible Senior Notes and Capped Call Transactions In June 2021 the Company fully redeemed the remaining outstanding principal amount of its convertible senior notes due 2023 (“Convertible Notes”) pursuant to the notice of redemption it issued in May 2021. During 2021, the Company converted $343.7 million aggregate principal amount of the Convertible Notes by issuing 4,846,965 shares of its Class A common stock. The aggregate value of all redemption transactions in the year ended December 31, 2021, was $1.7 billion. Of the $1.7 billion, $1.4 billion and $335.7 million were allocated to the equity and liability components, respectively, as required by the applicable accounting guidance. The Company utilized the effective interest rate method to determine the fair value of the liability component. The selected interest rate reflected the Company’s incremental borrowing rate, adjusted for the Company’s credit standing on nonconvertible debt with similar maturity. The extinguishment of these Convertible Notes resulted in a $29.0 million loss that is included in other expenses, net, in the accompanying consolidated statement of operations for the year ended December 31, 2021. No sinking fund was provided for these Convertible Notes. In connection with the initial offering of the Convertible Notes in 2018, the Company entered into privately negotiated capped call transactions with certain counterparties (the “capped calls”). Concurrently with the redemption of the Convertible Notes, the Company settled these capped calls in June 2021 for gross cash consideration of $229.8 million received by the Company, which the Company recorded in additional paid-in-capital, net of $1.4 million in transaction costs and a $3.2 million realized gain. The gain was primarily driven by the change in the fair value of the Company’s Class A common stock on the transaction settlement date. The gain was recorded in other expenses, net, in the accompanying consolidated statement of operations for the year ended December 31, 2021. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information A roll‑forward of the Company’s customer credit reserve is as follows: As of December 31, 2022 2021 2020 (In thousands) Balance, beginning of period $ 18,577 $ 16,783 $ 6,784 Additions 86,303 55,937 50,817 Deductions against reserve (71,756) (54,143) (40,818) Balance, end of period $ 33,124 $ 18,577 $ 16,783 |
Revenue by Geographic Area and
Revenue by Geographic Area and Groups of Similar Products | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by Geographic Area and Groups of Similar Products | Revenue by Geographic Area and Groups of Similar Products 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: Year Ended December 31, 2022 2021 (1) 2020 Revenue by geographic area: (In thousands) United States $ 2,510,525 $ 1,927,302 $ 1,282,213 International 1,315,796 914,537 479,563 Total $ 3,826,321 $ 2,841,839 $ 1,761,776 Percentage of revenue by geographic area: United States 66 % 68 % 73 % International 34 % 32 % 27 % ____________________ (1) During 2022, the Company identified a misclassification of some of its United States customers for the fourth quarter of 2021, which impacted the reported United States versus international revenue split for the year ended December 31, 2021. The Company has updated the amounts herein to accurately reflect the revenue split by geographic area. No other amounts were impacted by this misclassification. Long-lived assets outside of the United States were $54.5 million and $41.0 million as of December 31, 2022 and 2021, respectively. The following table sets forth revenue by groups of similar products: Year Ended December 31, 2022 2021 2020 Revenue by groups of similar products: (In thousands) Communications: Programmable Messaging $ 2,066,300 $ 1,416,265 $ 820,887 Programmable Voice 474,790 428,484 345,042 Email 333,500 277,400 218,700 Other 376,650 289,131 213,800 Total communications 3,251,240 2,411,280 1,598,429 Software 441,477 325,943 98,363 Other 133,604 104,616 64,984 Total $ 3,826,321 $ 2,841,839 $ 1,761,776 Twilio Communications includes a variety of APIs and software solutions to optimize communications between Twilio customers and their end users. This is primarily concentrated within the Messaging, Voice and Email communication channels. Twilio Software applications include Twilio Segment, Twilio Engage, Twilio Flex and Marketing Campaigns. These products enable businesses to achieve more effective customer engagement by providing the tools necessary for customers to build direct, personalized relationships with their end users. Other includes other miscellaneous products and services, including enterprise and support plans. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Lease and Other Commitments The Company entered into various non-cancelable operating lease agreements for its facilities. Refer to Note 8 to these consolidated financial statements for additional detail on the Company's operating lease commitments. Additionally, the Company has contractual commitments with its cloud infrastructure provider, network service providers and other vendors that are noncancellable and expire within one As of Year Ending December 31, (In thousands) 2023 $ 205,257 2024 194,237 2025 221,438 2026 227,515 Total payments $ 848,447 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. The trial is expected to be held in the summer of 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 16(d) to these 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 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 December 31, 2022 and 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 consolidated balance sheets. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Preferred Stock As of December 31, 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 December 31, 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 December 31, 2022, 176,358,104 shares of Class A common stock and 9,617,605 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 December 31, 2022 2021 Stock options issued and outstanding 2,277,379 3,351,313 Unvested restricted stock units issued and outstanding 15,414,997 6,475,700 Class A common stock reserved for Twilio.org 530,449 618,857 Stock-based awards available for grant under 2016 Plan 19,851,399 24,650,104 Stock-based awards available for grant under ESPP 7,648,429 6,382,830 Total 45,722,653 41,478,804 Public Equity Offerings In February 2021 and August 2020, the Company completed public equity offerings in which it sold 4,312,500 shares and 5,819,838 shares, respectively, of its Class A common stock at a public offering price of $409.60 and $247.00 per share, respectively. The Company received total proceeds of $1.8 billion and $1.4 billion, respectively, net of underwriting discounts and offering expenses paid by the Company. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2008 Stock Option Plan The Company maintained a stock plan, the 2008 Stock Option Plan, as amended and restated (the “2008 Plan”), which allowed the Company to grant incentive (“ISO”) and non‑statutory (“NSO”) stock options and restricted stock units (“RSU”) to its employees, directors and consultants to participate in the Company’s future performance through stock‑based awards at the discretion of the Company’s board of directors. On June 22, 2016, the 2008 Plan and the Company’s right of refusal for outstanding equity awards granted under this plan were terminated in connection with the Company’s initial public offering (“IPO”), and, accordingly, no shares were available for issuance under this plan since the IPO. Stock options granted under this plan generally expire 10 years from the date of the grant and as such, this plan continues to govern outstanding equity awards granted thereunder. All remaining outstanding stock options granted under the 2008 Plan are vested and exercisable. 2016 Stock Option Plan The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) became effective on June 21, 2016. The 2016 Plan provides for the grant of ISOs, NSOs, restricted stock, RSUs, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards to employees, directors and consultants of the Company. A total of 11,500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 Plan. These available shares automatically increase each January 1, beginning on January 1, 2017, by 5% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2022 and 2021, the shares available for grant under the 2016 Plan were automatically increased by 9,023,405 shares and 8,202,376 shares, respectively. Under the 2016 Plan, the stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying common stock on the date of grant. SendGrid 2009, 2012 and 2017 Stock Incentive Plans In connection with its acquisition of SendGrid, the Company assumed and replaced all stock options and restricted stock units of the continuing employees issued under SendGrid’s 2009, 2012 and 2017 Stock Incentive Plans that were unvested outstanding on the date of acquisition. The assumed equity awards continue to vest and are governed by the provisions of their respective plans. Additionally, the Company assumed shares of SendGrid common stock that were reserved and available for issuance under SendGrid's 2017 Equity Incentive Plan, on an as converted basis. These shares were utilized for equity grants under the Company’s 2016 Plan in the post-acquisition period, to the extent permitted by New York Stock Exchange rules. Segment 2013 Stock Incentive Plan In connection with its acquisition of Segment, the Company assumed and replaced all stock options and restricted stock units of continuing employees issued under Segment’s 2013 Stock Incentive Plan (“Segment Plan”) that were unvested and outstanding on the acquisition date. The assumed equity awards continue to vest and are governed by the provisions of the Segment Plan. Zipwhip 2008 Stock Plan and 2018 Equity Incentive Plan In connection with its acquisition of Zipwhip, the Company assumed and replaced all stock options and restricted stock units of the continuing employees issued under Zipwhip Amended and Restated 2008 Stock Plan and 2018 Equity Incentive Plan (“Zipwhip Plans”) that were unvested and outstanding on the acquisition date. The assumed equity awards continue to vest and are governed by the provisions of the Zipwhip Plans. Under all plans, stock options generally expire 10 years from the date of grant and vest over periods determined by the board of directors. The vesting period for stock options and restricted stock units is generally four years from the date of grant. For existing employees and, effective in 2022, for new-hires the stock options and restricted stock units vest in equal monthly and quarterly installments, respectively, over the service period. 2016 Employee Stock Purchase Plan The Company’s 2016 ESPP initially became effective on June 21, 2016. A total of 2,400,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 ESPP. These available shares automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,800,000 shares of the Company's Class A common stock, 1% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2022 and 2021, the shares available for grant under the 2016 ESPP were automatically increased by 1,800,000 shares and 1,640,475 shares, respectively. The 2016 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of 15% through payroll deductions of their eligible compensation, subject to any plan limitations. The 2016 ESPP provides for separate six-month offering periods beginning in May and November of each year. On each purchase date, eligible employees purchase the Company’s stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company’s Class A common stock on the offering date or (ii) the fair market value of the Company’s Class A common stock on the purchase date. Stock-options and restricted stock units and awards activity under the Company’s equity incentive plans was as follows: Stock Options Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2021 3,351,313 $ 78.10 6.09 $ 646,760 Granted 167,150 85.17 Exercised (766,024) 29.32 Forfeited and canceled (475,060) 171.53 Outstanding options as of December 31, 2022 2,277,379 $ 75.54 5.32 $ 39,167 Options vested and exercisable as of December 31, 2022 1,823,525 $ 54.75 4.59 $ 39,011 Year Ended December 31, 2022 2021 2020 (In thousands, except per share amounts) Aggregate intrinsic value of stock options exercised (1) $ 80,839 $ 508,539 $ 603,597 Total estimated grant date fair value of options vested $ 77,403 $ 138,851 $ 107,854 Weighted-average grant date fair value per share of options granted $ 50.66 $ 216.29 $ 170.70 ____________________________________ ( 1 ) Aggregate intrinsic value represents the difference between the fair value of the Company’s Class A common stock as reported on the New York Stock Exchange and the exercise price of outstanding “in-the-money” options. As of December 31, 2022, total unrecognized compensation cost related to all unvested stock options was $50.4 million, which will be amortized on a straight-line basis over a weighted-average period of 1.9 years. Restricted Stock Units Number of Weighted- Aggregate Unvested RSUs as of December 31, 2021 6,475,700 $ 237.22 $ 1,705,311 Granted 16,951,118 110.83 Vested (4,259,908) 170.46 Forfeited and canceled (3,751,913) 178.50 Unvested RSUs as of December 31, 2022 15,414,997 $ 130.97 $ 754,718 In March 2022, the Company granted 919,289 shares of performance-based restricted stock units (“PSU”) to certain of its executive employees. These awards, including subsequent forfeitures, if any, are included in the table above. The PSUs were granted with a grant date fair value per share of $157.44 and an aggregate grant date fair value of $144.7 million. 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. Each PSU award consisted of three tranches that vest separately over distinct service periods if its respective performance targets, as defined in the grant agreements, are achieved in the respective period. The final vesting is determined by the Company’s Compensation Committee subsequent to the completion of the vesting period. The vesting of the first tranche is based on achievement of revenue growth targets with respect to the year ended December 31, 2022. The vesting of the second and third tranches is based on both (a) revenue growth targets and (b) profitability targets achievement with respect to each of the years ended 2023 and 2024. If performance targets are not achieved, the related tranche will be forfeited. Vesting of these performance-based restricted stock unit awards can range up to 100% above the target based on levels of performance and is recorded in stock-based compensation expense in the year during which each tranche vests. As of December 31, 2022, the Company had outstanding 16,547 restricted stock awards (“RSAs”) that were held in escrow subject to vesting. The aggregate intrinsic value of these awards was not significant. As of December 31, 2022, total unrecognized compensation cost related to unvested RSUs and RSAs was $1.9 billion, which will be amortized over a weighted-average period of 2.9 years. As of December 31, 2022, the unrecognized compensation cost related to Class A common stock subject to vesting was $11.4 million, which will be amortized over a term of 1.5 years. Valuation Assumptions The fair value of employee stock options was estimated on the date of grant using the following assumptions in the Black-Scholes option pricing model: Year Ended December 31, Employee Stock Options: 2022 2021 2020 Fair value of common stock $85.17 $268.55 - $409.21 $108.37 - $301.72 Expected term (in years) 6.02 0.30 - 6.39 0.52 - 6.08 Expected volatility 61.6% 42.9% - 61.5% 51.9% - 65.1% Risk-free interest rate 3.3% 0.1% - 1.4% 0.1% - 1.4% Dividend rate —% —% —% The Company uses the Black-Scholes option pricing model to measure the fair value of its purchase rights issued under the 2016 ESPP: Year Ended December 31, Employee Stock Purchase Plan: 2022 2021 2020 Fair value of common stock $50.81 - $99.68 $297.20 - $310.80 $183.40 - $278.50 Expected term (in years) 0.50 0.50 0.50 Expected volatility 73.2% - 97.3% 46.4% - 58.7% 54.4% - 72.1% Risk-free interest rate 1.5% - 4.5% —% - 0.1% 0.1% - 0.2% Dividend rate —% —% —% Stock-Based Compensation Expense The Company recorded stock-based compensation expense as follows: Year Ended December 31, 2022 2021 2020 (In thousands) Cost of revenue $ 21,136 $ 14,074 $ 8,857 Research and development 374,846 258,672 173,303 Sales and marketing 240,109 213,351 103,450 General and administrative 148,194 146,188 76,301 Restructuring costs 14,275 — — Total $ 798,560 $ 632,285 $ 361,911 |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 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: Year Ended December 31, 2022 2021 2020 Net loss attributable to common stockholders (in thousands) $ (1,256,145) $ (949,900) $ (490,979) Weighted-average shares used to compute net loss per share attributable to 182,994,038 174,180,465 146,708,663 Net loss per share attributable to common stockholders, basic and diluted $ (6.86) $ (5.45) $ (3.35) 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 December 31, 2022 2021 2020 Stock options issued and outstanding 2,277,379 3,351,313 5,625,735 Unvested restricted stock units issued and outstanding 15,414,997 6,475,700 7,523,882 Class A common stock reserved for Twilio.org 530,449 618,857 707,265 Class A common stock committed under ESPP 766,334 147,947 103,703 Convertible Notes (1) — — 4,847,578 Class A common stock in escrow 31,503 75,506 75,612 Class A common stock in escrow and restricted stock awards subject to future vesting 56,237 235,054 268,030 Total 19,076,899 10,904,377 19,151,805 ____________________________________ (1) The Convertible Notes were fully redeemed in 2021 and were no longer outstanding as of December 31, 2021. As of December 31, 2020, the Company expected to settle the principal amount of the notes in shares of its Class A common stock, and as such used the if-converted method to calculate any potential dilutive effect of the debt settlement on diluted net income per share, if applicable. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents domestic and foreign components of loss before income taxes for the periods presented: Year Ended December 31, 2022 2021 2020 (In thousands) United States $ (1,021,208) $ (737,360) $ (403,148) International (222,424) (223,569) (101,278) Loss before provision for income taxes $ (1,243,632) $ (960,929) $ (504,426) Provision for (benefit from) income taxes consists of the following: Year Ended December 31, 2022 2021 2020 Current: (In thousands) Federal $ 3,928 $ 122 $ — State 4,100 420 272 Foreign 17,450 8,274 5,215 Total 25,478 8,816 5,487 Deferred: Federal (5,155) (13,772) (12,719) State (818) (4,083) (3,563) Foreign (6,992) (1,990) (2,652) Total (12,965) (19,845) (18,934) Provision for (benefit from) income taxes $ 12,513 $ (11,029) $ (13,447) The following table presents a reconciliation of the statutory federal tax rate and the Company's effective tax rate: Year Ended December 31, 2022 2021 2020 Tax at federal statutory rate 21 % 21 % 21 % State tax, net of federal benefit 3 8 12 Stock-based compensation (7) 16 24 Credits 1 4 3 Foreign rate differential (2) (1) (4) Permanent book vs. tax differences — — (1) Change in valuation allowance (17) (46) (51) Other (1) — — Effective tax rate (2) % 2 % 4 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company's deferred tax assets and liabilities: As of December 31, 2022 2021 Deferred tax assets: (In thousands) Net operating loss carryforwards $ 959,864 $ 1,054,585 Accrued and prepaid expenses 47,986 24,831 Stock-based compensation 37,981 44,261 Research and development credits 159,604 148,282 Intangibles 135,500 135,500 Capitalized research and development expenses 219,176 — Lease liability 60,795 71,651 Unrealized losses on marketable securities 32,108 4,602 Other 36,830 28,859 Gross deferred tax assets 1,689,844 1,512,571 Valuation allowance (1,357,300) (1,136,827) Net deferred tax assets 332,544 375,744 Deferred tax liabilities: Capitalized software (36,552) (28,825) Prepaid expenses (1,587) (1,649) Acquired intangibles (202,778) (251,034) Right-of-use asset (35,734) (64,277) Deferred commissions (59,675) (47,897) Net deferred tax liability $ (3,782) $ (17,938) The following table summarizes the Company’s tax carryforwards, carryovers and credits: As of Expiration Date (In thousands) Federal tax credits $ 136,000 Various dates beginning in 2036 Federal net operating loss carryforwards $ 3,665,700 Indefinite State net operating loss carryforwards $ 2,684,800 Various dates beginning in 2026 State tax credits $ 105,200 Indefinite Foreign net operating loss carryforwards $ 498,500 Indefinite A limitation may apply to the use of the net operating loss and credit carryforwards, under provisions of the Internal Revenue Code of 1986, as amended, and similar state tax provisions that are applicable if the Company experiences an “ownership change.” An ownership change may occur, for example, as a result of issuance of new equity. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a potential reduction in the gross deferred tax assets before considering the valuation allowance. The Company's accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company's deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the federal, state and foreign net deferred tax assets will be realized, and accordingly, a valuation allowance has been established. The valuation allowance increased by approximately $220.5 million and $459.0 million during the years ended December 31, 2022 and 2021, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2022 2021 2020 (In thousands) Unrecognized tax benefit, beginning of year $ 223,380 $ 191,183 $ 49,042 Gross increases for tax positions of prior years 3,250 3,496 4,259 Gross decreases for tax positions of prior years (705) (10,693) (931) Gross increases for tax positions of current year 4,081 39,394 138,813 Lapse of statute of limitations (1,040) — — Unrecognized tax benefit, end of year $ 228,966 $ 223,380 $ 191,183 As of December 31, 2022, the Company had approximately $229.0 million of unrecognized tax benefits. If the $229.0 million is recognized, $6.1 million would affect the effective tax rate. The remaining amount would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company recognizes interest and penalties, if any, related to uncertain tax positions in its income tax provision. As of December 31, 2022, 2021 and 2020, such amounts are not significant. The Company does not anticipate any significant changes within 12 months of December 31, 2022, in its uncertain tax positions that would be material to its consolidated financial statements taken as a whole because nearly all of the unrecognized tax benefit has been offset by a deferred tax asset, which has been reduced by a valuation allowance. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. As of December 31, 2022, the tax years 2008 through the current period remain open to examination by the major jurisdictions in which the Company is subject to tax. Years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. The Company is fully reserved for all open U.S. federal, state and local, or non-U.S. income tax examinations by any tax authorities. On June 7, 2019, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit overturned the U.S. Tax Court's decision in Altera Corp. v. Commissioner and upheld the portion of the Treasury regulations under Section 482 of the Internal Revenue Code that requires related parties in a cost-sharing arrangement to share expenses related to share-based compensation. As a result of this decision, the Company's gross unrecognized tax benefits increased to reflect the impact of including share-based compensation in cost-sharing arrangements. On July 22, 2019, Altera filed a petition for a rehearing before the full Ninth Circuit and the request was denied on November 12, 2019. On February 10, 2020, Altera filed a petition to appeal the decision to the Supreme Court and on June 22, 2020 the Supreme Court denied the petition. There is no impact on the Company’s effective tax rate for years ended December 31, 2022 and 2021 due to a full valuation allowance against its deferred tax assets. We will continue to monitor future developments and their potential effects on our consolidated financial statements. In connection with the Zipwhip acquisition, the Company recorded a net deferred tax liability which provides an additional source of taxable income to support the realization of the pre-existing deferred tax assets and, accordingly, during the year ended December 31, 2021, the Company released a total of $15.9 million of its U.S. valuation allowance. The Company continues to maintain a valuation allowance for its U.S. Federal and State net deferred tax assets. The provision for and benefit from income taxes recorded in the years ended December 31, 2022 and 2021, respectively, consist primarily of income taxes, withholding taxes in foreign jurisdictions in which the Company conducts business and the tax benefit related to the release of valuation allowance from acquisitions. The Company’s U.S. operations have been in a loss position and the Company maintains a full valuation allowance against its U.S. deferred tax assets. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the right to deduct research and development expenditures for tax purposes in the period the expenses were incurred and instead requires all U.S. and foreign research and development expenditures to be amortized over 5 and 15 tax years, respectively. The Company’s provision for income taxes for the year ended December 31, 2022 included $7.5 million due to this required capitalization of research and development expenditures. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn February 13, 2023, the Company committed to a workforce reduction plan that, in addition to the September Plan, is intended to reduce operating costs, improve operating margins, and accelerate profitability (the “February Plan”). The February Plan included the elimination of approximately 17% of the Company’s workforce. The Company estimates that it will incur approximately $100.0 million to $135.0 million in charges in connection with the February Plan, consisting of cash expenditures for employee transition, notice period and severance payments, employee benefits and related facilitation costs. The Company expects that the majority of the restructuring charges related to the February Plan will be incurred in the first quarter of 2023 and that the execution of the February Plan, including cash payments, will be substantially complete by the end of the second quarter of 2023. Potential position eliminations in each country are subject to local laws and consultation requirements, which may extend this process beyond the second quarter of 2023 in certain countries. The charges that the Company expects to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and therefore, actual expenses may differ materially from the estimates disclosed above. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of ConsolidationThe 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 new customers and periodic re-evaluations, as needed, of existing 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. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and, • Recognition of revenue when, or as, the Company satisfies a performance obligation. Nature of Products and Services The majority of the Company's revenue is derived from usage-based fees earned from its communications products when customers access its cloud-based platform. Platform access is considered a monthly series comprising of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. In the years ended December 31, 2022, 2021 and 2020, the revenue from usage-based fees represented 73%, 72% and 76% of total revenue, respectively. Subscription-based fees are derived from non-usage-based products on the Company’s cloud-based platform, such as Twilio Segment, Twilio Engage, Twilio Flex, as well as from sales of other products such as short codes, customer support, email API and others. Non-usage-based contracts revenue is recognized on a ratable basis over the contractual term which is generally between one No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price. The Company's arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. Remaining Performance Obligations |
Deferred Revenue and Customer Deposits and Deferred Sales Commissions | Deferred Revenue and Customer Deposits Deferred revenue is recorded when a non-cancellable contractual right to bill exists or when cash payments are received in advance of future usage on non-cancelable contracts. Customer refundable prepayments are recorded as customer deposits. As of December 31, 2022 and 2021, the Company recorded $139.1 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 consolidated balance sheets. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $124.9 million, $70.1 million and $19.5 million of revenue, respectively, that was included in the deferred revenue and customer deposits balance as of the end of the previous year. (g) Deferred Sales Commissions The Company records an asset for the incremental costs of obtaining a contract with a customer, for example, sales commissions that are earned upon execution of contracts. The Company uses the portfolio of data method to determine the estimated period of benefit of capitalized commissions which is generally determined to be up to five years. Amortization expense related to these capitalized costs related to initial contracts, upsells and renewals, is recognized on a straight line basis over the estimated period of benefit of the capitalized commissions. The Company applies the optional exemption of expensing these costs as incurred with amortization periods of one year or less. Total net capitalized commission costs as of December 31, 2022 and 2021, were $239.1 million and $193.4 million, respectively, and are included in prepaid expenses and other current assets and other long‑term assets in the accompanying consolidated balance sheets. Amortization of these assets was $57.9 million, $31.5 million and $13.3 million in the years ended December 31, 2022, 2021 and 2020, respectively, and is included in sales and marketing expense in the accompanying consolidated statements of operations. |
Cost of Revenue | Cost of RevenueCost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes fees to support the Company's cloud infrastructure, direct costs of personnel, such as salaries and stock-based compensation for the customer care and support services employees, and non-personnel costs, such as amortization of capitalized internal-use software development costs and amortization of acquired intangibles. |
Research and Development Expense | Research and Development ExpenseResearch and development expenses consist primarily of personnel costs, cloud infrastructure fees for staging and development of the Company’s products, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meets the criteria for capitalization. |
Internal-Use Software Development Costs | Internal-Use Software Development CostsCertain costs of platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance, minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are also expensed as incurred.Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in operating expenses. |
Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred and were $92.6 million, $78.8 million and $47.2 million in the years ended December 31, 2022, 2021 and 2020, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations. |
Restructuring Costs | Restructuring CostsThe 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. |
Stock-Based Compensation | Stock-Based Compensation All stock-based compensation to employees, including the purchase rights issued under the Company's 2016 Employee Stock Purchase Plan, as amended (the “2016 ESPP”), is measured on the grant date based on the fair value of the awards on the date of grant. These costs are recognized as an expense following straight-line attribution method over the requisite service period. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the purchase rights issued under the ESPP. The fair value of the restricted stock units is determined using the closing fair value of the Company's Class A common stock on the date of grant and recognized as an expense following straight-line attribution method over the requisite service period. Forfeitures are recorded in the period in which they occur. Compensation expense for stock options granted to nonemployees is calculated using the Black-Scholes option pricing model and is recognized in expense over the service period. The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock options and the purchase rights issued under ESPP. These assumptions include: • Fair value of the common stock. The Company uses the market closing price of its Class A common stock, as reported on the New York Stock Exchange, for the fair value. • Expected term. The expected term represents the period that the stock option or the purchase right is expected to be outstanding. The Company uses the simplified calculation of expected term, which reflects the weighted-average time-to-vest and the contractual life of the stock option or the purchase right; • Expected volatility. Prior to July 1, 2021, the expected volatility was derived from an average of the historical volatilities of the Class A common stock of the Company and several other entities with characteristics similar to those of the Company, such as the size and operational and economic similarities to the Company's principal business operations. Beginning with the third quarter 2021, the expected volatility was derived from the average of the historical volatilities of the Class A common stock of the Company. • Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; and • Expected dividend. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. If any of the assumptions used in the Black-Scholes model changes, stock-based compensation for future options may differ materially compared to that associated with previous grants. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with authoritative guidance which requires the use of the asset and liability approach. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry-forwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the consolidated statements of operations. |
Foreign Currency | Foreign Currency The functional currency of the Company's foreign subsidiaries is generally the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the month in which the transaction occurs. Remeasurement adjustments are recognized in the consolidated statements of operations as other expense, net, in the year of occurrence. Foreign currency transaction gains and losses were insignificant for all periods presented. For those entities where the functional currency is a foreign currency, adjustments resulting from translating the financial statements into U.S. dollars are recorded as a component of accumulated other comprehensive (loss) income as part of the total stockholders' equity. Monetary assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates in effect during the month in which a transaction occurs. Equity transactions are translated using historical exchange rates. Foreign currency transaction gains and losses are included in other expenses, net, in the accompanying consolidated statements of operations. |
Comprehensive Loss | Comprehensive LossComprehensive loss refers to net loss and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders' equity but are excluded from the calculation of net loss. |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The Company calculates its basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. The Company has 100,000,000 shares of preferred stock that was authorized but never issued or outstanding. Class A and Class B common stock are the only outstanding equity securities of the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder on a one-for-one basis and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. The shares are also automatically converted upon reaching the final conversion date of June 28, 2023, as defined in the Company’s amended and restated certificate of incorporation. Shares of Class A common stock are not convertible. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of cash deposited into money market funds, reverse repurchase agreements and commercial paper. All credit and debit card transactions that process as of the last day of each month and settle within the first few days of the subsequent month are also classified as cash and cash equivalents as of the end of the month in which they were processed. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsAccounts receivable are recorded net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company's assessment of its ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of accounts receivable balances and other known conditions that may affect a customer's ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer's ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believe will be collected. The Company writes-off accounts receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. |
Costs Related to Public Offerings | Costs Related to Public OfferingsCosts related to public offerings, which consist of direct incremental legal, printing and accounting fees are deferred until the offering is completed. Upon completion of the offering, these costs are offset against the offering proceeds within the consolidated statements of stockholders' equity. |
Property and Equipment | Property and Equipment Property and equipment, both owned and under finance leases, is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred. The useful lives of property and equipment are as follows: Capitalized internal-use software development costs 3 years Data center equipment 2 - 4 years Leasehold improvements 5 years or remaining lease term Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under financing lease 5 years or remaining lease term |
Leases | Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are measured and recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease agreements may have lease and non-lease components, which the Company accounts for as a single lease component. When estimating the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain such options will be exercised. Operating lease costs are recognized in operating expenses in the accompanying consolidated statements of operations on a straight-line basis over the lease term and variable payments are recognized in the period they are incurred. The Company’s lease agreements do not contain any residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Within the consolidated statements of cash flows, the Company presents the lease payments made on the operating leases as cash flows from operations and principal payments made on the finance leases as part of financing activities. |
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 or decreased by contributions made to and distributions received 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. Basis differences related to finite-lived intangible assets are amortized on a straight-line basis. 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, as applicable, 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 period of such determination. The authoritative guidance allows a measurement period of up to one year from the date of acquisition of the investment to make adjustments to the preliminary determination and allocation of the excess basis in the investment. |
Intangible Assets | Intangible Assets Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and trademarks, acquiring domain names and the fair value of identifiable intangible assets acquired in business combinations. Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment at least annually. The useful lives of the intangible assets are as follows: Developed technology 4 - 7 years Customer relationships 3 - 10 years Supplier relationships 5 years Trade names 3 - 5 years Patents 20 years Telecommunication licenses Indefinite Trademarks Indefinite Domain names Indefinite |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected November 30 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company's business. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets. The Company has the option to first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. However, the Company may elect to bypass the qualitative assessment and proceed directly to the quantitative impairment tests. The impairment test involves comparing the fair value of the reporting unit to its carrying value, including goodwill. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value. The impairment is limited to the carrying amount of goodwill. |
Derivatives and Hedging | Derivatives and Hedging The Company is exposed to a wide variety of risks arising from its business operations and overall economic conditions. These risks include exposure to fluctuations in various foreign currencies against its functional currency and can impact the value of cash receipts and payments. The Company minimizes its exposure to these risks through management of its core business activities, specifically, the amounts, sources and duration of its assets and liabilities, and the use of derivative financial instruments. During 2021, the Company started using foreign currency derivative forward contracts, and in the future may also use foreign currency option contacts. Foreign currency derivative forward contracts involve fixing the exchange rate for delivery of a specified amount of foreign currency on a specified date. These agreements are typically cash settled in U.S. dollars for their fair value at or close to their settlement date. Foreign currency option contracts will require the Company to pay a premium for the right to sell a specified amount of foreign currency prior to the maturity date of the option. The Company does not enter into derivative financial instruments trading for speculative purposes. Derivative instruments are carried at fair value and recorded as either an asset or a liability until they mature. Gains and losses resulting from changes in fair value of these instruments are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. For derivative instruments designated as cash flow hedges, gains or losses are initially recorded in other comprehensive income (“OCI”) in the balance sheet, then reclassified into the statement of operations in the period in which the derivative instruments mature. These realized gains and losses are recorded within the same financial statement line item as the hedged transaction. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsThe Company evaluates its long-lived assets, including property, equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. |
Business Combinations | Business CombinationsThe Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, 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 acquisition to make adjustments to the preliminary allocation of the purchase price. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. |
Segment Information | Segment InformationThe Company's Chief Executive Officer is the chief operating decision maker who reviews the Company's financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company's financial performance. The Company had no segment managers during the periods presented. Accordingly, the Company has determined that it operates in a single operating and reportable segment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company applies fair value accounting for all financial instruments on a recurring basis. The Company's financial instruments, which include cash, restricted cash, cash equivalents, accounts receivable and accounts payable are recorded at their carrying amounts, which approximate their fair values due to their short-term nature. Marketable securities consist of U.S. treasury securities, non-U.S government securities, high credit quality corporate debt securities and commercial paper. All marketable securities are considered to be available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss. In valuing these items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair values of the senior notes due 2029 and 2031 (“2029 Notes” and “2031 Notes,” respectively) are determined based on their respective closing prices on the last trading day of the reporting period and are classified as Level 2 in the fair value hierarchy. The carrying value of the strategic investments, which consist of restricted equity securities of a publicly held company and equity securities of privately held companies, is determined under the measurement alternative on a non-recurring basis adjusting for observable changes in fair value. The Company does not have a controlling interest nor it can exercise significant influence over any of these entities. The Company regularly reviews changes to the rating of its debt securities by rating agencies and monitors the surrounding economic conditions to assess the risk of expected credit losses. As of December 31, 2022, the risk of expected credit losses was not significant. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other expenses, net. |
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 No. (“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 contact 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. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2021-08 in the first quarter of 2022 with no material impact to its consolidated financial statements. (af) Recently Issued Accounting Guidance, Not yet Adopted In June 2022, the FASB issued ASU 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. ASU 2022-03 is effective for interim and annual periods beginning after December 15, 2023, with early adoption permitted. The Company is evaluating the impact of the adoption of this guidance to its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment | The useful lives of property and equipment are as follows: Capitalized internal-use software development costs 3 years Data center equipment 2 - 4 years Leasehold improvements 5 years or remaining lease term Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under financing lease 5 years or remaining lease term Property and equipment consisted of the following: As of December 31, 2022 2021 (In thousands) Capitalized internal-use software developments costs $ 257,983 $ 198,589 Data center equipment (1) 100,207 77,946 Leasehold improvements 91,660 85,297 Office equipment 70,815 58,636 Furniture and fixtures 14,935 15,360 Software 14,675 10,506 Total property and equipment 550,275 446,334 Less: accumulated depreciation and amortization (1) (286,296) (191,018) Total property and equipment, net $ 263,979 $ 255,316 ____________________________________ ( 1 ) Data center equipment contains $72.4 million and $63.0 million in assets held under finance leases as of December 31, 2022 and 2021, respectively. Accumulated depreciation and amortization contains $41.2 million and $26.8 million of accumulated depreciation for assets held under finance leases as of December 31, 2022 and 2021, respectively. |
Schedule of intangible assets | The useful lives of the intangible assets are as follows: Developed technology 4 - 7 years Customer relationships 3 - 10 years Supplier relationships 5 years Trade names 3 - 5 years Patents 20 years Telecommunication licenses Indefinite Trademarks Indefinite Domain names Indefinite |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 Gross Fair Value Hierarchy as of Aggregate Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 46,610 $ — $ — $ — $ 46,610 $ — $ — $ 46,610 Reverse repurchase 200,000 — — — — 200,000 — 200,000 Commercial paper 2,249 — — — — 2,249 — 2,249 Total included in cash 248,859 — — — 46,610 202,249 — 248,859 Marketable securities: U.S. Treasury securities 481,463 — (1,269) (11,347) 468,847 — — 468,847 Non-U.S. government 149,901 — (33) (6,304) 143,564 — — 143,564 Corporate debt securities and 2,973,844 307 (12,202) (71,043) 5,000 2,885,906 — 2,890,906 Total marketable 3,605,208 307 (13,504) (88,694) 617,411 2,885,906 — 3,503,317 Total financial assets $ 3,854,067 $ 307 $ (13,504) $ (88,694) $ 664,021 $ 3,088,155 $ — $ 3,752,176 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 December 31, 2022 As of December 31, 2021 Amortized Aggregate Amortized Aggregate Financial Assets: (In thousands) Less than one year $ 1,943,836 $ 1,909,218 $ 1,084,751 $ 1,085,006 One to three years 1,661,372 1,594,099 2,812,521 2,793,424 Total $ 3,605,208 $ 3,503,317 $ 3,897,272 $ 3,878,430 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The useful lives of property and equipment are as follows: Capitalized internal-use software development costs 3 years Data center equipment 2 - 4 years Leasehold improvements 5 years or remaining lease term Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under financing lease 5 years or remaining lease term Property and equipment consisted of the following: As of December 31, 2022 2021 (In thousands) Capitalized internal-use software developments costs $ 257,983 $ 198,589 Data center equipment (1) 100,207 77,946 Leasehold improvements 91,660 85,297 Office equipment 70,815 58,636 Furniture and fixtures 14,935 15,360 Software 14,675 10,506 Total property and equipment 550,275 446,334 Less: accumulated depreciation and amortization (1) (286,296) (191,018) Total property and equipment, net $ 263,979 $ 255,316 ____________________________________ ( 1 ) Data center equipment contains $72.4 million and $63.0 million in assets held under finance leases as of December 31, 2022 and 2021, respectively. Accumulated depreciation and amortization contains $41.2 million and $26.8 million of accumulated depreciation for assets held under finance leases as of December 31, 2022 and 2021, respectively. |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 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 consolidated balance sheet: Workforce Reduction Costs Facilitation Costs Total (In thousands) Balance as of December 31, 2021 $ — $ — $ — Restructuring charges 60,553 1,808 62,361 Cash payments (60,053) (1,242) (61,295) Balance as of December 31, 2022 $ 500 $ 566 $ 1,066 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gains and losses associated with foreign currency forward contracts | Gains and losses associated with these foreign currency forward contracts were as follows: Consolidated Statement of Operations and Statement of Comprehensive Loss Year Ended 2022 2021 (In thousands) Gains recognized in OCI Net change in market value of effective foreign currency forward exchange contracts $ 556 $ 294 Losses recognized in income due to instruments maturing Cost of revenue $ 34,862 $ 7,545 |
Right-of-Use Assets and Lease_2
Right-of-Use Assets and Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of lease, cost | Supplemental cash flow and other information related to operating leases was as follows: Year Ended December 31, 2022 2021 Operating cash flows paid for amounts included in operating lease liabilities (in thousands) $ 64,473 $ 60,085 Weighted average remaining lease term (in years) 4.8 5.5 Weighted average discount rate 4.5 % 4.5 % |
Schedule of lessee, operating lease, liability, maturity | Maturities of operating lease liabilities were as follows: As of December 31, 2022 Year Ended December 31, (In thousands) 2023 $ 62,696 2024 52,185 2025 38,262 2026 34,861 2027 26,818 Thereafter 28,100 Total lease payments 242,922 Less: imputed interest (24,149) Total operating lease obligations 218,773 Less: current obligations (54,222) Long-term operating lease obligations $ 164,551 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Purchase price components | The purchase price components, as adjusted, are summarized in the following table: Total (In thousands) Fair value of Class A common stock transferred $ 419,197 Cash consideration 418,073 Fair value of the pre-combination service through equity awards 1,511 Total purchase price $ 838,781 |
Schedule of purchase price allocation | The following table presents the purchase price allocation on the acquisition close date, as adjusted: Total (In thousands) Cash and cash equivalents $ 21,610 Accounts receivable and other current assets 11,481 Property and equipment, net 2,950 Operating right-of-use asset 23,545 Intangible assets (1) 244,500 Other assets 370 Goodwill 600,574 Accounts payable and other liabilities (20,239) Deferred revenue (4,526) Operating lease liability, noncurrent (23,169) Deferred tax liability (18,315) Total purchase price $ 838,781 ____________________________________ ( 1 ) Identifiable intangible assets are comprised of the following: Total Estimated (In thousands) (In years) Developed technology $ 56,800 7 Customer relationships 147,700 10 Supplier relationships 39,600 5 Trade names 400 5 Total intangible assets acquired $ 244,500 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of preliminary basis difference attributable to identifiable assets and useful lives | The following table presents the estimated basis differences attributable to the identifiable intangible assets as of the date of investment 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) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill balance | The goodwill balance as of December 31, 2022 and 2021 was as follows: Total (In thousands) Balance as of December 31, 2020 $ 4,595,394 Goodwill additions related to 2021 acquisitions 663,599 Measurement period and other adjustments 4,173 Balance as of December 31, 2021 $ 5,263,166 Goodwill additions related to 2022 acquisitions 25,748 Measurement period and other adjustments (4,761) Balance as of December 31, 2022 $ 5,284,153 |
Schedule of intangible assets | Intangible assets consisted of the following: As of December 31, 2022 Cost Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 795,753 $ (335,893) $ 459,860 Customer relationships 538,466 (204,241) 334,225 Supplier relationships 56,922 (19,846) 37,076 Trade names 30,342 (20,106) 10,236 Order backlog 10,000 (10,000) — Patent 4,028 (705) 3,323 Total amortizable intangible assets 1,435,511 (590,791) 844,720 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 1,440,726 $ (590,791) $ 849,935 As of December 31, 2021 Cost 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 December 31, 2022 Year Ended December 31, (In thousands) 2023 $ 202,708 2024 197,273 2025 193,699 2026 120,237 2027 72,218 Thereafter 58,585 Total $ 844,720 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2022 2021 (In thousands) Accrued payroll and related $ 79,703 $ 78,780 Accrued bonus and commission 35,449 64,665 Accrued cost of revenue 161,455 118,004 Sales and other taxes payable 92,319 61,975 Finance lease liability 11,871 12,370 Employee sabbatical benefit accrual 30,683 — Accrued other expense 78,741 81,709 Total accrued expenses and other current liabilities $ 490,221 $ 417,503 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-term debt | Long-term debt, net, consisted of the following: As of December 31, 2022 2021 (In thousands) 2029 Senior Notes Principal $ 500,000 $ 500,000 Unamortized discount (5,001) (5,701) Unamortized issuance costs (1,126) (1,286) Net carrying amount 493,873 493,013 2031 Senior Notes Principal 500,000 500,000 Unamortized discount (5,299) (5,832) Unamortized issuance costs (1,192) (1,274) Net carrying amount 493,509 492,894 Total long-term debt, net $ 987,382 $ 985,907 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of the sales credit reserve | A roll‑forward of the Company’s customer credit reserve is as follows: As of December 31, 2022 2021 2020 (In thousands) Balance, beginning of period $ 18,577 $ 16,783 $ 6,784 Additions 86,303 55,937 50,817 Deductions against reserve (71,756) (54,143) (40,818) Balance, end of period $ 33,124 $ 18,577 $ 16,783 |
Revenue by Geographic Area an_2
Revenue by Geographic Area and Groups of Similar Products (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by geographic area and similar products | 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: Year Ended December 31, 2022 2021 (1) 2020 Revenue by geographic area: (In thousands) United States $ 2,510,525 $ 1,927,302 $ 1,282,213 International 1,315,796 914,537 479,563 Total $ 3,826,321 $ 2,841,839 $ 1,761,776 Percentage of revenue by geographic area: United States 66 % 68 % 73 % International 34 % 32 % 27 % ____________________ (1) During 2022, the Company identified a misclassification of some of its United States customers for the fourth quarter of 2021, which impacted the reported United States versus international revenue split for the year ended December 31, 2021. The Company has updated the amounts herein to accurately reflect the revenue split by geographic area. No other amounts were impacted by this misclassification. Year Ended December 31, 2022 2021 2020 Revenue by groups of similar products: (In thousands) Communications: Programmable Messaging $ 2,066,300 $ 1,416,265 $ 820,887 Programmable Voice 474,790 428,484 345,042 Email 333,500 277,400 218,700 Other 376,650 289,131 213,800 Total communications 3,251,240 2,411,280 1,598,429 Software 441,477 325,943 98,363 Other 133,604 104,616 64,984 Total $ 3,826,321 $ 2,841,839 $ 1,761,776 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of unrecorded unconditional purchase obligations disclosure | Future minimum payments under these noncancellable purchase commitments are summarized in the table below. Unrecognized tax benefits are not included in these amounts because any amounts expected to be settled in cash are not material: As of Year Ending December 31, (In thousands) 2023 $ 205,257 2024 194,237 2025 221,438 2026 227,515 Total payments $ 848,447 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2022 2021 Stock options issued and outstanding 2,277,379 3,351,313 Unvested restricted stock units issued and outstanding 15,414,997 6,475,700 Class A common stock reserved for Twilio.org 530,449 618,857 Stock-based awards available for grant under 2016 Plan 19,851,399 24,650,104 Stock-based awards available for grant under ESPP 7,648,429 6,382,830 Total 45,722,653 41,478,804 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock options activity | Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2021 3,351,313 $ 78.10 6.09 $ 646,760 Granted 167,150 85.17 Exercised (766,024) 29.32 Forfeited and canceled (475,060) 171.53 Outstanding options as of December 31, 2022 2,277,379 $ 75.54 5.32 $ 39,167 Options vested and exercisable as of December 31, 2022 1,823,525 $ 54.75 4.59 $ 39,011 |
Schedule of weighted average grant date fair value | Year Ended December 31, 2022 2021 2020 (In thousands, except per share amounts) Aggregate intrinsic value of stock options exercised (1) $ 80,839 $ 508,539 $ 603,597 Total estimated grant date fair value of options vested $ 77,403 $ 138,851 $ 107,854 Weighted-average grant date fair value per share of options granted $ 50.66 $ 216.29 $ 170.70 ____________________________________ ( 1 ) Aggregate intrinsic value represents the difference between the fair value of the Company’s Class A common stock as reported on the New York Stock Exchange and the exercise price of outstanding “in-the-money” options. |
Schedule of restricted stock unit activity | Number of Weighted- Aggregate Unvested RSUs as of December 31, 2021 6,475,700 $ 237.22 $ 1,705,311 Granted 16,951,118 110.83 Vested (4,259,908) 170.46 Forfeited and canceled (3,751,913) 178.50 Unvested RSUs as of December 31, 2022 15,414,997 $ 130.97 $ 754,718 |
Schedule of valuation assumptions, options | The fair value of employee stock options was estimated on the date of grant using the following assumptions in the Black-Scholes option pricing model: Year Ended December 31, Employee Stock Options: 2022 2021 2020 Fair value of common stock $85.17 $268.55 - $409.21 $108.37 - $301.72 Expected term (in years) 6.02 0.30 - 6.39 0.52 - 6.08 Expected volatility 61.6% 42.9% - 61.5% 51.9% - 65.1% Risk-free interest rate 3.3% 0.1% - 1.4% 0.1% - 1.4% Dividend rate —% —% —% |
Schedule of valuation assumptions, ESOP | Year Ended December 31, Employee Stock Purchase Plan: 2022 2021 2020 Fair value of common stock $50.81 - $99.68 $297.20 - $310.80 $183.40 - $278.50 Expected term (in years) 0.50 0.50 0.50 Expected volatility 73.2% - 97.3% 46.4% - 58.7% 54.4% - 72.1% Risk-free interest rate 1.5% - 4.5% —% - 0.1% 0.1% - 0.2% Dividend rate —% —% —% |
Schedule of stock based compensation expense | The Company recorded stock-based compensation expense as follows: Year Ended December 31, 2022 2021 2020 (In thousands) Cost of revenue $ 21,136 $ 14,074 $ 8,857 Research and development 374,846 258,672 173,303 Sales and marketing 240,109 213,351 103,450 General and administrative 148,194 146,188 76,301 Restructuring costs 14,275 — — Total $ 798,560 $ 632,285 $ 361,911 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 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: Year Ended December 31, 2022 2021 2020 Net loss attributable to common stockholders (in thousands) $ (1,256,145) $ (949,900) $ (490,979) Weighted-average shares used to compute net loss per share attributable to 182,994,038 174,180,465 146,708,663 Net loss per share attributable to common stockholders, basic and diluted $ (6.86) $ (5.45) $ (3.35) |
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 December 31, 2022 2021 2020 Stock options issued and outstanding 2,277,379 3,351,313 5,625,735 Unvested restricted stock units issued and outstanding 15,414,997 6,475,700 7,523,882 Class A common stock reserved for Twilio.org 530,449 618,857 707,265 Class A common stock committed under ESPP 766,334 147,947 103,703 Convertible Notes (1) — — 4,847,578 Class A common stock in escrow 31,503 75,506 75,612 Class A common stock in escrow and restricted stock awards subject to future vesting 56,237 235,054 268,030 Total 19,076,899 10,904,377 19,151,805 ____________________________________ (1) The Convertible Notes were fully redeemed in 2021 and were no longer outstanding as of December 31, 2021. As of December 31, 2020, the Company expected to settle the principal amount of the notes in shares of its Class A common stock, and as such used the if-converted method to calculate any potential dilutive effect of the debt settlement on diluted net income per share, if applicable. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income tax, domestic and foreign | The following table presents domestic and foreign components of loss before income taxes for the periods presented: Year Ended December 31, 2022 2021 2020 (In thousands) United States $ (1,021,208) $ (737,360) $ (403,148) International (222,424) (223,569) (101,278) Loss before provision for income taxes $ (1,243,632) $ (960,929) $ (504,426) |
Schedule of components of income tax expense (benefit) | Provision for (benefit from) income taxes consists of the following: Year Ended December 31, 2022 2021 2020 Current: (In thousands) Federal $ 3,928 $ 122 $ — State 4,100 420 272 Foreign 17,450 8,274 5,215 Total 25,478 8,816 5,487 Deferred: Federal (5,155) (13,772) (12,719) State (818) (4,083) (3,563) Foreign (6,992) (1,990) (2,652) Total (12,965) (19,845) (18,934) Provision for (benefit from) income taxes $ 12,513 $ (11,029) $ (13,447) |
Schedule of effective income tax rate reconciliation | The following table presents a reconciliation of the statutory federal tax rate and the Company's effective tax rate: Year Ended December 31, 2022 2021 2020 Tax at federal statutory rate 21 % 21 % 21 % State tax, net of federal benefit 3 8 12 Stock-based compensation (7) 16 24 Credits 1 4 3 Foreign rate differential (2) (1) (4) Permanent book vs. tax differences — — (1) Change in valuation allowance (17) (46) (51) Other (1) — — Effective tax rate (2) % 2 % 4 % |
Schedule of deferred tax assets and liabilities | The following table presents the significant components of the Company's deferred tax assets and liabilities: As of December 31, 2022 2021 Deferred tax assets: (In thousands) Net operating loss carryforwards $ 959,864 $ 1,054,585 Accrued and prepaid expenses 47,986 24,831 Stock-based compensation 37,981 44,261 Research and development credits 159,604 148,282 Intangibles 135,500 135,500 Capitalized research and development expenses 219,176 — Lease liability 60,795 71,651 Unrealized losses on marketable securities 32,108 4,602 Other 36,830 28,859 Gross deferred tax assets 1,689,844 1,512,571 Valuation allowance (1,357,300) (1,136,827) Net deferred tax assets 332,544 375,744 Deferred tax liabilities: Capitalized software (36,552) (28,825) Prepaid expenses (1,587) (1,649) Acquired intangibles (202,778) (251,034) Right-of-use asset (35,734) (64,277) Deferred commissions (59,675) (47,897) Net deferred tax liability $ (3,782) $ (17,938) |
Summary of operating loss carryforwards | The following table summarizes the Company’s tax carryforwards, carryovers and credits: As of Expiration Date (In thousands) Federal tax credits $ 136,000 Various dates beginning in 2036 Federal net operating loss carryforwards $ 3,665,700 Indefinite State net operating loss carryforwards $ 2,684,800 Various dates beginning in 2026 State tax credits $ 105,200 Indefinite Foreign net operating loss carryforwards $ 498,500 Indefinite |
Summary of tax credit carryforwards | The following table summarizes the Company’s tax carryforwards, carryovers and credits: As of Expiration Date (In thousands) Federal tax credits $ 136,000 Various dates beginning in 2036 Federal net operating loss carryforwards $ 3,665,700 Indefinite State net operating loss carryforwards $ 2,684,800 Various dates beginning in 2026 State tax credits $ 105,200 Indefinite Foreign net operating loss carryforwards $ 498,500 Indefinite |
Schedule of unrecognized tax benefits roll forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2022 2021 2020 (In thousands) Unrecognized tax benefit, beginning of year $ 223,380 $ 191,183 $ 49,042 Gross increases for tax positions of prior years 3,250 3,496 4,259 Gross decreases for tax positions of prior years (705) (10,693) (931) Gross increases for tax positions of current year 4,081 39,394 138,813 Lapse of statute of limitations (1,040) — — Unrecognized tax benefit, end of year $ 228,966 $ 223,380 $ 191,183 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) reporting_unit manager vote shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 154,500,000 | ||
Deferred revenue | 139,100,000 | $ 141,500,000 | |
Revenue recognized out of adjusted deferred revenue balance | $ 124,900,000 | 70,100,000 | $ 19,500,000 |
Amortization period for deferred incremental commission costs of obtaining new contracts | 3 years | ||
Total net capitalized costs | $ 239,100,000 | 193,400,000 | |
Amortization of deferred commissions | 57,913,000 | 31,541,000 | 13,322,000 |
Advertising expense | $ 92,600,000 | $ 78,800,000 | 47,200,000 |
Preferred stock, authorized (in shares) | shares | 100,000,000 | 100,000,000 | |
Number of reporting units | reporting_unit | 1 | ||
Goodwill, impairment loss | $ 0 | $ 0 | $ 0 |
Number of segment managers | manager | 0 | ||
Common Stock Class A | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Votes per share | vote | 1 | ||
Common Stock Class B | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Votes per share | vote | 10 | ||
Conversion ratio | 1 | ||
Incremental commission costs of obtaining new contracts | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Amortization period for deferred incremental commission costs of obtaining new contracts | 5 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Revenue Recognition Period One | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Revenue, remaining performance obligation, percentage | 66% | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Revenue Recognition Period Two | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Revenue, remaining performance obligation, percentage | 94% | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months | ||
Usage Based Contracts | Revenue Benchmark | Product Concentration Risk | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Percentage of revenue | 73% | 72% | 76% |
Non-Usage Based Contracts | Minimum | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Revenue recognized, period for recognition | 1 year | ||
Non-Usage Based Contracts | Maximum | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Revenue recognized, period for recognition | 3 years | ||
Non-Usage Based Contracts | Revenue Benchmark | Product Concentration Risk | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Percentage of revenue | 27% | 28% | 24% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Developed technology | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 4 years |
Developed technology | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 7 years |
Customer relationships | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 3 years |
Customer relationships | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 10 years |
Supplier relationships | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 5 years |
Trade names | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 3 years |
Trade names | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 5 years |
Patents | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated life | 20 years |
Capitalized internal-use software developments costs | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 3 years |
Data center equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 2 years |
Data center equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 4 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 5 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 5 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 3 years |
Assets under financing lease | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated life | 5 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | $ 248,859 | $ 832,624 |
Amortized Cost or Carrying Value | 3,605,208 | 3,897,272 |
Gross Unrealized Gains | 307 | 966 |
Gross Unrealized Losses Less Than 12 Months | (13,504) | (19,808) |
Gross Unrealized Losses More Than 12 Months | (88,694) | |
Marketable securities, aggregate fair value | 3,503,317 | 3,878,430 |
Total financial assets | 3,854,067 | 4,729,896 |
Total financial assets | 3,752,176 | 4,711,054 |
Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 46,610 | 786,548 |
Marketable securities, aggregate fair value | 617,411 | 624,036 |
Total financial assets | 664,021 | 1,410,584 |
Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 202,249 | 46,076 |
Marketable securities, aggregate fair value | 2,885,906 | 3,254,394 |
Total financial assets | 3,088,155 | 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 | 481,463 | 375,305 |
Gross Unrealized Gains | 0 | 6 |
Gross Unrealized Losses Less Than 12 Months | (1,269) | (2,561) |
Gross Unrealized Losses More Than 12 Months | (11,347) | |
Marketable securities, aggregate fair value | 468,847 | 372,750 |
U.S. Treasury securities | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 468,847 | 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 | 149,901 | 221,641 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses Less Than 12 Months | (33) | (1,355) |
Gross Unrealized Losses More Than 12 Months | (6,304) | |
Marketable securities, aggregate fair value | 143,564 | 220,286 |
Non-U.S. government securities | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 143,564 | 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 | 2,973,844 | 3,300,326 |
Gross Unrealized Gains | 307 | 960 |
Gross Unrealized Losses Less Than 12 Months | (12,202) | (15,892) |
Gross Unrealized Losses More Than 12 Months | (71,043) | |
Marketable securities, aggregate fair value | 2,890,906 | 3,285,394 |
Corporate debt securities and commercial paper | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 5,000 | 31,000 |
Corporate debt securities and commercial paper | Level 2 | ||
Fair Value Measurements, Financial Assets | ||
Marketable securities, aggregate fair value | 2,885,906 | 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: | 46,610 | 786,548 |
Money market funds | Level 1 | ||
Fair Value Measurements, Financial Assets | ||
Cash and cash equivalents: | 46,610 | 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: | 2,249 | 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: | 2,249 | 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 ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gross Unrealized Losses More Than 12 Months | $ 88,694 | ||
Gross Unrealized Losses Less Than 12 Months | 13,504 | $ 19,808 | |
Interest earned on marketable securities | 64,600 | 55,700 | $ 32,400 |
Investment in equity securities, carrying value | 76,900 | 68,300 | |
Impairments or other adjustments | 0 | 0 | $ 0 |
Corporate Debt Securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unrealized losses | 2,660,000 | ||
Gross Unrealized Losses More Than 12 Months | 2,040,000 | ||
Gross Unrealized Losses Less Than 12 Months | 620,500 | ||
2029 Senior Notes | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of the notes | 410,900 | 510,200 | |
2031 Senior Notes | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of the notes | $ 399,400 | $ 512,800 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Less than one year, amortized cost | $ 1,943,836 | $ 1,084,751 |
One to three years, amortized cost | 1,661,372 | 2,812,521 |
Amortized Cost or Carrying Value | 3,605,208 | 3,897,272 |
Less than one year, aggregate fair value | 1,909,218 | 1,085,006 |
One to three years, aggregate fair value | 1,594,099 | 2,793,424 |
Total aggregate fair value | $ 3,503,317 | $ 3,878,430 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and Equipment | ||
Total property and equipment | $ 550,275 | $ 446,334 |
Less: accumulated depreciation and amortization | (286,296) | (191,018) |
Total property and equipment, net | 263,979 | 255,316 |
Capitalized internal-use software developments costs | ||
Property and Equipment | ||
Total property and equipment | 257,983 | 198,589 |
Data center equipment | ||
Property and Equipment | ||
Total property and equipment | 100,207 | 77,946 |
Finance lease asset | 72,400 | 63,000 |
Finance lease asset, accumulated amortization | 41,200 | 26,800 |
Leasehold improvements | ||
Property and Equipment | ||
Total property and equipment | 91,660 | 85,297 |
Office equipment | ||
Property and Equipment | ||
Total property and equipment | 70,815 | 58,636 |
Furniture and fixtures | ||
Property and Equipment | ||
Total property and equipment | 14,935 | 15,360 |
Software | ||
Property and Equipment | ||
Total property and equipment | $ 14,675 | $ 10,506 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 71.7 | $ 59.6 | $ 51.1 |
Capitalized internal use software development costs | $ 65.4 | $ 63.1 | $ 47.1 |
Impairment (Details)
Impairment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of long-lived assets due to 2022 office closures | $ 97,722 | $ 0 | $ 0 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Employees elimination percentage | 11% | |||
Restructuring charges | $ 76,636 | $ 0 | $ 0 | |
Stock-based compensation - restructuring | 14,275 | |||
Employee Severance and Facilitation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 62,361 | |||
Stock-Based Awards | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 14,300 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Restructuring Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | $ 76,636 | $ 0 | $ 0 |
Employee Severance and Facilitation Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance of period | 0 | ||
Restructuring charges | 62,361 | ||
Cash payments | (61,295) | ||
Ending balance of period | 1,066 | 0 | |
Workforce Reduction Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance of period | 0 | ||
Restructuring charges | 60,553 | ||
Cash payments | (60,053) | ||
Ending balance of period | 500 | 0 | |
Facilitation Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance of period | 0 | ||
Restructuring charges | 1,808 | ||
Cash payments | (1,242) | ||
Ending balance of period | $ 566 | $ 0 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) - Foreign Currency Forward - Designated as Cash Flow Hedges - Cash Flow Hedge $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Maximum | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Derivative, term of contract | 6 months |
Buy | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |
Derivative, notional amount | $ 219.8 |
Derivatives and Hedging - Gains
Derivatives and Hedging - Gains (Losses) Associated With Foreign Currency Forward Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cost of revenue | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Losses recognized in income due to instruments maturing | $ 34,862 | $ 7,545 |
Foreign Currency Forward | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Gains recognized in OCI | $ 556 | $ 294 |
Right-of-Use Assets and Lease_3
Right-of-Use Assets and Lease Liabilities - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Number of leased properties | property | 30 | ||
Renewal option | 5 years | ||
Operating lease, impairment loss | $ 72,800 | ||
Operating lease, cost | 57,800 | $ 61,000 | $ 49,300 |
Impairment of long-lived assets due to 2022 office closures | $ 97,722 | $ 0 | $ 0 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease | 1 month 6 days | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease | 7 years |
Right-of-Use Assets and Lease_4
Right-of-Use Assets and Lease Liabilities - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows paid for amounts included in operating lease liabilities | $ 64,473 | $ 60,085 |
Weighted average remaining lease term | 4 years 9 months 18 days | 5 years 6 months |
Weighted average discount rate | 4.50% | 4.50% |
Right-of-Use Assets and Lease_5
Right-of-Use Assets and Lease Liabilities - Lease Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 62,696 | |
2024 | 52,185 | |
2025 | 38,262 | |
2026 | 34,861 | |
2027 | 26,818 | |
Thereafter | 28,100 | |
Total lease payments | 242,922 | |
Less: imputed interest | (24,149) | |
Total operating lease obligations | 218,773 | |
Less: current obligations | (54,222) | $ (52,325) |
Long-term operating lease obligations | $ 164,551 | $ 211,253 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquisition | ||||
Goodwill | $ 5,284,153 | $ 5,263,166 | $ 4,595,394 | |
Fair value of the pre-combination service through equity awards | 1,511 | $ 38,972 | ||
2022 Acquisitions | ||||
Acquisition | ||||
Purchase price, as adjusted | 32,700 | |||
Goodwill | 25,700 | |||
Intangible assets | 8,200 | |||
Zipwhip | ||||
Acquisition | ||||
Purchase price, as adjusted | $ 838,781 | |||
Goodwill | 600,574 | |||
Cash consideration | 418,073 | |||
Fair value of Class A common stock transferred | $ 419,197 | |||
Shares issuable as part of acquisition (in shares) | 1,200,000 | |||
Fair value of the pre-combination service through equity awards | $ 1,511 | |||
Business combination, contingent consideration | $ 19,100 | |||
Business combination, contingent consideration. term | 3 years | |||
Fair value of unvested employee shares | $ 30,700 | |||
Revenues | $ 139,500 | 55,400 | ||
Intangible assets | 244,500 | |||
Zipwhip | Developed technology | ||||
Acquisition | ||||
Intangible assets | 56,800 | |||
Zipwhip | Common Stock Class A | ||||
Acquisition | ||||
Shares issuable as part of acquisition (in shares) | 1,100,000 | |||
Shares subject to future vesting conditions (in shares) | 59,533 | |||
Weighted average remaining contractual term | 3 years | |||
Other Acquisitions | ||||
Acquisition | ||||
Purchase price, as adjusted | 105,000 | |||
Goodwill | 63,200 | |||
Other Acquisitions | Developed technology | ||||
Acquisition | ||||
Intangible assets | 13,400 | |||
Other Acquisitions | Other Intangible Assets | ||||
Acquisition | ||||
Intangible assets | $ 23,600 |
Business Combinations - Purchas
Business Combinations - Purchase Price Components (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Fair value of the pre-combination service through equity awards | $ 1,511 | $ 38,972 | |
Zipwhip | |||
Business Acquisition [Line Items] | |||
Fair value of Class A common stock transferred | $ 419,197 | ||
Cash consideration | 418,073 | ||
Fair value of the pre-combination service through equity awards | 1,511 | ||
Total purchase price | $ 838,781 |
Business Combinations - Purch_2
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Acquisition | |||
Goodwill | $ 5,284,153 | $ 5,263,166 | $ 4,595,394 |
Zipwhip | |||
Acquisition | |||
Cash and cash equivalents | 21,610 | ||
Accounts receivable and other current assets | 11,481 | ||
Property and equipment, net | 2,950 | ||
Operating right-of-use asset | 23,545 | ||
Intangible assets | 244,500 | ||
Other assets | 370 | ||
Goodwill | 600,574 | ||
Accounts payable and other liabilities | (20,239) | ||
Deferred revenue | (4,526) | ||
Operating lease liability | (23,169) | ||
Deferred tax liability | (18,315) | ||
Total purchase price | $ 838,781 |
Business Combinations - Identif
Business Combinations - Identifiable Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Supplier relationships | ||
Acquisitions | ||
Intangible assets, estimated life | 5 years | |
Zipwhip | ||
Acquisitions | ||
Intangible assets | $ 244,500 | |
Zipwhip | Developed technology | ||
Acquisitions | ||
Intangible assets | $ 56,800 | |
Intangible assets, estimated life | 7 years | |
Zipwhip | Customer relationships | ||
Acquisitions | ||
Intangible assets | $ 147,700 | |
Intangible assets, estimated life | 10 years | |
Zipwhip | Supplier relationships | ||
Acquisitions | ||
Intangible assets | $ 39,600 | |
Intangible assets, estimated life | 5 years | |
Zipwhip | Trade names | ||
Acquisitions | ||
Intangible assets | $ 400 | |
Intangible assets, estimated life | 5 years |
Equity Method Investment - Narr
Equity Method Investment - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 12 Months Ended | ||
May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Marketable Securities [Line Items] | |||||
Intangible assets | $ 849,935 | $ 849,935 | $ 1,050,012 | ||
Deferred tax liabilities | 3,782 | 3,782 | 17,938 | ||
Equity method investment | $ 699,911 | 699,911 | 0 | ||
Share of losses from equity method investment | (35,315) | 0 | $ 0 | ||
Share of other comprehensive loss from equity method investment | $ 14,940 | $ 0 | $ 0 | ||
Syniverse | |||||
Marketable Securities [Line Items] | |||||
Acquisition of voting stock (in percent) | 44.60% | 44.50% | 44.50% | ||
Payments to acquire equity method investments | $ 750,000 | ||||
Intangible assets | 530,741 | $ 508,900 | $ 508,900 | ||
Deferred tax liabilities | 41,300 | 41,300 | 41,300 | ||
Estimated goodwill | $ 623,800 | 623,800 | 623,800 | ||
Equity method investment | 700,000 | 700,000 | |||
Share of other comprehensive loss from equity method investment | $ 14,900 | ||||
Impact of transaction | $ 89,600 |
Equity Method Investment - Basi
Equity Method Investment - Basis Differences (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Marketable Securities [Line Items] | |||
Intangible assets | $ 849,935 | $ 1,050,012 | |
Syniverse | |||
Marketable Securities [Line Items] | |||
Intangible assets | $ 530,741 | $ 508,900 | |
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 |
Equity Method Investment (Detai
Equity Method Investment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Equity method investment | $ 699,911 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill | ||
Beginning balance of period | $ 5,263,166 | $ 4,595,394 |
Goodwill additions related to 2021 acquisitions | 25,748 | 663,599 |
Measurement period and other adjustments | (4,761) | 4,173 |
Ending balance of period | $ 5,284,153 | $ 5,263,166 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortizable intangible assets: | ||
Cost | $ 1,435,511 | $ 1,429,470 |
Accumulated Amortization | (590,791) | (384,673) |
Total | 844,720 | 1,044,797 |
Intangible assets, gross | 1,440,726 | 1,434,685 |
Total | 849,935 | 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: | 295 | 295 |
Developed technology | ||
Amortizable intangible assets: | ||
Cost | 795,753 | 794,831 |
Accumulated Amortization | (335,893) | (222,765) |
Total | 459,860 | 572,066 |
Customer relationships | ||
Amortizable intangible assets: | ||
Cost | 538,466 | 538,264 |
Accumulated Amortization | (204,241) | (128,035) |
Total | 334,225 | 410,229 |
Supplier relationships | ||
Amortizable intangible assets: | ||
Cost | 56,922 | 51,671 |
Accumulated Amortization | (19,846) | (9,491) |
Total | 37,076 | 42,180 |
Trade names | ||
Amortizable intangible assets: | ||
Cost | 30,342 | 30,669 |
Accumulated Amortization | (20,106) | (13,874) |
Total | 10,236 | 16,795 |
Order backlog | ||
Amortizable intangible assets: | ||
Cost | 10,000 | 10,000 |
Accumulated Amortization | (10,000) | (10,000) |
Total | 0 | 0 |
Patent | ||
Amortizable intangible assets: | ||
Cost | 4,028 | 4,035 |
Accumulated Amortization | (705) | (508) |
Total | $ 3,323 | $ 3,527 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 206.4 | $ 198.8 | $ 98.6 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Total Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets | ||
2023 | $ 202,708 | |
2024 | 197,273 | |
2025 | 193,699 | |
2026 | 120,237 | |
2027 | 72,218 | |
Thereafter | 58,585 | |
Total | $ 844,720 | $ 1,044,797 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued payroll and related | $ 79,703 | $ 78,780 |
Accrued bonus and commission | 35,449 | 64,665 |
Accrued cost of revenue | 161,455 | 118,004 |
Sales and other taxes payable | 92,319 | 61,975 |
Finance lease liability | 11,871 | 12,370 |
Employee sabbatical benefit accrual | 30,683 | 0 |
Accrued other expense | 78,741 | 81,709 |
Total accrued expenses and other current liabilities | $ 490,221 | $ 417,503 |
Finance lease liability | Total accrued expenses and other current liabilities | Total accrued expenses and other current liabilities |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||
Total long-term debt, net | $ 987,382,000 | $ 985,907,000 | |
2029 Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | 500,000,000 | 500,000,000 | $ 500,000,000 |
Unamortized discount | (5,001,000) | (5,701,000) | |
Unamortized issuance costs | (1,126,000) | (1,286,000) | |
Total long-term debt, net | 493,873,000 | 493,013,000 | |
2031 Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal | 500,000,000 | 500,000,000 | $ 500,000,000 |
Unamortized discount | (5,299,000) | (5,832,000) | |
Unamortized issuance costs | (1,192,000) | (1,274,000) | |
Total long-term debt, net | $ 493,509,000 | $ 492,894,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Converted instrument, amount including cash | $ 1,700,000,000 | $ 894,600,000 | |||
Carrying amount of equity component | 1,400,000,000 | 701,900,000 | |||
Debt instrument, liability component | 335,700,000 | 192,700,000 | |||
Gain (loss) on extinguishment of debt | $ 0 | $ (28,965,000) | (12,863,000) | ||
Payment for debt settlement | $ 2,000,000 | ||||
Common Stock | Common Stock Class A | |||||
Debt Instrument [Line Items] | |||||
Equity component from partial settlement and redemption of convertible senior notes due 2023 (in shares) | 4,846,965 | 2,902,434 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 1,000,000,000 | ||||
Net proceeds from the debt offering | 984,700,000 | ||||
Senior Notes | Change of control event | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 101% | ||||
2029 Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||
Interest rate | 3.625% | ||||
2029 Senior Notes | Redemption Period One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maximum redemption price as a percentage of principal 180 days after equity offer | 40% | ||||
Debt instrument, minimum redemption price as a percentage of principal outstanding | 50% | ||||
2029 Senior Notes | Redemption Period Two | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 101.813% | ||||
2029 Senior Notes | Redemption Period Three | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100.906% | ||||
2029 Senior Notes | Redemption Period Four | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100% | ||||
2029 Senior Notes | Maximum | Redemption Period One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 103.625% | ||||
2029 Senior Notes | Minimum | Redemption Period One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100% | ||||
2031 Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 500,000,000 | $ 500,000,000 | 500,000,000 | ||
Interest rate | 3.875% | ||||
2031 Senior Notes | Redemption Period One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 103.875% | ||||
Debt instrument, maximum redemption price as a percentage of principal 180 days after equity offer | 40% | ||||
Debt instrument, minimum redemption price as a percentage of principal outstanding | 50% | ||||
2031 Senior Notes | Redemption Period Two | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100% | ||||
2031 Senior Notes | Redemption Period Three | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 101.938% | ||||
2031 Senior Notes | Redemption Period Four | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 101.292% | ||||
2031 Senior Notes | Redemption Period Five | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100.646% | ||||
2031 Senior Notes | Redemption Period Six | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, redemption price, percentage | 100% | ||||
Convertible Senior Notes 0.25 Percent Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Debt settlement, amount | $ 206,300,000 | ||||
Convertible Senior Notes Due2023 | |||||
Debt Instrument [Line Items] | |||||
Debt settlement, amount | 343,700,000 | ||||
Gain (loss) on extinguishment of debt | $ (29,000,000) | ||||
Capped Call Arrangement | |||||
Debt Instrument [Line Items] | |||||
Gain (loss) on extinguishment of debt | $ 3,200,000 | ||||
Proceeds from convertible debt | 229,800,000 | ||||
Transaction costs for settlement of capped calls | $ 1,400,000 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Sales Credit Reserve (Details) - Sales credit reserve - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Sales credit reserve | |||
Balance, beginning of period | $ 18,577 | $ 16,783 | $ 6,784 |
Additions | 86,303 | 55,937 | 50,817 |
Deductions against reserve | (71,756) | (54,143) | (40,818) |
Balance, end of period | $ 33,124 | $ 18,577 | $ 16,783 |
Revenue by Geographic Area an_3
Revenue by Geographic Area and Groups of Similar Products - Revenue and Percentage of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue by geographic area: | |||
Revenue | $ 3,826,321 | $ 2,841,839 | $ 1,761,776 |
Communications: | |||
Revenue by geographic area: | |||
Revenue | 3,251,240 | 2,411,280 | 1,598,429 |
Programmable Messaging | |||
Revenue by geographic area: | |||
Revenue | 2,066,300 | 1,416,265 | 820,887 |
Programmable Voice | |||
Revenue by geographic area: | |||
Revenue | 474,790 | 428,484 | 345,042 |
Revenue by geographic area: | |||
Revenue | 333,500 | 277,400 | 218,700 |
Other | |||
Revenue by geographic area: | |||
Revenue | 376,650 | 289,131 | 213,800 |
Software | |||
Revenue by geographic area: | |||
Revenue | 441,477 | 325,943 | 98,363 |
Other | |||
Revenue by geographic area: | |||
Revenue | 133,604 | 104,616 | 64,984 |
United States | |||
Revenue by geographic area: | |||
Revenue | $ 2,510,525 | $ 1,927,302 | $ 1,282,213 |
United States | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||
Percentage of revenue by geographic area: | |||
Percentage of revenue | 66% | 68% | 73% |
International | |||
Revenue by geographic area: | |||
Revenue | $ 1,315,796 | $ 914,537 | $ 479,563 |
International | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||
Percentage of revenue by geographic area: | |||
Percentage of revenue | 34% | 32% | 27% |
Revenue by Geographic Area an_4
Revenue by Geographic Area and Groups of Similar Products - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Long-lived assets | $ 54.5 | $ 41 |
Commitments and Contingencies -
Commitments and Contingencies - Lease and Other Commitments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Term of non-cancellable agreement | 4 years |
Purchase commitment, cumulative amount | $ 936.2 |
Minimum | |
Loss Contingencies [Line Items] | |
Term of non-cancellable agreement | 1 year |
Maximum | |
Loss Contingencies [Line Items] | |
Term of non-cancellable agreement | 4 years |
Commitment and Contingencies -
Commitment and Contingencies - Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 205,257 |
2024 | 194,237 |
2025 | 221,438 |
2026 | 227,515 |
Total payments | $ 848,447 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Matters (Details) $ in Millions | Sep. 30, 2020 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Taxes payable, jurisdictional estimate | $ 38.8 |
Commitments and Contingencies_3
Commitments and Contingencies - Indemnification Agreements (Details) - USD ($) $ in Millions | Dec. 31, 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 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Loss Contingencies [Line Items] | ||||
Taxes payable, jurisdictional estimate | $ 38.8 | |||
Accrued taxes | $ 11.5 | |||
Domestic Tax Authority | ||||
Loss Contingencies [Line Items] | ||||
Taxes payable | $ 29.1 | $ 25.4 | ||
Foreign Tax Authority | ||||
Loss Contingencies [Line Items] | ||||
Taxes payable | $ 20.6 | $ 17.7 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Dec. 31, 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 | Dec. 31, 2022 | Dec. 31, 2021 |
Common Stock | ||
Common stock, authorized (in shares) | 1,100,000,000 | 1,100,000,000 |
Common stock, issued (in shares) | 185,975,709 | 180,468,099 |
Common stock, outstanding (in shares) | 185,975,709 | 180,468,099 |
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) | 176,358,104 | 170,625,994 |
Common stock, outstanding (in shares) | 176,358,104 | 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) | 9,617,605 | 9,842,105 |
Common stock, outstanding (in shares) | 9,617,605 | 9,842,105 |
Stockholders' Equity - Common_2
Stockholders' Equity - Common Stock Shares Reserved (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Total (in shares) | 45,722,653 | 41,478,804 |
2016 Stock Option and Incentive Plan | ||
Stockholders' Equity | ||
Stock-based awards available for grant under 2016 Plan and ESPP (in shares) | 19,851,399 | 24,650,104 |
Common Stock Class A | ||
Stockholders' Equity | ||
Class A common stock reserved for Twilio.org (in shares) | 530,449 | 618,857 |
Stock options issued and outstanding | ||
Stockholders' Equity | ||
Stock options issued and outstanding (in shares) | 2,277,379 | 3,351,313 |
Unvested restricted stock units issued and outstanding | ||
Stockholders' Equity | ||
Unvested restricted stock units issued and outstanding (in shares) | 15,414,997 | 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) | 7,648,429 | 6,382,830 |
Stockholders' Equity - Public O
Stockholders' Equity - Public Offering (Details) - Common Stock Class A - USD ($) $ / shares in Units, $ in Billions | 1 Months Ended | |
Feb. 28, 2021 | Aug. 31, 2020 | |
Class of Stock [Line Items] | ||
Shares sold in offering (in shares) | 4,312,500 | 5,819,838 |
Offering price per share (in dollars per share) | $ 409.60 | $ 247 |
Aggregate proceeds from stock offering | $ 1.8 | $ 1.4 |
Stock-Based Compensation - 2008
Stock-Based Compensation - 2008 Stock Option Plan (Details) - 2008 Stock Option Plan | Jun. 22, 2016 shares |
Stock Based Compensation | |
Shares available for future issuance (in shares) | 0 |
Employee stock options | |
Stock Based Compensation | |
Expiration term | 10 years |
Stock-Based Compensation - 2016
Stock-Based Compensation - 2016 Stock Option Plan (Details) - shares | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 01, 2021 | Dec. 31, 2022 | Jun. 21, 2016 | |
Stock Based Compensation | ||||
Vesting period | 4 years | |||
Stock Options | ||||
Stock Based Compensation | ||||
Expiration term | 10 years | |||
2016 Stock Option and Incentive Plan | ||||
Stock Based Compensation | ||||
Maximum automatic annual increase as a percentage of outstanding common shares | 5% | |||
Increase in shares available for grant (in shares) | 9,023,405 | 8,202,376 | ||
2016 Stock Option and Incentive Plan | Stock Options | ||||
Stock Based Compensation | ||||
Minimum grant price as a percentage of fair market value per share of the underlying common stock on the date of grant (as a percent) | 100% | |||
2016 Stock Option and Incentive Plan | Common Stock Class A | ||||
Stock Based Compensation | ||||
Shares reserved for issuance (in shares) | 11,500,000 |
Stock-Based Compensation - 20_2
Stock-Based Compensation - 2016 Employee Stock Purchase Plan (Details) - Class A common stock committed under ESPP - shares | 12 Months Ended | |||
Jan. 01, 2022 | Jan. 01, 2021 | Dec. 31, 2022 | Jun. 21, 2016 | |
Stock Based Compensation | ||||
Maximum automatic annual increase (in shares) | 1,800,000 | |||
Maximum automatic annual increase as a percentage of outstanding common shares | 1% | |||
Increase in shares available for grant (in shares) | 1,800,000 | 1,640,475 | ||
Stock plan offering period | 6 months | |||
Common Stock Class A | ||||
Stock Based Compensation | ||||
Shares reserved for issuance (in shares) | 2,400,000 | |||
Discount from market price, offering date (as a percent) | 15% | |||
Purchase price, percentage of fair market value (as a percent) | 85% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options outstanding | ||
Outstanding options as of the beginning of the period (in shares) | 3,351,313 | |
Granted (in shares) | 167,150 | |
Exercised (in shares) | (766,024) | |
Forfeited and cancelled (in shares) | (475,060) | |
Outstanding options as of the end of the period (in shares) | 2,277,379 | 3,351,313 |
Weighted- average exercise price (Per share) | ||
Outstanding options as of the beginning of the period (in dollars per share) | $ 78.10 | |
Granted (in dollars per share) | 85.17 | |
Exercised (in dollars per share) | 29.32 | |
Forfeited and cancelled (in dollars per share) | 171.53 | |
Outstanding options as of the end of the period (in dollars per share) | $ 75.54 | $ 78.10 |
Weighted- average remaining contractual term (In years) | ||
Weighted-average remaining contractual term (in years) | 5 years 3 months 25 days | 6 years 1 month 2 days |
Aggregate intrinsic value | $ 39,167 | $ 646,760 |
Options vested and exercisable and options vested and expected to vest | ||
Options vested and exercisable - number of options outstanding (in shares) | 1,823,525 | |
Options vested and exercisable - weighted-average exercise price (in dollars per share) | $ 54.75 | |
Options vested and exercisable - weighted-average remaining contractual term | 4 years 7 months 2 days | |
Options vested and exercisable - aggregate intrinsic value | $ 39,011 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Fair Value (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Based Compensation | |||
Aggregate intrinsic value of stock options exercised | $ 80,839 | $ 508,539 | $ 603,597 |
Total estimated grant date fair value of options vested | $ 77,403 | $ 138,851 | $ 107,854 |
Weighted-average grant date fair value per share of options granted (in dollars per share) | $ 50.66 | $ 216.29 | $ 170.70 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Details) - Unvested restricted stock units issued and outstanding - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of awards outstanding | ||
Unvested RSUs at the beginning of the period (in shares) | 6,475,700 | |
Granted (in shares) | 16,951,118 | |
Vested (in shares) | (4,259,908) | |
Forfeited and canceled (in shares) | (3,751,913) | |
Unvested RSUs at the end of the period (in shares) | 15,414,997 | |
Weighted- average grant date fair value (Per share) | ||
Unvested RSUs at the beginning of the period (in dollars per share) | $ 237.22 | |
Granted (in dollars per share) | 110.83 | |
Vested (in dollars per share) | 170.46 | |
Forfeited and canceled (in dollars per share) | 178.50 | |
Unvested RSUs at the end of the period (in dollars per share) | $ 130.97 | |
Aggregate intrinsic value | ||
Aggregate intrinsic value | $ 754,718 | $ 1,705,311 |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock Units - Additional Information (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended |
Mar. 31, 2022 USD ($) tranche $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Unvested restricted stock units issued and outstanding | ||
Stock Based Compensation | ||
Granted (in shares) | shares | 16,951,118 | |
Granted (in dollars per share) | $ / shares | $ 110.83 | |
Unrecognized compensation cost, other than options | $ | $ 1,900 | |
Weighted-average remaining period | 2 years 10 months 24 days | |
Class A shares in escrow subject to future vesting | ||
Stock Based Compensation | ||
Shares subject to future vesting conditions (in shares) | shares | 16,547 | |
Unrecognized compensation cost, other than options | $ | $ 11.4 | |
Weighted-average remaining period | 1 year 6 months | |
Performance-Based Restricted Stock Units | ||
Stock Based Compensation | ||
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 | ||
Stock Based Compensation | ||
Vesting percentage of target | 100% |
Stock-Based Compensation - Unre
Stock-Based Compensation - Unrecognized Compensation Cost (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Stock options issued and outstanding | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost, options | $ 50.4 |
Weighted-average remaining period | 1 year 10 months 24 days |
Class A shares in escrow subject to future vesting | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average remaining period | 1 year 6 months |
Shares subject to future vesting conditions (in shares) | shares | 16,547 |
Unrecognized compensation cost, other than options | $ 11.4 |
Unvested restricted stock units issued and outstanding | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average remaining period | 2 years 10 months 24 days |
Unrecognized compensation cost, other than options | $ 1,900 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee stock options | |||
Valuation Assumptions | |||
Fair value of common stock (in dollars per share) | $ 85.17 | ||
Expected term (in years) | 6 years 7 days | ||
Expected volatility, low end of range (as a percent) | 61.60% | 42.90% | 51.90% |
Expected volatility, high end of range (as a percent) | 61.50% | 65.10% | |
Risk-free interest rate, low end of range (as a percent) | 3.30% | 0.10% | 0.10% |
Risk-free interest rate, high end of range (as a percent) | 1.40% | 1.40% | |
Dividend rate (as a percent) | 0% | 0% | 0% |
Class A common stock committed under ESPP | |||
Valuation Assumptions | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Expected volatility, low end of range (as a percent) | 73.20% | 46.40% | 54.40% |
Expected volatility, high end of range (as a percent) | 97.30% | 58.70% | 72.10% |
Risk-free interest rate, low end of range (as a percent) | 1.50% | 0% | 0.10% |
Risk-free interest rate, high end of range (as a percent) | 4.50% | 0.10% | 0.20% |
Dividend rate (as a percent) | 0% | 0% | 0% |
Minimum | Employee stock options | |||
Valuation Assumptions | |||
Fair value of common stock (in dollars per share) | $ 268.55 | $ 108.37 | |
Expected term (in years) | 3 months 18 days | 6 months 7 days | |
Minimum | Class A common stock committed under ESPP | |||
Valuation Assumptions | |||
Fair value of common stock (in dollars per share) | $ 50.81 | $ 297.20 | $ 183.40 |
Maximum | Employee stock options | |||
Valuation Assumptions | |||
Fair value of common stock (in dollars per share) | $ 409.21 | $ 301.72 | |
Expected term (in years) | 6 years 4 months 20 days | 6 years 29 days | |
Maximum | Class A common stock committed under ESPP | |||
Valuation Assumptions | |||
Fair value of common stock (in dollars per share) | $ 99.68 | $ 310.80 | $ 278.50 |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 798,560 | $ 632,285 | $ 361,911 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 21,136 | 14,074 | 8,857 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 374,846 | 258,672 | 173,303 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 240,109 | 213,351 | 103,450 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 148,194 | 146,188 | 76,301 |
Restructuring costs | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 14,275 | $ 0 | $ 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net Loss Per Share Attributable to Common Stockholders | |||
Net loss attributable to common stockholders, basic | $ (1,256,145) | $ (949,900) | $ (490,979) |
Net loss attributable to common stockholders, diluted | $ (1,256,145) | $ (949,900) | $ (490,979) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 182,994,038 | 174,180,465 | 146,708,663 |
Weighted-average shares used to compute net loss per share attributable to common stockholders, diluted (in shares) | 182,994,038 | 174,180,465 | 146,708,663 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (6.86) | $ (5.45) | $ (3.35) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (6.86) | $ (5.45) | $ (3.35) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Anti-Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 19,076,899 | 10,904,377 | 19,151,805 |
Stock options issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 2,277,379 | 3,351,313 | 5,625,735 |
Unvested restricted stock units issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 15,414,997 | 6,475,700 | 7,523,882 |
Class A common stock reserved for Twilio.org | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 530,449 | 618,857 | 707,265 |
Class A common stock committed under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 766,334 | 147,947 | 103,703 |
Convertible Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 0 | 0 | 4,847,578 |
Class A common stock in escrow | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities (in shares) | 31,503 | 75,506 | 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 | 235,054 | 268,030 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (1,021,208) | $ (737,360) | $ (403,148) |
International | (222,424) | (223,569) | (101,278) |
Loss before (provision for) benefit from income taxes | $ (1,243,632) | $ (960,929) | $ (504,426) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 3,928 | $ 122 | $ 0 |
State | 4,100 | 420 | 272 |
Foreign | 17,450 | 8,274 | 5,215 |
Total | 25,478 | 8,816 | 5,487 |
Deferred: | |||
Federal | (5,155) | (13,772) | (12,719) |
State | (818) | (4,083) | (3,563) |
Foreign | (6,992) | (1,990) | (2,652) |
Total | (12,965) | (19,845) | (18,934) |
Provision for (benefit from) income taxes | $ 12,513 | $ (11,029) | $ (13,447) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Tax Rate and the Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | 21% | 21% | 21% |
State tax, net of federal benefit | 3% | 8% | 12% |
Stock-based compensation | (7.00%) | 16% | 24% |
Credits | 1% | 4% | 3% |
Foreign rate differential | (2.00%) | (1.00%) | (4.00%) |
Permanent book vs. tax differences | 0% | 0% | (1.00%) |
Change in valuation allowance | (17.00%) | (46.00%) | (51.00%) |
Other | (1.00%) | 0% | 0% |
Effective tax rate | (2.00%) | 2% | 4% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 959,864 | $ 1,054,585 |
Accrued and prepaid expenses | 47,986 | 24,831 |
Stock-based compensation | 37,981 | 44,261 |
Research and development credits | 159,604 | 148,282 |
Intangibles | 135,500 | 135,500 |
Capitalized research and development expenses | 219,176 | 0 |
Lease liability | 60,795 | 71,651 |
Unrealized losses on marketable securities | 32,108 | 4,602 |
Other | 36,830 | 28,859 |
Gross deferred tax assets | 1,689,844 | 1,512,571 |
Valuation allowance | (1,357,300) | (1,136,827) |
Net deferred tax assets | 332,544 | 375,744 |
Deferred tax liabilities: | ||
Capitalized software | (36,552) | (28,825) |
Prepaid expenses | (1,587) | (1,649) |
Acquired intangibles | (202,778) | (251,034) |
Right-of-use asset | (35,734) | (64,277) |
Deferred commissions | (59,675) | (47,897) |
Net deferred tax liability | $ (3,782) | $ (17,938) |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards and Tax Credits (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Domestic Tax Authority | |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforward, amount | $ 136,000 |
Operating loss carryforwards with indefinite lives | 3,665,700 |
State and Local Jurisdiction | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 2,684,800 |
Tax credit carryforward, amount | 105,200 |
Foreign Tax Authority | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 498,500 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of year | $ 223,380 | $ 191,183 | $ 49,042 |
Gross increases for tax positions of prior years | 3,250 | 3,496 | 4,259 |
Gross decreases for tax positions of prior years | (705) | (10,693) | (931) |
Gross increases for tax positions of current year | 4,081 | 39,394 | 138,813 |
Lapse of statute of limitations | (1,040) | 0 | 0 |
Unrecognized tax benefit, end of year | $ 228,966 | $ 223,380 | $ 191,183 |
Income Taxes - Unrecognized T_2
Income Taxes - Unrecognized Tax Benefit - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits | $ 228,966 | $ 223,380 | $ 191,183 | $ 49,042 |
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 6,100 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Valuation allowance increase (decrease) | $ 220.5 | $ 459 |
Capitalization of research and development expenditure | $ 7.5 | |
Zipwhip | ||
Business Acquisition [Line Items] | ||
Valuation allowance increase (decrease) | $ (15.9) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Feb. 13, 2023 | Sep. 30, 2022 |
Subsequent Events | ||
Employees elimination percentage | 11% | |
Subsequent Events | ||
Subsequent Events | ||
Employees elimination percentage | 17% | |
Subsequent Events | Minimum | ||
Subsequent Events | ||
Estimated restructuring costs | $ 100 | |
Subsequent Events | Maximum | ||
Subsequent Events | ||
Estimated restructuring costs | $ 135 |