TWLO TWILIO INC
Twilio provides a cloud communications and customer data platform. Its APIs let developers embed messaging, voice, email, and video into customer-facing applications, and it offers software products such as digital engagement centers, marketing campaigns, and user authentication/identity solutions. It combines these communications capabilities with a customer data platform (Segment) and AI-powered orchestration to help businesses manage customer engagement across the full customer journey.
How the business makes money
Twilio generates revenue primarily from usage-based fees tied to customer consumption of its messaging, voice, and email APIs, supplemented by subscription-based products like Segment and Marketing Campaigns. As of December 31, 2025, the company had over 402,000 Active Customer Accounts spanning small businesses to large enterprises across many industries, with growth driven by both new customer acquisition and expansion of usage among existing customers (tracked via Dollar-Based Net Expansion Rate). Because usage-based revenue depends on end-customer consumer activity, results are more directly exposed to swings in consumer spending and macroeconomic conditions than a purely subscription-based business, and the company also passes through network service provider fees (including rising A2P messaging fees from U.S. mobile carriers) to customers at cost, which pressures gross margin without affecting gross profit dollars.
Revenue reported to the SEC
| Fiscal year | Revenue (USD) |
|---|---|
| FY2021 | 2.8B |
| FY2022 | 3.8B |
| FY2023 | 4.2B |
| FY2024 | 4.5B |
| FY2025 | 5.1B |
What the filings support
The platform serves over 402,000 Active Customer Accounts ranging from small and medium-sized businesses to large enterprises across numerous industries, indicating a broad and diversified customer base.
Dollar-Based Net Expansion Rate improved to 116% in the quarter ended June 30, 2026 from 108% a year earlier, indicating existing customers are increasing usage of the platform.
Total revenue grew 22% year-over-year for the three months ended June 30, 2026, an acceleration from 13% growth in the prior-year comparable quarter.
The company's Super Network interconnects communications networks and inbox service providers globally and continually analyzes billions of data points to optimize the quality and cost of communications, providing a differentiated infrastructure layer underlying its API products.
The company concluded it is more likely than not that the majority of its U.S. deferred tax assets are realizable, based on positive evidence including recent pre-tax book income in the U.S. and expectations of future U.S. profits, resulting in a release of a significant portion of its valuation allowance.
Risks the company discloses
A majority of Twilio's revenue is usage-based, making the business more immediately and severely exposed to adverse macroeconomic conditions, reduced consumer spending, and delayed or reduced customer usage than a subscription-driven business.
In the second quarter of 2026, Twilio recognized a $32.8 million impairment loss on prepaid network service assets after determining it would be unable to consume services prepaid to two network service providers experiencing operational and financial challenges, reflecting reliance on third-party network service providers.
Rising network service provider fees for A2P messaging charged by major U.S. mobile carriers, which Twilio passes through to customers at cost, create an ongoing headwind to gross margin even though they do not affect gross profit dollars.
The company carries substantial indebtedness that could decrease its business flexibility.
Twilio faces risks from unwanted, fraudulent, or illegal usage of its products, as well as from increasingly stringent telecommunications, privacy, data protection, and cybersecurity regulations that could affect its ability to obtain or retain phone numbers and process porting requests.
Could not verify
- Specific revenue or customer breakdown by product line (Messaging, Voice, Email, Segment, etc.) was not provided in the supplied text.
- Customer or supplier concentration figures (e.g., percentage of revenue from top customers) were not disclosed in the supplied text.
- Details of the share repurchase program's size or execution were not provided in the supplied text.
- The specific amount of outstanding indebtedness or its terms were not provided in the supplied text.
- Segment-level or geographic revenue breakdowns for the current quarter were not provided in the supplied text.
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