Summary
Twilio reported first quarter fiscal 2024 revenue of $1.05 billion, up 4.0% from the prior-year quarter. Organic revenue growth was 7%. GAAP gross profit was $544.0 million, up 10.9%. Gross margin was 52.0%, up 3.2 percentage points. The company posted a GAAP loss from operations of $43.5 million, an 83.5% improvement year over year. Operating margin was negative 4.2%, up 22.1 percentage points. GAAP net loss was $55.3 million, an 83.8% improvement. GAAP net loss per share was $0.31, an 83.2% improvement. Operating cash flow was $190.1 million. Free cash flow was $177.3 million. Non-GAAP income from operations was $159.6 million, and non-GAAP net income attributable to common stockholders was $146.3 million, or $0.80 per diluted share.
Deferred revenue was $142.4 million, up 4.3%. Remaining performance obligations were $150.6 million, down 9.2%. Active Customer Accounts exceeded 313,000 as of March 31, 2024, compared with more than 300,000 as of March 31, 2023. The Dollar-Based Net Expansion Rate was 102%, compared with 106% in the prior-year quarter. Communications Dollar-Based Net Expansion Rate was 103%, while the Segment Dollar-Based Net Expansion Rate was 92%. The company ended the quarter with 5,582 employees. Management pointed to financial discipline and said the quarter showed continued progress on profitability and significant free cash flow.
Twilio initiated second quarter fiscal 2024 guidance for revenue of $1,050 million to $1,060 million, revenue growth of 1% to 2%, and organic revenue growth of 4% to 5%. The second quarter guidance also includes non-GAAP income from operations of $135 million to $145 million, non-GAAP diluted earnings per share of $0.64 to $0.68, and 171 million non-GAAP weighted average diluted shares outstanding. For the full fiscal year 2024, Twilio reaffirmed organic revenue growth guidance of 5% to 10% and raised its non-GAAP income from operations range to $585 million to $635 million. The company also expects full year 2024 free cash flow to be in line with full year 2024 non-GAAP income from operations.
Capital allocation remains active. Twilio repurchased $384.3 million, or 6.1 million shares, in the first quarter. It has completed approximately $1.5 billion of aggregate repurchases and targets the remaining $1.5 billion before the end of 2024. Risks include the Oi SA reorganization in Brazil, the wind-down of the Zipwhip software business, and the migration of part of Segment's architecture to a new infrastructure provider, which is expected to pressure Segment gross margins until the migration is completed by the end of 2024. Usage-based revenue also remains sensitive to macroeconomic conditions and consumer spending, and the company faces competition, regulatory compliance costs, network service provider fees, and foreign exchange swings.
The quarter shows real progress on profitability and cash generation, but growth remains modest. Reported revenue growth of 4% and organic growth of 7% sit below the company's historical pace. The Dollar-Based Net Expansion Rate of 102% signals limited expansion from existing customers, and the Segment rate of 92% points to churn and contraction. Management's plan leans on cost discipline, share repurchases, and focused investments to re-accelerate growth over time. Execution on Segment margins, the Zipwhip wind-down, and Oi SA collections will be key watch items in coming quarters.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.05B | $1.08B | -2.7% | $1.01B | +4.0% |
| Gross profit | $544.0M | $531.2M | +2.4% | $490.7M | +10.9% |
| Gross margin | 52.0% | 49.4% | +2.6 pp | 48.8% | +3.2 pp |
| Research & development | $251.6M | $235.6M | +6.8% | $238.6M | +5.5% |
| Sales & marketing | $214.0M | $238.6M | -10.3% | $259.9M | -17.6% |
| General & administrative | $112.0M | $107.0M | +4.7% | $112.6M | -0.5% |
| Total operating expenses | $587.5M | $892.9M | -34.2% | $754.8M | -22.2% |
| Operating income (loss) | -$43.5M | -$361.7M | +88.0% | -$264.1M | +83.5% |
| Operating margin | -4.2% | -33.6% | +29.5 pp | -26.2% | +22.1 pp |
| Net income (loss) | -$55.3M | -$365.4M | +84.9% | -$342.1M | +83.8% |
| Net margin | -5.3% | -34.0% | +28.7 pp | -34.0% | +28.7 pp |
| Diluted EPS | -$0.31 | -$1.99 | +$1.68 | -$1.84 | +$1.53 |
Risks
Global economic and political conditions, including macroeconomic uncertainties, inflation, banking sector volatility, and geopolitical conflict, may continue to pressure customer budgets. Because a majority of revenue is usage-based, Twilio may be more immediately and severely impacted than SaaS subscription models; Communications customers have reduced or terminated usage and Segment customers have renegotiated contracts or failed to renew.
Twilio has reduced its workforce by approximately 35% since September 2022 and may not realize the intended benefits of restructuring. The smaller sales force increases reliance on self-service for Communications, and Twilio may incur additional cash and non-cash costs or experience attrition beyond planned reductions.
In Q1 2024 Twilio conducted an operational review of Segment and targets break-even non-GAAP income from operations for Segment by Q2 2025 and consolidated GAAP operating profitability by Q4 2025. Segment non-GAAP loss from operations increased $3.8 million, or 22%, in the quarter compared to the prior year, and there is no guarantee these targets will be met.
Dollar-Based Net Expansion Rate was 102% in Q1 2024, down from 106% in Q1 2023, and Segment Dollar-Based Net Expansion Rate was 92%. If customers do not increase usage, Twilio may need to spend significantly more on sales and marketing to maintain or increase revenue.
Twilio expects to commit significant resources to AI and ML products, including CustomerAI, but these investments may not lead to wider adoption. New technologies from competitors could deliver competitive products at lower prices or render existing products obsolete, such as if authentication practices reduce use of one-time passwords.
Adoption by enterprises, including Segment and Engage, requires multiple technical and business approvals, extensive education, and protracted pricing and contract negotiations, leading to higher costs and longer sales cycles. Customers may also demand price reductions as usage grows, which could adversely impact gross margin.
Twilio relies on network service providers and internet service providers, and fees can change daily or weekly; U.S. mobile carriers have introduced A2P SMS fees. Passing these fees through typically increases Communications revenue and cost of revenue without increasing gross profit dollars, and has a negative impact on gross margins.
Twilio's 10 largest Active Customer Accounts generated an aggregate of 10% of revenue in the three months ended March 31, 2024 and 2023. Loss or decline in revenue from any large customer could harm results.
Oi SA, a Brazilian telecom customer, initiated reorganization proceedings in February 2023; as of March 31, 2024 Twilio had $10.8 million in pre-petition accounts receivable net of $4.4 million reserves and $16.7 million in post-petition receivables. If the Oi Reorganization Plan is not ratified or Oi SA fails to pay, Twilio may incur additional bad debt expense or revenue reductions.
Twilio is winding down the software component of Zipwhip in 2024, which it expects will negatively impact revenue growth rates in 2024. It extended the video product end-of-life to December 2026, so it no longer expects a significant 2024 revenue growth impact from video.
Jeff Lawson resigned as CEO in January 2024 and Khozema Shipchandler was appointed CEO, and Twilio has experienced and may continue to experience high attrition among senior management and key employees. Reductions in force may impair its ability to hire, retain, and motivate employees.
Twilio reserved $18.2 million and $20.0 million for domestic and non-U.S. indirect tax exposures, respectively, on the March 31, 2024 balance sheet, and actual assessments could differ materially. It also has substantial NOL carryforwards subject to limitations under Sections 382 and 383 and changes in tax rules.
SaaS KPIs
All quarters →Dollar-Based Net Expansion Rate
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Active Customer Accounts
Free Cash Flow Margin
Communications Dollar-Based Net Expansion Rate
Free Cash Flow
Non-GAAP Income from Operations
Segment Dollar-Based Net Expansion Rate
Summary, forecast, risks and KPIs are extracted from TWILIO INC's SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.