Summary
Twilio closed fiscal 2024 with fourth-quarter revenue of $1.19 billion, up 11.0% from the prior-year quarter. Full-year revenue was $4.46 billion, up 7.3%. Fourth-quarter gross profit was $599.70 million, up 12.9%, and gross margin was 50.2%, up 0.8 percentage points. Full-year gross margin was 51.1%, up 1.9 percentage points. The company posted fourth-quarter operating income of $13.73 million, up 103.8% and swung to a profit. Its fourth-quarter net loss was $12.47 million, a narrowed loss. The full-year net loss was $109.40 million, also a narrowed loss. Full-year diluted EPS was -$0.66, a narrowed loss. Operating margin was 1.1% in the fourth quarter, up 34.8 percentage points. The full-year operating margin was -1.2%, up 19.9 percentage points.
Cash flow was uneven. Full-year operating cash flow was $716.24 million, up 72.7%. Fourth-quarter operating cash flow was $108.45 million, down 51.3%. Deferred revenue was $155.70 million, up 7.8% from the prior-year quarter. Remaining performance obligations were $182.30 million, up 26.6%. On a non-GAAP basis, full-year income from operations was $714.4 million and non-GAAP operating margin was 16%. Free cash flow was $657.5 million for the full year, with a free cash flow margin of 15%.
Customer metrics were mixed. Active Customer Accounts were 325,000 as of December 31, 2024, compared with 305,000 as of December 31, 2023. The full-year Dollar-Based Net Expansion Rate was 104%, compared with 103% in 2023. Communications Dollar-Based Net Expansion Rate was 105%, while Segment Dollar-Based Net Expansion Rate was 92%. On a non-GAAP basis, Communications income from operations was $1.04 billion for 2024, up 24%. Segment non-GAAP loss from operations was $62.7 million, a narrowed loss of 13%. The company realigned into a functional support model under one organization on January 1, 2025, though it still has two reportable segments.
Management's preliminary 8-K estimates covered fourth-quarter revenue growth and positive GAAP income from operations for the fourth quarter. Non-GAAP income from operations for the fourth quarter and full year 2024 was above the top end of the guidance ranges originally provided on October 30, 2024. Free cash flow for fiscal year 2024 was within the range provided on that date. Final results are expected on February 13, 2025. On January 19, 2025, the board authorized a $2.0 billion share repurchase program that expires on December 31, 2027. The prior programs expired on December 31, 2024. In fiscal 2024, Twilio repurchased $2.3 billion, or 36.8 million shares, of its Class A common stock.
Risks remain. Twilio fully reserved receivables from Oi SA after the Brazilian telecom company's bankruptcy proceedings. The company introduced an annual cash bonus program in 2024 to reduce equity compensation and expects the change to lower operating expenses in future periods. Segment gross margins faced overlapping infrastructure expenses during the migration to a new provider, though the migration was largely completed by December 31, 2024. The 10-K lists macroeconomic uncertainty, competition, regulatory compliance costs, network service provider fees, and the ability to execute cost savings and attract customers as risks. The quarter showed better top-line growth and a GAAP operating profit, but the full-year net loss and weaker fourth-quarter operating cash flow show that profitability remains uneven.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.19B | $1.13B | +5.4% | $1.08B | +11.0% |
| Gross profit | $599.7M | $578.6M | +3.6% | $531.2M | +12.9% |
| Gross margin | 50.2% | 51.0% | -0.9 pp | 49.4% | +0.8 pp |
| Research & development | $252.6M | $260.9M | -3.2% | $235.6M | +7.2% |
| Sales & marketing | $216.7M | $212.6M | +1.9% | $238.6M | -9.2% |
| General & administrative | $116.8M | $106.3M | +9.8% | $107.0M | +9.2% |
| Total operating expenses | $586.0M | $583.5M | +0.4% | $892.9M | -34.4% |
| Operating income (loss) | $13.7M | -$4.9M | +380.5% | -$361.7M | +103.8% |
| Operating margin | 1.1% | -0.4% | +1.6 pp | -33.6% | +34.8 pp |
| Net income (loss) | -$12.5M | -$9.7M | -28.2% | -$365.4M | +96.6% |
| Net margin | -1.0% | -0.9% | -0.2 pp | -34.0% | +32.9 pp |
| Diluted EPS | -$0.08 | -$0.06 | -$0.02 | -$1.99 | +$1.91 |
Risks
Global economic and political uncertainties have adversely impacted and may continue to adversely impact Twilio. A majority of revenue is usage-based and more immediately exposed to consumer sentiment and activity than subscription revenue, which can reduce demand or delay spending.
Twilio faces rapid technological change and intense competition, and it is committing significant resources to combine communications with contextual data and AI. Competitors may offer lower priced or more efficient AI-enabled products that render Twilio products less competitive or obsolete.
MD&A reports a Segment Dollar-Based Net Expansion Rate of 92%, reflecting churn and contraction among existing Segment customers. Usage-based customers generally have no long-term commitments and may reduce or cease usage at any time without penalty.
Enterprise sales require multiple technical and business approvals, extensive education, and protracted pricing and contract negotiations, resulting in higher costs and longer sales cycles. Some enterprise customers may not use products enough to justify the cost of acquisition.
Twilio has reduced its sales force and increasingly relies on self-service capabilities and AI/automation to drive adoption. These efforts may not be as effective as anticipated or may take longer to generate growth.
Network service provider fees, including A2P SMS fees imposed by major U.S. mobile carriers, can increase costs. Passing these fees through to customers typically increases revenue and cost of revenue but negatively impacts gross margins, and international messaging carries lower gross margins than domestic.
Twilio depends on highly skilled personnel and has experienced, and may continue to experience, high attrition among senior management and key employees. Past workforce reductions could cause unintended attrition, lower morale, and loss of institutional knowledge.
Twilio has previously suffered social engineering attacks, including an August 2022 smishing campaign that gave a threat actor access to data of approximately 209 customers. Incorporating AI solutions may further increase cybersecurity risks.
Twilio has recorded a provision for potential indirect tax payments and is in discussions with certain jurisdictions regarding prior-period sales and other indirect taxes. If jurisdictions disagree with management's assumptions and analysis, actual exposure could differ materially and harm results.
In February 2023, customer Oi SA initiated reorganization proceedings, and Twilio has fully reserved its pre-petition and post-petition accounts receivable from Oi SA. A limited number of large customers could create collection and revenue risks.
SaaS KPIs
All quarters →Communications Dollar-Based Net Expansion Rate
Free Cash Flow
Segment Dollar-Based Net Expansion Rate
Summary, forecast, risks and KPIs are extracted from TWILIO INC's SEC filings for Q4 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.