01—Abstract
Summary
Summary of the 10-K filed February 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported total revenue of $2.84 billiona for the year ended December 31, 2021, up 61% from $1.76 billion in 2020, driven by higher usage of Programmable Messaging, Programmable Voice and Email products, growth in Active Customer Accounts to over 256,000, and contributions from the Segment, Zipwhip and other acquisitions.
The Dollar-Based Net Expansion Rate was 131% for 2021, down from 137% in 2020. Gross margin declined to 49% from 52%, primarily due to additional carrier A2P SMS fees and growth in lower-margin international messaging. The company remained unprofitable, with a net loss of $949.9 millionb (diluted loss per share of $5.45) compared with $491.0 million in 2020, and an accumulated deficit of $2.1 billion.
Operating cash flow was negative at $(58.2) million for 2021, versus positive $32.7 millionc in 2020. The balance sheet strengthened considerably through financing activity. Cash and cash equivalents were $1.48 billion and short-term marketable securities were $3.88 billion at year-end.
Twilio raised $1.8 billiond in a February 2021 follow-on offering and issued $1.0 billion of 3.625% 2029 and 3.875% 2031 senior notes in March 2021, while redeeming its 2023 convertible notes. Long-term debt stood at $985.9 million. Goodwill and intangible assets totaled $6.3 billion following acquisitions, including Zipwhip for $838.8 million in July 2021.
Non-GAAP operating loss was $2.5 million on a non-GAAP basis in 2021, compared with income of $35.7 million in 2020. The filing also highlights ongoing risks, including a $38.8 million San Francisco tax assessment that Twilio is contesting in court, the pending minority investment of $500.0 million to $750.0 million in Syniverse Corporation after a prior merger was terminated in February 2022, and a dual-class structure in which directors and officers held 21.3% of voting power. The company reported 7,867 employees at December 31, 2021.
02—Key points
Key Highlights
- Revenue rose 61% to $2.84 billion in 2021 from $1.76 billion in 2020, led by usage growth in messaging, voice and email products and by acquisitions.
- Dollar-Based Net Expansion Rate was 131% in 2021, down from 137% in 2020; Active Customer Accounts grew to over 256,000 from 221,000.
- Gross margin declined to 49% from 52%, mainly from additional carrier A2P SMS fees and international messaging growth.
- Net loss widened to $949.9 million ($5.45 per share) from $491.0 million, and operating cash flow turned negative at $(58.2) million.
- Raised $1.8 billion in a February 2021 equity offering and $1.0 billion in senior notes due 2029 and 2031, ending 2021 with $1.48 billion in cash and $3.88 billion in short-term marketable securities.
- Acquired Zipwhip for $838.8 million in July 2021, adding to goodwill and intangibles totaling $6.3 billion.
- Faces a $38.8 million San Francisco tax assessment under litigation and a pending $500.0 million to $750.0 million minority investment in Syniverse Corporation.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2021, Twilio lost $0.33.
- Revenue$2.84B100.0%
- Cost of revenue−$1.45B51.1%
- Gross profit$1.39B48.9%
- Operating costs−$2.31B81.2%
- Operating income−$915.6M32.2%
- Interest, other & tax−$34.4M1.2%
- Net income−$950.0M33.4%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 22, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $2.84B$1.76B | +61.3% |
| Cost of Revenue | $1.45B$846.12M | +71.5% |
| Gross Profit | $1.39B$915.66M | +51.9% |
| R&D Expenses | $789.22M$530.55M | +48.8% |
| Operating Expenses | $2.31B$1.41B | +63.7% |
| Operating Income | -$915.58M-$492.90M | −85.8% |
| Net Income | -$950.00M-$490.98M | −93.5% |
| EPS (Basic) | $-5.45$-3.35 | −62.7% |
| EPS (Diluted) | $-5.45$-3.35 | −62.7% |
| Shares Outstanding (Basic) | 174.18M146.71M | +18.7% |
| Shares Outstanding (Diluted) | 174.18M146.71M | +18.7% |
05—Questions
Frequently Asked Questions
How fast did Twilio's revenue grow in 2021?
Total revenue was $2.84 billion in 2021, an increase of 61% from $1.76 billion in 2020. The filing attributes the growth mainly to higher usage of Programmable Messaging, Programmable Voice and Email products, additional carrier A2P fees, existing customers adopting more products, and contributions from the Segment, Zipwhip and other acquisitions.
Is Twilio profitable, and how has its loss changed?
No. Twilio reported a 2021 net loss of $949.9 million, or $5.45 per share, compared with a net loss of $491.0 million in 2020. The filing notes net losses in every year since inception and an accumulated deficit of $2.1 billion as of December 31, 2021.
What happened to customer spending and retention metrics?
The Dollar-Based Net Expansion Rate was 131% for 2021, compared with 137% in 2020. Active Customer Accounts rose to over 256,000 at December 31, 2021, from 221,000 a year earlier.
How is Twilio funding its growth and what debt does it carry?
In 2021 Twilio received $1.8 billion in net proceeds from a February public offering and about $984.7 million in net proceeds from $1.0 billion of 3.625% notes due 2029 and 3.875% notes due 2031. Long-term debt was $985.9 million at year-end, and the company's convertible notes were fully redeemed in June 2021.
What are the main legal and transaction risks disclosed?
The company is contesting a San Francisco assessment of $38.8 million in telephone and access line taxes, including interest and penalties, filed in May 2021. It also disclosed that the Syniverse merger with M-3 Brigade Acquisition II Corp. was terminated in February 2022, and that Twilio will instead make a minority investment of $500.0 million to $750.0 million in Syniverse, expected to close in 2022.
06—Continue