01—Abstract
Summary
Summary of the 10-K/A filed April 22, 2022. Cited figures are marked; the original filing is the authoritative source.
This Amendment No. 1 to Twilio Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 supplies Part III information: board and executive officer details, executive and director compensation, security ownership, related party transactions, and principal accountant fees.
The filing reports that Twilio's board has nine directors, all independent except Chief Executive Officer Jeff Lawson, and it describes the compensation committee's 2021 decisions and its 2022 changes. Fiscal 2021 revenue was $2.84 billiona, up 61% year-over-year. GAAP loss from operations was $915.6 million, compared with $492.9 million in 2020, and non-GAAP income from operations was $2.5 million, compared with $35.7 million.
Active Customer Accounts exceeded 256,000 at December 31, 2021, up from 221,000. Compensation is heavily weighted toward equity. The filing states that fixed pay was 1%b and variable pay 99% of the CEO's 2021 target total direct compensation.
Mr. Lawson's 2021 total compensation was $14,625,745,c and the reported CEO pay ratio was 88:1. Beginning in 2022, the committee granted performance-based restricted stock units tied to year-over-year organic revenue growth and non-GAAP operating profit. The company also raised the stock ownership requirement for the CEO to six times base salary and for other named executive officers to three times base salary.
Ownership data as of March 31, 2022 show 171,763,174 Class A and 9,820,605 Class B shares outstanding. The filing lists The Vanguard Group at 6.1% of Class A shares and BlackRock, Inc. at 5.4%. KPMG fees were $5,397 thousandd for 2021, compared with $4,829 thousand for 2020, with audit fees of $4,105 thousand in 2021.
02—Key points
Key Highlights
- Fiscal 2021 revenue of $2.84 billion, up 61% year-over-year, including $200.9 million from Twilio Segment and $55.4 million from Zipwhip, Inc.
- GAAP loss from operations widened to $915.6 million in 2021 from $492.9 million in 2020; non-GAAP income from operations was $2.5 million versus $35.7 million in 2020.
- Active Customer Accounts exceeded 256,000 at December 31, 2021 (excluding Zipwhip), up from 221,000 at December 31, 2020.
- CEO Jeff Lawson's 2021 total compensation was $14,625,745, with a reported CEO-to-median-employee pay ratio of 88:1; 99% of his target total direct compensation was variable pay.
- Starting in 2022, the compensation committee began granting performance-based RSUs tied to year-over-year organic revenue growth and non-GAAP operating profit, and raised stock ownership requirements for executives and directors.
- The board has nine directors, all independent except Mr. Lawson; Jeff Epstein and Donna Dubinsky were determined to be audit committee financial experts.
- Employees increased to 7,867 as of December 31, 2021 from 4,629 a year earlier; KPMG fees totaled $5,397 thousand for 2021 versus $4,829 thousand for 2020.
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-K/AFY2021filed April 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 much did Twilio's CEO and other executives earn in 2021, and how is pay structured?
Mr. Lawson's 2021 total compensation was $14,625,745, primarily from equity awards, with a 2021 base salary of $134,000. The filing states that the CEO's target total direct compensation was 1% fixed pay and 99% variable pay. Other named executive officers received base salaries, equity awards split 50% stock options and 50% time-based RSUs by fair value, and, for Mr. Boroditsky, sales commissions. The company has not maintained a formal annual cash bonus plan since July 1, 2015.
What changed in Twilio's executive compensation program for 2022?
In March 2022, the compensation and talent management committee granted performance-based restricted stock unit awards in addition to time-based RSUs to named executive officers. These awards vest based on achieving goals over specified performance periods, including year-over-year organic revenue growth rates and non-GAAP operating profit. The committee also revised the stock ownership policy, raising the salary multiple for named executive officers other than the CEO from one time to three times annual base salary.
Who are the largest holders of Twilio's stock, and how is voting power split?
As of March 31, 2022, the company had 171,763,174 Class A shares and 9,820,605 Class B shares outstanding. The Vanguard Group reported 10,443,890 Class A shares, or 6.1%, and BlackRock, Inc. reported 9,295,211 Class A shares, or 5.4%. Class A shares carry one vote and Class B shares carry ten votes. Mr. Lawson held 5,920,194 Class B shares, which the filing shows as 58.4% of Class B shares, and all executive officers and directors as a group held 59.0% of Class B shares.
What related party transactions and governance matters does the filing disclose?
The filing discloses a sublease with Numenta, Inc., where director Donna Dubinsky serves as Chief Executive Officer and director. The sublease covers 2,420 square feet at a rent of $18,225 per month for the initial 12-month term starting August 1, 2021. Numenta notified the company in January 2022 that it would exercise its first renewal option, increasing rent to $18,771.75 per month effective August 1, 2022. The filing also describes indemnification agreements with directors and executive officers and states that the board found six directors, Messrs. Dalzell, Deeter, Epstein, Immelt and Patrick and Mses. Donio, Dubinsky and Rottenberg, independent.
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