01—Abstract
Summary
Summary of the 10-K filed February 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported total revenue of $5.07 billiona for the year ended December 31, 2025, up 14% from $4.46 billion in 2024, driven primarily by increased usage from existing customers (Dollar-Based Net Expansion Rate of 108%) and $242.0 million of revenue from new Active Customer Accounts.
The company returned to net income of $33.8 millionb in 2025 after net losses of $109.4 million in 2024 and $1.0 billion in 2023. Gross profit rose to $2.48 billion, with gross margin of 49% versus 51% in 2024, reflecting the pass-through of A2P messaging fees imposed by a major U.S. carrier, which the filing says create a modest margin headwind. Operating income was $157.8 million compared with an operating loss of $53.7 million in 2024, and non-GAAP income from operations was $924.0 million, or 18% of revenue.
Other expenses were affected by an $80.6 millionc impairment of the company's equity method investment in Syniverse Corporation. Free cash flow was $945.4 million (19% of revenue), up from $657.5 million in 2024. At year end, cash and cash equivalents totaled $682.3 million and short-term marketable securities $1.8 billion, against $1.0 billion of senior notes due 2029 and 2031.
The company repurchased $854.6 milliond of stock in 2025 under a $2.0 billion program, leaving approximately $1.1 billion available, and management states that cash and cash equivalents and cash flows are sufficient for the next 12 months and beyond. The filing also notes that the company expects a significant income tax benefit if it releases a portion of its U.S. valuation allowance within the next twelve months.
Key risks highlighted include the usage-based nature of most revenue (74% of 2025 revenue), exposure to network service provider fee increases, international operations (36% of 2025 revenue from outside the United States), cybersecurity incidents, and evolving privacy, telecommunications and AI regulation. The auditor KPMG LLP issued an unqualified opinion on both the financial statements and internal control over financial reporting, with revenue recognition for Messaging and Voice APIs identified as the critical audit matter.
02—Key points
Key Highlights
- Revenue rose 14% to $5.07 billion in 2025 from $4.46 billion in 2024; the filing attributes the increase mainly to existing-customer usage (Dollar-Based Net Expansion Rate of 108%) and $242.0 million from new Active Customer Accounts.
- Net income was $33.8 million in 2025 (diluted EPS $0.21), compared with net losses of $109.4 million in 2024 and $1.0 billion in 2023.
- Operating income was $157.8 million in 2025 versus an operating loss of $53.7 million in 2024; non-GAAP income from operations was $924.0 million (18% margin).
- Free cash flow was $945.4 million (19% of revenue) in 2025, up from $657.5 million in 2024, with operating cash flow of $1.00 billion.
- An $80.6 million impairment of the equity method investment in Syniverse Corporation was recorded in 2025, the main driver of higher other expenses.
- The company repurchased $854.6 million of Class A common stock in 2025; approximately $1.1 billion remains under the $2.0 billion program expiring December 31, 2027.
- Gross margin declined to 49% from 51% as A2P messaging fees increased; the filing states these pass-through fees do not affect gross profit but create a modest margin headwind.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Twilio kept $0.01.
- Revenue$5.07B100.0%
- Cost of revenue−$2.59B51.1%
- Gross profit$2.48B48.9%
- Operating costs−$2.32B45.8%
- Operating income$157.8M3.1%
- Interest, other & tax−$123.8M2.4%
- Net income$34.0M0.7%
Where FY2025 revenue went
$5.07B- Cost of revenue: $2.59B, 51% of revenue
- Other operating costs: $1.30B, 26% of revenue
- R&D: $1.02B, 20% of revenue
- Net income: $34.0M, 0.7% of revenue
- Interest, other & tax: $123.8M, 2.4% of revenue
Kept 0.7% as net incomeNet income $34.0M · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 24, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $5.07B$4.46B | +13.7% |
| Cost of Revenue | $2.59B$2.18B | +18.7% |
| Gross Profit | $2.48B$2.28B | +8.8% |
| R&D Expenses | $1.02B$1.01B | +1.1% |
| Operating Expenses | $2.32B$2.33B | −0.5% |
| Operating Income | $157.80M-$53.71M | +393.8% |
| Net Income | $34.00M-$109.00M | +131.2% |
| EPS (Basic) | $0.22$-0.66 | +133.3% |
| EPS (Diluted) | $0.21$-0.66 | +131.8% |
| Shares Outstanding (Basic) | 152.99M165.93M | −7.8% |
| Shares Outstanding (Diluted) | 159.79M165.93M | −3.7% |
05—Questions
Frequently Asked Questions
How much of Twilio's revenue depends on usage rather than subscriptions?
In 2025, 74% of revenue came from usage-based fees and 26% from non-usage-based (subscription) fees. The filing notes that most usage-based customers have no long-term financial commitments and may reduce usage at any time without penalty.
What is driving the change in profitability?
Operating income improved to $157.8 million from an operating loss of $53.7 million, as total operating expenses fell slightly to $2.32 billion while revenue grew. General and administrative expenses decreased $38.4 million, partly due to lower provisions for doubtful accounts, though gross margin narrowed to 49%.
What debt does Twilio have and how is it covered?
The company had $1.0 billion of senior notes outstanding: $500.0 million of 3.625% notes due 2029 and $500.0 million of 3.875% notes due 2031. Management states that cash and cash equivalents of $682.3 million, short-term marketable securities of $1.8 billion, and operating cash flows are sufficient to meet liquidity needs for at least the next 12 months.
What did the Syniverse impairment mean for the company?
Twilio recorded an $80.6 million impairment of its equity method investment in Syniverse Corporation, which it acquired a 43.7% stake in during 2022. The company engaged a third-party expert, concluded the investment was impaired as of December 31, 2025, and allocated the full impairment to equity method goodwill.
Could Twilio record a large tax benefit in the near future?
The filing states there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to release a significant portion of the valuation allowance against U.S. deferred tax assets, which would produce a significant income tax benefit. The timing and amount depend on future operating results.
06—Continue