01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported third-quarter 2024 revenue of $1.13 billiona, up from $1.03 billion a year earlier, and narrowed its net loss to $9.7 million from $141.7 million.
For the nine months ended September 30, 2024, revenue was $3.26 billionb and the net loss was $96.9 million, compared with a $650.0 million net loss in the prior-year period. Loss from operations was $4.9 million in the quarter versus $108.9 million a year earlier. Communications revenue grew 10% to $1.06 billion, while Segment revenue was flat at $73.4 million.
Segment non-GAAP results remained negative, with a non-GAAP loss from operations of $15.8 millionc in the quarter, and the filing states the company targets break-even non-GAAP income from operations for Segment by the second quarter of 2025. Cash flow and capital return were prominent in the period. Net cash provided by operating activities was $607.8 million for the nine months, versus $192.2 million in the prior year.
The company repurchased 32.0 million Class A shares for $1.9 billiond in the nine months, leaving approximately $412.0 million available under its repurchase programs, which expire December 31, 2024. Cash and cash equivalents were $584.0 million and short-term marketable securities were $2.1 billion as of September 30, 2024, against $1.0 billion of senior notes outstanding. Stockholders' equity declined to $8.23 billion from $9.73 billion at year-end 2023, largely reflecting the share repurchases and the accumulated deficit of $7.09 billion.
The filing also notes a company-wide cash bonus program introduced in 2024, which recorded $94.4 million of expense in the nine months, and the wind-down of the software component of the Zipwhip business, which the company expects to weigh on fourth-quarter 2024 revenue growth. The company is migrating part of Segment's architecture to a new infrastructure provider, which it expects to pressure Segment gross margins in the fourth quarter.
02—Key points
Key Highlights
- Total revenue of $1,133.6 million for Q3 2024, up 10% from $1,033.7 million in Q3 2023; nine-month revenue of $3,263.2 million versus $3,078.0 million.
- Net loss attributable to common stockholders narrowed to $9.7 million in Q3 2024 from $141.7 million in Q3 2023; nine-month net loss was $96.9 million versus $650.0 million.
- Communications revenue rose 10% to $1,060.3 million in the quarter, with Communications Dollar-Based Net Expansion Rate of 106%; Segment revenue was flat at $73.4 million, with Segment Dollar-Based Net Expansion Rate of 91%.
- Communications non-GAAP income from operations increased 21% to $267.8 million in Q3, while Segment non-GAAP loss from operations was $15.8 million.
- Repurchased 32.0 million Class A shares for $1.9 billion in the nine months ended September 30, 2024; approximately $412.0 million remained available under the repurchase programs, which expire December 31, 2024.
- Operating cash flow of $607.8 million for the nine months ended September 30, 2024, compared with $192.2 million a year earlier; free cash flow for Q3 2024 was $189.1 million.
- Cash and cash equivalents of $584.0 million and short-term marketable securities of $2.1 billion at September 30, 2024, against $1.0 billion of senior notes.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2024, Twilio lost $0.01.
- Revenue$1.13B100.0%
- Cost of revenue−$555.0M49.0%
- Gross profit$578.6M51.0%
- Operating costs−$583.5M51.5%
- Operating income−$4.9M0.4%
- Interest, other & tax−$4.8M0.4%
- Net income−$9.7M0.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.13B$1.03B | +9.7% |
| Cost of Revenue | $555.02M$517.35M | +7.3% |
| Gross Profit | $578.63M$516.32M | +12.1% |
| R&D Expenses | $261.51M$241.65M | +8.2% |
| Operating Expenses | $583.52M$625.22M | −6.7% |
| Operating Income | -$4.89M-$108.90M | +95.5% |
| Net Income | -$9.73M-$141.71M | +93.1% |
| EPS (Basic) | $-0.06$-0.78 | +92.3% |
| EPS (Diluted) | $-0.06$-0.78 | +92.3% |
| Shares Outstanding (Basic) | 159.09M181.75M | −12.5% |
| Shares Outstanding (Diluted) | 159.09M181.75M | −12.5% |
05—Questions
Frequently Asked Questions
How did Twilio's profitability change in the third quarter of 2024?
Loss from operations narrowed to $4.9 million in Q3 2024 from $108.9 million in Q3 2023, and net loss attributable to common stockholders narrowed to $9.7 million from $141.7 million. Gross profit rose to $578.6 million from $516.3 million, and total operating expenses fell to $583.5 million from $625.2 million. Q3 2024 included $45.8 million of expense related to the new cash bonus program.
What is driving revenue growth, and how is Segment performing?
Communications revenue increased $100.0 million, or 10%, in Q3 2024, attributed to increased usage by existing customers and $51.1 million from new Communications Active Customer Accounts. Segment revenue was unchanged at $73.4 million, with churn and contraction from existing customers offsetting $6.9 million from new Segment accounts. The company targets break-even non-GAAP income from operations for Segment by the second quarter of 2025.
How much has Twilio returned to shareholders through buybacks, and how much remains authorized?
In the nine months ended September 30, 2024, Twilio repurchased 32.0 million shares of Class A common stock for an aggregate $1.9 billion. As of September 30, 2024, approximately $412.0 million of the aggregate authorized amount remained available, and both programs expire on December 31, 2024.
What factors could affect Twilio's results in the coming quarter?
The filing states that the wind-down of the software component of the Zipwhip business is expected to negatively impact revenue growth rates in Q4 2024, and that migrating part of Segment's architecture to a new infrastructure provider will overlap expenses in Q4 2024, which is expected to negatively impact Segment gross margins. The company also expects its new cash bonus program to continue increasing expenses in future periods.
What is Twilio's liquidity and debt position?
As of September 30, 2024, Twilio had cash and cash equivalents of $584.0 million and short-term marketable securities of $2.1 billion, with total long-term debt, net, of $990.2 million from the 3.625% 2029 Notes and 3.875% 2031 Notes. The company stated it was in compliance with all covenants under the related indentures and believes its resources will be sufficient for the next 12 months and beyond.
06—Continue