01—Abstract
Summary
Summary of the 10-Q filed May 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported first-quarter 2025 revenue of $1.17 billiona, up from $1.05 billion in the prior-year period, and net income of $20.0 million versus a net loss of $(55.3) million a year earlier.
Income from operations was $23.1 millionb compared with a loss from operations of $(43.5) million. Communications revenue rose $124.8 million, or 13%, driven by existing-customer usage and $50.9 million from new Communications Active Customer Accounts, while Segment revenue was roughly flat at $75.7 million, up 1%. The Communications Dollar-Based Net Expansion Rate was 108% and the Segment rate was 94%.
Gross margin fell to 50% from 52%, mainly due to a $76.7 millionc increase in network service provider costs, net of hedging. Cash flow and capital returns were the other focus. Net cash provided by operating activities was $191.0 million and free cash flow was $178.3 million.
Cash and cash equivalents were $467.1 milliond and short-term marketable securities were $2.0 billion. The company repurchased 1.2 million Class A shares for $130.2 million under a $2.0 billion program authorized in January 2025, leaving about $1.9 billion available. Stock-based compensation remained significant at $139.3 million for the quarter, and total long-term debt, net, was $991.0 million across the 2029 and 2031 Senior Notes.
The filing states that the company's disclosure controls were effective as of March 31, 2025, and it reports no material change in internal control over financial reporting during the quarter. Management believes cash and marketable securities, together with operating cash flows, will be sufficient for the next 12 months and beyond. The filing also discloses that Section 13(r) activity related to SMS messages terminating in Iran through a non-U.S. subsidiary's Swiss service provider has been terminated, with no gross revenue or net profits received from the Iranian Entities.
02—Key points
Key Highlights
- Revenue of $1,172.5 million, up from $1,047.1 million, with Communications revenue up 13% and Segment revenue up 1%.
- Net income of $20.0 million (diluted EPS $0.12) versus a net loss of $(55.3) million in Q1 2024; income from operations of $23.1 million versus a loss of $(43.5) million.
- Gross margin of 50% versus 52% a year earlier, reflecting a $76.7 million increase in network service provider costs, net of hedging.
- Communications Dollar-Based Net Expansion Rate of 108% and Segment rate of 94%; Active Customer Accounts of 335,000 versus 313,000.
- Operating cash flow of $191.0 million and free cash flow of $178.3 million; cash and equivalents of $467.1 million plus $2.0 billion of short-term marketable securities.
- Repurchased $130.2 million of Class A common stock (1.2 million shares) under the $2.0 billion program authorized in January 2025, with approximately $1.9 billion remaining.
- Total long-term debt, net, of $991.0 million, comprised of $500.0 million 3.625% 2029 Notes and $500.0 million 3.875% 2031 Notes principal; the company was in covenant compliance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Twilio kept $0.02.
- Revenue$1.17B100.0%
- Cost of revenue−$590.9M50.4%
- Gross profit$581.6M49.6%
- Operating costs−$558.5M47.6%
- Operating income$23.1M2.0%
- Interest, other & tax−$3.1M0.3%
- Net income$20.0M1.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 2, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.17B$1.05B | +12.0% |
| Cost of Revenue | $590.90M$503.01M | +17.5% |
| Gross Profit | $581.57M$544.04M | +6.9% |
| R&D Expenses | $254.29M$260.46M | −2.4% |
| Operating Expenses | $558.49M$587.54M | −4.9% |
| Operating Income | $23.08M-$43.50M | +153.1% |
| Net Income | $20.02M-$55.35M | +136.2% |
| EPS (Basic) | $0.13$-0.31 | +141.9% |
| EPS (Diluted) | $0.12$-0.31 | +138.7% |
| Shares Outstanding (Basic) | 153.35M181.02M | −15.3% |
| Shares Outstanding (Diluted) | 161.79M181.02M | −10.6% |
05—Questions
Frequently Asked Questions
How did Twilio's revenue and profitability change in the first quarter of 2025?
Revenue rose to $1.17 billion from $1.05 billion, and the company swung to net income of $20.0 million from a net loss of $(55.3) million. Income from operations was $23.1 million compared with a loss of $(43.5) million a year earlier, though gross margin declined to 50% from 52%.
What drove growth in the Communications and Segment businesses?
Communications revenue increased $124.8 million, or 13%, mainly from increased usage by existing customers (108% Dollar-Based Net Expansion Rate) and $50.9 million from new Communications Active Customer Accounts. Segment revenue rose $0.6 million, or 1%, as $5.0 million from new accounts was partly offset by churn and contraction, reflected in a 94% Segment Dollar-Based Net Expansion Rate.
How much cash does Twilio have and how is it returning capital?
The company had $467.1 million of cash and cash equivalents and $2.0 billion of short-term marketable securities at March 31, 2025. It repurchased $130.2 million of Class A common stock in the quarter under a $2.0 billion program that runs through December 31, 2027, with approximately $1.9 billion still available.
What debt does Twilio carry, and what does the filing say about its ability to meet obligations?
Long-term debt, net, was $991.0 million, consisting of the 3.625% Senior Notes due 2029 and the 3.875% Senior Notes due 2031, each with $500.0 million principal. Management believes existing cash, marketable securities and operating cash flows will be sufficient to meet anticipated needs for the next 12 months and beyond.
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