01—Abstract
Summary
Summary of the 10-Q filed August 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported revenue of $1,228.4 milliona for the three months ended June 30, 2025, up from $1,082.5 million a year earlier, and net income of $22.4 million versus a net loss of $31.9 million in the prior-year quarter.
Income from operations was $37.0 millionb compared with a loss of $19.0 million. For the six months ended June 30, 2025, revenue was $2,400.9 million and net income was $42.4 million. The filing states the Communications segment drove growth, with Communications revenue of $1,153.0 million (up $145.7 million) and Segment revenue of $75.5 million, roughly flat.
Segment non-GAAP income from operations was $280.6 millionc for Communications and $6.0 million for Segment in the quarter. Balance sheet and cash flow remained solid. As of June 30, 2025, cash and cash equivalents totaled $969.2 million and short-term marketable securities $1.57 billion, against $991.4 million of long-term debt, net.
Net cash provided by operating activities was $468.1 milliond for the six months, and the company repurchased $306.9 million of Class A common stock in the period, leaving about $1.7 billion available under the $2.0 billion program authorized in January 2025. The filing also discloses that a major U.S. mobile carrier raised A2P messaging fees in June 2025, which the company passes through at cost and which the filing says will create a modest headwind to gross margins. Gross margin was 49% for the quarter versus 51% a year earlier, and the filing attributes the increase in cost of revenue primarily to a $94.5 million rise in network service provider costs.
Active Customer Accounts were 349,000 versus 316,000, and Dollar-Based Net Expansion Rate was 108% versus 102%. Management stated it believes existing cash and cash flows will be sufficient for the next 12 months and beyond.
02—Key points
Key Highlights
- Q2 2025 revenue of $1.23 billion, up 13% from $1.08 billion, with Communications revenue up 14% to $1.15 billion and Segment revenue nearly flat at $75.5 million.
- Net income of $22.4 million for Q2 2025 versus a net loss of $31.9 million in Q2 2024; income from operations of $37.0 million versus a loss of $19.0 million.
- Gross margin of 49% in Q2 2025 versus 51% in Q2 2024, with cost of revenue up $99.0 million, primarily from a $94.5 million increase in network service provider costs.
- Active Customer Accounts rose to 349,000 from 316,000, and Dollar-Based Net Expansion Rate was 108% versus 102%.
- Net cash provided by operating activities was $468.1 million for the six months ended June 30, 2025, versus $403.5 million a year earlier; free cash flow for Q2 2025 was $263.5 million.
- The company repurchased $306.9 million of Class A common stock in the six months, with about $1.7 billion remaining under the $2.0 billion program authorized in January 2025.
- Cash and cash equivalents of $969.2 million and short-term marketable securities of $1.57 billion as of June 30, 2025, against $991.4 million of long-term debt, net.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Twilio kept $0.02.
- Revenue$1.23B100.0%
- Cost of revenue−$625.7M50.9%
- Gross profit$602.7M49.1%
- Operating costs−$565.8M46.1%
- Operating income$37.0M3.0%
- Interest, other & tax−$14.6M1.2%
- Net income$22.4M1.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 8, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $1.23B$1.08B | +13.5% |
| Cost of Revenue | $625.68M$526.66M | +18.8% |
| Gross Profit | $602.74M$555.85M | +8.4% |
| R&D Expenses | $243.50M$242.78M | +0.3% |
| Operating Expenses | $565.75M$574.88M | −1.6% |
| Operating Income | $36.99M-$19.04M | +294.3% |
| Net Income | $22.42M-$31.86M | +170.4% |
| EPS (Basic) | $0.15$-0.19 | +178.9% |
| EPS (Diluted) | $0.14$-0.19 | +173.7% |
| Shares Outstanding (Basic) | 153.23M170.22M | −10.0% |
| Shares Outstanding (Diluted) | 159.69M170.22M | −6.2% |
05—Questions
Frequently Asked Questions
How did Twilio's profitability change compared with the prior-year quarter?
Net income attributable to common stockholders was $22.4 million for the three months ended June 30, 2025, compared with a net loss of $31.9 million in the same period of 2024. Income from operations was $37.0 million versus a loss of $19.0 million, reflecting revenue growth and a $12.7 million decrease in general and administrative expenses, which the filing says was primarily due to lower charitable contributions through Twilio.org.
What drove the revenue increase?
The filing attributes the Communications segment's $145.7 million revenue increase to higher usage of Communications products by existing customers, reflected in a Communications Dollar-Based Net Expansion Rate of 109%, and $55.2 million of revenue from new Communications Active Customer Accounts. Segment revenue was nearly flat, rising $0.3 million, as churn and contraction among existing customers offset $4.0 million from new accounts.
Are there pressures on gross margin that investors should watch?
Yes. The filing says a major U.S. mobile carrier increased network service provider fees for A2P messages in June 2025. Twilio passes these fees through to customers at cost, so they do not affect gross profit dollars, but the filing says they will create a modest headwind to gross margins going forward and that other U.S. carriers may follow suit.
How is the company returning capital and what liquidity does it have?
In the six months ended June 30, 2025, the company purchased $306.9 million of Class A common stock under its share repurchase program, and about $1.7 billion remained available as of June 30, 2025. It held $969.2 million in cash and cash equivalents and $1.57 billion in short-term marketable securities. Management stated these balances and operating cash flows will be sufficient to meet anticipated cash needs for the next 12 months and beyond.
What debt obligations does Twilio have?
The company has $500.0 million principal of 3.625% Senior Notes due 2029 and $500.0 million principal of 3.875% Senior Notes due 2031. Long-term debt, net, was $991.4 million as of June 30, 2025, and the filing states the company was in compliance with all covenants under the related indentures.
06—Continue