Twilio (NYSE: TWLO), the customer engagement platform that drives real-time, personalized experiences for today’s leading brands, reported financial results for its fourth quarter and full year ended December 31, 2023.
“Twilio had a terrific fourth quarter to close out a strong 2023,” said Khozema Shipchandler, Twilio’s CEO. “It’s a privilege to lead the Twilio team into its next chapter as we continue to make strides on our path to GAAP profitability. We enter 2024 from a position of strength and the team is focused on further delivering on our customer engagement vision for our customers.”
Fourth Quarter 2023 Financial Highlights
- Total revenue of $1.08 billion for the fourth quarter of 2023, up 5% year-over-year. Communications revenue of $1.00 billion for the fourth quarter of 2023, up 5% year-over-year. Segment (formerly Data & Applications) revenue of $75.0 million for the fourth quarter of 2023, up 4% year-over-year.
- Total organic revenue growth of 8% year-over-year for the fourth quarter of 2023. Communications organic revenue growth of 8% year-over-year for the fourth quarter of 2023.
- GAAP loss from operations of $361.7 million for the fourth quarter of 2023, compared with GAAP loss from operations of $218.6 million for the fourth quarter of 2022.
- Non-GAAP income from operations of $172.6 million for the fourth quarter of 2023, compared with non-GAAP income from operations of $32.9 million for the fourth quarter of 2022.
- GAAP net loss per share attributable to common stockholders, basic and diluted, of $2.01 based on 181.8 million weighted average shares outstanding in the fourth quarter of 2023, compared with GAAP net loss per share attributable to common stockholders, basic and diluted, of $1.24 based on 185.1 million weighted average shares outstanding in the fourth quarter of 2022.
- Non-GAAP net income per share attributable to common stockholders, diluted, of $0.86 based on 184.0 million non-GAAP weighted average shares outstanding in the fourth quarter of 2023, compared with non-GAAP net income per share attributable to common stockholders, diluted, of $0.22 based on 187.2 million non-GAAP weighted average shares outstanding in the fourth quarter of 2022.
- Net Cash Provided by Operating Activities of $222.5 million and Free Cash Flow of $210.9 million.
Full Year 2023 Financial Highlights
- Total revenue of $4.15 billion for the full year 2023, up 9% year-over-year. Communications revenue of $3.86 billion for the full year 2023, up 9% year-over-year. Segment (formerly Data & Applications) revenue of $295.3 million for the full year 2023, up 7% year-over-year.
- Total organic revenue growth of 10% year-over-year for the full year 2023. Communications organic revenue growth of 11% year-over-year for the full year 2023.
- GAAP loss from operations of $876.5 million for the full year 2023, compared with GAAP loss from operations of $1.21 billion for the full year 2022.
- Non-GAAP income from operations of $533.0 million for the full year 2023, compared with non-GAAP loss from operations of $4.5 million for the full year 2022.
- GAAP net loss per share attributable to common stockholders, basic and diluted, of $5.54 based on 183.3 million weighted average shares outstanding in the full year 2023, compared with GAAP net loss per share attributable to common stockholders, basic and diluted, of $6.86 based on 183.0 million weighted average shares outstanding in the full year 2022.
- Non-GAAP net income per share attributable to common stockholders, diluted, of $2.45 based on 185.4 million non-GAAP weighted average shares outstanding in the full year 2023, compared with non-GAAP net loss per share attributable to common stockholders, basic and diluted, of $0.15 based on 183.0 million non-GAAP weighted average shares outstanding in the full year 2022.
- Net Cash Provided by Operating Activities of $414.8 million and Free Cash Flow of $363.5 million.
Key Metrics
- More than 305,000 Active Customer Accounts as of December 31, 2023 compared to more than 290,000 Active Customer Accounts as of December 31, 2022.
- Dollar-Based Net Expansion Rate of 102% for the fourth quarter of 2023 compared to Dollar-Based Net Expansion Rate of 110% for the fourth quarter of 2022. Dollar-Based Net Expansion Rate of 103% for the full year 2023 compared to Dollar-Based Net Expansion Rate of 121% for the full year 2022.
- 5,867 employees as of December 31, 2023.
Share Repurchase Program
- In February 2023, Twilio authorized a share repurchase program pursuant to which it may repurchase up to $1.0 billion of its outstanding Class A common stock. As of today, Twilio has completed over $730 million of repurchases, representing over 73% of the total program amount. Twilio intends to continue making progress against the balance of its share repurchase authorization in future quarters. The program expires on December 31, 2024.
Executive Leadership Update
- On January 7, 2024, Jeff Lawson resigned as Twilio’s Chief Executive Officer (“CEO”), as a member of Twilio’s Board of Directors (the “Board”) and as Board Chair, in each case, effective January 8, 2024.
- On January 7, 2024, the Board appointed Khozema Shipchandler, Twilio’s President, Communications, as CEO of Twilio and as a member of the Board, effective January 8, 2024.
Business Unit Update
- In the fourth quarter of 2023, Twilio moved its Flex and Marketing Campaigns products from its Data & Applications business unit to its Communications business unit. Twilio has also renamed its Data & Applications business unit to Twilio Segment, which includes both its Segment and Engage products. As a result of these changes, all segment-level results and metrics have been recast accordingly.
Segment Update
- Twilio announced that management is undergoing an operational review of the Segment business unit in order to identify the appropriate path forward for improved execution and profitable growth. Twilio management will provide more details on the outcome of this review upon its completion in March of 2024. During the fourth quarter, Twilio recorded a $285.7 million impairment related to the intangible assets acquired as part of the Segment acquisition.
Outlook
Twilio plans to provide its full-year 2024 non-GAAP income from operations outlook, as well as any updates to its financial framework, following the completion of the Segment operational review in March of 2024. At a minimum, Twilio expects to exceed its 2023 non-GAAP income from operations for the full-year 2024.
Twilio is initiating guidance for the first quarter ending March 31, 2024.
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Q1 FY24 |
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Revenue (millions) |
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$1,025 – $1,035 |
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Y/Y Revenue Growth |
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2% – 3% |
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Y/Y Organic Revenue Growth |
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5% – 6% |
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Non-GAAP income from operations (millions) |
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$120 – $130 |
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Non-GAAP diluted earnings per share (1) |
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$0.56 – $0.60 |
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Non-GAAP weighted average diluted shares outstanding (millions) |
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185 |
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(1) Non-GAAP diluted earnings per share guidance assumes no impact from volatility of foreign exchange rates. |
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Conference Call Information
Twilio posted prepared remarks on its investor relations website at https://investors.twilio.com. Twilio is hosting a Q&A conference call today, February 14, 2024, to discuss its fourth quarter and full year 2023 financial results. The conference call will begin at 2:00 p.m. (PT) / 5:00 p.m. (ET), and investors and analysts should register for the webcast in advance by visiting https://events.q4inc.com/attendee/764646733. The live webcast of the conference call, as well as a replay, will be available on the investor relations website.
Twilio uses its investor relations website and its X (formerly Twitter) feed (@twilio), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
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