Reorganization and Segment Reporting

12 Months Ended

Dec. 31, 2023

Restructuring and Related Activities [Abstract]

In February 2023, the Company announced a reorganization of its business into two business units, Twilio Communications and Twilio Data & Applications (the “Reorganization”). With the Reorganization, the Company changed the organizational structure of its business, including the way management operated the business. In the second quarter of 2023, the Company concluded that it had two operating and reportable segments: Twilio Communications (“Communications”) and Twilio Data & Applications (“Data & Applications”).

In the fourth quarter of 2023, the Company further reorganized its business by shifting certain components of the business between its operating segments. This reorganization did not impact the segment structure of the business. The impact on the reporting unit structure is described in Note 12.

After the reorganization, the Company’s Data & Applications segment consisted of its Segment and Engage products and, therefore, the reportable segment was renamed from Data & Applications to Twilio Segment (“Segment”).

Twilio Communications: The Communications segment consists of a variety of application programming interfaces (“APIs”) and software solutions to optimize communications between Twilio customers and their end users. The key products from which the segment derives its revenue are Messaging, Voice and Email.

Twilio Segment: The Segment segment consists of software products that enable businesses to achieve more effective customer engagement by providing the tools necessary for customers to build direct, personalized relationships with their end users. The key products from which the segment derives its revenue are Segment and Engage.

Discrete financial information reviewed by the CODM

In January 2024, the Company’s newly appointed CEO, who is also the CODM, began reviewing segment operating results using non-GAAP income from operations as the measure of segment profitability. Presented below is the discrete financial information by reportable segment for the years ended December 31, 2023, 2022, and 2021, that reflects management’s current view of the business for performance assessment and resource allocation decisions. Prior period amounts were reclassified to conform to the current period’s presentation. Asset information is not presented below since it is not reviewed by the CODM on a segment by segment basis. Revenue, costs of revenue and operating expenses are generally directly attributable to each segment. Certain costs of revenue and operating expenses are allocated based on methodologies that best reflect the patterns of consumption of these costs. Corporate costs consist of costs that support company-wide processes and are managed on the company-wide level, and include costs related to corporate governance and communication, global brand awareness, information security, and certain legal, finance and accounting expenses.


		Year Ended
		December 31,
		2023		2022		2021
	(In thousands)
Revenue:
Communications		$	3,858,693	$	3,550,087	$	2,640,874
Segment		295,252		276,234		200,965
Total		$	4,153,945	$	3,826,321	$	2,841,839
Non-GAAP income (loss) from operations:
Communications		$	841,990	$	318,680	$	276,496
Segment		(72,430)		(29,695)		(13,006)
Corporate costs		(236,552)		(293,475)		(260,970)
Total		$	533,008	$	(4,490)	$	2,520

Reconciliation of non-GAAP income (loss) from operations to loss from operations:
Total non-GAAP income (loss) from operations		$	533,008	$	(4,490)	$	2,520
Stock-based compensation		(662,842)		(784,285)		(632,285)
Amortization of acquired intangibles		(192,307)		(206,181)		(198,784)
Acquisition and divestiture related expenses		(5,555)		(2,621)		(7,449)
Loss on net assets divested		(32,277)		—		—
Payroll taxes related to stock-based compensation		(12,985)		(23,832)		(48,417)
Charitable contributions		(17,346)		(9,541)		(31,169)
Restructuring costs		(165,733)		(76,636)		—
Impairment of long-lived assets		(320,504)		(97,722)		—
Loss from operations		(876,541)		(1,205,308)		(915,584)
Other expenses (income), net		(120,188)		(38,324)		(45,345)
Loss before (provision for) benefit from income taxes		$	(996,729)	$	(1,243,632)	$	(960,929)

Depreciation and amortization expenses included in non-GAAP income from operations for the Communications reportable segment was $74.1 million, $61.9 million and $53.5 million in the years ended December 31, 2023, 2022 and 2021, respectively. Amortization of deferred commissions included in non-GAAP income from operations for the Communications reportable segment was $60.0 million, $47.7 million and $27.8 million in the years ended December 31, 2023, 2022 and 2021, respectively.

Depreciation and amortization expenses included in non-GAAP loss from operations for the Segment reportable segment was $13.7 million, $6.1 million and $2.6 million in the years ended December 31, 2023, 2022 and 2021, respectively. Amortization of deferred commissions included in non-GAAP loss from operations for the Segment reportable segment was $12.9 million, $10.3 million and $3.7 million in the years ended December 31, 2023, 2022 and 2021, respectively.