Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

During 2023, as a result of business reorganization events, the Company shifted from a single reporting unit structure to a multiple reporting unit structure. The Company reallocated goodwill to its newly formed reporting units and tested goodwill for impairment on the reporting unit level immediately before and immediately after each reorganization. The Company engaged a third-party expert to assist in the valuation analysis. The Company concluded that its goodwill was not impaired immediately before and immediately after each reorganization.

To allocate goodwill to the newly formed reporting units in 2023, the Company estimated the fair value of its reporting units using a weighting of fair values derived from an income and a market approach. Estimating the fair value by these methods involves the use of various assumptions that the Company believes were reasonable under then current circumstances. Under the income approach, the Company determined the fair value of a reporting unit based on the present value of estimated

future cash flows using the cash flow projections prepared by management. The market approach estimates the fair value based on market multiples of revenue or adjusted EBITDA, as applicable, derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. While these assumptions reflect management’s best estimates of future performance at that time, the estimates are inherently complex and uncertain and the Company’s actual results could differ materially from the estimates.

The following table presents the goodwill allocated to the Company’s reportable segments as of December 31, 2024 and 2023, and the changes during the period:


	Twilio Communications		Twilio Segment		Total
	(In thousands)
Balance as of December 31, 2022	$	—	$	—	$	5,284,153
Foreign currency adjustments					26
Reallocation to segments in 2023(1)	$	4,978,094	$	306,085	—
Foreign currency adjustments	251		—		251
Goodwill divested(2)	(41,164)		—		(41,164)

Balance as of December 31, 2023	$	4,937,181	$	306,085	$	5,243,266


____________________________________
(1) Represents reallocation of goodwill as a result of the change in reporting unit structure in 2023.
(2) Represents goodwill related to the divestitures of the ValueFirst business and IoT asset group in 2023, as described in Note 5.

There was no goodwill activity during the year ended December 31, 2024. As of December 31, 2024, the balance of the Company’s goodwill was $5.2 billion, of which $4.9 billion relates to the Communications reportable segment and $306.1 million relates to the Segment reportable segment.

Intangible assets

Intangible assets consist of the following:


	As of December 31, 2024
	Cost		Accumulated Amortization		Net
Amortizable intangible assets:	(In thousands)
Developed technology	$	388,341	$	(306,063)	$	82,278
Customer relationships	348,314		(215,523)		132,791
Supplier relationships	49,756		(35,363)		14,393
Trade names	25,968		(25,014)		954

Patent	3,968		(1,096)		2,872
Total amortizable intangible assets	816,347		(583,059)		233,288
Non-amortizable intangible assets:
Telecommunication licenses	4,920		—		4,920
Trademarks and other	295		—		295
Total	$	821,562	$	(583,059)	$	238,503


	As of December 31, 2023
	Cost		Accumulated Amortization		Net
Amortizable intangible assets:	(In thousands)
Developed technology	$	397,473	$	(259,635)	$	137,838
Customer relationships	349,074		(170,511)		178,563
Supplier relationships	49,756		(26,316)		23,440
Trade names	25,968		(23,600)		2,368
Order backlog	10,000		(10,000)		—
Patent	3,968		(902)		3,066
Total amortizable intangible assets	836,239		(490,964)		345,275
Non-amortizable intangible assets:
Telecommunication licenses	4,920		—		4,920
Trademarks and other	295		—		295
Total	$	841,454	$	(490,964)	$	350,490

Amortization expense was $112.0 million, $192.5 million and $206.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

There was no impairment related to intangible assets in the year ended December 31, 2024. In the year ended December 31, 2023, the Company recorded an impairment charge related to certain of its intangible assets, as described in Note 6.

Total estimated future amortization expense is as follows:


	As of December 31, 2024
Year Ended December 31,	(In thousands)
2025	$	107,862
2026	42,149
2027	25,330
2028	19,055
2029	14,970
Thereafter	23,922
Total	$	233,288