Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Entity Registrant Name | TWILIO INC | |
Entity Central Index Key | 1,447,669 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 68,822,548 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 24,207,167 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 91,906 | $ 305,665 |
Short-term marketable securities | 192,031 | 0 |
Accounts receivable, net | 37,258 | 26,203 |
Prepaid expenses and other current assets | 26,420 | 21,512 |
Total current assets | 347,615 | 353,380 |
Restricted cash | 7,450 | 7,445 |
Property and equipment, net | 47,718 | 37,552 |
Intangible assets, net | 21,274 | 10,268 |
Goodwill | 17,407 | 3,565 |
Other long-term assets | 2,084 | 484 |
Total assets | 443,548 | 412,694 |
Current liabilities: | ||
Accounts payable | 7,117 | 4,174 |
Accrued expenses and other current liabilities | 55,283 | 59,308 |
Deferred revenue | 13,599 | 10,222 |
Total current liabilities | 75,999 | 73,704 |
Long-term liabilities | 12,549 | 9,543 |
Total liabilities | 88,548 | 83,247 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Class A and Class B common stock | 93 | 87 |
Additional paid-in capital | 584,390 | 516,090 |
Accumulated deficit | (231,519) | (186,730) |
Accumulated other comprehensive income | 2,036 | |
Total stockholders' equity | 355,000 | 329,447 |
Total liabilities and stockholders' equity | $ 443,548 | $ 412,694 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Operations | ||||
Revenue | $ 100,542 | $ 71,533 | $ 283,784 | $ 195,383 |
Cost of revenue | 48,254 | 31,285 | 127,873 | 86,315 |
Gross profit | 52,288 | 40,248 | 155,911 | 109,068 |
Operating expenses: | ||||
Research and development | 31,674 | 21,106 | 87,910 | 53,339 |
Sales and marketing | 25,778 | 15,873 | 73,047 | 47,451 |
General and administrative | 18,867 | 14,545 | 40,810 | 36,773 |
Total operating expenses | 76,319 | 51,524 | 201,767 | 137,563 |
Loss from operations | (24,031) | (11,276) | (45,856) | (28,495) |
Other income, net | 1,000 | 138 | 1,969 | 92 |
Loss before provision for income taxes | (23,031) | (11,138) | (43,887) | (28,403) |
Provision for income taxes | (422) | (116) | (902) | (313) |
Net loss attributable to common stockholders | $ (23,453) | $ (11,254) | $ (44,789) | $ (28,716) |
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.25) | $ (0.13) | $ (0.49) | $ (0.68) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 92,156,768 | 83,887,901 | 90,543,087 | 42,030,989 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (23,453) | $ (11,254) | $ (44,789) | $ (28,716) |
Other comprehensive income: | ||||
Unrealized loss on marketable securities | (44) | (238) | ||
Foreign currency translation | 793 | 2,274 | ||
Total other comprehensive income | 749 | 2,036 | ||
Comprehensive loss attributable to common stockholders | $ (22,704) | $ (11,254) | $ (42,753) | $ (28,716) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (44,789) | $ (28,716) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13,406 | 5,292 |
Amortization of bond premium | 153 | |
Stock-based compensation | 35,973 | 15,649 |
Provision for doubtful accounts | 407 | 1,017 |
Gain on lease termination | (295) | |
Write-off of internally developed software | 96 | 188 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (9,173) | (11,275) |
Prepaid expenses and other current assets | (4,947) | (11,561) |
Other long-term assets | (1,512) | (59) |
Accounts payable | 1,411 | 2,317 |
Accrued expenses and other current liabilities | (1,454) | 18,625 |
Deferred revenue | 3,364 | 3,346 |
Long-term liabilities | 306 | 9,596 |
Net cash provided by (used in) operating activities | (7,054) | 4,419 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
(Increase) decrease in restricted cash | 1,170 | (7,439) |
Purchases of marketable securities | (280,569) | |
Maturities of marketable securities | 87,325 | |
Capitalized software development costs | (12,281) | (8,447) |
Purchases of property and equipment | (8,613) | (5,282) |
Purchases of intangible assets | (206) | (646) |
Acquisition, net of cash acquired | (22,621) | |
Net cash used in investing activities | (235,795) | (21,814) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from initial public offering, net of underwriting discounts | 160,426 | |
Payments of costs related to public offerings | (430) | (3,936) |
Proceeds from exercises of stock options | 22,504 | 4,751 |
Proceeds from shares issued in ESPP | 7,404 | |
Tax benefit related to stock-based compensation | 62 | |
Value of equity awards withheld for tax liabilities | (476) | (518) |
Net cash provided by financing activities | 29,002 | 160,785 |
Effect of exchange rate changes on cash and cash equivalents | 88 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (213,759) | 143,390 |
CASH AND CASH EQUIVALENTS-Beginning of period | 305,665 | 108,835 |
CASH AND CASH EQUIVALENTS-End of period | 91,906 | 252,225 |
Cash paid for income taxes | 489 | 153 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Purchases of property, equipment and intangible assets, accrued but not paid | 124 | 2,373 |
Stock-based compensation capitalized in software development costs | 2,712 | 1,068 |
Vesting of early exercised options | $ 315 | 512 |
Costs related to the public offerings, accrued but not paid | $ 368 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business Twilio Inc. (the “Company”) was incorporated in the state of Delaware on March 13, 2008. The Company is the leader in the Cloud Communications Platform category and enables developers to build, scale and operate real-time communications within their software applications via simple-to-use Application Programming Interfaces, or APIs. The power, flexibility, and reliability offered by the Company’s software building blocks empower entities of virtually every shape and size to build world-class engagement into their customer experience. The Company’s headquarters are located in San Francisco, California and the Company has subsidiaries in the United Kingdom, Estonia, Ireland, Colombia, Germany, Hong Kong, Singapore, Bermuda, Spain, Sweden and Australia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC on February 21, 2017 (“Annual Report”). The condensed consolidated balance sheet as of December 31, 2016, included herein, was derived from the audited financial statements as of that date, but may not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. In the fourth quarter of 2016, the Company adopted the guidance of Accounting Standard Update (“ASU”) No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” , which simplified several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. The Company adopted all provisions on either prospective or modified retrospective basis. The impact from any of the adopted provisions was immaterial to the Company’s financial position, results of operations and cash flows. Hence, prior periods were not adjusted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2017 or any future period. (b) Principles of Consolidation The condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. (c) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue allowances and returns; valuation of the Company’s stock and stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. (d) Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, restricted cash and accounts receivable. The Company maintains cash, cash equivalents, restricted cash and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any one of the large customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. As of September 30, 2017, one customer organization represented approximately 11% of the Company’s gross accounts receivable. As of December 31, 2016, one customer organization represented approximately 16% of the Company’s gross accounts receivable. In the three and nine months ended September 30, 2017, no customers represented more than 10% of the Company’s total revenue. In the three months ended September 30, 2016, one customer organization represented 15% of the Company’s total revenue, and in the nine months ended September 30, 2016, two customer organizations represented 10% and 13% of the Company’s total revenue. (e) Significant Accounting Policies There have been no changes to our significant accounting policies described in our Annual Report. (f) Recently Issued Accounting Guidance, Not yet Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2017-09, “ Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting” , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, “ Simplifying the Test for Goodwill Impairment ”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2019. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations (Topic 805) Clarifying the Definition of a Business”, which amends the guidance of FASB Accounting Standards Codification Topic 805, “ Business Combinations ”, adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted under certain circumstances. The Company will evaluate the impact of this guidance on its financial statements and related disclosures next time there is a potential business combination. In November 2016, the FASB issued ASU 2016-18, “Restricted Cash” , which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this guidance upon its effective date. The restricted cash balances as of September 30, 2017 and December 31, 2016 were $7.4 million and $8.6 million, respectively. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers Other Than Inventory” , which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of this guidance on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “ Leases” . The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. For public companies, the new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its condensed consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers ”. This new guidance will replace most existing U.S. GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which deferred, by one year, the effective date for the new revenue reporting standard for entities reporting under U.S. GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted beginning January 1, 2017. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing,” clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In September 2017, the FASB issued ASU 2017-13, “ Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)” . These amendments provide additional clarification and implementation guidance on the previously issued ASUs. These amendments do not change the core principles of the guidance stated in ASU 2014-09, instead they are intended to clarify and improve operability of certain topics included within the revenue standard. The effective date and transition requirements for ASU 2016-08, ASU 2016-10 and ASU 2016-12 are the same as the effective date and transition requirements for ASU 2014-09. The Company performed its preliminary evaluation and selected a modified retrospective transition method with cumulative effect adjustment as of the standard’s effective date. While the Company has not yet completed the full analysis, based on the evaluation to date, the Company does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cash flows. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements The Company records certain of its financial assets at fair value on a recurring basis. The Company’s financial instruments, which include cash, cash equivalents, accounts receivable and accounts payable, are recorded at their carrying amounts, which approximate their fair values due to their short-term nature. Restricted cash is short-term and long-term in nature and consists of cash in a savings account, hence its carrying amount approximates its fair value. Marketable securities consist of U.S. treasury securities and high credit quality corporate debt securities. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net. The following tables summarize the Company’s financial assets as of September 30, 2017 and December 31, 2016 by type (in thousands): Amortized Cost Net Fair Value Hierarchy as of September 30, 2017 Aggregate Fair Value Losses Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents: Money market funds $ $ — $ $ — $ — $ Total included in cash and cash equivalents — — — Marketable securities: U.S. Treasury securities ) — — Corporate debt securities ) — — Total marketable securities ) — Total financial assets $ $ ) $ $ $ — $ There were no marketable securities as of December 31, 2016. Carrying Fair Value Hierarchy as of December 31, 2016 Aggregate Fair Value Level 1 Level 2 Level 3 Value Total Financial Assets: Money market funds (included in cash and cash equivalents) $ $ $ — $ — $ Total financial assets $ $ $ — $ — $ The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of September 30, 2017 (in thousands): Amortized Aggregate Fair Cost Value Financial Assets: Less than one year $ $ One to two years Total $ $ For fixed income securities that had unrealized losses as of September 30, 2017, the Company has determined that no other-than-temporary impairment existed. As of September 30, 2017, all securities in an unrealized loss position have been in an unrealized loss position for less than one year. Interest earned on marketable securities in the three and nine months ended September 30, 2017 was $0.7 million and $1.8 million, respectively, and is recorded as other income (expense), net, in the accompanying condensed consolidated statements of operations. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following (in thousands): As of As of Capitalized software development costs $ $ Leasehold improvements Office equipment Furniture and fixtures Software Total property and equipment Less: accumulated depreciation and amortization ) ) Total property and equipment, net $ $ Depreciation and amortization expense was $3.4 million and $9.3 million for the three and nine months ended September 30, 2017, respectively, and $1.9 million and $4.9 million for the three and nine months ended September 30, 2016, respectively. The Company capitalized $5.5 million and $15.0 million of software development costs in the three and nine months ended September 30, 2017, respectively, and $3.4 million and $9.5 million in the three and nine months ended September 30, 2016, respectively. Of this amount, the stock-based compensation expense was $1.2 million and $2.8 million in the three and nine months ended September 30, 2017, respectively, and $0.4 million and $1.1 million in the three and nine months ended September 30, 2016, respectively. Amortization of capitalized software development costs was $2.2 million and $5.9 million in the three and nine months ended September 30, 2017, respectively, and $1.4 million and $3.7 million in the three and nine months ended September 30, 2016, respectively. |
Recent Acquisition
Recent Acquisition | 9 Months Ended |
Sep. 30, 2017 | |
Recent Acquisition | |
Recent Acquisition | 5. Recent Acquisition On February 6, 2017, the Company completed its acquisition of a messaging provider based in Sweden specializing in messaging and SMS solutions, for a total purchase price of $23.0 million, paid in cash, of which $5.0 million was held in escrow. The escrow will continue for 18 months after the transaction closing date and may be extended under certain circumstances. Additionally, the Company deposited $2.0 million into a separate escrow account that will be released to certain employees on the first and second anniversaries of the closing date, provided the underlying service conditions are met. This amount is recorded as prepaid compensation in the accompanying condensed consolidated balance sheet and is amortized into expense as the services are rendered. The acquisition was accounted for as a business combination and, accordingly, the total purchase price was allocated to the preliminary net tangible and intangible assets and liabilities based on their preliminary fair values on the acquisition date. The prepaid compensation subject to service conditions is accounted for as a post-acquisition compensation expense and recorded as research and development expense in the accompanying condensed consolidated statement of operations. We expect to continue to obtain information to assist us in determining the fair values of the net assets acquired on the acquisition date during the measurement period. The acquired entity’s results of operations have been included in the condensed consolidated financial statements of the Company from the date of acquisition. The following table presents the preliminary purchase price allocation recorded in the Company’s condensed consolidated balance sheet on the acquisition date, and as subsequently adjusted during the three months ended June 30, 2017 (in thousands): Total Net tangible liabilities $ ) Goodwill (1) Intangible assets (2) Total purchase price $ The Company acquired a net deferred tax liability of $2.6 million in this business combination. (1) Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology platform, existing customer and supplier relationships as well as operational synergies. (2) Identifiable finite-lived intangible assets were comprised of the following: Total Estimated Developed technology $ 4 Customer relationships 7-8 Supplier relationships 5 Total intangible assets acquired $ The estimated fair value of the intangible assets acquired was determined by the Company, and the Company considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. Specifically, the developed technology asset class was valued using the-relief-from royalty method, while the customer relationships asset class was valued using a multi-period excess earnings method and the supplier relationships asset class was valued using an incremental cash flow method. The Company incurred costs related to this acquisition of $0.7 million, of which $0.3 million and $0.4 million were incurred during the fiscal years 2017 and 2016, respectively. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’s condensed consolidated financial statements is immaterial. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Intangible Assets | 6. I ntangible Assets Goodwill Goodwill balance as of September 30, 2017 and December 31, 2016 was as follows: Total Balance as of December 31, 2016 $ Goodwill recorded in connection with the recent acquisition Measurement period adjustment ) Effect of exchange rate Balance as of September 30, 2017 $ Intangible assets Intangible assets consisted of the following (in thousands): As of September 30, 2017 Gross Accumulated Net Amortizable intangible assets: Developed technology $ $ ) $ Customer relationships ) Supplier relationships ) Trade name ) — Patent ) Total amortizable intangible assets ) Non-amortizable intangible assets: Domain names — Trademarks — Total $ $ ) $ As of December 31, 2016 Gross Accumulated Net Amortizable intangible assets: Developed technology $ $ ) $ Customer relationships ) Trade name ) Patent ) Total amortizable intangible assets ) Non-amortizable intangible assets: Domain names — Trademarks — Total $ $ ) $ Amortization expense was $1.5 million and $4.2 million for the three and nine months ended September 30, 2017, respectively, and $0.1 million and $0.4 million for the three and nine months ended September 30, 2016, respectively. Total estimated future amortization expense was as follows (in thousands): As of 2017 (remaining 3 months) $ 2018 2019 2020 2021 Thereafter Total $ |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 7. Accrued Expenses and Other Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): As of As of 2017 2016 Accrued payroll and related $ $ Accrued bonus and commission Accrued cost of revenue Sales and other taxes payable ESPP contributions Deferred rent Accrued other expense Total accrued expenses and other current liabilities $ $ Long-term liabilities consisted of the following (in thousands): As of As of 2017 2016 Deferred rent $ $ Deferred tax liability — Accrued other expense Total other long-term liabilities $ $ |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Balance Sheet Information | |
Supplemental Balance Sheet Information | 8. Supplemental Balance Sheet Information A roll-forward of the Company’s reserves is as follows (in thousands): (a) Allowance for doubtful accounts (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Balance, beginning of period $ $ $ $ Additions Write-offs — ) ) ) Balance, end of period $ $ $ $ (b) Sales credit reserve (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Balance, beginning of period $ $ $ $ Additions Deductions against reserve ) ) ) ) Balance, end of period $ $ $ $ |
Revenue by Geographic Area
Revenue by Geographic Area | 9 Months Ended |
Sep. 30, 2017 | |
Revenue by Geographic Area | |
Revenue by Geographic Area | 9. Revenue by Geographic Area Revenue by geographic area is based on the IP address at the time of registration. The following table sets forth revenue by geographic area (dollars in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Revenue by geographic area: United States $ $ $ $ International Total $ $ $ $ Percentage of revenue by geographic area: United States % % % % International % % % % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies (a) Lease Commitments The Company entered into various non-cancelable operating lease agreements for its facilities over the next seven years. Certain operating leases contain provisions under which monthly rent escalates over time. When lease agreements contain escalating rent clauses or free rent periods, the Company recognizes rent expense on a straight-line basis over the term of the lease. Rent expense was $2.1 million and $6.1 million for the three and nine months ended September 30, 2017, respectively, and $2.1 million and $5.1 million for the three and nine months ended September 30, 2016, respectively. Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): Year Ending December 31: As of September 30, 2017 (remaining three months) $ 2018 2019 2020 2021 Thereafter Total minimum lease payments $ (b) Legal Matters On April 30, 2015, Telesign Corporation, or Telesign, filed a lawsuit against the Company in the United States District Court, Central District of California (“Telesign I”). Telesign alleges that the Company is infringing three U.S. patents that it holds: U.S. Patent No. 8,462,920 (“‘920”), U.S. Patent No. 8,687,038 (“‘038”) and U.S. Patent No. 7,945,034 (“‘034”). The patent infringement allegations in the lawsuit relate to the Company’s Programmable Authentication products, its two-factor authentication use case and an API tool to find information about a phone number. The Company has petitioned the U.S. Patent and Trademark Office (“U.S. PTO”) for inter partes review of the patents at issue. On July 8, 2016, the U.S. PTO denied the Company’s petition for inter partes review of the ‘920 and ‘038 patents. After the U.S. PTO held its hearing on the ‘034 patent inter partes review, on June 26, 2017, it upheld the patentability of the ‘034 patent, adopting Telesign’s narrow construction of its patent. On March 28, 2016, Telesign filed a second lawsuit against the Company in the United States District Court, Central District of California (“Telesign II”), alleging infringement of U.S. Patent No. 9,300,792 (“‘792”) held by Telesign. The ‘792 patent is in the same patent family as the ‘920 and ‘038 patents asserted in Telesign I. On March 8, 2017, in response to a petition by the Company, the U.S. PTO issued an order instituting the inter partes review for the ‘792 patent. A final written decision is expected by March 2018. On March 15, 2017, Twilio filed a motion to consolidate and stay related cases pending the conclusion of the now instituted ‘792 patent inter partes review. On May 16, 2017, the court issued an order to consolidate the Telesign I and Telesign II matters and stay the consolidated case until the completion of the inter partes review of the ‘792 patent. With respect to each of the patents asserted in Telesign I and Telesign II, the complaints seek, among other things, to enjoin the Company from allegedly infringing the patents, along with damages for lost profits. On December 1, 2016, the Company filed a patent infringement lawsuit against Telesign in the United States District Court, Northern District of California, alleging indirect infringement of United States Patent No. 8,306,021, United States Patent No. 8,837,465, United States Patent No. 8,755,376, United States Patent No. 8,736,051, United States Patent No. 8,737,962, United States Patent No. 9,270,833, and United States Patent No. 9,226,217. Telesign filed a motion to dismiss the complaint on January 25, 2017. In two orders, issued on March 31, 2017 and April 17, 2017, the Court granted Telesign’s motion to dismiss with respect to the ‘962, ‘833, ‘051 and ‘217 patents, but denied Telesign’s motion to dismiss as to the ‘021, ‘465 and ‘376 patents. This litigation is currently ongoing. On February 18, 2016, a putative class action complaint was filed in the Alameda County Superior Court in California, entitled Angela Flowers v. Twilio Inc. The complaint alleges that the Company’s products permit the interception, recording and disclosure of communications at a customer’s request and are in violation of the California Invasion of Privacy Act. The complaint seeks injunctive relief as well as monetary damages. On May 27, 2016, the Company filed a demurrer to the complaint. On August 2, 2016, the court issued an order denying the demurrer in part and granted it in part, with leave to amend by August 18, 2016 to address any claims under California’s Unfair Competition Law. The plaintiff opted not to amend the complaint. Discovery has already begun, and a hearing on the class certification motion is set for December 2017. The Company intends to vigorously defend these lawsuits and believes it has meritorious defenses to each matter in which it is a defendant. It is too early in these matters to reasonably predict the probability of the outcomes or to estimate ranges of possible losses. In addition to the litigation matters discussed above, from time to time, the Company is a party to legal action and subject to claims that arise in the ordinary course of business. The claims are investigated as they arise and loss estimates are accrued, when probable and reasonably estimable. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that these legal proceedings will not have a material adverse effect on its financial position or results of operations. (c) Indemnification Agreements The Company has signed indemnification agreements with all of its board members and executive officers. The agreements indemnify the board members and executive officers from claims and expenses on actions brought against the individuals separately or jointly with the Company for certain indemnifiable events. Indemnifiable Events generally mean any event or occurrence related to the fact that the board member or the executive officer was or is acting in his or her capacity as a board member or an executive officer for the Company or was or is acting or representing the interests of the Company. In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company’s various products, or its acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments. The terms of such obligations may vary. As of September 30, 2017 and December 31, 2016, no amounts were accrued. (d) Other taxes The Company conducts operations in many tax jurisdictions throughout the United States. In many of these jurisdictions, non-income-based taxes, such as sales and use and telecommunications taxes are assessed on the Company’s operations. Prior to March 2017, the Company had not billed nor collected these taxes from its customers and, in accordance with U.S. GAAP, recorded a provision for its tax exposure in these jurisdictions when it is both probable that a liability has been incurred and the amount of the exposure can be reasonably estimated. Effective March 2017, the Company began collecting these taxes from customers in certain jurisdictions and intends to collect in other jurisdictions in the near term. As a result, the Company recorded a liability of $29.0 million and $28.8 million as of March 31, 2017 and December 31, 2016, respectively. These estimates include several key assumptions including, but not limited to, the taxability of the Company’s services, the jurisdictions in which its management believes it has nexus, and the sourcing of revenues to those jurisdictions. Simultaneously, the Company was and continues to be in discussions with certain states regarding its prior state sales and other taxes, if any, that the Company may owe. During the three months ended June 30, 2017, the Company revised its estimates of its tax exposure based on settlements reached with various states indicating that certain revisions to the key assumptions including, but not limited to, the sourcing of revenue and the taxability of the Company’s services were appropriate in the current period. In the nine months ended September 30, 2017, total impact of these changes on the net loss attributable to common stockholders was a reduction of $13.1 million, or $0.14 per share. As of September 30, 2017, the total liability related to these taxes was $19.4 million. In the event other jurisdictions challenge management’s assumptions and analysis, the actual exposure could differ materially from the current estimates. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity (a) Preferred Stock As of September 30, 2017, the Company had authorized 100,000,000 shares of preferred stock, par value $0.001, of which no shares were issued and outstanding. (b) Common Stock As of September 30, 2017 and December 31, 2016, the Company had authorized 1,000,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each par value $0.001 per share. As of September 30, 2017, 68,671,207 shares of Class A common stock and 24,248,777 shares of Class B common stock were issued and outstanding. As of December 31, 2016, 49,996,410 shares of Class A common stock and 37,252,138 shares of Class B common stock were issued and outstanding. The Company had reserved shares of common stock for issuance as follows: As of As of 2017 2016 Stock options issued and outstanding Nonvested restricted stock units issued and outstanding Class A common stock reserved for Twilio.org Stock-based awards available for grant under 2016 Plan Class A common stock reserved for issuance under 2016 ESPP Total |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. Stock-Based Compensation 2008 Stock Option Plan The Company granted options under its 2008 Stock Option Plan (the “2008 Plan”), as amended and restated, until June 22, 2016, when the plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under the 2008 Plan. The 2008 Plan continues to govern outstanding equity awards granted thereunder. 2016 Stock Option Plan The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) became effective on June 21, 2016. The 2016 Plan provides for the grant of ISOs, NSOs, restricted stock, RSUs, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards to employees, directors and consultants of the Company. A total of 11,500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 Plan. These available shares automatically increase each January 1, beginning on January 1, 2017, by 5% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2017, the shares available for grant under the 2016 Plan were automatically increased by 4,362,427 shares. Under the 2016 Plan, the stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying common stock on the date of grant. Under both plans, stock options generally expire 10 years from the date of grant and vest over periods determined by the board of directors. The vesting period for new-hire options and restricted stock units is generally a four-year term from the date of grant, at a rate of 25% after one year, then monthly or quarterly, respectively, on a straight-line basis thereafter. In July 2017, the Company began granting restricted stock units to existing employees that vest in equal quarterly installments over a four year service period. 2016 Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan (“2016 ESPP”) became effective on June 21, 2016. A total of 2,400,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 ESPP. These available shares automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,800,000 shares of the common stock, 1% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2017, the shares available for grant under the 2016 Plan were automatically increased by 872,485 shares. The 2016 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2016 ESPP provides for separate six-month offering periods beginning in May and November of each fiscal year, starting in May 2017. On each purchase date, eligible employees will purchase the Company’s stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company’s Class A common stock on the offering date or (ii) the fair market value of the Company’s Class A common stock on the purchase date. In the three months ended June 30, 2017, 580,705 shares of the Company’s Class A common stock were purchased under the 2016 ESPP and 224,126 shares are expected to be purchased in the fourth quarter of 2017. As of September 30, 2017, total unrecognized compensation cost related to the 2016 ESPP was $0.3 million, which will be amortized over a weighted-average period of 0.13 years. Stock option activity under the 2008 Plan and the 2016 Plan during the nine months ended September 30, 2017 was as follows: Stock Options Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2016 $ $ Granted Exercised ) Forfeited and cancelled ) Outstanding options as of September 30, 2017 $ $ Options vested and exercisable as of September 30, 2017 $ $ Aggregate intrinsic value represents the difference between the fair value of the Company’s common stock and the exercise price of outstanding “in-the-money” options. Prior to the IPO, the fair value of the Company’s common stock was estimated by the Company’s board of directors. After the IPO, the fair value of the Company’s common stock is the Company’s Class A common stock price as reported on the New York Stock Exchange. The aggregate intrinsic value of stock options exercised was $18.6 million and $119.3 million for the three and nine months ended September 30, 2017, respectively, and $4.4 million and $15.7 million for the three and nine months ended September 30, 2016, respectively. The total estimated grant date fair value of options vested was $3.0 million and $12.2 million for the three and nine months ended September 30, 2017, respectively, and $4.9 million and $11.4 million for the three and nine months ended September 30, 2016, respectively. No options were granted in the three months ended September 30, 2017 and 2016. The weighted-average grant-date fair value of options granted in the nine months ended September 30, 2017 and 2016 was $13.48 and $5.52, respectively. On February 28, 2017, the Company granted a total of 555,000 shares of performance-based stock options in three distinct awards to an employee with grant date fair values of $13.48, $10.26 and $8.41 per share for a total grant value of $5.9 million. The first half of each award vests upon satisfaction of a performance condition and the remainder vests thereafter in equal monthly installments over a 24-month period. The achievement window expires after 4.3 years from the date of grant and the stock options expire seven years after the date of grant. The stock options are amortized over a derived service period of three years, 4.25 years and 4.75 years, respectively. The stock options value and the derived service period were estimated using the Monte-Carlo simulation model. The following table summarizes the details of the performance options: Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2016 — $ — — $ — Granted Exercised — — Forfeited and cancelled — — Outstanding options as of September 30, 2017 $ $ — Options vested and exercisable as of September 30, 2017 — $ — — $ — As of September 30, 2017, total unrecognized compensation cost related to all non-vested stock options was $38.6 million, which will be amortized over a weighted-average period of 2.2 years. Restricted Stock Units Number of Weighted- Aggregate Nonvested RSUs as of December 31, 2016 $ $ Granted Vested ) Forfeited and cancelled ) Nonvested RSUs as of September 30, 2017 $ $ As of September 30, 2017, total unrecognized compensation cost related to nonvested RSUs was $121.1 million, which will be amortized over a weighted-average period of 3.26 years. Equity Awards Granted to Nonemployees In September 2016, the Company granted 30,255 restricted stock units to a nonemployee. The award is vested upon the satisfaction of a service condition over two years starting in August 2015. The stock-based compensation expense recorded for this award during the three and nine months ended September 30, 2017 was $0.1 million and $0.3 million, respectively. As of September 30, 2017, there were no nonemployee awards outstanding. Early Exercises of Nonvested Options As of September 30, 2017 and December 31, 2016, the Company recorded a liability of $0.1 million and $0.3 million for 16,033 and 49,580 unvested shares, respectively, that were early exercised by employees and were subject to repurchase at the respective period end. These amounts are reflected in current and non-current liabilities on the Company’s consolidated balance sheets. Valuation Assumptions The fair value of employee stock options under our equity incentive plans and purchase rights under the ESPP was estimated on the date of grant using the following assumptions in the Black-Scholes option pricing model: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Employee Stock Options: Fair value of common stock * * $24.77 -$31.96 $10.09-$15.00 Expected term (in years) * * Expected volatility * * 46.1%-47.6% 51.4%-53.0% Risk-free interest rate * * 1.9%-2.1% 1.3%-1.5% Dividend rate * * *No stock options were granted in the period. Employee Stock Purchase Plan: Expected term (in years) Expected volatility % % % % Risk-free interest rate % % % % Dividend rate % % % % The following assumptions were used in the Monte Carlo simulation model to estimate the fair value and the derived service period of the performance options: Asset volatility % Equity volatility % Discount rate % Stock price at grant date $ Stock-Based Compensation Expense The Company recorded total stock-based compensation expense as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Cost of revenue $ $ $ $ Research and development Sales and marketing General and administrative Total $ $ $ $ |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2017 | |
Net Loss per Share Attributable to Common Stockholders | |
Net Loss per Share Attributable to Common Stockholders | 13. Net Loss per Share Attributable to Common Stockholders Basic and diluted net loss per common share is presented in conformity with the two-class method required for participating securities. Class A and Class B common stock are the only outstanding equity in the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. Basic net loss per share attributable to common stockholders is computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share attributable to common stockholders is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Weighted-average shares used to compute basic and diluted net loss per share attributable to common stockholders Net loss per share attributable to common stockholders, basic and diluted $ ) $ ) $ ) $ ) The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: As of September 30, 2017 2016 Issued and outstanding options Nonvested RSUs issued and outstanding Common stock reserved for Twilio.org Shares committed under 2016 ESPP Unvested shares subject to repurchase Total |
Transactions with Investors
Transactions with Investors | 9 Months Ended |
Sep. 30, 2017 | |
Transactions with Investors | |
Transactions with Investors | 14. Transactions with Investors In 2015, two of the Company’s vendors participated in the Company’s Series E convertible preferred stock financing and owned approximately 1.9% and 1.0%, respectively, of the Company’s outstanding common stock as of September 30, 2017, and 2.0% and 1.0%, respectively, of the Company’s outstanding common stock as of December 31, 2016. The amount of software services the Company purchased from the first vendor was $5.3 million and $14.7 million for the three and nine months ended September 30, 2017, respectively, and $3.7 million and $10.3 million during the three and nine months ended September 30, 2016, respectively. The net amount due to this vendor as of September 30, 2017 was $1.9 million. The amounts due to or from this vendor as of December 31, 2016 were insignificant. The amount of services the Company purchased from the second vendor was $0.2 million and $0.6 million for the three and nine months ended September 30, 2017, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2016, respectively. The net amounts due from this vendor as of September 30, 2017 and December 31, 2016 were insignificant. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2017 | |
Employee Benefit Plan | |
Employee Benefit Plan | 15. Employee Benefit Plan The Company sponsors a 401(k) defined contribution plan covering all employees. The employer contribution to the plan was $0.3 million and $1.6 million in the three and nine months ended September 30, 2017, respectively, and $0.2 million and $0.9 million in the three and nine months ended September 30, 2016, respectively |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC on February 21, 2017 (“Annual Report”). The condensed consolidated balance sheet as of December 31, 2016, included herein, was derived from the audited financial statements as of that date, but may not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. In the fourth quarter of 2016, the Company adopted the guidance of Accounting Standard Update (“ASU”) No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” , which simplified several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. The Company adopted all provisions on either prospective or modified retrospective basis. The impact from any of the adopted provisions was immaterial to the Company’s financial position, results of operations and cash flows. Hence, prior periods were not adjusted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2017 or any future period. |
Principles of Consolidation | (b) Principles of Consolidation The condensed consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | (c) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue allowances and returns; valuation of the Company’s stock and stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. |
Concentration of Credit Risk | (d) Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, restricted cash and accounts receivable. The Company maintains cash, cash equivalents, restricted cash and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any one of the large customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. As of September 30, 2017, one customer organization represented approximately 11% of the Company’s gross accounts receivable. As of December 31, 2016, one customer organization represented approximately 16% of the Company’s gross accounts receivable. In the three and nine months ended September 30, 2017, no customers represented more than 10% of the Company’s total revenue. In the three months ended September 30, 2016, one customer organization represented 15% of the Company’s total revenue, and in the nine months ended September 30, 2016, two customer organizations represented 10% and 13% of the Company’s total revenue. |
Significant Accounting Policies | (e) Significant Accounting Policies There have been no changes to our significant accounting policies described in our Annual Report. |
Recently Issued Accounting Guidance, Not yet Adopted | (f) Recently Issued Accounting Guidance, Not yet Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2017-09, “ Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting” , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, “ Simplifying the Test for Goodwill Impairment ”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2019. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations (Topic 805) Clarifying the Definition of a Business”, which amends the guidance of FASB Accounting Standards Codification Topic 805, “ Business Combinations ”, adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted under certain circumstances. The Company will evaluate the impact of this guidance on its financial statements and related disclosures next time there is a potential business combination. In November 2016, the FASB issued ASU 2016-18, “Restricted Cash” , which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this guidance upon its effective date. The restricted cash balances as of September 30, 2017 and December 31, 2016 were $7.4 million and $8.6 million, respectively. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers Other Than Inventory” , which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have any material impact on the Company’s financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments” , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of this guidance on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “ Leases” . The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. For public companies, the new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its condensed consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers ”. This new guidance will replace most existing U.S. GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which deferred, by one year, the effective date for the new revenue reporting standard for entities reporting under U.S. GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted beginning January 1, 2017. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing,” clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In September 2017, the FASB issued ASU 2017-13, “ Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)” . These amendments provide additional clarification and implementation guidance on the previously issued ASUs. These amendments do not change the core principles of the guidance stated in ASU 2014-09, instead they are intended to clarify and improve operability of certain topics included within the revenue standard. The effective date and transition requirements for ASU 2016-08, ASU 2016-10 and ASU 2016-12 are the same as the effective date and transition requirements for ASU 2014-09. The Company performed its preliminary evaluation and selected a modified retrospective transition method with cumulative effect adjustment as of the standard’s effective date. While the Company has not yet completed the full analysis, based on the evaluation to date, the Company does not expect the adoption of this guidance to have a material impact on its financial position, results of operations or cash flows. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Schedule of financial assets by type | The following tables summarize the Company’s financial assets as of September 30, 2017 and December 31, 2016 by type (in thousands): Amortized Cost Net Fair Value Hierarchy as of September 30, 2017 Aggregate Fair Value Losses Level 1 Level 2 Level 3 Value Financial Assets: Cash and cash equivalents: Money market funds $ $ — $ $ — $ — $ Total included in cash and cash equivalents — — — Marketable securities: U.S. Treasury securities ) — — Corporate debt securities ) — — Total marketable securities ) — Total financial assets $ $ ) $ $ $ — $ Carrying Fair Value Hierarchy as of December 31, 2016 Aggregate Fair Value Level 1 Level 2 Level 3 Value Total Financial Assets: Money market funds (included in cash and cash equivalents) $ $ $ — $ — $ Total financial assets $ $ $ — $ — $ |
Schedule of contractual maturities of marketable securities | The following table summarizes the contractual maturities of marketable securities as of September 30, 2017 (in thousands): Amortized Aggregate Fair Cost Value Financial Assets: Less than one year $ $ One to two years Total $ $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): As of As of Capitalized software development costs $ $ Leasehold improvements Office equipment Furniture and fixtures Software Total property and equipment Less: accumulated depreciation and amortization ) ) Total property and equipment, net $ $ |
Recent Acquisition (Tables)
Recent Acquisition (Tables) - Messaging provider based in Sweden | 9 Months Ended |
Sep. 30, 2017 | |
Recent Acquisition | |
Schedule of preliminary purchase price allocation | The following table presents the preliminary purchase price allocation recorded in the Company’s condensed consolidated balance sheet on the acquisition date, and as subsequently adjusted during the three months ended June 30, 2017 (in thousands): Total Net tangible liabilities $ ) Goodwill (1) Intangible assets (2) Total purchase price $ The Company acquired a net deferred tax liability of $2.6 million in this business combination. (1) Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology platform, existing customer and supplier relationships as well as operational synergies. (2) Identifiable finite-lived intangible assets were comprised of the following: Total Estimated Developed technology $ 4 Customer relationships 7-8 Supplier relationships 5 Total intangible assets acquired $ |
Schedule of identifiable finite-lived intangible assets | Total Estimated Developed technology $ 4 Customer relationships 7-8 Supplier relationships 5 Total intangible assets acquired $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | |
Schedule of goodwill balance | Total Balance as of December 31, 2016 $ Goodwill recorded in connection with the recent acquisition Measurement period adjustment ) Effect of exchange rate Balance as of September 30, 2017 $ |
Schedule of intangible assets | Intangible assets consisted of the following (in thousands): As of September 30, 2017 Gross Accumulated Net Amortizable intangible assets: Developed technology $ $ ) $ Customer relationships ) Supplier relationships ) Trade name ) — Patent ) Total amortizable intangible assets ) Non-amortizable intangible assets: Domain names — Trademarks — Total $ $ ) $ As of December 31, 2016 Gross Accumulated Net Amortizable intangible assets: Developed technology $ $ ) $ Customer relationships ) Trade name ) Patent ) Total amortizable intangible assets ) Non-amortizable intangible assets: Domain names — Trademarks — Total $ $ ) $ |
Schedule of total estimated future amortization expense | Total estimated future amortization expense was as follows (in thousands): As of 2017 (remaining 3 months) $ 2018 2019 2020 2021 Thereafter Total $ |
Accrued Expenses and Other Li26
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): As of As of 2017 2016 Accrued payroll and related $ $ Accrued bonus and commission Accrued cost of revenue Sales and other taxes payable ESPP contributions Deferred rent Accrued other expense Total accrued expenses and other current liabilities $ $ |
Schedule of long-term liabilities | Long-term liabilities consisted of the following (in thousands): As of As of 2017 2016 Deferred rent $ $ Deferred tax liability — Accrued other expense Total other long-term liabilities $ $ |
Supplemental Balance Sheet In27
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Balance Sheet Information | |
Schedule of the allowance for doubtful accounts | (a) Allowance for doubtful accounts (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Balance, beginning of period $ $ $ $ Additions Write-offs — ) ) ) Balance, end of period $ $ $ $ |
Schedule of the sales credit reserve | (b) Sales credit reserve (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Balance, beginning of period $ $ $ $ Additions Deductions against reserve ) ) ) ) Balance, end of period $ $ $ $ |
Revenue by Geographic Area (Tab
Revenue by Geographic Area (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Revenue by Geographic Area | |
Schedule of revenue by geographic area | The following table sets forth revenue by geographic area (dollars in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Revenue by geographic area: United States $ $ $ $ International Total $ $ $ $ Percentage of revenue by geographic area: United States % % % % International % % % % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): Year Ending December 31: As of September 30, 2017 (remaining three months) $ 2018 2019 2020 2021 Thereafter Total minimum lease payments $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity | |
Schedule of reserved shares of common stock for issuance | As of As of 2017 2016 Stock options issued and outstanding Nonvested restricted stock units issued and outstanding Class A common stock reserved for Twilio.org Stock-based awards available for grant under 2016 Plan Class A common stock reserved for issuance under 2016 ESPP Total |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation | |
Schedule of stock option activity | Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2016 $ $ Granted Exercised ) Forfeited and cancelled ) Outstanding options as of September 30, 2017 $ $ Options vested and exercisable as of September 30, 2017 $ $ |
Schedule of restricted stock unit activity | Number of Weighted- Aggregate Nonvested RSUs as of December 31, 2016 $ $ Granted Vested ) Forfeited and cancelled ) Nonvested RSUs as of September 30, 2017 $ $ |
Schedule of valuation assumptions for ESPP | Employee Stock Purchase Plan: Expected term (in years) Expected volatility % % % % Risk-free interest rate % % % % Dividend rate % % % % |
Schedule of stock based compensation expense | The Company recorded total stock-based compensation expense as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Cost of revenue $ $ $ $ Research and development Sales and marketing General and administrative Total $ $ $ $ |
Employee Stock Option | |
Stock-Based Compensation | |
Schedule of valuation assumptions | Three Months Ended Nine Months Ended 2017 2016 2017 2016 Employee Stock Options: Fair value of common stock * * $24.77 -$31.96 $10.09-$15.00 Expected term (in years) * * Expected volatility * * 46.1%-47.6% 51.4%-53.0% Risk-free interest rate * * 1.9%-2.1% 1.3%-1.5% Dividend rate * * *No stock options were granted in the period. |
Performance-based stock options | |
Stock-Based Compensation | |
Schedule of stock option activity | Number of Weighted- Weighted- Aggregate Outstanding options as of December 31, 2016 — $ — — $ — Granted Exercised — — Forfeited and cancelled — — Outstanding options as of September 30, 2017 $ $ — Options vested and exercisable as of September 30, 2017 — $ — — $ — |
Schedule of valuation assumptions | Asset volatility % Equity volatility % Discount rate % Stock price at grant date $ |
Net Loss per Share Attributab32
Net Loss per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Loss per Share Attributable to Common Stockholders | |
Schedule of the calculation of basic and diluted net loss per share attributable to common stockholders | The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except share and per share data): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Weighted-average shares used to compute basic and diluted net loss per share attributable to common stockholders Net loss per share attributable to common stockholders, basic and diluted $ ) $ ) $ ) $ ) |
Schedule of common stock equivalents excluded from the computation of the diluted net loss per share attributable to common stockholders | As of September 30, 2017 2016 Issued and outstanding options Nonvested RSUs issued and outstanding Common stock reserved for Twilio.org Shares committed under 2016 ESPP Unvested shares subject to repurchase Total |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts Receivable | Credit Concentration Risk | |||||
Concentration of Credit Risk | |||||
Concentration risk (as a percent) | 11.00% | 16.00% | |||
Number of customers | 1 | 1 | |||
Revenue | Customer Concentration Risk | |||||
Concentration of Credit Risk | |||||
Concentration risk (as a percent) | 15.00% | ||||
Number of customers | 0 | 1 | 0 | 2 | |
Revenue | Customer Concentration Risk | Customer One | |||||
Concentration of Credit Risk | |||||
Concentration risk (as a percent) | 10.00% | ||||
Revenue | Customer Concentration Risk | Customer Two | |||||
Concentration of Credit Risk | |||||
Concentration risk (as a percent) | 13.00% |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Cash | ||
Restricted cash balances | $ 7.4 | $ 8.6 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Measurements | ||
Marketable securities, Amortized Cost | $ 192,269 | |
Total marketable securities, Aggregate Fair Value | 192,031 | $ 0 |
Recurring | ||
Fair Value Measurements | ||
Marketable securities, Amortized Cost | 192,269 | |
Marketable securities, Net Unrealized Losses | (238) | |
Total financial assets, Amortized Cost or Carrying Value | 282,413 | |
Recurring | U.S. Treasury securities | ||
Fair Value Measurements | ||
Marketable securities, Amortized Cost | 59,951 | |
Marketable securities, Net Unrealized Losses | (125) | |
Recurring | Corporate debt securities | ||
Fair Value Measurements | ||
Marketable securities, Amortized Cost | 132,318 | |
Marketable securities, Net Unrealized Losses | (113) | |
Recurring | Carrying Value | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | |
Total financial assets | 274,135 | |
Recurring | Carrying Value | Money market funds | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | 274,135 |
Recurring | Aggregate Fair Value | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | |
Total marketable securities, Aggregate Fair Value | 192,031 | |
Total financial assets | 282,175 | 274,135 |
Recurring | Aggregate Fair Value | U.S. Treasury securities | ||
Fair Value Measurements | ||
Total marketable securities, Aggregate Fair Value | 59,826 | |
Recurring | Aggregate Fair Value | Corporate debt securities | ||
Fair Value Measurements | ||
Total marketable securities, Aggregate Fair Value | 132,205 | |
Recurring | Aggregate Fair Value | Money market funds | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | 274,135 |
Recurring | Aggregate Fair Value | Level 1 | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | |
Total marketable securities, Aggregate Fair Value | 59,826 | |
Total financial assets | 149,970 | 274,135 |
Recurring | Aggregate Fair Value | Level 1 | U.S. Treasury securities | ||
Fair Value Measurements | ||
Total marketable securities, Aggregate Fair Value | 59,826 | |
Recurring | Aggregate Fair Value | Level 1 | Money market funds | ||
Fair Value Measurements | ||
Cash and cash equivalents | 90,144 | $ 274,135 |
Recurring | Aggregate Fair Value | Level 2 | ||
Fair Value Measurements | ||
Total marketable securities, Aggregate Fair Value | 132,205 | |
Total financial assets | 132,205 | |
Recurring | Aggregate Fair Value | Level 2 | Corporate debt securities | ||
Fair Value Measurements | ||
Total marketable securities, Aggregate Fair Value | $ 132,205 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Less than one year, Amortized Cost | $ 121,215 | |
One to two years, Amortized Cost | 71,054 | |
Total amortized cost | 192,269 | |
Less than one year, Aggregate Fair Value | 121,130 | |
One to two years, Aggregate Fair Value | 70,901 | |
Total marketable securities, Aggregate Fair Value | $ 192,031 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Disclosures (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | |
Fair Value Measurements | ||
Other-than-temporary impairments | $ 0 | $ 0 |
Interest earned on marketable securities | $ 700 | $ 1,800 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property and Equipment | ||
Total property and equipment | $ 70,444 | $ 50,997 |
Less: accumulated depreciation and amortization | (22,726) | (13,445) |
Total property and equipment, net | 47,718 | 37,552 |
Capitalized software development costs | ||
Property and Equipment | ||
Total property and equipment | 43,571 | 28,661 |
Leasehold improvements | ||
Property and Equipment | ||
Total property and equipment | 14,208 | 14,063 |
Office equipment | ||
Property and Equipment | ||
Total property and equipment | 9,263 | 5,729 |
Furniture and fixtures | ||
Property and Equipment | ||
Total property and equipment | 1,902 | 1,576 |
Software | ||
Property and Equipment | ||
Total property and equipment | $ 1,500 | $ 968 |
Property and Equipment - Deprec
Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property and Equipment | ||||
Depreciation and amortization | $ 3.4 | $ 1.9 | $ 9.3 | $ 4.9 |
Property and Equipment - Capita
Property and Equipment - Capitalized Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property and Equipment | ||||
Capitalized software development costs | $ 5,500 | $ 3,400 | $ 15,000 | $ 9,500 |
Stock-based compensation capitalized in software development costs | 1,200 | 400 | 2,712 | 1,068 |
Amortization of capitalized software development costs | $ 2,200 | $ 1,400 | $ 5,900 | $ 3,700 |
Recent Acquisition - Considerat
Recent Acquisition - Consideration (Details) - Messaging provider based in Sweden $ in Millions | Feb. 06, 2017USD ($) |
Acquisition | |
Total purchase price | $ 23 |
Purchase price paid in cash | 23 |
Amount of purchase price placed into an escrow account | $ 5 |
Escrow effective period | 18 months |
Amount deposited into an employee escrow account | $ 2 |
Recent Acquisition - Purchase P
Recent Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Feb. 06, 2017 | Dec. 31, 2016 |
Acquisition | |||
Goodwill | $ 17,407 | $ 3,565 | |
Messaging provider based in Sweden | |||
Acquisition | |||
Net tangible liabilities | $ (3,326) | ||
Goodwill | 12,588 | ||
Intangible assets | 13,700 | ||
Total purchase price | 22,962 | ||
Net deferred tax liability | $ 2,600 |
Recent Acquisition - Identifiab
Recent Acquisition - Identifiable Finite-lived Intangible Assets (Details) - Messaging provider based in Sweden $ in Thousands | Feb. 06, 2017USD ($) |
Acquisition | |
Total intangible assets acquired | $ 13,700 |
Developed technology | |
Acquisition | |
Total intangible assets acquired | $ 5,000 |
Estimated life (in years) | 4 years |
Customer relationships | |
Acquisition | |
Total intangible assets acquired | $ 6,100 |
Customer relationships | Minimum | |
Acquisition | |
Estimated life (in years) | 7 years |
Customer relationships | Maximum | |
Acquisition | |
Estimated life (in years) | 8 years |
Supplier relationships | |
Acquisition | |
Total intangible assets acquired | $ 2,600 |
Estimated life (in years) | 5 years |
Recent Acquisition - Acquisitio
Recent Acquisition - Acquisition Costs (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | 21 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | |
Messaging provider based in Sweden | General and administrative | |||
Business Combinations | |||
Acquisition related costs | $ 0.3 | $ 0.4 | $ 0.7 |
Intangible Assets - Goodwill (D
Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 3,565 |
Goodwill recorded in connection with the recent acquisition | 12,688 |
Measurement period adjustment | (100) |
Effect of exchange rate | 1,254 |
Balance at the end of the period | $ 17,407 |
Intangible Assets - Amortizable
Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible Assets | ||
Gross | $ 26,635 | $ 11,372 |
Accumulated Amortization | (5,656) | (1,399) |
Net | 20,979 | 9,973 |
Developed technology | ||
Intangible Assets | ||
Gross | 14,888 | 9,400 |
Accumulated Amortization | (4,365) | (1,140) |
Net | 10,523 | 8,260 |
Customer relationships | ||
Intangible Assets | ||
Gross | 7,096 | 400 |
Accumulated Amortization | (774) | (148) |
Net | 6,322 | 252 |
Supplier relationships | ||
Intangible Assets | ||
Gross | 2,854 | |
Accumulated Amortization | (364) | |
Net | 2,490 | |
Trade name | ||
Intangible Assets | ||
Gross | 60 | 60 |
Accumulated Amortization | (60) | (56) |
Net | 4 | |
Patent | ||
Intangible Assets | ||
Gross | 1,737 | 1,512 |
Accumulated Amortization | (93) | (55) |
Net | $ 1,644 | $ 1,457 |
Intangible Assets - Non-amortiz
Intangible Assets - Non-amortizable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Domain names | ||
Intangible Assets | ||
Non-amortizable intangible assets | $ 32 | $ 32 |
Trademarks | ||
Intangible Assets | ||
Non-amortizable intangible assets | $ 263 | $ 263 |
Intangible Assets - Total Intan
Intangible Assets - Total Intangible Assets, Gross (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets | |||
Amortizable intangible assets, gross | $ 26,635 | $ 11,372 | |
Total | 26,930 | 11,667 | $ 11,372 |
Domain names | |||
Intangible Assets | |||
Non-amortizable intangible assets | 32 | 32 | |
Trademarks | |||
Intangible Assets | |||
Non-amortizable intangible assets | $ 263 | $ 263 |
Intangible Assets - Total Int49
Intangible Assets - Total Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible Assets | ||
Amortizable intangible assets, net | $ 20,979 | $ 9,973 |
Total | 21,274 | 10,268 |
Domain names | ||
Intangible Assets | ||
Non-amortizable intangible assets | 32 | 32 |
Trademarks | ||
Intangible Assets | ||
Non-amortizable intangible assets | $ 263 | $ 263 |
Intangible Assets - Total Int50
Intangible Assets - Total Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets | |||
Gross | $ 26,930 | $ 11,667 | $ 11,372 |
Accumulated Amortization | (5,656) | (1,399) | |
Net | $ 21,274 | $ 10,268 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Intangible Assets | ||||
Amortization expense | $ 1.5 | $ 0.1 | $ 4.2 | $ 0.4 |
Intangible Assets - Total Estim
Intangible Assets - Total Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible Assets | ||
2017 (remaining 3 months) | $ 2,659 | |
2,018 | 5,483 | |
2,019 | 5,081 | |
2,020 | 2,651 | |
2,021 | 1,518 | |
Thereafter | 3,587 | |
Net | $ 20,979 | $ 9,973 |
Accrued Expenses and Other Li53
Accrued Expenses and Other Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Expenses and Other Liabilities | ||
Accrued payroll and related | $ 5,408 | $ 3,133 |
Accrued bonus and commission | 3,204 | 2,251 |
Accrued cost of revenue | 11,553 | 8,741 |
Sales and other taxes payable | 19,394 | 28,795 |
ESPP contributions | 3,574 | 4,364 |
Deferred rent | 668 | 1,250 |
Accrued other expense | 11,482 | 10,774 |
Total accrued expenses and other current liabilities | $ 55,283 | $ 59,308 |
Accrued Expenses and Other Li54
Accrued Expenses and Other Liabilities - Long-term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Expenses and Other Liabilities | ||
Deferred rent | $ 9,335 | $ 9,387 |
Deferred tax liability | 2,780 | |
Accrued other expense | 434 | 156 |
Total long-term liabilities | $ 12,549 | $ 9,543 |
Supplemental Balance Sheet In55
Supplemental Balance Sheet Information - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Allowance for doubtful accounts | ||||
Balance, beginning of period | $ 923 | $ 795 | $ 1,076 | $ 486 |
Additions | 125 | 170 | 407 | 1,017 |
Write-offs | (16) | (435) | (554) | |
Balance, end of period | $ 1,048 | $ 949 | $ 1,048 | $ 949 |
Supplemental Balance Sheet In56
Supplemental Balance Sheet Information - Sales Credit Reserve (Details) - Sales credit reserve - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales credit reserve | ||||
Balance, beginning of period | $ 734 | $ 652 | $ 544 | $ 714 |
Additions | 104 | 169 | 1,076 | 1,012 |
Deductions against reserve | (238) | (337) | (1,020) | (1,242) |
Balance, end of period | $ 600 | $ 484 | $ 600 | $ 484 |
Revenue by Geographic Area - Re
Revenue by Geographic Area - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue by geographic area | ||||
Revenue | $ 100,542 | $ 71,533 | $ 283,784 | $ 195,383 |
United States | ||||
Revenue by geographic area | ||||
Revenue | 76,713 | 60,535 | 221,914 | 165,528 |
International | ||||
Revenue by geographic area | ||||
Revenue | $ 23,829 | $ 10,998 | $ 61,870 | $ 29,855 |
Revenue by Geographic Area - Pe
Revenue by Geographic Area - Percentage of Revenue by Geographic Area (Details) - Revenue - Geographic Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
United States | ||||
Percentage of revenue by geographic area | ||||
Percentage of revenue (as a percent) | 76.00% | 85.00% | 78.00% | 85.00% |
International | ||||
Percentage of revenue by geographic area | ||||
Percentage of revenue (as a percent) | 24.00% | 15.00% | 22.00% | 15.00% |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Lease Commitments | ||||
Lease agreements term | 7 years | |||
Rent expense | $ 2.1 | $ 2.1 | $ 6.1 | $ 5.1 |
Commitments and Contingencies60
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Future minimum lease payments | |
2017 (remaining three months) | $ 1,958 |
2,018 | 7,326 |
2,019 | 7,375 |
2,020 | 7,068 |
2,021 | 7,033 |
Thereafter | 16,052 |
Total minimum lease payments | $ 46,812 |
Commitments and Contingencies61
Commitments and Contingencies - Indemnification Agreements (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Indemnification Agreement | ||
Indemnification Agreements | ||
Amount accrued | $ 0 | $ 0 |
Commitments and Contingencies62
Commitments and Contingencies - Other taxes (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Other taxes | ||||||
Liability for uncertain tax positions | $ 19,400 | $ 19,400 | $ 29,000 | $ 28,800 | ||
Net loss attributable to common stockholders | $ (23,453) | $ (11,254) | $ (44,789) | $ (28,716) | ||
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.25) | $ (0.13) | $ (0.49) | $ (0.68) | ||
Change in estimate for non-income-based tax exposure - revisions in key assumptions | ||||||
Other taxes | ||||||
Net loss attributable to common stockholders | $ (13,100) | |||||
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.14) |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) | Sep. 30, 2017$ / sharesshares |
Preferred Stock | |
Preferred stock, authorized (in shares) | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, issued (in shares) | 0 |
Preferred stock, outstanding (in shares) | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common Class A | ||
Common Stock | ||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 68,671,207 | 49,996,410 |
Common stock, outstanding (in shares) | 68,671,207 | 49,996,410 |
Common Class B | ||
Common Stock | ||
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 24,248,777 | 37,252,138 |
Common stock, outstanding (in shares) | 24,248,777 | 37,252,138 |
Stockholders' Equity - Common65
Stockholders' Equity - Common Stock Shares Reserved (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Stockholders' Equity | ||
Reserved shares of common stock (in shares) | 28,271,590 | 28,104,671 |
2016 Stock Option and Incentive Plan | ||
Stockholders' Equity | ||
Stock - based awards available for grant (in shares) | 11,601,980 | 10,143,743 |
Common Class A | ||
Stockholders' Equity | ||
Common stock reserved for Twilio.org (in shares) | 680,397 | 680,397 |
Stock Options | ||
Stockholders' Equity | ||
Stock options issued and outstanding (in shares) | 11,380,189 | 14,649,276 |
Restricted Stock Units (RSUs) | ||
Stockholders' Equity | ||
Nonvested restricted stock units issued and outstanding (in shares) | 4,384,898 | 2,034,217 |
Employee Stock | Common Class A | ||
Stockholders' Equity | ||
Common stock reserved for issuance under an ESPP (in shares) | 224,126 | 597,038 |
Stock-Based Compensation - 2008
Stock-Based Compensation - 2008 Stock Option Plan (Details) | Sep. 30, 2017shares |
2008 Stock Option Plan | |
Stock Based Compensation | |
Shares available for future issuance (in shares) | 0 |
Stock-Based Compensation - 2016
Stock-Based Compensation - 2016 Stock Option Plan (Details) - shares | Jan. 01, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Jun. 21, 2016 |
Employee and Nonemployee Stock Options | ||||
Stock Based Compensation | ||||
Expiration term | 10 years | |||
Vesting period | 4 years | |||
Employee and Nonemployee Stock Options | First vesting | ||||
Stock Based Compensation | ||||
Vesting period | 1 year | |||
Percentage of vesting rights | 25.00% | |||
Restricted Stock Units (RSUs) | ||||
Stock Based Compensation | ||||
Vesting period | 4 years | |||
Restricted Stock Units (RSUs) | Granted in July 2017 | ||||
Stock Based Compensation | ||||
Vesting period | 4 years | |||
Restricted Stock Units (RSUs) | First vesting | ||||
Stock Based Compensation | ||||
Vesting period | 1 year | |||
Percentage of vesting rights | 25.00% | |||
2016 Stock Option and Incentive Plan | ||||
Stock Based Compensation | ||||
Maximum automatic annual increase as a percentage of outstanding common shares | 5.00% | |||
Automatic increase in shares available for grant (in shares) | 4,362,427 | |||
2016 Stock Option and Incentive Plan | Common Class A | ||||
Stock Based Compensation | ||||
Shares reserved for issuance (in shares) | 11,500,000 | |||
2016 Stock Option and Incentive Plan | Employee and Nonemployee Stock Options | ||||
Stock Based Compensation | ||||
Minimum grant price as a percentage of fair market value per share of the underlying common stock on the date of grant (as a percent) | 100.00% |
Stock-Based Compensation - 2068
Stock-Based Compensation - 2016 Employee Stock Purchase Plan (Details) - Employee Stock - USD ($) $ in Millions | Jan. 01, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Jun. 21, 2016 |
Stock Based Compensation | |||||
Maximum automatic annual increase (in shares) | 1,800,000 | ||||
Maximum automatic annual increase as a percentage of outstanding common shares | 1.00% | ||||
Automatic increase in shares available for grant (in shares) | 872,485 | ||||
Unrecognized compensation cost, other than options | $ 0.3 | ||||
Weighted-average period (in years) | 1 month 17 days | ||||
Common Class A | |||||
Stock Based Compensation | |||||
Shares reserved for issuance (in shares) | 2,400,000 | ||||
Discount from market price, offering date (as a percent) | 15.00% | ||||
Discount from market price, purchase date (as a percent) | 15.00% | ||||
Purchase price, percentage of fair market value (as a percent) | 85.00% | ||||
Shares purchased (in shares) | 580,705 | ||||
Common Class A | Forecast | |||||
Stock Based Compensation | |||||
Shares purchased (in shares) | 224,126 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Employee and Nonemployee Stock Options - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Number of options outstanding | ||||
Outstanding options as of the beginning of the period (in shares) | 14,649,276 | |||
Granted (in shares) | 0 | 0 | 1,443,335 | |
Exercised (in shares) | (4,615,225) | |||
Forfeited and cancelled (in shares) | (652,197) | |||
Outstanding options as of the end of the period (in shares) | 10,825,189 | 10,825,189 | 14,649,276 | |
Weighted-average exercise price (per share) | ||||
Outstanding options as of the beginning of the period (in dollars per share) | $ 6.14 | |||
Granted (in dollars per share) | 31.06 | |||
Exercised (in dollars per share) | 4.88 | |||
Forfeited and cancelled (in dollars per share) | 7.93 | |||
Outstanding options as of the end of the period (in dollars per share) | $ 9.89 | $ 9.89 | $ 6.14 | |
Weighted-average remaining contractual term and aggregate intrinsic value | ||||
Weighted-average remaining contractual term (in years) | 7 years 4 months 13 days | 7 years 6 months 7 days | ||
Aggregate intrinsic value | $ 218,574 | $ 218,574 | $ 332,716 | |
Options vested and exercisable and options vested and expected to vest | ||||
Options vested and exercisable - number of options outstanding (in shares) | 5,166,349 | 5,166,349 | ||
Options vested and exercisable - weighted-average exercise price (in dollars per share) | $ 5.30 | $ 5.30 | ||
Options vested and exercisable - weighted-average remaining contractual term (in years) | 6 years 6 months 15 days | |||
Options vested and exercisable - aggregate intrinsic value | $ 126,828 | $ 126,828 |
Stock-Based Compensation - St70
Stock-Based Compensation - Stock Options - Additional Information (Details) - Employee and Nonemployee Stock Options - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Based Compensation | ||||
Aggregate intrinsic value of stock options exercised | $ 18.6 | $ 4.4 | $ 119.3 | $ 15.7 |
Grant date fair value of options vested | $ 3 | $ 4.9 | $ 12.2 | $ 11.4 |
Weighted-average grant date fair value of options granted (in dollars per share) | $ 13.48 | $ 5.52 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-Based Stock Options (Details) $ / shares in Units, $ in Millions | Feb. 28, 2017USD ($)item$ / shares | Sep. 30, 2017$ / sharesshares |
Performance-based stock options | ||
Stock-Based Compensation | ||
Number of distinct awards | item | 3 | |
Total grant value | $ | $ 5.9 | |
Vesting period upon satisfaction of performance condition | 24 months | |
Performance condition achievement window | 4 years 3 months 18 days | |
Expiration term | 7 years | |
Number of options outstanding | ||
Granted (in shares) | shares | 555,000 | |
Outstanding options as of the end of the period (in shares) | shares | 555,000 | |
Weighted-average exercise price (per share) | ||
Granted (in dollars per share) | $ 31.72 | |
Outstanding options as of the end of the period (in dollars per share) | $ 31.72 | |
Weighted-average remaining contractual term and aggregate intrinsic value | ||
Weighted-average remaining contractual term (in years) | 6 years 4 months 28 days | |
Performance-based stock options, $13.48 grant date fair value | ||
Stock-Based Compensation | ||
Grant date fair value (in dollars per share) | $ 13.48 | |
Derived service period | 3 years | |
Performance-based stock options, $10.26 grant date fair value | ||
Stock-Based Compensation | ||
Grant date fair value (in dollars per share) | $ 10.26 | |
Derived service period | 4 years 3 months | |
Performance-based stock options, $8.41 grant date fair value | ||
Stock-Based Compensation | ||
Grant date fair value (in dollars per share) | $ 8.41 | |
Derived service period | 4 years 9 months |
Stock-Based Compensation - St72
Stock-Based Compensation - Stock Options - Unrecognized Compensation Cost (Details) - Employee and Nonemployee Stock Options $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Stock Based Compensation | |
Unrecognized compensation cost, options | $ 38.6 |
Weighted-average period (in years) | 2 years 2 months 12 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Number of units outstanding | ||
Nonvested RSUs at the beginning of the period (in shares) | 2,034,217 | |
Granted (in shares) | 3,093,326 | |
Vested (in shares) | (492,757) | |
Forfeited and cancelled (in shares) | (249,888) | |
Nonvested RSUs at the end of the period (in shares) | 4,384,898 | |
Weighted-average grant date fair value (per share) | ||
Nonvested RSUs (in dollars per share) | $ 30.86 | $ 32.66 |
Aggregate intrinsic value | ||
Aggregate intrinsic value | $ 130,818 | $ 58,687 |
Stock-Based Compensation - Re74
Stock-Based Compensation - Restricted Stock Units - Unrecognized Compensation Cost (Details) - Restricted Stock Units (RSUs) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Stock Based Compensation | |
Unrecognized compensation cost, other than options | $ 121.1 |
Weighted-average period (in years) | 3 years 3 months 4 days |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Awards Granted to Nonemployees (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Based Compensation | |||||
Stock-based compensation expense | $ 14,188 | $ 7,648 | $ 35,973 | $ 15,649 | |
Nonemployee Restricted Stock Units | |||||
Stock Based Compensation | |||||
Restricted stock units granted (in shares) | 30,255 | ||||
Service condition period (in years) | 2 years | ||||
Stock-based compensation expense | $ 100 | $ 300 | |||
Restricted stock unit awards outstanding (in shares) | 0 | 0 | |||
Nonemployee Stock Option | |||||
Stock Based Compensation | |||||
Stock option awards outstanding (in shares) | 0 | 0 |
Stock-Based Compensation - Earl
Stock-Based Compensation - Early Exercises of Nonvested Options (Details) - Employee Stock Option - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Stock Based Compensation | ||
Liability for unvested shares | $ 0.1 | $ 0.3 |
Unvested shares that were early exercised (in shares) | 16,033 | 49,580 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Stock Option | ||||
Valuation Assumptions | ||||
Expected term (in years) | 6 years 29 days | 6 years 29 days | ||
Expected volatility, low end of range (as a percent) | 46.10% | 51.40% | ||
Expected volatility, high end of range (as a percent) | 47.60% | 53.00% | ||
Risk-free interest rate, low end of range (as a percent) | 1.90% | 1.30% | ||
Risk-free interest rate, high end of range (as a percent) | 2.10% | 1.50% | ||
Dividend rate (as a percent) | 0.00% | 0.00% | ||
Stock options granted (in shares) | 0 | 0 | ||
Employee Stock | ||||
Valuation Assumptions | ||||
Expected term (in years) | 6 months | 10 months 24 days | 6 months | 10 months 24 days |
Expected volatility (as a percent) | 33.20% | 52.00% | 33.20% | 52.00% |
Risk-free interest rate (as a percent) | 1.10% | 0.60% | 1.10% | 0.60% |
Dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Performance-based stock options | ||||
Valuation Assumptions | ||||
Stock options granted (in shares) | 555,000 | |||
Asset volatility (as a percent) | 40.00% | |||
Equity volatility (as a percent) | 45.00% | |||
Discount rate (as a percent) | 14.00% | |||
Stock price at grant date (in dollars per share) | $ 31.72 | $ 31.72 | ||
Minimum | Employee Stock Option | ||||
Valuation Assumptions | ||||
Fair value of common stock (in dollars per share) | 24.77 | $ 10.09 | ||
Maximum | Employee Stock Option | ||||
Valuation Assumptions | ||||
Fair value of common stock (in dollars per share) | $ 31.96 | $ 15 |
Stock-Based Compensation - St78
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock-Based Compensation Expense | ||||
Stock-based compensation expense | $ 14,188 | $ 7,648 | $ 35,973 | $ 15,649 |
Cost of revenue | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense | 180 | 84 | 460 | 135 |
Research and development | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense | 6,493 | 3,741 | 16,687 | 7,636 |
Sales and marketing | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense | 2,603 | 1,432 | 6,961 | 3,282 |
General and administrative | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense | $ 4,912 | $ 2,391 | $ 11,865 | $ 4,596 |
Net Loss per Share Attributab79
Net Loss per Share Attributable to Common Stockholders - General Information (Details) | Sep. 30, 2017Vote |
Common Class A | |
Net Loss Per Share Attributable to Common Stockholders | |
Votes per share | 1 |
Common Class B | |
Net Loss Per Share Attributable to Common Stockholders | |
Votes per share | 10 |
Net Loss per Share Attributab80
Net Loss per Share Attributable to Common Stockholders - Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Loss Per Share Attributable to Common Stockholders | ||||
Net loss attributable to common stockholders | $ (23,453) | $ (11,254) | $ (44,789) | $ (28,716) |
Weighted-average shares used to compute basic and diluted net loss per share attributable to common stockholders (in shares) | 92,156,768 | 83,887,901 | 90,543,087 | 42,030,989 |
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.25) | $ (0.13) | $ (0.49) | $ (0.68) |
Net Loss per Share Attributab81
Net Loss per Share Attributable to Common Stockholders - Anti-Dilutive Securities (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Anti-dilutive securities | ||
Total | 16,685,643 | 19,576,064 |
Employee and Nonemployee Stock Options | ||
Anti-dilutive securities | ||
Total | 11,380,189 | 16,476,973 |
Restricted Stock Units (RSUs) | ||
Anti-dilutive securities | ||
Total | 4,384,898 | 1,639,378 |
Common stock reserved for Twilio.org | ||
Anti-dilutive securities | ||
Total | 680,397 | 780,397 |
Employee Stock | ||
Anti-dilutive securities | ||
Total | 224,126 | 604,865 |
Unvested shares subject to repurchase | ||
Anti-dilutive securities | ||
Total | 16,033 | 74,451 |
Transactions with Investors (De
Transactions with Investors (Details) - Investor $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)Counterparty | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Counterparty | Sep. 30, 2016USD ($) | Dec. 31, 2016Counterparty | Dec. 31, 2015Counterparty | |
Transactions With Investors | ||||||
Vendors, number | Counterparty | 2 | 2 | 2 | 2 | ||
Vendor 1 | ||||||
Transactions With Investors | ||||||
Ownership percentage (as a percent) | 1.90% | 1.90% | 2.00% | |||
Purchases from vendor | $ 5.3 | $ 3.7 | $ 14.7 | $ 10.3 | ||
Amount due from vendor | $ 1.9 | $ 1.9 | ||||
Vendor 2 | ||||||
Transactions With Investors | ||||||
Ownership percentage (as a percent) | 1.00% | 1.00% | 1.00% | |||
Purchases from vendor | $ 0.2 | $ 0.1 | $ 0.6 | $ 0.3 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Benefit Plan | ||||
Employer contributions | $ 0.3 | $ 0.2 | $ 1.6 | $ 0.9 |