AddedRisk Factors
•our reliance on network service providers and internet service providers for network service and connectivity;
TWLOTwilio
We envision a world in which every digital interaction is amazing. 10-K, Item 1
- Employees
- 5,587
- Headquarters
- San Francisco, CA
- CEO
- Khozema Shipchandler
- Next results
- around Feb 11, 2027
10-K 0001447669-26-000021 (2026-02-24) vs 10-K 0001447669-25-000035 (2025-02-26)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 23,008 | 32.0% |
| MD&A | Item 7 | 6,055 | 32.3% |
| Legal Proceedings | Item 3, via Note 18 – Commitments and Contingencies | 723 | 0.8% |
| Accounting Policies | Item 8, Note 2 – Summary of Significant Accounting Policies | 6,075 | 12.5% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 243 words changed in this paragraph; it is 51% similar to last year's version.
For example, we outsource a substantial majority of our cloud infrastructure to Amazon Web Services (“AWS”), which hosts our products and platform. Our customers need to be able to reliably access our platform, without material interruption or degradation of performance. AWS runs its own platform that we access, and we are, therefore, vulnerable to service interruptions at AWS. We have experienced, and expect that we may experience interruptions, delays and outages in service and availability in the future due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. Capacity constraints could be caused by a number of potential causes, including technical failures, natural disasters, public health epidemics or pandemics, fraud or security attacks. In addition, if our security, or that of AWS, is compromised, if our products, platform or customer data become unavailable, or if our users are unable to use our products within a reasonable amount of time or at all, any one of which may be due to circumstances beyond our control, then our business, results of operations and financial condition could be adversely affected. In some instances, we may encounter difficulties or otherwise not be able to identify the cause or causes of these performance problems within a period of time acceptable to our customers. It may become increasingly difficult to maintain and improve our platform performance and to troubleshoot performance issues, especially during peak usage times, as our products become more complex and the usage of our products increases. To the extent that we do not effectively address capacity constraints, either through AWS or alternative providers of cloud infrastructure, or through other factors that may result in interruptions, delays and outages in service and availability of our products and/or services, our business, results of operations and financial condition may be adversely affected. In addition, if Amazon.com, Inc. (“Amazon”) requires that we comply with unfavorable terms in order to continue our use of AWS or if Amazon implements any changes in its service levels for AWS, the changes may adversely affect our ability to meet our customers’ requirements, result in negative publicity which could harm our reputation and brand and may adversely affect the usage of our platform.
Source: Item 1A, 10-K 0001447669-26-000021 vs Item 1A, 10-K 0001447669-25-000035
Accounting Policies 175 words changed in this paragraph; it is 31% similar to last year's version.
In November 2023, September 2025, the Financial Accounting Standards Board (“FASB”) FASB issued Accounting Standards Update No. (“ASU”) 2023-07, “Segment Reporting (Topic 280): ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to Reportable Segment Disclosures,” the Accounting for Internal-Use Software,” which is intended to improve reportable segment disclosures. The modernizes the accounting for internal-use software by replacing the previous stage-based model and aligning the capitalization process with current development practices, especially agile and iterative methods. ASU expands segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss. It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segment's profit or loss and assets. ASU 2023-07 2025-06 is effective for fiscal years annual reporting periods beginning after December 15, 2023, 2027, and interim periods within fiscal years beginning after December 15, 2024, with retrospective application required. may be applied prospectively, retrospectively, or using a modified transition approach. Early adoption is permitted. The Company adopted is in process of evaluating the impact of the adoption of this ASU 2023-07 in the fourth quarter of 2024. The adoption required certain additional disclosure that the Company made in Note 8 to these on its consolidated financial statements.
Source: Item 8, Note 2 – Summary of Significant Accounting Policies, 10-K 0001447669-26-000021 vs Item 8, Note 2 – Summary of Significant Accounting Policies, 10-K 0001447669-25-000035
MD&A 160 words changed in this paragraph; it is 34% similar to last year's version.
Source: Item 7, 10-K 0001447669-26-000021 vs Item 7, 10-K 0001447669-25-000035
Legal Proceedings 6 words changed in this paragraph; it is 97% similar to last year's version.
Additionally, the Company has contractual commitments with its cloud infrastructure providers, network service providers and other vendors that are noncancellable and expire within one to four five years. In the year ended December 31, 2024, 2025, the Company entered into several such agreements with terms of up to four five years for a total purchase commitment of $182.5 $149.1 million. Future minimum payments under these noncancellable purchase commitments are summarized in the table below. Unrecognized tax benefits are not included in these amounts because any amounts expected to be settled in cash are not significant:As of December 31, 2024 2025 Year Ending December 31, (In thousands) 2025 2026 $ 405,331 2026 245,946 288,615 2027 3,831 31,861 2028 220 13,152 2029 9,166 2030 6,447 Total payments $ 655,328 349,241
Source: Item 3, via Note 18 – Commitments and Contingencies, 10-K 0001447669-26-000021 vs Item 3, via Note 17 – Commitments and Contingencies, 10-K 0001447669-25-000035
Every change, by type
Sentences and paragraphs of TWLO's Risk Factors and MD&A, 10-K 2026-02-24 against 10-K 2025-02-26. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
Macroeconomic and political conditions and uncertainties have in the past adversely affected, and may in the future adversely affect, our business, results of operations and financial condition, and could exacerbate many of the other risks described in this “Risk Factors” section.
AddedRisk Factors
•seasonal trends, including due to increased consumer activity in the fourth quarter;
AddedRisk Factors
Reliance on these providers poses risks to the quality of our services, primarily by limiting our control, operating flexibility, and ability to timely identify and respond to necessary service changes, and by subjecting us to service interruptions or outages. Reliance on such providers in the past has caused, and may in the future cause, errors, service outages, security incidents, or poor-quality communications on our products, and we could encounter difficulty identifying the source of the problem. This has in the past, and may in the future, cause harm to our brand, result in lost revenue, and cause us to lose existing and prospective customers.
AddedRisk Factors
We also face risks related to losing access to these services. Many of these providers do not have long-term committed contracts with us and may interrupt services or terminate their agreements with us without notice. We may not be able to replace these services on a cost-effective basis, or at all, and even if we can, replacing providers may be time-consuming, costly and result in delays.
AddedRisk Factors
We depend upon our IT systems to conduct virtually all of our business operations, ranging from our internal operations and research and development activities to our marketing and sales efforts and communications with our customers, vendors and other business partners. Moreover, our platform stores, transmits, and otherwise processes our, our customers’ and our partners’ proprietary, confidential, and sensitive data. We also rely on various third-party service providers – including network service providers, internet service providers, telecommunications carriers, and providers of cloud infrastructure and cloud communications – for business operations, to operate our platform and to deliver our products, as well as third-party technology and intellectual property.
AddedRisk Factors
We have been targeted by threat actors seeking unauthorized access to our systems or data, or that of our customers or third-party service providers, or to disrupt our operations or ability to provide our services. Our third-party service providers have also been targeted. Our platform and our underlying infrastructure, the information we store and process, and those of our third-party service providers, are subject to evolving threats and have in the past and may in the future be subject to breaches, compromises, disruptions, or other incidents, including as a result of the following:
AddedRisk Factors
•fraud, social-engineering attacks (such as phishing) and other third-party attempts to induce our employees, customers or partners to disclose sensitive information to gain access to our customers’ data or systems, or our data or our systems;
AddedRisk Factors
•efforts by hackers or sophisticated groups, such as criminal organizations, state-sponsored organizations or nation-states, to launch coordinated cyberattacks on internally built infrastructure or on third-party cloud-computing platform providers, including malicious code, ransomware, destructive malware, supply chain attacks and distributed denial-of-service attacks;
AddedRisk Factors
•third-party attempts to abuse our marketing, advertising, messaging or products and functionalities to impersonate persons or organizations and disseminate information that is false, misleading or malicious;
AddedRisk Factors
•attacks on, malfunctions or unavailability of, or other vulnerabilities in, the underlying networks and services that power the internet or that our products otherwise depend on, many of which are not under our control or the control of our customers or partners;
AddedRisk Factors
•employee fraud, misconduct or error, including resulting from efforts to bribe, extort, infiltrate or otherwise compromise our or our service providers’ workforce.
RemovedRisk Factors
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RewordedRisk Factors
RewordedRisk Factors
In addition, in order to obtain allocations of, assign and retain Numbering Resources in the EU or certain other regions, many international jurisdictions, we are often required to be licensed by local telecommunications regulatory authorities, some of which have been increasingly monitoring and regulating the categories of Numbering Resources that are eligible for provisioning to us or our customers, including restricting the use of types of numbers for particular use cases. authorities.
RewordedRisk Factors
RewordedRisk Factors
Changes in tax laws laws, including recently enacted U.S. federal tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBB Act”), or tax rulings, or changes in interpretations of existing laws, could cause us to be subject to additional income-based taxes and non-income taxes (such as payroll, sales, use, value-added, digital tax, net worth, property, and goods and services taxes), taxes, which in turn could materially affect our financial position and results of operations.
RewordedRisk Factors
Although we have, or are in the process of acquiring acquiring, authorization in many countries to provide voice and messaging services and for direct access to phone numbers and for the provision of voice and messaging services on the networks of fixed and mobile network service providers, in many countries, we expect that we will to continue to rely to some extent on network service providers for these services.
RewordedRisk Factors
RewordedRisk Factors
Global economic and business activities continue to face widespread macroeconomic uncertainties, including market volatility, changes in international economic and trade relations, supply chain disruptions, changes in the labor market market, elevated interest rates and supply chain disruptions, inflation and monetary supply shifts, volatility potential increases in the banking and financial services sectors, inflation, foreign currency exchange rate fluctuations and recession risks, which may continue for an extended period.
RewordedRisk Factors
Our competitors are primarily (i) CPaaS companies that offer communications products and applications, (ii) other software companies that compete with portions of our communications product line, (iii) regional network service providers that offer limited developer functionality on top of their own physical infrastructure, (iv) (iii) customer relationship management and customer experience vendors and (v) vendors, (iv) standalone customer data platform vendors. vendors and (v) other software companies that compete with portions of our product line.
RewordedRisk Factors
If we fail to comply with these laws, we and certain of our employees could be subject to substantial civil or criminal penalties, including: the possible loss of export privileges; fines, which may be imposed on us and responsible employees or managers; criminal liability, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.
RewordedRisk Factors
Number portability is considered an important feature by to many potential customers, and if we fail failure to reduce any related delays, then we delays may experience result in adverse regulatory enforcement, increased difficulty in acquiring new customers. customers, or costs to compensate customers for certain failures in the porting process.
RewordedRisk Factors
The success of any enhancements or new products we introduce depends on several factors, including timely completion, adequate quality testing, actual performance quality, market-accepted pricing levels, customer value and the ability to provide rapid time-to-value for our customers, and overall market acceptance. the emergence of competing products and services that may be delivered at lower prices, more efficiently, conveniently or securely, or render our products obsolete.
RewordedRisk Factors
AddedMD&A
We envision a world in which every digital interaction is amazing. By combining our leading communications capabilities with rich contextual data and AI, we provide the infrastructure for businesses of all sizes to revolutionize how they engage with their customers by delivering seamless, trusted, and personalized customer experiences at scale.
AddedMD&A
Operating Decision Maker (“CODM”), to reflect this realignment and the change in how management currently views and operates the business. These changes required us to re-evaluate our operating segment structure and resulted in the conclusion that starting with the third quarter of 2025 and as of December 31, 2025, we had one operating and reportable segment, which comprised all of the consolidated Company.
AddedMD&A
In June 2025, a major U.S. mobile carrier increased network service provider fees for A2P messages delivered to its subscribers. Other major U.S. carriers have since followed suit, with fee increases effective in January and April 2026. We pass these fees through to our customers at cost. As a result, we recognize an equal amount of revenue and cost of revenue related to these fees. The increased fees do not impact our gross profit, but they will create a modest headwind to our gross margins going forward. Such fees may increase further over time.
AddedMD&A
Given our recent history of generating net income in the U.S., we believe that there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to allow us to determine that a significant portion of the valuation allowance recorded against our U.S. deferred tax assets should be released. The reversal would result in a significant income tax benefit for the period when we release the valuation allowance in the U.S. However, the exact timing and amount of the valuation allowance release are subject to change based on our actual operating results.
AddedMD&A
Our results of operations have in the past been, and could in the future be, impacted by adverse macroeconomic conditions. We are continuing to monitor actual and potential effects of recent macroeconomic and political conditions and uncertainty on our business. For additional details, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.
AddedMD&A
compensation expense related to vesting of stock-based awards of the impacted employees.
RemovedMD&A
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RewordedMD&A
In 2024, 2025, cash provided by operating activities consisted primarily of our net loss income of $109.4 $33.8 million adjusted for non-cash items, including $616.6 $600.4 million of stock-based compensation expense, $206.0 $195.4 million of depreciation and amortization expense, $76.3 million amortization of deferred commissions, $19.1 $101.2 million of non-cash reduction in our operating right-of-use asset, $108.5 million of share of losses from equity method investments, $35.4 investment, $80.6 million of provision for doubtful accounts impairment related to our equity method investment, $74.5 million in amortization of deferred commissions, $22.0 million of non-cash reductions in our operating right-of-use asset and $234.1 $113.9 million of cumulative changes in operating assets and liabilities.
RewordedMD&A
Research and development 20 23 23 28 Sales and marketing 17 19 25 33 General and administrative 8 10 11 14 Restructuring costs * * 4 2 Impairment of long-lived assets * — 8 3 Total operating expenses 46 52 70 79 Loss Income (loss) from operations 3 (1) (21) (32) Other expenses, net Share of losses from equity method investment (2) (2) (3) (1) Impairment of equity method investment (2) — — Impairment of strategic investments — * (1) — Other income (expenses), income, net 2 2 1 * Total other expenses, net (2) (1) (3) (1) Loss Income (loss) before provision for income taxes 1 (2) (24) (33) Provision for income taxes * * * Net loss income (loss) attributable to common stockholders 1% (2 (24 (33
RewordedMD&A
In 2024, 2025, cash provided by investing activities was $1.4 billion $80.9 million primarily consisting of $1.4 billion $200.3 million of maturities and sales of marketable securities and other investments, net of purchases, partially offset by $51.8 $61.5 million of net cash paid to acquire other businesses as described in Note 11 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, $52.0 million related to capitalized software development costs and $7.0 $5.8 million related to purchases of long-lived assets.
RewordedMD&A
This increase was primarily attributable to an $87.8 a $362.4 million increase in network service providers’ costs, net of the impact of the hedging instruments, and which includes $49.5 million of the incremental A2P fees introduced by a $34.7 million increase in hosting fees, which support the growth in usage of our products by our new and existing customers. major U.S. carrier during 2025.
RewordedMD&A
When presented in this Annual Report on Form 10-K, (i) the number of Active Customer Accounts is rounded down to the nearest thousand, (ii) the number of Communications Active Customer Accounts is rounded down to the nearest thousand, and (iii) the number of Segment Active Customer Accounts is rounded down to the nearest hundred. thousand.
RewordedMD&A
Stock-based compensation 598,654 613,429 662,842 784,285 Amortization of acquired intangibles 108,074 111,851 192,307 206,181 Acquisition and divestiture related expenses 486 — 5,555 2,621 Loss on net assets divested — — 32,277 — Payroll taxes related to stock-based compensation 24,754 9,642 12,985 23,832 Charitable contributions 18,940 19,907 17,346 9,541 Restructuring costs 15,030 13,273 165,733 76,636 Impairment of long-lived assets 1,849 — 320,504 97,722 Gain on lease termination (1,556) — — Non-GAAP income (loss) from operations $ 924,033 $ 714,394 $ 533,008 $ (4,490) Non-GAAP operating margin 18 % 16 % 13 % — %
RewordedMD&A
RewordedMD&A
Year Ended December 31, 2025 2024 2023 2022 (In thousands) Cash provided by (used in) operating activities $ 1,003,244 $ 716,241 $ 414,752 $ (254,368) Cash provided by (used in) investing activities 80,948 1,370,837 228,603 (616,452) Cash (used in) provided by used in financing activities (833,095) (2,311,572) (643,610) 45,007 Effect of exchange rate changes on cash, cash equivalents and restricted cash — — 108 60 Net decrease increase (decrease) in cash, cash equivalents and restricted cash $ 251,097 $ (224,494) $ (147) $ (825,753)
RewordedMD&A
We are investing strategically in alignment with our focus on building bringing communications, data and AI together into a trusted, leading customer engagement platform. single platform that enables fast, relevant and personalized interactions.
RewordedMD&A
To increase revenue and grow market share, we intend to drive product innovation, leverage predictive and generative AI, further enhance our ISV, independent software vendor (“ISV”), reseller and other partner relationships, improve our self-service capabilities, cross-sell our products, and expand internationally, enhance Segment data warehouse interoperability, and reduce time to value for Segment. internationally.
RewordedMD&A
As of December 31, 2024, the 2025, we had an accrued bonus liability was $109.8 of $136.2 million related to our company-wide bonus program recorded in the accrued expenses and other current liabilities in our consolidated balance sheet included elsewhere in this Annual Report on Form 10-K.
RewordedMD&A
In 2023, 2025, cash used in financing activities was $643.6 $833.1 million primarily consisting of $668.8 $868.9 million of cash paid to repurchase 11.3 8.0 million shares of our common stock in the open market, stock, including related costs, offset by $43.8 $41.4 million in proceeds from stock options exercised by our employees and shares issued under our employee stock purchase plan.
Quiet changesMD&A
Repurchases under this program can be made through open market, private transactions or other means, in compliance with applicable federal securities laws, and could can include repurchases pursuant to Rule 10b5-1 trading plans.
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