What changed in this filing

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Item 1. Business

2022-02-22 compared with 2021-02-26 · 112 added, 118 removed, 306 unchanged (43% of the section changed)

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Twilio was started to solve this problem in 2008.

Twilio spent the last 12 years building the leading cloud communication platform, but communications is just the beginning.

Twilio's vision is to be the leading customer engagement platform, ultimately providing businesses with the holy grail—a single view of the customer journey.

Twilio spent over a decade building the leading cloud communication platform, but communications is just the beginning.

Twilio's vision is to become the leading customer engagement platform, ultimately providing businesses with the holy grail—a single view of the customer journey and the ability to take action, delivering real-time, personalized communications.

We believe the future of customer engagement will be written in software by the developers of the world—our customers.

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These APIs are focused on the business challenges that a developer is looking to address, allowing our customers to more quickly and easily build better ways to engage with their customers throughout their journey.

We also offer a set of APIs that enable developers to embed voice, messaging, video and email capabilities into their applications, and are designed to support almost all the fundamental ways humans communicate, unlocking innovators to address just about any communication market.

Our engagement platform also includes a set of APIs that enable developers to embed voice, messaging, video and email capabilities into their applications, and are designed to support almost all the fundamental ways humans communicate, unlocking innovators to address just about any communication market.

The Super Network is our software layer that allows our customers' software to communicate with connected devices globally.

It interconnects with communications networks and inbox service providers around the world and continually analyzes data to optimize the quality and cost of communications that flow through our platform.

The Super Network also contains a set of APIs giving our customers access to more foundational components of our platform, like phone numbers.

The Super Network also contains a set of APIs giving our customers access to more foundational components of our platform, like phone numbers and session initiation protocol (“SIP”) Trunking.

In February 2019 we acquired SendGrid, Inc.

(“SendGrid”), the leading email API platform.

Email is an important channel for businesses to communicate with their customers.

Incorporating SendGrid's products into our platform allows us to enable businesses to engage with their customers via email effectively and at scale.

Email is an important channel for businesses to communicate with their customers and incorporating SendGrid's products into our platform allows us to enable businesses to engage with their customers via email effectively and at scale.

In November 2020 we acquired Segment.io, Inc.

(“Segment”), the market-leading customer data platform.

Segment provides businesses a unified customer view to better understand their customers and engage more effectively.

Segment provides businesses a unified customer view to better understand their customers and engage more effectively, enabling us to drive personalization at scale.

The acquisition expands and strengthens use cases across customer service, marketing, sales, product and analytics and accelerates Twilio’s journey to build the world’s leading customer engagement platform.

In July 2021 we acquired Zipwhip, Inc., (“Zipwhip”) a leading provider of toll-free messaging in the United States.

Zipwhip’s customizable APIs enable organizations to text enable their existing toll-free phone numbers in minutes and seamlessly fit texting into their workflows.

We had over 256,000 Active Customer Accounts as of December 31, 2021, representing organizations big and small, old and young, across nearly every industry, with one thing in common:

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With our customer engagement platform, our customers are disrupting existing industries and creating new ones.

For example, our customers' software applications use our platform to notify a diner when a table is ready, provide enhanced application security through two-factor authentication, connect potential buyers to real estate agents, and power large, omni-channel contact centers.

For example, our customers' software applications use our platform to notify a diner when a table is ready, provide enhanced application security through two-factor authentication to safely recognize a customer, connect potential buyers to real estate agents, and power large, omni-channel contact centers.

The range of applications that developers build with the Twilio platform has proven to be nearly limitless.

Our goal is for Twilio to be in the toolkit of every software developer in the world.

Our goal is for Twilio to be in the toolkit of every software developer in the world, from small businesses to major enterprises.

Because big ideas often start small, we encourage developers to experiment and iterate on our platform.

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As previously announced in our Annual Report on Form 10-K filed with the SEC on March 2, 2020, commencing with the three-month period ended March 31, 2020, we calculate our Dollar-Based Net Expansion Rate by comparing total revenue from a cohort of Active Customer Accounts in a period to the same period in the prior year (the “New DBNE Definition”).

When we calculate Dollar‑Based Net Expansion Rate for periods longer than one quarter, we use the average of the applicable quarterly Dollar‑Based Net Expansion Rates for each of the quarters in such period.

Under the New DBNE Definition, our Dollar-Based Net Expansion Rate was 131% and 137% for the years ended December 31, 2021 and 2020, respectively.

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Our Platform Approach

Twilio's mission is to be the leading customer engagement platform.

We enable developers to build, scale and operate real-time communications within software applications, ultimately empowering every developer and company to improve their interactions with their customers through software.

We believe that by giving developers the power to build with software at every level of their business we enable businesses to create novel and creative new consumer experiences that delight their customers and enable them to differentiate from their competitors.

Twilio's mission is to unlock the imagination of builders.

Our plan is to be the leading customer engagement platform.

We enable builders - the developers of the world - to build, scale and operate real-time communications within software applications, ultimately empowering every developer and company to improve their interactions with their customers.

This enables businesses to create novel and creative new consumer experiences that delight their customers and differentiate their companies from their competitors.

Our platform approach enables developers to build this future.

Using our software, developers are able to incorporate communications into applications that span a range of industries and functionalities.

Using our software, developers are able to incorporate communications and customer data into applications that span a range of industries and functionalities.

Our technology partner customers also embed our products in solutions they sell to other businesses.

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Twilio gives companies complete control and flexibility to rapidly deploy remote agents, digital channels, self-service and integrations for lower costs and higher productivity.

• Alerts & Notifications.

From delivery notifications to critical emergency alerts, Twilio provides the building blocks to develop critical communications across short message service ("SMS"), voice and email channels.

• User Verification.

• Alerts and Notifications.

From delivery notifications to critical emergency alerts, Twilio provides the building blocks to develop critical communications across messaging channels (short message service (“SMS”), multimedia message service (“MMS”), Short Codes, Toll-Free, WhatsApp, Facebook Messenger, and Google Business Messages), voice and email channels.

• User Identity Verification.

Customers can use a globally optimized multi-channel user verification solution to combat fraud, reduce fake user sign-ups and authorize sensitive account actions.

• Field services & contactless delivery.

• Field services and contactless delivery.

Our customers can use Twilio Conversations to ensure privacy with masked communications, provide granular session control over user permissions, session duration and roles and keep private information private.

• Marketing .

Email and SMS campaign support to target, nurture and develop new customer relationships.

• Customer Loyalty.

Customers can send reminders about reward programs through email or SMS to drive repeat purchases through loyalty incentives.

Customers can send reminders about reward programs through email or messaging to drive repeat purchases through loyalty incentives.

• Twilio For Good.

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Segment's platform and APIs allow companies to collect, clean and control their customer data, providing a single view of customers across channels for more effective engagement.

This insight enables businesses to delight their customers with personalized, timely and impactful communications on the right channel at the right time.

When combined with Twilio's communication channels, this insight enables businesses to delight their customers with personalized, timely and impactful communications on the right channel at the right time.

The Segment platform includes:

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Use identity resolutions to take event data from across devices and channels, merge the data together, and create unified customer profiles to build and enrich audiences, and activate audiences across marketing tools with a single view of the customer.

Comply with laws and regulations, such as General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 ("CCPA"), using Segment’s privacy tools.

Comply with laws and regulations, such as General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”), by using first-party data, collected and privatized with Segment, instead of increasingly regulated third-party data.

Standardize data collection to create a single source of truth for customer data that is clean, consistent, and compliant, and adheres to a well thought out tracking plan.

Our Channel APIs consist of software products that can be used individually or in combination to build rich contextual communications within applications.

We do not aim to provide complete business solutions, rather to offer flexible building blocks that enable our customers to build what they need.

We offer flexible building blocks that enable our customers to build what they need.

Our easy-to-use developer APIs provide a programmatic channel to access our software.

Developers can utilize our intuitive programming language, TwiML, to specify application functions, such as <Dial>, <Record> and <Play>, leveraging our software to manage the complexity of executing the specified functions.

Our Channel APIs include:

Twilio Programmable Messaging is an API to send and receive SMS, multimedia message service ("MMS") and over-the-top ("OTT") (WhatsApp and Facebook Messenger) messages globally.

Twilio Programmable Messaging is an API to send and receive SMS, MMS and over-the-top (“OTT”) (WhatsApp and Facebook Messenger) messages globally.

It uses intelligent sending features to ensure messages reliably reach end users wherever they are.

Our customers build use cases, such as appointment reminders, delivery notifications, order confirmations and customer care.

Our customers build use cases, such as appointment reminders, delivery notifications, order confirmations and many two-way and conversational use cases, such as customer care.

Programmable Messaging includes:

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• OTT channels.

Programmatically send, receive and track messages to messaging apps such as WhatsApp and Facebook Messenger globally.

Programmatically send, receive and track messages to messaging apps such as WhatsApp and Facebook Messenger.

We charge on a per-message basis for most of our Programmable Messaging products.

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• Voice Insights.

Call quality and performance data at your fingertips.

Call quality and performance data at the fingertips of our customers.

Beyond details of a single call, every account on Twilio has access to the Voice Insights Dashboard, a powerful tool in Twilio Console that provides out-of-the-box visibility to key performance indicators and data to understand changes in call behavior.

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Allows for real-time access to the raw audio stream of your phone calls.

Through Media Streams you can fork the media of a phone call in real-time, effectively creating a copy of the initial audio stream that can be routed to your own application or to a third party to power advanced capabilities of your choosing.

Through Media Streams our customers can fork the media of a phone call in real-time, effectively creating a copy of the initial audio stream that can be routed to your own application or to a third party to power advanced capabilities of your choosing.

• SHAKEN/STIR.

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SHAKEN/STIR is free to all Twilio customers and allows them to increase answer rates for their calls by giving their calls the highest attestation under the SHAKEN and STIR caller authentication framework.

• Programmable Voice Session Initiation Protocol (" SIP") Interfaces.

• Programmable Voice SIP Interfaces.

Enables voice infrastructure to be augmented with cloud capabilities.

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• Integrations.

Businesses can integrate our email API with multiple leading development frameworks and client libraries, including Node.js, Ruby, Python, Go, Hypertext Preprocessor, Java and C#.

Businesses can integrate our email API with multiple leading development frameworks and client libraries in multiple programming languages.

• Internet Protocol (“IP”) Management.

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• Deliverability.

Our proprietary Mail Transfer Agent (“MTA”) optimizes for inbox placement while offering tools for sender reputation management and expert deliverability professional services.

Our real-time email address validation API checks email address legitimacy before sending to improve deliverability.

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Our two-factor authentication, API key permissions and Event Webhook Security helps enable secure management of our Email API by our customers.

Conversations

Twilio Conversations is a unified conversational API that is pre-integrated with SMS, MMS, WhatsApp and Chat and supports cross-channel, multiparty conversations.

It includes software that support groups, cross-channel orchestration and conversation durations.

This extends the functionality of our Messaging channels and enables developers to use one API regardless of the channel their end-users support.

Programmable Video provides developers with the building blocks to add voice and video to web and mobile applications.

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They can use our JavaScript, iOS or Android SDKs, quickstarts and open source sample code to launch applications in minutes, then customize them to meet the unique needs of their use case.

As we observe the customer use cases that are most common and the workflows our customers find most challenging, we create Solutions.

With Video Insights, developers can monitor the performance of their video applications directly from the Twilio Console.

Twilio Live gives developers the tools to create immersive, interactive audio or video live streaming experiences.

Low-latency delivery enables speakers and audience members to engage via chat, polls, and inviting audience members “on stage” to speak.

Developers can build interactive shopping experiences, broadcast events such as conferences or concerts, fitness, and more using live streaming APIs, SDKs, and sample code optimized for iOS, Android, and all major browsers.

Conversations

The Twilio Conversations API allows developers to build rich, one-to-one and group interactions for customer support and commerce use cases.

The unified messaging API provides cross-channel support for SMS and MMS, Chat, WhatsApp, Facebook Messenger, and Google Business Messages – all while archiving message history, preserving participant identity, and reducing time to market with software development kits (“SDKs”) and pre-built mobile and web user interfaces.

As we observe the customer engagement use cases that are most common and the workflows our customers find most challenging, we create Solutions.

We bring these Solutions to a broader audience, including non-technical customers, in the form of higher level APIs.

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User Verification

Online fraud has exploded from a minor nuisance to a major factor in how businesses operate today.

Online fraud has exploded from a minor nuisance to a major factor in how businesses operate today requiring advanced solutions to register, onboard and recognize customers.

Twilio Verify is a managed solution that takes care of channel orchestration and management as well as security and business logic.

Using our two-factor authentication APIs ("Twilio Authy"), developers can add an extra layer of security to their applications with second-factor passwords sent to a user via SMS, voice, email or push notifications.

Twilio Authy provides user authentication codes through a variety of formats based on the developer’s needs.

Using our two-factor authentication APIs (“Twilio Verify”), developers can add an extra layer of security to their applications with second-factor passwords sent to a user via SMS, voice, email or push notifications.

Twilio Verify provides user authentication codes through a variety of formats based on the developer’s needs.

Codes can be delivered through the Authy app on registered mobile phones, desktop or smart devices or via SMS and voice automated phone calls.

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Marketing Campaigns

Marketing Campaigns help digital marketers build and send email campaigns at scale and faster than ever.

Marketing Campaigns is built on top of SendGrid's proven email infrastructure to help digital marketers build and send email campaigns at scale - faster than ever.

With drag and drop editing, approachable automation and powerful contacts management, Marketing Campaigns help marketers attract and retain customers more efficiently.

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Acquire local, national, mobile and/or toll-free phone numbers on demand in approximately 80 countries and connect them into the customers’ applications.

• Short Codes.

Typically five to six digit phone number used to send and receive a high-volume of messages per second.

• Elastic SIP Trunking.

Connect legacy voice applications to our Super Network over IP infrastructure with globally available phone numbers and pay-as-you-go pricing.

Twilio’s Emergency Calling for SIP Trunking feature enables emergency call routing to PSAPs in the US, Canada and the UK.

Twilio’s Emergency Calling for SIP Trunking feature enables emergency call routing to PSAPs in the U.S., Canada and the UK.

• Interconnect.

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Our Business Model for Innovators

Our goal is to include Twilio in the toolkit of every developer in the world.

Our goal is to include Twilio in the toolkit of every developer in the world, from small businesses to major enterprises.

Because big ideas often start small, developers need the freedom and tools to experiment and iterate on their ideas.

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We are the leader in the cloud communications platform category based on revenue, market share and reputation and intend to continue to set the pace for innovation.

We will continue to invest aggressively in our platform approach, which prioritizes increasing our reach and scale.

We also have the leading market share in the Customer Data Platform category.

Our overall strategy is to develop great APIs that developers love.

These developers are our champions and bring us “in” to companies of every type, most frequently utilizing our messaging and email tools as an entry point.

This “in” motion creates initial relationships with customers of all sizes including major enterprises that allow us to move “up” the software stack and provide those companies with software solutions that address their customer engagement requirements from marketing to sales and support.

Today, we offer Twilio Campaigns for marketing, Twilio Flex for customer support and Twilio Verify to onboard and recognize customers.

The more strategic nature of these software products also allows us to move up the organization chart, interacting with more senior and strategic purchasers.

This “in” and “up” strategy is a motion we work on improving every day.

We will also continue to invest aggressively in our platform approach, which prioritizes increasing our reach and scale.

We intend to pursue the following growth strategies:

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We intend to expand our relationships with existing technology partner customers and to add new technology partner customers.

We plan to invest in a range of initiatives to encourage increased collaboration with, and generation of revenue from, technology partner customers.

We have started developing relationships with consulting partners who provide consulting and development services for organizations that have limited software development expertise to build our platform into their software applications.

We plan to invest in a range of

initiatives to encourage increased collaboration with, and generation of revenue from, technology partner customers.

We have developed relationships with consulting partners who provide consulting and development services for organizations that have limited software development expertise to build our platform into their software applications.

We intend to continue to invest in and develop the ecosystem for our solutions in partnership with consulting partners to accelerate awareness and adoption of our platform.

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From 2015 through 2021, we made several acquisitions which have allowed us to expand our platform and service offerings to include features such as a cloud-based API to seamlessly embed two-factor authentication and phone verification into any application, Web Real-Time-Communication (“Web RTC”) media processing technologies, contact center analytics, software mobile network infrastructure and language recognition capabilities.

In addition, our acquisition of SendGrid in February 2019 allowed us to add a leading e-mail API platform to our product offerings and our acquisition of Segment in November 2020 allowed us to add the market-leading customer data platform to our product offerings.

In addition, our acquisition of SendGrid in February 2019 allowed us to add a leading e-mail API platform to our product offerings, our acquisition of Segment in November 2020 allowed us to add the market-leading customer data platform to our product offerings and our acquisition of Zipwhip in July 2021 allowed us to expand the toll-free channel, offering developers and businesses another affordable, trusted, high-quality engagement option via messaging-enabled toll-free numbers.

The Twilio Magic

We believe there's a unique spirit to Twilio, manifested in who we are and how we work together.

These are the principles we use to build an impactful, high growth business while staying true to ourselves.

Collectively, these principles guide how we act, how we make decisions and how we win.

Owners know their business, embracing the good news and the bad.

Owners sweat the details and "pick up the trash." Owners think long term and spend money wisely.

Empower Others.

We believe that unleashing human potential—both inside and outside our company—is the key to our success.

Be humble and realize it's not just about us.

Invest in each other.

No Shenanigans.

Always act in an honest, direct and transparent way.

How We Make Decisions

Wear the Customer's Shoes.

Spend the time to deeply understand customers and solve problems from their perspective.

Earn trust through every interaction.

Write It Down.

Our business is complex, so take the time to express yourself in prose—for your sake and for the folks with whom you're collaborating.

Ruthlessly Prioritize.

Prioritization helps break down complex problems and provides clarity in the face of uncertainty.

Decisions are progress, so make decisions with available information and keep learning.

We're driven by a hunger to build a meaningful and impactful company.

Embrace crazy ideas and remember, every big idea starts small.

Be Inclusive.

To achieve our goals, we need a diverse set of voices in the room.

Build diverse teams and seek out unique points of view.

Draw the Owl.

There's no instruction book, it's ours to write.

Figure it out, ship it and iterate.

Invent the future, but don't wing it.

Don't Settle.

Expect the best from yourself and others, because there's no feeling greater than being proud of our work.

Hire the best people for every role.

We believe we can create greater social good through better communications.

Through Twilio.org, which is a part of our company and not a separate legal entity, we donate and discount our products to nonprofits who use our products to engage their audience, expand their reach and focus on making a meaningful change in the world.

Twilio.org's mission is to fuel communications that give hope, power, and freedom with a 10-year goal to help one billion people every year.

In 2015, we reserved 1% of our common stock to fund our social impact at Twilio.org.

In March 2019, we increased the Twilio.org share reserve by 203,658 shares of Class A common stock to account for a similar program previously operated by SendGrid, Inc., one of our wholly owned subsidiaries, which we acquired in February 2019.

Since 2015, Twilio.org has made several donations consistent with its philanthropic goals, which were treated as charitable contributions and recorded in general and administrative expenses in our consolidated statements of operations included elsewhere in this Annual Report on Form 10-K.

As of December 31, 2020, the total remaining shares of Class A common stock reserved for Twilio.org was 707,265.

We value and invest in a positive culture of optimism, innovation, and accountability.

Our values, which we call the Twilio Magic, remind us every day who we are at our core and guide how we act and how we make decisions.

We are Builders .

We are Owners .

We are Curious .

We are Positrons .

We believe communications play a critical role in solving some of the world’s toughest social challenges.

Through Twilio.org, which is a part of our company and not a separate legal entity, we donate and sell our products at a reduced rate to social impact organizations and provide grant funding to help scale organizations' mission.

In 2015, we reserved 1% of Twilio's common stock to fund Twilio.org.

We have periodically replenished that initial reserve and as of December 31, 2021, the number of shares of Twilio Class A common stock set aside for Twilio.org operations was 618,857.

We started Twilio.org so that more people around the world have the opportunity to thrive.

In 2021, over 7,500 social impact organizations used Twilio products and funding to reach more than 500 million people worldwide.

2021 marked another year of living through the COVID-19 pandemic and Twilio products and funding were used by over 1,200 organizations to provide more than 300 million people with vaccine and COVID-19 related information.

Information on our key Environmental, Social and Governance (“ESG”) programs, goals and commitments, and certain metrics can be found in our annual Impact Report, available on our website at https://investors.twilio.com/governance.

Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

While we believe that our ESG goals align with our long-term growth strategy and financial and operational priorities, they are aspirational and may change, and there can be no assurance that they will be met.

Our Employees and Human Capital Resources

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We consider our relations with our employees to be good and have not experienced interruptions of operations or work stoppages due to labor disagreements.

Diversity and Inclusion

At Twilio, we strive to build a diverse workforce, promote equity in our practices, and create inclusive communities for all Twilions to thrive.

Our mission is to foster an equitable approach to hiring, delivering on a promise of equality for all in career development, compensation and growth, and to continuously improve a sense of inclusion for everyone at Twilio.

In the wake of this summer's racial injustices, which continue to plague the country, we created a Racial Justice and Equity accountability priority that included a commitment to becoming an anti-racist company.

We believe that a company culture focused on equity and driving toward being anti-racist is a key driver in being better corporate citizens, creating a more inclusive workplace, attracting the best talent, and ultimately delivering better business performance.

Some of the programs that came out of this accountability priority included “Be Inclusive” diversity and inclusion training for People Managers.

We also developed a “RiseUp” professional development program for our top Black and Latinx managers.

Our Black and Latinx managers also received an opportunity for professional coaching through the “Better Up Coaching” platform as a way to continue career development.

This platform provided access to coaches of color and various backgrounds to offer support and development.

We were also able to hire our first Chief Diversity Officer who sits on the executive team, with a reporting line to our CEO.

In addition, we work hard to maintain and enhance our diverse and inclusive environment, creating a workplace where people are highly valued and are empowered to do their best work.

Our employee resource groups, such as Black Twilions, Latinx @ Twilio, Remoties, Asians @ Twilio, Spectrum, the Family Nest, Warriors, Twilipinos, Women @ Twilio, and Wonder offer our employees support, mentoring and networking opportunities and help to foster a friendly and diverse workplace.

Diversity, Equity and Inclusion

We are driving a diversity, equity and inclusion (“DEI”) strategy based on the principles of antiracism.

At Twilio, we use “antiracism” as an umbrella term for actively identifying and eliminating racism/oppression by changing systems, organizational structures, policies, practices, and attitudes, so that power is shared equitably.

By educating and empowering Twilions to think and operate through an antiracist lens, we’ll be able to build a more diverse workforce, promote equity for all communities in the workplace and foster safe, inclusive environments.

Following our commitment to become an antiracist organization, we began the work to embed and operationalize antiracism across the business, with a strong focus on education.

In 2021, over 100 senior Twilio executives participated in an antiracism workshop, with continued learning planned in 2022.

We are growing our partnerships with global organizations to help us find, grow, and keep diverse talent in various demographics, regions, and countries.

We are coordinating antiracist learning opportunities through employee resource group (“ERG”) specific programming and events.

Lastly, we continue to maintain healthy pay parity, ensuring that employees with the same job and location are paid fairly relative to one another, regardless of gender or race.

We will continue to grow our DEI resources and global footprint to make sure DEI scales along with the business.

Most recently, we expanded the DEI team and launched new ERG chapters globally.

This will ensure we are translating antiracism and amplifying DEI efforts across all teams and regions.

Compensation and Benefits

Twilio is committed to delivering a comprehensive compensation and benefits program that provides support for all of our employees’ well-being.

We provide competitive compensation and benefits to attract and retain talented employees, including offering market-competitive salary, bonuses or sales commissions, and equity.

We provide competitive compensation and benefits to attract and retain talented employees, including offering market-competitive salaries, sales commissions for our sales teams, and equity.

We generally offer full-time employees equity at the time of hire and through annual equity grants, as well as provide an employee stock purchase plan, to foster a strong sense of ownership and engage our employees in being committed to our long-term success.

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Our full-time employees are eligible to receive, subject to the satisfaction of certain eligibility requirements, our comprehensive benefits package including our medical, dental and vision insurance and life and disability insurance plans.

In addition, we provide time off, as well as maintain a tax-qualified 401(k) retirement plan that provides eligible U.S employees with an opportunity to save for retirement on a tax-advantaged basis.

In addition, we provide time off, as well as maintain a tax-qualified 401(k) retirement plan that provides eligible U.S.

employees with an opportunity to save for retirement on a tax-advantaged basis.

In 2021, we matched 50% of the first 6% of contributions by plan participants, subject to annual contribution limits set forth in the Internal Revenue Code of 1986, as amended.

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Research and Development

Our research and development efforts are focused on building a trusted communications platform and enhancing our existing products and developing new products.

Our research and development organization is built around small development teams.

Our research and development efforts are focused on building a trusted, smart engagement platform and enhancing our existing products and developing new products and features.

Our research and development organization is predominantly built around small development teams.

Our small development teams foster greater agility, which enables us to develop new, innovative products and make rapid changes to our infrastructure that increase resiliency and operational efficiency.

Our development teams designed, built and continue to expand our customer engagement platform and Super Network.

Our development teams designed, built and continue to expand our customer engagement platform, our core platforms stack and Super Network.

As of December 31, 2021, we had 3,103 employees in our research and development organization.

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Our sales and marketing teams work together closely to drive awareness and adoption of our platform, accelerate customer acquisition and generate revenue from customers.

Our go-to-market model is primarily focused on reaching and serving the needs of developers.

We have a strategy to grow within our customers that we refer to as our “in and up” strategy.

We get in to new customers through our messaging and email products, often directly via developers, then build on those relationships to grow our footprint with broader adoption and higher value products.

Our go-to-market model is primarily focused on initiating customer relationships by reaching and serving the needs of developers.

We are a pioneer of developer evangelism and education and have cultivated a large global developer community.

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Historically, we have acquired the substantial majority of our customers through this self-service model.

As customers expand their usage of our platform, our relationships with them often evolve to include business leaders within their organizations.

Once our customers reach a certain spending level with us, we support them with account managers or customer success advocates to ensure their satisfaction and expand their usage of our products.

We also supplement our self-service model with a sales effort aimed at engaging larger potential customers and existing customers through a direct sales approach.

As customers expand their usage of our platform, we expand our relationships with them to include business leaders within their organizations.

We supplement our self-service model with account executives and customer success managers aimed at engaging customers through a direct sales approach to expand usage and ensure satisfaction.

To help increase our awareness in the enterprise, we have expanded our marketing efforts through programs like our Twilio Engage roadshow, where we seek to bring business leaders and developers together to discuss the future of customer engagement.

We have developed products to support this effort as well, like the Twilio Enterprise Plan, which provides capabilities for advanced security, access management and granular administration.

Our sales organization targets technical leaders and business leaders who are seeking to leverage software to drive competitive differentiation.

Our sales organization targets technical leaders and business leaders who are seeking to leverage software to drive superior customer engagement and competitive differentiation.

As we educate these leaders on the benefits of developing applications incorporating our products to differentiate their business, they often consult with their developers regarding implementation.

We believe that developers are often advocates for our products as a result of our developer-focused approach.

Our sales organization includes sales development, inside sales, field sales and sales engineering personnel.

When potential customers do not have the available developer resources to build their own applications, we refer them to either our technology partners who embed our products in the solutions that they sell to other businesses (such as contact centers and sales force and marketing automation), or our consulting partners who provide consulting and development services for organizations that have limited software development expertise to build our platform into their software applications.

Our sales organization includes sales development, inside sales, field sales, specialty sales and sales engineering personnel.

When potential customers do not have the available developer resources to build their own applications, we refer them to either our technology partners who embed our products in the solutions that they sell to other businesses (such as contact centers and sales force and marketing automation), or our professional services team or outside consulting partners who provide consulting and development services for organizations that have limited software development expertise to build our platform into their software applications.

As of December 31, 2021, we had 3,661 employees in our sales and marketing organization.

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Our highest tier plan, intended for our largest customers, includes a dedicated support engineer, duty manager coverage and quarterly status reviews.

Our support model is global, with 24x7 coverage and support offices located in the U.S., Ireland, Colombia, India, and Singapore.

Our support model is global, with 24x7 coverage and support offices located throughout the world, with our larger offices located in the U.S., Ireland, Colombia, India, and Singapore.

We currently derive an insignificant amount of revenue from fees for customer support.

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Our goal is to help our customers achieve business results faster.

Offerings include services for implementing contact center solutions, email implementation and deliverability, and configuration and integration of communications capabilities.

Offerings include services for implementing contact center solutions, email implementation and deliverability, customer data platform design, and configuration and integration of communications capabilities.

The market for cloud communication platforms is rapidly evolving and increasingly competitive.

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Because U.S., federal, state and foreign laws and regulations have continued to develop and evolve rapidly, it is possible that we or our products or our platform may not be, or may not have been, compliant with each such applicable law or regulation.

For example, the General Data Protection Regulation ("GDPR"), which took full effect on May 25, 2018, enhanced data protection obligations for businesses and requires service providers (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measures and keep records of personal data processing activities.

Noncompliance with the GDPR can trigger fines equal to the greater of €20 million or 4% of global annual revenue.

For example, the General Data Protection Regulation (“GDPR”) and the United Kingdom’s GDPR (“UK GDPR”) impose strict requirements for processing the personal information of individuals located, respectively within the European Economic Area (“EEA”) and the United Kingdom (“UK”).

Noncompliance with the GDPR and UK GDPR can result in, for example, bans on data processing and fines of up to the greater of 20 million euros (£17.5 million for the UK GDPR) or 4% of annual global revenue.

Further, individuals may initiate litigation related to our processing of their personal information.

Given the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR has required significant time and resources, including a review of our technology and systems currently in use against the requirements of GDPR.

We have taken steps to comply with GDPR, including integrating GDPR-compliant privacy protections into our products and platform, commercial agreements and record-keeping practices to help us and our customers meet the compliance obligations of GDPR.

However, additional EU laws and regulations (and member states' implementations thereof) further govern the protection of consumers and of electronic communications.

If our efforts to comply with GDPR or other applicable U.S., federal, state or foreign laws and regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability to conduct business in the EU or other regions could be significantly impaired.

In addition, the Telephone Consumer Protection Act of 1991 ("TCPA"), restricts telemarketing and the use of automatic text messages without proper consent.

Our actual or perceived failure to comply with laws, regulations or contractual commitments regarding privacy, data protection and data security could lead to costly legal action, adverse publicity, significant liability and decreased demand for our services, which could adversely affect our business, results of operations and financial condition.

In addition, laws such as the Telephone Consumer Protection Act of 1991 (“TCPA”), restrict telemarketing and the use of automatic SMS text messages without explicit customer consent.

The scope and interpretation of the laws that are or may be applicable to the delivery of text messages are continuously evolving and developing.

If we do not comply with these laws, or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply with these laws by obtaining proper consent, we could face direct liability.

If we do not comply with these laws or regulations, or if our customers fail to do so, we could face direct liability.

Compliance with these laws and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods, and we do not currently anticipate material capital expenditures for environmental control facilities, of which we currently have none.

For additional information about government regulation applicable to our business, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

For additional information

about government regulation applicable to our business, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

Corporate Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business