What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-02 · 215 added, 99 removed, 530 unchanged (37% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

As of March 31, As of December 31,

As of June 30, As of December 31,

(In thousands)

35 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

(In thousands, except share and per share amounts)

8 unchanged sentences

Income (loss) from operations 36,989 ( 19,037 ) 60,071 ( 62,541 )

Other income (expenses), net:

Other (expenses) income, net:

Share of losses from equity method investment ( 25,222 ) ( 23,940 ) ( 44,693 ) ( 53,515 )

Other income, net 21,825 16,734 44,798 44,652

Total other income (expenses), net 3,502 ( 1,657 )

Total other (expenses) income, net

( 3,397 ) ( 7,206 ) 105 ( 8,863 )

Income (loss) before provision for income taxes 33,592 ( 26,243 ) 60,176 ( 71,404 )

1 unchanged sentence

Net income (loss) attributable to common stockholders $ 22,423 $ ( 31,858 ) $ 42,440 $ ( 87,207 )

Net income (loss) per share attributable to common stockholders:

Net income (loss) per share attributable to common

stockholders:

Basic $ 0.15 $ ( 0.19 ) $ 0.28 $ ( 0.50 )

$ 0.12 $ ( 0.31 )

Diluted $ 0.14 $ ( 0.19 ) $ 0.26 $ ( 0.50 )

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

Basic 153,228,766 170,222,104 153,273,594 175,613,672

161,794,287 181,017,726

Diluted 159,691,758 170,222,104 160,729,638 175,613,672

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

(In thousands)

1 unchanged sentence

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities 5,058 ( 5,193 )

Net change in market value of effective foreign currency forward exchange contracts 8,386 ( 4,505 )

Share of other comprehensive (loss) income from equity method investment ( 1,785 ) 4,138

Unrealized (loss) gain on marketable securities

( 1,116 ) ( 1,821 ) 3,942 ( 7,014 )

Net change in market value of effective foreign currency

forward exchange contracts

15,821 ( 823 ) 24,207 ( 5,328 )

Share of other comprehensive (loss) income from equity

method investment

( 347 ) ( 3,086 ) ( 2,132 ) 1,052

Total other comprehensive income (loss) 14,358 ( 5,730 ) 26,017 ( 11,290 )

Comprehensive income (loss) attributable to common stockholders $ 31,676 $ ( 60,909 )

Comprehensive income (loss) attributable to common

$ 36,781 $ ( 37,588 ) $ 68,457 $ ( 98,497 )

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2025

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income

Accumulated Deficit Total Stockholders' Equity

Shares Amount

(In thousands, except share amounts)

Balance as of March 31, 2025 153,254,342 $ 153 $ 15,625,545 $ 10,358 $ ( 7,631,765 ) $ 8,004,291

Net income — — — — 22,423 22,423

Exercises of vested stock options 225,709 — 2,384 — — 2,384

Vesting of restricted stock units 1,631,186 2 ( 2 ) — — —

Value of equity awards withheld for tax liability ( 661 ) — ( 85 ) — — ( 85 )

Shares issued under ESPP 253,298 — 20,757 — — 20,757

Shares of Class A common stock issued and donated to charity 22,102 — 2,237 — — 2,237

Unrealized loss on marketable securities

— — — ( 1,116 ) — ( 1,116 )

Repurchases of shares of Class A common stock including related costs ( 1,809,818 ) ( 1 ) — — ( 176,747 ) ( 176,748 )

Net change in market value of effective foreign currency forward exchange contracts — — — 15,821 — 15,821

Share of other comprehensive loss from equity method investment — — — ( 347 ) — ( 347 )

Stock-based compensation — — 154,305 — — 154,305

Balance as of June 30, 2025

153,576,158 $ 154 $ 15,805,141 $ 24,716 $ ( 7,786,089 ) $ 8,043,922

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2025

Class A Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income

8 unchanged sentences

Value of equity awards withheld for tax liability ( 1,084 ) — ( 138 ) — — ( 138 )

Shares issued under ESPP 253,298 — 20,757 — — 20,757

Shares of Class A common stock issued and donated to charity 44,204 — 5,013 — — 5,013

5 unchanged sentences

Stock-based compensation — — 298,239 — — 298,239

Balance as of June 30, 2025

153,576,158 $ 154 $ 15,805,141 $ 24,716 $ ( 7,786,089 ) $ 8,043,922

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2024

Class A Additional Paid-In Capital Accumulated Other Comprehensive Loss

Accumulated Deficit Total Stockholders' Equity

Shares Amount

(In thousands, except share amounts)

Balance as of March 31, 2024

177,471,887 $ 177 $ 14,960,837 $ ( 4,941 ) $ ( 5,508,343 ) $ 9,447,730

Net loss — — — — ( 31,858 ) ( 31,858 )

Exercises of vested stock options 27,598 — 678 — — 678

Vesting of restricted stock units 1,464,534 1 ( 1 ) — — —

Value of equity awards withheld for tax liability ( 780 ) — ( 45 ) — — ( 45 )

Shares issued under ESPP 394,479 — 20,601 — — 20,601

Shares of Class A common stock issued and donated to charity 22,102 — 1,315 — — 1,315

Unrealized loss on marketable securities

— — — ( 1,821 ) — ( 1,821 )

Repurchases of shares of Class A common stock including related costs ( 15,229,731 ) ( 14 ) — — ( 906,605 ) ( 906,619 )

Net change in market value of effective foreign currency forward exchange contracts — — — ( 823 ) — ( 823 )

Share of other comprehensive loss from equity method investment

— — — ( 3,086 ) — ( 3,086 )

Stock-based compensation — — 153,401 — — 153,401

Balance as of June 30, 2024

164,150,089 $ 164 $ 15,136,786 $ ( 10,671 ) $ ( 6,446,806 ) $ 8,679,473

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2024

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss)

8 unchanged sentences

Value of equity awards withheld for tax liability ( 27,537 ) — ( 1,963 ) — — ( 1,963 )

Shares issued under ESPP 394,479 — 20,601 — — 20,601

Shares of Class A common stock issued and donated to charity 44,204 — 2,610 — — 2,610

6 unchanged sentences

Stock-based compensation — — 314,462 — — 314,462

Balance as of March 31, 2024

177,471,887 $ 177 $ 14,960,837 $ ( 4,941 ) $ ( 5,508,343 ) $ 9,447,730

Stock-based compensation - restructuring — — 2,448 — — 2,448

Balance as of June 30, 2024 164,150,089 $ 164 $ 15,136,786 $ ( 10,671 ) $ ( 6,446,806 ) $ 8,679,473

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

25 unchanged sentences

Purchases of long-lived and intangible assets ( 2,167 ) ( 2,756 )

Net cash (used in) provided by investing activities

Net cash provided by investing activities

382,879 974,384

3 unchanged sentences

Repurchases of shares of Class A common stock and related costs ( 323,249 ) ( 1,273,699 )

Proceeds from exercises of stock options 2,766 421

Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP 25,907 21,700

Net cash used in financing activities ( 301,708 ) ( 1,261,022 )

( 125,794 ) ( 363,229 )

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 549,297 116,828

5 unchanged sentences

Cash and cash equivalents $ 969,229 $ 755,065

Restricted cash in other current assets — 7,554

Restricted cash in other long-term assets 11,505 10,140

13 unchanged sentences

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 the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2025 (“Annual Report”).

Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2025 (“Annual Report”).

The condensed consolidated balance sheet as of December 31, 2024, 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 opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss), stockholders’ equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2025 or any future period.

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 income (loss), stockholders’ equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2025 or any future period.

(b) Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries.

The unaudited condensed consolidated financial statements include the Company and its wholly owned subsidiaries.

All intercompany balances and transactions have been eliminated.

11 unchanged sentences

(d) Remaining Performance Obligations

Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $ 169.4 million as of March 31, 2025, of which 61 % is expected to be recognized over the next 12 months and 92 % is expected to be recognized over the next 24 months.

Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $ 158.8 million as of June 30, 2025, of which 63 % is expected to be recognized over the next 12 months and 93 % is expected to be recognized over the next 24 months.

(e) Deferred Revenue and Customer Deposits

As of March 31, 2025, and December 31, 2024, the Company recorded $ 154.0 million and $ 155.7 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits and other long-term liabilities in the accompanying condensed consolidated balance sheets.

During the three months ended March 31, 2025 and 2024, the Company recognized $ 70.1 million and $ 65.4 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

As of June 30, 2025, and December 31, 2024, the Company recorded $ 148.0 million and $ 155.7 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits and other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

During the three months ended June 30, 2025 and 2024, the Company recognized $ 35.0 million and $ 32.1 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

During the six months ended June 30, 2025 and 2024, the Company recognized $ 105.1 million and $ 97.4 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

(f) Concentration of Credit Risk

7 unchanged sentences

Actual credit losses may differ from the Company’s estimates.

As of March 31, 2025, and December 31, 2024, the allowance for doubtful accounts was $ 26.6 million and $ 27.5 million, respectively, and is recorded in accounts receivable, net, in the accompanying condensed consolidated balance sheets.

In the three months ended March 31, 2025 and 2024, no customer organization accounted for more than 10% of the Company’s total revenue.

As of March 31, 2025, and December 31, 2024, no customer organization represented more than 10% of the Company’s gross accounts receivable.

As of June 30, 2025, and December 31, 2024, the allowance for doubtful accounts was $ 22.3 million and $ 27.5 million, respectively, and is recorded in accounts receivable, net, in the accompanying unaudited condensed consolidated balance sheets.

In the three and six months ended June 30, 2025 and 2024, no customer organization accounted for more than 10% of the Company’s total revenue.

As of June 30, 2025, and December 31, 2024, no customer organization represented more than 10% of the Company’s gross accounts receivable.

(g) Recently Issued Accounting Guidance, Not yet Adopted

1 unchanged sentence

Improvements to Income Tax Disclosures, ” which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and may be applied on a prospective basis.

ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and may be applied on a prospective basis.

Early adoption is permitted.

2 unchanged sentences

In November 2024, the FASB issued ASU 2024-03, “ Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses,” which requires the disaggregation of certain expenses in the notes of the financial statements to provide enhanced transparency into the expense captions presented on the face of the statements of operations.

Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the statements of operations.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively.

6 unchanged sentences

12 Months Fair Value Hierarchy as of

March 31, 2025 Aggregate

June 30, 2025 Aggregate

Level 1 Level 2 Level 3

10 unchanged sentences

Treasury securities 285,864 1,066 — — 286,930 — — 286,930

government securities

2,909 30 — — 2,939 — — 2,939

Corporate debt securities and commercial paper 1,275,992 8,253 ( 180 ) ( 14 ) — 1,284,051 — 1,284,051

31 unchanged sentences

Because the Company views its debt securities as available to support current operations, it has classified all available for sale securities as short-term.

Interest earned on debt securities was $ 18.9 million and $ 27.2 million in the three months ended March 31, 2025 and 2024, respectively.

The interest is recorded as other income, net, in the accompanying condensed consolidated statements of operations.

Interest earned on debt securities was $ 17.9 million and $ 36.8 million in the three and six months ended June 30, 2025, respectively, and $ 23.5 million and $ 50.6 million in the three and six months ended June 30, 2024, respectively.

The interest is recorded as other (expenses) income, net, in the accompanying unaudited condensed consolidated statements of operations.

The following table summarizes the contractual maturities of debt securities:

As of March 31, As of December 31,

As of June 30, As of December 31,

Cost Aggregate

7 unchanged sentences

Strategic Investments

As of March 31, 2025 and December 31, 2024, the Company held strategic investments with a carrying value of $ 22.2 million and $ 23.5 million, respectively, recorded as other long-term assets in the accompanying condensed consolidated balance sheets.

There were no significant impairments or adjustments recorded in the three months ended March 31, 2025 and 2024, related to these securities.

As of June 30, 2025 and December 31, 2024, the Company held strategic investments with a carrying value of $ 22.2 million and $ 23.5 million, respectively, recorded as other long-term assets in the accompanying unaudited condensed consolidated balance sheets.

There were no significant impairments or adjustments recorded in the three and six months ended June 30, 2025 and 2024 related to these securities.

Financial Liabilities

The Company’s financial liabilities that are measured at fair value on a recurring basis consist of foreign currency derivative liabilities and are classified as Level 2 financial instruments in the fair value hierarchy.

As of March 31, 2025 and December 31, 2024, the aggregate fair value of these liabilities and the associated unrealized losses were not significant.

As of June 30, 2025 and December 31, 2024, the aggregate fair value of these liabilities and the associated unrealized losses were not significant.

The Company’s financial liabilities that are not measured at fair value on a recurring basis are its Senior Notes due 2029 (“2029 Notes”) and its Senior Notes due 2031 (“2031 Notes”).

As of March 31, 2025, the fair values of the 2029 Notes and 2031 Notes were $ 465.5 million and $ 451.4 million, respectively.

As of June 30, 2025, the fair values of the 2029 Notes and 2031 Notes were $ 481.7 million and $ 473.7 million, respectively.

As of December 31, 2024, the fair values of the 2029 Notes and 2031 Notes were $ 464.9 million and $ 453.9 million, respectively.

1 unchanged sentence

Property and equipment consist of the following:

As of March 31, As of December 31,

As of June 30, As of December 31,

(In thousands)

11 unchanged sentences

____________________________________

( 1 ) Data center equipment includes $ 28.3 million and $ 33.5 million in assets held under finance leases as of March 31, 2025, and December 31, 2024, respectively.

Accumulated depreciation and amortization includes $ 25.5 million and $ 28.6 million of accumulated depreciation for assets held under finance leases as of March 31, 2025, and December 31, 2024, respectively.

Depreciation and amortization expense was $ 21.9 million and $ 23.8 million in the three months ended March 31, 2025 and 2024, respectively.

The Company capitalized $ 16.2 million and $ 16.1 million in internal‑use software development costs in the three months ended March 31, 2025 and 2024, respectively .

( 1 ) Data center equipment includes $ 21.4 million and $ 33.5 million in assets held under finance leases as of June 30, 2025, and December 31, 2024, respectively.

Accumulated depreciation and amortization includes $ 20.4 million and $ 28.6 million of accumulated depreciation for assets held under finance leases as of June 30, 2025, and December 31, 2024, respectively.

Depreciation and amortization expense was $ 22.3 million and $ 23.3 million in the three months ended June 30, 2025 and 2024, respectively, and $ 44.1 million and $ 47.2 million in the six months ended June 30, 2025 and 2024, respectively.

The Company capitalized $ 17.6 million and $ 20.4 million in internal‑use software development costs in the three months ended June 30, 2025 and 2024, respectively, and $ 33.9 million and $ 36.5 million in the six months ended June 30, 2025 and 2024, respectively.

Segment Reporting

As of March 31, 2025, the Company had two operating and reportable segments:

As of June 30, 2025, the Company had two operating and reportable segments:

Twilio Communications (“Communications”) and Twilio Segment (“Segment”).

7 unchanged sentences

The CODM uses this measure of segment profitability to allocate resources and assess performance of each segment by comparing each segment’s actual results to the comparable results in prior periods and to any internally or externally set expectations.

Presented below is the discrete financial information by reportable segment for the three months ended March 31, 2025 and 2024, that reflects management’s current view of the business and that is regularly provided to the CODM.

Presented below is the discrete financial information by reportable segment for the three and six months ended June 30, 2025 and 2024, that reflects management’s current view of the business and that is regularly provided to the CODM.

Asset information is not reviewed by the CODM on a segment basis.

4 unchanged sentences

In addition to corporate costs, cost of revenue and operating expenses not allocated to operating segments include stock-based compensation, amortization of acquired intangibles, payroll taxes related to stock-based compensation, charitable contributions and restructuring costs.

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Communications

3 unchanged sentences

Operating expenses attributable to segments 286,196 50,084 336,280

Segment non-GAAP income from operations

$ 280,613 $ 6,009 $ 286,622

Reconciliation of total segment non-GAAP income from operations to income from operations:

Total segment non-GAAP income from operations $ 286,622

Corporate costs not allocated to segments ( 66,079 )

Stock-based compensation ( 149,251 )

Amortization of acquired intangibles ( 27,005 )

Payroll taxes related to stock-based compensation ( 4,921 )

Charitable contributions ( 2,237 )

Restructuring costs ( 140 )

Income from operations 36,989

Other expenses, net

Income before provision for income taxes

Three Months Ended June 30, 2024

Communications

(In thousands)

Revenue $ 1,007,302 $ 75,200 $ 1,082,502

Cost of revenue attributable to segments 485,155 20,034 505,189

Operating expenses attributable to segments 272,217 70,981 343,198

Segment non-GAAP income (loss) from operations $ 249,930 $ ( 15,815 ) $ 234,115

Reconciliation of total segment non-GAAP income from operations to loss from operations:

Total segment non-GAAP income from operations $ 234,115

Corporate costs not allocated to segments ( 58,796 )

Stock-based compensation ( 147,657 )

Amortization of acquired intangibles ( 28,184 )

Payroll taxes related to stock-based compensation ( 3,510 )

Charitable contributions ( 15,315 )

Restructuring costs 310

Loss from operations ( 19,037 )

Other expenses, net

Loss before provision for income taxes

Six Months Ended June 30, 2025

Communications

(In thousands)

Revenue $ 2,249,762 $ 151,126 $ 2,400,888

Cost of revenue attributable to segments 1,136,925 39,059 1,175,984

Operating expenses attributable to segments 554,760 107,576 662,336

Segment non-GAAP income from operations

$ 558,077 $ 4,491 $ 562,568

Reconciliation of total segment non-GAAP income from operations to income from operations:

9 unchanged sentences

Income before provision for income taxes

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Communications

4 unchanged sentences

Segment non-GAAP income (loss) from operations $ 498,940 $ ( 36,809 ) $ 462,131

Reconciliation of total segment non-GAAP income from operations to loss from operations:

Reconciliation of total segment non-GAAP income from operations to income from operations:

Total segment non-GAAP income from operations $ 462,131

8 unchanged sentences

Loss before provision for income taxes

Depreciation and amortization expenses, except for amortization of acquired intangibles, that are included in non-GAAP income from operations for the Communications reportable segment were $ 16.7 million and $ 19.3 million in the three months ended March 31, 2025 and 2024, respectively.

Amortization of deferred commissions included in non-GAAP income from operations for the Communications reportable segment was $ 15.2 million in each of the three months ended March 31, 2025 and 2024, respectively.

Depreciation and amortization expenses, except for amortization of acquired intangibles, that are included in non-GAAP loss from operations for the Segment reportable segment were $ 4.9 million and $ 4.1 million in the three months ended March 31, 2025 and 2024, respectively.

Amortization of deferred commissions included in non-GAAP loss from operations for the Segment reportable segment was $ 4.0 million and $ 3.6 million in the three months ended March 31, 2025 and 2024, respectively.

Depreciation and amortization expenses, except for amortization of acquired intangibles, that are included in non-GAAP income from operations for the Communications reportable segment were $ 16.7 million and $ 18.5 million in the three months ended June 30, 2025 and 2024, respectively, and $ 33.4 million and $ 37.8 million in the six months ended June 30, 2025 and 2024, respectively.

Amortization of deferred commissions included in non-GAAP income from operations for the Communications reportable segment was $ 15.1 million in each of the three months ended June 30, 2025 and 2024, respectively, and $ 30.4 million and $ 30.3 million in the six months ended June 30, 2025 and 2024, respectively.

Depreciation and amortization expenses, except for amortization of acquired intangibles, that are included in non-GAAP income (loss) from operations for the Segment reportable segment were $ 5.2 million and $ 4.4 million in the three months ended June 30, 2025 and 2024, respectively, and $ 10.1 million and $ 8.5 million in the six months ended June 30, 2025 and 2024, respectively.

Amortization of deferred commissions included in non-GAAP income (loss) from operations for the Segment reportable segment was $ 4.0 million and $ 3.8 million in the three months ended June 30, 2025 and 2024, respectively, and $ 8.0 million and $ 7.5 million in the six months ended June 30, 2025 and 2024, respectively.

Derivatives and Hedging

As of March 31, 2025, the Company had outstanding foreign currency forward contracts designated as cash flow hedges with a total sell notional value of $ 218.7 million.

As of June 30, 2025, the Company had outstanding foreign currency forward contracts designated as cash flow hedges with a total sell notional value of $ 308.8 million.

The notional value represents the amount that will be sold upon maturity of the forward contract.

As of March 31, 2025, these contracts had maturities of up to seventeen months.

As of June 30, 2025, these contracts had maturities of up to seventeen months.

Gains and losses associated with these foreign currency forward contracts were not significant.

The Company is subject to master netting agreements with certain counterparties of the foreign exchange contracts, under which it is permitted to net settle transactions of the same currency with a single net amount payable by one party to the other.

It is the Company’s policy to present the derivatives at gross in its condensed consolidated balance sheets.

It is the Company’s policy to present the derivatives at gross in its unaudited condensed consolidated balance sheets.

The Company’s foreign currency forward contracts are not subject to any credit contingent features or collateral requirements.

The Company manages its exposure to counterparty risk by entering into contracts with a diversified group of major financial institutions and by actively monitoring its outstanding positions.

As of March 31, 2025, the Company did not have any offsetting arrangements.

As of June 30, 2025, the Company did not have any offsetting arrangements.

Goodwill and Intangible Assets

As of March 31, 2025 and December 31, 2024, the balance of the Company’s goodwill was $ 5.2 billion, of which $ 4.9 billion related to the Communications reportable segment and $ 306.1 million related to the Segment reportable segment.

There was no goodwill activity during the three months ended March 31, 2025.

As of June 30, 2025, and December 31, 2024, the balance of the Company’s goodwill was $ 5.2 billion, of which $ 4.9 billion related to the Communications reportable segment and $ 306.1 million related to the Segment reportable segment.

There was no goodwill activity during the six months ended June 30, 2025.

Intangible assets

Intangible assets consist of the following:

As of March 31, 2025

As of June 30, 2025

Cost Accumulated Amortization Net

25 unchanged sentences

Total $ 821,562 $ ( 583,059 ) $ 238,503

Amortization expense was $ 27.2 million and $ 29.0 million for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense was $ 27.1 million and $ 28.2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 54.2 million and $ 57.2 million for the six months ended June 30, 2025 and 2024, respectively.

Total estimated future amortization expense is as follows:

As of March 31, 2025

As of June 30, 2025

Year Ended December 31, (In thousands)

2025 (remaining nine months) $ 80,674

2025 (remaining six months) $ 53,619

Thereafter 23,922

2 unchanged sentences

Prepaid expenses and other current assets consist of the following:

As of March 31, As of As of December 31,

As of June 30, As of December 31,

(In thousands)

4 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

As of March 31, As of December 31,

As of June 30, As of December 31,

(In thousands)

Accrued payroll and related $ 56,733 $ 76,708

Accrued payroll and related liabilities $ 72,170 $ 76,708

Company-wide bonus program liability 54,357 109,776

7 unchanged sentences

Long-term debt, net, consists of the following:

As of March 31, As of December 31,

As of June 30, As of December 31,

(In thousands)

10 unchanged sentences

Total long-term debt, net $ 991,429 $ 990,587

As of March 31, 2025, the Company was in compliance with all of its covenants under the related indentures.

As of June 30, 2025, the Company was in compliance with all of its covenants under the related indentures.

Revenue by Geographic Area

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Revenue by geographic area:

9 unchanged sentences

The Company leases its facilities under various non-cancelable operating lease agreements.

In the three months ended March 31, 2025, the Company did not enter into any significant new lease agreements.

In the three and six months ended June 30, 2025, the Company did not enter into any significant new lease agreements.

The Company has non-cancelable contractual commitments with its cloud infrastructure provider, network service providers and other vendors.

In the three months ended March 31, 2025, the Company entered into several new agreements with terms up to three years for a total purchase commitment of $ 18.3 million .

In the three and six months ended June 30, 2025, the Company entered into several new agreements with terms up to three years for a total purchase commitment of $ 21.7 million and $ 40.0 million, respectively.

(b) Legal Matters

5 unchanged sentences

Significant judgment is required to determine the probability of a loss and to estimate the amount of any probable loss.

Legal fees and other costs related to litigation and other legal proceedings are expensed as incurred and are included in general and administrative expenses in the accompanying condensed consolidated statements of operations.

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The Company has also signed indemnification agreements with all of its board members and executive officers and certain employees that may require the Company to indemnify them for certain events in connection with their services to the Company or its direct or indirect subsidiaries.

As of March 31, 2025, and December 31, 2024, no amounts were accrued related to any outstanding indemnification agreements.

As of June 30, 2025, and December 31, 2024, no amounts were accrued related to any outstanding indemnification agreements.

(d) Other Taxes

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In the event any of these jurisdictions disagree with management’s assumptions and analysis, the assessment of the Company’s tax exposure could differ materially from management’s current estimates.

As of March 31, 2025, the liabilities accrued for non-income-based taxes were $ 19.4 million for domestic jurisdictions and $ 22.8 million for jurisdictions outside of the United States.

As of June 30, 2025, the liabilities accrued for non-income-based taxes were $ 20.3 million for domestic jurisdictions and $ 23.2 million for jurisdictions outside of the United States.

As of December 31, 2024, these liabilities were $ 19.3 million and $ 22.0 million, respectively.

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Preferred Stock

As of March 31, 2025, and December 31, 2024, the Company had authorized 100,000,000 shares of preferred stock, par value $ 0.001 , of which no shares were issued and outstanding in either period.

As of March 31, 2025 and December 31, 2024, the Company had authorized 1,000,000,000 shares of Class A common stock and 3,170,181 shares of Class B common stock, each with a par value of $ 0.001 per share.

As of March 31, 2025 and December 31, 2024, 153,254,342 and 152,610,697 shares of Class A common stock, respectively, and no shares of Class B common stock were issued and outstanding.

As of June 30, 2025, and December 31, 2024, the Company had authorized 100,000,000 shares of preferred stock, par value $ 0.001 per share, of which no shares were issued and outstanding in either period.

As of June 30, 2025 and December 31, 2024, the Company had authorized 1,000,000,000 shares of Class A common stock, par value $ 0.001 per share.

As of June 30, 2025 and December 31, 2024, the Company had authorized 0 and 3,170,181 shares of Class B common stock, par value $ 0.001 per share, respectively.

As of June 30, 2025 and December 31, 2024, 153,576,158 and 152,610,697 shares of Class A common stock were issued and outstanding, respectively, and no shares of Class B common stock were issued and outstanding.

The Company had reserved shares of common stock for issuance as follows:

As of March 31, As of December 31,

As of June 30, As of December 31,

Stock options issued and outstanding 964,952 1,322,176

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The Company’s previous share repurchase authorizations expired on December 31, 2024.

In the three months ended March 31, 2025 and 2024, the Company repurchased 1.2 million and 6.1 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 130.2 million and $ 384.3 million, respectively.

As of March 31, 2025, approximately $ 1.9 billion of the amount originally authorized for share repurchases in January 2025 remained available for future repurchases.

In the three months ended June 30, 2025 and 2024, the Company repurchased 1.8 million and 15.2 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 176.7 million and $ 898.6 million, respectively.

In the six months ended June 30, 2025 and 2024, the Company repurchased 3.0 million and 21.4 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 306.9 million and $ 1.3 billion, respectively.

As of June 30, 2025, approximately $ 1.7 billion of the amount originally authorized for share repurchases in January 2025 remained available for future repurchases.

Stock-Based Compensation

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The fair value of the portion of the PSUs with an operational performance target equals the closing price of the Company’s Class A common stock on the date of grant.

For this portion, the expense is recognized on a straight-line basis and only if it is probable that the performance target will be achieved during the performance period.

The probability of achievement is assessed each reporting period and

cumulative adjustments are recorded in the period in which the probability assessment changes.

For this portion, the expense is recognized on a straight-line basis when it is probable that the performance target will be achieved during the performance period.

The probability of achievement is assessed each reporting period and cumulative adjustments are recorded in periods in which the probability assessment changes.

The fair value of the portion of the PSUs with market conditions was determined using a Monte-Carlo simulation model, and the expense is recognized on a straight-line basis over the performance achievement period.

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The ESPP provides for separate six-month offering periods beginning in May and November of each year.

As of March 31, 2025, total unrecognized compensation cost related to unvested restricted stock units (“RSUs”) was $ 1.1 billion which will be amortized over a weighted-average period of 2.4 years.

As of March 31, 2025, total unrecognized compensation cost related to unvested stock options and the ESPP was not significant.

As of June 30, 2025, total unrecognized compensation cost related to unvested restricted stock units (“RSUs”) was $ 1.3 billion, which will be amortized over a weighted-average period of 2.4 years.

As of June 30, 2025, total unrecognized compensation cost related to unvested stock options and the ESPP was not significant.

Stock-Based Compensation Expense

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(In thousands)

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Net Income (Loss) Per Share Attributable to Common Stockholders

The Company computes net income (loss) per share in accordance with ASC 260 “Earnings per Share” .

Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income (loss) per share gives effect to all dilutive potential common shares outstanding during the period, such as stock options, RSUs, including PSUs, and shares partially paid for under ESPP, using the treasury stock method;

PSUs follow the contingently issuable shares guidance.

The Company computes net income (loss) per share in accordance with ASC 260 “Earnings per Share.” Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income (loss) per share gives effect to all dilutive potential common shares outstanding during the period, such as stock options, RSUs, and shares partially paid for under ESPP, using the treasury stock method as well as PSUs using the contingently issuable shares guidance.

Diluted net income (loss) per share excludes all dilutive potential common shares if their effect is anti-dilutive.

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Three Months Ended

Net income (loss) attributable to common stockholders (in thousands) $ 20,017 $ ( 55,349 )

June 30, Six Months Ended

2025 2024 2025 2024

Net income (loss) attributable to common stockholders

(in thousands)

$ 22,423 $ ( 31,858 ) $ 42,440 $ ( 87,207 )

Weighted-average shares outstanding, basic 153,228,766 170,222,104 153,273,594 175,613,672

Dilutive effect of outstanding stock options, RSUs and stock committed under ESPP

Dilutive effect of outstanding stock options, RSUs, PSUs and

stock committed under ESPP

6,462,992 — 7,456,044 —

Weighted-average shares outstanding, diluted

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The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive:

As of March 31,

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Stock options issued and outstanding 414,972 1,529,641 145,350 1,529,641

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The primary difference between the Company’s effective tax rate and the federal statutory rate is the full valuation allowance the Company has established on its federal, state and certain foreign net operating losses and credits.

The provision for income taxes recorded in the three months ended March 31, 2025 and 2024 consist primarily of federal, state and foreign income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business.

The provision for income taxes recorded in the three months ended March 31, 2024 also consists of income tax expense from a foreign audit settlement.

The provision for income taxes recorded in the three and six months ended June 30, 2025 and 2024 consist primarily of federal, state and foreign income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business.

The provision for income taxes recorded in the three and six months ended June 30, 2024 also includes income tax expense from a foreign audit settlement.

The Company is subject to taxation in the U.S.

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federal and state jurisdictions, the statute of limitations is open for all tax years.

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act.

Included in this legislation are provisions that restore the immediate expensing of certain domestic research and development expenses, reinstate immediate expensing of certain capital expenditures, and make other changes to the U.S.

taxation of profits derived from foreign operations.

The Company is currently assessing the impact of the legislation on its future consolidated financial statements.

Related Party Transactions

In May 2022, the Company and Syniverse Corporation (“Syniverse”), an equity method investee, entered into a wholesale agreement pursuant to which Syniverse would process, route and deliver application-to-person messages originating and/or terminating between the Company’s customers and mobile network operators.

For the three months ended March 31, 2025 and 2024, the value of the transactions that occurred between the Company and Syniverse were $ 38.7 million and $ 34.0 million, respectively.

These transactions were recorded as cost of revenue in the accompanying condensed consolidated statements of operations.

For the three and six months ended June 30, 2025, the value of the transactions that occurred between the Company and Syniverse were $ 30.3 million and $ 69.0 million, respectively.

For the three and six months ended June 30, 2024, the value of the transactions that occurred between the Company and Syniverse were $ 35.2 million and $ 69.2 million, respectively.

These transactions were recorded as cost of revenue in the accompanying unaudited condensed consolidated statements of operations.

Special Note Regarding Forward-Looking Statements

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• the impact of global economic and political conditions and uncertainty and significant market volatility on our business, customers and partners;

• our future financial performance, including expectations regarding our revenue, revenue growth, cost of revenue, gross profit, gross margin and operating expenses, our ability to generate positive cash flow and ability to achieve and sustain profitability on GAAP and non-GAAP bases, the factors affecting our results of operations, the timing of future expenses, the end dates for certain types of expenses, and the assumptions underlying such expectations;

• our future financial performance, including expectations regarding our revenue, revenue growth, cost of revenue, gross profit, gross margin, operating expenses, and stock-based compensation, our ability to generate positive cash flow and our ability to achieve, improve and sustain profitability;

• our expectations regarding the factors affecting our results of operations, the timing of future expenses, and the assumptions underlying such expectations;

• the realignment of our business unit structure, including its expected costs and benefits and the related accounting determinations;

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• our ability to leverage artificial intelligence and machine learning, including to develop and commercialize products and features for our customers and deploy internal applications for our own operational efficiency;

• our ability to drive revenue growth, improve profitability and increase our market share, including by forming and expanding partnerships with independent software vendors and other partners, improving our self-service capabilities, cross-selling our products and expanding internationally;

• our ability to drive durable, profitable growth and increase our market share, including through product innovation, leveraging artificial intelligence, forming and enhancing relationships with independent software vendors and other partners, improving our self-service capabilities, cross-selling our products and expanding internationally;

• our ability to simplify and modernize our business processes and improve our overall operating efficiency;

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• our ability to maintain, protect and enhance our intellectual property;

• our ability to comply with modified or new industry standards, laws and regulations applying to our business;

• our ability to manage changes in network service provider fees that we pay in connection with the delivery of communications on our platform;

• the impact of, and our ability to comply with, modified or new industry standards, laws and regulations applying to our business, including legislative developments that may affect our tax obligations or tax expense;

• our expectations regarding changes in network service provider fees that we pay in connection with the delivery of communications on our platform, including A2P messaging fees, our ability to manage such fees and their impact on our financial results;

• investments and costs required to prevent, detect and remediate potential cybersecurity threats, incidents and breaches of ours or our customers’ systems or 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-Q

Item 1. Financial Statements