What changed in this filing

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Item 1. Financial Statements

2025-10-31 compared with 2025-08-08 · 131 added, 201 removed, 544 unchanged (38% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

As of June 30, As of December 31,

As of September 30, As of December 31,

(In thousands)

35 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

14 unchanged sentences

( 8,264 ) 1,243 ( 8,159 ) ( 7,620 )

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

Provision for income taxes ( 11,169 ) ( 5,615 ) ( 17,736 ) ( 15,803 )

Income (loss) before benefit from (provision for) income taxes

32,684 ( 3,651 ) 92,860 ( 75,055 )

Benefit from (provision for) income taxes

4,564 ( 6,075 ) ( 13,172 ) ( 21,878 )

Net income (loss) attributable to common stockholders $ 37,248 $ ( 9,726 ) $ 79,688 $ ( 96,933 )

8 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

1 unchanged sentence

Net income (loss) $ 37,248 $ ( 9,726 ) $ 79,688 $ ( 96,933 )

Other comprehensive income (loss):

Unrealized (loss) gain on marketable securities

Other comprehensive (loss) income:

Unrealized gain on marketable securities

1,999 29,317 5,941 22,303

2 unchanged sentences

( 5,634 ) 6,613 18,573 1,285

Share of other comprehensive (loss) income from equity

Share of other comprehensive income (loss) from equity

method investment

1,525 ( 864 ) ( 607 ) 188

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

Total other comprehensive (loss) income

( 2,110 ) 35,066 23,907 23,776

Comprehensive income (loss) attributable to common

2 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income

2 unchanged sentences

(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

Balance as of June 30, 2025

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

Net income — — — — 37,248 37,248

2 unchanged sentences

Value of equity awards withheld for tax liability ( 581 ) — ( 75 ) — — ( 75 )

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

Shares of Class A common stock issued and donated to charity 22,102 — 2,105 — — 2,105

Unrealized loss on marketable securities

Unrealized gain on marketable securities

— — — 1,999 — 1,999

1 unchanged sentence

Net change in market value of effective foreign currency forward exchange contracts — — — ( 5,634 ) — ( 5,634 )

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

Share of other comprehensive income from equity method investment

— — — 1,525 — 1,525

Stock-based compensation — — 163,621 — — 163,621

Balance as of June 30, 2025

Balance as of September 30, 2025

152,067,819 $ 152 $ 15,971,163 $ 22,606 $ ( 8,098,632 ) $ 7,895,289

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

16 unchanged sentences

Stock-based compensation — — 461,860 — — 461,860

Balance as of June 30, 2025

Balance as of September 30, 2025

152,067,819 $ 152 $ 15,971,163 $ 22,606 $ ( 8,098,632 ) $ 7,895,289

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2024

Class A Additional Paid-In Capital Accumulated Other Comprehensive Loss

Three Months Ended September 30, 2024

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

Accumulated Deficit Total Stockholders' Equity

1 unchanged sentence

(In thousands, except share amounts)

Balance as of March 31, 2024

Balance as of June 30, 2024

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

3 unchanged sentences

Value of equity awards withheld for tax liability ( 302 ) — ( 18 ) — — ( 18 )

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

Shares of Class A common stock issued and donated to charity 22,102 — 1,301 — — 1,301

Unrealized loss on marketable securities

Unrealized gain on marketable securities

— — — 29,317 — 29,317

4 unchanged sentences

Stock-based compensation — — 160,143 — — 160,143

Balance as of June 30, 2024

Balance as of September 30, 2024

155,386,309 $ 155 $ 15,299,179 $ 24,395 $ ( 7,094,862 ) $ 8,228,867

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income

Accumulated Deficit Total Stockholders' Equity

10 unchanged sentences

Shares returned from escrow ( 696 ) — ( 192 ) — — ( 192 )

Unrealized loss on marketable securities

Unrealized gain on marketable securities

— — — 22,303 — 22,303

3 unchanged sentences

Stock-based compensation — — 477,054 — — 477,054

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

Balance as of September 30, 2024

155,386,309 $ 155 $ 15,299,179 $ 24,395 $ ( 7,094,862 ) $ 8,228,867

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

Provision for doubtful accounts 6,361 18,123

Value of shares of Class A common stock issued and donated to charity 7,118 3,911

Share of losses from equity method investment 72,199 78,794

23 unchanged sentences

Net cash used in financing activities ( 649,660 ) ( 1,903,802 )

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

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

303,406 ( 54,268 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period 431,437 655,931

21 unchanged sentences

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.

The unaudited 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.

15 unchanged sentences

(d) Remaining Performance Obligations

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.

Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $ 168.7 million as of September 30, 2025, of which 64 % is expected to be recognized over the next 12 months and 95 % is expected to be recognized over the next 24 months.

(e) Deferred Revenue and Customer Deposits

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.

As of September 30, 2025, and December 31, 2024, the Company recorded $ 159.2 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 September 30, 2025 and 2024, the Company recognized $ 20.6 million and $ 16.3 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 nine months ended September 30, 2025 and 2024, the Company recognized $ 125.8 million and $ 113.7 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 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.

As of September 30, 2025, and December 31, 2024, the allowance for doubtful accounts was $ 21.5 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 nine months ended September 30, 2025 and 2024, no customer organization accounted for more than 10% of the Company’s total revenue.

As of September 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

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

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 reporting periods beginning after December 15, 2024, and may be applied on a prospective basis.

In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software,” which modernizes the accounting for internal-use software by replacing the previous stage-based model and aligning the capitalization process with current development practices, especially agile and iterative methods.

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach.

Early adoption is permitted.

The Company expects to adopt ASU 2023-09 in its consolidated financial statements for the year ended December 31, 2025.

The adoption will require certain additional disclosure in the notes to the Company’s consolidated financial statements.

The Company expects to adopt this ASU on its effective date.

The Company is in process of evaluating the impact of the adoption of this ASU on its consolidated financial statements.

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 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.

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 prospectively or retrospectively.

Early adoption is permitted.

The adoption will require certain additional disclosure in the notes to the Company’s consolidated financial statements.

The Company expects to adopt this ASU on its effective date.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “ Income Taxes (Topic 740):

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.

The Company expects to adopt this ASU on its effective date.

The Company is in process of evaluating the impact of this ASU on its consolidated financial statements.

Fair Value Measurements

3 unchanged sentences

12 Months Fair Value Hierarchy as of

June 30, 2025 Aggregate

September 30, 2025 Aggregate

Level 1 Level 2 Level 3

43 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 $ 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.

Interest earned on debt securities was $ 16.3 million and $ 53.2 million in the three and nine months ended September 30, 2025, respectively, and $ 20.1 million and $ 70.7 million in the three and nine months ended September 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 June 30, As of December 31,

As of September 30, As of December 31,

Cost Aggregate

7 unchanged sentences

Strategic Investments

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.

As of September 30, 2025 and December 31, 2024, the Company held strategic investments with a carrying value of $ 20.3 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 nine months ended September 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 June 30, 2025 and December 31, 2024, the aggregate fair value of these liabilities and the associated unrealized losses were not significant.

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

As of September 30, 2025, the fair values of the 2029 Notes and 2031 Notes were $ 477.3 million and $ 471.1 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 June 30, As of December 31,

As of September 30, As of December 31,

(In thousands)

11 unchanged sentences

____________________________________

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

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

Twilio Communications :

The Communications segment consists of a variety of application programming interfaces (“APIs”) and software solutions to optimize communications between Twilio customers and their end users.

The key products from which the segment derives its revenue are Messaging, Voice and Email.

Twilio Segment :

The Segment segment consists of software products that enable businesses to achieve more effective customer engagement by providing the tools necessary for customers to build direct, personalized relationships with their end users.

The key product from which the segment derives its revenue is Segment.

The Company’s Chief Executive Officer, who is also the Chief Operating Decision Maker (“CODM”), reviews the operating results by segment using non-GAAP income (loss) from operations as the measure of segment profitability.

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 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.

Revenue, costs of revenue and operating expenses are generally directly attributable to each segment.

Certain costs of revenue and operating expenses are allocated based on methodologies that best reflect the patterns of consumption of these costs.

Corporate costs are not allocated to operating segments.

Corporate costs consist of costs that support company-wide processes, are managed on the company-wide level, and include costs related to corporate governance and communication, global brand awareness, information security, and certain legal, human resources, finance and accounting expenses.

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 June 30, 2025

Communications

(In thousands)

Revenue $ 1,152,955 $ 75,470 $ 1,228,425

Cost of revenue attributable to segments 586,146 19,377 605,523

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:

Total segment non-GAAP income from operations $ 562,568

Corporate costs not allocated to segments ( 128,617 )

Stock-based compensation ( 286,771 )

Amortization of acquired intangibles ( 54,144 )

Payroll taxes related to stock-based compensation ( 16,121 )

Charitable contributions ( 5,013 )

Restructuring costs ( 11,831 )

Income from operations 60,071

Other income, net

Income before provision for income taxes

Six Months Ended June 30, 2024

Communications

(In thousands)

Revenue $ 1,979,308 $ 150,244 $ 2,129,552

Cost of revenue attributable to segments 949,455 36,825 986,280

Operating expenses attributable to segments 530,913 150,228 681,141

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

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

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

Corporate costs not allocated to segments ( 127,202 )

Stock-based compensation ( 303,815 )

Amortization of acquired intangibles ( 57,123 )

Payroll taxes related to stock-based compensation ( 10,286 )

Charitable contributions ( 16,610 )

Restructuring costs ( 9,636 )

Loss from operations

Other expenses, net

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 $ 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.

( 1 ) Data center equipment includes $ 1.4 million and $ 33.5 million in assets held under finance leases as of September 30, 2025, and December 31, 2024, respectively.

Accumulated depreciation and amortization includes $ 1.4 million and $ 28.6 million of accumulated depreciation for assets held under finance leases as of September 30, 2025, and December 31, 2024, respectively.

Depreciation and amortization expense was $ 21.1 million and $ 22.8 million in the three months ended September 30, 2025 and 2024, respectively, and $ 65.2 million and $ 70.0 million in the nine months ended September 30, 2025 and 2024, respectively.

The Company capitalized $ 19.3 million and $ 20.0 million in internal‑use software development costs in the three months ended September 30, 2025 and 2024, respectively, and $ 53.1 million and $ 56.5 million in the nine months ended September 30, 2025 and 2024, respectively.

Reorganization and Segment Reporting

As previously announced, on January 1, 2025, the Company realigned its organizational structure into a functional support model by dissolving its existing business unit components.

Despite the change in the organizational structure, until the end of the second quarter of 2025, the Company had two operating and reportable segments based on the manner in which the Company’s Chief Executive Officer, who is also its Chief Operating Decision Maker ("CODM"), reviewed financial information for purposes of assessing business performance and allocating resources.

In the third quarter of 2025, the presentation of the financial information reviewed by the CODM was modified to reflect the change in the organizational structure.

In conjunction with this change, the Company reevaluated its segment structure and concluded that as of September 30, 2025, it had one operating and reportable segment.

Effective September 30, 2025, the financial information of the Company regularly provided to the CODM was on a consolidated level and consolidated net income was its measure of profitability.

This measure of profitability is used by the CODM to allocate resources and assess performance of the Company by comparing its actual results to the comparable results in prior periods and to any internally or externally set expectations.

The consolidated financial information provided to the CODM, including significant expenses, is presented in a manner consistent with the information already disclosed in the accompanying unaudited condensed consolidated financial statements and the notes thereof.

Derivatives and Hedging

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.

As of September 30, 2025, the Company had outstanding foreign currency forward contracts designated as cash flow hedges with a total sell notional value of $ 340.7 million.

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

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

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

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

1 unchanged sentence

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.

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

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

Goodwill and Intangible Assets

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.

In connection with the change in the Company’s operating segment structure, as described in Note 5, the Company reevaluated its reporting unit structure and concluded that as of September 30, 2025, it had one reporting unit.

The Company performed goodwill impairment assessments for each reporting unit immediately before and immediately after the change and concluded that goodwill was not impaired.

As of September 30, 2025, and December 31, 2024, the balance of goodwill was $ 5.2 billion.

There was no goodwill activity during the nine months ended September 30, 2025.

Intangible assets

Intangible assets consist of the following:

As of June 30, 2025

As of September 30, 2025

Cost Accumulated Amortization Net

25 unchanged sentences

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

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.

Amortization expense was $ 26.9 million and $ 27.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 81.2 million and $ 84.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Total estimated future amortization expense is as follows:

As of June 30, 2025

As of September 30, 2025

Year Ended December 31, (In thousands)

2025 (remaining six months) $ 53,619

2025 (remaining three months) $ 26,712

Thereafter 23,922

2 unchanged sentences

Prepaid expenses and other current assets consist of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(In thousands)

4 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(In thousands)

9 unchanged sentences

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

As of June 30, As of December 31,

As of September 30, As of December 31,

(In thousands)

10 unchanged sentences

Total long-term debt, net $ 991,856 $ 990,587

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

As of September 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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

10 unchanged sentences

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

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

In the three and nine months ended September 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 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.

In the three and nine months ended September 30, 2025, the Company entered into several new agreements with terms up to three years for a total purchase commitment of $ 40.8 million and $ 80.7 million, respectively.

(b) Legal Matters

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While the Company currently believes that the final outcomes of these matters will not have a material adverse effect on its business, the results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

The Company accrues for contingencies when it believes that a loss is probable and that it can be reasonably estimated.

The Company accrues for contingencies associated with legal matters when it believes that a loss is probable and that it can be reasonably estimated.

To the extent there is a reasonable possibility that a loss may be incurred that is in excess of amounts already recognized and such additional loss amount may be material, the Company either discloses the estimated additional loss amount or states that such an estimate cannot be made.

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

As of September 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 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 September 30, 2025, the liabilities accrued for non-income-based taxes were $ 20.8 million for domestic jurisdictions and $ 23.0 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 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.

As of September 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.

As of September 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 September 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 September 30, 2025 and December 31, 2024, 152,067,819 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 June 30, As of December 31,

As of September 30, As of December 31,

Stock options issued and outstanding 937,881 1,322,176

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

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.

In the three months ended September 30, 2025 and 2024, the Company repurchased 3.4 million and 10.6 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 349.7 million and $ 633.0 million, respectively.

In the nine months ended September 30, 2025 and 2024, the Company repurchased 6.4 million and 32.0 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 656.7 million and $ 1.9 billion, respectively.

As of September 30, 2025, approximately $ 1.3 billion of the amount authorized in January 2025 for share repurchases remained available for future repurchases.

Stock-Based Compensation

The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) provides for the grant of stock options, restricted stock units, restricted stock awards, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards by the Company to its employees, directors and consultants.

The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) provides for the grant of stock options, restricted stock units (“RSUs”), restricted stock awards, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards by the Company to its employees, directors and consultants.

Certain of the Company’s outstanding equity awards were granted under equity incentive plans that are no longer active but continue to govern the outstanding equity awards granted thereunder.

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At the end of the vesting period, the number of shares actually issued may range from 0 % to 200 % of the target based on levels of performance.

In addition, pursuant to the Company’s 2016 Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of the Company’s Class A common stock at a discount of 15 % through payroll deductions of their eligible compensation.

The Company’s 2016 Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of 15 % through payroll deductions of their eligible compensation.

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

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.

As of September 30, 2025, total unrecognized compensation cost related to unvested RSUs was $ 1.1 billion, which will be amortized over a weighted-average period of 2.3 years.

As of September 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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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$ 0.23 $ ( 0.06 ) $ 0.50 $ ( 0.57 )

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:

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Shares of Class A common stock committed under ESPP — 240,905 — 240,905

Shares of Class A common stock in escrow subject to future vesting — 3,771 — 3,771

Total 4,215,088 22,275,202 3,858,320 22,275,202

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The number of PSUs that will ultimately vest may increase or decrease the number of shares that will be issued at the end of the performance period.

The Company computes its provision for income taxes for interim periods using an estimated annual effective tax rate based on anticipated annual pretax income or loss.

The Company computes its benefit from (provision for) income taxes for interim periods using an estimated annual effective tax rate based on anticipated annual pretax income or loss.

The estimated annual effective tax rate is applied to the Company’s year-to-date income or loss, and is adjusted for discrete items recorded in the period.

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 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 provision for income taxes recorded in the nine months ended September 30, 2025, and three and nine months ended September 30, 2024, consists primarily of federal, state and foreign income taxes and withholding taxes in foreign jurisdictions, in which the Company conducts business.

The benefit for income taxes in the three months ended September 30, 2025, is primarily attributable to the offsetting impact of a newly enacted legislation, as described below.

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

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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.

Included in this legislation are provisions that reinstate the immediate expensing of certain domestic research and development expenses and 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.

As a result of the enactment of this legislation, the Company’s income tax provision decreased in the current period, primarily related to the immediate expensing of domestic research and development expenses.

While the total impact was not significant to the Company’s results of operations in the quarter, it contributed to the $ 4.6 million benefit for income taxes in the three months ended September 30, 2025.

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 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.

For the three and nine months ended September 30, 2025, the value of transactions that occurred between the Company and Syniverse were $ 35.6 million and $ 104.6 million, respectively.

For the three and nine months ended September 30, 2024, the value of the transactions that occurred between the Company and Syniverse were $ 34.6 million and $ 103.8 million, respectively.

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

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• 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;

• our ability to execute on our vision for our platform, including delivering new product releases and enhancements, reducing friction across our platform and streamlining cross-channel orchestration;

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• our customers’ and other platform users’ violation of our policies or other misuse of our platform;

• our ability to successfully integrate acquired businesses and realize the benefits of our past or future strategic acquisitions, divestitures or investments.

• the timing and completion of our proposed acquisition of Stytch, Inc., and our ability to successfully integrate acquired businesses and realize the benefits of our past or future strategic acquisitions, divestitures or investments.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

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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