TWILIO INC 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185 ) 59 Consolidated Balance Sheets 61 Consolidated Statements of Operations 62 Consolidated Statements of Comprehensive Income ( Loss ) 63 Consolidated Statements of Stockholders' Equity 64 Consolidated Statements of Cash Flows 67 Notes to Consolidated Financial Statements 68 58 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Twilio Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Twilio Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 59 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of the sufficiency of audit evidence over revenue recognition As discussed in Note 2(e) to the consolidated financial statements, the Company's revenue is derived from usage and non-usage-based fees earned from customers accessing the Company's cloud-based platform. As of December 31, 2025, the Company recorded $5.1 billion in revenues, a portion of which related to Messaging and Voice APIs. The Company’s revenue recognition process is highly automated, and revenue is recorded within the Company’s general ledger through reliance on customized and proprietary information technology (IT) systems. We identified the evaluation of the sufficiency of audit evidence over revenue recognition related to the Company’s Messaging and Voice APIs as a critical audit matter. This matter required especially subjective auditor judgment because of the large number of information technology (IT) applications involved in the revenue recognition process. Auditor judgment was required in determining the nature and extent of audit evidence obtained over these information systems that process revenue transactions. Involvement of IT professionals with specialized skills and knowledge was required to assist with the performance and evaluation of certain procedures and determination of IT applications subject to testing. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over revenue recognition. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s Messaging and Voice revenue recognition process. We involved IT professionals with specialized skills and knowledge, who assisted in testing controls related to the Company’s general information technology and application controls related to the systems utilized within the Company’s Messaging and Voice revenue recognition process. For a sample of customer agreements, we compared the pricing reflected in the Company’s revenue IT system to the contractually agreed upon pricing with the customer. For a sample of revenue transactions, we compared the amounts recognized for consistency with underlying documentation, including contracts with customers. We assessed the recorded revenue by comparing revenue to underlying cash receipts. We evaluated credits issued after year end to assess the revenue recorded within the period. In addition, we evaluated the overall sufficiency of audit evidence obtained by assessing the results of procedures performed, including appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2013. San Francisco, California February 24, 2026 60 Table of Contents TWILIO INC. Consolidated Balance Sheets As of December 31, 2025 2024 (In thousands, except share and per share amounts) ASSETS Current assets: Cash and cash equivalents $ 682,335 $ 421,297 Short-term marketable securities 1,788,007 1,963,102 Accounts receivable, net 636,736 588,540 Prepaid expenses and other current assets 469,650 474,360 Total current assets 3,576,728 3,447,299 Property and equipment, net 176,963 191,042 Operating right-of-use assets 39,031 53,405 Equity method investment 301,642 485,835 Intangible assets, net 142,065 238,503 Goodwill 5,291,787 5,243,266 Other long-term assets 242,674 206,122 Total assets $ 9,770,890 $ 9,865,472 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 85,089 $ 100,169 Accrued expenses and other current liabilities 608,119 530,686 Deferred revenue and customer deposits 158,677 155,680 Operating lease liability, current 35,123 33,685 Total current liabilities 887,008 820,220 Operating lease liability, noncurrent 54,162 85,875 Long-term debt, net 992,287 990,587 Other long-term liabilities 15,887 15,824 Total liabilities 1,949,344 1,912,506 Commitments and contingencies (Note 18) Stockholders’ equity: Preferred stock, $ 0.001 par value, 100,000,000 shares authorized, none issued — — Class A common stock, $ 0.001 par value per share Authorized shares 1,000,000,000 as of December 31, 2025 and 2024; Issued and outstanding shares 152,411,346 and 152,610,697 as of December 31, 2025 and 2024 152 153 Additional paid-in capital 16,148,190 15,476,124 Accumulated other comprehensive income (loss) 15,668 ( 1,301 ) Accumulated deficit ( 8,342,464 ) ( 7,522,010 ) Total stockholders’ equity 7,821,546 7,952,966 Total liabilities and stockholders’ equity $ 9,770,890 $ 9,865,472 See accompanying notes to consolidated financial statements . 61 Table of Contents TWILIO INC. Consolidated Statements of Operations Year Ended December 31, 2025 2024 2023 (In thousands, except share and per share amounts) Revenue $ 5,067,220 $ 4,458,036 $ 4,153,945 Cost of revenue 2,588,486 2,179,824 2,110,015 Gross profit 2,478,734 2,278,212 2,043,930 Operating expenses: Research and development 1,020,159 1,008,747 942,790 Sales and marketing 873,216 860,821 1,022,985 General and administrative 410,678 449,079 468,459 Restructuring costs 15,030 13,273 165,733 Impairment of long-lived assets 1,849 — 320,504 Total operating expenses 2,320,932 2,331,920 2,920,471 Income (loss) from operations 157,802 ( 53,708 ) ( 876,541 ) Other expenses, net: Share of losses from equity method investment ( 101,217 ) ( 108,481 ) ( 121,897 ) Impairment of equity method investment ( 80,629 ) — — Impairment of strategic investments — ( 8,220 ) ( 46,154 ) Other income, net 79,138 81,796 47,863 Total other expenses, net ( 102,708 ) ( 34,905 ) ( 120,188 ) Income (loss) before provision for income taxes 55,094 ( 88,613 ) ( 996,729 ) Provision for income taxes ( 21,260 ) ( 20,790 ) ( 18,712 ) Net income (loss) attributable to common stockholders $ 33,834 $ ( 109,403 ) $ ( 1,015,441 ) Net income (loss) per share attributable to common stockholders: Basic $ 0.22 $ ( 0.66 ) $ ( 5.54 ) Diluted $ 0.21 $ ( 0.66 ) $ ( 5.54 ) Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: Basic 152,986,390 165,925,128 183,327,844 Diluted 159,788,944 165,925,128 183,327,844 See accompanying notes to consolidated financial statements. 62 Table of Contents TWILIO INC. Consolidated Statements of Comprehensive Income (Loss) Year Ended December 31, 2025 2024 2023 (In thousands) Net income (loss) $ 33,834 $ ( 109,403 ) $ ( 1,015,441 ) Other comprehensive income (loss): Unrealized gain on marketable securities 5,273 7,332 99,742 Foreign currency translation — — 5,587 Net change in market value of effective foreign currency forward exchange contracts 14,043 ( 9,986 ) 898 Share of other comprehensive (loss) income from equity method investment ( 2,347 ) 734 15,553 Total other comprehensive income (loss) 16,969 ( 1,920 ) 121,780 Comprehensive income (loss) attributable to common stockholders $ 50,803 $ ( 111,323 ) $ ( 893,661 ) See accompanying notes to consolidated financial statements. 63 Table of Contents TWILIO INC. Consolidated Statements of Stockholders’ Equity Common Stock Class A Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Stockholders' Equity Shares Amount (In thousands, except share amounts) Balance as of December 31, 2024 152,610,697 $ 153 $ 15,476,124 $ ( 1,301 ) $ ( 7,522,010 ) $ 7,952,966 Net income — — — — 33,834 33,834 Exercises of vested stock options 420,056 — 6,248 — — 6,248 Vesting of restricted stock units 6,944,005 8 ( 8 ) — — — Value of equity awards withheld for tax liability ( 1,665 ) — ( 213 ) — — ( 213 ) Shares of Class A common stock issued and donated to charity 88,408 — 9,935 — — 9,935 Unrealized gain on marketable securities — — — 5,273 — 5,273 Repurchases of shares of Class A common stock including related costs ( 8,048,649 ) ( 9 ) — — ( 854,288 ) ( 854,297 ) Shares issued under ESPP 398,494 — 35,115 — — 35,115 Net change in market value of effective foreign currency forward exchange contracts — — — 14,043 — 14,043 Share of other comprehensive loss from equity method investment — — — ( 2,347 ) — ( 2,347 ) Stock-based compensation — — 619,236 — — 619,236 Stock-based compensation - restructuring — — 1,753 — — 1,753 Balance as of December 31, 2025 152,411,346 $ 152 $ 16,148,190 $ 15,668 $ ( 8,342,464 ) $ 7,821,546 See accompanying notes to consolidated financial statements. 64 Table of Contents TWILIO INC. Consolidated Statements of Stockholders’ Equity Common Stock Class A Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity Shares Amount (In thousands, except share amounts) Balance as of December 31, 2023 181,945,771 $ 182 $ 14,797,723 $ 619 $ ( 5,065,972 ) $ 9,732,552 Net loss — — — — ( 109,403 ) ( 109,403 ) Exercises of vested stock options 181,818 — 4,341 — — 4,341 Vesting of restricted stock units 6,639,672 7 ( 7 ) — — — Value of equity awards withheld for tax liability ( 28,006 ) — ( 2,000 ) — — ( 2,000 ) Shares of Class A common stock issued and donated to charity 88,408 — 5,907 — — 5,907 Unrealized gain on marketable securities — — — 7,332 — 7,332 Repurchases of shares of Class A common stock including related costs ( 36,848,645 ) ( 36 ) — — ( 2,346,635 ) ( 2,346,671 ) Shares returned from escrow ( 696 ) — ( 192 ) — — ( 192 ) Shares issued under ESPP 632,375 — 33,045 — — 33,045 Net change in market value of effective foreign currency forward exchange contracts — — — ( 9,986 ) — ( 9,986 ) Share of other comprehensive income from equity method investment — — — 734 — 734 Stock-based compensation — — 634,129 — — 634,129 Stock-based compensation - restructuring — — 3,178 — — 3,178 Balance as of December 31, 2024 152,610,697 $ 153 $ 15,476,124 $ ( 1,301 ) $ ( 7,522,010 ) $ 7,952,966 See accompanying notes to consolidated financial statements. 65 Table of Contents TWILIO INC. Consolidated Statements of Stockholders’ Equity Common Stock Class A Common Stock Class B Additional Paid-In Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Stockholders' Equity Shares Amount Shares Amount (In thousands, except share amounts) Balance as of December 31, 2022 176,358,104 $ 174 9,617,605 $ 12 $ 14,055,853 $ ( 121,161 ) $ ( 3,375,836 ) $ 10,559,042 Net loss — — — — — — ( 1,015,441 ) ( 1,015,441 ) Exercises of vested stock options 238,474 — 127,982 — 7,344 — — 7,344 Vesting of restricted stock units 5,939,641 7 — — ( 7 ) — — — Value of equity awards withheld for tax liability ( 38,655 ) — — — ( 2,565 ) — — ( 2,565 ) Conversion of shares of Class B common stock into shares of Class A common stock 9,745,587 12 ( 9,745,587 ) ( 12 ) — — — — Shares of Class A common stock issued and donated to charity 88,408 — — — 5,346 — — 5,346 Unrealized gain on marketable securities — — — — — 99,742 — 99,742 Repurchases of shares of Class A common stock including related costs ( 11,292,516 ) ( 11 ) — — — — ( 674,695 ) ( 674,706 ) Foreign currency translation — — — — — 5,587 — 5,587 Shares issued under ESPP 906,728 — — — 36,496 — — 36,496 Net change in market value of effective foreign currency forward exchange contracts — — — — — 898 — 898 Share of other comprehensive income from equity method investment — — — — — 15,553 — 15,553 Stock-based compensation — — — — 682,241 — — 682,241 Stock-based compensation - restructuring — — — — 13,015 — — 13,015 Balance as of December 31, 2023 181,945,771 $ 182 — $ — $ 14,797,723 $ 619 $ ( 5,065,972 ) $ 9,732,552 See accompanying notes to consolidated financial statements. 66 Table of Contents TWILIO INC . Consolidated Statements of Cash Flows Year Ended December 31, 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: (In thousands) Net income (loss) $ 33,834 $ ( 109,403 ) $ ( 1,015,441 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 195,444 205,984 284,413 Non-cash reduction to the right-of-use asset 22,000 19,095 26,971 Net amortization of investment premium and discount ( 14,132 ) ( 22,940 ) ( 44 ) Impairment of long-lived assets 1,849 — 320,504 Stock-based compensation 600,407 616,607 675,857 Amortization of deferred commissions 74,533 76,348 72,892 Realized and unrealized (gains) losses on equity securities ( 1,016 ) 1,681 8,043 Provision for doubtful accounts 8,230 35,393 51,859 Value of shares of Class A common stock issued and donated to charity 9,935 5,907 5,346 Share of losses from equity method investment 101,217 108,481 121,897 Impairment of equity method investment 80,629 — — Impairment of strategic investments — 8,220 46,154 Loss on net assets divested — — 32,277 Other adjustments 4,182 5,009 14,669 Changes in operating assets and liabilities: Accounts receivable ( 55,067 ) ( 61,160 ) ( 85,093 ) Prepaid expenses and other current assets 10,552 ( 153,470 ) ( 56,283 ) Other long-term assets ( 122,203 ) ( 47,077 ) ( 2,328 ) Accounts payable ( 14,973 ) ( 20,256 ) 12,370 Accrued expenses and other current liabilities 102,652 87,434 ( 51,816 ) Deferred revenue and customer deposits 2,038 11,181 5,371 Operating lease liabilities ( 35,592 ) ( 48,759 ) ( 56,340 ) Other long-term liabilities ( 1,275 ) ( 2,034 ) 3,474 Net cash provided by operating activities 1,003,244 716,241 414,752 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired and payments related to prior period acquisitions ( 61,496 ) — ( 5,770 ) Divestitures, net of cash divested — — 38,194 Purchases of marketable securities and other investments ( 1,050,858 ) ( 923,863 ) ( 1,953,003 ) Proceeds from sales and maturities of marketable securities and other investments 1,251,119 2,353,486 2,200,417 Capitalized software development costs ( 51,969 ) ( 51,808 ) ( 39,925 ) Purchases of long-lived and intangible assets ( 5,848 ) ( 6,978 ) ( 11,310 ) Net cash provided by investing activities 80,948 1,370,837 228,603 CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on finance leases ( 5,306 ) ( 12,558 ) ( 16,134 ) Value of equity awards withheld for tax liabilities ( 213 ) ( 2,000 ) ( 2,565 ) Repurchases of shares of Class A common stock and related costs ( 868,939 ) ( 2,334,400 ) ( 668,751 ) Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP 41,363 37,386 43,840 Net cash used in financing activities ( 833,095 ) ( 2,311,572 ) ( 643,610 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — — 108 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 251,097 ( 224,494 ) ( 147 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period 431,437 655,931 656,078 CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period $ 682,534 $ 431,437 $ 655,931 Cash paid for income taxes, net $ 17,711 $ 36,547 $ 37,818 Cash paid for interest $ 37,578 $ 37,904 $ 38,389 RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS Cash and cash equivalents $ 682,335 $ 421,297 $ 655,931 Restricted cash in other current assets 199 — — Restricted cash in other long-term assets — 10,140 — Total cash, cash equivalents and restricted cash $ 682,534 $ 431,437 $ 655,931 See accompanying notes to consolidated financial statements. 67 Table of Contents TWILIO INC. Notes to Consolidated Financial Statements 1. Organization and Description of Business Twilio Inc. (the “Company”) was incorporated in the state of Delaware on March 13, 2008. Today's leading companies trust Twilio's Customer Engagement Platform to build direct, personalized relationships with their customers everywhere in the world. Twilio enables companies to use communications and data to add intelligence and security to every step of their customers’ journey, from sales to marketing to growth, customer service and many more engagement use cases in a flexible, programmatic way. The Company’s headquarters are located in San Francisco, California, and the Company has subsidiaries across North America, South America, Europe, Asia and Australia. 2. Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). (b) Principles of Consolidation The consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue allowances and sales credit reserves; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair values of acquired intangible assets, goodwill and equity method investments; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments, therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. (d) Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, marketable securities and accounts receivable. The Company maintains cash, restricted cash, cash equivalents and marketable securities with financial institutions. Certain balances held by such financial institutions exceed insured limits. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customer deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs credit evaluations of the financial condition of significant customers and periodic re-evaluations, as needed, of existing customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. During the years ended December 31, 2025, 2024 and 2023, no customer organization accounted for more than 10% of the Company’s total revenue. As of December 31, 2025 and 2024, no customer organization represented more than 10% of the Company’s gross accounts receivable. 68 Table of Contents (e) Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and, • Recognition of revenue when, or as, the Company satisfies a performance obligation. Nature of Products and Services The Company recognizes revenue from its products on either a usage basis or a subscription basis, depending on the nature of the product and the type of customer contract. The majority of the Company’s revenue is derived from usage‑based fees. These fees are earned when customers access the Company’s cloud-based platform and start using the Company’s products. Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. Some examples of the usage-based products are Messaging and Voice. For the Messaging products, the fees relate to the number of text messages sent or received. For the Voice products, the fees primarily relate to minutes of call duration. In the years ended December 31, 2025, 2024 and 2023, the revenue from usage-based fees represented 74 %, 72 %, and 71 % of total revenue, respectively. Subscription-based fees are derived from various products such as Segment, Email and others. Subscription-based contracts revenue is recognized on a ratable basis over the contractual term which is generally between one to three years . In the years ended December 31, 2025, 2024 and 2023, the revenue from non-usage-based fees represented 26 %, 28 %, and 29 % of total revenue, respectively. When our usage-based products are embedded into our subscription-based products, or when multiple products are purchased together as a solution, we charge for each product separately on a usage or a subscription basis, as applicable. No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price. The Company's arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been charged via credit card or invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. The Company defines U.S. revenue as revenue from customers with IP addresses or mailing addresses at the time of registration in the United States. The Company defines international revenue as revenue from customers with IP addresses or mailing addresses at the time of registration outside of the United States. 69 Table of Contents Remaining Performance Obligations Revenue allocated to remaining performance obligations represents deferred revenue and amounts that were and will be invoiced and recognized as revenue in future periods for non-cancelable subscription arrangements with terms greater than one year. The Company applies the optional exemption of not disclosing the transaction price allocated to the remaining performance obligations for its usage-based contracts and contracts with original duration of less than one year. Revenue allocated to remaining performance obligations for contracts with durations of greater than one year was $ 175.2 million as of December 31, 2025, of which 65 % is expected to be recognized over the next 12 months and 96 % is expected to be recognized over the next 24 months. (f) Deferred Revenue and Customer Deposits Deferred revenue is recorded when a non-cancellable contractual right to bill exists or when cash payments are received in advance of future usage on non-cancelable contracts. Customer refundable prepayments are recorded as customer deposits. As of December 31, 2025 and 2024, the Company recorded $ 158.7 million and $ 155.7 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits in the accompanying consolidated balance sheets. During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 134.1 million, $ 120.7 million, and $ 120.5 million of revenue, respectively, that was included in its deferred revenue and customer deposits balances as of the end of the previous year. (g) Deferred Sales Commissions The Company records an asset for the incremental costs of obtaining a contract with a customer, such as sales commissions, that are earned upon execution of contracts. The Company uses the portfolio of data method to determine the estimated period of benefit of capitalized commissions which is generally determined to be up to five years . Amortization expense related to these capitalized costs are recognized on a straight line basis over the estimated period of benefit. The Company applies the optional exemption of expensing these costs as incurred with amortization periods of one year or less. Total net capitalized commission costs as of December 31, 2025 and 2024 were $ 147.7 million and $ 166.0 million, respectively, and are included in prepaid expenses and other current assets and other long‑term assets in the accompanying consolidated balance sheets. Amortization of these assets was $ 74.5 million, $ 76.3 million and $ 72.9 million in the years ended December 31, 2025, 2024 and 2023, respectively, and is included in sales and marketing expense in the accompanying consolidated statements of operations. (h) Cost of Revenue Cost of revenue consists primarily of fees paid to network service providers. Cost of revenue also includes cloud infrastructure fees, direct costs of personnel, such as salaries and stock‑based compensation for customer support employees, and other non‑personnel costs, such as depreciation and amortization expense related to data centers and hosting equipment, amortization of capitalized internal-use software development costs and acquired intangible assets. (i) Research and Development Expense Research and development expenses consist primarily of personnel costs, outsourced engineering services, cloud infrastructure fees for staging and development of the Company’s products, depreciation, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meets the criteria for capitalization. (j) Internal-Use Software Development Costs Certain costs of platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance, minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are also expensed as incurred. 70 Table of Contents Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years . Management periodically evaluates the useful life of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to software applications developed for internal use is included in operating expenses. (k) Advertising Costs Advertising costs are expensed as incurred and were $ 39.8 million, $ 48.7 million and $ 71.1 million in the years ended December 31, 2025, 2024 and 2023, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations. (l) Restructuring Costs The Company records restructuring expenses when management commits to a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the plan are not likely and employees who are impacted have been notified of the pending involuntary termination. (m) Stock-Based Compensation All stock-based compensation to employees is measured on the grant date based on the fair value of the awards on that date. These costs are recognized in expense following a straight-line attribution method over the requisite service period. For performance-based restricted stock units (“PSUs”) with operational performance targets, the grant date fair value is the closing price of the Company’s Class A common stock on the date of grant. The expense is recognized on a straight-line basis over the performance period only if it is probable that the performance target will be achieved. The probability of achievement is assessed each reporting period and adjustments are recorded accordingly. For PSUs with market conditions, the grant date fair value is determined using a Monte-Carlo simulation model and the expense is recognized on a straight-line basis over the performance period. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the purchase rights issued under the Company's 2016 Employee Stock Purchase Plan, as amended (the “ESPP”). The grant date fair value of the restricted stock units (“RSUs”) is the closing price of the Company's Class A common stock on the date of grant. The expense for options, purchase rights issued under the ESPP and RSUs is recognized on a straight-line basis over the requisite service period. Forfeitures are recorded in the period in which they occur. The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock options and the purchase rights issued under the ESPP. If any of the assumptions used in the Black-Scholes model change, stock-based compensation for future options may differ materially compared to that associated with previous grants. These assumptions include: • Fair value of the common stock. The Company uses the market closing price of its Class A common stock, as reported on the New York Stock Exchange, for the fair value. • Expected term. The expected term represents the period over which the stock option or the purchase right is expected to be outstanding. The Company uses a simplified calculation for the expected term, which reflects the weighted-average time-to-vest and the contractual life of the stock option or the purchase right; • Expected volatility. The expected volatility is derived from the average of the historical volatilities of the Company’s Class A common stock. • Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; and • Expected dividend. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. 71 Table of Contents (n) Income Taxes The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating losses and tax credit carry-forwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is more than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the consolidated statements of operations. As of December 31, 2025, 2024 and 2023, these amounts were not significant. (o) Foreign Currency The functional currency of the Company's foreign subsidiaries is primarily the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the month in which the transactions occur. Remeasurement adjustments are recognized in the consolidated statements of operations as other income, net, in the year of occurrence. Foreign currency transaction gains and losses are included in other income, net, in the accompanying consolidated statements of operations. For those entities where the functional currency is a foreign currency, adjustments resulting from translating the financial statements into U.S. dollars are recorded as a component of accumulated other comprehensive income (loss) as part of the total stockholders' equity. Monetary assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates in effect during the month in which the transactions occur. Equity transactions are translated using historical exchange rates. (p) Comprehensive Income (Loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under U.S. GAAP, are recorded as an element of stockholders' equity but are excluded from the calculation of net income (loss). (q) Net Income (Loss) Per Share Attributable to Common Stockholders The Company computes net income (loss) per share in accordance with Accounting Standards Codification (“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; the contingently issuable shares guidance is applied to PSUs. Diluted net income (loss) per share excludes all dilutive potential common shares if their effect is anti-dilutive. The Company calculates its basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. The Company has 100,000,000 shares of preferred stock that are authorized but none are issued or outstanding. Class A common stock was the only outstanding class of equity securities of the Company as of December 31, 2025 and 2024. Each share of Class A common stock is entitled to one vote per share. Prior to June 28, 2023, the Company’s outstanding equity securities included its Class B common stock. On June 28, 2023, each outstanding share of the Company’s Class B common stock automatically converted (the “Conversion”) into one share of the Company’s Class A common stock pursuant to the terms of the Company’s certificate of incorporation. In addition, upon the Conversion, all outstanding stock options that were exercisable for shares of Class B common stock prior to the 72 Table of Contents Conversion became exercisable for shares of Class A common stock. The Company retired all of the shares of its Class B common stock that were issued but not outstanding following the Conversion. (r) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents may consist of cash deposited into money market funds, U.S. treasury bills and commercial paper. All credit and debit card transactions that process as of the last day of each month and settle within the first few days of the subsequent month are also classified as cash and cash equivalents as of the end of the month in which they were processed. (s) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company's assessment of its ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of accounts receivable balances and other known conditions that may affect a customer's ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer's ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believes will be collected. The Company writes-off accounts receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. As of December 31, 2025 and 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 consolidated balance sheets. (t) Property and Equipment Property and equipment, both owned and under finance leases, is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred. The useful lives of property and equipment are as follows: Capitalized internal-use software development costs 3 years Data center equipment 2 - 4 years Leasehold improvements Shorter of 5 years or the remaining lease term Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under financing lease Shorter of 5 years or the remaining lease term (u) Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying consolidated balance sheets. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are measured and recognized at the lease commencement date based on the present value of the remaining lease payments over the lease term. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the commencement date to determine the present value of lease payments. The Company’s lease agreements may have lease and non-lease components, which the Company accounts for as a single lease component. When estimating the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain such options will be exercised. Operating lease costs are recognized in operating expenses in the accompanying consolidated statements of operations on a straight-line basis over the lease term and variable payments are 73 Table of Contents recognized in the period they are incurred. The Company’s lease agreements do not contain any residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Within the consolidated statements of cash flows, the Company presents the lease payments made on the operating leases as cash flows from operations and principal payments made on the finance leases as part of financing activities. (v) Equity Method Investments Equity investment holdings in which the Company does not have a controlling financial interest but can exercise significant influence over the investee are accounted for under the equity method. Equity method investments are originally recorded at cost and are increased or reduced in subsequent periods to reflect the Company’s proportionate share of the investee’s net earnings or losses and other comprehensive income or losses, as those occur. The Company records the investee losses on a three-month lag and up to the carrying amount of the investment. Investments are also increased or decreased by contributions made to and distributions received from the investee, basis difference amortization and other-than-temporary impairments, if any. All costs directly associated with the acquisition of the investment are included in the carrying amount of the investment. Profits or losses related to intra-entity sales are eliminated until realized by the Company or the investee. The Company determines the difference between its purchase price and its proportionate share of the net assets of the investee, which constitutes its excess basis in the investment. This excess basis is allocated to the identifiable assets and liabilities of the investee utilizing purchase accounting principles and is used to calculate the amortizable basis difference and the equity method goodwill. Basis differences attributed to intangible assets with determinable economic lives and liabilities are generally amortized on a straight-line basis over the useful lives of the associated assets and the expected term for the liabilities. Basis differences related to intangible assets without determinable economic lives are not amortized. Equity method goodwill is not amortized or tested for impairment. Instead, the Company evaluates its equity method investments for impairment whenever events or changes in circumstance indicate that the carrying amounts of such investments may be in excess of their fair value. When such indicators exist, the other-than-temporary impairment model is utilized, which considers the severity and duration of a decline in fair value below book value and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in the period of such determination. When an impairment loss is recorded in the period, the Company allocates such loss to its overall basis difference in the following order: (a) reducing the equity method goodwill to zero, then (b) reducing the individual basis differences attributable to long-lived assets proportionately based on their amounts relative to the overall basis difference on the impairment date. (w) Segment Information The Company determines its operating and reportable segments in accordance with ASC 280 Segment Reporting , which requires financial information to be reported based on how the chief operating decision maker (“CODM”), who is the Company's Chief Executive Officer (“CEO”), reviews and manages the business, and establishes criteria for aggregating operating segments into reportable segments. The Company operates in and reports its results in a single operating and reportable segment. (x) Business Combinations The Company records identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of the net assets acquired on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. The authoritative guidance allows a measurement period of up to one year from the date of acquisition to make adjustments to the preliminary allocation of the purchase price. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. 74 Table of Contents (y) Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company operates as one reporting unit and has selected October 1 as the date of its annual impairment test. The Company has the option to first perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. However, the Company may elect to bypass the qualitative assessment and proceed directly to the quantitative impairment tests. The impairment test involves comparing the fair value of a reporting unit to its carrying amount, including goodwill. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the reporting unit. Changes in these estimates or assumptions in future periods may result in the recognition of an impairment in the affected period. Goodwill impairment is calculated as the amount by which the reporting unit’s carrying amount exceeds its fair value, and is limited to the carrying amount of goodwill. (z) Intangible Assets Intangible assets recorded by the Company include the fair values of identifiable intangible assets acquired in business combinations and costs directly associated with securing legal registration of patents and trademarks and acquiring domain names. Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company's long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment at least annually. The useful lives of the intangible assets are as follows: Developed technology 4 - 7 years Customer relationships 4 - 10 years Supplier relationships 5 years Trade names 5 years Patents 20 years Telecommunication licenses Indefinite Trademarks Indefinite Domain names Indefinite (aa) Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property, equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, an impairment loss would be equal to the amount the carrying value exceeds the fair value. The impairment is allocated to the long-lived assets within the asset group on a pro-rata basis using the relative carrying amounts of the assets. Carrying amounts of individual long-lived assets are not reduced below their respective fair values. In the valuation of an asset or an asset group, management must make assumptions regarding estimated future revenue and cash flows to be derived from the respective asset or asset group, discount rates used and other assumptions. Changes in these estimates or their related assumptions in future periods may result in the recognition of an impairment of an asset or an asset group in the affected period.. 75 Table of Contents (ab) Derivatives and Hedging The Company is exposed to a wide variety of risks arising from its business operations and overall economic conditions. These risks include exposure to fluctuations in various foreign currencies against its functional currency and can impact the value of cash receipts and payments. The Company minimizes its exposure to these risks through management of its core business activities, specifically, the amounts, sources and duration of its assets and liabilities, and the use of derivative financial instruments. The Company uses foreign currency derivative forward contracts, and in the future may also use foreign currency option contacts. Foreign currency derivative forward contracts involve fixing the exchange rate for delivery of a specified amount of foreign currency on a specified date. These agreements are typically cash settled in U.S. dollars for their fair value at or close to their settlement date. Foreign currency option contracts will require the Company to pay a premium for the right to sell a specified amount of foreign currency prior to the maturity date of the option. The Company does not enter into derivative financial instruments trading for speculative purposes. Derivative instruments are carried at fair value and recorded as either an asset or a liability until they mature. Gains and losses resulting from changes in fair value of these instruments are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. For derivative instruments designated as cash flow hedges, gains or losses are initially recorded in accumulated other comprehensive income (loss) on the balance sheet, then reclassified into the statement of operations in the period in which the derivative instruments mature. These realized gains and losses are recorded within the same financial statement line item as the hedged transaction. The Company’s foreign currency derivative contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. (ac) Share Repurchases The Company elected to record the excess of the repurchase price over the par value of the repurchased shares of its Class A common stock in accumulated deficit, along with the associated transaction costs and excise taxes. Immediately upon repurchase, the shares are retired and returned to the status of unauthorized and unissued. (ad) Fair Value of Financial Instruments The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: • Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company applies fair value accounting for all financial instruments measured at fair value on a recurring basis. The Company's financial instruments, which include cash, restricted cash, cash equivalents, accounts receivable and accounts payable are recorded at their carrying amounts, which approximate their fair values due to their short-term nature. Marketable securities consist of U.S. treasury securities, non-U.S. government securities, high credit quality corporate debt securities and commercial paper. All marketable securities are considered to be available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). In valuing these 76 Table of Contents items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair values of the senior notes due 2029 and 2031 (“2029 Notes” and “2031 Notes,” respectively) are determined based on their respective closing prices on the last trading day of the reporting period. These financial liabilities are not measured at fair value on a recurring basis. The carrying values of the strategic investments, which consist of restricted equity securities of a publicly held company and equity securities of privately held companies, are determined under the measurement alternative on a non-recurring basis adjusting for observable changes in fair value or impairment. The Company does not have a controlling interest nor can it exercise significant influence over any of these entities. The Company regularly reviews changes to the rating of its debt securities by rating agencies and monitors the surrounding economic conditions to assess the risk of expected credit losses. As of December 31, 2025, the risk of expected credit losses was not significant. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income, net in the accompanying consolidated statements of operations. (ae) Recently Adopted Accounting Guidance In December 2023, the Financial Accounting Standards Board (“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 periods beginning after December 15, 2024, and may be applied on a prospective basis. The Company adopted ASU 2023-09 on a prospective basis in 2025. Prior periods were not restated to conform to the new presentation. (af) Recently Issued Accounting Guidance, Not yet Adopted In September 2025, the 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 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 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. 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. The adoption will require certain additional disclosure in the notes to the Company’s consolidated financial statements. 77 Table of Contents 3. Fair Value Measurements Financial Assets The following tables provide the financial assets measured at fair value on a recurring basis: Amortized Cost or Carrying Value Gross Unrealized Gains Gross Unrealized Losses Less Than 12 Months Gross Unrealized Losses More Than 12 Months Fair Value Hierarchy as of December 31, 2025 Aggregate Fair Value Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 454,505 $ — $ — $ — $ 454,505 $ — $ — $ 454,505 Commercial paper 37,517 — — — — 37,517 — 37,517 Total included in cash and cash equivalents 492,022 — — — 454,505 37,517 — 492,022 Marketable securities: Debt securities: U.S. Treasury securities 249,396 1,190 ( 9 ) — 250,577 — — 250,577 Corporate debt securities and commercial paper 1,523,935 9,360 ( 84 ) ( 1 ) — 1,533,210 — 1,533,210 Total debt securities 1,773,331 10,550 ( 93 ) ( 1 ) 250,577 1,533,210 — 1,783,787 Equity securities 4,220 — — — 4,220 — — 4,220 Total marketable securities 1,777,551 10,550 ( 93 ) ( 1 ) 254,797 1,533,210 — 1,788,007 Total financial assets $ 2,269,573 $ 10,550 $ ( 93 ) $ ( 1 ) $ 709,302 $ 1,570,727 $ — $ 2,280,029 Amortized Cost or Carrying Value Gross Unrealized Gains Gross Unrealized Losses Less Than 12 Months Gross Unrealized Losses More Than 12 Months Fair Value Hierarchy as of December 31, 2024 Aggregate Fair Value Level 1 Level 2 Level 3 Financial Assets: (In thousands) Cash and cash equivalents: Money market funds $ 207,323 $ — $ — $ — $ 207,323 $ — $ — $ 207,323 Commercial paper 15,059 — — — — 15,059 — 15,059 U.S. Treasury bills 2,748 — — — 2,748 — — 2,748 Total included in cash and cash equivalents 225,130 — — — 210,071 15,059 — 225,130 Marketable securities: Debt securities: U.S. Treasury securities 379,846 1,243 ( 296 ) ( 55 ) 380,738 — — 380,738 Non-U.S. government securities 2,909 27 — — 2,936 — — 2,936 Corporate debt securities and commercial paper 1,571,944 6,415 ( 1,594 ) ( 557 ) 16,890 1,559,318 — 1,576,208 Total debt securities 1,954,699 7,685 ( 1,890 ) ( 612 ) 400,564 1,559,318 — 1,959,882 Equity securities 3,220 — — — 3,220 — — 3,220 Total marketable securities 1,957,919 7,685 ( 1,890 ) ( 612 ) 403,784 1,559,318 — 1,963,102 Total financial assets $ 2,183,049 $ 7,685 $ ( 1,890 ) $ ( 612 ) $ 613,855 $ 1,574,377 $ — $ 2,188,232 Debt Securities The Company’s primary objective when investing excess cash is preservation of capital, hence the Company’s debt securities primarily consist of U.S. Treasury securities, non-U.S. government securities, high credit quality corporate debt securities and commercial paper. Because the Company views its debt securities as available to support its current operations, it has classified all available for sale securities as short-term. Interest earned on marketable securities was $ 70.6 million, $ 90.2 million and $ 77.7 million in the years ended December 31, 2025, 2024 and 2023, respectively. The interest is recorded as other income, net, in the accompanying consolidated statements of operations. 78 Table of Contents The following table summarizes the contractual maturities of marketable securities: As of December 31, 2025 2024 Amortized Cost Aggregate Fair Value Amortized Cost Aggregate Fair Value Financial Assets: (In thousands) Less than one year $ 588,022 $ 590,997 $ 684,294 $ 685,091 One to three years 1,185,309 1,192,790 1,270,405 1,274,791 Total $ 1,773,331 $ 1,783,787 $ 1,954,699 $ 1,959,882 Strategic Investments As of December 31, 2025 and 2024, the Company held strategic investments with an aggregate carrying value of $ 24.5 million and $ 23.5 million, respectively, recorded as other long-term assets in the accompanying consolidated balance sheets. There were no significant impairments or adjustments recorded in the years ended December 31, 2025 and 2024 related to these securities. In the year ended December 31, 2023, the Company remeasured to fair value one of its strategic investments acquired in 2021 due to an assessed impairment. The fair value measurement of the strategic investment is classified as Level 2 in the fair value hierarchy and the primary input used in the fair value measurement was the publicly available stock price of the issuer’s unrestricted security of the same class. The impairment loss of $ 46.2 million is recorded in other expenses, net, in the accompanying consolidated statement of operations for the year ended December 31, 2023. 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 December 31, 2025 and 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 2029 Notes and its 2031 Notes. As of December 31, 2025, the fair value of the 2029 Notes and 2031 Notes were $ 489.7 million and $ 483.9 million, respectively. As of December 31, 2024, the fair value of the 2029 Notes and 2031 Notes were $ 464.9 million and $ 453.9 million, respectively. These fair values are classified as Level 2 in the fair value hierarchy. 4. Property and Equipment Property and equipment consist of the following: As of December 31, 2025 2024 (In thousands) Capitalized internal-use software developments costs $ 421,795 $ 357,334 Data center equipment (1) 27,843 63,672 Leasehold improvements 62,143 78,104 Office equipment 46,709 50,659 Furniture and fixtures 10,399 12,618 Software 14,927 14,143 Total property and equipment 583,816 576,530 Less: accumulated depreciation and amortization (1) ( 406,853 ) ( 385,488 ) Total property and equipment, net $ 176,963 $ 191,042 ____________________________________ ( 1 ) Data center equipment includes $ 1.4 million and $ 33.5 million in assets held under finance leases as of December 31, 2025 and 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 December 31, 2025 and 2024, respectively. 79 Table of Contents Depreciation and amortization expense was $ 85.1 million, $ 91.9 million and $ 89.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company capitalized $ 72.5 million, $ 72.5 million and $ 57.2 million in internal‑use software development costs in the years ended December 31, 2025, 2024 and 2023, respectively. 5. Divestitures There were no divestitures in the years ended December 31, 2025 or 2024. In 2023, the Company sold its ValueFirst business, which operated an enterprise communications platform in India, for a total cash sales price of $ 45.5 million, or $ 38.2 million in proceeds, net of cash divested. The sale resulted in a loss of $ 28.8 million, which is recorded within general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2023. The Company also recorded an additional $ 3.3 million of divestiture-related expenses in the same period. 6. Impairment of Long-Lived Assets No significant impairments of long-lived assets were recorded during the years ended December 31, 2025 or 2024. Operating right-of-use assets In 2023, the Company permanently closed several of its offices, which triggered reassessment for impairment of certain operating right-of-use (“ROU”) assets and related leasehold improvements and property and equipment. Based on the reassessment, the Company concluded that certain assets were impaired and recorded a $ 34.8 million impairment in the impairment of long-lived assets line item in the accompanying consolidated statement of operations for the year ended December 31, 2023. Intangible assets In the fourth quarter of 2023, the Company identified an indicator that the carrying amounts of certain long-lived assets within its then Segment reportable segment may not have been recoverable. The Company performed a fair value measurement of the impacted asset group and concluded that the asset group was impaired. The impairment was allocated to the assets within the impacted asset group reducing the respective carrying amounts of the assets as of the December 1, 2023, measurement date, as follows: Total Impairment Allocation (In thousands) Developed technology $ 209,350 Customer relationships 76,361 Total impairment $ 285,711 The impairment is recorded within the impairment of long-lived assets line item in the accompanying consolidated statement of operations for the year ended December 31, 2023. No other significant impairments were recorded during the year ended December 31, 2023. 7. Restructuring Activities No significant restructuring activities occurred in the years ended December 31, 2025 or 2024. 80 Table of Contents In February 2023, the Company announced a workforce reduction plan (the “February 2023 Plan”) that was designed to reduce operating costs, improve operating margins and accelerate profitability. The February 2023 Plan eliminated approximately 17 % of the Company’s workforce and was substantially completed in the first quarter of 2023. For the year ended December 31, 2023, restructuring charges related to the February 2023 Plan were $ 141.1 million, which consisted of $ 130.0 million related to employee severance, benefits and facilitation costs, and $ 11.1 million related to vesting of employee stock based compensation awards. These charges were recorded within restructuring costs in the accompanying consolidated statement of operations for the year ended December 31, 2023. 8. Reorganization and Segment Reporting The Company announced on January 1, 2025, that it realigned its organizational structure into a functional support model by dissolving its previously existing business unit components. Despite the change in the organizational structure on January 1, 2025, until the end of the second quarter of 2025, the Company had two operating and reportable segments based on the manner in which the 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 the third quarter of 2025, it had one operating and reportable segment. Commencing in the third quarter of 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 consolidated financial statements and the notes thereof. 9. Derivatives and Hedging As of December 31, 2025, the Company’s outstanding foreign currency forward contracts designated as cash flow hedges had a total sell notional value of $ 280.8 million. The notional value represents the amount that will be sold upon maturity of the forward contract. As of December 31, 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 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 December 31, 2025, the Company did not have any offsetting arrangements. 10. Right-of-Use Assets and Lease Liabilities The Company has entered into various operating lease agreements for office space. As of December 31, 2025, the Company had various leased properties with remaining lease terms from 0.1 years to 5.0 years, some of which include options to extend the leases for up to 5.0 years. In the years ended December 31, 2025 and 2024, there were no significant impairment charges related to office closures. During 2023, as a result of the office closures described in Note 6, the Company impaired several of its ROU assets related to office leases that would no longer be used to support its ongoing operations. Of the $ 34.8 million of impairment recorded in the year ended December 31, 2023, $ 24.8 million related to the ROU assets and the remaining amount related to the associated assets in the property, plant and equipment categories. For the years ended December 31, 2025, 2024 and 2023, the Company did not have significant sublease income related to any of its subleased offices. 81 Table of Contents Operating lease costs recorded in the accompanying consolidated statements of operations were $ 27.0 million, $ 25.4 million and $ 35.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Lease costs associated with short-term leases, variable leases and finance leases were not significant. Supplemental cash flow and other information related to operating leases are as follows: Year Ended December 31, 2025 2024 Operating cash flows paid for amounts included in operating lease liabilities (in thousands) $ 40,700 $ 54,376 Weighted average remaining lease term (in years) 2.9 3.6 Weighted average discount rate 4.7 % 4.6 % Maturities of operating lease liabilities are as follows: As of December 31, 2025 Year Ended December 31, (In thousands) 2026 $ 38,557 2027 29,320 2028 22,445 2029 4,492 2030 554 Total lease payments 95,368 Less: imputed interest ( 6,083 ) Total operating lease obligations 89,285 Less: current obligations ( 35,123 ) Long-term operating lease obligations $ 54,162 11. Business Combinations On November 14, 2025, the Company acquired all outstanding shares of Stytch, Inc. (“Stytch”), an identity platform for AI agents based in San Francisco, California, for a purchase price of $ 104.1 million paid in cash, or $ 58.5 million net of cash acquired. The acquisition was accounted for as a business combination and the total preliminary purchase price of $ 104.1 million was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date with the excess recorded as goodwill. The acquired entities' results of operations have been included in the consolidated financial statements of the Company from the date of acquisition. The following table presents the preliminary purchase price allocation: Total (In thousands) Cash and cash equivalents $ 45,565 Other tangible assets and liabilities, net ( 1,844 ) Intangible assets (1) 11,833 Goodwill 48,507 Total preliminary purchase price $ 104,061 Less: cash and cash equivalents acquired ( 45,565 ) Total preliminary purchase price, net of cash acquired $ 58,496 ____________________________________ (1) Identifiable intangible assets were comprised of the following: 82 Table of Contents Total Estimated life (In thousands) (In years) Developed technology $ 9,864 5 Customer relationships 1,969 4 Total intangible assets acquired $ 11,833 12. Equity Method Investment In 2022, the Company acquired 44.6 % of the equity interests in Syniverse Corporation (“Syniverse”) for $ 750.0 million in cash. The Company determined that it did not have a controlling financial interest in Syniverse but did exercise significant influence and, therefore, the investment was accounted for under the equity method. The Company’s ownership percentage and other information related to the equity method investment, reported on a 90-day lag, are as follows: As of December 31, 2025 2024 Ownership percentage 43.7 % 43.8 % Basis difference attributable to intangible assets and deferred tax liability $ 297,114 $ 353,307 Equity method goodwill $ 543,157 $ 623,786 During 2025, the Company observed a change in the performance trend of its equity method investment, which it deemed an indicator that the carrying value of its equity method investment could be in excess of its fair value. The Company engaged a third-party expert to assist in performing a fair value assessment of the investment and concluded that as of December 31, 2025, its equity method investment was impaired. The Company recorded an impairment of $ 80.6 million in the impairment of equity method investment line item in the accompanying consolidated statement of operations for the year ended December 31, 2025. The Company allocated the full impairment amount to the equity method goodwill. The Company estimated the fair value of its equity method investment using a weighting of fair values derived from an income and a market approach. Estimating the fair value by these methods involves the use of various assumptions that the Company believed were reasonable under the circumstances. Under the income approach, the Company determined the fair value of the investment based on the present value of estimated future cash flows using the cash flow projections prepared by the investee management. The market approach estimated the fair value based on market multiples of adjusted EBITDA derived from comparable publicly traded companies with similar operating and investment characteristics as the investment. While these assumptions reflect management’s best estimates at the time of the valuation, the estimates are inherently complex and uncertain and the actual results could differ materially from the estimates. The fair value measurement of the equity method investment is classified as Level 3 in the fair value hierarchy. In conjunction with this investment, the Company and Syniverse 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. The values of the transactions that occurred between the Company and Syniverse were $ 138.9 million, $ 145.0 million and $ 143.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. These transactions were recorded as cost of revenue in the accompanying consolidated statements of operations. Summarized financial information of Syniverse is presented below on a one-month lag. The investee’s fiscal year end is November 30. As of November 30, 2025 2024 (In thousands) Current assets $ 172,548 $ 225,975 Noncurrent assets $ 2,365,336 $ 2,344,658 Current liabilities $ 214,359 $ 232,522 Noncurrent liabilities $ 1,198,196 $ 1,176,332 Non controlling interest $ 5,068 $ 6,027 83 Table of Contents Year Ended November 30, 2025 2024 2023 (In thousands) Revenue $ 795,749 $ 819,164 $ 739,317 Cost of operations (excluding depreciation and amortization) $ 481,486 $ 474,081 $ 430,140 Income from operations $ 92,701 $ 113,950 $ 67,870 Net loss $ ( 56,926 ) $ ( 38,849 ) $ ( 89,096 ) Net loss attributable to Syniverse Corporation $ ( 59,338 ) $ ( 40,917 ) $ ( 90,770 ) 13. Goodwill and Intangible Assets Goodwill In connection with the change in the Company’s operating segment structure, as described in Note 8, 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 in structure and concluded that goodwill was not impaired. The goodwill balance as of December 31, 2025 and 2024, and the changes during the period, were as follows: Total (In thousands) Balance as of December 31, 2024 and 2023 $ 5,243,266 Goodwill additions related to 2025 acquisitions and other 48,521 Balance as of December 31, 2025 $ 5,291,787 Intangible assets Intangible assets consist of the following: As of December 31, 2025 Cost Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 398,205 $ ( 359,450 ) $ 38,755 Customer relationships 350,283 ( 260,216 ) 90,067 Supplier relationships 49,756 ( 44,443 ) 5,313 Trade names 25,968 ( 25,928 ) 40 Patent 3,968 ( 1,293 ) 2,675 Total amortizable intangible assets 828,180 ( 691,330 ) 136,850 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 833,395 $ ( 691,330 ) $ 142,065 84 Table of Contents As of December 31, 2024 Cost Accumulated Amortization Net Amortizable intangible assets: (In thousands) Developed technology $ 388,341 $ ( 306,063 ) $ 82,278 Customer relationships 348,314 ( 215,523 ) 132,791 Supplier relationships 49,756 ( 35,363 ) 14,393 Trade names 25,968 ( 25,014 ) 954 Patent 3,968 ( 1,096 ) 2,872 Total amortizable intangible assets 816,347 ( 583,059 ) 233,288 Non-amortizable intangible assets: Telecommunication licenses 4,920 — 4,920 Trademarks and other 295 — 295 Total $ 821,562 $ ( 583,059 ) $ 238,503 Amortization expense was $ 108.3 million, $ 112.0 million and $ 192.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total estimated future amortization expense is as follows: As of December 31, 2025 Year Ended December 31, (In thousands) 2026 $ 44,615 2027 27,796 2028 21,520 2029 17,353 2030 16,614 Thereafter 8,952 Total $ 136,850 14. Balance Sheet Components Prepaid expenses and other current assets consist of the following: As of December 31, 2025 2024 (In thousands) Prepaid expenses $ 307,263 $ 333,911 Other current assets 162,387 140,449 Total prepaid expenses and other current assets $ 469,650 $ 474,360 85 Table of Contents Accrued expenses and other current liabilities consist of the following: As of December 31, 2025 2024 (In thousands) Accrued payroll and related liabilities $ 95,795 $ 76,708 Company-wide bonus program liability 136,221 109,776 Accrued sales bonus and commissions 21,922 21,585 Accrued cost of revenue 226,878 173,739 Sales and other taxes payable 58,259 79,731 ESPP contributions 6,925 5,745 Accrued other expense 62,119 63,402 Total accrued expenses and other current liabilities $ 608,119 $ 530,686 15. Long-Term Debt Long-term debt, net, consists of the following: As of December 31, 2025 2024 (In thousands) 2029 Senior Notes Principal $ 500,000 $ 500,000 Unamortized discount ( 2,733 ) ( 3,518 ) Unamortized issuance costs ( 615 ) ( 792 ) Net carrying amount 496,652 495,690 2031 Senior Notes Principal 500,000 500,000 Unamortized discount ( 3,563 ) ( 4,166 ) Unamortized issuance costs ( 802 ) ( 937 ) Net carrying amount 495,635 494,897 Total long-term debt, net $ 992,287 $ 990,587 2029 and 2031 Senior Notes In March 2021, the Company issued $ 1.0 billion aggregate principal amount of senior notes, consisting of $ 500.0 million principal amount of 3.625 % notes due 2029 (the “2029 Notes”) and $ 500.0 million principal amount of 3.875 % notes due 2031 (the “2031 Notes” and together with the 2029 Notes, the “Notes”). Initially, none of the Company’s subsidiaries guaranteed the Notes. However, under certain circumstances in the future the Notes can be guaranteed by each of the Company’s material domestic subsidiaries. The 2029 Notes and 2031 Notes will mature on March 15, 2029 and March 15, 2031, respectively. Interest payments are payable semi-annually in arrears on March 15 and September 15 of each year. The aggregate net proceeds from offering of the Notes were approximately $ 984.7 million after deducting underwriting discounts and issuance costs paid by the Company. As of December 31, 2025, the Company may voluntarily redeem the 2029 Notes, in whole or in part, under the following circumstances: (1) at any time on or after March 15, 2025 at a prepayment price equal to 100.906 % of the principal amount; and (2) at any time on or after March 15, 2026 at a prepayment price equal to 100.000 % of the principal amount; in each case, the redemption will include the accrued and unpaid interest, as applicable. 86 Table of Contents As of December 31, 2025, the Company may voluntarily redeem the 2031 Notes, in whole or in part, under the following circumstances: (1) at any time prior to March 15, 2026 at 100 % of the principal amount, plus a “make-whole” premium; (2) at any time on or after March 15, 2026 at a prepayment price equal to 101.938 % of the principal amount; (3) at any time on or after March 15, 2027 at a prepayment price equal to 101.292 % of the principal amount; (4) at any time on or after March 15, 2028 at a prepayment price equal to 100.646 % of the principal amount; and (5) at any time on or after March 15, 2029 at a prepayment price equal to 100.000 % of the principal amount; in each case, the redemption will include accrued and unpaid interest, as applicable. The Notes are general unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes that the Company may incur in the future and equal in right of payment with the Company’s existing and future unsecured and unsubordinated liabilities. In certain circumstances involving a change of control event, the Company will be required to make an offer to repurchase the Notes of the applicable series at a repurchase price equal to 101 % of the principal amount of the Notes of such series to be repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date. The indenture governing the Notes (the “Indenture”) contains restrictive covenants limiting the Company’s ability and the ability of its subsidiaries to: (i) create liens on certain assets to secure debt; (ii) grant a subsidiary guarantee of certain debt without also providing a guarantee of the Notes; and (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets to another person. These covenants are subject to a number of limitations and exceptions. Certain of these covenants will not apply during any period in which the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services. As of December 31, 2025, the Company was in compliance with all of its covenants under the Indenture. 16. Supplemental Balance Sheet Information A roll‑forward of the Company’s customer credit reserve is as follows: As of December 31, 2025 2024 2023 (In thousands) Balance, beginning of period $ 19,341 $ 33,594 $ 33,124 Additions 98,955 81,695 167,044 Deductions against reserve ( 86,484 ) ( 95,948 ) ( 166,574 ) Balance, end of period $ 31,812 $ 19,341 $ 33,594 87 Table of Contents 17. Revenue by Geographic Area and Groups of Similar Products Revenue by geographic area is based on the IP address or the mailing address of the customer at the time of registration. The following table sets forth revenue by geographic area: Year Ended December 31, 2025 2024 2023 Revenue by geographic area: (In thousands) United States $ 3,246,863 $ 2,898,056 $ 2,757,470 International 1,820,357 1,559,980 1,396,475 Total $ 5,067,220 $ 4,458,036 $ 4,153,945 Percentage of revenue by geographic area: United States 64 % 65 % 66 % International 36 % 35 % 34 % The following table sets forth long-lived assets by geographic area: As of December 31, 2025 2024 Long-lived assets by geographic area: (In thousands) United States $ 43,491 $ 65,782 International 15,561 25,676 Total $ 59,052 $ 91,458 Percentage of long-lived assets by geographic area: United States 74 % 72 % International 26 % 28 % The following table sets forth revenue by groups of similar products: Year Ended December 31, 2025 2024 (1) 2023 (1) Revenue by groups of similar products: (In thousands) Messaging $ 2,878,304 $ 2,435,462 $ 2,251,308 Voice 615,655 543,117 511,728 Email 523,470 488,271 440,185 Segment 303,250 297,696 295,252 Other 746,541 693,490 655,472 Total $ 5,067,220 $ 4,458,036 $ 4,153,945 ________________________________________ (1) Prior year amounts were reclassified to conform to the current year presentation. In 2025, RCS Messaging and WhatsApp Messaging were reclassified into Messaging. Previously, revenue related to these products was presented within Other. As a result, $ 76.7 million and $ 66.6 million were reclassified out of Other and into Messaging for the years ended December 31, 2024 and 2023, respectively. 18. Commitments and Contingencies (a) Lease and Other Commitments The Company entered into various non-cancelable operating lease agreements for its facilities. Refer to Note 10 for additional detail on the Company's operating lease commitments. 88 Table of Contents Additionally, the Company has contractual commitments with its cloud infrastructure providers, network service providers and other vendors that are noncancellable and expire within one to five years . In the year ended December 31, 2025, the Company entered into several such agreements with terms of up to five years for a total purchase commitment of $ 149.1 million. Future minimum payments under these noncancellable purchase commitments are summarized in the table below. Unrecognized tax benefits are not included in these amounts because any amounts expected to be settled in cash are not significant: As of December 31, 2025 Year Ending December 31, (In thousands) 2026 $ 288,615 2027 31,861 2028 13,152 2029 9,166 2030 6,447 Total payments $ 349,241 (b) Legal Matters From time to time, the Company may be subject to legal actions, claims, and government investigations or inquiries arising in the ordinary course of business. These matters may include, but are not limited to, matters involving privacy, data protection, data security, intellectual property, competition, telecommunications, consumer protection, taxation, securities, employment and contractual rights. 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 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 the 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. 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 consolidated statements of operations. (c) Indemnification Agreements In the ordinary course of business and in connection with its financing and business combination transactions, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to business partners, customers and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company’s products or its acts or omissions. 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 December 31, 2025 and 2024, no amounts were accrued related to any outstanding indemnification agreements. (d) Other Taxes The Company conducts operations in many tax jurisdictions within and outside the United States. In many of these jurisdictions, non-income-based taxes, such as sales, use, telecommunications and other local taxes are assessed on the Company’s operations. The Company carries reserves for certain of its non-income-based tax exposures in certain jurisdictions when it is both probable that a liability was incurred and the amount of the exposure can be reasonably estimated. These reserves are based on estimates which include several key assumptions including, but not limited to, the taxability of the Company’s services, the jurisdictions in which management believes it had nexus and the sourcing of revenues to those jurisdictions. 89 Table of Contents The Company continues to remain in discussions with certain jurisdictions regarding its prior sales and other taxes that it may owe. 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 December 31, 2025, the liabilities recorded for non-income-based taxes were $ 21.1 million for domestic jurisdictions and $ 21.8 million for jurisdictions outside of the United States. As of December 31, 2024, these liabilities were $ 19.3 million and $ 22.0 million, respectively. 19. Stockholders' Equity Preferred Stock As of December 31, 2025 and 2024, the Company had authorized 100,000,000 shares of preferred stock, par value $ 0.001 , of which no shares were issued and outstanding. Common Stock As of December 31, 2025 and 2024, the Company had authorized 1,000,000,000 shares of Class A common stock, par value of $ 0.001 per share. As of December 31, 2024, the Company had also authorized 3,170,181 shares of Class B common stock, par value of $ 0.001 per share. As of December 31, 2025 and 2024, 152,411,346 and 152,610,697 shares of Class A common stock, 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 December 31, 2025 2024 Stock options issued and outstanding 902,120 1,322,176 Unvested restricted stock units issued and outstanding 13,663,977 18,386,271 Shares of Class A common stock reserved for Twilio.org 265,225 353,633 Stock-based awards available for grant under 2016 Plan 28,543,969 23,292,678 Shares of Class A common stock reserved for issuance pursuant to ESPP 10,836,938 9,709,326 Total 54,212,229 53,064,084 Share Repurchase Programs In January 2025, the board of directors of the Company authorized a share repurchase program to repurchase up to $ 2.0 billion in aggregate value of the Company’s outstanding Class A common stock. Repurchases under this program can be made through open market, private transactions or other means, in compliance with applicable federal securities laws, and can include repurchases pursuant to Rule 10b5-1 trading plans. The Company has discretion in determining the conditions under which shares may be repurchased from time to time. The program expires on December 31, 2027. The Company’s previous share repurchase authorizations expired on December 31, 2024. During the years ended December 31, 2025 and 2024, the Company repurchased 8.0 million shares and 36.8 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 854.6 million and $ 2.3 billion, respectively. As of December 31, 2025, approximately $ 1.1 billion of the amount authorized in January 2025 for share repurchases remained available for future repurchases. 20. Stock-Based Compensation The following equity incentive plans govern a significant amount of the outstanding equity awards as of December 31, 2025: 90 Table of Contents 2016 Stock Option Plan The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) became effective on June 21, 2016. The 2016 Plan provides for the grant of ISOs, NSOs, restricted stock awards, RSUs, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards to employees, directors and consultants of the Company. A total of 11,500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 Plan. These available shares automatically increase each January 1, beginning on January 1, 2017, by 5 % of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2025 and 2024, the shares available for grant under the 2016 Plan were automatically increased by 7,630,534 shares and 9,097,289 shares, respectively. Under the 2016 Plan, the stock options are granted at a price per share not less than 100 % of the fair market value per share of the underlying common stock on the date of grant. 2016 Employee Stock Purchase Plan The Company’s 2016 ESPP was effective on June 21, 2016. A total of 2,400,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 ESPP. These available shares automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,800,000 shares of the Company's Class A common stock, 1 % of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2025 and 2024, the shares available for grant under the 2016 ESPP were automatically increased by 1,526,106 and 1,800,000 shares, respectively. The 2016 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, subject to any plan limitations. The 2016 ESPP provides for separate six-month offering periods beginning in May and November of each year. On each purchase date, eligible employees purchase shares of the Company’s Class A common stock at a price per share equal to 85 % of the lesser of (i) the fair market value of the Company’s Class A common stock on the offering date or (ii) the fair market value of the Company’s Class A common stock on the purchase date. As of December 31, 2025, total unrecognized compensation cost related to the 2016 ESPP was not significant. Stock-options and restricted stock units and awards activity under the Company’s equity incentive plans is as follows: Stock Options Number of options outstanding Weighted- average exercise price (Per share) Weighted- average remaining contractual term (In years) Aggregate intrinsic value (In thousands) Outstanding options as of December 31, 2024 1,322,176 $ 74.15 3.05 $ 74,838 Exercised ( 420,056 ) $ 14.87 Outstanding options as of December 31, 2025 902,120 $ 101.75 2.87 $ 59,701 Options vested and exercisable as of December 31, 2025 902,120 $ 101.75 2.87 $ 59,701 Year Ended December 31, 2025 2024 2023 (In thousands, except per share amounts) Aggregate intrinsic value of stock options exercised (1) $ 41,976 $ 8,649 $ 15,242 Total estimated grant date fair value of options vested $ 844 $ 9,351 $ 28,619 ____________________________________ ( 1 ) Aggregate intrinsic value represents the difference between the fair value of the Company’s Class A common stock as reported on the New York Stock Exchange and the exercise price of outstanding “in-the-money” options. As of December 31, 2025, all stock options have vested. 91 Table of Contents Restricted Stock Units Number of awards outstanding Weighted- average grant date fair value (Per share) Aggregate intrinsic value (In thousands) Unvested RSUs as of December 31, 2024 18,386,271 $ 71.96 $ 1,394,966 Granted 4,728,094 $ 119.02 Vested ( 6,944,005 ) $ 84.28 Forfeited and canceled ( 2,506,383 ) $ 78.06 Unvested RSUs as of December 31, 2025 13,663,977 $ 80.86 $ 1,943,564 In 2025 and 2024, the Company granted to certain of its executive employees performance-based restricted stock units (“PSUs”) covering 185,899 and 516,626 shares, respectively, of Class A common stock that had an aggregate grant date fair value of $ 27.1 million and $ 34.5 million, respectively. These awards are included in the table above. The PSUs will vest if certain operational performance conditions or market conditions, as defined in the respective grant agreements, are met during the performance achievement periods, which expire on December 31, 2027 and 2026, respectively. 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. As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $ 994.9 million, which will be amortized over a weighted-average period of 2.2 years. Valuation Assumptions The Company used the following assumptions in the Black-Scholes option pricing model to estimate the fair value of the purchase rights issued under the 2016 ESPP: Year Ended December 31, Employee Stock Purchase Plan: 2025 2024 2023 Fair value of common stock $ 116.34 - $ 120.22 $ 61.54 - $ 96.41 $ 47.36 - $ 61.55 Expected term (in years) 0.50 0.50 0.50 Expected volatility 57.8 % - 58.7 % 38.6 % - 41.8 % 45.8 % - 57.1 % Risk-free interest rate 3.8 % - 4.3 % 4.4 % - 5.4 % 5.3 % - 5.4 % Stock-Based Compensation Expense The Company recorded stock-based compensation expense as follows: Year Ended December 31, 2025 2024 2023 (In thousands) Cost of revenue $ 16,570 $ 22,001 $ 26,343 Research and development 326,767 330,933 331,526 Sales and marketing 136,998 135,331 183,389 General and administrative 118,319 125,164 121,584 Restructuring costs 1,753 3,178 13,015 Total $ 600,407 $ 616,607 $ 675,857 92 Table of Contents 21. Net Income (Loss) Per Share Attributable to Common Stockholders The following table sets forth the calculation of basic and diluted net income (loss) per share attributable to common stockholders during the periods presented: Year Ended December 31, 2025 2024 2023 Numerator: Net income (loss) attributable to common stockholders (in thousands) $ 33,834 $ ( 109,403 ) $ ( 1,015,441 ) Denominator: Weighted-average shares outstanding, basic 152,986,390 165,925,128 183,327,844 Dilutive effect of outstanding stock options, RSUs, and stock committed under ESPP 6,802,554 — — Weighted-average shares outstanding, diluted 159,788,944 165,925,128 183,327,844 Net income (loss) per share attributable to common stockholders Basic $ 0.22 $ ( 0.66 ) $ ( 5.54 ) Diluted $ 0.21 $ ( 0.66 ) $ ( 5.54 ) 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: Year Ended December 31, 2025 2024 2023 Stock options issued and outstanding 145,350 1,322,176 1,722,861 Unvested restricted stock units issued and outstanding (1) 773,678 18,386,271 18,755,538 Shares of Class A common stock reserved for Twilio.org — 353,633 442,041 Shares of Class A common stock committed under ESPP 238,403 265,698 426,199 Shares of Class A common stock in escrow — — 31,503 Shares of Class A common stock in escrow subject to future vesting — — 3,771 Total 1,157,431 20,327,778 21,381,913 ____________________________________ (1) 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. 93 Table of Contents 22. Income Taxes The following table presents domestic and foreign components of income (loss) before provision for income taxes for the periods presented: Year Ended December 31, 2025 2024 2023 (In thousands) United States $ 150,891 $ 40,982 $ ( 816,089 ) International ( 95,797 ) ( 129,595 ) ( 180,640 ) Income (loss) before provision for income taxes $ 55,094 $ ( 88,613 ) $ ( 996,729 ) Provision for income taxes consists of the following: Year Ended December 31, 2025 2024 2023 Current: (In thousands) Federal $ 341 $ 5,617 $ 2,567 State 1,515 2,305 1,533 Foreign 20,692 14,850 31,354 Total 22,548 22,772 35,454 Deferred: Federal 95 196 ( 1,337 ) State ( 27 ) 149 ( 208 ) Foreign ( 1,356 ) ( 2,327 ) ( 15,197 ) Total ( 1,288 ) ( 1,982 ) ( 16,742 ) Provision for income taxes $ 21,260 $ 20,790 $ 18,712 The provision for income taxes recorded in the years ended December 31, 2025, 2024 and 2023, consists primarily of income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business. Due to a history of losses in the U.S., the Company maintains a full valuation allowance against its U.S. deferred tax assets. 94 Table of Contents As described in Note 2(ae), in the current period, the Company adopted ASU 2023-09 on a prospective basis. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09, is as follows: Year Ended December 31, 2025 Amount (in thousands) Percent Tax at federal statutory rate $ 11,570 21 % Federal: Effect of cross-border tax laws: Foreign income taxed in the United States, net of foreign tax deductions ( 1,440 ) ( 3 ) Withholding taxes 157 — Tax Credits: Research and development tax credits ( 40,879 ) ( 74 ) Changes in valuation allowance 36,651 67 Nontaxable or nondeductible items: Excess benefit on share-based payment awards ( 41,493 ) ( 75 ) Other share-based payment award related items 14,216 26 Other 1,651 3 Other adjustments 264 1 State and local taxes, net of federal income tax effect (1) 1,080 2 Foreign tax effects: Ireland: Statutory tax rate difference between Ireland and United States 9,473 17 Changes in valuation allowance 9,720 18 Foreign exchange gains/losses 7,394 13 Other ( 580 ) ( 1 ) Brazil: Withholding taxes 7,758 14 Other 1,213 2 Other foreign jurisdictions (2) 6,118 11 Worldwide changes in unrecognized tax benefits (gross) ( 1,613 ) ( 3 ) Effective tax rate $ 21,260 39 % ____________________________________ ( 1 ) State taxes in North Carolina and Texas made up the majority (greater than 50 percent) of the tax effect in this category. (2) Other foreign jurisdictions is comprised of $2.6 million related to India. The remaining foreign jurisdictions are not significant. A reconciliation of the U.S. federal statutory income tax rates to the Company’s effective tax rate for the years ended December 31, 2024 and 2023, pursuant to previous disclosure requirements, is as follows: Year Ended December 31, 2024 2023 Tax at federal statutory rate 21 % 21 % State tax, net of federal benefit 1 3 Stock-based compensation ( 40 ) ( 7 ) Credits 20 2 Foreign rate differential ( 67 ) 1 Permanent book vs. tax differences 8 — Change in valuation allowance 32 ( 23 ) Other 2 1 Effective tax rate ( 23 ) % ( 2 ) % 95 Table of Contents Cash paid for income taxes, net of refunds, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows: Year Ended December 31, 2025 (In thousands) U.S. federal taxes $ 3,157 U.S. state taxes 3,973 Non-U.S. taxes 10,581 Total income taxes paid, net $ 17,711 Income taxes paid exceeds 5% of total income taxes paid, net of refunds, in the following jurisdictions: Year Ended December 31, 2025 (In thousands) U.S. State California $ 1,723 Non-U.S. Brazil $ 2,446 Colombia $ 1,879 Japan $ 1,678 India $ 3,706 Income taxes paid, net, for the years ended December 31, 2024 and 2023 were $ 36.5 million and $ 37.8 million, respectively. 96 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company's deferred tax assets and liabilities: As of December 31, 2025 2024 Deferred tax assets: (In thousands) Net operating loss carryforwards $ 818,284 $ 810,278 Accruals and reserves 80,185 73,535 Stock-based compensation 31,673 28,238 Research and development credits 237,447 175,746 Intangibles 135,500 135,500 Capitalized research and development expenses 230,302 299,061 Lease liability 21,499 30,697 Investments and other basis differences 126,369 81,248 Other 8,992 18,139 Gross deferred tax assets 1,690,251 1,652,442 Valuation allowance ( 1,554,727 ) ( 1,488,328 ) Net deferred tax assets 135,524 164,114 Deferred tax liabilities: Capitalized software ( 39,022 ) ( 38,394 ) Prepaid expenses ( 863 ) ( 900 ) Acquired intangibles ( 32,633 ) ( 55,283 ) Right-of-use asset ( 8,913 ) ( 13,112 ) Deferred commissions ( 37,173 ) ( 42,313 ) Net deferred tax asset $ 16,920 $ 14,112 The following table summarizes the Company’s tax carryforwards, carryovers and credits: As of December 31, 2025 Expiration Date (If not utilized) (In thousands) Federal tax credits $ 205,987 Various dates beginning in 2038 Federal net operating loss carryforwards $ 2,866,460 Indefinite State net operating loss carryforwards $ 2,400,985 Various dates beginning in 2026 State tax credits $ 155,404 Various dates beginning in 2029 Foreign net operating loss carryforwards $ 965,615 Indefinite A limitation may apply to the use of the federal and state net operating loss and credit carryforwards, under provisions of the Internal Revenue Code of 1986, as amended, and similar state tax provisions that are applicable if the Company experiences an “ownership change.” An ownership change may occur, for example, as a result of issuance of new equity. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a potential reduction in the gross deferred tax assets before considering the valuation allowance. The Company's accounting for deferred taxes involves the evaluation of a number of factors related to the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company's deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the federal, state and certain foreign net deferred tax assets will be realized, and accordingly, a valuation allowance has been established. The valuation allowance increased by approximately $ 66.4 million during the year ended December 31, 2025, and decreased by approximately $ 45.6 million during the year ended December 31, 2024. 97 Table of Contents A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2025 2024 2023 (In thousands) Unrecognized tax benefit, beginning of year $ 252,208 $ 233,778 $ 228,966 Gross increases for tax positions of prior years 6,647 7,476 3,427 Gross decreases for tax positions of prior years ( 1,085 ) ( 198 ) ( 5,130 ) Gross increases for tax positions of current year 24,889 13,253 7,754 Gross decreases for tax positions of current year ( 168 ) — — Lapse of statute of limitations ( 1,795 ) ( 2,101 ) ( 1,239 ) Unrecognized tax benefit, end of year $ 280,696 $ 252,208 $ 233,778 As of December 31, 2025, the Company had approximately $ 280.7 million of unrecognized tax benefits. If the $ 280.7 million is recognized, $ 1.3 million would affect the effective tax rate. The remaining amount would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. As of December 31, 2025, the tax years 2008 through the current period remain open to examination by the major jurisdictions in which the Company is subject to tax. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. The Company is fully reserved for all open U.S. federal, state and local, or non-U.S. income tax examinations by any tax authorities. On June 7, 2019, a three-judge panel from the U.S. Court of Appeals for the Ninth Circuit overturned the U.S. Tax Court's decision in Altera Corp. v. Commissioner and upheld the portion of the Treasury regulations under Section 482 of the Internal Revenue Code that requires related parties in a cost-sharing arrangement to share expenses related to share-based compensation. As a result of this decision, the Company's gross unrecognized tax benefits increased to reflect the impact of including share-based compensation in cost-sharing arrangements. The Company will continue to monitor future developments related to this matter and their potential effects on its consolidated financial statements. There is no impact on the Company’s effective tax rate for years ended December 31, 2025 and 2024 due to a full valuation allowance against its deferred tax assets. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.