What changed in this filing

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Item 1. Financial Statements

2026-05-01 compared with 2025-10-31 · 120 added, 210 removed, 465 unchanged (42% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

As of September 30, As of December 31,

As of March 31, As of December 31,

(In thousands)

28 unchanged sentences

Additional paid-in capital 16,294,528 16,148,190

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

( 4,317 ) 15,668

4 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Three Months Ended

(In thousands, except share and per share amounts)

7 unchanged sentences

Total operating expenses 576,578 558,485

Income (loss) from operations 40,948 ( 4,894 ) 101,019 ( 67,435 )

Income from operations

107,666 23,082

Other (expenses) income, net:

3 unchanged sentences

( 5,434 ) 3,502

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

Income before provision for income taxes

102,232 26,584

Benefit from (provision for) income taxes

Provision for income taxes

( 12,093 ) ( 6,567 )

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

Net income (loss) per share attributable to common

stockholders:

Net income attributable to common stockholders

$ 90,139 $ 20,017

Net income per share attributable to common stockholders:

Basic $ 0.59 $ 0.13

Diluted $ 0.57 $ 0.12

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

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

Basic 152,424,306 153,345,192

1 unchanged sentence

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

(In thousands)

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

$ 90,139 $ 20,017

Other comprehensive (loss) income:

Unrealized gain on marketable securities

Unrealized (loss) gain on marketable securities

( 10,069 ) 5,058

Net change in market value of effective foreign currency

forward exchange contracts

Net change in market value of effective foreign currency forward exchange contracts

( 10,590 ) 8,386

Share of other comprehensive income (loss) from equity

method investment

Share of other comprehensive income (loss) from equity method investment

674 ( 1,785 )

1 unchanged sentence

( 19,985 ) 11,659

Comprehensive income (loss) attributable to common

Comprehensive income attributable to common stockholders

$ 70,154 $ 31,676

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended September 30, 2025

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income

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

Accumulated Deficit Total Stockholders' Equity

1 unchanged sentence

(In thousands, except share amounts)

Balance as of June 30, 2025

Balance as of December 31, 2025

152,411,346 $ 152 $ 16,148,190 $ 15,668 $ ( 8,342,464 ) $ 7,821,546

4 unchanged sentences

Shares of Class A common stock issued and donated to charity 22,102 — 2,445 — — 2,445

Unrealized gain on marketable securities

Unrealized loss on marketable securities

— — — ( 10,069 ) — ( 10,069 )

4 unchanged sentences

Stock-based compensation — — 143,378 — — 143,378

Balance as of September 30, 2025

Balance as of March 31, 2026

152,105,999 $ 152 $ 16,294,528 $ ( 4,317 ) $ ( 8,506,279 ) $ 7,784,084

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Nine Months Ended September 30, 2025

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

8 unchanged sentences

Value of equity awards withheld for tax liability ( 423 ) — ( 53 ) — — ( 53 )

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

Shares of Class A common stock issued and donated to charity 22,102 — 2,776 — — 2,776

Unrealized gain on marketable securities

Repurchases of shares of Class A common stock including related costs ( 6,421,039 ) ( 7 ) — — ( 656,310 ) ( 656,317 )

Net change in market value of effective foreign currency forward exchange contracts — — — 18,573 — 18,573

Share of other comprehensive loss from equity method investment

— — — 5,058 — 5,058

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

Balance as of September 30, 2025

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

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended September 30, 2024

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 June 30, 2024

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

Net loss — — — — ( 9,726 ) ( 9,726 )

Exercises of vested stock options 43,562 — 969 — — 969

Vesting of restricted stock units 1,813,439 2 ( 2 ) — — —

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

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

Unrealized gain on marketable securities

— — — 29,317 — 29,317

Repurchases of shares of Class A common stock including related costs ( 1,222,193 ) ( 2 ) — — ( 129,772 ) ( 129,774 )

3 unchanged sentences

Stock-based compensation — — 143,934 — — 143,934

Balance as of September 30, 2024

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

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

Nine Months Ended September 30, 2024

Class A Additional Paid-In Capital Accumulated Other Comprehensive Income

Accumulated Deficit Total Stockholders' Equity

Shares Amount

(In thousands, except share amounts)

Balance as of December 31, 2023

181,945,771 $ 182 $ 14,797,723 $ 619 $ ( 5,065,972 ) $ 9,732,552

Net loss — — — — ( 96,933 ) ( 96,933 )

Exercises of vested stock options 114,995 — 2,068 — — 2,068

Vesting of restricted stock units 4,893,903 5 ( 5 ) — — —

Value of equity awards withheld for tax liability ( 27,839 ) — ( 1,981 ) — — ( 1,981 )

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

Shares of Class A common stock issued and donated to charity 66,306 — 3,911 — — 3,911

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

Unrealized gain on marketable securities

— — — 22,303 — 22,303

Repurchases of shares of Class A common stock including related costs ( 32,000,610 ) ( 32 ) — — ( 1,931,957 ) ( 1,931,989 )

Net change in market value of effective foreign currency forward exchange contracts — — — 1,285 — 1,285

Share of other comprehensive income from equity method investment — — — 188 — 188

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

Balance as of September 30, 2024

Balance as of March 31, 2025

153,254,342 $ 153 $ 15,625,545 $ 10,358 $ ( 7,631,765 ) $ 8,004,291

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

(In thousands)

Net income (loss) $ 79,688 $ ( 96,933 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ 90,139 $ 20,017

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 34,167 49,565

3 unchanged sentences

Amortization of deferred commissions 17,139 19,265

Provision for doubtful accounts 6,361 18,123

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

Unrealized (gains) losses on marketable equity securities ( 4,795 ) 750

Share of losses from equity method investment 27,223 19,471

11 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions, net of cash acquired.

and payments related to prior period acquisitions ( 685 ) —

Purchases of marketable securities and other investments ( 353,288 ) ( 213,844 )

Proceeds from sales and maturities of marketable securities 1,043,977 2,025,267

Proceeds from sales and maturities of marketable securities and other investments 333,644 207,431

Capitalized software development costs ( 16,708 ) ( 11,564 )

Purchases of long-lived and intangible assets ( 4,402 ) ( 3,548 )

Net cash provided by investing activities

Purchases of long-lived assets ( 4,153 ) ( 1,163 )

Net cash used in investing activities

( 41,190 ) ( 19,140 )

3 unchanged sentences

Repurchases of shares of Class A common stock and related costs ( 253,027 ) ( 126,256 )

Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP 26,280 22,669

Proceeds from exercises of stock options 559 2,766

Net cash used in financing activities ( 252,574 ) ( 125,794 )

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

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

( 140,558 ) 46,108

5 unchanged sentences

Cash and cash equivalents $ 541,976 $ 467,094

Restricted cash in other current assets — 7,554

Restricted cash in other long-term assets — 10,451

16 unchanged sentences

GAAP on an annual reporting basis.

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

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income, stockholders’ equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2026 or any future period.

(b) Principles of Consolidation

7 unchanged sentences

capitalization and useful life of the Company’s capitalized internal-use software development costs;

fair value of acquired intangible assets and goodwill;

fair values of acquired intangible assets, goodwill and equity method investments;

accruals and contingencies.

3 unchanged sentences

(d) Remaining Performance Obligations

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

Revenue allocated to remaining performance obligations for contracts with durations of more than one year was $ 158.5 million as of March 31, 2026, of which 67 % is expected to be recognized over the next 12 months and 96 % is expected to be recognized over the next 24 months.

(e) Deferred Revenue and Customer Deposits

As of September 30, 2025, and December 31, 2024, the Company recorded $ 159.2 million and $ 155.7 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits and other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

During the three months ended September 30, 2025 and 2024, the Company recognized $ 20.6 million and $ 16.3 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

During the nine months ended September 30, 2025 and 2024, the Company recognized $ 125.8 million and $ 113.7 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

As of March 31, 2026, and December 31, 2025, the Company recorded $ 159.6 million and $ 158.7 million as its deferred revenue and customer deposits, respectively, that are included in deferred revenue and customer deposits in the accompanying unaudited condensed consolidated balance sheets.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 76.8 million and $ 70.1 million of revenue, respectively, that was included in the deferred revenue and customer deposits balances as of the end of the previous year.

(f) Concentration of Credit Risk

7 unchanged sentences

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

As of September 30, 2025, and December 31, 2024, the allowance for doubtful accounts was $ 21.5 million and $ 27.5 million, respectively, and is recorded in accounts receivable, net, in the accompanying unaudited condensed consolidated balance sheets.

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

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

(g) Recently Issued Accounting Guidance, Not yet Adopted

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

As of March 31, 2026, and December 31, 2025, the allowance for doubtful accounts was $ 20.5 million and $ 21.5 million, respectively, and is recorded in accounts receivable, net, in the accompanying unaudited condensed consolidated balance sheets.

In the three months ended March 31, 2026 and 2025, no customer organization accounted for more than 10% of the Company’s total revenue.

As of March 31, 2026, and December 31, 2025, no customer organization represented more than 10% of the Company’s gross accounts receivable.

(g) Segment Reporting

The Company operates in and reports its results in a single operating and reportable segment.

Operating and reportable segments are determined 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, reviews and manages the business, and establishes criteria for aggregating operating segments into reportable segments.

The financial information of the Company regularly provided to the CODM is on a consolidated level and consolidated net income is its measure of profitability.

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

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

(h) Recently Issued Accounting Guidance, Not yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

1 unchanged sentence

Early adoption is permitted.

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

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

3 unchanged sentences

Early adoption is permitted.

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

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

2023-09, “ Income Taxes (Topic 740):

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

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

Early adoption is permitted.

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

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

Fair Value Measurements

1 unchanged sentence

The following tables provide the financial assets measured at fair value on a recurring basis:

Losses Less Than 12 Months Gross

12 Months Fair Value Hierarchy as of

September 30, 2025 Aggregate

Losses Less Than 12 Months Fair Value Hierarchy as of

March 31, 2026 Aggregate

Level 1 Level 2 Level 3

25 unchanged sentences

Commercial paper 37,517 — — — 37,517 37,517

Treasury bills 2,748 — — — 2,748 — — 2,748

Total included in cash

3 unchanged sentences

Treasury securities 249,396 1,190 ( 9 ) — 250,577 — — 250,577

securities 2,909 27 — — 2,936 — — 2,936

Corporate debt securities and

7 unchanged sentences

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.

Treasury securities, high credit quality corporate debt securities and commercial paper.

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

Interest earned on debt securities was $ 16.3 million and $ 53.2 million in the three and nine months ended September 30, 2025, respectively, and $ 20.1 million and $ 70.7 million in the three and nine months ended September 30, 2024, respectively.

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

Interest earned on debt securities was $ 17.5 million and $ 18.9 million in the three months ended March 31, 2026 and 2025, respectively.

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

The following table summarizes the contractual maturities of debt securities:

As of September 30, As of December 31,

As of March 31, As of December 31,

Cost Aggregate

7 unchanged sentences

Strategic Investments

As of September 30, 2025 and December 31, 2024, the Company held strategic investments with a carrying value of $ 20.3 million and $ 23.5 million, respectively, recorded as other long-term assets in the accompanying unaudited condensed consolidated balance sheets.

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

As of March 31, 2026 and December 31, 2025, the Company held strategic investments with a carrying value of $ 22.2 million and $ 24.5 million, respectively, recorded as other long-term assets in the accompanying unaudited condensed consolidated balance sheets.

There were no significant impairments or adjustments recorded in the three months ended March 31, 2026 and 2025 related to these securities.

Financial Liabilities

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

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

As of March 31, 2026 and December 31, 2025, the aggregate fair value of these liabilities and the associated unrealized losses were not significant.

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

As of September 30, 2025, the fair values of the 2029 Notes and 2031 Notes were $ 477.3 million and $ 471.1 million, respectively.

As of March 31, 2026, the fair values of the 2029 Notes and 2031 Notes were $ 479.7 million and $ 468.2 million, respectively.

As of December 31, 2025, the fair values of the 2029 Notes and 2031 Notes were $ 489.7 million and $ 483.9 million, respectively.

1 unchanged sentence

Property and equipment consist of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(In thousands)

10 unchanged sentences

Total property and equipment, net $ 181,388 $ 176,963

____________________________________

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

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

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

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

Reorganization and Segment Reporting

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

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

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

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

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

Depreciation and amortization expense was $ 17.0 million and $ 21.9 million in the three months ended March 31, 2026 and 2025, respectively.

The Company capitalized $ 23.3 million and $ 16.2 million in internal‑use software development costs in the three months ended March 31, 2026 and 2025, respectively.

Derivatives and Hedging

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

As of March 31, 2026, the Company’s outstanding foreign currency forward contracts designated as cash flow hedges had a total sell notional value of $ 294.6 million.

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

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

As of March 31, 2026, these contracts had maturities of up to seventeen months .

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

1 unchanged sentence

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

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

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

As of March 31, 2026, the Company did not have any offsetting arrangements.

Goodwill and Intangible Assets

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

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

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

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

The goodwill balance as of March 31, 2026 and December 31, 2025, and the changes during the period, were as follows:

(In thousands)

Balance as of December 31, 2025

Measurement period adjustment and other

Balance as of March 31, 2026

Intangible assets

Intangible assets consist of the following:

As of September 30, 2025

As of March 31, 2026

Cost Accumulated Amortization Net

25 unchanged sentences

Total $ 833,395 $ ( 691,330 ) $ 142,065

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

Amortization expense was $ 16.7 million and $ 27.2 million for the three months ended March 31, 2026 and 2025, respectively.

Total estimated future amortization expense is as follows:

As of September 30, 2025

As of March 31, 2026

Year Ended December 31, (In thousands)

2025 (remaining three months) $ 26,712

2026 (remaining nine months) $ 27,949

Thereafter 8,952

2 unchanged sentences

Prepaid expenses and other current assets consist of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(In thousands)

4 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

As of September 30, As of December 31,

As of March 31, As of December 31,

(In thousands)

9 unchanged sentences

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

As of September 30, As of December 31,

As of March 31, As of December 31,

(In thousands)

10 unchanged sentences

Total long-term debt, net $ 992,722 $ 992,287

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

As of March 31, 2026, the Company was in compliance with all of its covenants under the related indentures.

Revenue by Geographic Area

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Revenue by geographic area:

9 unchanged sentences

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

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

In the three months ended March 31, 2026, the Company did not enter into any significant new lease agreements.

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

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

The Company had $ 273.2 million of non-cancelable purchase commitments as of March 31, 2026 with remaining terms up to five years .

(b) Legal Matters

9 unchanged sentences

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

As of March 31, 2026, and December 31, 2025, no amounts were accrued related to any outstanding indemnification agreements.

(d) Other Taxes

5 unchanged sentences

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

As of March 31, 2026, the liabilities accrued for non-income-based taxes were $ 21.8 million for domestic jurisdictions and $ 21.0 million for jurisdictions outside of the United States.

As of December 31, 2025, these liabilities were $ 21.1 million and $ 21.8 million, respectively.

1 unchanged sentence

Preferred Stock

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

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

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

As of September 30, 2025 and December 31, 2024, 152,067,819 and 152,610,697 shares of Class A common stock were issued and outstanding, respectively, and no shares of Class B common stock were issued and outstanding.

As of March 31, 2026 and December 31, 2025, the Company had authorized 100,000,000 shares of preferred stock, par value $ 0.001 per share, of which no shares were issued and outstanding.

As of March 31, 2026 and December 31, 2025, the Company had authorized 1,000,000,000 shares of Class A common stock, par value $ 0.001 per share.

As of March 31, 2026 and December 31, 2025, 152,105,999 and 152,411,346 shares of Class A common stock, respectively, were issued and outstanding.

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

As of September 30, As of December 31,

As of March 31, As of December 31,

Stock options issued and outstanding 864,951 902,120

9 unchanged sentences

The program expires on December 31, 2027.

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

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

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

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

In the three months ended March 31, 2026 and 2025, the Company repurchased 2.1 million and 1.2 million shares of its Class A common stock, respectively, for an aggregate purchase price of $ 253.4 million and $ 130.2 million, respectively.

As of March 31, 2026, approximately $ 892.0 million of the amount authorized in January 2025 for share repurchases remained available for future repurchases.

Stock-Based Compensation

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In the first quarter of 2026, the Company granted to certain of its executive employees performance-based restricted stock units (“PSUs”) covering 210,301 shares of Class A common stock that had an aggregate grant date fair value of $ 24.8 million.

The PSUs will vest if certain operational performance or market conditions, as defined in the grant agreements, are met during the performance achievement period, which expires on December 31, 2027.

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

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

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

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

The PSUs will vest if certain operational performance conditions, as defined in the grant agreements, are met during the three-year performance achievement period, which expires on December 31, 2028.

Additionally, if certain market conditions are met during the performance achievement period, the number of shares that ultimately vest may further increase or decrease.

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.

The fair value of the PSUs was determined using a Monte-Carlo simulation model.

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

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

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

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

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

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

As of March 31, 2026, total unrecognized compensation cost related to unvested RSUs was $ 885.6 million, which will be amortized over a weighted-average period of 2.0 years.

As of March 31, 2026, total unrecognized compensation cost related to unvested stock options and the ESPP was not significant.

Stock-Based Compensation Expense

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

(In thousands)

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Total $ 136,511 $ 139,273

Net Income (Loss) Per Share Attributable to Common Stockholders

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

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

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

The following table sets forth the calculation of basic and diluted net income (loss) per share attributable to common stockholders during the periods presented:

Net Income Per Share Attributable to Common Stockholders

The following table sets forth the calculation of basic and diluted net income per share attributable to common stockholders during the periods presented:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net income (loss) attributable to common stockholders

(in thousands)

Net income attributable to common stockholders (in thousands)

$ 90,139 $ 20,017

Weighted-average shares outstanding, basic 152,424,306 153,345,192

Dilutive effect of outstanding stock options, RSUs, PSUs and

stock committed under ESPP

Dilutive effect of outstanding common stock equivalents

5,334,835 8,449,095

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157,759,141 161,794,287

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

Net income per share attributable to common stockholders:

$ 0.59 $ 0.13

$ 0.57 $ 0.12

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:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Stock options issued and outstanding 145,350 145,350

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940,692 1,384,775

Shares of Class A common stock reserved for Twilio.org — 375,735 — 375,735

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

Total 1,086,042 1,530,125

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(1) A portion of these unvested restricted stock units are PSUs.

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

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

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

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

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

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

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

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

Given the Company’s recent history of generating net income in the U.S., the Company believes that there is a reasonable possibility that during 2026 sufficient positive evidence may become available to allow the Company to determine that a significant portion of the valuation allowance recorded against the Company’s U.S.

deferred tax assets should be released.

This would result in a significant income tax benefit for the period when the Company releases the valuation allowance in the U.S.

However, the exact timing and amount of the valuation allowance release are subject to change based on the Company’s actual operating results.

The provision for income taxes recorded in the three months ended March 31, 2026 and 2025 consists primarily of federal, state and foreign income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business.

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

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

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

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

taxation of profits derived from foreign operations.

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

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

In February 2026, the Internal Revenue Service notified the Company of its intent to commence an audit of the Company's federal income tax return for the year ended December 31, 2023.

The audit is in its preliminary stages.

While the final outcome of this audit is uncertain, management believes that adequate amounts have been reserved for any adjustments that may result and does not expect the audit to have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

Related Party Transactions

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

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

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

For the three months ended March 31, 2026 and 2025, the value of transactions that occurred between the Company and Syniverse were $ 31.0 million and $ 38.7 million, respectively.

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

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• our ability to successfully deliver an interoperable platform that allows businesses to harness the power of customer data and consumer insights to improve customer engagement;

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

• our use of and ability to leverage artificial intelligence (“AI”) and machine learning, including to develop and commercialize products and features for our customers and deploy internal applications for our own operational efficiency;

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

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

• our expectations regarding the potential release of the valuation allowance recorded against our U.S.

deferred tax assets;

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

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

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

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

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

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Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

Unless otherwise indicated or the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “Twilio,” the “Company,” “we,” “our,” “us,” or similar terms are to Twilio Inc.

and its consolidated subsidiaries.

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

What changed 10-Q

Item 1. Financial Statements