Twilio (TWLO) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue reached $1.195 billion, up 11% year-over-year, with full-year revenue at $4.458 billion, up 9% organic and 7% reported year-over-year.

• Achieved first-ever GAAP operating profit in Q4 2024 with $14 million income; full-year GAAP operating loss narrowed to $54 million from $877 million in 2023.

• Non-GAAP income from operations was $197 million for Q4 and $714 million for the year, both increasing year-over-year.

• Free cash flow for Q4 was $93 million (7.8% margin); full-year free cash flow was $657 million (14.7% margin), up nearly $1 billion since 2022.

• Over 325,000 active customer accounts as of year-end, with a Q4 dollar-based net expansion rate of 106%.

Financial highlights

• Q4 non-GAAP income from operations was $197 million (16.5% margin); full-year was $714 million (16.0% margin).

• Q4 non-GAAP net income per share was $1.00, up from $0.86 in Q4 2023; full-year non-GAAP net income per share was $3.67, up from $2.45 in 2023.

• Communications business Q4 revenue was $1.121 billion, up 12% year-over-year; Segment revenue was $74 million, down 1% year-over-year.

• Non-GAAP gross margin was 52% in Q4 and 53% for the year; communications non-GAAP gross margin was 50.6% in Q4, Segment was 72.3%.

• Stock-based compensation as a percentage of revenue was 13% in Q4, down 240 basis points year-over-year.

Outlook and guidance

• Q1 2025 revenue guidance is $1.13–$1.14 billion, representing 8–9% year-over-year growth.

• Full-year 2025 organic revenue growth guidance is 7–8%; non-GAAP income from operations expected at $825–$850 million.

• Q1 non-GAAP income from operations expected at $180–$190 million; non-GAAP diluted EPS guidance for Q1 2025: $0.88–$0.93.

• Free cash flow for 2025 expected in the range of $825–$850 million.

• Targeting non-GAAP operating margins of 21–22% by 2027 and $3B+ cumulative free cash flow from 2025–2027.