Twilio Inc. revenue jumped on 62.9% while EBITDA Margin decreased slightly on 1.9 pp from -11.9% to -13.7%
02/12/2019 • About Twilio Inc. (
$TWLO) • By InTwits
Twilio Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Twilio Inc. is a fast growth stock: 2018 revenue growth was 62.9%, 5 year revenue CAGR was 67.1% at 2018 ROIC -18.6%
- The company operates at negative EBITDA Margin: -13.7%
- Twilio Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 11.4% while average EBITDA Margin was -14.3% for the sames years. In 2018 SBC/Revenue was even higher: 14.3%
- Twilio Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $5m in 2018, $9m in 2017, $14m in 2016, $2m in 2015, $1m in 2014
- In the last 5 years the company invested considerably less than D&A: $31m vs. $59m. In 2018 this situation was still the same: CAPEX was 5 while D&A was 26
- The company has unprofitable business model: ROIC is -18.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 62.9%. Revenue growth showed acceleration in 18Q4 - it increased 77.3% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from -11.9% to -13.7% in 2018. During 2014-2018 EBITDA Margin topped in 2017 at -11.9%.
Gross Margin showed almost no change in 2018. During 2014-2018 Gross Margin topped in 2016 at 56.5% and was declining since that time. SG&A as a % of Revenue increased on 3.8 pp from 40.2% to 44.0% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2017 at 40.2%. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 1.9 pp from 12.4% to 14.3% in 2018. SBC as a % of Revenue followed a growing trend at 2.7 pp per annum in the last 5 years.
Net Income margin decreased on 2.8 pp from -16.0% to -18.8% in 2018. During 2014-2018 Net Income margin topped in 2016 at -14.9% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Twilio Inc.'s CAPEX/Revenue was 0.72% in 2018. Twilio Inc.'s CAPEX/Revenue showed almost no change from 2015 to 2018. Average CAPEX/Revenue for the last three years was 2.7%.
Accounts receivable as a % of Revenue increased on 4.2 pp from 10.8% to 15.0% in 2018. Accounts payable as a % of Revenue showed almost no change in 2018.
Twilio Inc. has spent
$31m on M&A in 2018 which accounts for 4.7% of revenue.
Return on investment
The company operates at negative ROIC (-18.6%) and ROE (-30.6%). ROIC increased slightly on 0.51 pp from -19.1% to -18.6% in 2018. ROE dropped on 12.1 pp from -18.5% to -30.6% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -4.7x and Debt / EBITDA is . Debt surged while cash jumped on 323%.
The company has no short term refinancing risk: short term debt is zero.
Management team
The company's CEO is Jeff Lawson. Jeff Lawson is a founder and has 3 years tenure with the company. CEO total compensation was
$6,597,956 in 2018 which included
$131,129 salary. Twilio Inc.'s CFO Khozema Z Shipchandler has spent 0 years with the company.
At the end of financial year the company had 2.6% shares owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 1,440 employees. The number of employees jumped on 44.6%. Average revenue per employee in 2018 was
$451,435 and it surged on 12.7%.
Financial and operational results
FY ended 12/31/2018
Twilio Inc. ($TWLO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 88.8 | 166.9 | 277.3 | 399.0 | 650.1 | 62.9% |
| Gross Profit | 47.4 | 92.5 | 156.8 | 216.1 | 349.2 | 61.6% |
| SG&A | 52.3 | 85.3 | 116.3 | 160.3 | 286.0 | 78.4% |
| EBITDA | -24.9 | -31.2 | -33.0 | -47.3 | -89.1 | |
| EBIT | -26.7 | -35.4 | -41.3 | -66.1 | -115.2 | |
| Tax | 0.0 | 0.1 | 0.3 | 0.7 | 0.8 | 12.2% |
| Net Income | -26.8 | -35.5 | -41.3 | -63.7 | -121.9 | |
| Stock Based Compensation | 4.0 | 8.9 | 24.2 | 49.6 | 93.3 | 88.0% |
Balance Sheet
|
|---|
| Cash | 32.6 | 108.8 | 305.7 | 115.3 | 487.2 | 322.6% |
| Accounts Receivable | 9.3 | 19.1 | 26.2 | 43.1 | 97.7 | 126.6% |
| Accounts Payable | 1.2 | 2.3 | 4.2 | 11.1 | 18.5 | 66.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 434.5 | |
Cash flow
|
|---|
| Capex | 1.0 | 1.7 | 14.2 | 9.2 | 4.7 | -49.5% |
| Acquisitions | | 1.8 | 8.5 | 22.6 | 30.6 | 35.2% |
Ratios
|
|---|
| Revenue growth | 78.0% | 87.9% | 66.1% | 43.9% | 62.9% | |
| EBITDA growth | -5.0% | 25.0% | 5.9% | 43.4% | 88.4% | |
|
|---|
| Gross Margin | 53.4% | 55.4% | 56.5% | 54.2% | 53.7% | -0.4% |
| EBITDA Margin | -28.1% | -18.7% | -11.9% | -11.9% | -13.7% | -1.9% |
| EBIT Margin | -30.0% | -21.2% | -14.9% | -16.6% | -17.7% | -1.2% |
| SG&A, % of revenue | 58.8% | 51.1% | 42.0% | 40.2% | 44.0% | 3.8% |
| SBC, % of revenue | 4.5% | 5.3% | 8.7% | 12.4% | 14.3% | 1.9% |
| Net Income Margin | -30.1% | -21.3% | -14.9% | -16.0% | -18.8% | -2.8% |
| CAPEX, % of revenue | 1.2% | 1.0% | 5.1% | 2.3% | 0.7% | -1.6% |
|
|---|
| ROIC | | -47.7% | -18.5% | -19.1% | -18.6% | 0.5% |
| ROE | | | | -18.5% | -30.6% | -12.1% |
People
|
|---|
| Insider ownership | 2.6% | 2.6% | 2.6% | 2.6% | 2.6% | 0.0% |
| Employees | | | 730 | 996 | 1,440 | 44.6% |
| Revenue/Employee, th. $ | | | 380 | 401 | 451 | 12.7% |
Twilio Inc. ($TWLO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 129 | 148 | 169 | 204 | | 47.8% | 54.1% | 68.0% | 77.3% |
| EBITDA | -19 | -16 | -18 | -36 | | | | | |
| Net Income | -24 | -24 | -27 | -47 | | | | | |
Balance Sheet
|
|---|
| Cash | 118 | 494 | 469 | 487 | | -0.6% | 435.4% | 410.4% | 322.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 423 | 429 | 434 | | | | | |
Ratios
|
|---|
| Gross Margin | 53.9% | 54.0% | 54.4% | 52.9% | | -3.5% | -1.8% | 2.4% | 0.6% |
| EBITDA Margin | -14.4% | -11.0% | -10.8% | -17.7% | | -2.1% | -8.3% | 8.2% | -4.8% |
| Net Income Margin | -18.4% | -16.2% | -16.0% | -23.1% | | -2.1% | -8.8% | 7.3% | -6.7% |
Peers in Internet Services & Infrastruc
Below you can find Twilio Inc. benchmarking vs. other companies in Internet Services & Infrastruc industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | | 20.4% | 108.0% |
| GTT Communications, Inc. ($GTT) | | 78.1% | 41.3% | 58.7% | 80.1% |
| MongoDB, Inc. ($MDB) | | | | 55.3% | 63.8% |
| Okta, Inc. ($OKTA) | | | 109.5% | 86.6% | 60.0% |
| Wix.com Ltd. ($WIX) | | 43.5% | 42.5% | 46.7% | 41.8% |
| |
|---|
| Median (15 companies) | 25.5% | 11.7% | 13.3% | 10.6% | 16.9% |
|---|
| Twilio Inc. ($TWLO) | | 87.9% | 66.1% | 43.9% | 62.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | 68.1% | 77.5% | 84.9% |
| VeriSign, Inc. ($VRSN) | 81.3% | 81.8% | 82.6% | 83.4% | 84.2% |
| Wix.com Ltd. ($WIX) | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% |
| MongoDB, Inc. ($MDB) | | | 68.0% | 70.5% | 74.2% |
| Carbonite, Inc. ($CARB) | 68.5% | 71.6% | 70.6% | 70.7% | 71.2% |
| |
|---|
| Median (15 companies) | 48.4% | 54.3% | 61.5% | 65.0% | 66.4% |
|---|
| Twilio Inc. ($TWLO) | 53.4% | 55.4% | 56.5% | 54.2% | 53.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 62.2% | 63.0% | 65.2% | 65.0% | 67.1% |
| Liberated Syndication Inc ($LSYN) | | | 32.0% | -29.9% | 32.2% |
| Internap Corporation ($INAP) | 20.0% | 21.0% | -5.4% | 28.4% | 30.5% |
| Akamai Technologies, Inc. ($AKAM) | 37.5% | 34.8% | 33.9% | 27.6% | 29.4% |
| Endurance International Group Holdings, Inc. ($EIGI) | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% |
| |
|---|
| Median (15 companies) | 6.1% | 2.9% | -2.8% | -1.1% | 16.8% |
|---|
| Twilio Inc. ($TWLO) | -28.1% | -18.7% | -11.9% | -11.9% | -13.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 16.2% | 20.2% | 13.5% | 16.7% | 14.9% |
| 21Vianet Group, Inc. ($VNET) | 32.6% | 29.0% | 15.8% | 11.7% | 12.8% |
| Internap Corporation ($INAP) | 24.0% | 17.5% | 14.9% | 12.7% | 12.1% |
| Limelight Networks, Inc. ($LLNW) | 11.5% | 14.5% | 5.7% | 11.2% | 8.2% |
| GTT Communications, Inc. ($GTT) | 2.8% | 3.8% | 4.6% | 5.1% | 5.2% |
| |
|---|
| Median (15 companies) | 4.4% | 3.8% | 3.3% | 4.1% | 3.3% |
|---|
| Twilio Inc. ($TWLO) | 1.2% | 1.0% | 5.1% | 2.3% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 60.6% | 68.7% | 65.2% | 54.3% | 81.9% |
| Liberated Syndication Inc ($LSYN) | | | | -13.2% | 12.1% |
| Akamai Technologies, Inc. ($AKAM) | 15.5% | 12.5% | 11.9% | 7.9% | 8.2% |
| Endurance International Group Holdings, Inc. ($EIGI) | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% |
| GoDaddy Inc. ($GDDY) | -3.3% | -1.7% | 2.9% | 2.7% | 4.6% |
| |
|---|
| Median (16 companies) | -2.7% | -4.4% | -11.3% | -13.2% | 1.4% |
|---|
| Twilio Inc. ($TWLO) | | -47.7% | -18.5% | -19.1% | -18.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GTT Communications, Inc. ($GTT) | 3.1x | 7.4x | 6.8x | 7.2x | 12.7x |
| Internap Corporation ($INAP) | 5.1x | 5.3x | | 6.5x | 6.9x |
| Endurance International Group Holdings, Inc. ($EIGI) | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x |
| GoDaddy Inc. ($GDDY) | 14.0x | 5.4x | 2.3x | 6.8x | 3.9x |
| VeriSign, Inc. ($VRSN) | 1.9x | 2.5x | 2.2x | 2.6x | 1.8x |
| |
|---|
| Median (10 companies) | 3.1x | 3.9x | 2.2x | 4.5x | 1.4x |
|---|
