Twilio Inc. revenue surged on 55.3% and EBITDA Margin increased on 3.3 pp from -20.0% to -16.7%
02/17/2021 • About Twilio Inc. (
$TWLO) • By InTwits
Twilio Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Twilio Inc. is a fast growth stock: 2020 revenue growth was 55.3%, 5 year revenue CAGR was 60.2% at 2020 ROIC -6.9%
- The company operates at negative EBITDA Margin: -16.7%
- Twilio Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 4.0%. Average EBITDA Margin for the same period was -16.3%
- Twilio Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 5.5%
- CAPEX is quite volatile: $26m in 2020, $45m in 2019, $5m in 2018, $9m in 2017, $14m in 2016
- The company has unprofitable business model: ROIC is -6.9%
- It operates with high leverage: Net Debt/EBITDA is 2.5x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 55.3%. Revenue growth showed acceleration in 20Q4 - it increased 65.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.3 pp from 7.6% to 9.0% in 2020.
Gross Margin decreased slightly on 1.7 pp from 53.7% to 52.0% in 2020. Gross Margin stuck to a declining trend at -0.96 pp per annum in 2016-2020. SG&A as a % of Revenue decreased slightly on 1.9 pp from 51.8% to 49.8% in 2020.
Net Income margin decreased slightly on 0.80 pp from -27.1% to -27.9% in 2020. Net Income margin followed a declining trend at -3.7 pp per annum in 2016-2020.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 1.5%. The company's CAPEX/Revenue decreased slightly on 0.85 pp from 2.3% in 2017 to 1.5% in 2020. It's average CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at negative ROIC (-6.9%) and ROE (-7.7%). ROIC increased on 5.5 pp from -12.4% to -6.9% in 2020. ROE increased on 5.3 pp from -13.0% to -7.7% in 2020. ROIC grew at 3.0 pp per annum in 2016-2020.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and Debt / EBITDA. Debt decreased on 5.2% while cash surged on 268%.
Twilio Inc. has no short term refinancing risk: cash is higher than short term debt (1,627.0%).
Management team
Twilio Inc.'s CEO is Jeff Lawson. Jeff Lawson has 13 years tenure with the company. Khozema Z Shipchandler is a Twilio Inc.'s CFO. Khozema Z Shipchandler has spent 2 years at the company.
Financial and operational results
FY ended 12/31/2020
Twilio Inc. ($TWLO) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 277 | 399 | 650 | 1,134 | 1,762 | 55.3% |
| Gross Profit | 157 | 216 | 349 | 609 | 916 | 50.4% |
| SG&A | 116 | 160 | 286 | 587 | 878 | 49.5% |
| EBITDA | -33 | -47 | -89 | -227 | -294 | |
| EBIT | -41 | -66 | -115 | | | |
| Tax | 0 | 1 | 1 | | | |
| Net Income | -41 | -64 | -122 | -307 | -491 | |
| Stock Based Compensation | 24 | 50 | 93 | | | |
Balance Sheet
|
|---|
| Cash | 306 | 115 | 487 | 254 | 934 | 268.2% |
| Accounts Receivable | 26 | 43 | 98 | | | |
| Accounts Payable | 4 | 11 | 18 | | | |
| Short Term Debt | 0 | 0 | 0 | 34 | 57 | 68.4% |
| Long Term Debt | 0 | 0 | 434 | 606 | 550 | -9.3% |
Cash flow
|
|---|
| Capex | 14 | 9 | 5 | 45 | 26 | -43.1% |
| Acquisitions | 9 | 23 | 31 | | | |
Ratios
|
|---|
| Revenue growth | 66.1% | 43.9% | 62.9% | 74.5% | 55.3% | |
| EBITDA growth | 5.9% | 43.4% | 88.4% | 154.4% | 29.6% | |
|
|---|
| Gross Margin | 56.5% | 54.2% | 53.7% | 53.7% | 52.0% | -1.7% |
| EBITDA Margin | -11.9% | -11.9% | -13.7% | -20.0% | -16.7% | 3.3% |
| EBIT Margin | -14.9% | -16.6% | -17.7% | | |
| SG&A, % of revenue | 42.0% | 40.2% | 44.0% | 51.8% | 49.8% | -1.9% |
| SBC, % of revenue | 8.7% | 12.4% | 14.3% | | |
| Net Income Margin | -14.9% | -16.0% | -18.8% | -27.1% | -27.9% | -0.8% |
| CAPEX, % of revenue | 5.1% | 2.3% | 0.7% | 4.0% | 1.5% | -2.5% |
|
|---|
| ROIC | -18.5% | -19.1% | -18.6% | -12.4% | -6.9% | 5.5% |
| ROE | | -18.5% | -30.6% | -13.0% | -7.7% | 5.3% |
People
|
|---|
| Insider ownership | 2.6% | 2.6% | 2.6% | | | |
| Employees | 730 | 996 | 1,440 | | | |
| Revenue/Employee, th. $ | 380 | 401 | 451 | | | |
Twilio Inc. ($TWLO) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 365 | 401 | 448 | 548 | | 56.5% | 45.7% | 51.8% | 65.5% |
| EBITDA | -50 | -58 | -67 | -119 | | - | - | - | - |
| Net Income | -95 | -100 | -117 | -179 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 346 | 476 | 1,127 | 934 | | -8.5% | -11.2% | 240.9% | 268.2% |
| Short Term Debt | 36 | 42 | 47 | 57 | | 24.6% | 41.9% | 62.7% | 68.4% |
| Long Term Debt | 612 | 653 | 615 | 550 | | 2.6% | 9.8% | 3.4% | -9.3% |
Ratios
|
|---|
| Gross Margin | 53.0% | 52.2% | 51.5% | 51.5% | | -1.0% | -2.4% | -2.1% | -1.3% |
| EBITDA Margin | -13.7% | -14.4% | -14.9% | -21.8% | | 11.7% | 6.4% | 4.3% | -5.5% |
| Net Income Margin | -26.0% | -24.9% | -26.1% | -32.7% | | -10.3% | 8.7% | 3.6% | -5.5% |
Peers in Internet Services & Infrastructure
Below we provide Twilio Inc. benchmarking against other companies in Internet Services & Infrastructure industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MongoDB, Inc. ($MDB) | - | 55.3% | 63.8% | 60.8% | 57.9% |
| Okta, Inc. ($OKTA) | - | 86.6% | 60.0% | 55.6% | 46.8% |
| Wix.com Ltd. ($WIX) | - | 46.7% | 41.8% | 26.1% | 29.9% |
| Limelight Networks, Inc. ($LLNW) | - | 9.6% | 6.1% | 2.5% | 14.7% |
| Crexendo Inc ($CXDO) | - | 11.7% | 16.9% | 21.2% | 13.5% |
| |
|---|
| Median (9 companies) | 20.7% | 10.6% | 16.9% | 12.3% | 13.5% |
|---|
| Twilio Inc. ($TWLO) | - | 43.9% | 62.9% | 74.5% | 55.3% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 82.6% | 83.4% | 84.2% | 85.3% | 85.8% |
| Okta, Inc. ($OKTA) | 58.1% | 65.1% | 68.5% | 71.6% | 72.8% |
| MongoDB, Inc. ($MDB) | 68.0% | 70.5% | 74.2% | 72.4% | 70.3% |
| Crexendo Inc ($CXDO) | 60.2% | 67.9% | 67.9% | 69.9% | 69.8% |
| Wix.com Ltd. ($WIX) | 84.4% | 83.7% | 79.0% | 74.1% | 68.1% |
| |
|---|
| Median (9 companies) | 61.5% | 65.0% | 66.4% | 69.9% | 68.1% |
|---|
| Twilio Inc. ($TWLO) | 56.5% | 54.2% | 53.7% | 53.7% | 52.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 65.0% | 67.1% | 69.2% | 68.8% |
| Akamai Technologies, Inc. ($AKAM) | 33.9% | 27.6% | 29.4% | 39.5% | 41.0% |
| GoDaddy Inc. ($GDDY) | 11.4% | 12.2% | 14.4% | 15.6% | 15.8% |
| Crexendo Inc ($CXDO) | -28.7% | -6.2% | -1.0% | 10.6% | 7.8% |
| Brightcove Inc. ($BCOV) | -0.8% | -8.0% | -3.8% | -2.6% | 5.5% |
| |
|---|
| Median (9 companies) | -2.8% | -1.1% | 16.8% | 3.8% | 5.5% |
|---|
| Twilio Inc. ($TWLO) | -11.9% | -11.9% | -13.7% | -20.0% | -16.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 13.5% | 16.7% | 14.9% | 19.4% | 22.9% |
| Limelight Networks, Inc. ($LLNW) | 5.7% | 11.2% | 8.2% | 17.3% | 10.9% |
| Crexendo Inc ($CXDO) | 0.0% | 0.0% | 0.1% | 0.5% | 4.5% |
| VeriSign, Inc. ($VRSN) | 2.3% | 4.2% | 3.0% | 3.3% | 3.4% |
| Okta, Inc. ($OKTA) | 4.8% | 3.9% | 2.6% | 5.0% | 2.6% |
| |
|---|
| Median (9 companies) | 3.3% | 4.1% | 3.3% | 2.9% | 2.6% |
|---|
| Twilio Inc. ($TWLO) | 5.1% | 2.3% | 0.7% | 4.0% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 54.3% | 81.9% | 228.3% | 221.3% |
| Akamai Technologies, Inc. ($AKAM) | 11.9% | 7.9% | 8.2% | 10.8% | 10.9% |
| GoDaddy Inc. ($GDDY) | 2.9% | 2.7% | 4.6% | 6.0% | 8.1% |
| Crexendo Inc ($CXDO) | -114.0% | -44.3% | -10.5% | 35.4% | 7.3% |
| Brightcove Inc. ($BCOV) | -11.3% | -26.9% | -19.0% | -24.8% | -5.2% |
| |
|---|
| Median (9 companies) | -11.3% | -13.2% | 1.4% | -8.6% | -5.2% |
|---|
| Twilio Inc. ($TWLO) | -18.5% | -19.1% | -18.6% | -12.4% | -6.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Limelight Networks, Inc. ($LLNW) | - | -1.7x | -1.8x | -0.4x | 5.7x |
| GoDaddy Inc. ($GDDY) | 2.3x | 6.8x | 3.9x | 3.4x | 4.9x |
| Akamai Technologies, Inc. ($AKAM) | 0.4x | 0.5x | 0.7x | 2.0x | 1.8x |
| VeriSign, Inc. ($VRSN) | 2.2x | 2.6x | 1.8x | 1.5x | 1.6x |
| Brightcove Inc. ($BCOV) | - | - | - | - | -2.6x |
| |
|---|
| Median (6 companies) | 2.2x | 4.5x | 1.4x | 1.5x | 1.7x |
|---|
