Twilio Inc (NYSE: TWLO)

Sector: Technology Industry: Software - Infrastructure CIK: 0001447669
Market Cap 20.54 Bn
P/B 2.60
P/E 305.56
P/S 4.19
ROIC (Qtr) 1.44
Div Yield % 0.00
Rev 1y % (Qtr) 14.71
Total Debt (Qtr) 1.09 Bn
Debt/Equity (Qtr) 0.14

About

Twilio Inc., a leading company in the customer engagement industry, is publicly traded on the NASDAQ stock exchange under the ticker symbol TWLO. The company provides a platform that revolutionizes how businesses engage with their customers through various channels, including messaging, voice, and email. Twilio's platform is highly customizable, allowing businesses to tailor their communications to specific customer segments and use cases. It is also highly scalable, enabling businesses to handle large volumes of customer interactions. Twilio's...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 840.13M provides robust 0.77x coverage of total debt 1.09B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 734.84M provide 21x coverage of short-term debt 34.99M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 782.79M exceeds capital expenditure of 57.34M by 13.65x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 4.31B provides 3.94x coverage of total debt 1.09B, indicating robust asset backing and low credit risk.
  • Tangible assets of 4.31B provide exceptional 27.09x coverage of deferred revenue 159.16M, showing strong service capability backing.

Bear case

  • Investment activities of 350.48M provide weak support for R&D spending of 1.01B, which is 0.35x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 840.13M shows concerning coverage of stock compensation expenses of 602.48M, with a 1.39 ratio indicating potential earnings quality issues.
  • Operating cash flow of 840.13M barely covers operating expenses of (57000) with a -14739.21 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Operating earnings of 79.30M show weak coverage of depreciation charges of 197.72M, with a 0.40 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 782.79M represents just -102.93x of debt issuance (7.61M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.13 2.69
EV to Cash from Ops. EV/CFO 24.61 28.91
EV to Debt EV to Debt 18.88 19.83
EV to EBIT EV/EBIT 260.68 -9.95
EV to EBITDA EV/EBITDA 66.16 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 26.41 26.09
EV to Market Cap EV to Market Cap 1.01 0.36
EV to Revenue EV/Rev 4.22 -9.34
Price to Book Value [P/B] P/B 2.60 3.88
Price to Earnings [P/E] P/E 305.56 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Interest Coverage 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.33 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 25.84 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 114.54 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 250.55 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 118.24 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 118.24 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 116.80 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 1.03 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.34 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.50 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.99 1.22
Current Ratio Curr Ratio (Qtr) 4.69 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.14 -0.96
Interest Cover Ratio Interest Cover Ratio 0.00 -14.20
Times Interest Earned Times Interest Earned 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.70 -548.16
EBIT Margin % EBIT Margin % (Qtr) 1.62 -199.84
EBT Margin % EBT Margin % (Qtr) 1.62 -607.20
Gross Margin % Gross Margin % (Qtr) 49.30 51.88
Net Profit Margin % Net Margin % (Qtr) 1.40 -610.00