Twilio (TWLO) risk factors, FY2025 10-K

Twilio's FY2025 10-K, filed Feb 24, 2026, lists 53 risk factors in 7 groups. Against the prior year's 54: 7 new, 8 dropped, 20 substantially reworded.

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Risk factors listed
537 groups
New this year
7vs 54 last year
Dropped
8since the prior 10-K
Substantially reworded
20of those kept
Section length
23k wordsItem 1A

What the changes say

  • Twilio tightened disclosures on global regulatory pressures, international message termination costs, and asset impairment charges.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business and Our Industry

    The current and prospective markets for our products are intensely competitive and rapidly evolving, and if we do not compete effectively or if these markets fail to grow as expected, our business, results of operations and financial condition could be harmed

    Competition in our markets is intense and rapidly evolving, which could harm our business if we fail to keep pace.

  • NewRisks Related to Our Business and Our Industry

    region or otherwise have a material impact on regional or global economies, any or all of which could adversely affect our business

    Higher network service provider fees and costs from international operations reduce gross margins for messages terminating internationally.

  • NewRisks Related to Legal and Regulatory Matters

    provide services may not comply with applicable governmental regulations, subjecting us to potential penalties or governmental actions that may be costly, harm our business and damage our brand and reputation

    Changing telecommunications and robocall regulations could increase compliance costs and limit the customers we can serve.

  • NewRisks Related to Legal and Regulatory Matters

    which may be imposed on us and responsible employees or managers; criminal liability, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers

    Trade law restrictions and encryption import-export controls could limit our ability to provide services or export products internationally.

  • NewRisks Related to Financial and Accounting Matters

    Events or changes in circumstances may require us to record impairment charges related to our intangible assets, goodwill or investments

    Adverse market conditions led to an $80.6 million equity method investment impairment in 2025, with $5.4 billion of goodwill remaining.

  • NewRisks Related to Financial and Accounting Matters

    over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis

    Failures in internal controls or integration of acquired businesses could result in financial statement misstatements or restatements.

  • NewGeneral Risks

    activities, lengthy interruptions in service, security breaches and incidents and loss or unavailability of critical data, any of which could adversely affect our business, results of operations and financial condition

    Cybersecurity attacks, technical infrastructure failures, and climate-driven natural disasters could disrupt our platform and harm customer retention.

Dropped

  • DroppedRisks Related to Our Business and Our Industry

    Historically, a majority of our Active Customer Accounts have been acquired through the adoption of our Communications API products by software developers using our self-service model

  • DroppedRisks Related to Our Business and Our Industry

    The markets in which we participate are intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed

  • DroppedRisks Related to Our Business and Our Industry

    The markets for our products continue to evolve and may decline or experience limited growth

    Developer self-service acquisition

  • DroppedRisks Related to Cybersecurity, Data Privacy and Intellectual Property

    available, and in sufficient amounts, to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim

  • DroppedRisks Related to Legal and Regulatory Matters

    In addition, from time to time we implement Know-Your-Customer and/or Know-Your-Traffic related processes in the jurisdictions in which we operate, which may create friction for our customers, require management attention, and increase our compliance costs

  • DroppedRisks Related to Legal and Regulatory Matters

    combat such violations of our Acceptable Use Policy could increase friction for our legitimate customers and decrease their use of our platform

  • DroppedRisks Related to Financial and Accounting Matters

    operations. In addition, to the extent that fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors and securities analysts who follow our stock, the trading price of our common stock could be adversely affected

  • DroppedRisks Related to Financial and Accounting Matters

    If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings

Reworded

  • 97% rewrittenRisks Related to Legal and Regulatory Matters

    Certain of our products are subject to telecommunications-related regulations, and future legislative or regulatory actions could adversely affect our business, results of operations and financial condition

    Added specific compliance references for fraud, scam prevention, Know Your Customer, and Know Your Traffic regulations.

  • 91% rewrittenRisks Related to Cybersecurity, Data Privacy and Intellectual Property

    Our actual or perceived failure to comply with increasingly stringent laws, regulations and contractual obligations relating to privacy, data protection and cybersecurity could harm our reputation and subject us to significant fines and liability or loss of business

    Updated data protection risks to emphasize frequent regulatory changes and ongoing operational challenges across jurisdictions.

  • 85% rewrittenRisks Related to Legal and Regulatory Matters

    Our global operations subject us to potential liability under export controls, economic sanctions, customs, anti-corruption, and other laws and regulations, and violating these laws could subject us to liability and impair our ability to compete in international markets

    Refined international trade restrictions to explicitly mention varying prohibitions on sales to sanctioned countries and individuals.

  • 84% rewrittenRisks Related to Our Business and Our Industry

    Failure to set optimal prices for our products could adversely impact our business, results of operations and financial condition

    Noted that usage-based customers often have negotiated pricing contracts alongside subscription agreements.

  • 80% rewrittenRisks Related to Financial and Accounting Matters

    If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired

    Shortened the internal control over financial reporting risk text by removing the full definition of material weakness.

  • 79% rewrittenRisks Related to Our Business and Our Industry

    Global economic and political conditions, including macroeconomic and political uncertainties, have had, and may continue to have, an adverse impact on our business, results of operations and financial condition

    Added potential U.S. federal government shutdowns and executive orders to macroeconomic and geopolitical risk factors.

  • 75% rewrittenRisks Related to Our Business and Our Industry

    If we are not able to maintain and enhance our brand and increase market awareness of our company and products, then our business, results of operations and financial condition may be adversely affected

    Maintained brand and market awareness risk with minor stylistic adjustments to phrasing.

  • 68% rewrittenRisks Related to Tax Matters

    Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our taxes

    Added explicit mention of recognizing income tax benefits under GAAP.

    Was: Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our income taxes

  • 67% rewrittenRisks Related to Our Business and Our Industry

    If we are unable to attract new customers or increase usage of our products by existing customers effectively and in a cost-efficient manner, our business, results of operations and financial condition would be adversely affected

    Was: If our sales and marketing efforts do not attract new customers or we are unable to sell additional products to our existing customers effectively and in a cost-efficient manner, our business, results of operations and financial condition would be adversely affected

  • 66% rewrittenRisks Related to Tax Matters

    We may have additional tax liabilities, which could harm our business, results of operations and financial condition

  • 60% rewrittenRisks Related to Our Business and Our Industry

    We may not be able to develop new products or product enhancements that achieve market acceptance, or adapt and respond effectively to rapidly changing technology, regulations, industry standards, or customer needs and preferences

    Was: Our future success depends, in part, on our ability to develop new products and product enhancements that achieve market acceptance, as well as adapt and respond effectively to rapidly changing technology, regulations, and industry standards

  • 57% rewrittenRisks Related to Legal and Regulatory Matters

    United States federal and state legislation and international laws impose certain obligations on the senders of commercial emails, which could minimize the effectiveness of our platform, and establish financial penalties for non-compliance, which could increase the costs of our business

  • 55% rewrittenRisks Related to Legal and Regulatory Matters

    If we are unable to obtain, assign or retain geographical, mobile, regional, local or toll-free numbers, or to effectively process requests to port such numbers in a timely manner due to industry regulations, our business and results of operations may be adversely affected

    Was: If we are unable to obtain or retain geographical, mobile, regional, local or toll-free numbers, or to effectively process requests to port such numbers in a timely manner due to industry regulations, our business and results of operations may be adversely affected

  • 50% rewrittenRisks Related to Tax Matters

    Our ability to use our net operating losses and certain other tax attributes to offset future taxable income and taxes may be subject to certain limitations

  • 44% rewrittenGeneral Risks

    Our business is subject to the risks of pandemics, earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, security breaches and incidents, terrorism or war

  • 39% rewrittenRisks Related to Our Business and Our Industry

    If we fail to effectively manage our growth and strategic changes to our business, then our business, results of operations and financial condition could be adversely affected

  • 38% rewrittenRisks Related to Financial and Accounting Matters

    We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition

  • 37% rewrittenRisks Related to Cybersecurity, Data Privacy and Intellectual Property

    The use of AI technologies in our platform and our business may not produce the desired benefits, and may result in increased liability, reputational harm, or other adverse consequences

  • 30% rewrittenRisks Related to Our Business and Our Industry

    We have a history of losses and may not achieve or sustain profitability in the future

  • 26% rewrittenRisks Related to Our Business and Our Industry

    Our international operations expose us to risks inherent in global operations

All 53 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Our Industry

  1. 01Global economic and political conditions, including macroeconomic and political uncertainties, have had, and may continue to have, an adverse impact on our business, results of operations and financial condition79% rewritten
  2. 02Our quarterly and annual results of operations have fluctuated in the past and may continue to do so in the future. As a result, we may fail to meet securities analysts’ and investors’ expectations, which could cause the price of our common stock to decline
  3. 03If our customers terminate or reduce their usage of our products, our business, results of operations and financial condition would be adversely affected
  4. 04If we are unable to attract new customers or increase usage of our products by existing customers effectively and in a cost-efficient manner, our business, results of operations and financial condition would be adversely affected67% rewritten
  5. 05We may not be able to develop new products or product enhancements that achieve market acceptance, or adapt and respond effectively to rapidly changing technology, regulations, industry standards, or customer needs and preferences60% rewritten
  6. 06The success of our products depends, in part, on our ability to integrate them with third-party products used by us or our customers and to ensure that they operate effectively with evolving platforms and technologies
  7. 07If we fail to effectively manage our growth and strategic changes to our business, then our business, results of operations and financial condition could be adversely affected39% rewritten
  8. 08The current and prospective markets for our products are intensely competitive and rapidly evolving, and if we do not compete effectively or if these markets fail to grow as expected, our business, results of operations and financial condition could be harmedNew
  9. 09We have a history of losses and may not achieve or sustain profitability in the future30% rewritten
  10. 10We depend largely on the continued services of highly skilled personnel, including our senior management and other key employees, and the inability to attract, integrate or retain such employees could adversely affect our business, results of operations and financial condition
  11. 11If we are not able to maintain and enhance our brand and increase market awareness of our company and products, then our business, results of operations and financial condition may be adversely affected75% rewritten
  12. 12Failure to set optimal prices for our products could adversely impact our business, results of operations and financial condition84% rewritten
  13. 13Our international operations expose us to risks inherent in global operations26% rewritten
  14. 14region or otherwise have a material impact on regional or global economies, any or all of which could adversely affect our businessNew
  15. 15We may not realize potential benefits from our acquisitions, partnerships and investments because of difficulties related to integration, the achievement of synergies, and other challenges

Risks Related to Cybersecurity, Data Privacy and Intellectual Property

  1. 16Our actual or perceived failure to comply with increasingly stringent laws, regulations and contractual obligations relating to privacy, data protection and cybersecurity could harm our reputation and subject us to significant fines and liability or loss of business91% rewritten
  2. 17We could incur substantial costs in protecting or defending our intellectual property rights, and any failure to protect our intellectual property could adversely affect our business, results of operations and financial condition
  3. 18We have been sued and may, in the future, be sued by third parties for alleged infringement of their intellectual or other proprietary rights, which could adversely affect our business, results of operations and financial condition
  4. 19We rely on technology and intellectual property of third parties, the loss of which could limit the functionality of our products and disrupt our business
  5. 20Our use of open source software could negatively affect our ability to sell our products and subject us to possible litigation
  6. 21The use of AI technologies in our platform and our business may not produce the desired benefits, and may result in increased liability, reputational harm, or other adverse consequences37% rewritten

Risks Related to Legal and Regulatory Matters

  1. 22Certain of our products are subject to telecommunications-related regulations, and future legislative or regulatory actions could adversely affect our business, results of operations and financial condition97% rewritten
  2. 23provide services may not comply with applicable governmental regulations, subjecting us to potential penalties or governmental actions that may be costly, harm our business and damage our brand and reputationNew
  3. 24If we are unable to obtain, assign or retain geographical, mobile, regional, local or toll-free numbers, or to effectively process requests to port such numbers in a timely manner due to industry regulations, our business and results of operations may be adversely affected55% rewritten
  4. 25United States federal and state legislation and international laws impose certain obligations on the senders of commercial emails, which could minimize the effectiveness of our platform, and establish financial penalties for non-compliance, which could increase the costs of our business57% rewritten
  5. 26Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products, and could adversely affect our business, results of operations and financial condition
  6. 27Our global operations subject us to potential liability under export controls, economic sanctions, customs, anti-corruption, and other laws and regulations, and violating these laws could subject us to liability and impair our ability to compete in international markets85% rewritten
  7. 28which may be imposed on us and responsible employees or managers; criminal liability, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managersNew
  8. 29The standards imposed by private entities and inbox service providers to regulate the use and delivery of email have in the past interfered with, and may continue to interfere with, the effectiveness of our platform and our ability to conduct business
  9. 30Any legal proceedings or claims against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome

Risks Related to Financial and Accounting Matters

  1. 31We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition38% rewritten
  2. 32We have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur substantially more debt, which may adversely affect our operations and financial results
  3. 33We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all
  4. 34We rely on assumptions and estimates to calculate certain of our business metrics, and real or perceived inaccuracies in such metrics could adversely affect our reputation and our business
  5. 35If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected
  6. 36Changes in accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our results of operations
  7. 37Events or changes in circumstances may require us to record impairment charges related to our intangible assets, goodwill or investmentsNew
  8. 38If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired80% rewritten
  9. 39over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basisNew

Risks Related to Tax Matters

  1. 40Our ability to use our net operating losses and certain other tax attributes to offset future taxable income and taxes may be subject to certain limitations50% rewritten
  2. 41We may have additional tax liabilities, which could harm our business, results of operations and financial condition66% rewritten
  3. 42Our global operations and structure subject us to potentially adverse tax consequences
  4. 43Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our taxes68% rewritten

Risks Related to Ownership of Our Common Stock

  1. 44The trading price of our common stock has been volatile and may continue to be volatile, and you could lose all or part of your investment
  2. 45Substantial future sales of shares of our common stock could cause the market price of our common stock to decline
  3. 46We may not realize the anticipated long-term stockholder value of our share repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price
  4. 47If securities or industry analysts change their recommendations regarding our common stock adversely, the trading price of our common stock and trading volume could decline
  5. 48Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt
  6. 49These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
  7. 50Our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees

General Risks

  1. 51Our business is subject to the risks of pandemics, earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, security breaches and incidents, terrorism or war44% rewritten
  2. 52activities, lengthy interruptions in service, security breaches and incidents and loss or unavailability of critical data, any of which could adversely affect our business, results of operations and financial conditionNew
  3. 53Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters

Other Twilio 10-Ks

  • FY2024 10-K risk factors
    54 risks

    Twilio faces high usage-based customer concentration risk alongside substantial operating losses, with $7.5 billion in accumulated deficit through 2024.

    Filed Feb 26, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.