TWILIO INCTWLO
TWILIO INC Fair Value Disclosure
Fair Value Measurements
Financial Assets
The following tables provide the financial assets measured at fair value on a recurring basis:
| Amortized Cost or Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses Less Than 12 Months | Gross Unrealized Losses More Than 12 Months | Fair Value Hierarchy as of December 31, 2025 | Aggregate Fair Value | |||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Assets: | (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 454,505 | $ | — | $ | — | $ | — | $ | 454,505 | $ | — | $ | — | $ | 454,505 | ||||||||||||||||||||||||||||||||||
| Commercial paper | 37,517 | — | — | — | — | 37,517 | — | 37,517 | ||||||||||||||||||||||||||||||||||||||||||
| Total included in cash and cash equivalents | 492,022 | — | — | — | 454,505 | 37,517 | — | 492,022 | ||||||||||||||||||||||||||||||||||||||||||
| Marketable securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 249,396 | 1,190 | (9) | — | 250,577 | — | — | 250,577 | ||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities and commercial paper | 1,523,935 | 9,360 | (84) | (1) | — | 1,533,210 | — | 1,533,210 | ||||||||||||||||||||||||||||||||||||||||||
| Total debt securities | 1,773,331 | 10,550 | (93) | (1) | 250,577 | 1,533,210 | — | 1,783,787 | ||||||||||||||||||||||||||||||||||||||||||
| Equity securities | 4,220 | — | — | — | 4,220 | — | — | 4,220 | ||||||||||||||||||||||||||||||||||||||||||
| Total marketable securities | 1,777,551 | 10,550 | (93) | (1) | 254,797 | 1,533,210 | — | 1,788,007 | ||||||||||||||||||||||||||||||||||||||||||
| Total financial assets | $ | 2,269,573 | $ | 10,550 | $ | (93) | $ | (1) | $ | 709,302 | $ | 1,570,727 | $ | — | $ | 2,280,029 | ||||||||||||||||||||||||||||||||||
| Amortized Cost or Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses Less Than 12 Months | Gross Unrealized Losses More Than 12 Months | Fair Value Hierarchy as of December 31, 2024 | Aggregate Fair Value | |||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Assets: | (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 207,323 | $ | — | $ | — | $ | — | $ | 207,323 | $ | — | $ | — | $ | 207,323 | ||||||||||||||||||||||||||||||||||
| Commercial paper | 15,059 | — | — | — | — | 15,059 | — | 15,059 | ||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury bills | 2,748 | — | — | — | 2,748 | — | — | 2,748 | ||||||||||||||||||||||||||||||||||||||||||
| Total included in cash and cash equivalents | 225,130 | — | — | — | 210,071 | 15,059 | — | 225,130 | ||||||||||||||||||||||||||||||||||||||||||
| Marketable securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 379,846 | 1,243 | (296) | (55) | 380,738 | — | — | 380,738 | ||||||||||||||||||||||||||||||||||||||||||
| Non-U.S. government securities | 2,909 | 27 | — | — | 2,936 | — | — | 2,936 | ||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities and commercial paper | 1,571,944 | 6,415 | (1,594) | (557) | 16,890 | 1,559,318 | — | 1,576,208 | ||||||||||||||||||||||||||||||||||||||||||
| Total debt securities | 1,954,699 | 7,685 | (1,890) | (612) | 400,564 | 1,559,318 | — | 1,959,882 | ||||||||||||||||||||||||||||||||||||||||||
| Equity securities | 3,220 | — | — | — | 3,220 | — | — | 3,220 | ||||||||||||||||||||||||||||||||||||||||||
| Total marketable securities | 1,957,919 | 7,685 | (1,890) | (612) | 403,784 | 1,559,318 | — | 1,963,102 | ||||||||||||||||||||||||||||||||||||||||||
| Total financial assets | $ | 2,183,049 | $ | 7,685 | $ | (1,890) | $ | (612) | $ | 613,855 | $ | 1,574,377 | $ | — | $ | 2,188,232 | ||||||||||||||||||||||||||||||||||
Debt Securities
The Company’s primary objective when investing excess cash is preservation of capital, hence the Company’s debt securities primarily consist of U.S. Treasury securities, non-U.S. government securities, high credit quality corporate debt securities and commercial paper. Because the Company views its debt securities as available to support its current operations, it has classified all available for sale securities as short-term.
Interest earned on marketable securities was $70.6 million, $90.2 million and $77.7 million in the years ended December 31, 2025, 2024 and 2023, respectively. The interest is recorded as other income, net, in the accompanying consolidated statements of operations.
The following table summarizes the contractual maturities of marketable securities:
| As of December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Amortized Cost | Aggregate Fair Value | Amortized Cost | Aggregate Fair Value | |||||||||||||||||||||||
| Financial Assets: | (In thousands) | |||||||||||||||||||||||||
| Less than one year | $ | 588,022 | $ | 590,997 | $ | 684,294 | $ | 685,091 | ||||||||||||||||||
| One to three years | 1,185,309 | 1,192,790 | 1,270,405 | 1,274,791 | ||||||||||||||||||||||
| Total | $ | 1,773,331 | $ | 1,783,787 | $ | 1,954,699 | $ | 1,959,882 | ||||||||||||||||||
Strategic Investments
As of December 31, 2025 and 2024, the Company held strategic investments with an aggregate carrying value of $24.5 million and $23.5 million, respectively, recorded as other long-term assets in the accompanying consolidated balance sheets. There were no significant impairments or adjustments recorded in the years ended December 31, 2025 and 2024 related to these securities. In the year ended December 31, 2023, the Company remeasured to fair value one of its strategic investments acquired in 2021 due to an assessed impairment. The fair value measurement of the strategic investment is classified as Level 2 in the fair value hierarchy and the primary input used in the fair value measurement was the publicly available stock price of the issuer’s unrestricted security of the same class. The impairment loss of $46.2 million is recorded in other expenses, net, in the accompanying consolidated statement of operations for the year ended December 31, 2023.
Financial Liabilities
The Company’s financial liabilities that are measured at fair value on a recurring basis consist of foreign currency derivative liabilities and are classified as Level 2 financial instruments in the fair value hierarchy. As of December 31, 2025 and 2024, the aggregate fair value of these liabilities and the associated unrealized losses were not significant.
The Company’s financial liabilities that are not measured at fair value on a recurring basis are its 2029 Notes and its 2031 Notes. As of December 31, 2025, the fair value of the 2029 Notes and 2031 Notes were $489.7 million and $483.9 million, respectively. As of December 31, 2024, the fair value of the 2029 Notes and 2031 Notes were $464.9 million and $453.9 million, respectively. These fair values are classified as Level 2 in the fair value hierarchy.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 22, 2017 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.