Q2 2024
Earnings Results
August 1, 2024

©2024 TWILIO INC. ALL RIGHTS RESERVED

Legal Disclaimer
This presentation and the accompanying conference call containforward-looking statements within the meaning of the federal securities
laws, including statements about our future performance and goals.
These statements involve substantial risks and uncertainties, as further
described in “Forward-Looking Statements” on slide 21, as well as in our
most recent periodic reports ﬁled with the SEC, including our Annual
Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q,
which are available on our website and at sec.gov.
This presentation and the accompanying conference call also contain
operating metrics, including Active Customer Accounts and Dollar-BasedNet Expansion Rate. We rely on assumptions to calculate these metrics,
they are calculated using internal company data that has not been
independently veriﬁed, and they are not based on any standardized
industry methodology. More information about the operating metrics we
use in this presentation can be found in “Operating Metrics” on slide 22
and slide 23.

This presentation and the accompanying conference call also contain
non-GAAP ﬁnancial measures. The non-GAAP ﬁnancial measures,
including non-GAAP gross proﬁt and non-GAAP gross proﬁt growth,non-GAAP gross margin, non-GAAP operating margin, non-GAAP net
income (loss) per share attributable to common stockholders, diluted(which we refer to as non-GAAP diluted earnings per share), non-GAAP
income (loss) from operations, organic revenue and organic revenue
growth, non-GAAP stock-based compensation expense and non-GAAP
stock-based compensation expense as a percentage of revenue, free cash
ﬂow and free cash ﬂow margin, are presented for supplemental
informational purposes only and should not be considered a substitutefor ﬁnancial information presented in accordance with GAAP. Moreinformation about and deﬁnitions of our non-GAAP ﬁnancial measuresused in this presentation and the accompanying conference call can befound in “Non-GAAP Financial Measures” on slide 24 and slide 25, andreconciliations of our non-GAAP ﬁnancial measures to the most directlycomparable GAAP measures are included in the appendix.

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Financial Overview©2024 TWILIO INC. ALL RIGHTS RESERVED
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Total Company Results
Total Revenue

Q2 2024$1,083M

Y/Y Revenue Growth

4%

Y/Y Organic Revenue Growth7%

Non-GAAP Gross Proﬁt$577M

Non-GAAP Gross Margin53.3%

Non-GAAP Income from Operations$175M

Non-GAAP Operating Margin16.2%

Free Cash Flow

$198M

Free Cash Flow Margin

18.3%

Dollar-Based Net Expansion Rate

102%

Active Customer Accounts

316,000+

Note: Organic revenue growth, non-GAAP gross proﬁt, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, free cash ﬂow and free
cash ﬂow margin are non-GAAP ﬁnancial measures. Refer to "Non-GAAP Financial Measures" in the appendix for their deﬁnitions and a reconciliation of each non-GAAP
measure to its most directly comparable GAAP measure.
Note: Numbers are rounded to the nearest million (other than percentages and Active Customer Accounts).

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Communications Results
Communications Revenue

Q2 2024$1,007M

Y/Y Communications Revenue Growth

4%

Y/Y Communications Organic Revenue Growth7%

Communications Non-GAAP Gross Proﬁt$522M

Communications Non-GAAP Gross Margin

51.8%

Communications Non-GAAP Income from Operations$250M

Communications Non-GAAP Operating Margin

24.8%

Communications Dollar-Based Net Expansion Rate

102%

Communications Active Customer Accounts

309,000+

Note: Organic revenue growth, non-GAAP gross proﬁt and non-GAAP gross margin for our Communications business are non-GAAP ﬁnancial measures. Refer to"Non-GAAP Financial Measures" in the appendix for their deﬁnitions and a reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.
Note: Numbers are rounded to the nearest million (other than percentages and Active Customer Accounts).
Note: Aggregating Communications and Segment non-GAAP income (loss) from operations will not equate to total company non-GAAP income (loss) from operations given
certain costs are considered corporate costs and are not allocated to either segment.

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Segment Results

Q2 2024

Segment Revenue$75M

Y/Y Segment Revenue Growth3%

Segment Non-GAAP Gross Proﬁt$55M

Segment Non-GAAP Gross Margin73.4%

Segment Non-GAAP Loss from Operations($16M)

Segment Non-GAAP Operating Margin(21.0%)

Segment Dollar-Based Net Expansion Rate

93%

Segment Active Customer Accounts

7,700+

Note: Non-GAAP gross proﬁt and non-GAAP gross margin for our Segment business are non-GAAP ﬁnancial measures. Refer to "Non-GAAP Financial Measures" in the
appendix for their deﬁnitions and a reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.
Note: Numbers are rounded to the nearest million (other than percentages and Active Customer Accounts).
Note: Aggregating Communications and Segment non-GAAP income (loss) from operations will not equate to total company non-GAAP income (loss) from operations
given certain costs are considered corporate costs and are not allocated to either segment.

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Q3 2024 & Full Year 2024 GuidanceQ3 2024 Guidance:● Total revenue: $1.085 billion to $1.095 billion, up 5% to 6% year-over-year on both a reported andorganic basis1● Non-GAAP income from operations: $160 million to $170 million
2● Non-GAAP diluted earnings per share : $0.81 - $0.86● Non-GAAP weighted average diluted shares outstanding: 160 million
Full Year 2024 Guidance:● Organic revenue: up 6% to 7% year-over-year3● Non-GAAP income from operations: $650 million to $675 million4● Free cash ﬂow: expect free cash ﬂow to be in line with full year non-GAAP income from operations
1

As a full year has elapsed since our 2023 divestitures, starting in the third quarter of 2024, reported and organic revenue growth rates will be equivalent.
2
Non-GAAP diluted earnings per share guidance assumes no impact from volatility of foreign exchange rates.
3
Adjusting full year organic revenue growth guidance as previously provided on May 7, 2024.
4
Raising non-GAAP income from operations range for ﬁscal year 2024 as previously provided on May 7, 2024.
Note: Organic revenue growth, non-GAAP income from operations, non-GAAP diluted earnings per share and free cash ﬂow are non-GAAP ﬁnancial measures. Refer to"Non-GAAP Financial Measures" in the appendix for their deﬁnitions.

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Quarterly Revenue

4%

Q2’24 Total Revenue
Growth Y/Y

4%

Q2’24 Communications
Revenue Growth Y/Y

3%

Q2’24 Segment Revenue
Growth Y/Y

Note: Numbers are rounded to the nearest million (other than percentages).
Note: Q2’23 reported revenue includes $25 million of revenue from our divested ValueFirst and IoT businesses.

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Quarterly Organic Revenue Growth7%

Q2’24 Organic Revenue
Growth Y/Y

7%

Q2’24 Communications
Organic Revenue Growth
Y/Y

Note: Organic revenue, organic revenue growth and Communications organic revenue growth are non-GAAP ﬁnancial measures. Refer to "Non-GAAP Financial Measures" inthe appendix for their deﬁnitions and a reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.
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Dollar-Based Net Expansion Rate

Note: IoT, which was divested on June 1, 2023, is excluded from the calculation beginning in Q2 2023, and ValueFirst, which was divested on July 3, 2023, is excluded
from the calculation beginning in Q3 2023. Refer to “Operating Metrics” in the appendix for our deﬁnition of Dollar-Based Net Expansion Rate.

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Top 10 Active Customer Accounts as a % of Total Revenue

Note: Refer to "Operating Metrics" in the appendix for our deﬁnition of Active Customer Accounts.

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Non-GAAP Gross Proﬁt

7%

Q2’24 NON-GAAP GROSSPROFIT GROWTH Y/Y

Note: Non-GAAP gross proﬁt and non-GAAP gross proﬁt growth are non-GAAP ﬁnancial measures. Refer to “Non-GAAP Financial Measures” in the appendix for
their deﬁnitions and a reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.

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Non-GAAP Stock-Based Compensation Expense

14%

Q2’24 NON-GAAP
STOCK-BASEDCOMPENSATION AS A % OF
REVENUE

Note: Non-GAAP stock-based compensation expense and non-GAAP stock-based compensation expense as a percentage of revenue are non-GAAP ﬁnancial
measures. Refer to “Non-GAAP Financial Measures” in the appendix for their deﬁnitions and a reconciliation of each non-GAAP measure to its most directlycomparable GAAP measure.

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Free Cash Flow18%

Q2’24 FREE CASH FLOWMARGIN

Note: Free cash ﬂow and free cash ﬂow margin are non-GAAP ﬁnancial measures. Refer to “Non-GAAP Financial Measures” in the appendix for their deﬁnitions
and a reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.
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Q2 2024: Representative
Customer Wins

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Representative Customer Wins from the Quarter
Communications:● A major global airline implemented Twilio Engagement Suite and rolled it out to millions of customers around the globe. WithEngagement Suite, the airline now uses shortened hyperlinks for its customer travel notiﬁcation SMS, resulting in a reduction inmessaging segments, ease of development, and quick time to market.
● We expanded our relationship with a leading mortgage lender company, which adopted both Voice and Verify in the quarter andincreased its Messaging usage. Twilio won this competitive cross-sell deal as our platform enabled the customer to have a single
console - with both Voice and Messaging - for the thousands of bankers who are using it on a daily basis to better connect withcustomers. Since deploying Twilio, the company is already seeing a 38% increase in SMS response rates and a 20% increase inbanker productivity.
● We expanded our ISV co-sell partnership agreement with Mosaicx, a conversational AI solution that uses advanced natural
language processing and machine learning technology to automate two-way customer interactions, and TeleVox, a leading patient
relationship management platform. By leveraging the entire Twilio Communications suite, including Engagement Suite, Twilio is
continuing to power all communications for its thousands of customers and ensure each communication is delivered safely andreliably each day.
● We expanded our relationship with longtime messaging customer Fresha, a booking software company for beauty and wellness
experiences, which chose Flex as its contact center solution. With the addition of Flex, Fresha can now drive personalized
omnichannel support for their customers in addition to their core messaging use cases for account notiﬁcations and marketing.

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Representative Customer Wins from the Quarter (cont.)
Communications (continued):● We signed an eight ﬁgure messaging expansion with a global payments provider. Additionally, the company has started to adopt
Silent Network Authentication to provide consumers with two-factor authentication and create a trusted sign-in process for
consumers● We signed a seven ﬁgure Messaging expansion with a leading identity management company. The customer is leveraging Twilio
Messaging as their primary vendor of choice to take the complexity out of user veriﬁcations and easily authenticate users.
● During the quarter, we achieved an eight-ﬁgure renewal with a leading customer experience (CX) provider who will continue toembed Twilio voice within their customer service software solution.
● We signed a new partnership with Omnisend, an omni-channel marketing platform targeting the SMB retail market, who will
help Twilio expand its footprint into new geographies.
● We also extended our co-sell partnerships with Airship, Bloomreach, Braze, Insider and Klaviyo into new geographical territories
to power a data-enriched, end-to-end marketing experience.
● During the quarter, we also signed an ISV partnership agreement with SMS Factory, a SMS platform for SMBs and Enterprises.
This was a competitive win, and Twilio will now be helping to power all SMS traﬃc in the US and Canada for thousands of SMS
Factory customers. Twilio's programmatic compliance management and expedited registration timelines were key
diﬀerentiators. Customers can beneﬁt from easier 10DLC registration processes, ensuring quick and eﬃcient setup.

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Representative Customer Wins from the Quarter (cont.)
Segment:● We signed a seven-ﬁgure deal with IBM, our largest Segment deal of the second quarter.
● The Motley Fool, an investing and stock market research company, quickly saw results after deploying Twilio’s CustomerAI
Predictions. During the quarter, the company's acquisition team was able to easily identify and target ads to people with ahigh predictive lifetime value, which reduced their lead acquisition costs by 34% on Facebook. Plus, the customers theyacquired with this predictive audience had a 9% higher customer lifetime value than those acquired by non-AI audiences --meaning they're gaining better quality customers at a lower cost.
● In Q2, we released Linked Audiences into public beta, which allows marketers to activate centralized data in the data
warehouse and combine it with real-time events and predictive AI traits to generate uniﬁed customer proﬁles and audience
cohorts to deliver targeted, personalized experiences. We’re excited to have early customers such as LegalZoom and Trade Me
deploy and realize the beneﬁts and eﬃciencies of Linked Audiences.

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Thank you!

©2024 TWILIO INC. ALL RIGHTS RESERVED

Appendix©2024 TWILIO INC. ALL RIGHTS RESERVED
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Forward-Looking Statements
This presentation and the accompanying conference call contain forward-looking statements within themeaning of the federal securities laws, which statements involve substantial risks and uncertainties.
Forward-looking statements generally relate to future events or our future ﬁnancial or operating
performance. In some cases, you can identify forward-looking statements because they contain words
such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,”“projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue” or thenegative of these words or other similar terms or expressions that concern our expectations, strategy,plans or intentions. Forward-looking statements contained in this presentation and the accompanying
conference call include, but are not limited to, statements about: our future ﬁnancial performance,
including our expected ﬁnancial results and our guidance; our expectations regarding proﬁtability,
including when we will become proﬁtable on GAAP and non-GAAP bases; our anticipated strategies andbusiness plans; our expectations regarding our relationships with ISVs, partners and resellers, and ourself-service and cross-sell eﬀorts, and our ability to expand into new markets and larger deal sizes andmore multi-year deals; our ability to execute on our announced plans and targets for Segment following
our operational review; our ability to create synergies with our Communications and Segment products;
the ongoing eﬀects of our previous workforce reductions and other cost-saving measures; ourexpectations regarding compensation programs; our expectations regarding levels of stock-based
compensation; the reorganization of our business and the shift in our segment reporting structure; ourexpectations regarding our sales pipeline, the beneﬁts to us of recently signed deals, new productreleases, increased investment and go-to-market focus to capture market share, our revenue growth,
proﬁt potential and anticipated cash ﬂows, and our strategy for streamlining the customer experience; ourability to develop products related to generative artiﬁcial intelligence and machine learning, including
CustomerAI and its use cases; our ability to deliver on our product roadmap and our focus on innovation;
our expectations regarding share repurchases; and our expectations regarding the impact ofmacroeconomic and industry conditions, the impact of such conditions on our customers, and our ability
to operate in such conditions. You should not rely upon forward-looking statements as predictions of
future events.

The outcome of the events described in these forward-looking statements is subject to known andunknown risks, uncertainties, and other factors that may cause our actual results, performance, or
achievements to diﬀer materially from those described in the forward-looking statements, including,among other things: our ability to successfully implement our cost-saving initiatives and to capture
expected eﬃciencies; our ability to realize the anticipated beneﬁts of changes to our operating modeland organizational structure; the impact of macroeconomic uncertainties and market volatility; ourﬁnancial performance, including expectations regarding our results of operations and the assumptions
underlying such expectations, and ability to achieve and sustain proﬁtability; our ability to attract andretain customers; our ability to compete eﬀectively in an intensely competitive market; our ability tocomply with modiﬁed or new industry standards, laws and regulations applying to our business, andincreased costs associated with regulatory compliance; our ability to manage changes in network service
provider fees and optimize our network service provider coverage and connectivity; our ability to formand expand partnerships; and our ability to successfully enter into new markets and manage ourinternational expansion.
The forward-looking statements contained in this presentation and the accompanying conference callare also subject to additional risks, uncertainties, and factors, including those more fully described in our
most recent ﬁlings with the Securities and Exchange Commission, including our Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q. Should any of these risks materialize, or should
our assumptions prove to be incorrect, actual ﬁnancial results could diﬀer materially from our
projections or those implied by these forward-looking statements. Further information on potential risks
that could aﬀect actual results will be included in the subsequent periodic and current reports and otherﬁlings that we make with the Securities and Exchange Commission from time to time. Moreover, weoperate in a very competitive and rapidly changing environment, and new risks and uncertainties may
emerge that could have an impact on the forward-looking statements contained in this presentation andthe accompanying conference call. Forward-looking statements represent our management’s beliefs andassumptions only as of the date such statements are made. We undertake no obligation to update any
forward-looking statements made in this presentation or the accompanying conference call to reﬂect
events or circumstances occurring after this presentation or accompanying conference call, as
applicable, or to reﬂect new information or the occurrence of unanticipated events, except as requiredby law.

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Operating Metrics
We review a number of operational and ﬁnancial metrics, including Active Customer Accounts and Dollar-Based Net Expansion Rate, to evaluate our business, measure our performance, identify trends aﬀecting ourbusiness, formulate business plans and make strategic decisions. These metrics are not based on any standardized industry methodology and are not necessarily calculated in the same manner or comparable tosimilarly titled measures presented by other companies. Similarly, these metrics may diﬀer from estimates published by third parties or from similarly titled metrics of our competitors due to diﬀerences inmethodology. The numbers that we use to calculate Active Customer Accounts and Dollar-Based Net Expansion Rate are based on internal data. While these numbers are based on what we believe to be reasonable
judgments and estimates for the applicable period of measurement, there are inherent challenges in measuring usage. We regularly review and may adjust our processes for calculating our internal metrics to
improve their accuracy. If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results ofoperations, and ﬁnancial condition would be harmed.
Active Customer Accounts. We deﬁne an Active Customer Account at the end of any period as an individual account, as identiﬁed by a unique account identiﬁer, for which we have recognized at least $5 of revenue
in the last month of the period. A single organization may constitute multiple unique Active Customer Accounts if it has multiple account identiﬁers, each of which is treated as a separate Active Customer Account.
Active Customer Accounts excludes customer accounts from Zipwhip, Inc. (“Zipwhip”). Communications Active Customer Accounts and Segment Active Customer Accounts are calculated using the same methodology,
but using only revenue recognized from accounts in the respective segment. The number of consolidated and Communications Active Customer Accounts is rounded down to the nearest thousand. The number ofSegment Active Customer Accounts is rounded down to the nearest hundred.
Our business and customer relationships have grown since we began reporting the number of Active Customer Accounts using the above deﬁnition, which is anchored to a minimum $5 monthly revenue ﬁgure. We
have a large number of Active Customer Accounts with relatively low individual spend that in the aggregate do not drive a signiﬁcant portion of our revenue. Due to this dynamic, we believe that the number of Active
Customer Accounts, as currently deﬁned, is less informative now as an indicator of the growth of our business and future revenue trends than it has been in prior periods.

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Operating Metrics
Dollar-Based Net Expansion Rate. Our Dollar-Based Net Expansion Rate compares the total revenue from all Active Customer Accounts and customer accounts from Zipwhip in a quarter to the same quarter in theprior year. To calculate the Dollar-Based Net Expansion Rate, we ﬁrst identify the cohort of Active Customer Accounts and customer accounts from Zipwhip that were Active Customer Accounts or customer accounts
from Zipwhip in the same quarter of the prior year. The Dollar-Based Net Expansion Rate is the quotient obtained by dividing the revenue generated from that cohort in a quarter, by the revenue generated from thatsame cohort in the corresponding quarter in the prior year. When we calculate Dollar-Based Net Expansion Rate for periods longer than one quarter, we use the average of the applicable quarterly Dollar-Based Net
Expansion Rates for each of the quarters in such period. Revenue from acquisitions does not impact the Dollar-Based Net Expansion Rate calculation until the quarter following the one-year anniversary of theapplicable acquisition, unless the acquisition closing date is the ﬁrst day of a quarter. As a result, for the quarter ended June 30, 2024, our Dollar-Based Net Expansion Rate excludes the contributions from any
acquisitions made after April 1, 2023. Revenue from divestitures does not impact the Dollar-Based Net Expansion Rate calculation beginning in the quarter the divestiture closed, unless the divestiture closing date is
the last day of a quarter. As a result, for the quarter ended June 30, 2024, our Dollar-Based Net Expansion Rate excludes the contributions from any divestitures made after June 30, 2023. Communications
Dollar-Based Net Expansion Rate and Segment Dollar-Based Net Expansion Rate are calculated using the same methodology, but using only revenue attributable to the respective segment and Active Customer
Accounts and customer accounts from Zipwhip for that respective segment. Dollar-Based Net Expansion Rate excluding crypto and Zipwhip software customers is calculated using the same methodology describedabove, but excluding revenue attributable to customers that operate in the cryptocurrency space and customers of our Zipwhip software business in each respective period. Revenue from customer accounts from
Zipwhip, which we acquired on July 14, 2021, has been included in our Dollar-Based Net Expansion Rate beginning in the quarter ended December 31, 2022.
We believe that measuring Dollar-Based Net Expansion Rate, on an aggregate basis and at the segment level, provides an important indication of the performance of our eﬀorts to increase revenue from existingcustomers. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing Active Customer Accounts and to increase their use of
the platform. An important way in which we have historically tracked performance in this area is by measuring the Dollar-Based Net Expansion Rate for Active Customer Accounts. Our Dollar-Based Net Expansion
Rate increases when such Active Customer Accounts increase their usage of a product, extend their usage of a product to new applications or adopt a new product. Our Dollar-Based Net Expansion Rate decreases
when such Active Customer Accounts cease or reduce their usage of a product or when we lower usage prices on a product. As our customers grow their businesses and extend the use of our platform, theysometimes create multiple customer accounts with us for operational or other reasons. As such, when we identify a signiﬁcant customer organization (deﬁned as a single customer organization generating more than
1% of revenue in a quarterly reporting period) that has created a new Active Customer Account, this new Active Customer Account is tied to, and revenue from this new Active Customer Account is included with, theoriginal Active Customer Account for the purposes of calculating this metric.

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Non-GAAP Financial Measures
In addition to ﬁnancial information presented in accordance with U.S. generally accepted accounting
principles (“GAAP”), this presentation and the accompanying conference call include certain non-GAAP
ﬁnancial measures, including non-GAAP gross proﬁt and non-GAAP gross proﬁt growth, non-GAAP grossmargin, non-GAAP operating margin, non-GAAP net income (loss) per share attributable to common
stockholders, diluted (which we refer to as “non-GAAP diluted earnings per share”), non-GAAP income(loss) from operations, organic revenue and organic revenue growth, organic revenue and organic revenue
growth adjusted to exclude revenue from crypto and Zipwhip software customers, Communicationsorganic revenue and Communications organic revenue growth, non-GAAP stock-based compensation
expense and non-GAAP stock-based compensation expense as a percentage of revenue, free cash ﬂow
and free cash ﬂow margin. We use these non-GAAP ﬁnancial measures to evaluate our ongoing operations
and for internal planning and forecasting purposes. We believe that these non-GAAP ﬁnancial measures
may be helpful to investors because they provide consistency and comparability with past ﬁnancial
performance, facilitate period-to-period comparisons of results of operations and assist in comparisonswith other companies, many of which use similar non-GAAP ﬁnancial measures to supplement their GAAP
results. We believe organic revenue, organic revenue growth, organic revenue and organic revenue growth
adjusted to exclude revenue from crypto and Zipwhip software customers, Communications organic
revenue and Communications organic revenue growth are useful in understanding the ongoing results of
our operations on a consolidated basis and at the segment level. We believe free cash ﬂow and free cash
ﬂow margin provide useful supplemental information to help investors understand underlying trends inour business and our liquidity. These non-GAAP ﬁnancial measures are presented for supplemental
informational purposes only, should not be considered substitutes for ﬁnancial information presented inaccordance with GAAP, and may be diﬀerent from similarly-titled non-GAAP measures used by othercompanies. A reconciliation of these measures to the most directly comparable GAAP measures is
included in the appendix. We have not provided the forward-looking GAAP equivalents for certain
forward-looking non-GAAP measures presented in this presentation or the accompanying conference call,or a GAAP reconciliation, as a result of the uncertainty regarding, and the potential variability of,reconciling items such as stock-based compensation expense. Accordingly, a reconciliation of these
non-GAAP guidance metrics to their corresponding forward-looking GAAP equivalents is not available
without unreasonable eﬀort. However, it is important to note that material changes to reconciling items
could have a signiﬁcant eﬀect on future GAAP results.

Non-GAAP Gross Proﬁt and Non-GAAP Gross Margin. For the periods presented, we deﬁne non-GAAP
gross proﬁt and non-GAAP gross margin as GAAP gross proﬁt and GAAP gross margin, respectively,
adjusted to exclude stock-based compensation, amortization of acquired intangibles and payroll taxes
related to stock-based compensation. Segment-level non‑GAAP gross proﬁt and non‑GAAP gross margin
are calculated using the same methodology, but using (and excluding, as applicable) only revenue andexpenses attributable to the applicable segment.
Non-GAAP Gross Proﬁt Growth. For the periods presented, we calculate non-GAAP gross proﬁt growthby dividing (i) non-GAAP gross proﬁt for the period presented less non-GAAP gross proﬁt in thecomparative period by (ii) non-GAAP gross proﬁt in the comparative period.
Non‑GAAP Income (Loss) from Operations and Non‑GAAP Operating Margin. For the periods
presented, we deﬁne non‑GAAP income (loss) from operations and non‑GAAP operating margin as GAAP
loss from operations and GAAP operating margin, respectively, adjusted to exclude, as applicable,
stock-based compensation, amortization of acquired intangibles, loss on net assets divested, acquisitionand divestiture related expenses, payroll taxes related to stock-based compensation, charitable
contributions, restructuring costs, and impairment of long-lived assets. Segment-level non‑GAAP income(loss) from operations and non‑GAAP operating margin are calculated using the same methodology, butusing (and excluding, as applicable) only revenue and expenses attributable to the applicable segment.
Non-GAAP Stock-Based Compensation Expense and Non-GAAP Stock-Based Compensation Expense
as a Percentage of Revenue. For the periods presented, we deﬁne non-GAAP stock-based compensation
expense as GAAP stock-based compensation expense, adjusted to exclude stock-based compensation
reﬂected in restructuring costs.
Non‑GAAP Net Income (Loss) Attributable to Common Stockholders and Non‑GAAP Net Income(Loss) Per Share Attributable to Common Stockholders. For the periods presented, we deﬁne
non-GAAP net income (loss) attributable to common stockholders and non‑GAAP net income (loss) per
share attributable to common stockholders, diluted (which we refer to as “non-GAAP diluted earnings per
share”) as GAAP net loss attributable to common stockholders and GAAP net loss per share attributable tocommon stockholders, basic and diluted, respectively, adjusted to exclude share-based compensation,amortization of acquired intangibles, loss on net assets divested, acquisition and divestiture related
expenses, payroll taxes related to stock-based compensation, amortization of debt discount and issuancecosts, income tax beneﬁt related to acquisitions, charitable contributions, share of losses from equity
method investment, restructuring costs, impairment of long-lived assets and gains on or impairment ofstrategic investments.
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Non-GAAP Financial Measures
Organic Revenue. For the periods presented, we deﬁne organic revenue as GAAP revenue, excluding (i)revenue from each acquired business and revenue from application-to-person (“A2P”) 10DLC fees imposedby major U.S. carriers on our core messaging business, in each case until the beginning of the ﬁrst fullquarter following the one-year anniversary of the closing date of such acquisition or the initial date such
fees were charged and (ii) revenue from each divested business beginning in the quarter of the closing
date of such divestiture; provided that (a) if an acquisition closes or such fees are initially charged on theﬁrst day of a quarter, such revenue will be included in organic revenue beginning on the one-year
anniversary of the closing date of such acquisition or the initial date such fees were charged and (b) if adivestiture closes on the last day of a quarter, such revenue will be included in organic revenue for thatquarter. A2P 10DLC fees are fees imposed by U.S. mobile carriers for A2P SMS messages delivered to its
subscribers, and we pass these fees to our messaging customers at cost.
Organic Revenue Growth. For the periods presented, we calculate organic revenue growth by dividing (i)organic revenue for the period presented less organic revenue in the comparative period by (ii) organic
revenue in the comparative period. If revenue from certain acquisitions, divestitures or A2P 10DLC fees is
included or excluded in organic revenue in the period presented, then revenue from the sameacquisitions, divestitures and A2P 10DLC fees is included or excluded in organic revenue in thecomparative period for purposes of the denominator in the organic revenue growth calculation. As aresult, the denominator used in this calculation will not always equal the organic revenue reported for thecomparative period. Organic revenue growth excluding crypto and Zipwhip software customers is
calculated using the same methodology, but excluding revenue attributable to customers that operate in
the cryptocurrency space and customers of our Zipwhip software business in each respective period.
Communications organic revenue growth is calculated using the same methodology, but using (andexcluding, as applicable) only revenue attributable to the Communications segment.
Free Cash Flow and Free Cash Flow Margin. For the periods presented, we deﬁne free cash ﬂow andfree cash ﬂow margin as net cash provided by (used in) operating activities and operating cash ﬂow
margin, respectively, excluding capitalized software development costs and purchases of long-lived andintangible assets.

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