Free cash flow margins reached a peak of 25.2% in 2025Q4, though the persistent $136.5 million in quarterly stock-based compensation continues to obscure the company's underlying cash-generating potential.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 |
|---|
| Cash from Operations | 1B | 1.04B | 716.24M | 414.75M | -254.37M | -58.19M | 32.65M | 14.05M | 7.98M | -3.26M | 10.09M | -18.76M | -17.36M | -22.62M |
| Operating CF Margin % | - | 20.5% | 16.07% | 9.98% | -6.65% | -2.05% | 1.85% | 1.24% | 1.23% | -0.82% | 3.64% | -11.24% | -19.54% | -45.32% |
| Operating CF Growth % | 222.29% | 45.04% | 72.69% | 263.05% | -337.12% | -278.21% | 132.45% | 75.97% | 344.88% | -132.31% | 153.78% | -8.08% | 23.26% | - |
| Net Income | 103.96M | 33.83M | -109.4M | -1.02B | -1.26B | -949.9M | -490.98M | -307.06M | -121.95M | -63.71M | -41.32M | -35.5M | -26.76M | -26.85M |
| Depreciation & Amortization | 195.56M | 217.44M | 183.04M | 284.41M | 279.13M | 258.38M | 149.66M | 110.43M | 26.09M | 18.76M | 8.31M | 4.23M | 1.76M | 610K |
| Stock-Based Compensation | 597.64M | 600.41M | 616.61M | 675.86M | 798.56M | 632.28M | 360.94M | 264.32M | 93.27M | 49.62M | 24.23M | 8.88M | 3.98M | 2.16M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | -17.24M | -16.46M | -55.74M | 3.98M | 1.14M | 1.86M | -108K | 0 | 0 |
| Other Non-Cash Items | 116.41M | 265.43M | 260.13M | 700.57M | 320.73M | 203.39M | 126.88M | 50.06M | 21.4M | 1.14M | 94K | 818K | 261K | 213K |
| Working Capital Changes | -12.57M | -78.28M | -234.14M | -230.65M | -396.64M | -185.11M | -97.39M | -47.96M | -14.82M | -10.21M | 16.93M | 2.93M | 3.4M | 1.25M |
| Change in Receivables | -138.4M | -55.07M | -61.16M | -85.09M | -194.66M | -117.94M | -81.3M | -51.36M | -58.23M | -15.28M | -8.25M | -10.51M | -4.3M | -3.24M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | -123M | -39.97M | -16.82M | 30.48M | -3.93M | 19.39M | 10.8M | 4.84M | 4.88M |
| Change in Payables | -16.32M | -14.97M | -20.26M | 12.37M | 30.34M | 10.19M | 10.06M | 17.25M | 6.98M | 5.43M | 1.71M | 658K | 1.23M | -1.4M |
| Cash from Investing | 58.9M | 80.95M | 1.37B | 228.6M | -616.45M | -2.49B | -845.86M | -1.29B | -139.42M | -223.63M | -42.42M | -12.38M | -5.34M | -452K |
| Capital Expenditures | 6.88M | -57.82M | -58.79M | -11.31M | -80.18M | -90.02M | -59.13M | -67.29M | -24.66M | -26.82M | -26.49M | -10.62M | -5.17M | -3.45M |
| CapEx % of Revenue | 0.13% | 1.14% | 1.32% | 0.27% | 2.1% | 3.17% | 3.36% | 5.93% | 3.79% | 6.72% | 9.55% | 6.36% | 5.82% | 6.92% |
| Acquisitions | -62.18M | -61.5M | 0 | 32.42M | -37.41M | -491.52M | -333.59M | 122.75M | -30.57M | -22.62M | -8.5M | -1.76M | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -72.83M | 0 | 0 | -39.92M | 0 | 0 | 0 | 0 | 0 | 3.12M | 0 | 0 | -170K | 0 |
| Cash from Financing | -995.47M | -868.69M | -2.31B | -643.61M | 45.01M | 3.1B | 1.49B | 1.02B | 515.82M | 36.44M | 229.16M | 107.35M | 612K | 65.61M |
| Debt Issued (Net) | -38.65M | -40.9M | -12.56M | -16.13M | -13.42M | 976.43M | -10.78M | -11.05M | 550M | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | -704.09M | -827.58M | -2.3B | -624.91M | 59.53M | 1.9B | 1.51B | 1.04B | 39.88M | 37.12M | 230.2M | -17.41M | 612K | -4.32M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -995.71M | -868.94M | -2.33B | -668.75M | 0 | 0 | 0 | 0 | 0 | -100K | -2K | -20.81M | -4K | -5.07M |
| Other Financing | -252.73M | -213K | -2M | -2.56M | -1.1M | 218.02M | -8.78M | -5.41M | -74.06M | -678K | -1.04M | 124.75M | 0 | 69.93M |
| Net Change in Cash | 74.68M | 261.04M | -224.49M | -147K | -825.75M | 547.95M | 680.15M | -251.6M | 384.55M | -190.38M | 196.83M | 76.21M | -22.09M | 42.54M |
| Free Cash Flow | 1.01B | 1.03B | 657.46M | 363.52M | -334.55M | -148.21M | -26.48M | -53.24M | -16.67M | -30.08M | -16.39M | -29.38M | -22.53M | -26.07M |
| FCF Margin % | 19.01% | 20.39% | 14.75% | 8.75% | -8.74% | -5.22% | -1.5% | -4.69% | -2.56% | -7.54% | -5.91% | -17.6% | -25.36% | -52.23% |
| FCF Growth % | 53.06% | 57.12% | 80.86% | 208.66% | -125.72% | -459.74% | 50.27% | -219.35% | 44.57% | -83.46% | 44.2% | -30.4% | 13.59% | - |
| FCF per Share | 6.39 | 6.46 | 3.96 | 1.98 | -1.83 | -0.85 | -0.18 | -0.41 | -0.17 | -0.33 | -0.19 | -0.38 | -0.31 | -1.55 |
| FCF Conversion (FCF/Net Income) | 9.70x | 30.70x | -6.55x | -0.41x | 0.20x | 0.06x | -0.07x | -0.05x | -0.07x | 0.05x | -0.24x | 0.53x | 0.65x | 0.84x |
| Interest Paid | 18.78M | 0 | 37.9M | 38.39M | 37.5M | 20.64M | 2.14M | 2.29M | 741K | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 10.69M | 0 | 36.55M | 37.82M | 7.41M | 6.15M | 3.09M | 1.37M | 564K | 605K | 225K | 46K | 13K | 1K |
Carrier fee margin compression
As reported in financial statements, Twilio exhibits a persistent and significant divergence between net income and operating cash flow, with the OCF/NI ratio frequently reaching extreme levels, such as the 12.36x multiple observed in 2025Q2, indicating that GAAP earnings remain a poor proxy for cash generation.
The massive gap between net income and operating cash flow suggests that non-cash charges, particularly stock-based compensation, continue to dominate the reconciliation. Investors should monitor whether this reliance on non-cash adjustments masks underlying volatility in the core business's ability to convert revenue into actual liquidity.
Based on recent SEC filings, Twilio has demonstrated a clear upward trend in free cash flow margins, which climbed from 7.8% in 2024Q4 to a peak of 25.2% in 2025Q4, reflecting a successful transition toward operational efficiency and disciplined capital management in the face of market skepticism.
This trajectory suggests that management's pivot toward profitability is yielding tangible results, as the company successfully decouples cash generation from its historical reliance on aggressive growth spending. However, the sustainability of these margins warrants further investigation, as they appear highly sensitive to the timing of working capital fluctuations.
According to the provided cash flow data, Twilio has prioritized aggressive share repurchases over the last ten quarters, with cumulative buybacks reaching $916.8 million in 2024Q2 alone, signaling a management intent to offset dilution and return capital to shareholders despite ongoing investments in the platform.
The scale of these repurchases relative to net income suggests that the company is utilizing its cash reserves to support its equity valuation rather than pursuing large-scale M&A. This capital allocation strategy appears to be a direct response to activist pressure, though it may limit the flexibility needed for future R&D.
Based on the reported figures, stock-based compensation remains a structural headwind for Twilio, consistently exceeding $135 million per quarter, which effectively obscures the company's true cash-generating potential and complicates the assessment of whether the business is truly self-sustaining on a cash-flow-neutral basis without equity-based incentives.
The persistent issuance of equity to employees acts as a hidden cost that is not fully captured in traditional FCF metrics. Analysts should be cautious, as this reliance on SBC may indicate that the company's reported cash flow strength is partially subsidized by the dilution of existing shareholders.
Quick answers to the most common questions about buying TWLO stock.
Twilio Inc. (TWLO) generated $1.04B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Twilio Inc. (TWLO) generated $1.03B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Twilio Inc. (TWLO) spent $57.8M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Twilio Inc. (TWLO) spent $868.9M on share repurchases. This shows the company's commitment to returning capital to its equity investors.