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Twilio S-1

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Re: Twilio S-1

#181

Post by ganeumann »

ChuckMcM wrote: post #148
Animats wrote: post #75

There's a lot there not to like: Revenue: $166,919,000 Net Loss: $38,896,000 So they're still not profitable. This is surprising, since they don't have any big capital investments. They're not doing anything that takes a lot of R&D. The thing runs on Amazon AWS. They've been operating for years and should be profitable by now. Yes, they're growing fast, but the costs don't rise in advance of the growth. You don't hav…

I don't think Google is much of a threat, they seem to hate Gvoice internally having had several opportunities to make it a platform and passing (yes they used to have voice APIs on code.google.com). Bottom line, I don't think Google gets it (kind of like Facebook and web search) And since the Unicorn Feeding stations have all been shut down :-) unprofitable companies of this size have three choices, IPO, die quickly…

Re the options, the S-1 says: "As of March 31, 2016, we had outstanding options to purchase an aggregate of 16,704,752 shares of our Class B common stock, with a weighted-average exercise price of approximately $5.57 per share, under our equity compensation plans. After March 31, 2016, we issued options to purchase an aggregate of 671,550 shares of our Class B common stock, with a weighted-average exercise price of $10.30 per share, under our 2008 Plan."

Assuming they're going to IPO at more than $10 per share (which is usual) and that the option strike price has not gone down (so all the options issued prior to 3/31/16 were at a strike less than $10.30 per share) it looks like almost all the options would be in the money to some extent.

Re: Twilio S-1

#182

Post by callalex »

jrcii wrote: post #177
markolschesky wrote: post #12

Had no idea that WhatsApp was even a Twilio customer let alone one of its largest. >We currently generate significant revenue from WhatsApp and the loss of WhatsApp could harm our business, results of operations and financial condition. >In 2013, 2014 and 2015 and the three months ended March 31, 2016, WhatsApp accounted for 11%, 13%, 17% and 15% of our revenue, respectively. WhatsApp uses our Programmable Voice prod…

I worry that maybe there's a bubble in Silicon Valley created by all these startups being large customers of each other so it's just a bunch of VC money going around in circles.

Isn't lots of capital flowing around the goal of any healthy economy?

Re: Twilio S-1

#183

Post by a_small_island »

ChuckMcM wrote: post #175
a_small_island wrote: post #162

Earlier quoted context omitted.

>if they did a big reverse split prior to the S-1 its possible the employees will have underwater options at the IPO Any past examples of this?

Lots. One I was personally familiar with was SSNI (Silver Spring Networks)

Can you elaborate on the exact financial implications of a reverse split prior to IPO? This Brad Feld article [1] seems to say the aversion to this is simply emotional.

[1] http://www.feld.com/archives/2005/06/when-are-350-million-sh...

Re: Twilio S-1

#184

Post by drglitch »

a_small_island wrote: post #162
ChuckMcM wrote: post #148

Earlier quoted context omitted.

I don't think Google is much of a threat, they seem to hate Gvoice internally having had several opportunities to make it a platform and passing (yes they used to have voice APIs on code.google.com). Bottom line, I don't think Google gets it (kind of like Facebook and web search) And since the Unicorn Feeding stations have all been shut down :-) unprofitable companies of this size have three choices, IPO, die quickly…

>if they did a big reverse split prior to the S-1 its possible the employees will have underwater options at the IPO Any past examples of this?

IANAL but citation needed. An ISO is granted against a certain point in time, and would be affected (as in, included) by a split at a future time. So in a 2:1 split you'd get double the shares at half the price. Other way simply doesn't work as that would screw your cost basis up and IRS would get all green and angry at you :)

The easiest way to screw people is to issue another set of shares and dilute.

Re: Twilio S-1

#185

Post by mwcampbell »

ben_jones wrote: post #165
shaqbert wrote: post #107

Earlier quoted context omitted.

Net loss: Don't think that is a biggie. They expanded their cost base both in R&D, sales & marketing, and general and admin. With a little bit of cost discipline for one year, they are going to be profitable. Voting rights: that is indeed yucky. Competitive threat: Not really. The inertia for existing customers is high, especially since the average revenue per active account is about $580/month. For a big company, th…

A list of their competitors: https://www.quora.com/Who-are-Twilios-competitors . As a Twilio customer that spends maybe ~$500 /mo i'll look at any alternative that allows me to send meta data or allows some process to have a foreign key allowing me to persist conversations in a sane manner (and I'm currently researching just that). Twilio also does not have their own network, so competitors like Bandwidth that have t…

I suggest that you look at Tropo (https://www.tropo.com/). They provide the option to run your script on their servers. I find it's much easier to program non-trivial conversations that way.

Re: Twilio S-1

#186

Post by ChuckMcM »

a_small_island wrote: post #183
ChuckMcM wrote: post #175

Earlier quoted context omitted.

Lots. One I was personally familiar with was SSNI (Silver Spring Networks)

Can you elaborate on the exact financial implications of a reverse split prior to IPO? This Brad Feld article [1] seems to say the aversion to this is simply emotional. [1] http://www.feld.com/archives/2005/06/when-are-350-million-sh...

Company, running privately for years and years, marginally cash flow positive but requires additional capital to expand, or develop the next product, or build inventory. Employees get refresher grants annually with an ever increasing strike price from .10 - 3.50 over say 8 years. Now during the road show the bankers say "You're company is really worth about 1/10th what you think its worth according to this feedback, we either cut off the roadshow or we recaptialize at a lower valuation." So the company does a 50:1 reverse stock split to get its outstanding stock numbers in line with the expected valuation of the company.

I'm not an accountant, but I've listened to a lot of accountants explain what is, and what is not, taxable. In this case, if you let your employees take a haircut (so their $1/share strike price is now $50 a share on a company expected to go out at $18) that isn't taxable (and it bites to be an employee). If your employee exercised their shares at the lower cost (to avoid capital gains etc) they now have a 'basis' value of $50 a share so if they sell shares at $18 the can claim a $32 / share capital loss. If you take back the vested but unexercised shares and issue vested shares at a new lower price, that price can be no lower than the pending IPO price (FMV) or it's a taxable event. And then when your company makes it out the gate and your long suffering investors cash out their funds, it pushes the price down around $8 once again putting your employees in a position to exercise at a loss or leave them on the table.

The key though is the company went through a period higher valuation, and employees are issued shares at the higher valuation and at IPO time the company is worth less than it was when you got your option, so your strike price is "high" relative to the company value.

Re: Twilio S-1

#187

Post by Nicholas_C »

nickbaum wrote: post #173

It's hard to overstate how much easier the Twilio API has made it for developers to interact with SMS and phones. When I first built StoryWorth, it only worked over email because I thought voice recording would be too complex (both to use and to implement). However, users kept asking for it so I finally bit the bullet... and it was way easier than I expected. Using the Twilio API, I had voice recordings over the phon…

Amen. I'm a hobbyist programmer and a while back I used Twilio and was amazed at how easy it is to use.

The finance geek in me is very excited to see their numbers and have a chance to do some due diligence and possibly invest.

Re: Twilio S-1

#188

Post by emmett »

Animats wrote: post #75

There's a lot there not to like: Revenue: $166,919,000 Net Loss: $38,896,000 So they're still not profitable. This is surprising, since they don't have any big capital investments. They're not doing anything that takes a lot of R&D. The thing runs on Amazon AWS. They've been operating for years and should be profitable by now. Yes, they're growing fast, but the costs don't rise in advance of the growth. You don't hav…

If you had to guess what the net loss for Facebook at IPO was, what would you say? More or less than Twilio?

Re: Twilio S-1

#189

Post by hammock »

gdudeman wrote: post #159
Animats wrote: post #75

There's a lot there not to like: Revenue: $166,919,000 Net Loss: $38,896,000 So they're still not profitable. This is surprising, since they don't have any big capital investments. They're not doing anything that takes a lot of R&D. The thing runs on Amazon AWS. They've been operating for years and should be profitable by now. Yes, they're growing fast, but the costs don't rise in advance of the growth. You don't hav…

Twilio went from $33m to $59 Q1 '15 to Q1 '16. That's huge growth - and is a lot to like. Virtually every company that is growing at 80% YoY runs unprofitably. Here's why: compounding. They're growing 80% YoY because of that spend and it's absolutely worth it. Say they could run break even at 50% YoY growth. Straight line that growth through 2019 and you have a company doing just shy of $800m in annual revenue. Inves…

There was a great article that gets posted here often about how it's ok to be unprofitable if you have high growth, and it's ok to have low growth if you have high profits. Anyone have a link?

Edit: found it. http://avc.com/2015/02/the-40-rule/

Re: Twilio S-1

#190

Post by [deleted] »

gdudeman wrote: post #159
Animats wrote: post #75

There's a lot there not to like: Revenue: $166,919,000 Net Loss: $38,896,000 So they're still not profitable. This is surprising, since they don't have any big capital investments. They're not doing anything that takes a lot of R&D. The thing runs on Amazon AWS. They've been operating for years and should be profitable by now. Yes, they're growing fast, but the costs don't rise in advance of the growth. You don't hav…

Twilio went from $33m to $59 Q1 '15 to Q1 '16. That's huge growth - and is a lot to like. Virtually every company that is growing at 80% YoY runs unprofitably. Here's why: compounding. They're growing 80% YoY because of that spend and it's absolutely worth it. Say they could run break even at 50% YoY growth. Straight line that growth through 2019 and you have a company doing just shy of $800m in annual revenue. Inves…

[deleted]
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