[maerF0x0]

I'm somewhat on top of the stock, here's my not financial advice take:

1. Growth rate slowed such that valuations had to come down (went from inevitable overtaking of Salesforce in size, to decades of growth required)

2. Environment -- Cashflow negative meaning another raise was required without fiscal controls and in a high interest environment that's really tough. A return to office end of covid anxiety meant the Covid bubbled stocks are returning to mean. (eg compare zoom has done relatively similar over past 5 yrs)

3. IMO a few execs were absurdly over compensated whilst investor pressure against dillution was targeted to rank and file employees. eg: Eyal Manor earned a reported $42M in compensation (and a $2.5M retention bonus that reading between the lines sounds like hush money), meanwhile ICs were often given below cost of living raises and no refreshers.

1-2 means outside investors had to lower the valuation and 3 meant a combination of dilution and morale hits.

[gkoberger]

A few other things that could contribute to a slowing growth rate:

1. People build software differently now. There's not as much reliance on text messages (fewer phone apps build built, 2fa via phone is considered dangerous, etc)

2. Gig economy is stabilizing. There was a huge increase in new companies for years, but at this point it feels like we've stalled on new innovations in that space (while a lot of VC-subsidized ones have faded out)

3. There's way more regulations on spam (good for us, bad for Twilio). I think Twilio did as good a job of avoiding spam as anyone could reasonably expect, but the barrier to entry to using Twilio for even reasonable projects now involves the government. Plus with the crackdown on spam (good!), a portion of their business has likely been affected.

[vineyardmike]

I have no idea the breakdown of their revenue, but my understanding is that now they do a lot more than just the SMS they were famous for. Especially with all the companies they bought.

[internet101010]

Semi-related to your third point, I do not trust a text message from a company that does not use the shortened phone number system that was popularized by Twilio. It's the easiest way to detect phishing attempts because scammers don't use those.

[DiggyJohnson]

Wait, you trust shortened numbers more than un-shortened ones? That hadn't occurred to me before.

[kelnos]

Why wouldn't you? Anyone and their mother could get a long code number from Twilio for $1/mo, without any kind of verification or KYC process.

Meanwhile, a short code would run you $4500 for three months (IIRC, memory is fuzzy, and it's probably changed), and you had to go through an approval process with all the mobile carriers (that is, Verizon, T-Mobile, etc. had to individually approve the short code) where you explained your use case and promised not to spam.

(Obviously things are different now with the campaign registration and approvals requires even for long code numbers. But short codes are still harder to get, and the approvals more rigorous.)

[umeshunni]

https://contracts.justia.com/companies/twilio-inc-3579/contr...

Looks like Eyal's compensation was more like 9-10M?

[mikeryan]

https://www.execpay.org/executive/eyal-manor-42374/r-186733

He got 33M in stock grants in 2021

You’re both pretty much right it looks like he vested all the RSUs in one year so he while he took it all home in 2021 it had probably vested over 4 years, the first 3 when it wasn’t reflected as comp.

[ilrwbwrkhv]

The new CEO will be selling the company now. Hold on.

[maerF0x0]

I truly hope it's not the divide and sell that activists have been pushing for. The time to sell to CRM or ADBE was during pandemic highs, now both those are probably more interested in AI hype. I think AWS or another cloud provider would be an interesting pairing though, but with Jeff out so does the hopes of an Amazon relationship besides 2023's announcement

https://investors.twilio.com/news/news-details/2023/AWS-and-...

[itsoktocry]

>Environment -- Cashflow negative meaning another raise was required without fiscal controls

The company was founded almost 20 years ago, and went public in 2016..and they are still needing to raise money?

I mean, this isn't a capital intensive space, right? What's the deal?

[vineyardmike]

They spent a ton of money buying other companies. That’s always capital intense.

Software isn’t capital intensive the way a large industrial factory would be, but it still has unfavorable financial conditions that require raising. You can’t sell software until you’ve built it, so you have to incur a large employee/R&D expense for years until the product is ready. And of course none of that is IP that you can just get a loan against (unlike say, building a factory).

[fshr]

> You can’t sell software until you’ve built it

It’s funny to contrast that with the video game publishers. They’ll push to sell things that aren’t even close to finished, make bank, and do it again and again.