SAN FRANCISCO - Twilio Inc. (NYSE: NYSE:TWLO), a global customer engagement platform, announced its plans to achieve non-GAAP break-even income from operations for its Segment business by the second quarter of 2025.
The company also aims to reach consolidated GAAP operating profitability by the fourth quarter of 2025. Additionally, Twilio disclosed an increase in its share repurchase program by $2 billion, expected to be completed within the fiscal year 2024.
Following an extensive operational review initiated by Twilio's Board and new CEO Khozema Shipchandler, who took the helm in January 2024, the company has decided to retain and revitalize its Segment business rather than exploring a sale. The review included discussions with customers, internal stakeholders, and independent advisors, concluding that operational improvements would best serve shareholder interests.
Twilio's Segment, contributing 7% to the company's 2023 revenue, is seen as a key differentiator for its customer engagement offerings, particularly with the integration of artificial intelligence (AI). Despite recent underperformance, Segment's data-driven customer insights are used by over 8,000 clients.
To turn around Segment's fortunes, Twilio is focusing on operational rigor, cost discipline, and innovation velocity. These efforts include streamlining investments, enhancing customer onboarding with AI and automation, and launching three new products in 2024 that integrate Segment into Twilio's Communications services.
In connection with these strategic shifts, Thomas Wyatt has been appointed President of Segment, effective March 11, 2024. Wyatt's background in data analytics and AI, coupled with his experience in scaling businesses, is expected to drive Segment towards its financial and operational targets.
Twilio reaffirmed its first-quarter 2024 guidance, initially provided on February 14, 2024, and set forth financial targets for fiscal years 2024 and 2025. These include a non-GAAP income from operations range of $550 million to $600 million for 2024, factoring in headwinds from discontinued products and new employee cash bonus programs.
The company's stock repurchase initiative, which now totals approximately $3 billion when including the previous authorization, reflects Twilio's confidence in its strategic direction and improved free cash flow profile.
This announcement is based on a press release statement from Twilio.
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