Blog: TWILIO INC : Costs Associated with Exit or Disposal Activities, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 2.05 Costs Associated with Exit or Disposal Activities.

On September 12, 2022, the compensation and talent management committee of the
board of directors of Twilio Inc. (the “Company”) approved a restructuring plan
that is designed to reduce operating costs, improve operating margins, and shift
the Company’s selling capacity to accelerate software sales (collectively, the
“Restructuring Plan”). The Restructuring Plan includes elimination of
approximately 11% of the Company’s current workforce.

The Company estimates that it will incur approximately $70-$90 million in
charges in connection with the Restructuring Plan, consisting of cash
expenditures for employee transition, notice period and severance payments,
employee benefits, and related facilitation costs as well as non-cash
expenditures related to vesting of share-based awards. Of this amount,
$55-$70 million is expected to result in future cash outlays. The Company
expects that the majority of the restructuring charges will be incurred in the
third quarter of 2022 and that the execution of this Restructuring Plan,
including cash payments, will be substantially complete by the end of the fourth
quarter of 2022.

Potential position eliminations in each country are subject to local law and
consultation requirements, which may extend this process beyond the fourth
quarter of 2022 in certain countries. The charges that we expect to incur are
subject to a number of assumptions, including local law requirements in various
jurisdictions, and actual expenses may differ materially from the estimates
disclosed above.

Item 7.01 Regulation FD Disclosure.

The costs associated with the Restructuring Plan will be included in the
Company’s GAAP results but will be excluded from the Company’s non-GAAP results.
The Company reaffirms the guidance it issued for the third quarter ending
September 30, 2022, in its Current Report on Form 8-K filed with the SEC on
August 4, 2022, as follows:

                                                    Q3 FY22
                                                   Guidance
Revenue (millions)                                $965 - $975
Y/Y Growth                                         30% - 32%
Organic Y/Y Growth (1)                             29% - 30%

Non-GAAP loss from operations (millions) (2) ($70) – ($60)
Non-GAAP loss per share (2)

                    ($0.43) - ($0.37)

Non-GAAP basic shares outstanding (millions) 183

(1) Organic revenue growth guidance excludes all revenue from Zipwhip and all

other acquisitions that closed after July 1, 2021.

(2) Includes an estimated $35 million non-cash accrual for the adoption of a new

    sabbatical program for tenured employees. In the quarters subsequent to the
    adoption, the impact from this program is not expected to be significant to
    our results of operations.

On September 14, 2022, the Company began notifying team members affected by the
Restructuring Plan and communicated the changes to the entire company with a
letter from Jeff Lawson, the Company’s Chief Executive Officer and Co-Founder,
which is attached to this Current Report on Form 8-K as Exhibit 99.1 and is
incorporated by reference.

The information furnished under this Item 7.01 and in the accompanying Exhibit
99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act regardless of any general incorporation language in such filing,
unless expressly incorporated by specific reference in such filing.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the
meaning 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 the negative of these

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words or other similar terms or expressions that concern our expectations,
strategy, plans or intentions. Forward-looking statements contained in this
Current Report on Form 8-K include, but are not limited to, statements about the
Company’s expectations regarding the costs, benefits, timing and financial
impacts from the Restructuring Plan, the Company’s outlook for the third quarter
of 2022 and related matters. 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 and unknown risks, uncertainties, and other factors that may
cause the Company’s actual results, performance, or achievements to differ
materially from those described in the forward-looking statements, including,
among other things: adverse changes in general economic or market conditions,
including labor shortages, supply chain disruptions, a downturn, recession and
inflation; changes in the market for communications; the impact of COVID-19 on
the Company and its customers and partners; the Company’s ability to adapt its
products to meet evolving market and customer demands and rapid technological
change; the Company’s ability to comply with modified or new industry standards,
laws and regulations applying to its business; the Company’s ability to generate
sufficient revenues to achieve or sustain profitability; general economic
conditions, including a downturn or recession and rising inflation, that may
adversely affect a prospective customer’s ability or willingness to adopt our
products, delay a prospective customer’s adoption decision, reduce the revenue
that we generate from the use of our products or affect customer retention;
retention of customer data platforms like the Company’s by organizations in
times of macroeconomic uncertainty; the Company’s ability to effectively manage
its growth and increase gross margins; the Company’s ability to compete
effectively in an intensely competitive market; the Company’s ability to attract
and retain qualified employees; the technical reliability of the Company’s
products and platform; the Company’s ability to successfully integrate its
acquisitions and risks that the anticipated benefits of such acquisitions and
partnerships and investments may not be fully realized or may take longer to
realize than expected; the Company’s ability to close the transactions
associated with such partnerships and investments; the impact of recent and
future privacy changes on certain third party platforms on the Company and its
customers; and the Company’s ability to manage changes in network service
provider fees that it pays in connection with the delivery of communications on
its platform and the impact of those fees on gross margin.

The forward-looking statements contained in this Current Report on Form 8-K are
also subject to additional risks, uncertainties, and factors, including those
more fully described in the Company’s most recent filings with the Securities
and Exchange Commission, including its most recent report on form 10-K,
subsequent reports on form 10-Q, and any amendments to any of the foregoing.
Further information on potential risks that could affect actual results will be
included in the subsequent periodic and current reports and other filings that
the Company makes with the Securities and Exchange Commission from time to time.
Moreover, the Company operates 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 Current Report on
Form 8-K.

Forward-looking statements represent the Company’s management’s beliefs and
assumptions only as of the date such statements are made. The Company undertakes
no obligation to update any forward-looking statements made in this Current
Report on Form 8-K to reflect events or circumstances after the date of this
Current Report on Form 8-K or to reflect new information or the occurrence of
unanticipated events, except as required by law.

Item 9.01 Financial Statements and Exhibits.



(d) Exhibits.

Exhibit
  No.        Description

99.1           Letter to Twilio team members from Jeff Lawson, dated September 14,
             2022

104          Cover Page Interactive Data File (embedded within the Inline XBRL
             document)



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