Companies · TWLO · Software (Internet)
What does Twilio's price assume?
The margin the price assumes
Revenue grows as its record suggests; the operating margin is solved at today's price.
At $219.48 on November 11, 2026, with growth of 15.0% a year, the price assumes an operating margin of 37.2% by year 5.
The price assumes
37.2%
Operating margin by year 5, solved at the price
Its 9-year median
−8.5%
Fiscal 2017–2025, adjusted for R&D and leases
Its industry
4.7%
Software (Internet), Damodaran Online, January 2026
The price assumes a margin above the company's own median and above its industry's.
The numbers behind the chart
| Fiscal year | Adjusted operating margin |
|---|---|
| 2017 | 1.8% |
| 2018 | −2.2% |
| 2019 | −8.5% |
| 2020 | −10.3% |
| 2021 | −16.7% |
| 2022 | −17.6% |
| 2023 | −17.6% |
| 2024 | 0.4% |
| 2025 | 3.5% |
- Revenue growth, years 1 to 5
- 15.0% a yearCapped at 15%, the most this neutral starting point allows.SEC filings, revenue to fiscal 2025
- Margin path
- From today's margin to 37.2% by year 5Solved at the price. After that, the margin holds.
The growth the price assumes
At its median margin, no revenue growth between −50% and 100% a year matches today's price.
The assumptions both views share
These are neutral settings, the same for every company. Each view holds them and solves for one driver at today's price.
- Reinvestment
- $1.35 of revenue for each $1 investedThe industry's sales-to-capital ratio: how much new capital growth needs.Damodaran Online, January 2026 industry data, Software (Internet)
- Cost of capital
- 10.81%The return investors need for the risk: the industry's beta, the market's risk premium, and debt rated D2/D from its median margin, with a stated 5-year debt maturity. Built by the engine from the parts listed under Sources, each with its date.
- After year 10
- Growth at the riskfree rate, foreverNew investment earns its cost of capital and no more, so growth after year 10 adds no value, and the cost of capital moves to a mature company's.
Worth knowing
- Revenue grew 23.5% a year over five years and grew 40.7% over ten: the record points two ways.
- Revenue grew 23.5% a year over five years, faster than 20%: a steady-company starting point fits it less well.
- Profitable in 1 of the last ten years, so its median margin is a weak yardstick.
- Its debt is large against its usual earnings: rated D2/D at its median margin.
This is a mechanical starting point with neutral assumptions, not a valuation. The story decides.
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- Price: Qualuation's records, close of November 11, 2026.
- 10-K for the period ended December 31, 2025, filed February 24, 2026 (SEC EDGAR, accession 0001447669-26-000021).
- 10-Q for the period ended September 30, 2026, filed October 30, 2026 (SEC EDGAR, accession 0001447669-26-000110).
- Margin record: SEC filings, fiscal 2017-2025, operating margin adjusted for R&D and leases.
- Industry margin: Damodaran Online, January 2026 industry data, Software (Internet), adjusted for R&D and leases.
- Sales to capital: Damodaran Online, January 2026 industry data, Software (Internet).
- US 10-year Treasury yield (FRED), October 29, 2026.
- Less the US default spread (Damodaran Online, July 2026).
- Industry beta, Software (Internet) (Damodaran Online, January 2026).
- Equity risk premium (Damodaran Online, October 2026).
- Debt rated D2/D at its median margin (rating table, Damodaran Online, January 2026).
- The margin the price assumes: solved by the engine at the price on November 12, 2026, with the assumptions above.