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Use these links to rapidly review the document TABLE OF CONTENTS INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents As filed with the Securities and Exchange Commission on May 26, 2016 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Twilio Inc. (Exact name of Registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 7372 (Primary Standard Industrial Classification Code Number) 26-2574840 (I.R.S. Employer Identification Number) 645 Harrison Street, Third Floor San Francisco, California 94107 (415) 390-2337 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) Jeff Lawson Chief Executive Officer Twilio Inc. 645 Harrison Street, Third Floor San Francisco, California 94107 (415) 390-2337 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Anthony J. McCusker, Esq. Rezwan D. Pavri, Esq. Goodwin Procter LLP 135 Commonwealth Drive Menlo Park, California 94025 (650) 752-3100 Karyn Smith, Esq. Twilio Inc. 645 Harrison Street, Third Floor San Francisco, California 94107 (415) 390-2337 Christopher L. Kaufman, Esq. Tad J. Freese, Esq. Latham & Watkins LLP 140 Scott Drive Menlo Park, CA 94025 (650) 328-4600 Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: o If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered Proposed Maximum Aggregate Offering Price Amount of Registration Fee Class A common stock, $0.001 par value per share $100,000,000 $10,070 Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. Includes the additional shares that the underwriters have the option to purchase from the Registrant, if any. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically Large accelerated filer o Accelerated filer o Non-accelerated filer ý (Do not check if a smaller reporting company) Smaller reporting company o (1)(2) (2) (1) (2)

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  • Usetheselinkstorapidlyreviewthedocument

    TABLEOFCONTENTS

    INDEXTOCONSOLIDATEDFINANCIALSTATEMENTS

    TableofContents

    AsfiledwiththeSecuritiesandExchangeCommissiononMay26,2016

    RegistrationNo.333-

    UNITEDSTATES

    SECURITIESANDEXCHANGECOMMISSION

    Washington,D.C.20549

    FORMS-1

    REGISTRATIONSTATEMENT

    UNDER

    THESECURITIESACTOF1933

    TwilioInc.

    (ExactnameofRegistrantasspecifiedinitscharter)

    Delaware

    (Stateorotherjurisdictionof

    incorporationororganization)

    7372

    (PrimaryStandardIndustrial

    ClassificationCodeNumber)

    26-2574840

    (I.R.S.Employer

    IdentificationNumber)

    645HarrisonStreet,ThirdFloor

    SanFrancisco,California94107

    (415)390-2337

    (Address,includingzipcode,andtelephonenumber,including

    areacode,ofRegistrant'sprincipalexecutiveoffices)

    JeffLawson

    ChiefExecutiveOfficer

    TwilioInc.

    645HarrisonStreet,ThirdFloor

    SanFrancisco,California94107

    (415)390-2337

    (Name,address,includingzipcode,andtelephonenumber,including

    areacode,ofagentforservice)

    Copiesto:

    AnthonyJ.McCusker,Esq.

    RezwanD.Pavri,Esq.

    GoodwinProcterLLP

    135CommonwealthDrive

    MenloPark,California94025

    (650)752-3100

    KarynSmith,Esq.

    TwilioInc.

    645HarrisonStreet,ThirdFloorSanFrancisco,California94107

    (415)390-2337

    ChristopherL.Kaufman,Esq.

    TadJ.Freese,Esq.

    Latham&WatkinsLLP

    140ScottDrive

    MenloPark,CA94025

    (650)328-4600

    Approximatedateofcommencementofproposedsaletothepublic:

    Assoonaspracticableafterthisregistrationstatementbecomeseffective.

    IfanyofthesecuritiesbeingregisteredonthisFormaretobeofferedonadelayedorcontinuousbasispursuanttoRule415undertheSecuritiesAct,checkthefollowingbox:

    o

    IfthisFormisfiledtoregisteradditionalsecuritiesforanofferingpursuanttoRule462(b)undertheSecuritiesAct,pleasecheckthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.

    o

    IfthisFormisapost-effectiveamendmentfiledpursuanttoRule462(c)undertheSecuritiesAct,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.

    o

    IfthisFormisapost-effectiveamendmentfiledpursuanttoRule462(d)undertheSecuritiesAct,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.

    o

    Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof"largeacceleratedfiler","acceleratedfiler"and"smallerreportingcompany"inRule12b-2oftheExchangeAct.(Checkone):

    CALCULATIONOFREGISTRATIONFEE

    TitleofEachClassofSecurities

    tobeRegistered

    ProposedMaximum

    AggregateOffering

    Price

    Amountof

    RegistrationFee

    ClassAcommonstock,$0.001parvaluepershare $100,000,000 $10,070

    EstimatedsolelyforthepurposeofcomputingtheamountoftheregistrationfeepursuanttoRule457(o)undertheSecuritiesActof1933,asamended.

    IncludestheadditionalsharesthattheunderwritershavetheoptiontopurchasefromtheRegistrant,ifany.

    TheRegistrantherebyamendsthisregistrationstatementonsuchdateordatesasmaybenecessarytodelayitseffectivedateuntiltheRegistrantshallfileafurtheramendmentwhichspecifically

    Largeacceleratedfiler

    o Acceleratedfiler

    o Non-acceleratedfiler

    ý

    (Donotcheckifasmaller

    reportingcompany)

    Smallerreportingcompany

    o

    (1)(2) (2)

    (1)

    (2)

  • statesthatthisregistrationstatementshallthereafterbecomeeffectiveinaccordancewithSection8(a)oftheSecuritiesActof1933oruntiltheregistrationstatementshallbecomeeffectiveonsuchdateastheSecuritiesandExchangeCommission,actingpursuanttosaidSection8(a),maydetermine.

  • TableofContents

    Theinformationinthispreliminaryprospectusisnotcompleteandmaybechanged.ThesesecuritiesmaynotbesolduntiltheregistrationstatementfiledwiththeSecuritiesandExchangeCommissioniseffective.Thispreliminaryprospectusisnotanoffertosellnordoesitseekanoffertobuythesesecuritiesinanyjurisdictionwheretheofferorsaleisnotpermitted.

    SubjectToCompletion.Dated

    .

    Shares

    TwilioInc.ClassACommonStock

    ThisisaninitialpublicofferingofsharesofClassAcommonstockofTwilioInc.

    Priortothisoffering,therehasbeennopublicmarketforthecommonstock.Itiscurrentlyestimatedthattheinitialpublicofferingpricepersharewillbebetween$

    and$

    .WeintendtolisttheClassAcommonstockontheNewYorkStockExchangeunderthesymbol"TWLO".

    Wehavetwoclassesofcommonstock,ClassAcommonstockandClassBcommonstock.TherightsoftheholdersofClassAcommonstockandClassBcommonstockareidentical,exceptvotingandconversionrights.EachshareofClassAcommonstockisentitledtoonevote.EachshareofClassBcommonstockisentitledto10votesandisconvertibleatanytimeintooneshareofClassAcommonstock.TheholdersofouroutstandingClassBcommonstockwillholdapproximately

    %ofthevotingpowerofouroutstandingcapitalstockfollowingthisoffering,withourdirectorsandexecutiveofficersandtheiraffiliatesholdingapproximately

    %.

    Wearean"emerginggrowthcompany"asdefinedunderthefederalsecuritieslawsand,assuch,wehaveelectedtocomplywithreducedreportingrequirementsforthisprospectusandmayelecttodosoinfuturefilings.

    See "Risk Factors" beginning on page 16 to read about factors you should consider before buying shares of the Class A common stock.

    NeithertheSecuritiesandExchangeCommissionnoranyotherregulatorybodyhasapprovedordisapprovedofthesesecuritiesorpassedupontheaccuracyoradequacyofthisprospectus.Anyrepresentationtothecontraryisacriminaloffense.

    Totheextentthattheunderwriterssellmorethan

    sharesofClassAcommonstock,theunderwritershavetheoptiontopurchaseuptoanadditional

    sharesfromTwilioattheinitialpublicofferingpricelesstheunderwritingdiscount.

    TheunderwritersexpecttodeliverthesharesagainstpaymentinNewYork,NewYorkon

    .

    Prospectusdated

    .

    PerShare Total

    Initialpublicofferingprice $

    $

    Underwritingdiscount(1) $

    $

    Proceeds,beforeexpenses,toTwilio $

    $

    Seethesectiontitled"Underwriting"foradditionalinformationregardingcompensationpayabletotheunderwriters.(1)

    Goldman,Sachs&Co. J.P.Morgan

    Allen&CompanyLLC PacificCrestSecurities

    adivisionofKeyBancCapitalMarkets

    JMPSecurities WilliamBlair CanaccordGenuity

  • TableofContents

  • TableofContents

  • TableofContents

  • TableofContents

    TABLEOFCONTENTS

    Prospectus

    Throughandincluding

    (the25thdayafterthedateofthisprospectus),alldealerseffectingtransactionsinthesesecurities,whetherornotparticipatinginthisoffering,mayberequiredtodeliveraprospectus.Thisisinadditiontoadealer'sobligationtodeliveraprospectuswhenactingasanunderwriterandwithrespecttoanunsoldallotmentorsubscription.

    Wehavenotauthorizedanyonetoprovideanyinformationortomakeanyrepresentationsotherthanthosecontainedinthisprospectusorinanyfreewritingprospectuseswehaveprepared.Weandtheunderwriterstakenoresponsibilityfor,andcanprovidenoassuranceastothereliabilityof,anyotherinformationthatothersmaygiveyou.Weareofferingtosell,andseekingofferstobuy,sharesofClassAcommonstockonlyinjurisdictionswhereoffersandsalesarepermitted.Theinformationcontainedinthisprospectusisaccurateonlyasofthedateofthisprospectus,regardlessofthetimeofdeliveryofthisprospectusorofanysaleoftheClassAcommonstock.

    ForinvestorsoutsidetheUnitedStates:Neitherwenoranyoftheunderwritershavedoneanythingthatwouldpermitthisofferingorpossessionordistributionofthisprospectusinanyjurisdictionwhereactionforthatpurposeisrequired,otherthanintheUnitedStates.PersonsoutsideoftheUnitedStateswhocomeintopossessionofthisprospectusmustinformthemselvesabout,andobserveanyrestrictionsrelatingto,theofferingofthesharesofClassAcommonstockandthedistributionofthisprospectusoutsideoftheUnitedStates.

    i

    PagePROSPECTUSSUMMARY 1RISKFACTORS 16SPECIALNOTEREGARDINGFORWARD-LOOKINGSTATEMENTS 51INDUSTRYANDMARKETDATA 53USEOFPROCEEDS 54DIVIDENDPOLICY 55CAPITALIZATION 56DILUTION 59SELECTEDCONSOLIDATEDFINANCIALANDOTHERDATA 62MANAGEMENT'SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONS 65LETTERFROMJEFFLAWSON,CO-FOUNDER,CHIEFEXECUTIVEOFFICERANDCHAIRMAN 95BUSINESS 98MANAGEMENT 118EXECUTIVECOMPENSATION 126CERTAINRELATIONSHIPSANDRELATEDPARTYTRANSACTIONS 137PRINCIPALSTOCKHOLDERS 142DESCRIPTIONOFCAPITALSTOCK 145SHARESELIGIBLEFORFUTURESALE 151MATERIALU.S.FEDERALINCOMETAXCONSEQUENCESTONON-U.S.HOLDERSOFOURCLASSACOMMONSTOCK 154UNDERWRITING 159LEGALMATTERS 164EXPERTS 164WHEREYOUCANFINDADDITIONALINFORMATION 164INDEXTOCONSOLIDATEDFINANCIALSTATEMENTS F-1

  • TableofContents

    PROSPECTUSSUMMARY

    This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you shouldconsider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled "Risk Factors" and "Management's Discussionand Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus, before makingan investment decision. Unless the context otherwise requires, the terms "Twilio," "the company," "we," "us" and "our" in this prospectus refer to Twilio Inc. and its consolidatedsubsidiaries.

    TWILIOINC.

    Overview

    Softwaredevelopersarereinventingnearlyeveryaspectofbusinesstoday.Yetasdevelopers,werepeatedlyencounteredanareawherewecouldnotinnovate—communications.Becausecommunicationisafundamentalhumanactivityandvitaltobuildinggreatbusinesses,wewantedtoincorporatecommunicationsintooursoftwareapplications,butthebarrierstoinnovationweretoohigh.Twiliowasstartedtosolvethisproblem.

    Webelievethefutureofcommunicationswillbewritteninsoftware,bythedevelopersoftheworld—ourcustomers.Byempoweringthem,ourmissionistofuelthefutureofcommunications.

    Cloudplatformsareanewcategoryofsoftwarethatenabledeveloperstobuildandmanageapplicationswithoutthecomplexityofcreatingandmaintainingtheunderlyinginfrastructure.Theseplatformshavearisentoenableafastpaceofinnovationacrossarangeofcategories,suchascomputingandstorage.WearetheleaderintheCloudCommunicationsPlatformcategory.Weenabledeveloperstobuild,scaleandoperatereal-timecommunicationswithinsoftwareapplications.

    Ourdeveloper-firstplatformapproachconsistsofthreethings:ourProgrammableCommunicationsCloud,SuperNetworkandBusinessModelforInnovators.OurProgrammableCommunicationsCloudsoftwareenablesdeveloperstoembedvoice,messaging,videoandauthenticationcapabilitiesintotheirapplicationsviaoursimple-to-useApplicationProgrammingInterfaces,orAPIs.Wedonotaimtoprovidecompletebusinesssolutions,ratherourProgrammableCommunicationsCloudoffersflexiblebuildingblocksthatenableourcustomerstobuildwhattheyneed.TheSuperNetworkisoursoftwarelayerthatallowsourcustomers'softwaretocommunicatewithconnecteddevicesglobally.Itinterconnectswithcommunicationsnetworksaroundtheworldandcontinuallyanalyzesdatatooptimizethequalityandcostofcommunicationsthatflowthroughourplatform.OurBusinessModelforInnovatorsempowersdevelopersbyreducingfrictionandupfrontcosts,encouragingexperimentationandenablingdeveloperstogrowascustomersastheirideassucceed.

    Wehadover28,000ActiveCustomerAccountsasofMarch31,2016,representingorganizationsbigandsmall,oldandyoung,acrossnearlyeveryindustry,withonethingincommon:theyarecompetingbyusingthepowerofsoftwaretobuilddifferentiationthroughcommunications.Withourplatform,ourcustomersaredisruptingexistingindustriesandcreatingnewones.Forexample,ourcustomershavereinventedhiredtransportationbyconnectingridersanddrivers,withcommunicationsasacriticalpartofeachtransaction.Ourcustomers'softwareapplicationsuseourplatformtonotifyadinerwhenatableisready,atravelerwhenaflightisdelayedorashopperwhenapackagehasshipped.TherangeofapplicationsthatdevelopersbuildwiththeTwilioplatformhasproventobenearlylimitless.

    1

  • TableofContents

    OurgoalisforTwiliotobeinthetoolkitofeverysoftwaredeveloperintheworld.AsofMarch31,2016,over900,000developeraccountshadbeenregisteredonourplatform.Becausebigideasoftenstartsmall,weencouragedeveloperstoexperimentanditerateonourplatform.WelovewhendevelopersexplorewhattheycandowithTwilio,becauseonedaytheymayhaveabusinessproblemthattheywilluseourproductstosolve.

    Asourcustomerssucceed,weshareintheirsuccessthroughourusage-basedrevenuemodel.Ourrevenuegrowsascustomersincreasetheirusageofaproduct,extendtheirusageofaproducttonewapplicationsoradoptanewproduct.WebelievethemostusefulindicatoroftheincreasedactivityfromourexistingcustomersisourDollar-BasedNetExpansionRate,whichwas155%fortheyearendedDecember31,2015.Seethesectiontitled"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations—KeyBusinessMetrics—Dollar-BasedNetExpansionRate."

    Wehaveachievedsignificantgrowthinrecentperiods.FortheyearsendedDecember31,2013,2014and2015andthethreemonthsendedMarch31,2016,ourrevenuewas$49.9million,$88.8million,$166.9millionand$59.3million,respectively.Weincurredanetlossof$26.9million,$26.8million,$35.5millionand$6.5millionfortheyearsendedDecember31,2013,2014and2015andthethreemonthsendedMarch31,2016,respectively.

    IndustryBackground

    Trends in Our Favor

    Rise of Software Developers

    Today,softwareisusedtodisruptindustriesandtransformproductsandservices,therebyredefininghoworganizationsengagewiththeircustomers.Thisshifthassignificantlyincreasedthevalueandinfluenceofsoftwaredevelopersacrossorganizationsofallsizesandindustries.

    Differentiation Must Increasingly Be Built, Not Bought

    Inorderfororganizationstodeliverdifferentiatedcustomerexperiencesthatbuildorextendcompetitiveadvantage,theyareincreasinglyaddingthesoftwaredevelopmentcompetenciesnecessarytobuildapplicationsthatdelighttheircustomers.Infact,Gartnerpredictsthatby2020,75%ofapplicationpurchasessupportingdigitalbusinesswillbe"build,notbuy."

    Cloud Platforms As Building Blocks for Modern Applications

    Cloudplatforms,anewcategoryofsoftwarethatenablesdeveloperstobuildandmanageapplicationswithoutthecomplexityofcreatingandmaintainingtheunderlyinginfrastructure,havearisentoenablethefastpaceofinnovationrequiredbymodernapplications.Theseplatformstypicallyprovideglobal,scalableandcost-effectivesolutions.Cloudplatformsareemergingacrossarangeofcategories,includinganalytics,communications,computing,mapping,paymentsandstorage.Thesecloudplatformsareenablingeveryorganization,fromsmallstartupstoFortune500enterprises,toexperiment,prototypeanddeploynext-generationapplications.

    Agility of Software Accelerates Pace of Innovation

    Thewayorganizationsbuild,deployandscalemodernapplicationshasfundamentallychanged.Organizationsmustcontinuouslybringnewapplicationsandfeaturestomarkettodifferentiatethemselvesfromtheircompetitorsandtobuildandextendtheircompetitiveadvantage.Heightenedconsumerexpectationsforreal-time,personalizedinteractionfurthernecessitaterapidinnovation.Inordertosatisfytheseneeds,developersmustbeempoweredtofreelyexperiment,quicklyprototypeandrapidlydeploynewapplicationsthataremassivelyscalable.Legacy

    2

  • TableofContents

    infrastructuredoesnotsupportthisnewparadigmfordevelopersbecauseittypicallyhasbeenslow,complexandcostlytoimplement,andinflexibletooperateanditerate.

    Contextual Communications Are Transforming Applications

    Communicationisfundamentaltohumanactivityandvitaltobuildinggreatbusinesses.Whilesoftwarehastransformedbusiness,communicationstechnologyhaslargelyfailedtoevolve.Infact,thephoneappontoday'ssmartphonesismerelyatouchscreenrepresentationofthepush-buttonphoneinventedinthe1960s.

    Today,thereisdemandforcommunicationstobeembeddedintoapplicationswherecommunicationscanbedeeplyintegratedwiththecontextofusers'lives,suchaspersonalandbusinessidentities,relationships,locationsanddailyschedules.Thistypeofcontextualcommunicationsenablesdeveloperstobuildthepowerfulapplicationsthataredifferentiatingorganizations.Whetheranapplicationisdesignedtobookahotel,hailarideoraidadelayedtraveler,enablinguserstoseamlesslycommunicateincontextiscriticaltoadelightfulexperience.Contextualcommunicationsaretransformingapplicationsandreplacingsiloedcommunicationsapplications,suchasthephoneapp.

    Limitations of Legacy Products

    Legacyproductswerenotdesignedwiththesoftwaremindsetandarethereforeunabletoaddresstheforegoingtrends.Theseproductstendtobemonolithic,costly,complicated,geopoliticallyboundedandimpracticaltoscale,allofwhichhinderinnovation.Asaresult,manyinnovativeideashaveneverevenbeenattemptedwithlegacyproducts,letalonerealized.Overtime,manyattemptshavebeenmadetoevolvethecommunicationsindustrywithsoftware.However,webelievethatnolegacyproducthastrulyempoweredtheglobaldevelopercommunitytotransformtheirapplicationswithcommunications.

    OurPlatformApproach

    Twilio'smissionistofuelthefutureofcommunications.Weenabledeveloperstobuild,scaleandoperatereal-timecommunicationswithinsoftwareapplications.

    OurProgrammableCommunicationsCloud,SuperNetworkandBusinessModelforInnovatorsworktogethertocreatevalueforourcustomersandacompetitiveadvantageforourcompany.

    Our Programmable Communications Cloud.

    OurProgrammableCommunicationsCloudconsistsofsoftwareproductsthatcanbeusedindividuallyorincombinationtobuildrichcontextualcommunicationswithinapplications.OurProgrammableCommunicationsCloudincludes:

    • ProgrammableVoice.

    OurProgrammableVoicesoftwareproductsallowdeveloperstobuildsolutionstomakeandreceivephonecallsglobally,andincorporateadvancedvoicefunctionalitysuchastext-to-speech,conferencing,recordingandtranscription.ProgrammableVoice,throughouradvancedcallcontrolsoftware,allowsdeveloperstobuildcustomizedapplicationsthataddressusecasessuchascontactcenters,calltrackingandanalyticssolutionsandanonymizedcommunications.

    • ProgrammableMessaging.

    OurProgrammableMessagingsoftwareproductsallowdeveloperstobuildsolutionstosendandreceivetextmessagesglobally,andincorporateadvancedmessagingfunctionalitysuchasemoji,picturemessagingandlocalizedlanguages.OurcustomersuseProgrammableMessaging,throughsoftwarecontrols,topowerusecasessuchasappointmentreminders,deliverynotifications,orderconfirmationsandcustomercare.

    3

  • TableofContents

    • ProgrammableVideo.

    OurrecentlyintroducedProgrammableVideosoftwareproductsenabledeveloperstobuildnext-generationmobileandwebapplicationswithembeddedvideo,includingforusecasessuchascustomercare,collaborationandphysicianconsultations.

    • UseCaseAPIs.

    Whiledeveloperscanbuildabroadrangeofapplicationsonourplatform,certainusecasesaremorecommon.OurUseCaseAPIsbuildupontheaboveproductstooffermorefullyimplementedfunctionalityforaspecificpurpose,suchastwo-factorauthentication,therebysavingdeveloperssignificanttimeinbuildingtheirapplications.

    • Add-on Marketplace.

    LaunchedinMay2016,ourAdd-onMarketplaceallowsthirdpartiestointegratetheircapabilitiesdirectlyintoourCloudCommunicationsPlatform,whichallowsustofurtherleverageourcommunitytoprovidenewanddifferentiatedfunctionalityforourcustomers.

    Our Super Network.

    OurProgrammableCommunicationsCloudisbuiltontopofourglobalsoftwarelayer,whichwecallourSuperNetwork.OurSuperNetworkinterfacesintelligentlywithcommunicationsnetworksglobally.Wedonotownanyphysicalnetworkinfrastructure.Weusesoftwaretobuildahighperformancenetworkthatoptimizesperformanceforourcustomers.OurSuperNetworkbreaksdownthegeopoliticalboundariesandscalelimitationsofthephysicalnetworkinfrastructure.

    Ourplatformhasglobalreach,consistingof22clouddatacentersinsevenregions.Weinterconnectthoseclouddatacenterswithnetworkserviceprovidersaroundtheworld,givingusredundantmeanstoreachusersglobally.Wearecontinuallyaddingnewnetworkserviceproviderrelationshipsaswescale.

    OurSuperNetworkanalyzesmassivevolumesofdatafromendusers,theirapplicationsandthecommunicationsnetworkstooptimizeourcustomers'communicationsforqualityandcost.Witheverynewmessageandcall,ourSuperNetworkbecomesmorerobust,intelligentandefficient,enablingustoprovidebetterperformanceatlowerpricestoourcustomers.OurSuperNetwork'ssophisticationbecomesincreasinglydifficultforotherstoreplicateovertime.

    Our Business Model for Innovators.

    Bigideasoftenstartsmall,andthereforedevelopersneedthefreedomandtoolstoexperimentanditerateontheirideas.Inordertoempowerdeveloperstoexperiment,ourdeveloper-firstbusinessmodelislowfriction,eliminatingtheupfrontcosts,timeandcomplexitythathinderinnovation.Developerscanbeginbuildingwithafreetrial.Oncedevelopersdeterminethatoursoftwaremeetstheirneeds,theycanflexiblyincreaseconsumptionandpaybasedonusage.Inshort,weacquiredeveloperslikeconsumersandenablethemtospendlikeenterprises.

    StrengthsofOurPlatformApproach

    Ourplatformwasbuiltbydevelopersfordevelopers,andourapproachhasthefollowingstrengths:

    • DeveloperMindShare.

    Wearerecognizedastheleadingplatformforcloudcommunications,andwebelievewesetthestandardfordeveloperstobuild,scaleandoperatereal-timecommunicationswithinsoftwareapplications.

    • Composable.

    Weareaplatformcompanyfocusedonprovidingsoftwaredeveloperswiththenecessarybuildingblockstocomposecommunicationssolutionsthatcanbeintegratedintotheirapplications.Webelievethisenablesdeveloperstobuilddifferentiatedapplicationsforanearlylimitlessrangeofusecases.

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    • Comprehensive.

    OurProgrammableCommunicationsCloudoffersabreadthoffunctionality,includingvoice,messagingandvideo,allwithglobalreachandacrossdevices.

    • EasytoGetStarted.

    Developerscanbeginbuildingwithafreetrial,allowingthemtoexperimentanditerateonourplatform.Thisapproacheliminatestheupfrontcostsandcomplexitythattypicallyhinderinnovation.

    • EasytoBuild.

    WedesignedourAPIssodeveloperscouldquicklylearn,accessandbuilduponourProgrammableCommunicationsCloud.

    • EasytoScale.

    Ourplatformallowsourcustomerstoscaleelasticallywithouthavingtorearchitecttheirapplicationsormanagecommunicationsinfrastructure.

    • Multi-TenantArchitecture.

    Ourmulti-tenantarchitectureenablesallofourcustomerstooperateonourplatformwhilesecurelypartitioningtheirapplicationusageanddata.Inaddition,ourSolutionPartnercustomers,whichembedourproductsinthesolutionstheyselltootherbusinesses,relyonourmulti-tenantplatformtoindependentlymanagetheirowncustomers'activity.

    • Reliable.

    Ourplatformconsistsoffault-tolerantandglobally-distributedsystemsthathaveenabledourcustomerstooperatetheirapplicationswithoutsignificantfailuresordowntime.

    • Global.

    Customerscanwriteanapplicationonceandconfigureittooperateinnearlyeverycountryintheworldwithoutanychangetothecode.

    OurOpportunity

    Gartnerestimatedthatin2015,$3.5trillionwouldbespentoninformationtechnologyglobally,and42%ofallITspendingwouldbeoncommunications.The$1.5trillionspentoncommunicationsservicesrepresentsalmostfivetimestheamountspentonenterprisesoftwareandninetimestheamountspentondatacenters.Webelievethelimitationsofexistinghardware-andnetwork-centriccommunicationsproductshistoricallyhaveanchoredthecommunicationstechnologymarketinhighcostandlowfunctionality.Overtime,webelievethatameaningfulportionofthe$1.5trillionspentoncommunicationsserviceswillmigratefromexistinghardware-andnetwork-centriccommunicationsproductstocontextualcommunicationssolutionsthatareintegratedintosoftwareapplications.

    OurProgrammableCommunicationsCloudincludesasuiteofsoftwareproducts,includingProgrammableVoice,ProgrammableMessaging,ProgrammableVideoandProgrammableAuthentication.Asaresult,ourplatformcurrentlyaddressessignificantportionsofseverallargemarketsthat,inaggregate,havebeenestimatedbyIDCtobe$45.6billionin2017.

    Specifically,IDCestimatesthat,in2017:

    • TheWorldwideApplication-to-PersonSMSmarketwillbe$29.4billion.OurProgrammableMessagingproductsaddressportionsofthismarket.

    • CertainsegmentsoftheWorldwideUnifiedCommunicationsandCollaborationmarketwillbe$14.1billion.OurProgrammableVoiceandProgrammableVideoproductsaddressportionsofthesemarketsegments.

    • TheAdvancedAuthenticationsegmentoftheWorldwideIdentityandAccessManagementmarketwillbe$2.1billion.OurProgrammableAuthenticationproductsaddressportionsofthismarketsegment.

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    OurGrowthStrategy

    WearetheleaderintheCloudCommunicationsPlatformcategorybasedonrevenue,marketshareandreputation,andintendtocontinuetosetthepaceforinnovation.Weintendtopursuethefollowinggrowthstrategies:

    • ContinueSignificantInvestmentinourTechnologyPlatform.

    Wewillcontinuetoinvestinbuildingnewsoftwarecapabilitiesandextendingourplatformtobringthepowerofcontextualcommunicationstoabroaderrangeofapplications,geographiesandcustomers.

    • GrowOurDeveloperCommunityandAccelerateAdoption.

    AsofMarch31,2016,over900,000developeraccountshadbeenregisteredonourplatform,andwehadover90,000payingcustomeraccounts,ofwhichover28,000wereActiveCustomerAccounts.WecategorizeacustomeraccountasanActiveCustomerAccountinaquarterinwhichitgeneratesatleast$5ofrevenueduringthelastmonthofthequarter.Wewillcontinuetoenhanceourrelationshipswithdevelopersgloballyandseektoincreasethenumberofdevelopersonourplatform.Inadditiontoaddingnewdevelopers,webelievethereissignificantopportunityforrevenuegrowthfromexistingpayingcustomeraccountsthatweseektogrowintoActiveCustomerAccounts.

    • IncreaseOurInternationalPresence.

    Ourplatformoperatesinover180countriestoday,makingitassimpletocommunicatefromSãoPauloasitisfromSanFrancisco.WeplantogrowinternationallybyexpandingouroperationsoutsideoftheUnitedStatesandcollaboratingwithinternationalstrategicpartners.

    • ExpandFocusonEnterprises.

    WeplantodrivegreaterawarenessandadoptionofTwiliofromenterprisesacrossindustries.Weintendtoincreaseourinvestmentinsalesandmarketingtomeetevolvingenterpriseneedsglobally,inadditiontoextendingourenterprise-focusedplatformcapabilitiesandusecases.

    • FurtherEnableSolutionPartnerCustomers.

    WehaverelationshipswithanumberofSolutionPartnercustomersthatembedourproductsinthesolutionsthattheyselltootherbusinesses.WeintendtoexpandourrelationshipswithexistingSolutionPartnercustomersandtoaddnewSolutionPartnercustomers.

    • ExpandISVDevelopmentPlatformandSIPartnerships.

    Weintendtocontinuetoinvestanddeveloptheecosystemforoursolutionsinpartnershipwithindependentsoftwarevendor(ISV)developmentplatformsandsystemintegrators,orSIs,toaccelerateawarenessandadoptionofourplatform.

    • SelectivelyPursueAcquisitionsandStrategicInvestments.

    Wemayselectivelypursueacquisitionsandstrategicinvestmentsinbusinessesandtechnologiesthatstrengthenourplatform.

    OurValuesandLeadershipPrinciples

    Ourcorevaluesareatthecenterofeverythingthatwedo.Asacompanybuiltbydevelopersfordevelopers,thesevaluesguideustoworkinawaythatexemplifiesmanyattributesofthedeveloperethos.Ourvaluesprovideaguideforthewayourteamswork,communicate,setgoalsandmakedecisions.

    Webelieveleadershipisabehavior,notaposition.Inadditiontoourvalues,wehavearticulatedtheleadershiptraitsweallstrivetoachieve.OurleadershipprinciplesapplytoeveryTwilion,notjustmanagersorexecutives,andprovideapersonalgrowthpathforemployeesintheirjourneystobecomebetterleaders.

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    ThecombinationofcorevaluesandleadershipprincipleshascreatedablueprintforhowTwilionsworldwideinteractwithcustomersandwitheachother,andforhowtheyrespondtonewchallengesandopportunities.

    RiskFactors

    Ourbusinessissubjecttonumerousrisksanduncertainties,includingthosehighlightedinthesectiontitled"RiskFactors"immediatelyfollowingthisprospectussummary.Someoftheserisksare:

    • Themarketforourproductsandplatformisnewandunproven,maydeclineorexperiencelimitedgrowth,andisdependentinpartondeveloperscontinuingtoadoptourplatformanduseourproducts.

    • Wehaveahistoryoflossesandweareuncertainaboutourfutureprofitability.

    • Wehaveexperiencedrapidgrowthandexpectourgrowthtocontinue,andifwefailtoeffectivelymanageourgrowth,thenourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.

    • Ourquarterlyresultsmayfluctuate,andifwefailtomeetsecuritiesanalysts'andinvestors'expectations,thenthetradingpriceofourClassAcommonstockandthevalueofyourinvestmentcoulddeclinesubstantially.

    • Ifwearenotabletomaintainandenhanceourbrandandincreasemarketawarenessofourcompanyandproducts,thenourbusiness,resultsofoperationsandfinancialconditionmaybeadverselyaffected.

    • Ourbusinessdependsoncustomersincreasingtheiruseofourproductsandanylossofcustomersordeclineintheiruseofourproductscouldmateriallyandadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    • Ifweareunabletoattractnewcustomersinacost-effectivemanner,thenourbusiness,resultsofoperationsandfinancialconditionwouldbeadverselyaffected.

    • Ifwedonotdevelopenhancementstoourproductsandintroducenewproductsthatachievemarketacceptance,ourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.

    • Ifweareunabletoincreaseadoptionofourproductsbyenterprises,ourbusiness,resultsofoperationsandfinancialconditionmaybeadverselyaffected.

    • Ourfuturesuccessdependsinpartonourabilitytodrivetheadoptionofourproductsbyinternationalcustomers.

    • Themarketinwhichweparticipateisintenselycompetitive,andifwedonotcompeteeffectively,ourbusiness,resultsofoperationsandfinancialconditioncouldbeharmed.

    • Thedualclassstructureofourcommonstockwillhavetheeffectofconcentratingvotingcontrolwithcertainstockholders,includingourdirectors,executiveofficersandsignificantstockholderswhowillholdintheaggregate

    %ofthevotingpowerofourcapitalstockfollowingthecompletionofthisoffering,whichwilllimitorprecludeyourabilitytoinfluencecorporatematters,includingtheelectionofdirectors,amendmentsofourorganizationaldocumentsandanymerger,consolidation,saleofallorsubstantiallyallofourassetsorothermajorcorporatetransactionrequiringstockholderapproval.

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    ChannelsforDisclosureofInformation

    Investors,themediaandothersshouldnotethat,followingthecompletionofthisoffering,weintendtoannouncematerialinformationtothepublicthroughfilingswiththeSecuritiesandExchangeCommission,ortheSEC,theinvestorrelationspageonourwebsite,pressreleasesandpublicconferencecallsandwebcasts.

    CorporateInformation

    TwilioInc.wasincorporatedinDelawareinMarch2008.Ourprincipalexecutiveofficesarelocatedat645HarrisonStreet,ThirdFloor,SanFrancisco,California94107,andourtelephonenumberis(415)390-2337.Ourwebsiteaddressiswww.twilio.com.Informationcontainedon,orthatcanbeaccessedthrough,ourwebsitedoesnotconstitutepartofthisprospectusandinclusionsofourwebsiteaddressinthisprospectusareinactivetextualreferencesonly.

    "Twilio"and"TwiML,"andourotherregisteredorcommonlawtradenames,trademarks,orservicemarksappearinginthisprospectusareourproperty.Othertrademarksandtradenamesreferredtointhisprospectusarethepropertyoftheirrespectiveowners.

    ImplicationsofBeinganEmergingGrowthCompany

    Wearean"emerginggrowthcompany,"asdefinedintheJumpstartOurBusinessStartupsActof2012.Wewillremainanemerginggrowthcompanyuntiltheearlierof(1)December31,2021(thelastdayofthefiscalyearfollowingthefifthanniversaryofourinitialpublicoffering),(2)thelastdayofthefiscalyearinwhichwehavetotalannualgrossrevenueofatleast$1.0billion,(3)thelastdayofthefiscalyearinwhichwearedeemedtobea"largeacceleratedfiler",asdefinedintheSecuritiesExchangeActof1934,ortheExchangeAct,and(4)thedateonwhichwehaveissuedmorethan$1.0billioninnon-convertibledebtduringthepriorthree-yearperiod.WerefertotheJumpstartOurBusinessStartupsActof2012hereinasthe"JOBSAct,"andanyreferencehereinto"emerginggrowthcompany"hasthemeaningascribedtoitintheJOBSAct.

    Anemerginggrowthcompanymaytakeadvantageofreducedreportingrequirementsthatareotherwiseapplicabletopubliccompanies.Theseprovisionsinclude,butarenotlimitedto:

    • beingpermittedtopresentonlytwoyearsofauditedfinancialstatementsandonlytwoyearsofrelated"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"inthisprospectus;

    • notbeingrequiredtocomplywiththeauditorattestationrequirementsofSection404oftheSarbanes-OxleyActof2002,asamended;

    • reduceddisclosureobligationsregardingexecutivecompensationinourperiodicreports,proxystatementsandregistrationstatements,includinginthisprospectus;and

    • exemptionsfromtherequirementsofholdinganonbindingadvisoryvoteonexecutivecompensationandstockholderapprovalofanygoldenparachutepaymentsnotpreviouslyapproved.

    WehaveelectedtotakeadvantageofcertainofthereduceddisclosureobligationsinthisprospectusandmayelecttotakeadvantageofotherreducedreportingrequirementsinourfuturefilingswithSEC.Asaresult,theinformationthatweprovidetoourstockholdersmaybedifferentthanyoumightreceivefromotherpublicreportingcompaniesinwhichyouholdequityinterests.

    TheJOBSActalsoprovidesthatanemerginggrowthcompanycantakeadvantageofanextendedtransitionperiodforcomplyingwithneworrevisedaccountingstandards.Wehaveirrevocablyelectednottoavailourselvesofthisexemptionand,therefore,wewillbesubjecttothesameneworrevisedaccountingstandardsasotherpubliccompaniesthatarenotemerginggrowthcompanies.

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    THEOFFERING

    ClassAcommonstockofferedbyus

    shares

    ClassAcommonstocktobeoutstandingafterthisoffering

    shares

    ClassBcommonstocktobeoutstandingafterthisoffering

    shares

    TotalClassAandClassBcommonstocktobeoutstandingafterthisoffering

    shares

    OptiontopurchaseadditionalsharesofClassAcommonstockfromus

    shares

    Useofproceeds

    WeestimatethatthenetproceedsfromthesaleofsharesofourClassAcommonstockinthisofferingwillbeapproximately$

    (orapproximately$

    iftheunderwriters'optiontopurchaseadditionalsharesofourClassAcommonstockfromusisexercisedinfull),basedupontheassumedinitialpublicofferingpriceof$

    pershare,whichisthemidpointoftheestimatedofferingpricerangesetforthonthecoverpageofthisprospectus,andafterdeductingunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.

    Theprincipalpurposesofthisofferingaretoincreaseourcapitalizationandfinancialflexibility,createapublicmarketforourClassAcommonstockandenableaccesstothepublicequitymarketsforusandourstockholders.Wecurrentlyintendtousethenetproceedsfromthisofferingforworkingcapitalorothergeneralcorporatepurposes,includingfundingourgrowthstrategiesdiscussedinthisprospectus.Theseusesandgrowthstrategiesincludeinvestmentstogrowourengineering,salesandmarketingandcustomersupportteams,toenhanceourtechnologyplatform,togrowourdevelopercommunityandaccelerateadoption,toincreaseourinternationalpresence,tofurtherenableourSolutionPartnercustomers,toexpandourfocusonenterprises,andtoexpandISVdevelopmentplatformandSIpartnerships;however,wedonotcurrentlyhaveanydefinitiveorpreliminaryplanswithrespecttotheuseofproceedsforsuchpurposes.Wemayalsouseaportionofthenetproceedstoacquirebusinesses,products,servicesortechnologies.However,wedonothaveagreementsorcommitmentsforanyacquisitionsatthistime.Seethesectiontitled"UseofProceeds."

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    VotingRights SharesofClassAcommonstockareentitledtoonevotepershare.SharesofClassBcommonstockareentitledto10votespershare.

    HoldersofourClassAcommonstockandClassBcommonstockwillgenerallyvotetogetherasasingleclass,unlessotherwiserequiredbylaworouramendedandrestatedcertificateofincorporation.EachshareofourClassBcommonstockwillbeconvertibleintooneshareofourClassAcommonstockatanytimeandwillconvertautomaticallyuponcertaintransfersandupontheearlierofsevenyearsfromthedateofthisprospectusorthedatetheholdersoftwo-thirdsofourClassBcommonstockelecttoconverttheClassBcommonstocktoClassAcommonstock.

    Uponcompletionofthisoffering,theholdersofouroutstandingClassBcommonstockwillhold

    %ofthevotingpowerofouroutstandingcapitalstock,withourdirectorsandexecutiveofficersandtheiraffiliatesholding

    %intheaggregate.Theseholderswillhavetheabilitytocontroltheoutcomeofmatterssubmittedtoourstockholdersforapproval,includingtheelectionofourdirectorsandtheapprovalofanychangeincontroltransaction.Seethesectionstitled"PrincipalStockholders"and"DescriptionofCapitalStock"foradditionalinformation.

    NewYorkStockExchangetradingsymbol

    "TWLO"

    ThenumberofsharesofourClassAandClassBcommonstockthatwillbeoutstandingafterthisofferingisbasedonnosharesofourClassAcommonstockand72,200,793sharesofourClassBcommonstock(includingconvertiblepreferredstockonanas-convertedbasis)outstandingasofMarch31,2016,andexcludes:

    • 16,704,752sharesofourClassBcommonstockissuableupontheexerciseofoptionstopurchasesharesofourClassBcommonstockoutstandingasofMarch31,2016,withaweighted-averageexercisepriceof$5.57pershare;

    • 573,800restrictedstockunitsforsharesofourClassBcommonstockthatarereleasableuponsatisfactionofserviceandliquidityconditionsoutstandingasofMarch31,2016;

    • 671,550sharesofourClassBcommonstockissuableupontheexerciseofoptionstopurchasesharesofourcommonstockthatweregrantedafterMarch31,2016,withanexercisepriceof$10.30pershare;

    • 130,375restrictedstockunitsforsharesofourClassBcommonstockthatarereleasableuponsatisfactionofserviceandliquidityconditionsthatweregrantedafterMarch31,2016;

    • 780,397sharesofourClassAcommonstockreservedforissuancetofundandsupporttheoperationsofTwilio.org,asadjustedonMay13,2016,ofwhichnonearecurrentlyissuedandoutstanding;and

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    • 13,900,000sharesofourClassAcommonstockreservedforfutureissuanceunderourequitycompensationplans,whichwillbecomeeffectivepriortothecompletionofthisoffering,consistingof:

    • 11,500,000sharesofourClassAcommonstockreservedforfutureissuanceunderour2016StockOptionandIncentivePlan,orour2016Plan;and

    • 2,400,000sharesofourClassAcommonstockreservedforfutureissuanceunderour2016EmployeeStockPurchasePlan,orourESPP.

    Our2016PlanandESPPeachprovideforannualautomaticincreasesinthenumberofsharesreservedthereunderandour2016PlanalsoprovidesforincreasestothenumberofsharesofClassAcommonstockthatmaybegrantedthereunderbasedonsharesunderlyinganyawardsunderour2008StockOptionPlan,orour2008Plan,thatexpire,areforfeitedorareotherwiseterminated,asmorefullydescribedinthesectiontitled"ExecutiveCompensation—EmployeeBenefitandStockPlans."

    Exceptasotherwiseindicated,allinformationinthisprospectusassumes:

    • theamendmenttoourcurrentcertificateofincorporationtoredesignateouroutstandingcommonstockasClassBcommonstockandcreateanewclassofClassAcommonstocktobeofferedandsoldinthisoffering;

    • theautomaticconversionofalloutstandingsharesofourconvertiblepreferredstockintoanaggregateof54,508,441sharesofourClassBcommonstock,theconversionofwhichwilloccurimmediatelypriortothecompletionofthisoffering;

    • thefilingandeffectivenessofouramendedandrestatedcertificateofincorporationinDelawareandtheeffectivenessofouramendedandrestatedbylaws,eachofwhichwilloccurimmediatelypriortothecompletionofthisoffering;and

    • noexercisebytheunderwritersoftheiroptiontopurchaseuptoanadditional

    sharesofourClassAcommonstockfromus.

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    SUMMARYCONSOLIDATEDFINANCIALANDOTHERDATA

    Thefollowingtablessummarizeourconsolidatedfinancialandotherdata.WehavederivedthesummaryconsolidatedstatementsofoperationsdatafortheyearsendedDecember31,2013,2014and2015fromourauditedconsolidatedfinancialstatementsincludedelsewhereinthisprospectus.WehavederivedthesummaryconsolidatedstatementsofoperationsdataforthethreemonthsendedMarch31,2015and2016andoursummaryconsolidatedbalancesheetdataasofMarch31,2016fromourunauditedinterimconsolidatedfinancialstatementsincludedelsewhereinthisprospectus.Theunauditedinterimconsolidatedfinancialstatementshavebeenpreparedonthesamebasisastheauditedconsolidatedfinancialstatementsandreflect,intheopinionofmanagement,alladjustmentsofanormal,recurringnaturethatarenecessaryforafairstatementoftheunauditedinterimconsolidatedfinancialstatements.Ourhistoricalresultsarenotnecessarilyindicativeoftheresultsthatmaybeexpectedinthefuture,andtheresultsforthethreemonthsendedMarch31,2016arenotnecessarilyindicativeoftheresultstobeexpectedforthefullyearoranyotherperiod.Thefollowingsummaryconsolidatedfinancialandotherdatashouldbereadinconjunctionwiththesectiontitled"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"andourconsolidatedfinancialstatementsandtherelatednotesincludedelsewhereinthisprospectus.

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    YearEnded

    December31,

    ThreeMonthsEnded

    March31,

    2013 2014 2015 2015 2016

    (Unaudited)

    (Inthousands,exceptshareandpersharedata)

    ConsolidatedStatementsofOperations:

    Revenue $ 49,920 $ 88,846 $ 166,919 $ 33,365 $ 59,340

    Costofrevenue(1)(2) 25,868 41,423 74,454 15,545 26,827

    Grossprofit 24,052 47,423 92,465 17,820 32,513

    Operatingexpenses:

    Researchanddevelopment(1)(2) 13,959 21,824 42,559 8,480 14,864

    Salesandmarketing(1) 21,931 33,322 49,308 9,869 13,422

    Generalandadministrative(1)(2)

    15,012 18,960 35,991 8,265 10,593

    Totaloperatingexpenses 50,902 74,106 127,858 26,614 38,879

    Lossfromoperations (26,850) (26,683) (35,393) (8,794) (6,366)Otherincome(expenses),net (4) (62) 11 53 (18)Lossbefore(provision)benefitforincometaxes (26,854) (26,745) (35,382) (8,741) (6,384)(Provision)benefitforincometaxes — (13) (122) 81 (84)Netloss (26,854) (26,758) (35,504) (8,660) (6,468)Deemeddividendtoinvestorsinrelationtotenderoffer — — (3,392) — —

    Netlossattributabletocommonstockholders $ (26,854) $ (26,758) $ (38,896) $ (8,660) $ (6,468)Netlosspershareattributabletocommonstockholders,basicanddiluted $ (1.59) $ (1.58) $ (2.19) $ (0.49) $ (0.37)

    Weighted-averagesharesusedincomputingnetlosspershareattributabletocommonstockholders,basicanddiluted 16,916,035 16,900,124 17,746,526 17,749,487 17,483,198

    Proformanetlosspershareattributabletocommonstockholders,basicanddiluted(unaudited) $ (0.45) $ (0.45) $ (0.54) $ (0.14) $ (0.09)

    Weighted-averagesharesusedincomputingproformanetlosspershareattributabletocommonstockholders,basicanddiluted(unaudited) 59,398,525 59,382,614 72,254,967 61,129,595 71,991,639

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    Includesstock-basedcompensationexpenseasfollows:(1)

    YearEnded

    December31,

    ThreeMonths

    Ended

    March31,

    2013 2014 2015 2015 2016

    (Unaudited)

    (Inthousands)

    Costofrevenue $ 27 $ 39 $ 65 $ 14 $ 23

    Researchanddevelopment 810 1,577 4,046 663 1,516

    Salesandmarketing 753 1,335 2,389 420 734

    Generalandadministrative 567 1,027 2,377 548 752

    Total $ 2,157 $ 3,978 $ 8,877 $ 1,645 $ 3,025

    Includesamortizationofacquiredintangiblesasfollows:(2)

    YearEnded

    December31,

    Three

    Months

    Ended

    March31,

    2013 2014 2015 2015 2016

    (Unaudited)

    (Inthousands)

    Costofrevenue $ — $ — $ 239 $ 28 $ 70

    Researchanddevelopment — — 130 17 38

    Generalandadministrative — — 95 11 27

    Total $ — $ — $ 464 $ 56 $ 135

    AsofMarch31,2016

    Actual ProForma(1)

    ProForma

    asAdjusted

    (2)(3)

    (Unaudited,inthousands)

    ConsolidatedBalanceSheetData:

    Cashandcashequivalents $ 103,320 $ 103,320

    Workingcapital 83,489 83,489

    Propertyandequipment,net 16,847 16,847

    Totalassets 167,254 167,254

    Totalstockholders'equity 114,351 114,351

    Theproformacolumninthebalancesheetdatatableabovereflects(a)theredesignationofouroutstandingcommonstockasClassBcommonstock,(b)theautomaticconversionofalloutstandingsharesofourconvertiblepreferredstockintoanaggregateof54,508,441sharesofourClassBcommonstock,whichconversionwilloccurimmediatelypriortothecompletionofthisoffering,and(c)thefilingandeffectivenessofouramendedandrestatedcertificateofincorporationinDelaware.

    Theproformaasadjustedcolumninthebalancesheetdatatableabovegiveseffectto(a)theproformaadjustmentssetforthaboveand(b)thesaleandissuancebyusof

    sharesofourClassAcommonstockinthisoffering,basedupontheassumedinitialpublicofferingpriceof$

    pershare,whichisthemidpointoftheestimatedofferingpricerangesetforthonthecoverpageofthisprospectus,andafterdeductingunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.

    Each$1.00increaseordecreaseintheassumedinitialpublicofferingpriceof$

    pershare,whichisthemidpointoftheestimatedofferingpricerangesetforthonthecoverpageofthisprospectus,wouldincreaseordecrease,asapplicable,theamountofourcashandcashequivalents,workingcapital,totalassetsandtotalstockholders'equityby$

    ,assumingthatthenumberofsharesofferedbyus,assetforthonthecoverpageofthisprospectus,remainsthesame,afterdeductingunderwritingdiscountsandcommissionspayablebyus.Anincreaseordecreaseof1.0millionsharesinthenumberofsharesofferedbyuswouldincreaseordecrease,asapplicable,theamountofourcashandcashequivalents,workingcapital,totalassetsandtotalstockholders'equityby$

    ,assuminganinitialpublicofferingpriceof$

    pershare,whichisthemidpointoftheestimatedofferingpricerangesetforthonthecoverpageofthisprospectus,afterdeductingunderwritingdiscountsandcommissionspayablebyus.

    (1)

    (2)

    (3)

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    KeyBusinessMetrics

    Number of Active Customer Accounts.

    WebelievethatthenumberofourActiveCustomerAccountsisanimportantindicatorofthegrowthofourbusiness,themarketacceptanceofourplatformandfuturerevenuetrends.WedefineanActiveCustomerAccountattheendofanyperiodasanindividualaccount,asidentifiedbyauniqueaccountidentifier,forwhichwehaverecognizedatleast$5ofrevenueinthelastmonthoftheperiod.WebelievethatuseofourplatformbyActiveCustomerAccountsatorabovethe$5permonththresholdisastrongerindicatorofpotentialfutureengagementthantrialusageofourplatformorusageatlevelsbelow$5permonth.AsinglecustomermayconstitutemultipleuniqueActiveCustomerAccountsifithasmultipleaccountidentifiers,eachofwhichistreatedasaseparateActiveCustomerAccount.

    IntheyearsendedDecember31,2013,2014and2015andthethreemonthsendedMarch31,2016,revenuefromActiveCustomerAccountsrepresentedapproximately99%oftotalrevenueineachperiod.

    Base Revenue.

    WemonitorBaseRevenueasoneofthemorereliableindicatorsoffuturerevenuetrends.BaseRevenueconsistsofallrevenueotherthanrevenuefromActiveCustomerAccountswithlargecustomersthathaveneverenteredinto12-monthminimumrevenuecommitmentcontractswithus,whichwerefertoasVariableCustomerAccounts.Whilealmostallofourcustomeraccountsexhibitsomelevelofvariabilityintheusageofourproducts,basedonourexperience,webelieveVariableCustomerAccountsaremorelikelytoexhibitsignificantfluctuationsinusageofourproductsfromperiodtoperiod,andthereforethatrevenuefromVariableCustomerAccountsmayalsofluctuatesignificantlyfromperiodtoperiod.Thisbehaviorisbestevidencedbythedecisionofsuchcustomersnottoenterintocontractswithusthatcontainminimumrevenuecommitments,eventhoughtheymayspendsignificantamountsontheuseofourproductsandtheymaybeforegoingmorefavorabletermsoftenavailabletocustomersthatenterintocommittedcontractswithus.ThisvariabilityadverselyaffectsourabilitytorelyuponrevenuefromVariableCustomerAccountswhenanalyzingexpectedtrendsinfuturerevenue.

    Forhistoricalperiods,wedefineaVariableCustomerAccountasanActiveCustomerAccountthat(i)iswithacustomerthathadneversignedaminimumrevenuecommitmentcontractwithusforatermofatleast12monthsand(ii)hasmetorexceeded1%ofourrevenueinanyquarterintheperiodspresented.Toallowforconsistentperiod-to-periodcomparisons,intheeventacustomeraccountqualifiedasaVariableCustomerAccountasofMarch31,2016,orapreviouslyVariableCustomerAccountceasedtobeanActiveCustomerAccountasofsuchdate,weincludedsuchcustomeraccountasaVariableCustomerAccountinallperiodspresented.Forfuturereportingperiods,wewilldefineaVariableCustomerAccountasacustomeraccountthat(a)hasbeencategorizedasaVariableCustomerAccountinanypriorquarter,aswellas(b)anynewcustomeraccountthat(i)iswithacustomerthathasneversignedaminimumrevenuecommitmentcontractwithusforatermofatleast12monthsand(ii)meetsorexceeds1%ofourrevenueinaquarter.OnceacustomeraccountisdeemedtobeaVariableCustomerAccountinanyperiod,it

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    YearEnded

    December31,

    ThreeMonths

    Ended

    March31,

    2013 2014 2015 2015 2016

    NumberofActiveCustomerAccounts(as of end date of period ) 11,048 16,631 25,347 19,340 28,648

    BaseRevenue(in thousands ) $ 41,751 $ 75,697 $ 136,851 $ 25,931 $ 49,834

    Base Revenue Growth Rate 111% 81% 81% 70% 92%Dollar-BasedNetExpansionRate 170% 153% 155% 145% 170%

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    remainsaVariableCustomerAccountinsubsequentperiodsunlesssuchcustomerentersintoaminimumrevenuecommitmentcontractwithusforatermofatleast12months.

    InthethreemonthsendedMarch31,2016,wehadnineVariableCustomerAccounts,whichrepresented16%ofourtotalrevenue.

    Dollar-Based Net Expansion Rate.

    Ourabilitytodrivegrowthandgenerateincrementalrevenuedepends,inpart,onourabilitytomaintainandgrowourrelationshipswithcustomersthathaveActiveCustomerAccountsandtoincreasetheiruseoftheplatform.AnimportantwayinwhichwetrackourperformanceinthisareaisbymeasuringtheDollar-BasedNetExpansionRateforourActiveCustomerAccounts,otherthanourVariableCustomerAccounts.OurDollar-BasedNetExpansionRateincreaseswhensuchActiveCustomerAccountsincreaseusageofaproduct,extendusageofaproducttonewapplicationsoradoptanewproduct.OurDollar-BasedNetExpansionRatedecreaseswhensuchActiveCustomerAccountsceaseorreduceusageofaproductorwhenwelowerusagepricesonaproduct.WebelievemeasuringourDollar-BasedNetExpansionRateonrevenuegeneratedfromourActiveCustomerAccounts,otherthanourVariableCustomerAccounts,providesamoremeaningfulindicationoftheperformanceofoureffortstoincreaserevenuefromexistingcustomeraccounts.

    OurDollar-BasedNetExpansionRatecomparestherevenuefromActiveCustomerAccounts,otherthanVariableCustomerAccounts,inaquartertothesamequarterintheprioryear.TocalculatetheDollar-BasedNetExpansionRate,wefirstidentifythecohortofActiveCustomerAccounts,otherthanVariableCustomerAccounts,thatwereActiveCustomerAccountsinthesamequarteroftheprioryear.TheDollar-BasedNetExpansionRateisthequotientobtainedbydividingtherevenuegeneratedfromthatcohortinaquarter,bytherevenuegeneratedfromthatsamecohortinthecorrespondingquarterintheprioryear.WhenwecalculateDollar-BasedNetExpansionRateforperiodslongerthanonequarter,weusetheaverageoftheapplicablequarterlyDollar-BasedNetExpansionRatesforeachofthequartersinsuchperiod.

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    RISKFACTORS

    Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the otherinformation in this prospectus, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financialstatements and related notes, before making a decision to invest in our Class A common stock. The risks and uncertainties described below may not be the only ones we face. If any of therisks actually occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the market price of our Class A commonstock could decline, and you could lose part or all of your investment.

    RisksRelatedtoOurBusinessandOurIndustry

    The market for our products and platform is new and unproven, may decline or experience limited growth and is dependent in part on developers continuing to adopt ourplatform and use our products.

    Wewerefoundedin2008,andhavebeendevelopingandprovidingacloud-basedplatformthatenablesdevelopersandorganizationstointegratevoice,messagingandvideocommunicationscapabilitiesintotheirsoftwareapplications.Thismarketisrelativelynewandunprovenandissubjecttoanumberofrisksanduncertainties.Webelievethatourrevenuecurrentlyconstitutesasignificantportionofthetotalrevenueinthismarket,andtherefore,webelievethatourfuturesuccesswilldependinlargepartonthegrowth,ifany,ofthismarket.TheutilizationofAPIsbydevelopersandorganizationstobuildcommunicationsfunctionalityintotheirapplicationsisstillrelativelynew,anddevelopersandorganizationsmaynotrecognizetheneedfor,orbenefitsof,ourproductsandplatform.Moreover,iftheydonotrecognizetheneedforandbenefitsofourproductsandplatform,theymaydecidetoadoptalternativeproductsandservicestosatisfysomeportionoftheirbusinessneeds.Inordertogrowourbusinessandextendourmarketposition,weintendtofocusoneducatingdevelopersandotherpotentialcustomersaboutthebenefitsofourproductsandplatform,expandingthefunctionalityofourproductsandbringingnewtechnologiestomarkettoincreasemarketacceptanceanduseofourplatform.Ourabilitytoexpandthemarketthatourproductsandplatformaddressdependsuponanumberoffactors,includingthecost,performanceandperceivedvalueassociatedwithsuchproductsandplatform.Themarketforourproductsandplatformcouldfailtogrowsignificantlyortherecouldbeareductionindemandforourproductsasaresultofalackofdeveloperacceptance,technologicalchallenges,competingproductsandservices,decreasesinspendingbycurrentandprospectivecustomers,weakeningeconomicconditionsandothercauses.Ifourmarketdoesnotexperiencesignificantgrowthordemandforourproductsdecreases,thenourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.

    We have a history of losses and we are uncertain about our future profitability.

    Wehaveincurrednetlossesineachyearsinceourinception,includingnetlossesof$26.9million,$26.8million,$35.5millionand$6.5millionin2013,2014and2015andthethreemonthsendedMarch31,2016,respectively.Wehadanaccumulateddeficitof$151.9millionasofMarch31,2016.Weexpecttocontinuetoexpendsubstantialfinancialandotherresourceson,amongotherthings:

    • investmentsinourengineeringteam,thedevelopmentofnewproducts,featuresandfunctionalityandenhancementstoourplatform;

    • salesandmarketing,includingexpandingourdirectsalesorganizationandmarketingprograms,especiallyforenterprisesandfororganizationsoutsideoftheUnitedStates,and

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    expandingourprogramsdirectedatincreasingourbrandawarenessamongcurrentandnewdevelopers;

    • expansionofouroperationsandinfrastructure,bothdomesticallyandinternationally;and

    • generaladministration,includinglegal,accountingandotherexpensesrelatedtobeingapubliccompany.

    Theseinvestmentsmaynotresultinincreasedrevenueorgrowthofourbusiness.Wealsoexpectthatourrevenuegrowthratewilldeclineovertime.Accordingly,wemaynotbeabletogeneratesufficientrevenuetooffsetourexpectedcostincreasesandachieveandsustainprofitability.Ifwefailtoachieveandsustainprofitability,thenourbusiness,resultsofoperationsandfinancialconditionwouldbeadverselyaffected.

    We have experienced rapid growth and expect our growth to continue, and if we fail to effectively manage our growth, then our business, results of operations and financialcondition could be adversely affected.

    Wehaveexperiencedsubstantialgrowthinourbusinesssinceinception.Forexample,ourheadcounthasgrownfrom386employeesonMarch31,2015to567employeesonMarch31,2016.Inaddition,wearerapidlyexpandingourinternationaloperations,andweestablishedoperationsinthreenewcountriesbetweenMarch31,2015andMarch31,2016.Weexpecttocontinuetoexpandourinternationaloperationsinthefuture.Wehavealsoexperiencedsignificantgrowthinthenumberofcustomers,usageandamountofdatathatourplatformandassociatedinfrastructuresupport.Thisgrowthhasplacedandmaycontinuetoplacesignificantdemandsonourcorporateculture,operationalinfrastructureandmanagement.

    Webelievethatourcorporateculturehasbeenacriticalcomponentofoursuccess.Wehaveinvestedsubstantialtimeandresourcesinbuildingourteamandnurturingourculture.Asweexpandourbusinessandmatureasapubliccompany,wemayfinditdifficulttomaintainourcorporateculturewhilemanagingthisgrowth.Anyfailuretomanageouranticipatedgrowthandorganizationalchangesinamannerthatpreservesthekeyaspectsofourculturecouldhurtourchanceforfuturesuccess,includingourabilitytorecruitandretainpersonnel,andeffectivelyfocusonandpursueourcorporateobjectives.This,inturn,couldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    Inaddition,inordertosuccessfullymanageourrapidgrowth,ourorganizationalstructurehasbecomemorecomplex.Inordertomanagetheseincreasingcomplexities,wewillneedtocontinuetoscaleandadaptouroperational,financialandmanagementcontrols,aswellasourreportingsystemsandprocedures.Theexpansionofoursystemsandinfrastructurewillrequireustocommitsubstantialfinancial,operationalandmanagementresourcesbeforeourrevenueincreasesandwithoutanyassurancesthatourrevenuewillincrease.

    Finally,continuedgrowthcouldstrainourabilitytomaintainreliableservicelevelsforourcustomers.Ifwefailtoachievethenecessarylevelofefficiencyinourorganizationaswegrow,thenourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.

    Our quarterly results may fluctuate, and if we fail to meet securities analysts' and investors' expectations, then the trading price of our Class A common stock and the value ofyour investment could decline substantially.

    Ourresultsofoperations,includingthelevelsofourrevenue,costofrevenue,grossmarginandoperatingexpenses,havefluctuatedfromquartertoquarterinthepastandmaycontinuetovarysignificantlyinthefuture.Thesefluctuationsarearesultofavarietyoffactors,manyofwhichareoutsideofourcontrol,maybedifficulttopredictandmayormaynotfullyreflecttheunderlying

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    performanceofourbusiness.Ifourquarterlyresultsofoperationsfallbelowtheexpectationsofinvestorsorsecuritiesanalysts,thenthetradingpriceofourClassAcommonstockcoulddeclinesubstantially.Someoftheimportantfactorsthatmaycauseourresultsofoperationstofluctuatefromquartertoquarterinclude:

    • ourabilitytoretainandincreaserevenuefromexistingcustomersandattractnewcustomers;

    • fluctuationsintheamountofrevenuefromourVariableCustomerAccounts;

    • ourabilitytoattractenterprisesandinternationalorganizationsascustomers;

    • ourabilitytointroducenewproductsandenhanceexistingproducts;

    • competitionandtheactionsofourcompetitors,includingpricingchangesandtheintroductionofnewproducts,servicesandgeographies;

    • thenumberofnewemployees;

    • changesinnetworkserviceproviderfeesthatwepayinconnectionwiththedeliveryofcommunicationsonourplatform;

    • changesincloudinfrastructurefeesthatwepayinconnectionwiththeoperationofourplatform;

    • changesinourpricingasaresultofouroptimizationeffortsorotherwise;

    • reductionsinpricingasaresultofnegotiationswithourlargercustomers;

    • therateofexpansionandproductivityofoursalesforce,includingourenterprisesalesforce,whichhasbeenafocusofourrecentexpansionefforts;

    • changeinthemixofproductsthatourcustomersuse;

    • changeintherevenuemixofU.S.andinternationalproducts;

    • theamountandtimingofoperatingcostsandcapitalexpendituresrelatedtotheoperationsandexpansionofourbusiness,includinginvestmentsinourinternationalexpansion;

    • significantsecuritybreachesof,technicaldifficultieswith,orinterruptionsto,thedeliveryanduseofourproductsonourplatform;

    • thetimingofcustomerpaymentsandanydifficultyincollectingaccountsreceivablefromcustomers;

    • generaleconomicconditionsthatmayadverselyaffectaprospectivecustomer'sabilityorwillingnesstoadoptourproducts,delayaprospectivecustomer'sadoptiondecision,reducetherevenuethatwegeneratefromtheuseofourproductsoraffectcustomerretention;

    • changesinforeigncurrencyexchangerates;

    • extraordinaryexpensessuchaslitigationorotherdispute-relatedsettlementpayments;

    • salestaxandothertaxdeterminationsbyauthoritiesinthejurisdictionsinwhichweconductbusiness;

    • theimpactofnewaccountingpronouncements;

    • expensesinconnectionwithmergers,acquisitionsorotherstrategictransactions;and

    • fluctuationsinstock-basedcompensationexpense.

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    Theoccurrenceofoneormoreoftheforegoingandotherfactorsmaycauseourresultsofoperationstovarysignificantly.Assuch,webelievethatquarter-to-quartercomparisonsofourresultsofoperationsmaynotbemeaningfulandshouldnotberelieduponasanindicationoffutureperformance.Inaddition,asignificantpercentageofouroperatingexpensesisfixedinnatureandisbasedonforecastedrevenuetrends.Accordingly,intheeventofarevenueshortfall,wemaynotbeabletomitigatethenegativeimpactonourincome(loss)andmarginsintheshortterm.Ifwefailtomeetorexceedtheexpectationsofinvestorsorsecuritiesanalysts,thenthetradingpriceofourClassAcommonstockcouldfallsubstantially,andwecouldfacecostlylawsuits,includingsecuritiesclassactionsuits.

    Additionally,certainlargescaleevents,suchasmajorelectionsandsportingevents,cansignificantlyimpactusagelevelsonourplatform,whichcouldcausefluctuationsinourresultsofoperations.Weexpectthatsignificantlyincreasedusageofallcommunicationsplatforms,includingours,duringcertainseasonalandone-timeeventscouldimpactdeliveryandqualityofourproductsduringthoseevents.Wealsoexperiencedincreasedexpensesinthesecondquarterof2015duetoourdeveloperconference,SIGNAL,whichweplantohostannually.Suchannualandone-timeeventsmaycausefluctuationsinourresultsofoperationsandmayimpactbothourrevenueandoperatingexpenses.

    If we are not able to maintain and enhance our brand and increase market awareness of our company and products, then our business, results of operations and financialcondition may be adversely affected.

    Webelievethatmaintainingandenhancingthe"Twilio"brandidentityandincreasingmarketawarenessofourcompanyandproducts,particularlyamongdevelopers,iscriticaltoachievingwidespreadacceptanceofourplatform,tostrengthenourrelationshipswithourexistingcustomersandtoourabilitytoattractnewcustomers.Thesuccessfulpromotionofourbrandwilldependlargelyonourcontinuedmarketingefforts,ourabilitytocontinuetoofferhighqualityproducts,ourabilitytobethoughtleadersinthecloudcommunicationsmarketandourabilitytosuccessfullydifferentiateourproductsandplatformfromcompetingproductsandservices.Ourbrandpromotionandthoughtleadershipactivitiesmaynotbesuccessfuloryieldincreasedrevenue.Inaddition,independentindustryanalystsoftenprovidereviewsofourproductsandcompetingproductsandservices,whichmaysignificantlyinfluencetheperceptionofourproductsinthemarketplace.Ifthesereviewsarenegativeornotasstrongasreviewsofourcompetitors'productsandservices,thenourbrandmaybeharmed.

    Fromtimetotime,ourcustomershavecomplainedaboutourproducts,suchascomplaintsaboutourpricingandcustomersupport.Ifwedonothandlecustomercomplaintseffectively,thenourbrandandreputationmaysuffer,ourcustomersmayloseconfidenceinusandtheymayreduceorceasetheiruseofourproducts.Inaddition,manyofourcustomerspostanddiscussonsocialmediaaboutInternet-basedproductsandservices,includingourproductsandplatform.Oursuccessdepends,inpart,onourabilitytogeneratepositivecustomerfeedbackandminimizenegativefeedbackonsocialmediachannelswhereexistingandpotentialcustomersseekandshareinformation.Ifactionswetakeorchangeswemaketoourproductsorplatformupsetthesecustomers,thentheironlinecommentarycouldnegativelyaffectourbrandandreputation.Complaintsornegativepublicityaboutus,ourproductsorourplatformcouldmateriallyandadverselyimpactourabilitytoattractandretaincustomers,ourbusiness,resultsofoperationsandfinancialcondition.

    Thepromotionofourbrandalsorequiresustomakesubstantialexpenditures,andweanticipatethattheseexpenditureswillincreaseasourmarketbecomesmorecompetitiveandasweexpandintonewmarkets.Totheextentthattheseactivitiesincreaserevenue,thisrevenuestillmaynotbeenoughtooffsettheincreasedexpensesweincur.Ifwedonotsuccessfullymaintainand

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    enhanceourbrand,thenourbusinessmaynotgrow,wemayseeourpricingpowerreducedrelativetocompetitorsandwemaylosecustomers,allofwhichwouldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    Our business depends on customers increasing their use of our products and any loss of customers or decline in their use of our products could materially and adverselyaffect our business, results of operations and financial condition.

    Ourabilitytogrowandgenerateincrementalrevenuedepends,inpart,onourabilitytomaintainandgrowourrelationshipswithexistingcustomersandtohavethemincreasetheirusageofourplatform.Ifourcustomersdonotincreasetheiruseofourproducts,thenourrevenuemaydeclineandourresultsofoperationsmaybeharmed.Customersarechargedbasedontheusageofourproducts.Mostofourcustomersdonothavelong-termcontractualfinancialcommitmentstousand,therefore,mostofourcustomersmayreduceorceasetheiruseofourproductsatanytimewithoutpenaltyorterminationcharges.Wecannotaccuratelypredictcustomers'usagelevelsandthelossofcustomersorreductionsintheirusagelevelsofourproductsmayeachhaveanegativeimpactonourbusiness,resultsofoperationsandfinancialcondition.ReductionsinusagefromexistingcustomersandthelossofcustomerscouldcauseourDollar-BasedNetExpansionRatetodeclineinthefutureifcustomersarenotsatisfiedwithourproducts,thevaluepropositionofourproductsorourabilitytootherwisemeettheirneedsandexpectations.Ifasignificantnumberofcustomersceaseusing,orreducetheirusageofourproducts,thenwemayberequiredtospendsignificantlymoreonsalesandmarketingthanwecurrentlyplantospendinordertomaintainorincreaserevenuefromcustomers.Suchadditionalsalesandmarketingexpenditurescouldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    If we are unable to attract new customers in a cost-effective manner, then our business, results of operations and financial condition would be adversely affected.

    Inordertogrowourbusiness,wemustcontinuetoattractnewcustomersinacost-effectivemanner.Weuseavarietyofmarketingchannelstopromoteourproductsandplatform,suchasdevelopereventsandevangelism,aswellassearchenginemarketingandoptimization.Weperiodicallyadjustthemixofourothermarketingprogramssuchasregionalcustomerevents,emailcampaigns,billboardadvertisingandpublicrelationsinitiatives.Ifthecostsofthemarketingchannelsweuseincreasedramatically,thenwemaychoosetousealternativeandlessexpensivechannels,whichmaynotbeaseffectiveasthechannelswecurrentlyuse.Asweaddtoorchangethemixofourmarketingstrategies,wemayneedtoexpandintomoreexpensivechannelsthanthosewearecurrentlyin,whichcouldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.Wewillincurmarketingexpensesbeforeweareabletorecognizeanyrevenuethatthemarketinginitiativesmaygenerate,andtheseexpensesmaynotresultinincreasedrevenueorbrandawareness.Wehavemadeinthepast,andmaymakeinthefuture,significantexpendituresandinvestmentsinnewmarketingcampaigns,andwecannotassureyouthatanysuchinvestmentswillleadtothecost-effectiveacquisitionofadditionalcustomers.Ifweareunabletomaintaineffectivemarketingprograms,thenourabilitytoattractnewcustomerscouldbemateriallyandadverselyaffected,ouradvertisingandmarketingexpensescouldincreasesubstantiallyandourresultsofoperationsmaysuffer.

    If we do not develop enhancements to our products and introduce new products that achieve market acceptance, our business, results of operations and financial conditioncould be adversely affected.

    Ourabilitytoattractnewcustomersandincreaserevenuefromexistingcustomersdependsinpartonourabilitytoenhanceandimproveourexistingproducts,increaseadoptionandusageof

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    ourproductsandintroducenewproducts.Thesuccessofanyenhancementsornewproductsdependsonseveralfactors,includingtimelycompletion,adequatequalitytesting,actualperformancequality,market-acceptedpricinglevelsandoverallmarketacceptance.Enhancementsandnewproductsthatwedevelopmaynotbeintroducedinatimelyorcost-effectivemanner,maycontainerrorsordefects,mayhaveinteroperabilitydifficultieswithourplatformorotherproductsormaynotachievethebroadmarketacceptancenecessarytogeneratesignificantrevenue.Furthermore,ourabilitytoincreasetheusageofourproductsdepends,inpart,onthedevelopmentofnewusecasesforourproducts,whichistypicallydrivenbyourdevelopercommunityandmaybeoutsideofourcontrol.Wealsohaveinvested,andmaycontinuetoinvest,intheacquisitionofcomplementarybusinesses,technologies,services,productsandotherassetsthatexpandtheproductsthatwecanofferourcustomers.Wemaymaketheseinvestmentswithoutbeingcertainthattheywillresultinproductsorenhancementsthatwillbeacceptedbyexistingorprospectivecustomers.Ourabilitytogenerateusageofadditionalproductsbyourcustomersmayalsorequireincreasinglysophisticatedandmorecostlysaleseffortsandresultinalongersalescycle.Ifweareunabletosuccessfullyenhanceourexistingproductstomeetevolvingcustomerrequirements,increaseadoptionandusageofourproducts,developnewproducts,orifoureffortstoincreasetheusageofourproductsaremoreexpensivethanweexpect,thenourbusiness,resultsofoperationsandfinancialconditionwouldbeadverselyaffected.

    If we are unable to increase adoption of our products by enterprises, our business, results of operations and financial condition may be adversely affected.

    Historically,wehavereliedontheadoptionofourproductsbysoftwaredevelopersthroughourself-servicemodelforasignificantmajorityofourrevenue,andwecurrentlygenerateonlyasmallportionofourrevenuefromenterprisecustomers.Ourabilitytoincreaseourcustomerbase,especiallyamongenterprises,andachievebroadermarketacceptanceofourproductswilldepend,inpart,onourabilitytoeffectivelyorganize,focusandtrainoursalesandmarketingpersonnel.Wehavelimitedexperiencesellingtoenterprisesandonlyrecentlyestablishedanenterprise-focusedsalesforce.

    Ourabilitytoconvinceenterprisestoadoptourproductswilldepend,inpart,onourabilitytoattractandretainsalespersonnelwithexperiencesellingtoenterprises.Webelievethatthereissignificantcompetitionforexperiencedsalesprofessionalswiththeskillsandtechnicalknowledgethatwerequire.Ourabilitytoachievesignificantrevenuegrowthinthefuturewilldepend,inpart,onourabilitytorecruit,trainandretainasufficientnumberofexperiencedsalesprofessionals,particularlythosewithexperiencesellingtoenterprises.Inaddition,evenifwearesuccessfulinhiringqualifiedsalespersonnel,newhiresrequiresignificanttrainingandexperiencebeforetheyachievefullproductivity,particularlyforsaleseffortstargetedatenterprisesandnewterritories.Ourrecenthiresandplannedhiresmaynotbecomeasproductiveasquicklyasweexpectandwemaybeunabletohireorretainsufficientnumbersofqualifiedindividualsinthefutureinthemarketswherewedobusiness.Becausewedonothavealonghistoryoftargetingoursaleseffortsatenterprises,wecannotpredictwhether,ortowhatextent,oursaleswillincreaseasweorganizeandtrainoursalesforceorhowlongitwilltakeforsalespersonneltobecomeproductive.

    Asweseektoincreasetheadoptionofourproductsbyenterprises,weexpecttoincurhighercostsandlongersalescycles.Inthismarketsegment,thedecisiontoadoptourproductsmayrequiretheapprovalofmultipletechnicalandbusinessdecisionmakers,includingsecurity,compliance,procurement,operationsandIT.Inaddition,whileenterprisecustomersmayquicklydeployourproductsonalimitedbasis,beforetheywillcommittodeployingourproductsatscale,theyoftenrequireextensiveeducationaboutourproductsandsignificantcustomersupporttime,engageinprotractedpricingnegotiationsandseektosecurereadilyavailabledevelopmentresources.Inaddition,salescyclesforenterprisesareinherentlymorecomplexandless

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    predictablethanthesalesthroughourself-servicemodel,andsomeenterprisecustomersmaynotuseourproductsenoughtogeneraterevenuethatjustifiesthecosttoobtainsuchcustomers.Inaddition,thesecomplexandresourceintensivesaleseffortscouldplaceadditionalstrainonourlimitedproductandengineeringresources.Further,enterprises,includingsomeofourcustomers,maychoosetodeveloptheirownsolutionsthatdonotincludeourproducts.Theyalsomaydemandreductionsinpricingastheirusageofourproductsincreases,whichcouldhaveanadverseimpactonourgrossmargin.Asaresultofourlimitedexperiencesellingandmarketingtoenterprises,oureffortstoselltothesepotentialcustomersmaynotbesuccessful.Ifweareunabletoincreasetherevenuethatwederivefromenterprises,thenourbusiness,resultsofoperationsandfinancialconditionmaybeadverselyaffected.

    If we are unable to expand our relationships with existing Solution Partner customers and add new Solution Partner customers, our business, results of operations andfinancial condition could be adversely affected.

    WebelievethatthecontinuedgrowthofourbusinessdependsinpartupondevelopingandexpandingstrategicrelationshipswithSolutionPartnercustomers.SolutionPartnercustomersembedoursoftwareproductsintheirsolutions,suchassoftwareapplicationsforcontactcentersandsalesforceandmarketingautomation,andthensellsuchsolutionstootherbusinesses.Whenpotentialcustomersdonothavetheavailabledeveloperresourcestobuildtheirownapplications,wereferthemtoournetworkofSolutionPartnercustomers.

    Aspartofourgrowthstrategy,weintendtoexpandourrelationshipswithexistingSolutionPartnercustomersandaddnewSolutionPartnercustomers.IfwefailtoexpandourrelationshipswithexistingSolutionPartnercustomersorestablishrelationshipswithnewSolutionPartnercustomers,inatimelyandcost-effectivemanner,oratall,thenourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.Additionally,evenifwearesuccessfulatbuildingtheserelationshipsbutthereareproblemsorissueswithintegratingourproductsintothesolutionsofthesecustomers,ourreputationandabilitytogrowourbusinessmaybeharmed.

    We rely upon Amazon Web Services to operate our platform and any disruption of or interference with our use of Amazon Web Services would adversely affect our business,results of operations and financial condition.

    WeoutsourcesubstantiallyallofourcloudinfrastructuretoAmazonWebServices,orAWS,whichhostsourproductsandplatform.Customersofourproductsneedtobeabletoaccessourplatformatanytime,withoutinterruptionordegradationofperformance.AWSrunsitsownplatformthatweaccess,andweare,therefore,vulnerabletoserviceinterruptionsatAWS.Wehaveexperienced,andexpectthatinthefuturewemayexperienceinterruptions,delaysandoutagesinserviceandavailabilityfromtimetotimeduetoavarietyoffactors,includinginfrastructurechanges,humanorsoftwareerrors,websitehostingdisruptionsandcapacityconstraints.Capacityconstraintscouldbeduetoanumberofpotentialcausesincludingtechnicalfailures,naturaldisasters,fraudorsecurityattacks.Forinstance,inSeptember2015,AWSsufferedasignificantoutagethathadawidespreadimpactontheabilityofourcustomerstouseseveralofourproducts.Inaddition,ifoursecurity,orthatofAWS,iscompromised,ourproductsorplatformareunavailableorourusersareunabletouseourproductswithinareasonableamountoftimeoratall,thenourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.Insomeinstances,wemaynotbeabletoidentifythecauseorcausesoftheseperformanceproblemswithinaperiodoftimeacceptabletoourcustomers.Itmaybecomeincreasinglydifficulttomaintainandimproveourplatformperformance,especiallyduringpeakusagetimes,asourproductsbecomemorecomplexandtheusageofourproductsincreases.Totheextentthatwedonoteffectivelyaddresscapacityconstraints,eitherthroughAWSoralternativeprovidersofcloud

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    infrastructure,ourbusiness,resultsofoperationsandfinancialconditionmaybeadverselyaffected.Inaddition,anychangesinservicelevelsfromAWSmayadverselyaffectourabilitytomeetourcustomers'requirements.

    ThesubstantialmajorityoftheservicesweusefromAWSareforcloud-basedservercapacityand,toalesserextent,storageandotheroptimizationofferings.AWSenablesustoorderandreserveservercapacityinvaryingamountsandsizesdistributedacrossmultipleregions.WeaccessAWSinfrastructurethroughstandardIPconnectivity.AWSprovidesuswithcomputingandstoragecapacitypursuanttoanagreementthatcontinuesuntilterminatedbyeitherparty.AWSmayterminatetheagreementbyproviding30dayspriorwrittennotice,andmayinsomecasesterminatetheagreementimmediatelyforcauseuponnotice.Althoughweexpectthatwecouldreceivesimilarservicesfromotherthirdparties,ifanyofourarrangementswithAWSareterminated,wecouldexperienceinterruptionsonourplatformandinourabilitytomakeourproductsavailabletocustomers,aswellasdelaysandadditionalexpensesinarrangingalternativecloudinfrastructureservices.

    Anyoftheabovecircumstancesoreventsmayharmourreputation,causecustomerstostopusingourproducts,impairourabilitytoincreaserevenuefromexistingcustomers,impairourabilitytogrowourcustomerbase,subjectustofinancialpenaltiesandliabilitiesunderourservicelevelagreementsandotherwiseharmourbusiness,resultsofoperationsandfinancialcondition.

    To deliver our products, we rely on network service providers for our network service.

    Wecurrentlyinterconnectwithnetworkserviceprovidersaroundtheworldtoenabletheusebyourcustomersofourproductsovertheirnetworks.Weexpectthatwewillcontinuetorelyheavilyonnetworkserviceprovidersfortheseservicesgoingforward.Ourrelianceonnetworkserviceprovidershasreducedouroperatingflexibility,abilitytomaketimelyservicechangesandcontrolqualityofservice.Inaddition,thefeesthatwearechargedbynetworkserviceprovidersmaychangedailyorweekly,whilewedonottypicallychangeourcustomers'pricingasrapidly.Furthermore,manyofthesenetworkserviceprovidersdonothavelong-termcommittedcontractswithusandmayterminatetheiragreementswithuswithoutnoticeorrestriction.Ifasignificantportionofournetworkserviceprovidersstopprovidinguswithaccesstotheirinfrastructure,failtoprovidetheseservicestousonacost-effectivebasis,ceaseoperations,orotherwiseterminatetheseservices,thedelaycausedbyqualifyingandswitchingtoothernetworkserviceproviderscouldbetimeconsumingandcostlyandcouldadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    Further,ifproblemsoccurwithournetworkserviceproviders,itmaycauseerrorsorpoorqualitycommunicationswithourproducts,andwecouldencounterdifficultyidentifyingthesourceoftheproblem.Theoccurrenceoferrorsorpoorqualitycommunicationsonourproducts,whethercausedbyourplatformoranetworkserviceprovider,mayresultinthelossofourexistingcustomersorthedelayofadoptionofourproductsbypotentialcustomersandmayadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    Our future success depends in part on our ability to drive the adoption of our products by international customers.

    In2013,2014and2015andthethreemonthsendedMarch31,2016,wederived9%,12%,14%and15%ofourrevenue,respectively,fromcustomeraccountslocatedoutsidetheUnitedStates.Thefuturesuccessofourbusinesswilldepend,inpart,onourabilitytoexpandourcustomerbaseworldwide.Whilewehavebeenrapidlyexpandingoursaleseffortsinternationally,ourexperienceinsellingourproductsoutsideoftheUnitedStatesislimited.Furthermore,ourdeveloper-firstbusinessmodelmaynotbesuccessfulorhavethesametractionoutsidetheUnited

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    States.Asaresult,ourinvestmentinmarketingourproductstothesepotentialcustomersmaynotbesuccessful.Ifweareunabletoincreasetherevenuethatwederivefrominternationalcustomers,thenourbusiness,resultsofoperationsandfinancialconditionmaybeadverselyaffected.

    We are in the process of expanding our international operations, which exposes us to significant risks.

    WearecontinuingtoexpandourinternationaloperationstoincreaseourrevenuefromcustomersoutsideoftheUnitedStatesaspartofourgrowthstrategy.BetweenMarch31,2015andMarch31,2016,weopenedthreeofficesoutsideoftheUnitedStates,allofwhichareprimarilyfocusedonsellingefforts.Weexpect,inthefuture,toopenadditionalforeignofficesandhireemployeestoworkattheseofficesinordertoreachnewcustomersandgainaccesstoadditionaltechnicaltalent.Operatingininternationalmarketsrequiressignificantresourcesandmanagementattentionandwillsubjectustoregulatory,economicandpoliticalrisksinadditiontothosewealreadyfaceintheUnitedStates.Becauseofourlimitedexperiencewithinternationaloperationsaswellasdevelopingandmanagingsalesininternationalmarkets,ourinternationalexpansioneffortsmaynotbesuccessful.

    Inaddition,wewillfacerisksindoingbusinessinternationallythatcouldadverselyaffectourbusiness,including:

    • thedifficultyofmanagingandstaffinginternationaloperationsandtheincreasedoperations,travel,infrastructureandlegalcompliancecostsassociatedwithnumerousinternationallocations;

    • ourabilitytoeffectivelypriceourproductsincompetitiveinternationalmarkets;

    • newanddifferentsourcesofcompetition;

    • potentiallygreaterdifficultycollectingaccountsreceivableandlongerpaymentcycles;

    • higherormorevariablenetworkserviceproviderfeesoutsideoftheUnitedStates;

    • theneedtoadaptandlocalizeourproductsforspecificcountries;

    • theneedtooffercustomersupportinvariouslanguages;

    • difficultiesinunderstandingandcomplyingwithlocallaws,regulationsandcustomsinforeignjurisdictions;

    • difficultieswithdifferingtechnicalandenvironmentalstandards,dataprivacyandtelecommunicationsregulationsandcertificationrequirementsoutsidetheUnitedStates,whichcouldpreventcustomersfromdeployingourproductsorlimittheirusage;

    • exportcontrolsandeconomicsanctionsadministeredbytheDepartmentofCommerceBureauofIndustryandSecurityandtheTreasuryDepartment'sOfficeofForeignAssetsControl;

    • compliancewithvariousanti-briberyandanti-corruptionlawssuchastheForeignCorruptPracticesActandUnitedKingdomBriberyActof2010;

    • tariffsandothernon-tariffbarriers,suchasquotasandlocalcontentrules;

    • morelimitedprotectionforintellectualpropertyrightsinsomecountries;

    • adversetaxconsequences;

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    • fluctuationsincurrencyexchangerates,whichcouldincreasethepriceofourproductsoutsideoftheUnitedStates,increasetheexpensesofourinternationaloperationsandexposeustoforeigncurrencyexchangeraterisk;

    • currencycontrolregulations,whichmightrestrictorprohibitourconversionofothercurrenciesintoU.S.dollars;

    • restrictionsonthetransferoffunds;

    • deteriorationofpoliticalrelationsbetweentheUnitedStatesandothercountries;and

    • politicalorsocialunrestoreconomicinstabilityinaspecificcountryorregioninwhichweoperate,whichcouldhaveanadverseimpactonouroperationsinthatlocation.

    Also,duetocostsfromourinternationalexpansioneffortsandnetworkserviceproviderfeesoutsideoftheUnitedStatesthataregenerallyhigherthandomesticrates,ourgrossmarginforinternationalcustomersistypicallylowerthanourgrossmarginfordomesticcustomers.Asaresult,ourgrossmarginmaybeimpactedandfluctuateasweexpandouroperationsandcustomerbaseworldwide.

    Ourfailuretomanageanyoftheseriskssuccessfullycouldharmourinternationaloperations,andadverselyaffectourbusiness,resultsofoperationsandfinancialcondition.

    We currently generate significant revenue from WhatsApp and the loss of WhatsApp could harm our business, results of operations and financial condition.

    In2013,2014and2015andthethreemonthsendedMarch31,2016,WhatsAppaccountedfor11%,13%,17%and15%ofourrevenue,respectively.WhatsAppusesourProgrammableVoiceproductsandProgrammableMessagingproductsinitsapplicationstoverifynewandexistingusersonitsservice.Wehaveseenyear-over-yeargrowthinWhatsApp'suseofourproductssince2013asitsservicehasexpandedandasithasincreasedtheuseofourproductswithinitsapplications.OurVariableCustomerAccounts,includingWhatsApp,donothavelong-termcontractswithusandmayreduceorfullyterminatetheirusageofourproductsatanytimewithoutpenaltyorterminationcharges.Inaddition,theusageofourproductsbyWhatsAppandotherVariableCustomerAccountsmaychangesignificantlybetweenperiods.

    Whileweexpectthattherevenueforourlargestcustomers,includingWhatsApp,willdecreaseovertimeasapercentageofourtotalrevenueaswegeneratemorerevenuefromothercustomers,wealsobelievethatrevenuefromWhatsAppmaycontinuetoaccountforasignificantportionofourrevenue,atleastinthenearterm.WhatsApphasnoobligationtoprovideanynoticetousiftheyelecttostopusingourproductsentirelyand,assuch,thecontributionfromWhatsAppcoulddeclinetozeroinanyfutureperiodwithoutadvancenotice.IntheeventthatWhatsAppdoesnotcontinuetouseourproducts,usesfewerofourproducts,orusesourproductsinamorelimitedcapacity,ornotatall,ourbusiness,resultsofoperationsandfinancialconditioncouldbeadverselyaffected.

    The market in which we participate is intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed.

    Themarketforcloudcommunicationsisrapidlyevolving,significantlyfragmentedandhighlycompetitive,withrelativelylowbarrierstoentryinsomesegments.Theprincipalcompetitivefactorsinourmarketincludecompletenessofoffering,credibilitywithdevelopers,globalreach,easeofintegrationandprogrammability,productfeatures,platformscalability,reliability,securityandperformance,brandawarenessandreputation,thestrengthofsalesandmarketingefforts,

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    customersupport,aswellasthecostofdeployingandusingourproducts.Ourcompetitorsfallintofourprimarycategories:

    • legacyon-premisevendors,suchasAvayaandCisco;

    • regionalnetworkserviceprovidersthatofferlimiteddeveloperfunctionalityontopoftheirownphysicalinfrastructure;

    • smallersoftwarecompaniesthatcompetewithportionsofourproductline;and

    • SaaScompaniesthatofferprepackagedapplicationsforanarrowsetofusecases.

    Someofourcompetitorsandpotentialcompetitorsarelargerandhavegreaternamerecognition,longeroperatinghistories,moreestablishedcustomerrelationships,largerbudgetsandsignificantlygreaterresourcesthanwedo.Inaddition,theyhavetheoperatingflexibilitytobundlecompetingproductsandservicesatlittleornoperceivedincrementalcost,includingofferingthematalowerpriceaspartofalargersalestransaction.Asaresult,ourcompetitorsmaybeabletorespondmorequicklyandeffectivelythanwecantoneworchangingopportunities,technologies,standardsorcustomerrequirements.Inaddition,somecompetitorsmayofferproductsorservicesthataddressoneoralimitednumberoffunctionsatlowerprices,withgreaterdepththanourproductsorindifferentgeographies.Ourcurrentandpotentialcompetitorsmaydevelopandmarketnewproductsandserviceswithcomparablefunctionalitytoourproducts,andthiscouldleadtoushavingtodecreasepricesinordertoremaincompetitive.Customersutilizeourproductsinmanyways,andusevaryinglevelsoffunctionalitythatourproductsofferorarecapableofsupportingorenablingwithintheirapplications.Customersthatusemanyofthefeaturesofourproductsoruseourproductstosupportorenablecorefunctionalityfortheirapplicationsmayhavedifficultyorfinditimpracticaltoreplaceourproductswithacompetitor'sproductsorservices,whilecustomersthatuseonlylimitedfunctionalitymaybeabletomoreeasilyreplaceourproductswithcompetitiveofferings.

    Withtheintroductionofnewproductsandservicesandnewmarketentrants,weexpectcompetitiontointensifyinthefuture.Inaddition,someofourcustomersmaychoosetouseourproductsandourcompetitors'productsatthesametime.Moreover,asweexpandthescopeofourproducts,wemayfaceadditionalcompetition.Ifoneormoreofourcompetitorsweretomergeorpartnerwithanotherofourcompetitors,thechangeinthecompetitivelandscapecouldalsoadverselyaffectourabilitytocompeteeffectively.Inaddition,someofourcompetitorshavelowerlistpricesthanus,whichmaybeattractivetocertaincustomersevenifthoseproductshavedifferentorlesserfunctionality.Ifweareunabletomaintainourcurrentpricingduetothecompetitivepressures,ourmarginswillbereducedandourbusiness,resultsofoperationsandfinancialconditionwouldbeadverselyaffected.Inaddition,pricingpressuresandincreasedcompetitiongenerallycouldresultinreducedrevenue,reducedmargins,increasedlossesorthefailureofourproductstoachieveormaintainwidespreadmarketacceptance,anyofwhichcouldharmourbusiness,resultsofoperationsandfinancialcondition.

    We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and increases the risk of your investment.

    Wewerefoundedandlaunchedourfirstproductin2008.Asaresultofourlimitedoperatinghistory,ourabilitytoforecastourfutureresultsofoperationsislimitedandsubjecttoanumberofuncertainties,includingourabilitytoplanforfuturegrowth.Ourhistoricalrevenuegrowthshouldnotbeconsideredindicativeofourfutureperformance.Wehaveencounteredandwillencounterrisksanduncertaintiesfrequentlyexperiencedbygrowingcompaniesinrapidlychangingindustries,suchas:

    • marketacceptanceofourproductsandplatform;


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