Twilio Inc (TWLO)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	421,297	655,931	651,752	1,479,450	933,885
Short-term investments	US$ in thousands	1,963,100	3,356,060	3,503,320	3,878,430	2,105,910
Receivables	US$ in thousands	588,540	562,773	547,507	388,215	251,167
Total current liabilities	US$ in thousands	820,220	738,297	808,158	703,550	448,306
Quick ratio		3.62	6.20	5.82	8.17	7.34

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($421,297K + $1,963,100K + $588,540K) ÷ $820,220K
= 3.62

The quick ratio of Twilio Inc. has exhibited notable fluctuations over the five-year period from December 31, 2020, to December 31, 2024. At the end of 2020, the quick ratio was 7.34, indicating that the company's liquid assets were more than seven times its current liabilities. This high ratio suggests a strong liquidity position, with ample short-term assets readily available to meet immediate obligations.

In 2021, the quick ratio increased further to 8.17, reflecting an improvement in liquidity or a reduction in current liabilities relative to liquid assets. This elevated ratio might imply an even more robust short-term financial position during that year.

By the end of 2022, the quick ratio declined to 5.82, signaling a reduction in liquidity levels, although the ratio remained well above 1.0, which generally indicates adequate short-term liquidity. The decrease suggests either a relative increase in current liabilities, a decrease in liquid assets, or a combination of both.

In 2023, the ratio further declined to 6.20, suggesting some recovery or stabilization; however, this figure remains below the peak levels observed in 2021. This indicates that while liquidity improved compared to 2022, it did not return to the exceptional levels noted in the earlier years.

By 2024, the quick ratio dropped to 3.62, representing a significant decrease from previous years but still maintaining a ratio above 1.0. This decline might reflect increased current liabilities, decreased liquid assets, or strategic changes in asset composition. Nonetheless, the ratio still indicates sufficient liquidity to cover short-term liabilities, albeit with less cushioning than in previous years.

Overall, the trend demonstrates a reduction in Twilio Inc.'s quick ratio over time, transitioning from exceptionally high levels in 2020 and 2021 to more moderate levels in 2023 and 2024. Despite these declines, the ratios consistently remain above 1.0, implying that the company maintains adequate liquidity to meet its immediate liabilities, though the diminishing trend warrants ongoing monitoring for potential liquidity risks.