Twilio Inc (TWLO)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-88,613	-996,729	-1,243,630	-960,929	-479,446
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	7,952,970	9,732,550	10,559,000	11,031,500	8,452,660
Return on total capital		-1.11%	-10.24%	-11.78%	-8.71%	-5.67%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $-88,613K ÷ ($—K + $7,952,970K)
= -1.11%

The analysis of Twilio Inc.'s return on total capital (ROTC) across the specified period reveals a consistent historical trend of negative returns, indicative of ongoing challenges in generating positive profitability relative to its total capital base. On December 31, 2020, the ROTC was recorded at -5.67%, reflecting a loss in efficiency in utilizing total capital to generate earnings. This negative trend deepened by December 31, 2021, with the ROTC declining further to -8.71%, and continued into December 31, 2022, reaching -11.78%, which suggests an increasing disinvestment in productive capacity or ongoing operational losses exceeding total capital invested.

Nevertheless, there is a noticeable improvement in the company's ROTC in the subsequent years. The figure for December 31, 2023, shows a reduction in the negative value to -10.24%, indicating a partial recovery or stabilization in capital utilization efficiency. Most notably, by December 31, 2024, the ROTC substantially improved to -1.11%, approaching a near break-even point but still remaining in negative territory. This trend could imply that Twilio Inc. is moving toward a more efficient deployment of its total capital or that operational losses are diminishing.

Overall, the trajectory suggests a positive momentum toward improving capital efficiency, yet the persistent negative ROTC indicates that the company has yet to achieve overall positive returns from its invested capital within this timeframe. The substantial reduction in the negative ROTC in 2024 hints at potential progress, but the firm remains unprofitable on a return on total capital basis as of the latest reported date.