TWLO - Earnings call transcript Q4 2019

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Operator

Good afternoon, and welcome to Twilio’s Q4 2019 Earnings Conference Call. My name is Cheryl, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

I will now turn the call over to Andrew Zilli, Vice President of Investor Relations. Mr. begin. may you Zilli,

Andrew Zilli

everyone, quarter you conference and afternoon, for call. joining Twilio’s fourth full-year and Good for thank us Thanks. XXXX earnings

today’s Our a on SEC release, IR call of our investors.twilio.com. results found can at filings website be press replay and

Lawson, Jeff COO; and CEO; are and today George Shipchandler, Khozema me Co-Founder Joining CFO. Hu,

press between be some non-GAAP results and of reminder, will found a GAAP our commentary today be guidance our can release. in As our non-GAAP in earnings terms. Reconciliations and

responses materialize may results to to and forward-looking our Additionally, statements, assumptions. forward-looking subject some discussion actual could of prove are contain risks, these from Should statements. which our company assumptions materially incorrect, be any or and differ uncertainties of these should

that SEC our in XX-Q, this A discussion are reference. be included including could filings, and results today’s should description report to these other considered affect our uncertainties of financial on our risks, most and our incorporate recent assumptions during Form by remarks factors information and

our unanticipated Forward-looking made during as undertake events update required the reflect statements forward-looking beliefs new are or of any today law. no call as of obligation information statements to We after statements such and occurrence or this reflect made. represent events, to date except to the only circumstances by or assumptions

With that, Jeff. you, I’ll hand it over to

Jeff Lawson

call Thanks, everybody. Zilli, welcome to today, and our

inclusive. of One Twilio the the core principles culture, is Be of Magic our

wanted in spirit, note this off that I that to States course, United the here So and, at History in Month week kicks of Black Twilio.

celebration was week the last of Lunar addition, Year. New In

Lunar Black Month Happy Year. those New Happy all listening, History to So and

on Now, results. to the

Twilio. finish to strong big was for quarter year fourth a Our a

we’re delivered than billion year more highlights total billion touch for $X.X that and quickly very on $X of revenue, me a proud of. our the full-year. revenue than milestone the We more a Let first in of in few

than we several the Media XXX,XXX and the product XXX We acquired more team a in including And August, year We billion active more. our interactions. ended acquisition We largest into our Streams, to announced largest nearly bringing new family. SIGNAL, with we Ads Twilio hosted where products, and date, SendGrid world-class SendGrid, customers. powered ever Conversations,

lot XXXX more time themselves from Valley, theme. reinventing retail world, the companies as Silicon Global hospitality, there’s and to throughout Berlin, discussions, finance, software I with common beyond. customers of companies, a Singapore startups and of healthcare, all spend a around And these in in

Companies build to generational It Twilio leads which are to unbreakable as experience. with adopt engagement, to their for new build digital customer looking every ways one most strategies customers they day opportunity the a customers. best still their help relationships their to for companies, engagement for is for reimagine engagement company

existing voice, and products channels, even know platform with Our the of new we messaging, like more higher combined this strategic who customers beginning. is with their the deeper, we’ve strategy. just eager are video, success relationships that alike, still leading portfolio to modernize with level Flex, and more, seen, communications driving is engagement application email And

create new progress They to full-year ones very with first is and we’ve the this. drive great and example and us product excited take Flex the possible And solutions without this areas wouldn’t in our opportunity portfolio, we of And the in about Flex growth. ahead. a our are the that developer be we are our success new builders, continue our lead into the who community. platform know made

customers us vendor more who several and Twilio went products us the and feature great a in Studio. month said, with gave in complementary hear including one customer, live are hundred for, Our to than like Twilio contact delivering working delivered a XXXX, Flex enhancements our product team and job XX prior from center.” presents, feedback has than done gave to signed features agents asking “Our QX, a in less continue Christmas We who great customers,

scale And to native will bring for outbound dialing a this feature, calling. programmable out-of-the-box at pad requested highly feature customers. dial outbound This enhancement quarter, a we’re Flex center as contact planning introduce the to

first and the with success as also engagement are engagement we available year part SendGrid added happier As their of our And of of with thrilled we’re happy Twilio, have platform. be you the know, couldn’t and business. customer and part it was that have to as toolkit, email XXXX to channel the customers trajectory customer to

as performance SendGrid of the scale. Twilio great shopping the in season. and from will quarter, well highlight wins, team The a deals, overall George couple customer but both discuss terms delivered numbers some of wanted holiday to a of as I

emails, On more X.X on XX% ensure result than impressive Black another a to an from the is XXXX. success we team to X.X infrastructure speaks uptime delivered until and processed lot and Friday, emails entire in was Monday, the This Cyber billion we scaling which thought we our billion deliverability.

X,XXX I’m XXX at in And year. areas, in fair Most were employees team, in November, proud of treatment pay, X,XXX one of ranking end the more out more. of entire than Companies XXXX named the including of which America’s the companies top and over leadership, the publicly-traded in JUST doubled of customer ethical to XXXX, the we of Twilio largest

This inclusive a jobs. protecting creating creating Twilions to And and Twilio is a I more was quality more such couldn’t credit for and and customer specifically, recognized culture providing recognition a be for proud. workplace, strong everywhere diverse privacy

email day messaging And this world a started make to over with as But world. complex categories, developers, idea, is we’ve communications always, the We providing a simpler. new Twilio all one communications simple I Twilio’s toolset created of by of the invoice, opportunity. and believe software

our out, the our innovation. just down it even not company. be beginning. act platform, to was as illuminated apps needs just an the which larger unleased It’s of enable into Using on platform developers No, to for it’s two and engagement the the communications of But customers world communications, APIs their turns that the broken as well.

unleash center. XXXX in companies application our can And accomplished in with we’ve software journey and that is of help idea last the what reaffirming astounding, innovate Flex, build developers leg seen customers contact next taking their to into win. customers, for the of two when years an the the began We we platform

We’re every and and industry. nearly seeing big response in small, new this old, companies across

And the is it’s customer while that opportunity larger a opportunity as platform even is the engagement market move huge, communications for clear cloud now we forward.

service As from we in customers, know, begin the doesn’t and and the center. and of engagement all with sales end support. all has customer touchpoints company It’s their a marketing to contact

of that a excited makes categories, capture about this invest our wall-to-wall to enabling today so platform our for customers approach so platform we of all continuing the market. and And us in we future fullness are software of becoming this customer massive our time, it’s opportunity envision these And why with more across to engagement.

we you’ve have plan an ambitious sure I’m XXXX. for investment As noticed,

communications, While to a a take just disrupt that’s With market not to for year, engagement generational right growth decision. intend also what we profit invest software, I this think, we do. long-term could wrong to and the decision opportunity capture, would customer a that been but and have is

Our priorities truly of for XXXX reflect opportunity. our generational capturing goal this

employees their to we and incredible and do trusted to customer to our the and continue our support leading continue infrastructure customers our globally; developers enterprises best enable become in to growth. continue First, third, work; to scale and our second, by to engagement systems platform, products invest deliver

growth customer and ourselves next decade and success. XXXX for of for excited the up setting We’re

it George. With that, let George? to me turn over

George Hu

team The year great delivered Jeff. our results. Thanks, in outstanding continue investments go-to-market to as an XXXX, produce

strategic becoming more In sign more for than of that fact, number full-year, are great we XXXX, a deals we our customers. seven-figure to the doubled compared to our

enterprise We on-site than business build events a hackathons, Engage several around customer’s hackathons Superclass held into hosted at hosted office, their more break where teams world and challenges. XX and developers to solve in prototypes the

community. attended want the more new than and Twilio great thank I the spectacular Program, the these ever. and their welcomed hosted Our team results. events dedication Developer for our August, SIGNAL nearly platform XXX we we members It Twilio where for And, was of to Relations in XXX entire to biggest into course, a year event recognize developers Champions delivering and team

in continue fourth see We tremendous to momentum quarter. the

with few the signed the of a closed. the deal We just customers. company wins new than million with highlight me payments team more let PayPal, global digital So a XXX

PayPal scale messaging growth. the SMS with company’s their mobile sought would increased, new a that traffic platform As

attending This with was manner. at PayPal as Twilio with SMS team engage to cost-effective selected more fantastic Creator this platform After delivery and and their SIGNAL, the be customers a we’re its working efficient Summit to effort, in a thrilled customer.

and allowing higher different programmable power video; We easily experience two, field to XX with solution one, and to provide customer formed a proprietary Twilio services is and internally of company customers new to customer techs, in two parts their in of service. business: levels their reach Call quickly replacing platform, agents and management Click that developed our a with Fortune an using media relationship

first we are our with full-year momentum also are extremely seeing. Flex we and happy was the and progress This with

a Here with we few employees. Flex Airlines, a the new Southwest We largest deal deals signed are just than low-cost XX,XXX in world’s signed with the the Flex of more carrier quarter.

platform, pops, agents, Flex volume to self-service helpdesk, green existing integrating their and and their is costs. alerts, Southwest with IT internal their total reporting ultimately bringing call reducing

and HubSpot, with a marketing, of provider our businesses. expanded customer software We for sales leading relationship growing service

to communications product, domestic its parts In hub global with provide improve and sales using audiences. into of and functionality Flex also addition use-of-voice their built omni-channel is with teams expanding support sales to international their HubSpot and productivity

backbone Flex new deal their new out conversational to with millions who looking of all Fortune provide that the with solution to experts in-store interactions using for their way commerce, solution that XXX conversational great a was and ability would global ultimately with customers to a Flex signed also a handle their a to was with to engage of We commerce of employees. company the selected new the become engine, customers. roll plans needed

expanding is coupled strong large The strategically spends. for with key our early countries and footprint, regions investments our off. developer paying these software where focus been ecosystems, tremendous targeting international opportunity we us A in are has named international are with

in relationship fact, And leader our opening headquartered signed we announcement, carpooling the of the of with the Blablacar, new office. a quarter, Paris. that we In European heels the Paris in on announced great

extensive customer scale. they been with them SMS For a dealing multiple API wanted with easy-to-use to their with years, to and help Blablacar to our and customer, consolidate. Already to continue network vendors super on connect customers chose as engagement SendGrid innovate they Twilio have great

supermarket app our the Australian their lifecycle. an and also proxy allows delivery account customers. the and relationship The leading between customer Twilio application XXXX Go, calls Willis We Woolworths with company. voice along driver and delivery a Global notifications, for fulfillment, Twilio developed and drivers for between communication expanded SMS uses [ph] that and Woolworths, Twilio

great the deliver medications customer. proxy SendGrid network of meals a with connects America We Rappi, to to unicorn signed a a to are first cash. couriers They that from of voice Latin and deal already out anything

Now experiencing a great Rappi as verify building Twilio more is well as is their for expanding for example messaging use new company great our cases. RappiPay. on of APIs Twilio, payment SMS service, marketing, a to and use success expanding to text This

excited to We’re to outstanding growth. continue their Rappi and support

Twilio, customers’ we an of Twilio the SendGrid We’ve for our purchase unified cross-sell buying during great As process products. performance happy extremely onto products important quarter, our core And fourth SendGrid the are the as form and This integration. Jeff same bringing we our in mentioned, process. is with our strides efforts. streamlining the step order made by

communications planned digital Blablacar customer future. the significant XXX transformation banking, communication Like bank. Twilio messaging working will a to email, which expansions across many for turned of power customer communications and They new and financial to In Fortune to credit, also mortgage addition SMS their with of cross-sell Rappi, and selected channels the and efforts institutions, are they we and payments. their started undergoing help across turbocharge the with additional front-end be hub, email to

build for enterprise still lot ecosystem. investments go. room expanding are and partner these in a to reach areas remains international focus and paying XXXX off, The for on early of My our continuing there’s our but to out us

continue to With market great to couple finish year. our entire we’re relationships. over move another for and years, team. quarter the to off team again, Overall, the strong Thanks, delivered go-to-market last to well-positioned investments strategic up build more the of XXXX a

And with Khozema. over to that, it I’ll pass

Khozema Shipchandler

platform business. Twilio Thanks, everyone. the world companies and the around enhance communication good engagement of for strategies George, be choice to another for and XXXX developers. afternoon, was the for continues customer year great leading

me touch getting couple items. into let quickly the of numbers, on Before a

Investor First, deck, Relations we quarterly on be published our can earnings which the found website.

which your a we with rates net we with in expansion, impact order models disclosing historically revenue. reporting our total presentation, using our quarter revenue no starting was QX will variable to to expansion XXXX, provided revenue As dollar-based of base the back longer IPO’d. separate be calculated reminder, historical XXXX our calculation QX categories. In and change report, This base help will this we’ve using

looked in the also as DB&E important included provided where as have an forward. SendGrid is periods like, We DB&E This what combined would all you well. rate view prior consider going

for impact the that provided revenue our from QX in one-time items the results adjusts two a slide also We from QX XXXX.

reminder, those a traffic large and of customer. stronger-than-expected political items ramp quarterly to related We a a to provide earnings on As international going deck our website IR forward. two were intend the

into a jumping to $XXX growth strong base comparison Twilio year-over-year, nearly including Organic last revenue, million. grew quarter. year-over-year the XX% Now revenue QX base $XXX million, against was from XX% year. SendGrid difficult up

over fourth in had year. great XX% up to SendGrid finish delivering a than Twilio the heard, revenue $XX year, the last more you’ve nearly of million quarter, As

year-over-year QX Total XX% million, and XX% was organically. up revenue $XXX

full-year, last year Xst million XX% since be billion, XX% This an acquisition the revenues break contributed out delivered that date. basis. of we revenue on last SendGrid SendGrid over separately. total quarter up we the will and organic For $X.XX $XXX February the

Dollar-based calculated QX. net using XXX% in revenue was expansion base

represented was forward, in no quarter. the to base and Because customer fourth in we six WhatsApp XXX%. WhatsApp’s be fourth quarter consistent in a approximately revenue the dollar-based expect full-year, the prior total expansion remained of For longer out provide with going of will we accounts X% breaking to and XXXX. variable contribution revenue There variable quarters.

active from customer XX% contributed of than and QX, the quarter finished compared to total customer XX accounts our Revenue $XXX,XXX We top XX% XXXX. more in with of XX% last revenue in active accounts. QX year

quarter, and in was others. down came some past. usage customer, international including from for margins product takes, Gross the QX, mix, saw puts carrier we in to country the the consistent normal at the discussed quarter mid that with due XX% FX slightly in with It we’ve last and increased high-XXs along and to fees,

continue to For the expect to we mid gross XXXX, high-XXs. in margins to be

XX%, Looking of we’re revenue for like at products continued growth expecting by in Flex. high billion billion of newer strength driven email to growth products XX% XXXX, and $X.XXX to $X.XXX our core and of

our Importantly, over weekend, benefit impact guidance went Verizon margin program while revenue live not fees. ADP or the the from does any ADP include

are a operating guiding million of million for We XXXX. loss also $XX to non-GAAP to $XX

the help rationale models, year the as with you should through talk progression well walk see me Let throughout figures. the these your to behind as about

show falls a loss of break-even can million get that in $XX higher You we then and guidance in May loss, Afterwards, $XX currently see SIGNAL expect million losses back of QX and to our this QX a expect in in we year. QX given QX. to to smaller

one the we these bit that are and investments, to business as behind structural. the long run believe some in benefit will Now drivers nature greatly in transitory is the a more

good multiplier substantial. Center drive a of a investments deal First, our we’re of force But will office of off to in provide early long-term benefits the XXXX. India we opening these efforts. the R&D an to are R&D believe Getting this in ground Excellence investment

up systems scale we’re in drive and and Second, stepping position coming with in the our anticipated in us investments growth to infrastructure our efficiencies internal years. further the our for processes

cash, and here with have This our these our deliver also to enhance previously higher as infrastructure as in system achieving growth. efficiencies areas. improving the discussed ready, supporting the processes, quote to of ensure in we is our to and an step-up continue We opportunities pay investments objective billing optimization will elevated in engineering have to and example procure we identified systems XXXX

as said efficient team those efficient to We’ve Third, invest as in aggressively in we percentage to maintained go-to-market so in a to revenue. invest we marketing we’re we’ve continue of investments sales and long area. previously, make continue continuing can as And particular. Flex, our and will an fashion, in this

our and and in opportunities significant interest and to last quarters, enterprise, digitally features the scored of flex see dial investments and over with significant products. programmable we are there enterprise existing in pad particular, also that in specifically, number native functionality mentioned the significant Jeff Flex. wins will to see the customers, In the several tremendous and a internationally continue add we we marketplace. other On

compensation offset implementing structural begun the take were heard feedback changes Finally, certain by to dilution time. call regarding through we I We’ve changes but our may quarter. flow recall, dilution. the address is and looking have investor stock-based you we mentioned cost compensation. philosophy over changes will we making last this, near-term on around And expect that than stock-based at SBC more These time to numbers, a reduced to

into on We’re not to detail these changes go today. going

as drive over Twilio help company a of leverage These levels believe revenue percentage us as investments years. business time expense elevated down we scales. the several deliver will to changes enable stock-based and to compensation next However, these the will create growth, the of over scale continue

call more to plan Before hold Conference to the the wanted Investor this an year information Francisco. from our for tuned SIGNAL mention we San in May Stay XX, open Day for team. IR during Thursday, questions, on I that we

XXXX was little with and customers’ lead here innovation continued and After our company, close, a at year we of to excited market massive I’m year continue To customer than our a for deliver this growth innovate disrupt another be Twilio. and even help the this engagement more more to platform. as company, strong

Operator, joining. Thank you for open questions. to, the please everyone, for line

Operator

go Instructions] of [Operator Bellini Goldman question ahead. first Heather Sachs. The comes Please from

is line open. Your

Heather Bellini

investments you to ask the much, taking little guys, the plan Thank wanted cited ambitious so you I in for for a Great. bit, question. XXXX.

sales us with maybe some share perspective? growth how you with you they’re Center ask you India, you’re sales R&D that could capacity growth direct into think if accelerating growth had that that maybe bit if in had little investment You if wanted should to can about thinking in for about And color increased from focused also kind of But a example. share XXXX and we little the or direct their actually talked a you where bit about on sales a XXXX?

And Twilio streamlined getting can and Send XXXX? you the you. and then just process for important Thank How George, I unified process? a be commented for it how significant about between buying follow-up, to And purchase that that QX. think, is

Khozema Shipchandler

So, There’s in of is this questions Khozema. hey, there. Heather a couple –

pretty investing step-up take we’ve of to first there’s investment. pretty I just wouldn’t couple We’ve that that that, we’ve found spent say, had in a area We in that has in So investment our way been a the the I over se the last sales efficient years. strong one, mean, per been significantly terms money. of that payback.

I and efficient percentage a strong as sales think of of we’ve maintained in overall revenue. percentages really terms

think And It the years, of year-to-year so years, stepped to last that I continue little going the as over has nothing markedly. seeing couple been really see as we we’re long those we’ve but the making bit up efficiencies investments. from a last over several

I prepared investment. is, keep earlier efficiency going And we long think, exists, as our as as just remarks, as what elevated to in think, is it making that explained we’re growth, that as I find that delivers we long

that that’s kind – of So of the question. part the first

And it part second me then turn of to to the George the question. let answer over

George Hu

of I sales a terms well. SendGrid streamlining had the the that we’ve team, some of talked going think, systems email very been SendGrid our of We the that’s well. integrating that plan about had we on very mission, results into We teams. actually We’ve deals call. of the In of turned specialist – integrating an the gone We team. overlay that’s gone, specialists and sales the the has team seen Twilio

think forms infrastructure benefit the well. are to order terms that And streamlining over doing been the quarter going is been we’ve from really last order what then our as that in and processing. that customers I below the of And

think good for a even that XXXX better So puts very I us that position to do on in front.

Heather Bellini

Thank you.

Operator

Meta is Morgan Stanley. Your next ahead. from Marshall question Please go of

Your line is open.

Meta Marshall

Great. Thanks.

to quarter? – completion of kind issues of terms focused? the Just when after that impact how any where you’ve some those of on last investments should kind see direction as are of the of made, we just the In some improvements And like review many of kind G&A billing a of of just that? grander on

maybe just integrators, Flex And on then helpful? with any just question a would system be Thanks. second is insight and progress there

Khozema Shipchandler

Yes.

of couple Meta. in So there there’s a things

talk me ones. Let me let of – of I’ll about some then first, it billing kind of other hit just the the piece

billing, answer, is seen in come It of going general, to in I to up short, any area investments just we the this not no. in later. we’ve a think So that number of is is in we’ve made sure whether obviously And last saw or I’m what an terms issues in. question relative quarter,

that area, we’re process I in providing adding going have would robust company. of our in that continue people that in and not guidance some a I we’re that functionality, with we do that, well any controls of ensure And is impact anticipate scaling and to confidence that any think is addition extremely the feature Our as we additional to balance say, and process the think future particular might material high. issues the today. on we that, in continue to

There’s a being point infrastructure to We a and for engineering systems, example; more around cash, pay. sort then around quote and example; broader broadly. and procure another pointed third tools process as to to systems of

all obviously. think are these I broad processes,

and those. make now good going of And provide the can we right is the they’re think that to investments with we make time the processes we in both to think associated leverage P&L. investments the think – that’s those systems to this some We and that there’s long-term

I on it But in particularly G&A. had se just we it it, some line the don’t leverage prepared think remarks. mentioned The third couple since over you we mentioned you in G&A the per have thing, of years. note out our is, last called a

structurally lines along alluded doing, India that doing we’re the investment, all P&L. in systems, SBC, help but of and I improvements we I things the those we’re the some And the drive to then, will around G&A-related, will of think of necessarily some not we long-term think, time. think, processes things things, that over

George Hu

good very side, the that feel made. I we’ve On about the Flex SI progress

us of we’ve some global global from closed, in look we’re and has increasing grow customers, speaks deployments SI always ecosystem that logos quarter, make that if we place quarter well of And that successful. as doesn’t the current back as to talking customers to that side of both been about being to to hold it previous partners the sales the at where able the coverage. a goal Our you announced

And Customer I’m efforts also hire new who with as to to major excited very Weinstein, about us of that, community. our will our continue of accelerate Chief Glenn and I the And global our Officer, continue recent leadership SI. think, out direction to he comes brings experience to a to work turbocharge our SI his

Meta Marshall

Great. guys. Thank you,

Operator

Your Zukin ahead. next Please go of question comes from RBC. Alex

open. Your line is

Alex Zukin

guys, my thanks for Hey, taking question.

I’ll to maybe maybe try Heather’s different question So rep – way hiring. to – around ask sales the just

given investments business set, acceleration the XXXX XXXX? rep you’re could opportunity making should that see and in level assume I hiring we as the of same the that maybe type think, given the of

of about that course next updated as the curious net quarter. dollar-based retention, trend that we the look of rate the start trajectory what how should think at there’s Obviously, just of to in first your back-half rate, tailwind over on the look the at the about But a thinking line, of And – we if year? we the on year? is then kind

Khozema Shipchandler

Yes.

it for today the DB&E. of part to, balance historically first, not of take the guide I it’s guided to that something obviously, the terms going in mean, not me second and to we’ve year. Let we’re

part had to I so looked think the numbers DB&E page the that a try like, is since you said, IPO guys we investor business with the what put appropriate I would been deck the company. do, could the one your have things illustrates that of into that for that SendGrid a the With models we is, work of that of mean,

that as the you what number. bit and relative we that, And be law we’ve run and over that around fade certainly But gives that, good to so to sense pretty of little your so mean, the the given should year that terms some the time, put numbers. do anticipate otherwise, business a for guidance quarter, expectations the a also that large getting expectations growing rate consistently larger, we we And of much is pretty up that our number good good about is in going just for certainly feel I of have XXXX. said into number

can there’s terms extraordinarily I then the the ordinary and that has sales investments, of of that. anything George I terms he to if wouldn’t investments. sales do in sort say of of out In anything add, maybe start can those

I different think, one making do same the efficiency number bridge try provide of we’re lot a year. them. one the we current a in is all time to of that found what That’s investments at of we of That’s that a around, there’s them in.

we’ve It’s uptick market we from few a saw what to And years relative investing so a we’re to an not it’s been. relative think and where opportunity I you so an uptick in continue maybe have efficient. there to way not It’s an going keep doing to ago. as as long

it’s investment the I areas kind some other of conjunction state, – but of steady with that in a investment. step-up think, in the is

George Hu

clip. on said mostly to view a very – a capacity hire well. I think, Honestly, on steady Khozema grower sales I continue us as our it

As we’ll is – And XXXX. XXXX, do a the honestly, continue the to back-half done reflect the to long that efficiency already have as that. good, XXXX and we lot of we’ll hiring going numbers especially of in are

in reflect I in, so, a numbers happened XXXX that’s even of that’s speak just think to it lot difference, so doesn’t a of lot And the it’s just XXXX a XXXX. activity already baked

Operator

comes question Bank ahead. Please from Nikolay go of next Beliov of Your America.

Your open. line is

Nikolay Beliov

can up et anecdotes more choosing a Twilio, the on year win if why hoping give Xx year. you have those versus I in are couple deals maybe deals? Hi. and the are prior of What customers last you questions color seven-figure for drivers you George, mentioned the I was main us George. some guys were cetera?

seems second more be my is, process to use and case-based service of a of the selling. around there sales question solutions, streamlining And around more operations, customer marketing

contract or talk organizations selling? the in cycles. the sending use you’re sales that, SMS details voice more can you or And how setting might to which than much. more little a the that up sales now it’s to so bit how case solutions-based video, If of Thanks us impact path do

George Hu

Thanks question. the for Yes.

the strategic So as larger as product growing transactions, growing I think of that in just capacity, of conversations. terms mostly us our it’s a more well

I our that this which the larger or we track of of which us or on Creator SIGNAL conversation. having factor significantly past call, executive speaks think, to is kind if came in that to grew you mentioned out attendance, I the think was year, on our came conversations. mentioned I in PayPal PayPal And the call a Summit, that

So really factor capacity, I strategic evolving frankly, that’s conversations, as technologies have it’s our been. the just with of strategic think positioning versus a as kind engagement, think like those to we’ve And set customer – more around I of of product more well Conversations. Flex, product like the plus that where a conversations

we of In to selling, case we evolving talk use terms certainly, are our look, way the the constantly customers.

about If our cases think, engagement and the smarter the we’re you in we use I customer followed of getting and us solutions pitching articulate Engage way absolutely. Roadshow message, kind

team platform, believe sales to the position is having the that It’s straightforward, going customer messaging versus with after customer. because approach multiple a that voice engagement a is of is separate have solutions a multiple we our which pretty to versus relationship APIs, Salesforce. want to products, multiple like fundamentally, sell one we lot able broad different Salesforce account But that as owns we

But our really that and customer a customer. customer with vision with the team with is Twilio vision the conversation help one to the a a then to have conversation end-to-end multi-product with end-to-end solution-oriented support help engagement of really use specialist to number our there understand we’ll life to of work and that is small teams. bring platform customers broad-based that We heart

Operator

Brent is Your ahead. of question Please Sandler. Bracelin from next Piper go

open. line Your is

Brent Bracelin

is Thanks. One Khozema, investing versus customers if the ambitious or Is more, and trying for plans you for for Khozema this external poll so the there scaling do internal? Jeff, why one customer about to something really from really scale they’re ahead go I to the asking to investment business, and hearing that and you’re back now? and here, could. is just question

Khozema Shipchandler

yield see the little you a mean, honestly. to both it’s think And kind think answer opportunity. I always question of part, think of mean, of I broadly, mean, just lot in bit large I I I invest a right Yes. kind is I we so behind long we And made our those make. opportunity. investors investments the we’ve to trade implicit growth as that like elevated want that of are feel to the that with that always investments

to internally, Now, now scale rate sure we’re now, a scaling all the about. several we time invest XXXX, years more we at right that the lapped from $X and be and the go do that wait obviously infrastructure given like in it in systems with the the were would processes right of company. different which we And which growing of and the is more great difficult. this in specifically, feels if feel just and Certainly, terms to company, billion lot

advanced And on a in – ambitions so our this is that an of kind respect. investment

other our enthusiasm of George, heard we to in a is I back want what specifically, think there’s marketplace the have share. And as Flex the goes to an on the that we is, Jeff opportunity products. that’s do. the for called and but other of market of out really same that able lot be dynamic both all from And the one offerings. you relative exactly we enthusiasm to our to capture

that think a to talk time to for the of We terms and I a kind make that efficient progression year. in right way, if exactly feel like in smart And you of the expect P&L is the we investments. we we can through now those do

Brent Bracelin

you’ve Helpful expectations in with Any once color. quite you Jeff, just adoption to trending – line talked uptake? above release one a be obviously here. then, API, your Is product. that Conversations relative color buzz was that there one Any on expectations? about your color that, Conversations, And helpful? quick would there

Jeff Lawson

you Yes. wide is year. at excited able and conversations where Thank you you, across be delivering multi-channel a over interactions to designed product use of places delivery complex chats, session. an able are channels. company a to in a type across where like variety a people that with in SMS, question. well engage scenario scenarios inside customer And essentially right, item increasingly have customer, launch for we last as a person of want long or and a plurality Conversations to now industries, have messaging customer be contact channels nice in It’s restaurant, multi-party cases that more. enable that play, these talking to as center that this like MMS, to happening of WhatsApp, talking center, We a – see reminder, where retail, to a our talk quick you is was as Q&A is a by And like a a Brent, running a conversation we’re to a a the SIGNAL SINGLE prepared supported might contact agent are in a store by delivery

there And product address is so to it. this

is a As such, product. beta this

in It’s new it since only So SIGNAL. announced August market been when we the the in it’s market. at

are And in the so we early phases.

the We’re product. customers educated getting about

We’re seeing us adopt we’re customers and seeing give them it, feedback.

I’d them to product expect what having in them going exactly take is continue is future. and doing grow a it’s educated so where the getting the into addition product, which we in it getting to getting beta as customers should us where to GA And onboard, and show

happy are So brand-new. over large progress. workflows opportunity, of We lot especially I is workflows these actually untapped a or that we’re this very exist These years a messaging. with mentioned so didn’t think because XX five ago, the far.

really been really that a new And it the not so for to has leading solution which in this to able case be past, to there addressing the is is bring exciting. product use market, a

forward and continue GA that to product and it looking work to from there. We bringing with growing customers to

Operator

go ahead. of Mark Murphy Your Please question from next JPMorgan. is

is line open. Your

Mark Murphy

center, just are on share kind to in Jeff, change plans huge service you offers not to can like of Could commenting game you also for what you. and how just Salesforce and a those they there any you you on Flex? the monster have you’re and contact plan complement markets, how insights mentioning those And innovate areas? but application marketing sales, have these stack. support Thank

Twitter what that your like activity there’s Google assumptions on that I the are And past? traffic to looks will going election for less be wondering happen was in then Khozema, this and of year, given it

Jeff Lawson

for Absolutely, Mark. Thanks the question.

What customers answering to a by we’re basically and customers, where learned platform is by platform. certain approach approach seeing your the that’s really app-centric a different about is start I’ll benefiting an And certain we’ve them. So what needed as engagement is approach, certain opposed for needs, question from Flex.

market build software hearts What Flex technology customers by minds and the to companies importantly, of and touchpoints the bring front and the putting want contact be is who want variety really of to that developers in limited win really see lines just We able to using to of designed to we customers And digital the platform enable customers. go channels is for build wide build. winning using customer and the across approach to a their opportunities innovation think are to what opportunity and and using them who on the for the don’t companies that of out center. our

a Now, that Flex. focused really said, on we are big Flex is undertaking.

We early days product. are in that the of

We’re progress. with the very excited

and as us we that, the a opportunity, of in short-term. do what there a want to approach success of bigger And out we customers an similar to company, we to are But a listened so problems. feel to here Flex tackle the use is focused guide the on we point customers the is as picture variety wider is very

think than different the is in I anyone market. very this Now, approach a

there approaches I that it’s think very today. complementary out are to existing

we thinking our we are customers different perspective And I’m order unlock seen before. just of have really need with about in and anything listening their I’m the really to innovation that not are providing something doing. to than customers about other a from approach thinking will companies so how what

Khozema Shipchandler

Hey, this is Khozema. Mark,

think the not we some out. to plays traffic-wise the what say not XXXX. of course the would out during the it there terms I little in that, revenue may bit political we in or traffic, we that is there expect we And the saw are from but depending return on may we’re XXXX On of year, in I breaking updates it in political on how building some in a back of provide expectation guidance, but guidance.

Operator

of from ahead. Jaluria comes go Your Davidson. next A. D. question Rishi Please

line Your is open.

Hannah Rudoff

for This is you Hannah question. guys. taking my Hi, for Rishi. on Thank

question. previous the on up following just I’m So

guys dial know the new] it’s So have it’s hear new [ph] success you’ve still competitive good you’ve especially in you the with talk added Flex early, you having changes or as any environment, functionality pad? to win like the with about quarter. been could seen I rates, but during [bringing

Jeff Lawson

environment. we’ve massive think – I I the that competitive think don’t a seen change in

predictable playbook on has I this transaction, brought seen sophisticated. – build our point. what at really a grown for being this gotten think with our to to customers now and essentially, in area it’s And more close our more We’ve we’ve they’ve team think, think much worked I something that’s Flex we’ve able is I close repeatable. specialist

the good for be the sense this and great type product, point Flex. which need to DNA we builders fit of think fit I are a have a best for of or the the at the customers internal have

a year think frankly, than ago. with productive, this I so let’s say, sales calories on we’re were, time And our more we Flex

So think product. and why with and I Flex over very predictably time. positive business feel that like And to successfully I more grow us that able we’re work has made the that’s customers be much really about

Operator

go Wells is Your Michael question Please ahead. from Securities. Turrin next Fargo of

is open. line Your

Michael Turrin

called of in guiding newer the Hey, you out of you of there, I Last GXK. reference that classification. thanks. don’t quarter, agreements And on think a was terms I into afternoon. that to just basis number XX that want thought useful push Good I expansion providing that’s color. regular to sort

opportunity of you’re customers, describing platform customers greenfield view maybe relative GXK of us in terms I how if within thumbnail you think But landing the given given spend in be to new it’s or of whether the wondering view a penetration penetration of some evolution what’s there’s today? here would you and could would where sketch even existing around kind what give of useful, questions just investment core you terms just be the here today, some possible,

Jeff Lawson

example, – we opportunity you are it’s today a many we from we And could probably not how that of and data GXK. us that that in today – massive have an over have us. a the with probably GXK customers, rental very today thousands month small we we very players us matter think think that that no spend world, is hundreds I slice just And spending of like working clear that dollars customer the the greenfield of also of leading $X with the that’s time the the with. spending are have ones in material have even majority example. dollars that’s and we’re with for and The vast the be one car

small or this investment. we And the no to So time to excited think it’s believe of proven definitely successfully go few that past there’s hired shortage that’s proven we’ve about to are I capacity, customer be greenfield opportunity that And go why into really we a reasons as Twilio. a have now the a that every talked there’s playbook we one that we for of can opportunity. productive. GXK. enterprise, we’ve over years, Because the the And prospects,

to So more customers – can and continue that we more playbook bring this and that confidence gives opportunity. us and extend

Khozema Shipchandler

take there’s obviously, into I are, metric that that incorporating to Michael, number what we’ll break going Investor – think about say today, but the Day. account. probably of those out, not we’ll a on that mean, ones we’ll

Operator

Derrick Cowen. ahead. is question next Wood of from Please Your go

is line open. Your

Derrick Wood

around Great. from guided to assumptions progression to in And share for larger customers? or your not XX% run in some QX rate any you’re the of XX% to for the Khozema, growth and across does which of year? XX% whether the imply change Anything amount year, XX% expecting you good with deceleration.

in And a of launched on Flex. was then solution. When Flex just as guys XXXX, a follow-up it you QX X.X

And curious it’s for XXXX? what Just for demand that guys do matured? the to How major think milestones year? Thanks. much in about you how could think the

Khozema Shipchandler

Derrick. Thanks, Yes.

of relative to is the have is, to extra thing in that benefit QX you month bear in one an big the So we I of for mind of QX, think that SendGrid the get and XXXX. compare

relative numbers an this at on little the we inorganic remainder good we’ll that time. the what hit think That’s would the guidance it I feel to mean, like be so look bit that basis And overall for and those our we expectations. And an about of provided I elevates the a feel able about that number to organic basis. year, on good

Operator

question comes Your Please from ahead. go next of Walravens Patrick JMP.

open. Your line is

Patrick Walravens

much. very Thanks great. Oh,

and and then four with just was I’m this which we was like talking be of Khozema, to that So, there cash, interfaces fund in back would right, in and were there a you able maybe all all to I remember, was there order I’m November, areas? then billings met connections, of – to lot procure when data was to maybe projects you architecture. basically funds you the the the if are does pay customer experience, which and plan was wondering, those – about

Khozema Shipchandler

from you. hear to good Pat, Hey,

I our I And a in the we’re to I called out number remarks, investment scale prepared it cross up the in think efficiently. work functional, to earlier mean, does. areas are They’re company to these I are mean, they be areas. stepping think require able these as the that different future. for and big spending we of systems processes

And think then us efficiently more leverage. business I that create as scale do we ultimately the will to think, elevated and so, deliver investments these growth, allow we

certainly alluded So I investment in say, would a of to, XX%-plus that that our level. wishlist relative included you is the to

Operator

Please William of Your Suri next Bhavan Blair. from go question ahead. comes of

is open. line Your

Bhavan Suri

a application, wealth these. sharing for right? use about greenfield GXK for opportunity. and pizza all a can at car my enterprise Jeff, go application, So Hey, one thanks bit I cases And your messaging let’s a or delivery customers little second. for is different, guess, just if seem right? large application, your guys, ride talked taking this really question. of George. here. But private you a So maybe exclude look we a you a through even The Flex

the that one penetrate a, of allow doing of sort you easier you the is to But faster cases to common of in to industry platform do [indiscernible] kind are allow appearing players that to benefit the doing this, sell seeing, happened that are, space how I’d across cross-sell this, and just of the other into cases guys vertical. common thing should use or untapped the use or GXK you stuff. same in verticals verticals you that this allow understand love what that guys pay

been you’re Flex great about programmable to and for penetration and use specific Obviously, of think case, platform but great see verticals? those those guys drive even starting core just the a wireless, to you is love cases within has sort use how using if common offering the and see

Jeff Lawson

Hey, Jeff. take This I’ll question. Bhavan. you. the Thank is

So, I think it’s interesting.

so their engage is all connect their every If make small, experiences, journey you company customer really the with together. various plays a really think and customers the touchpoints it, and across bunch a customer that every the and vertical, like like disconnected not it then matter have they it’s looking old, company, feels new doesn’t of disparate, about but the with big good to dots,

we talk typically, to the there’s that point. so customers, is And when something starting

trying And obvious. really pain customer their working that in the experience, is It’s are Some the customer increase point. place their we in product to where points engagement, or start and starting that’s they the with them.

It’s then have foot the that the And from we starting like door. point, opportunity. in this

what’s big next of that point, the so customer that’s of and the pain the improve and part trying company is journey rest And the to what’s experience. customer that

great, you’re a is when the well, is ready, a to when table And ships, look so – you your at first happens. is customer color we ready, and is use when trying just that is say, package come say, is. log first flow, you whatever give thing This us type and pretty my them the When And when when such the in ready, example, a food case. you to and in, right? it of it’s do want such where customer common might alert to an really I’ll

the message? really reply natural question great, that’s a question. then people is, next good to that But happens when what Oh,

get to wherever conversation center conversation delivery that the it or routed a they contact starts example, to if agents, the is, or how be about reply ought for we’re retail in, no be that can to so that pun or Conversations, their using message to into And store about a intended. messaging person

better it so and there. fruit a then out expand create company cases to can how are often the it from you see a type engagement from lowest-hanging And of leads like of that use like inside naturally the obvious

is in different, common what is a I is every their and bit account mind there’s what’s they’re trying a us, like for. think, of many so ways little they when point solve there ultimately really together But is dots in pain going playbook this the solve come on that, you’re their it And to area create connect engagement like of to what like to journey is or thus do after in we in customer model time we coming customer how and a these compelling that all a starting saying far fullness point. just

Khozema Shipchandler

Yes.

add to to just on that. I think

I think, look, think true. Jeff is I said absolutely what

think to cost time, use streamline by are looking patterns of that I always same a the verticals. reusing across and also sales we’re our in cases leverageable at across

start add the years, you’ll over think more time to to let’s us you’ll I efforts. over So some few orientation, say, see see our some next vertical of sales

really, I small, kind like big, shoots have We of like on very some front. that think, green

long-term productivity, there do. us pretty And typically rigorously can scale really that said, and we to Jeff more think patterns as the continue and is common that, again what over ultimately that think which us on maintain six confident cases we industry is across ultimately do use some industry, I Salesforce, and that all then are investment helping to promote our over of nine depending this on. think, all And makes I good I train there’s and which

Operator

is from Hynes David question ahead. next Your Canaccord. Please go of

is open. Your line

David Hynes

very much. thanks Hey,

hasn’t topic the is that on up One with the Jeff. for maybe opportunity So call IoT. come

what the all customers for doorbells the you’re of do picture, a opportunity be But or material point? some maybe we is you where contributor are this just it then And to could nice and have, I business areas, the obvious a think connected think get to big applicability innovate? seeing stuff. home some security less at

Jeff Lawson

clock a question question. platform the I really – us Absolutely. But voice roll to we is we an next think, starting enormous as think answer added company, the the Thank the it fantastic led with of back us. and we build. IoT the of for if to of opportunity We – of I started business the as company. latter I started years the for kind that XX a can you, the it be first, and we’re think customer then and area when David, big to messaging that engagement you the part

and now set doing seeds planting the what next big will great product. that we’re use domain is expose that’s Twilio But platform with cases we’re that our IoT of the next for the and IoT

is often the to what jump the we IoT, bigger what smart see. think as use cases? Related and your because the I much When marketing sockets that of wear question, both consumers it industrial city like of But to lot in non-obvious a a house, in people interesting. in is your Yes, you you that’s existing type opportunity actually, stuff think, of the area, type applications applications. are the

of year got the my we stopping customer same about half explains life. can like half ton a overflowing. trucks know just space, the One stage they’re empty you, it problem had are in lot is one every I that really other on and I when and customer smart the around solving, which about the garbage right? a SIGNAL them route the never that them every blindly is in week, it garbage garbage are last makes sense, You don’t of running But at drive of thought

a the be don’t the and the then notify dumpsters dumpsters fuel, And that says dumpster level to saves can And inside don’t. and they’re which garbage so it put around sensor And can of that emptying. they driving need their emptying. that a which drive need need because centrally, then emptied with the ones to fill solution, trucks smart dumpsters not just

are because great. to when Their and lot money they empty wins, customers be. need their environmental dumpsters are are they save a and impacts of happier, Everybody

cases this a lot of use would of of now product. good And have new case and we there domain opportunities opportunity. different arise in the of IoT, like it. thought Yes, that cases, example we’re tremendous there’s tracking, use cities use in So aspects of industrial never because see I we before a of fleet that’s seeing type narrowband the launched smart and are the

always. wirelessly in customers can profile connected that garbage enabled sensor means it of a really smart does, they lightweight key to battery, fact on put drain the battery for to dumpster the the the is Internet this of fact, that have MBIoT sale by very single and years has enabler which and into In a recharge a brand-new not garbage that’s It’ll use it cases. last some these

Operator

go Kidron from comes Oppenheimer. question Please of last ahead. Your Ittai

is line Your open.

Ittai Kidron

lot the I to kind the have the a almost Thanks. range I guess, with the focus is of you, growing there. George, Help is Salesforce portfolio about extensively want basis is efficiency that Salesforce how expanding. of understand And there? moving with a you the have? productivity in you think on I quarterly discussions you will goalpost? on and quite And be mean, expect about build-out How clearly me you the do great. of gains do that? such that how you think do What a you measure companies

comes sales understand cycles. deliver what little right the person have portfolio people that within understand into push a now? lot me that I a probably the I longer you one enterprise well really help with bit think mean, the of But can

Jeff Lawson

think it’s question. good all So go of going Obviously, our all the like not to we’re metrics. details a – I sales into

Just margin for when and a complex, salesperson at you a about if can costs. not level a that how incremental we in mean, that it high I or it’s look level, calculation their conceptual think to revenue a bring much way. relative

is. it is right and efficiency high and scale over to ideally maintain Salesforce, productivity see try we goal staying as our goal our productivity very and we And – good is scale time we where it that the it to have And long now. as as

I your numbers productivity the you think actually of it’s to very hard to Salesforce as grow dramatically. large scale

I that we if certainly wouldn’t we term. clear about high rate our maintain productivity I at And think can right it. for expanding. use we’re we’re point now think and so So feel good hurdle I still, that investment, But then

Operator

conference. We have today’s participating in you questions. for Thank completed for the time allotted

disconnect. now may You

Twilio (TWLO) 5 Feb 202019 Q4 Earnings call transcript