TWLO - Earnings call transcript Q1 2020

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Operator

Good afternoon, and welcome to Twilio's Q1 2020 Earnings Conference Call. My name is Michelle, 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 XXXX afternoon, for joining Twilio's first earnings and Good for thank us Thanks. conference call.

first we if our separate technical is time earnings our This call glitches. locations, so run appreciate we understanding your into any conducting from

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

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

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

projections that results Additionally, responses and customers of and incorrect, and materialize business, operations or change. is to and differ our which to could actual assumptions. statements, our COVID-XX these the some uncertainties materially our those results are these subject of particular be the of of our our prove around expectations our discussion may implied assumptions contain by are on should conditions forward-looking In risks, company financial impact and statements. Should subject to any of partners forward-looking pandemic from

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

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

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

Jeff Lawson

joining and you thank Thanks, for us Zilli, today. everyone

the these couple express discussing I begin us top been safety that of I months. past mind for to has want Before quarter,

that your and in relatively you ride in our what's decisions are hope our safety well safe faring during mind, With most all this time, important. that a at and customers driven comfortable belief families by are the friends world you I this we out. the challenging and are team, that as of Our are large that and

I to their and distributed of in want each employees fully of mutual our work of that move this early COVID-XX employees for we of customers. our mind during top to to want support during a March. for also model has our stress time thank their flexibility other, and safety and I been

and I You all thank magic, exhibited the Twilio you.

we this Twilio many wished wouldn't built it in way, ways, this. was have While for

world email, and digital Our such to cloud video as while the agility, economy safe. participants working, many have Technologies parts three needs, platform engagement, the of software continue things its scale. messaging, provides voice keeping and enabled

iterating our of That's of quickly, organizations And has needs essence Moving enabled months every workloads days building Twilio as and the been evolve and in nearly of organization. kind weeks, for reimagine to and years. many critical prototypes communications has not agility. their

society. across a as felt the As tell the is QX again you and numbers, before for from both company, impact to starting was strong COVID-XX the can quarter the impact be

companies Our us served currently This startups base during countries diversified industries, many fortune period well to over spanning of this non-profits bodies. diversification even and sizes, customer of consists government and organizations, time. XXX,XXX XXXs, from

others declines, saw customers some While saw growth.

As during patterns and can period. very hospitality this you customers unusual imagine, exhibited have travel in

slowed. as during in and a hotels shelter and from dealt First, into stark cancelled travel there rebookings transition were protocols. Then, spikes in business the flights with pre-COVID-XX volume decline and there as airlines place was restrictions

logistics. curbside for and Another saw increases pickup example during a decline large retail sharp is rideshares demand food cases with this time, offsets many by that in delivery, in

home this addition, In time. pickup and from centers adoption of during contact telehealth work a saw

the of exactly are will one environment. back no year given the optimistic, of cautiously what predict can in uncertainty we the While half transpire macroeconomic the

while resilient usage to that certain expect of and in have will return model continue industries, are may and believe we the of our use our be because others that certainly and a to many importance. industries we business we to And cases grow business that long-term, So impacted we diversified headwinds seeing will customer base. newer

now." cases also strengthen product need the made project We quarter to became in saw for use future other several our that where was "we announcements slated a sometime the in we this offering. And

more is in information HIPAA eligible, our of to trusted We in data And products that security utilize and products our to containing platform video, to we protected a of communication by way. compliant announced providing customers can elevating health a easily voice, milestone meet HIPAA our meaning our several now patients. for fit develop are customers SMS committed HIPAA compliant customers. needs and and privacy another Twilio the are workflows

from to also Flex We enabling released Instances. Flex Dialpad beta, outbound public calling

thereafter, Flex to also which companies We by prospects months of Video qualified three adapt COVID-XX. video We've giving Shortly and API. the resources Boost, announced for we affected launched seen also multiple industries real-time operational our in provides COVID-XX. financial contact Boost centers across free technical,

reconfiguring that and work home centre from world reality. big to years for small on-prem and instead cloud transformation have the XXX% from an taken projects the nearly contact and took Developers a companies ecommerce Digital could such a transitioning got to weekend. as work,

various over industries give with you customers across cases couple helped last that used the our we've me a Let of just few months.

people comprehensive in solutions mobilized a millions supports health social allows of Virtual history visit review patient providers for records by Epic, solution with new place a telehealth doctors, patient, million distancing into around clinicians clinical powered and update Epic. directly The has patients nurses, relevant demand video. care to company to documentation the and launch Twilio's telehealth platform, With going effect, that programmable of became video a and soared. within own the build its and for world XXX reality the shelter

including person businesses unnecessary priority Protecting customers and employees Comcast. in from top became a many contact for

their to Comcast enabling technician care to service customer video diagnosis weeks, the a to setting Comcast a for into homegrown customers few just into of phone technicians and course customer voice customer developers Twilio enable requests initiated camera remotely. integrated the technician without a pilot a on and at incorporate can which contact the They can foot also and Over database, Twilio use self their in a show database, home. repair same through their setup ever to them walk the their

is and and With and center widespread during connect in from studies. SMS to to gone keep Twilio online have Flex, days to has critical with in communications challenges track educational keep using their And students its two contact connect mainstream school posing with specialists closures, on closures patients learning who teaching Blackboard deployed [indiscernible], for distributed new a an teachers and on teachers home. experience students updated. the schoolclosures.org families engaged

on-prem on usage home service to work turned those reconfigured premises and usage. was we're in for They into to be legacy perform four distributed up Nearly The to needed critical Flex every solution. and call centre for XXX within working to and the as increased And days, to operators city of response their no Pittsburgh running Twilio to spiking contact enable a safely from in disruption residents. agents COVID-XX. workforces with to especially support without way continue needed centers, a going

safe time. on York food with growth City of Way basically Nonprofits the reservation environment. an have helping demand way to volume Trunk for scale system with during also built Yorkers messages the had scheduling this SMS partnership the Phone, emergency provides through unprecedented get New Harvest in New with They in current from up more are XX% United and appointments And City food a in a clients support of a critical Twilio. more partners. people XXX% relief

cases I'm circumstances bring incredibly the Twilio and like team the these often We proud to even on opportunities digital over based first in use adapted how that the that believe address. has for last how long-term more us the and actually for they to acceleration they've environment. this and know I the quarter opportunities happened new changing created ever of numerous that performed time month, unprecedented

driving about for to a to to thank I'm to Within this risk may low for being and want declared a clear.org global focused to who $X by of COVID-XX pandemic, be medical give severely ahead they've virus. twilio.org impacted I at done respond to serving what Twilio. more excited various such, on week the organizations As the pandemic. a everything income populations, team a donated lies COVID-XX million you our response even

two Medical for organizations one matching the of to including focused pandemic, the efforts of this we charitable but acts our to is and International, Twilio aware response, employee us need. acutely around need invest are continue the are initial Global Foundation, Gift our to and donations in time of during Release communities Corp. we'll These in COVID-XX on communities also more CDC Asia part to our International response

and Chief the talent global new of leaders as couple to for recently be the she'll want Christy our growing responsible around new magic company's and Twilio. also welcome and Officer, Lake driving to our world. hired I strategy the a Twilio at acquisition We People development people

Steve welcome have Pugh to lead new board. and we're you Security Officer Chief cybersecurity, global responsible team on as physical for corporate our security Twilio's also to trust excited We and both

frontlines doing it Thank thank stock and or pandemic, professionals, a hand manufacturing the to grocery on workers, workers, slowing delivery the the of with role I the drivers, everyone local the Before medical in everything our you're workers of to over who you. spread, those for truck the you us. rest the this stores. food playing want who for is Thank us store else providing the are George, the in shelves I

hand With George? it George. to that, over I'll

George Hu

Jeff. Thanks,

our engagement to mind When continues are our new closed did and delivered great our with in first a job team the investments great quarter we Our results helping expand top offices of customers. March, Customer continued engagement. our as early drive ways digital to reach. in for team go-to-market companies be continuing we to engage the in them of

learns. in engagement than we team programs XX events plan virtual, that QX to roundtables virtual and marketing the mid-April to more ever to first more with if several events registrants. XXXX from engage person Twilio virtual in And Our our held events lunch center shifted than

Our more. TV developer also engaging through Developer Quest great our Relations online, Twilio Twilio job team and and extensive did a community

support our fact, throughout XXX,XXX quarter nearly and to community total customers minutes XXX,XXX live being a minutes developer video developers the of spent learning team content watching Twilio this our watching In thanks averaged for our changing quest, minutes entire on and video there the on-demand plus environment. to content XXX,XXX

want our providing to challenging for centers, packages AI also and up more. during partner remote contact agent services alerts, needed Twilio mass and thank implementation stepping ecosystem this time, bots for I powered

accelerated you As transformation Jeff across COVID-XX industries. has projects from digital drastically heard many

uniquely our engagement We to customer positioned complete help platform. with are

Twilio introduce average of the first a signups existing new This to or April compared additional saw customers, opportunity daily XX% video adding cloud. for us for weeks In for fact, to or as from But is increase environment XX opportunity. for multiple XX quarter. act whether centers telemedicine, with we to in through the products move XX March the companies customers with expand our it's individual expand for presented updates the us to to that contact notifications, points IVR, long-term email channels quickly to bigger voice just it's great need than as their entry current

this was Prior seats the of market center contact outbreak, were estimated cloud. in XX% it in million to about that the the XX roughly

contact provides is opportunity it fully by XX% be this programmable a to platform. to transition XXXX. with help with us Now companies a Flex And great expected center

a signed in discuss me deals few the we quarter. Let

years. some increased outside over been This as and percentage headcount our just paying expanding the us we presence in international opened companies. continue has U.S. total the key know, several strategy is international and We've you area new our of from to offices of the with for of roughly a last great XX% off expand of land couple As to year. XX% has past the investment

New fintech expanded For company example, Latin America. relationship we the our Bank, with in largest

in and Twilio several such agents to programmable Bank. XXXX are New a Brazil are to to scale turned thousand thanks with to Twilio our growth. email to building bank trusted power that Bank New In QX, them relationship center help became for their New contracts their with customer platform, great team contact a their keep up that Flex in chose

Global signed We new performance the XXX is flexibility, in example digital provide their they business than build and years, XX their group also for a with fortune Standard Bank a Chartered, company international XX,XXX their provide for AB relationship of leading which We Twilio XXXX customers. more Standard employees And platform an entered and scale been more into a Flex than banking has XXX to markets. with best deals across InBev new transformation. selected experience conglomerate. messaging incredible needs with Chartered to enterprise to the

our We expanded customer a our likely have They're workflow several a a expand years, mobile brick and channels. text it's you notifications new online shipping brand many Twilio workflow will messaging with those applications. their interacted via relationship recently. and of retail with for who the order to guest offer and SMS to web for usage mortar and purchase of This and and XXX new been Fortune building company, through

and us it relationship and platform their Adding better performing. reliable to engagement. with continue their solution selected emails their to needed a a into been single of Twilio, for new authentication that deliverability entered for has integrated very They us. of solution to combining we SMS customers, platform deals the email manufacturer platform allows a factor customers large customers. car two digital at experience great a new drive a a for new their a successful, ensure for email platform And provide see was reliable to as offer as more as not to customer We existing choice

chose We applications due across of ideate, marketing little to one deploy integrate customer over products. world's across campaigns their relationship consulting and business largest key to enabling countries, They to several and Twilio, notifications teams in our email as with ability friction. add product our also expanded test to XXX power into an the quickly with they firms

a strong had we quarter. Overall, first

extend this supporting Looking we and adapt us for our environment. to the We customers forward, on ensuring investments are long-term. partner as them our support platform and investing continuing our and We're we team up focused current today remain ecosystem. efforts areas presence, these environment enterprise internationally expand in go-to-market our as to ready our grow they our through our will in believe set new the

the hand entire with I'll it to Thanks great over delivering for And to team Khozema. that, these results.

Khozema Shipchandler

George. Thanks,

on of both Verizon's to approximately X million last WhatsApp or to and ADP revenue. [Audio revenue. to fee implemented Gap] February QX XX%, X% person and in messaging contributed contributed application XXXX. compared quarter, approximately was X

dollars. a reminder, was a did customers not direct this and profit gross As through pass to impact

XX% XX non-GAAP fees. First points gross by quarter and margin was from negatively was ADP basis impacted

continue throughout provide XXXX. impacts will remainder ADP to financial of the the of fees We

planned was million at primarily revenue hiring. profit came and by operating forecast. as stronger expenses $X than Non-GAAP originally driven in slower favorability than reduced well travel outperformance as office This plus

me discuss guidance. let Now,

to strength see feel we business, the we our macroeconomic remains employ guidance environment and in prudence in While philosophy. continue our to dynamic, it best

are guidance the we year. for withdrawing such, As full

XX% providing million high of growth we're net expect base. expectations increase strong relative overall diversified model a resilient to QX, to the second in guidance However, continued fees and see a testament for and in quarter growth end. ADP broadly business, and including revenue XXX at our the million to of usage the our XXX To-date for in year-over-year we've to customer

these better a built mix our going As revenue. to the we're specifics guidance possible as scenarios understand Jeff variety believe And the We've the geographic cases, hospitality well into performed more for industry environment. retail said from to of and offsetting customers verticals a takes while earlier, ride of were not healthcare, consideration we industries kind we and travel, and revenue analyses into this across others. used education, naturally like impacted scenario sharing, benefits headwinds and of get heavily to from impacts as

less averaged Twilio number than are over That puts. there categorized industries and In seen far To last email. in takes revenue several quarters. the puts we've XX% impacted note specific have and so we that short, those customers of more excludes

$XX range loss of operating quarter in million second to million. the $XX expect the We

well the opportunity investment on we year of As XXXX our the the of front we discussed sheet of call, us. the portfolio as in balance given earnings size strength as view our of last as

to continue in the Our stronger an investing intention cycle. out is Twilio to outcomes our continue stakeholders this generate and is the to even We enabling elevated foreseeable the and current environment through for this interest of future, come growth position. believe in us of best will

brief Let give call. of we areas out laid investment on a last of each update the me our on

that India, For a virtually currently our continued who are hiring office we but have employees Excellence R&D plans and now, with number have opened Center of for working in of space, office we on-boarded leasing remotely. are our

continuing hire teams deeper drive Flex specialists. into expansion This and for platform to when to reps, focus continue become digital of choice to critical go-to-market a with international engagement. on our We a we are investment and enterprise comes the enterprise remains customers' our as it

systems our continue we infrastructure. and investing Lastly, in

benefits of want As to we the Twilio leverage continues grow, scale. to

better invest to generate been our the We have today long-term. will functional ambiguity to in improvements world our and continue result in these as We investments in COVID-XX. across employees. confident billing [ph] we to the for cross that company of understand enable ROI the [flow prioritized the highly exists in systems, areas are But a other the that cash]

Additionally, on with we sheet, in through feel more side. in equivalents position of billion the and other the stronger out business cash X.X pandemic, this balance come to than we and manage a strength cash are in the

opening discuss A items few other before to call to the questions.

conference, event SIGNAL as is for week the planned XX. a originally now rescheduled virtual for of Our September May

Investor We will provide some our costs likely virtual of in we and the tuned working this the mind are update Stay details IR October Day marketing expenses with to and now reallocate planned are of related which from SIGNAL We're QX postponing aligned still related event call. and team. making other on the will Keep an through be more the X. Thursday, areas. targeting virtual will for also our also information SIGNAL

well Thank you're line and joining. safe. the open please healthy hope everyone questions. wish for and you Operator, I for Finally,

Operator

America. of [Operator Instructions] Beliov Your from Nikolay comes first from Bank question

open. is line Your

Nikolay Beliov

guys. everybody's for and thanks. safe Thanks I healthy. results hope taking Nice Hi, my here And questions.

those three cases used about marketing, into you puts customer support. main about the are those each in seeing out saw you. in Maybe can and used of used how me. I trends help for it for the case quarter, operations you wanted and us I takes Twilio, the cases. When during dig us give and the Thank Just of think what what April? and That's you month laid in think to you that

Jeff Lawson

call you get? I Does This on want problem it, coordination to Nikolay. is sorry Jeff. you, usual. the this anybody to take Thank have Khozema, want like

Khozema Shipchandler

used I far really so are of I cases elevated the Nikolay that think say. we've in categories some would seen

example. used that But the which cases other like areas what offsetting talked the about relative through healthcare, more for it's you certainly of called net we business. all used we've or of think seen and terms back in some the that start QX, overall continued headwinds, the expectations then usage in begin goes broad cases in benefits increase on on in that is to the education, the we the some that is, a end part first some So, of think in of some I I side of look, to of vertical just I we're we've is strength well, in that new as think and And seeing retail, areas, those to quarter, out. to see because slight as of to of relative our kind

is The diversified. business broadly

by that wouldn't think very others and specific spans, we're activities we model called elevated out a areas, geos, the some obviously, in a in so out. and I but some industries and have case, base necessarily I used resilient those of offset of verticals, seeing We it call customer

George Hu

Khozema, under contact of Yes. are us we're we the trends most remote This seeing opportunistically are that add that. in agree the six coming I'd COVID. six George, by cases under cases are is ones the of but that learning, seeing That And I said, with we're and centre, the not, history. saw for And are seeing are forward to service, we self used use excited those Certainly that delivery, telehealth used new mass those COVID. are about. are strong, contact core that notifications. we're distance going emerging cases some list some on

Operator

Wood comes Your Cowen. from next question Derrick from

open. is line Your

Derrick Wood

the growth big a on take quarter. And new in acceleration congrats thanks. impressive and customer in accounts jump Great, into

communicating. wanted I with how Obviously, a strategy touch on disruption to there's people here. the are of sales lot

doing seeing sales talking guys and sales more just are about You guess, from move what into are transformation. suite. acceleration the a developer lean I'm the I from opportunity, digital you standpoint? And in strategy a you engagements of out are to C curious, given and this

George Hu

both really so And that be I'm few as executive the This the really is George. to that as engaging contact now situation. decisions we've programs distribution over that -- coming investments industries because talked you. a seeing the across have of we're in so higher transform Yes, programs take what have I've now level we're relationships engagement is with than is well cases, we before, can or made seeing in advantage at the we glad to, a to companies, years the we've XX to our built that about, growth able what we are down last got executive these really, what days some center

say which this had would on go time, strategically. is more a long I But we've really for enterprise, more just the sell sell building higher, much into is now strategy to

arming to, to continuing job cases, preparing for used think I'm well. that and alter training go a new our we're really more been except new we've on then think playbook good execute fundamentally playbook of years, about. done six for the force several cases sales these And very used focusing really prosecute so we've I excited which And the as I these

Operator

Michael from Fargo. Wells comes question from next Your Turrin

Your is line Turrin, on open. mute? line Mr. Are is you open. your

Michael Turrin

happening what's contact that. well able is to given it react big and of some you've Flex Is you seems talked the to then about us of how in pretty a market came demand remote the undergoing terms add like in terms to of suited just center center up. terms Flex transformation there seems You in and capture else certainly uptick addition here to new been can some contact the of in particular of be features in the of also anything

George Hu

George. is This Yes.

the to for the terms is in in support quickly, that proposition. have up ability So home work perfect think moment, by -- I was that this really think mean, agents. addition, to capabilities partner capabilities think, I for this made the able I our which and at ability having augmented I agents, and of tailor value to product our and deploy being capabilities. of flexibility great platform time services really some We've Flex our remote really a beefing

internally, a which we've services a Twilio program, set cases, to just quickly. is Lightning the cases very, calling few So turn of help created somebody's platform, customers which we're that around some program on get days Flex able deployed In we're the to emergency in a very is incredibly exciting.

the seeing, to And saw QX step build partner our and to a partner, the starting we're as also off, ecosystem is our deployments up program north help of I Twilio which in think XX% done us pay ecosystem. team Flex we there. involved work of is to side, just product the continuing sales a And and excited we're our real on in engagement also about the but the testament not the to partner platform our build we've progress

Operator

Matt question Blair. next William from Stotler will come from Your

open. is line Your

Matt Stotler

me. for ones quick couple a Just

of so sounds you're seeing into in usage, see continued in the in of new usage much you're So and move in versus one, when behaviors QX like how QX at customers we existing customer what do as guidance you behaviors, you said a continuing your you seeing from coming with QX? strong to onboard above customers at and for terms about think results as obviously increase that QX, is far growth expectations look

Jeff Lawson

Matt, Yes. question. the thanks for

retail others talked some honestly. additional we the education, from certainly both of seeing from that that We're of it's healthcare, about. tailwind a think and mix from I

have to little bit. I cases some a little But also some to going to other same have moderate think the think that time, is, I that those come at at point, we're bit. going the is going of down happen what use are a back been is

And But, so that of think, what tailwind there's sort in like, there we've are said puts here. remarks, the mix. earlier is overall been and in seen takes I a some we as our

it prudent if say, of And the just things but cautiously going that that half excited back how do ever We in out was about I we're the optimistic are we period, there. of certainly given to play the as to still withdraw been, I for optimistic. felt our things excited. think the more We're terms year, dynamic we've would cautiously way remain long-term. for as are, not guidance

Matt Stotler

environment SendGrid Yes, just the just and what quickly in all that's And coming into COVID want inboxes. seeing that that emails how we're the right. performed there, related seeing I and on email wondering given all or you're the Right, more great. quarter, in our QX given

Jeff Lawson

Yes. We we talked anymore, did break what perform usage, to don't QX. similarly, to relative out but across COVID-XX business in this experienced well, to SendGrid well specific continue as It's email higher it about Also the based bear business so that entirety is buckets as doesn't predominantly as of the fluctuate for business. product and much of just kind in mind on the usage. revenue sold email the that

Operator

come will question Next from Pat Walravens Securities. JMP from

line open. is Your

Unidentified Analyst

in payment, there? you kind so my any what's policy the question. taking you if guys payment, request terms I'm flexible of the model SMB for Thank and [indiscernible]. of the wondering, -- much just Flex they for Mark is this for Hi, if have

Jeff Lawson

Yes.

understood me Is of kind terms? seen the Let question. for just that flexible payment deviations for have any make customers? SMB been I requests that Have Or right? we sure there

Unidentified Analyst

Correct? Yes.

Jeff Lawson

where from requests terms a or far, payment not around commitments, received number an minimum Okay. business evaluating impact by case small changes But we've And or in the to was is other really increase pretty no a quarters. in in change stable, 'XX it QX QX We've seen and customers to from those those relative so at requests. that and we've in good on basis. of our case material DSO not seen and there's delinquencies on we're a

Operator

Meta Stanley. from from next Marshall will Morgan question And your come

open. is line Your

Meta Marshall

the wanted Epic dive market. into Just telehealth kind to the deal of

least at solution previously. been or I Epic, think have using news video a from some different reports

providers of kind what just looking to helpful. for? with a engagement So they them of Twilio would and transition platform be telehealth just of made it level other that kind were Thanks. That was

George Hu

Hey. George. This is

time I really like and in product one incredibly for I of a base also able get video be think that, so that is any I a) try think that scale our of Now, entry. the can barriers this It's we've terms people the fantastic all very to product. product and that of in tailor-made nice, can a deployed consumption tailwind period it's seen benefits it is our started it's think And without being of well of products, quickly, quality. excellent to deliver

so and timing plus to And out think I Twilio that compliant, now HIPAA worked that think well. I the is the HIPAA incredibly DDAs, fact supports find combination able

of they address huge Epic, developer of enthusiast who again, through And to And a used recommended power who their our video able our so, of some friend and and us of quickly was that had side intriguing the get end power with the platform, an community a is were they part started to it. made enterprise it I we've platform of And try fundamental power power see DDAs. for Twilio at through challenges. the power business hand worked investments being, think of the running because think, the cycle a rapid with I for up up in this hand the themselves, model that that, us of and our relatively actually story, cycle, model of developer help the Twilio where, a

amazing period. support Epic plus speak of strength combination really the type deal this during channel omni-channel I of really of incredible we're model, a made, the again, strategy, speaks we've motion, our thrilled or power time enterprise to having our of be those developer an think, the multi like and this all I strategy able organization and investments to to So to of the

Operator

Panigrahi will come from Your from next Mizuho. question Siti

line Your is open.

Siti Panigrahi

in give this at with cloud how understand, there changes, Glad you question. you're of your talk, contact the having about opportunity I all changes we have for some And some are getting about the discussion the to can can what color opportunity customer, you the and the and kind George just mostly talked Thanks doing what my taking supplement pipeline point, opportunity contact long-term go-to-market Could happening there like? look given into of existing center. center market. the motion are the well. you talk

George Hu

Yes.

and channels need communicating down that, they could transformation. contact that with accelerate that as could to So, in say digital that also could all digital voice environment really Jeff customers on be messaging to But be great, and center. ever. I we And Look, overall, be companies be that be a back our the would And is that take said, video. need than their step could be question. WhatsApp, and to and double showing this they need more -- great

All of important across is just this center. of really the seeing products, strength not we're incredibly the are these contact time. channels period that And multiple

customers all of doing of while rapport, fantastic are our age, that. can't building is what's challenge there's our some other's time that with video having, during visit build opportunities with this job that taking your up our calls is sales customers, think I engaging opportunity personal having force deeper team, home, In they executives. really with it's engaging customers customers. And interesting for really stay at challenging of this us period you're our in advantage opened is of to you're homes, sales each this deeper being us obviously sales our doing certainly amazing about for go They're an team and connection

seeing is, causing situation for we're that contact And rethink contact to opportunities them to, out, center. a is what not that in BPO. aspects many contact board, to centre, one distance, part from this for across we happening do huge as work I our companies is migration And of but one in was doubt accelerate the that, agents were And, of of there's their this is to model. technology our so overall our okay, we're that think contact this, socially figure home a had How they centers customers to I they we that as suddenly is of sure center. how of talking our Now, the support hopefully who center, make no because BPO of current is cloud. because using their contact certainly the those absolutely the their transformation And benefiting the model business much agents of there's that, do our agents. at going this, and as and anyone, many

excited lot we is engaging I that admits happening. about And in a cases. excited definitely about. think the we're these industries are of certain excited that an use we're challenges So about We're and transformation area this

Operator

Murphy from question from comes JPMorgan. Your next Mark

open. is line Your

Pinjalim Bora

way the Khozema your on upside mean, out This behalf material portfolio there question. and for I based figure disaggregate expected had Congrats thanks variable from on guidance there and portion? any to the between Mark. base you and Because any before? was SendGrid one versus the contribution variable the is just trying Pinjalim quarter change what in to for revenue versus you the of question portfolio is is,

Khozema Shipchandler

that areas had I in challenged base I a way was point buckets. tailwind, a mean, what break reiterate to economically overall. some areas reflection and not customer that broadly of of that think Yes. that were more disclosing but few out earlier would it those QX the those a we a I this a diversified had don't anymore. performance we saw strong of simply We're we the that noted then segments that And, I say made different

Pinjalim Bora

the Okay, SAP? interconnect any if Jeff, for Jeff messaging understood. thoughts acquiring I one competitive could in quick the Sinch business on shape digital forward, going all? that And one if for How at environment may, the

Jeff Lawson

Yes.

take And typically that As of customers think their of at, to when building with customers all they and software focused size we think here touch as good diversification scale, helps I we're which very needs at the the needs. we're as offer United growing really globally across have in points. wide our a our products company, customers our a and where variety to the on, engage customers, what look the that our And that's serve I business the of and our our the far well some position of that on and you to as a strength us. customers customers business, at is our at we're focus our different following that as we in States pace

Operator

Heather Your from comes next Goldman Sachs. Bellini question from

line open. Your is

Heather Bellini

of maybe questions. through about kind you -- before the you think how that people Jeff, And be up be strategy for pure two pegged sense that those for coming much you for a kind have think the we're cognizant what in kind just would going real more I a of of now? you penetration where had omni-channel fun would might George, guess, you even do what of need do or how touch and I of a conversations of omni-channel of points? with have do people making

follow $X And million. we be for Does then went guidance think for benefit I expecting said should into the impact that X think said you effect quarter, the mean embedded in February. And up Khozema that's I is ADP second just million a you. Thank the it in you quarter? the was for

Khozema Shipchandler

Let me and just let take piece. on piece elaborate the Jeff I'll second the first

it you're didn't out but call ballpark. in second QX, specifically The for piece, the we

Jeff Lawson

Thanks Khozema.

or engaged us you light that right Heather, we're it the who digital of going where part question, company done a kind to is thing more And in Twilio mean, in industry of at companies slated of on the is is what see quarters many many I transformation. for for, transformation years your were one think are even going becoming they're I is got they're weeks. shapes for businesses takes of relevant in oftentimes based type So that of it projects day COVID. that these I first in But think for or their now, undertake, clear the to that on in that

this as digital be And great a so going is acceleration. seen to

for they agility, video messaging, Facebook agile, address continues one biggest changing this have conditions. answer many, ability to Twilio And and digital channels, and need three they we engagement, companies face-to-face engagement, the is they things to to workloads, of changing the chat plans. it's as the Yes, how ways, digital offer things need accelerating going as Messenger, WhatsApp circumstances the in channels, provides the that quickly ability build to many That's to of Twilio evolve. then, on build like obviously all organizations to need the in what so engagement voice the QX are digital they or or build as to that's that costs digital as whether person in or need their be to we've these iteratively moved, workloads nature all or or digital was for the to that moment, and we so companies built

offer thing scale. we And the cloud is third

Now, And requirements of to scale where this to up isn't you And we build your the but true racking something you plan months you to pretty it. deploy also geographically the to that's can planning data peak, the need you your need are to instantly. and moment for capacity work cost centre around. it much spend, need scale,

it's all-in-all, Twilio every built that as needed, this. mind that for the is is these them and whether so, whether, so Twilio And to are of agility, top the well brings for and engagement, And regardless type case used of things of was scale, right digital table the that cloud now. company

are to be like occurring companies the that ways. making investments many right are the in believe in I our And persist are now, durable, going are that going society to changes

think I start for telehealth And things lot that normalized delivery over. become are stay will that is COVID these visits after getting going doctors' or now pickup curbside to normal. think are or even a that like to I example, many as many food visits more of right ecommerce more

is of many will going our think it distancing change and social so behaviors address can and to the permanently help now changing right that is And we companies I on is those behaviors, those opportunities.

Operator

from Zukin RBC comes Capital. Your from next question Alex

line open. Your is

Alex Zukin

maybe acceleration way me, a like like new call used Flex Jeff, for a if called entry customer case number mini out growth signups verticals, categories. of vectors Two this George new from step we channels and first what new of you on sounds back, more bunch into attaching

and most growth which about? to you So is you or I sector the ask to enthusiastic biggest incremental want where you most organizationally either just exciting is focus

Jeff Lawson

the First employees communities. our our and and actually the our and health been customers our business foremost, safety has for focus and of

number serve want for this crisis? our arising. customers? our through just I to a We is, two And new so number think we the of through through, And emerge verticals is do emphasize stronger to how whether as areas this one see help it priority Then that address, priority are that customers number to been us that's we do crisis. how really we

first was in announce was long that it had But in week worked support planned COVID. of HIPAA time a that announced because period. ability actually coincidence we to DDAs really that in we wasn't the been sign a planned it that So, and and February, to fortuitous and the that

the so obviously, that of rapid oriented in this time. serve the rise used for And us timing a to very during medical could number was good see we cases

But, serve see right opportunities as to and it I you do to now. opportunities to are that as cases as serve to organizations and employing their their businesses really continue they for lot because used during we George And And six this our I reconfigure pressure as people their outlined customers Twilio. order see are time. a the customers, their of before, driving opportunities it immense see in right, under

is, And good so to us those both for their that a is good opportunity cases time. customers way to used and customers also ensuring business serve serve our success our six in during it's this

at people home saw continue was up very reconfigure lot But automation. about customers having in core to as where George time as cloud scale reinvent you the I to open plans of to saw as really, many think learning, of about think channels email which and far messaging, the as about move those organizations examples about into everybody's the our and as their work the into bit have to times with to Flex these invest contact from so, they're obviously healthcare, And I while some is in as far distance that a order those talked a to which to of ways think contact the centers accelerate organizations their having far same up of in to so their allow quarter Flex scale some unprecedented as software, their new to center just working. that up, during and stood in companies voice, and wins products we well engage the need

customers. run we're to And able those things so all to

Alex Zukin

any that if headwinds of Got versus should be How follow of about facing customers Khozema, kind versus the it. if then, there's think exposure tailwinds? seasonality books then some that new think that overall think And about are next for for then, advance seeing maybe to around a up percentages industries may revenue some we in kind meaning that and and versus exposure just can backdrop, anything that, we apologies level industries the provide? for half, we for the existing multi-multi quarter existing, DB&E questions. bookings And you of second the from trajectory, part about way in high new

Khozema Shipchandler

mean, start diversified across okay. guess Alex. industries. we're would well That's that Thanks, I I I by saying think that very I

in business you model that's And have like so of creates that the a And saw performance QX. that helps think us to that. what kind that's I

it revenue of a think the just of actually of out in have as less not that terms and overall remarks earlier In on They're hospitality, others. our relates some than basis, travel in last revenue impacted to the which several share our industries, excluding I quarters, specifically we email. and XX% more that's QX, impacted ride over called been significantly than

in offset in pretty have about came terms the some if in downside at that the And then feel retail, of newer that of those used and even we healthcare, cases those on, some exposure diversity that, you also .org as we So education, good business. we of look some noted, our areas. typically of the I in in impacted think the saw

pretty I good. think feel generally we so And

at continued, add, mean, I then I largely would And trend that finally, just I into is guess QX, to-date. least

feel providing think and really was I in our we'll to which about you're there. we like that stay We're in like diversity the is what and the able DB&E at in stuff historically. DB&E, terms business drive that's overall what of great guidance Again, of and practice not terms any DB&E on focused seasonality terms that. In of not been getting

Operator

question Richard next Valera Your come from will from Needham.

open. is line Your

Unidentified Analyst

remarks And Hi, question. is Rich. on for results taking Thanks quarter. [indiscernible] for our in the This guys. [indiscernible] I'll strong echo the

play what maybe like and perspective, from a maybe a in grew wondering dynamics specifically looking where specifically geographic looks are faster SendGrid. or international out quarter email the at at calling in So the reversal recent it really than domestic trend product breakdown,

If you could provide any color there would be much appreciated.

Khozema Shipchandler

it don't have about prior is to in say trend ballpark into would just read to or can would periods, I particular pieces, Khozema, there to XXX the be. wouldn't we it much moving Honestly, the it's what I Yes. mean, it way it. was there, drive think relative one off I too This and expected was I of, of other. any our relative lots of any that categories bps

we and areas good I education back some U.S. of we our thing healthcare of read that. highlighted, fact is wouldn't particularly beyond growth much and just on in that geographic a saw think businesses into the the that I mix the strong

Operator

Your from Sandler. from next come Bracelin will Piper question Brent

Your open. is line

Brent Bracelin

laid paying encouraging the diversity spades out this to see really and the Jeff, diversification quarter. IPO here vision in at the off strategy

would a you acceleration in given you up Khozema. no. have consider If i.e., your XXXX, seeing COVID one induced if customer kind large Would accelerating Why you'd asked not me question Comcast, for quick in said, and we're there via build again, probably I follow or operator of the digital My for then strategy? this a is opportunity. by why

Jeff Lawson

and the both and well and of are of Brent. we company business the mean, product time. I terms in core build buying this yes, processes a Yes, think accelerating period the think thing we're Yes. long-term the and lot as in scaling as that together it's distribution, continue as see. invest versus to see I in building do, the business to can celebrating make because by we the a I of systems we Thank can long of we're order you, tools for investments right continuing and to our everything you build means

going of about but the but able can point opportunities, customers balance but we that to with all both and be as going we in inorganic, and And may long-term kinds invest so the sheet an now, as think are we're this, organic a to new build, and be we And customer or also environment, and we to the the even that also be many position participate of essentially entry we that you to to be going invest can emerge new We as years are XX opportunity from products need on in, from stronger. this that to what's our to current new some this for able see COVID for have. emerge. that pandemic investment more right see X, pandemic relationships, point now long-term, markets a

Brent Bracelin

got WhatsApp And X% then Khozema, the revenue looked this just was if in right, I like quarter. it of

the plus up $XXX I that's from rate. X% was million at -- think higher year-over-year that WhatsApp would year run prior it in put up materially

video I used and guess cases at some question So be my that WhatsApp this is, what Thanks. the outperformance driving certainly the helpful the there, WhatsApp? what's at are drove quarter. right would color that? happening What drove Any on strength there if is number, new

Khozema Shipchandler

Yes.

one terms out in And case that's number predominantly you was we what cited, earlier of It's just our it X% remarks. account So that the called of verification. in revenue. used around

again, sound you that day. to it, day. get back numbers a a I And have but cited. strong terms specifics. work with we we that maintained to company. single as you company. to with directionally I me, some of obviously specific They get to said, hard hard We relationship But have work relationship think, the just back right have every We I'd good it every in at of at I on that

we going we global opportunistic a I time have Just be our obviously, a particular, one a strength. buy in mentioned, other $X.X puts around spot a could we've sheet, it, a balance remarks this, for in never billion us Jeff raised but the on would lot to got be which thing pretty strong on We part anticipated opportunistic us that side did and leaves when I in like optionality forward. pandemic add bill-buy, money we Jeff's think of position of that to have in

Operator

Rishi your today final be D.A. Jaluria will for from from And question Davidson.

Your line is open.

Phil Rigby

what you about This is political on how Can for there sense Just in to Rishi. seeing the environment? get taking for Phil to tracking expectations. related a to talk is spend your Rigby trying activity impacts relative Thanks of actually question. you're this just

Jeff Lawson

messaging level, I especially high the to be United effective pretty think likely anticipated medium politics, in for in a with voters. I'll proving the candidates is States, engage to as give

predictions XXXX this participants. be So, expected I out well business. as elevated political not XXXX year. spend, will our XXXX, We're that year category think we breaking would was say it's But, like of around quite any in a it I out by and of the playing

Operator

the are the There closing I to no for turn questions. call back presenters remarks. will further over

Andrew Zilli

the Thanks right. to are hope And All with look up over staying so. we quarter you and safe you everybody today. next for all and forward catching or joining healthy

Operator

Thank conference call. This conclude you today's everyone. will

may disconnect. You now

Twilio (TWLO) 6 May 202020 Q1 Earnings call transcript