TWLO - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to Twilio's Third Quarter 2020 Earnings Conference Call. My name is Rob, 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 and Treasury. Mr. begin. may you Zilli,

Andrew Zilli

everyone. quarter you XXXX afternoon, for joining Twilio's third earnings And Good for thank us Thanks. conference call.

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

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

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

should included affect Form on and discussion our of XX-Q. of our subject are could considered on business our that be fashion. risks, our filings, and Segment could of may factors and and contain incorporate In Should and segment or and financial during to from in financial our those the are by condition, customers some timely subsequent projections reports or close Additionally, business, of our description forward-looking reference. differ any by and And discussion in including the assumptions plans materialize benefits ability acquisition Form the results today's which incorrect, these actual SEC statements, our implied responses should our subject our the statements a materially impacts uncertainties prove from to be or results to this acquisition, around to and assumptions. most pandemic remarks expected assumptions XX-K, these recent information A forward-looking report financial results financial acquisition, including of to close other impact our expectations uncertainties operations risks, to that and and the partners of particular, and is our the risks change. these on timing COVID-XX

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

Jeff Lawson

everyone Thanks, Zilli, to earnings and call. this quarter's welcome,

this earnings, to especially in want our plan, to States briefly heard. make of all vote, time, your United time the on in please seriously. we to dialogue the matter. needs at find it hope elements social that our listening, to it that of we about. policy other At who said, has here some At last At a issues impact, say to the the are issues call, Twilio, may have the a Lives turning Black continue Matter. be to these from Twilio or I Before encourage I've earnings I Black to way, to show societal I care discuss some advance Lives voice justice, calls because that take it, will issues and And referenced top fact want we still the and

times. quarter Now, could prouder what during outstanding of accomplished I the delivered trying be not We we've another these earnings. on of results.

is software to a digital testament cloud businesses, value agility offers platform proposition engagement, success Our the Twilio's scale. and that

of Throughout and Our going we and We're help continue the products new Delta solve we know vision SINGAL, customers announced our builder leading where our to our the platform. embracing from Twilio partners recent developers over customers we platform workforce this are the in challenges, management, transformation ever leading to XX our virtual by CRM. about take to Twilio's the registered customers, of on a Salesforce, and all to including during evident customers want contact of first accelerate they to was enabling complex to and and initiatives. customer SIGNAL there. to access to enterprises goal the to ways are they their developer platform, Flex was do build most using ecosystem, of their to Twilio demand breed more innovations great Calabrio, to people which on had contact thousands tens that digital they've engagement for the achieve But our of than to engage products, Zendesk, for continuing today's to digital and Google, their Ernst their new customer run ensure with conference investing SIGNAL, our needs customer grown digital solutions solutions build workloads continue we world is matter has video several down we as hands announced excitement in Nike, use meet mentality they as conference, Video to channels. execute our developers and such from team of create how out Flex And projects. to to like internal as looking Twilio months to many world's developed love, largest Young best platform solutions We in get center people. We Usage want to possible. Twilio's engagement our to in as Airlines, while validated and The center a heard skyrocketed, built success. the and the

use consumers, that Twilio a of that's Go. employees private announced safe, WebRTC and in to peer Twilio way direct a secure customer Twilio facing is a for between compliance. provides connection peer and Frontline called messaging-based Video mobile version free a cases So Video we app

connectivity more a to lower customer As Microvisor, runs types far secure IoT. and eliminates the connected non-desk device WiFi sales, can help time a the costs complete satisfaction the outnumber of manage different workers creates platform including cellular Microvisor announced frontline and And workers, and device that complexity desk on Twilio [indiscernible]. networks, higher for we through efficient operations. greater of of to building the intelligence course one with connect drive

design data the Segment, and to need from of record, leading customer and acquire system the service intent to Segment marketing, empowering every engagement. with leaders means customer that every an customer business every build our touchpoint and customer step announced data relevant, to platform. recently enables engagement is sales insights Segment and across developers unify to engagement data platform. also We they help building will we The driven channel customer and be able leading personalized, more make impactful. our vision combination and customer This their towards any important world's of timely Twilio, the of companies

the is of company's and our strategy to been on all California, company, the their excited to on who our inclusive able for thanks the Twilio’s and are thank who a and event. and excited stations, Which scaling great hand vision is initiatives fighting fires such to a time in those for working has guiding who continue get week. employees, remember and over Chief Diversity, workforce. for to who SIGNAL to I'll virtual she the rest be be us. wouldn't across also execute also will results, Lybra never out you, and that, first dedication our bring Diversity poll and Lybra in welcome inclusion Twilio’s embrace I'm without to workforce election and every Inclusion strong to team these diversity to special George. delivering doing I where please Clemons, for fight over employees of frontlines, want Belonging the everything those the Thank We continued customers With There those delivering just vote. a pandemic, culture will are of I'm the to why important us. day. for this for to responsible C-suite global a And of those an thank the I it lead for want and the outstanding Head this again Officer. more you're to

George Hu

in quarter team of great Thanks, delivered QX. Jeff. results The another

And growing as SIGNAL. presence, ecosystem expanding I'm impressed result. our companies who amazing Twilio’s drive experience our growing customer our our created for team, to and great on engagement focus outcomes, enterprise opportunity Our expanding is virtual marketing extremely events and turn an internationally a to with as continues partner platform.

hosted all executives and from from network to we than and sessions, individual to customers the brought of prospects more XXX inspirational addition creator Twilio. summit, about In great together when learn we speakers our here

and attendees SMS. and conference on from brand super incorporating content our than experience more more We Video class of hours also built XX XXX than TV, team up, experience ground our had Flex, developer the and delivered SIGNAL including at XX our products, Twilio

it voice opportunity a to customer tools. COVID-XX product to of we the for been first quarter, use Deloitte need. also services, such as provide Twilio In on This SMS, helped of services, crisis Twilio technology coronavirus experience. help the radically Digital that Twilio’s step the and our always announced better as such address the that for global Twilio premier all critical top team Flex within conversations, Digital’s as Twilio that hard immediacy outcomes circumstances. dramatically well reinvent the innovative partner including patients contact and advance leverage new will Twilio in ability top as During set the fit for the work great the Twilio has their our of but program, sales our transform chat, tools an Deloitte APIs adapt workflow. journey healthcare suite, service magnitude and The most create where the expands be engagement clients at video, to industry many and of of joining these forward the to the This offer platform runtime and transform as to communications has marketing, solutions financial entire seamlessly and full crisis, highlighted have Twilio that the hit been Deloitte sizes institutions and products is partner to vision, SIP to built healthcare, the a as the integrator. our program reach the to deliver practice in been physician's and of will centers, customer has industries, make eligible, and systems expertise urgency, built significantly

New Look-Up Center, as Philips, just one They Health, texts relationship systems experience like viruses for regulated hospital But providers. waiting room Banner Verify better multiple highly And to are to solution, COVID-XX a room. Twilio, new Haven for Banner build exam The leading service Yale with replace to that to SMS, Banner beginning focused In entered health a these improving industry As response institutions in focus that test the a long deals their for this to so enabling customers. you off, After new across primary people systems the another eligible weeks. several country. paying signed area to across with quarter. physical had solutions power go focus the first can patient expanded healthcare were an with six the Health when the way the in With our Boston is straight couple is virtual and digital also of patient the view company capabilities them apps, notifications customer with healthcare services, COVID, the for as of lives Health tools and like largest financial investigating and voice put leading Twilio see cure into interact the people's We on API. of a technology and and these service Philips continuum. engagement have available, with back patient flu. today, can COVID other was the that using health healthcare on they not consistent the time this power we waiting Health. HIPAA hospital We help platform with them as the and Medical customers. across key connect our outcomes arrive selected can when this Twilio a relationship Twilio they vendors, room channels, Health space to profit text chatbots

from flooded home. calls enable tools hit developing effectively employees set With managers were the to with tasked work insurance of banks, consumer pandemic customers, while companies capabilities to from and their and a being richer wealth with and inbound safely

to any to at any with a look third of range create future, close in selected quarter we branches channels. via solutions and improve and the implementing providers channel. our as digital user COVID. that to were experience better for they're force in sales a for their to Fortune time new this with strategy, customers new that to They service bank customers a messaging provide a it XX forced customer power response digital on customer expanded saw integrating to omnichannel with on We and way Now, as was the looking They relationship better many conversion digital programmable engage Flex, demand. better lead engagement

Robinhood, a with a Flex of We new pioneer commission also signed deal free trading.

accelerated COVID, elements As adapt, for and is its Flex. their scale a to support of continuing demand as with platform customer of power the has result Robinhood

have we financial used by base customer a discussed, more just is than platform healthcare or we companies As and broad very our across services.

agents from Some U.S. other employees with to pass SMS. is a an with using the to our effort an to airline boarding via connected their guests assessment expanded to great passenger relationship direct on testing the Alaska programmable allow based customer's response a We include relationship in reduce Airlines, technology-enabled Alaska in fifth deals to leader and In reservation global SMS new COVID, the Prometric, system send between interaction entered quarter traffic. largest solutions.

interface with a management application, test as an proctoring of new a agents, consumer international With well to Flex are Prometric our team for Twilio investments video remote COVID, in test as on strategy digital our as paying agents user technology as off. driving between security of for ecosystem and behaviors, readiness our takers. service need Overall, enterprise go-to-market, proctors, execute our acceleration and the the their as result as partner the continues increasing selected expansion

hand excited the next the are to to I'll year, massive and we're years. And of We over in close as well-positioned opportunity about several we ahead with extremely Khozema. us the look out that, it

Khozema Shipchandler

George, $XXX expansion Revenue business. year-over-year million, see XX% Total continued the afternoon, for as grew everyone. Thank you, QX and to strength net based across we broad was dollar-based and to XXX% good

third saw political to As contributed quarter traffic in traffic or X% we likely $XX we approximately to and closer million as political up, the the to revenue. that get election, is pick

in last Starting approximately XX% down quarter, year. traffic revenue, revenue last XX% to of revenue XXXX, XX contributed no quarter of QX, we revenue in top political compared XX%. X% from to in last our and from XXXX. XXXX, a XX% International Excluding customer represented accounts of to grew Revenue percentage total X% XX% was longer and active breakout XX% revenue. revenue, WhatsApp XX% QX, quarter. in as will QX, last WhatsApp compared

WhatsApp. We with continue to have a relationship great

our approximately is contributed businesses the Verizon's scaled, $XX discussed fees the as at diversification single Day, with Investor a less However, disclosing revenue. million our contribution meaningful. we coupled AXP from strong revenue customer to

that breaking of lap we fee provide this when XXXX, does direct expect we dollars. reminder, out fees. to to a we from pass experience in other do and information a to Verizon As is fees I profit and that impact through stop not gross customers did this want if implementation carriers, the as If relevant. we note to the expect

was by margin gross XX% and non-GAAP fees. negatively points quarter, was Third basis approximately XXX impacted AXP from

to it continued As growth. euro, Gross in XXX relative of foreign million dollar. forecasted, $X be impacted as Analyst gross is Day, the messaging we discussed To short-term, the than reaccelerating, which from was we margins trend reiterate, Non-GAAP adds appreciating profit our gladly and exchange, been hiring product as can growth at has that by recall revenue the basis profit points driven our the by that negatively take from we primarily recent elevated dollars, trade-off operating about margin a impacted QX. in would timing continue quarter. that forecasted U.S. reinvest, from in the approximately you'll a levels of will gross originally the this within higher of came delivering to than also negatively stronger

catch-up third forecasted. were While quarter, some plans our the the we meant able that we the the recognize we expenses fully hiring to of on hires timing didn't of in had

today Please of guidance. our that acquisition not of impact does note the Segment. guidance Moving include to announced our

quarter in fourth close the top and do We bottom and a during impact we expect the quarter. to line modest expect the acquisition

million, year-over-year on revenue operating the such, we expect basis, million. quarter standalone to AXP fees to expect of million and we $XXX XX%, of QX $XXX million a including to As loss for growth of $XX range XX% in $XX fourth a

our velocity. guidance While of guidance, you on topic on like to update the I'd

guidance not our Day, pending years. on only provided provided business. XX% that was annual medium-term guidance plan This Going for revenue on At for the forward, quarterly based existing our our growth forecast incorporate four recent organic the medium-term of guidance expect Segment. we does acquisition guidance. Also, we providing next we Twilio’s Investor

the business our stakeholders medium-term revenue and decisions managing guidance benefit for long-term, are all reflects this. We the making that

we anticipate year. we certain we with continue As enhance engagement intend making originally XXXX, deal of plans there our investments QX into on provide incur platform. year Segment, to materialize, will at plan, we some further information will still expect the discussed Twilio’s costs to announcement investment the our acquire more not did recent had XXXX We're we Also, be closes, with finalizing losses plan drive Analyst our Day, Once this to forecasted operating call. our we due which to as will to our integration into customer next on COVID.

of Lastly, I webcasts. and website October well are Thank to announcement and our questions. and investors.twilio.com, the as you Investor safe. our Investor view visit acquiring healthy Relations missed as I Day line those at open the please you well Segment Twilio’s encourage held that to for for X, everyone you Operator, have on joining. may hope wish presentations

Operator

of question Meta And Stanley. Instructions]. the your first Marshall from from [Operator comes line Morgan

Your line open. is

Meta Marshall

sessions? just noting give Khozema surprising? Great. that any bounce worth questions some you and you most for it SIGNAL. as around? Or of That's just on were to saw me. verticals where in first what commentary then of Thanks. was or any most like color Maybe Could And kind key And question, hospitality? customer Thanks. attended back maybe travel the

Jeff Lawson

This you the Meta. Thank for question, is Jeff.

sessions for creator and the in as developers technical of SIGNAL for well So with the in both our summit. tracks broad the across based audience, think was the as executives for a terms board, I success the

into as problem we and technical about question as I communications allowing companies, cloud such to more key inside And based that the the strategic us and particular increasing narrower is with those of so sell our progressed engagement organizations. much built actually more broadly but the workflows. the things customer and And as executives. that remains started strategy bigger of a view broad think folks, also really building of to now the on opposed of our one the SIGNAL dialogue not engagement, positioning And

that's We're as Obviously, of And really fantastic. XXx enterprises. nature the that's leading prior of of and years. virtual of by it, so growth by lot by well the participation the SIGNAL, a the pleased attendance driven

this have Airlines about their we year Delta digital gone, have acceleration digital both of So those of the CEOs of Nike, and talking transformations COVID. transformations the because

And some of don't I are And SIGNAL. so, of you know, I think do something key if Khozema, have the that? those highlights about

Khozema Shipchandler

the was seen we pre-COVID return, around levels. some shoots. green impacted Meta, part think the industries, they're the and second as would more it traffic below characterize or the of in heavily question I hospitality and impacted have more I industries still but travel

Meta Marshall

Thanks, Great. guys.

Operator

from comes of question the line of next America. Your from Nikolay Bank Beliov

Your line is open.

Nikolay Beliov

customer them? philosophically, Hi, please. George. you this Adobe, you thinking do you. the at platform, topic, build for step my questions. guys if much what engagement and you this running Just compliment point question legacy thanks just It's wondering you George, start taking what coexist customer a out and Thank vendors? for your comprehensive At will, Salesforce, point so as engagement back around Oracle, into

George Hu

problem other great them of would the we're like, customers many with complimentary, say a We very don't in in of customers is the developers focus. customer different coming Yes, we I often, very and strong companies. compete which on working with And point very the we where communications them and it's see other we're with we're are really that, way. we sense obviously, not and we're our that see And mentioned because these complementary. question. don't are I a a them starting of really lot mean, And today you companies our out of engagement,

that we're way. say, view our overall, complementary I’ll and very So, customers it very,

for think So that's going well us. very I

Nikolay Beliov

on a around new the will them a now? as wins become Flex. wholesale versus Congratulations follow-up, think to way you George, right centers call legacy When And around Flex. do replace Flex complimenting

the complimenting existing center replacement. Some call of them sounds solutions wholesale versus like

George Hu

Yes.

a that think mature I the for it's multi-year us product. to journey

we use platform. us So, do companies do have the that contact as center end-to-end

have situations we’re We many complementary.

it enterprise view I normal just it's maturity. as software think I

over to workloads see about evolution to the And But to years think normal We're continue you're normal there. platform. on and time more going mature just that. on we be product recognize able So market several in over we're we're the just very and of the take nothing, evolution product. a now I I to time. think that the larger going And it's excited we're more and And the seeing evolution. larger

Nikolay Beliov

Thanks, so much.

Operator

Your of line next question Fargo. comes Wells from from Turrin the Michael

Your line is open.

Michael Turrin

afternoon. Good thanks. Great,

Day that think target the around the the last biggest I growth next many out the of organic years. revenue that the us was ambition over point around takeaway XX% of four Khozema for laid Investor from

what execute you're going in in software seeing able put back air to that you you in guys maybe you would are vision, you pace? confidence can to gives So your on that sustain verified ability as and an that, expand field the on you to that that admittedly today if multiyear the

George Hu

to this is environment, in new seeing consumers push channels We're We're greater George, the ever that this since seeing and Well, customers that digital be engage especially for new field in are able and acceleration. a modalities. ways asked there's to digital than people on realizing perspective. you

a And digital our was was conference accelerated major or I the on three years. they're with shows up research also acceleration talked that last about to that a where this transformation CIO panelists is CXO six just being that week all fact, by of acceleration. digital digital so, said seeing in other retailer And

part but way companies a this level, So, a to the not I new engage. just thing, that at every of think is temporal

the think is small that business in the its marketplace, enterprise. tremendous we there's going, that gives that world need in us to seeing the all this the the need market where a way in that shift and are up I confidence has a from so is macro every we're market, company the acceleration but it's that huge And a macro is need,

just have in size us have not level speaks which we this so also I that seeing we even reflected and that makes think conversations And creator sustain these that executives the to this just also really is and generational the for opportunity is a have that developers at Twilio way. are XXX to Twilio awesome growth, which believe realize fact now, this summit executives more number strategic in just here to that really the to and we we're of a field And the I of on they And starting with very an the at at message address product right that to but company market you more and that the our right think even numbers right plus platform, that for us time that is our them. this quarter. the to need. area see approach And the different think go approach right speaks that market a in

Michael Turrin

color. good It's

follow-up. quick a maybe Just

back dollar the XXX%. stepped metric up based expansion to net that On

impacts we've think talking SendGrid highest normalization, we've year. organic that's but the since more I mid-last all seen about been level

anything scale else to as sustain you Thank you add can levels allowing to move So what's those around even you. here. you greater

Khozema Shipchandler

is this Khozema here. Michael,

broad-based think, we're board across strength that there's is seeing I of the entirety the the across what business. just

that. one there's result so would a specific no I thing as And of that highlight

of based think we're will tailwinds super the are the that companies certainly normalize some to there of do we're happened a on and times. a I lot think just as think that are fade digitally we but quarter. we're few And described that over we out happy happy transform XXX%. And seeing with really George that pointed things I about the what time, in and continuing

Michael Turrin

appreciate results. Excellent it. Thanks. I

Khozema Shipchandler

Thanks.

Operator

Blair. the of from William question Matt from next Your comes Stotler line

Your line is open.

Matt Stotler

guess take questions. launch business how this about start see terms opportunity to it And cases IoT business in for you think Hey, IoT. with How that contributor significant do you kind do interesting for for over especially be Obviously, on think of to Twilio's you? time just you there? you thanks become my how very a overall will long of taking to for of Microvisor. a significant do use And today? the could what I here, guys the business more

Jeff Lawson

Thanks, is Matt. this Jeff. will I take,

market is about. excited we're very the IoT So

I a is say the in of years, of field a next think grow last a which to to that of And XX market this Twilio decade That almost is part gone its IoT investments and smaller it's we're a five more. infancy. capture or all on our the that is we going the said, of that's the talk over investing than is smaller smarter thing are customer our investments time. great business what unfolds, that feel it's we allows business, is to to still blocks mainstream developer you and it, hands can there, and say the over us And them about the the challenges developers to applicable see you as the a building make way wait build. at can't unsolved market put But developers show where look platform that big the I engagement. at of having you most broadest start the in

in the to innovation. encourages with and we that platform product, invest code able updatable, those that were to when that actually understand devices developers make that technology, secure, deploy had And and to example, Microvisor. that chip big another connectivity, because et code allowed in packaged you we actually And itself, for unsolved cetera. the up leverage IoT, complex us how oriented for economics with and how that use easy to developers an taking very led IoT on in skill started So that then inspectable, to you relationships we and based telco that on was for us problem

fields is be base a people like whatever. areas or there'll it's innovation a the will bet their growth, of hundreds maybe thermostat their years sensors a when start run the day broad that IoT in crops really market the cities. long one infancy. it think of or roadmap detractors types I about come. of smart in And of or cases be and IoT in innovation of that so we're day at there the investing amount their tremendous about are places we and a very just a billions And are home is think where actually Those see see where making grown, they out of that the on their millions, we you And to to watch just are and think lot the and in big not IoT subsidies where basis, or connecting necessarily there use

we is of about better things bit One quite internally of is cities, direct efficient. resources one order in of the fields in on society about more and many our can the and drivers what's make we our things how our information going it's that better to framing IoT the or with economy one cities actually drivers energy better, IoT, connectedness, whether save of like and in talked a in or And to the our of the environment. in

of that like lot market things technology drivers solutions as the of a the there's So chips drivers innovations the are such now we and and that are to that, IoT smarter XG, coming bring more. believe the arising well Twilio that over that as are narrowband, coming the decade as

Matt Stotler

it. very interesting. It's Yes. Got

just and down they dollar what in at The least I quarter up be that will political contribute of base terms is expansion think there's the guidance you've in the that for And one QX? then impact or net thoughts stable color on to the helpful? that cases Maybe the any embedded had any more to helpful, on political use just revenue. and for how around Khozema. contributions

Khozema Shipchandler

modest of Yes. I would impact. QX It's it's the terms in say same range. the pretty kind of in

bit Not contribution dollar expansion, again, like million bit. Investor out expect Today, elevation on our modest. I to of increase a that's of range, it a If impact and a we X%. it don't the a But, you a so hugely little obviously pretty elections expect recall more impact we it's little to we to significant Day, around the transpire will we week think called be X% lot that. after back it it a away, think it'll but about I would kind this call

Matt Stotler

Alright. Understood. again. Thanks

Khozema Shipchandler

Matt. Thanks,

Operator

Cowen Your from next Wood the and Company. line Derrick from of comes question

Your is line open.

Derrick Wood

frontlines, questions. on customer quarter. ask further my to interesting Great. for engagement Two to certainly a transform congrats I wanted be and seems Thanks good an taking initiatives. help to and question opportunity question, first very

exist doesn't marketing First, fair you where over this really to the even two market. do like come already you've or an in then customer line? one customers? like curious years, Thanks. I'm it's whether budgets considering could think application especially or look a this got this, operational other to seems interesting that think, service, And opportunity you on revenue as where Greenfield the some are some driver, a you second, likely from next become referenceable

Jeff Lawson

Jeff. Thanks, Derrick. This is

really a So, first see workload. emerging as this of all, we

the it result about need five years not frontline these and of think just but frontline you number ago of changed workers just the the quantity COVID and role the changed, have If of result growing, a saw the as of engaging for is maybe a the role these they of role customers, lot with play essentially some companies. as digitization role for is This of the workers directly industries. of a being new

investing we're an this emerging is in. think that And workload so I

that and are through of types are technicians, of end ability employees, different delivery frontline these top being platform because with we we're us. allows it, of those And workers, of So communicators having retail they businesses. so logic our their in all see more to of success them of able engagements omnichannel these workloads be whether build the drivers, we whether because to see get find use great them to customers use themselves service it hands instead workers they go a fighting, are to in excited customers, the you a when working to and agents something organically quickly they them build of they already field of whether these can types using allow cases and frontlines by on take for great talk to lot

And question? -- so, was I your the think second part what of

George Hu

second the come where think budget I from. would the

would of I where with we're contribution. the in discussion that, And think still terms say revenue beta. in I frontline just in

in of point over it'll kind bleed would revenues time. not expect would a And time, our we at so Obviously, the contribute commenting contribution on products, really time. revenue, this revenue over but beta like to it lot that into we're of our to

Derrick Wood

Got it.

follow-up maybe Khozema. Okay,

maybe can't lower there about seasonal into seen X% may Regarding generate year Or of keeping could something And you've you And going guidance, if sequentially. this just historically years? that that how into speak good is pipeline about degree strength versus a aware QX. much I past that's conservatism? to mostly than of it's QX? be you to think flat up Is just to feel QX

Khozema Shipchandler

really Yes. what is QX, the kind feel this like are so. I continue about we across we and here diversified obviously obviously the next a what macro mean, to week business facing point. election questions see turned And and strength environment. I at think in broad we we Derrick, There's of an good we persistent in based feel or

environment I just to we're little So strength, that in being so but certainly bit we continue uncertain macro prudent. think is QX, see a and

I And certainly guidance medium-term, we our remain X you'll growth. the investor then, next the as published strong our in four note, XX% shows the optimistic performance the as We guidance over near-term. continued think at about provided day cautiously of years. in

the remain prospects both medium-terms. our So and Thanks. in we growth near certainly confident in

Derrick Wood

congrats. and Thanks

Khozema Shipchandler

Thanks, Derrick.

Operator

Your the next question KeyBanc. of from comes Kurtz from line Alex

open. is line Your

Alex Kurtz

be are here? of or And bets Yes, the thanks. you at there and the is being the or think on When what fiscal rating year? taking any are year, the whether year where this big layering end made? you're just product congrats to next the run versus there Thanks making on you changes something Flex, hypervisor through, versus investments quarter. year the you're question, maybe for that changes the next Any Is it's about for telemedicine? going

Khozema Shipchandler

start we that We've Yes, not little at would year, than the originally and commented the she really. bit as steady those year, kind make commented Alex, throughout to were going say we goes. make bit a out. how of a been on of harder investments I we've to it's more it's the set

has And that advantage called basics Flex systems of that's think We make excellence India, recent we're up some talked there. are And so we example, We to investments traction kind of that building this called and that center important scaling the we off we trying of to do and about the just they're those wanted the good go we we set at point, if business market. a then, great We and medium-term. refresher, things, opened enterprise take to and number of a those make investing to Investor previously, to nicely in We've start, in to R&D the investments think, for just ourselves going the a then continue just in a in that in think, particular, up during set we're us. the for about of we that of again, feel to Day. growth to can out seen, international. kind as George and the scale. company. continuing And our processes up And I we're

Alex Kurtz

you. Thank

Khozema Shipchandler

Thanks, Alex.

Operator

next of line Rishi Jaluria comes from from Your a question Davidson Company. D.A. and

is open. line Your

Rishi Jaluria

gave my of going Hey, taking you to some that geographies And Maybe want little thanks us any Analyst seeing, you're And out for strong alongside the you at so continued the there's we're in much I international of nice execution. us just if the where you're just particular I see particular recall strength color bit back guys, Day. a give help mean, to into little wanted go a questions. in. calling deeper to can a, business. side terms that, seeing bit

should thinking wise? the we customers of you internationally, traffic both be you're gross continue the margin to investments Thanks. grow internationally, about making and how as trajectory getting Just expansion, and

George Hu

It's George.

is areas I in America. do if both think America there globally. the as it Americas, would particular as that growth strengths, that, well be seeing think any North balanced the we're Latin I story some were overall

more We say are the overall, would we're for balanced But seeing it strength seeing a growth. there. Khozema bit turn to over margins. probably little I I'll question around

Khozema Shipchandler

guidance we're on change Day. example. we provided at there messaging out a with really the growing margins, very from talked of dynamics for And the our terms the about the of short-term, business, lot opportunity In of focused profits. Investor in we gross accelerating we and that no Rishi, see some

terms We no range, margins experience, great and in complicated do are onboarding and that anticipate to reps our selling example. continue continue of above see we Flex XX% going in paybacks for to real that to our there. creep of time change But and we over philosophy terms gross want enterprise

Rishi Jaluria

Thank great. All you. right,

Khozema Shipchandler

Rishi. Thanks,

Operator

next question the comes from from & Ittai Co. of Your Kidron line Oppenheimer

Your open. line is

Ittai Kidron

Guys, Thanks. Khozema congrats for questions OpEx Couple of first It's for clearly. me, great you on the quarter. Ittai.

more that changing internally short doesn't for hire next to of lot seem hire makes to move will you working, enable It You're be of falling difficult lot. a you seems quarters a sense little a that than What's to planned. kind of a few plans though, trying a in to lot. It a do you for It as into like, you year? row.

that? to And So going a change follow-up. what's have I

Khozema Shipchandler

Yes.

I there's a there, Ittai. dynamics think couple

that, the as of of revenue, So some that increased result is, is just first the through thing is profit right. a dropped

dynamic So there's a there. little a bit of

we able I it was in last in our second up is, that QX, think the catch is quarter to couple first quarters that thing were hiring. probably the the

of in right, talent a team. in just of some appropriately certainly difficulty our staffed we QX, bit acquisition and of you're did now, terms terms So QX have we've I COVID little dynamics. think But

to to we'll think in I that a on being And or those investments that now think position we to be year a investments And over I and the make pace the able we'll so. and like lot shape so great of in hiring. next be be would

Ittai Kidron

deals are there? odds George, we That's the that great. Can bit Deloitte And Deloitte any And in is Digital us showing? more Twilio make give about has you How there on going the to is to go? long here? What do how exclusivity color on Deloitte start the then the a a investment deal. other committed how order results out to Digital see And you, think follow-up we ramp on for each? little drive before

George Hu

acceleration that we both it of really enterprise Thanks. That's overall, aligning And been broader excited in We our that making that broader as just great progress to partnership. digital we're platform think also the And Digital this with we've a story and talking about. partnership. well question. we're the story, Deloitte the very about kicked off the speaks to as

educated get to We're basically right certain in partnership. a the platform. number consultants on customers progress of them a are committing We're So jumpstart you the now up. know, we of Twilio trained. ramping right lighthouse them with They're couple also now, to getting

So program, that. partnership, after just not can focusing an ramping big the I what partnership. that to the for at going mutually it's and GSI how is an think systems we're be level. we but we especially do And to It's of expand these lighthouse customers we we successful. partnership, getting exclusive period the hopefully, integrator think obviously, of of up first And then exciting on vision this grow continue our together. And beginning have,

Ittai Kidron

Congrats, Good guys. luck. Excellent. good. Very

Operator

question of Scott next from the line RBC. from comes Your Wilson

open. is line Your

Alex Zukin

about directions? customer important next today? send level, kind bidirectional level how the question. are Thanks I What I'm going the the guys. is both follow-up. the my percentage Hey, first high new for If at level should that how I've three in both a messaging years? seeing existing about Alex And we at taking you think the the maybe for level. one over you terms And acceleration customer guess to I business the Zukin. because that think business at that you're got at quick This the messaging of in is a of messages

Khozema Shipchandler

out super direction don't of breakouts mean, to about is think terms Alex, that I terms of that the over have down I'll disclosures. of us go we're I you at that break we long-term. a level. to number we split is our bidirectional I in it that’s product say important the in planning Investor What Yes. and at Day, the think to

just your own we think the As feel it products again, infancy. about sending conversations is that's number that And that still based consumer And messaging in way its I the been I you adopted. relative know nature products particular and in guess still with on of great that the interactions of year, bidirectional one are we last most way. the launched have, businesses we the

over opportunity there's so And there think time. we

Alex Zukin

that you kind one, to going those business that maybe year, likely are there's to tailwinds that presuming picture well economy as you been your to a another what are quite the potentially be? big would us year. have executing those? it. If headwinds And What about about recover. continues of But driver? remind then into is think could we And which Got next you next headwinds if turn some obviously think this still how year, growth tailwinds should become

Khozema Shipchandler

business. way over guided, I terms four basically that Yes. like we mean, or years continue the we over have that XX% the the feel that broad-based revenue what pretty think can the across I said we've that or growth think of entirety and of I so the last is strength we And year seen annually. been revenue we there's in next consistent so delivering

when we dynamic think were say. COVID, than And, that. and exactly the Now, calling we that I is into it's there this back the industries that bounce in And heavily lower some expect we obviously, as industries traffic went not like now is pre-COVID hospitality. volumes rideshare, kind negative the on of side was some did one to as in see sort would of those we're we about like in travel impacted that hard talked so still earlier call,

that that all. think the The those healthcare going other don't seen, is resilient. we education, be of just going example, I but ephemeral also cases e-commerce, pretty are in acceleration thing some would be use out, and for though, that, they're to point to at we've I think

a see In we opportunity fact, in lot more think I some industries. those of

the over going I think ongoing medium-term so tailwind that's And to well. provide as

Alex Zukin

going the could down? subscription? write gotten that of the I if more is roughly deferred to question, And is is sneak about continuously just one Segment. usage impact Khozema, stream A percentage revenue how I've there it. what Got based and versus

Khozema Shipchandler

Yes. a more you able once impacts in information I And Segment position provide give not we're disclose financial closed But, not financials We're our on we'll information we accounting lot transaction close, and right yet. the QX today. not think be to Alex, to to going just results, we're we as get there. provide now. a

Alex Zukin

guys. enough. you, Fair Congrats again. Thank

Khozema Shipchandler

Thanks, Alex.

Operator

Bracelin the Sandler. Piper question comes next from line of Your Brent from

open. is Your line

Brent Bracelin

segment. you around here keynote more I'll a start share set see Good you that the I guess you. I feedback Thank even with way partner your detail on could from Jeff, I guess, the week week came and at Peter's a provide lot CDP opportunity question so? in my you. the customer any of last maybe financial can't impressed Segment's perspective last event out or afternoon. know did But I here. with

Jeff Lawson

of so Well, customers their what in really can them going a about think are started I that's accelerate what with we you or end. terms visions. it's far we've together. lot only and think platform partners engagement roadmap really an And excitement, to a to do be from it, SendGrid's customers what if for but take customer to communications, of end. or think lot a we Segment's to I But single Because we're of heard that able can end is because that's means looking not

data the engaging BXC in your understanding with really companies really starts piece companies, essentially with done with about all it what those that's and for customer. the BXC of data. all different For is your customer. customer the picture for And residing you And those systems, all know

you once communication. a are And well, them can really to that's assemble you so, able then complete your And effectively. picture customer, engage of with

more of build the them customer, and those them the single power and actual communications customer with can relevant, that data, loyal actually end-to-end them, understanding together, that with touching that's customers, So by customers. that's timely we engagement, our together bringing platform customer make happier Segment, goal, getting impactful that's engaging the

customers that we in platform the why told reflective customer generally the of find gist have the we're act. it how that’s us, problem a engagement and of so want building way solved, And they is that's speaking, we what that that and

Brent Bracelin

and with two I era. in of color. George, that It acceleration post-COVID Is the deal hoping about sense, seen talk customer enterprise journey. I it a was helpful you just quarters fold guess makes evolving? discussions we have this that accelerating? landing how fold expands Are are Flex now the changing, you But much journey quarters broader. us is and you. you Are walk customer behind two enterprise that through the messaging? Just have

George Hu

starting and continue phenomenon, of in dynamics I think stayed for which us while is a similar, fantastic messaging that being And developers, we will long a more really some certainly actually a for which a is I of are have similar, time. within product for been a think recent that's for happening an that now, we've the acceleration to as is digital couple of that been point. stay the digital Well, this transformation pandemic landing by in continuously account brought quarters

very, And alone I per is a adoption speed There previous attended expected use if point me the what been while would understand section. by the not far starting changed I the session. really And IoT SIGNAL to then, that on really the Video. to great messaging that as half what reflects, acceleration that had more most We really attendance. attendees almost some would was session breakout have have attendees voice. roughly interesting messaging are even had many, question of think, of in globally. easy and like there has more would exploration, example channels, cases. was So the But, of fantastic be is A new complex

year parlay two to now had strength we're was able not broader conversation. And you ago. certainly that speaking. that the strength, SIGNAL messaging from landing from a CEOs and So, case we that in saw fantastic That at much Delta into Nike

platform, well here, level the of a presence our and happening confluence in So, that and as I think of these both have our be we've expand things to the to able place to digital our acceleration right a at the the and lot now be right our discussions on of this investment that for made time team there's technology in this, company. both go-to-market our capability as capture to to well within as need as

with or cases So what of of use becomes coming starts out center becomes that. of sorts program that other are method or voice all eventually messaging interesting contact

I to really, think which announcement, Segment's us, exciting that led think laid the just in falls I we've right the time one and made, of a investments really I strategy line that the that validates So, for it's out. we've with think yes, a lot and also

Brent Bracelin

had. Thank Thank you. That’s all you. I Awesome.

Operator

Morgan. Your comes from the Murphy question JP Mark line from next of

open. is line Your

Mark Murphy

voice the how Yes, voice to the future very thank us I Jeff, to channel It pretty channel. messaging relative you But had told going of voice thinking about integral interested Flex. the believe much. to like investing in you messaging, be you're messaging? shift feels in on XX%. kind just seeing you has if younger settled the that XX% more has to of around aggressively into and exploded much messaging in have you revenue are to investments margin of gravitating reasons are toward generations about And that is more

Jeff Lawson

I different just the the between think drivers different. are channels

them It's messaging, think actually times messaging with you how you've relatively like but conversation growing. to had If about still engaging this. actually many about, a it's small, think

a it like you a text few was just got when your ago, flight fact, was your novel. or arriving that In or message and years whatever, food like business, from novel boarding is you just a was telling

as look that old use And very been did, XXX their of actually changing. And years messaging seeing is voice use year messaging in I is use a use no how use long are there's well it how we But works Whereas as to the so But is less and how do it has different is of how technology ago. way the voice, businesses. a for deploying number people time, think that obviously, around how we and the XX than cases, changing help that’s people like say, grow technology. around we growth nature a voice different. people

very to workflows desktop your being as by into as our here's like the standalone, nature, so virtualization global the into its voice well And as the many we phone. that it cloud, moving embedding just opposed it of and maybe have

workflows voice such well. in voice center many software the other different an those embedded where as or becoming it Now embedded contact workflows, as is is actually of in part

paid to first adoption of ways nature for or voice those be them. of give a calls build because understand channels of software. flexible to world cases companies tailored And workloads service the these how of ways drivers are potentially consider new to ink for the voice to our on considered drivers opportunities versus new sort causing that, messaging, so use to and inside And driving get the do like capture in the new there, think like cycles, they emerging we oftentimes use re-architect, patch. medium driving the is time different. sentiments more the is things and adopt what's to are of that what data, voice, them and I the just used to of our sales therefore an in transcribe tailor net which I'll of to you of being And voice able to of variety an capabilities callers are example

Mark Murphy

Great year into you unable follow-up. quick to would just Very to XXXX? Jeff. dollar of thankful. amount make flow think investments answer, Khozema, I systems have that a able were the you that this Are you approximate rough

Khozema Shipchandler

on We're going Yes. just Mark. not guidance to today, that provide

I of same will a of in investment. the say that out. there's that spelled the dynamic on gave I or if of we the guidance number of to you areas years. loss quarter-by-quarter a will, At give profit going terms kind beginning areas some it's the the several of next you we year, basis. over guidance, guidance think kind We're revenue of for the

a today. number to not just I'm So give going

Mark Murphy

Okay. Thank you.

Khozema Shipchandler

Thanks.

Operator

of Your next Power question from from William the line comes Baird.

open. is line Your

William Power

color a Okay. that out Great, questions couple video in existing of to I rate, in greater really migration that sure And of the looking driver? too. I versus into from the drivers sources engagement the key the thanks. anything how surprise increased to usage use call in kind upside dollar I second But outside, an whether of I'm answer history. else, of provide existing largest net just think products the perhaps at Khozema. Yes, customers? I'm guess Maybe for Any back SMS, of trying that products beat terms based. probably I mean, even was cloud QX, question, your then front on the partly much that. anything just And think is of expansion coming particular you broad of of dig you

Khozema Shipchandler

Well, good that's a question.

question, provided answer additional but the details. give in largely I'll a your maybe few You you

number performance a question. in revenue in what showed the percent that part saw that million terms political. and to of think today the you. then $XX X% we're Two And your So, what other Day things of kind of terms said we based bucks QX. closer of terms segments, you're of We saw out to about just in I right geographies, the in the closer both other DBNE of it a pointed of that have is a products, terms at dynamic of was have we Investor We cloud a great based of customer affect is a of board. that broad in strength. across how I broad all-around And kind graphic Investor strength our seeing our about changed I we Investor we're since we that about of other is terms And dynamic dynamic if we've Day that great so our significantly and the to today, Again, a messaging and well new as versus in are on you the at the kind business. in additional probably engagement is, existing reacceleration, there. forth the I feel growth continuing drive say usage DBNE. then see products And you wouldn't then. in will, anything been think, think we're really the to of able does Day, has We during

both continuation growth in our So DBNE that good quarter. kind well the feel seeing. of about trends we're a really revenue as And as of we

William Power

Thank Okay. you.

Khozema Shipchandler

Will. Thanks,

Operator

Mizuho. line last your Panigrahi Siti from And the of comes from question

open. Your line is

Siti Panigrahi

center. Flex question. about Thanks my for cloud contact adoption taking to I George, of the ask want just

think of a out solution, box the I'm talked center about penetration how to So, into box out now this recent wondering the we since about contact you going solution. of with the partnerships having SIs build should forward,

George Hu

Well, around I proposition market. well. overall we're believe compelling that very of positioned And are that we've hope we situation particular that that's in leader is we we right certainly, during of that combination programmability. think the certainly the now differentiation accelerated always value to for center contact the seen you've Flex beneficiary as And movement that movement in the this cloud and that very, its a cloud. in a I And plus think the also

want the that, in the segment of solution, resources. in-house are have SI customized of programmable on highly may that the certainly, the proposition development not terms In the value the but companies dynamic market a of value SI that, there of impact

makes And natural a what program SIs Deloitte that's that SIs that in platform build fantastic about, meet one needs. allow will models and other think that's and our excited things us the think such I our I to and of fit. are the are

of meet now their to You allow them set world SIs in having of have the of for solutions these in-house. a now broader into that the companies us tap to build can to needs

think do market. it I So, opens our

I very addressable over will still I But it be seen think have. of excited. increase much how of We will it I that beginning side our we're think impact we’re I just to customer think that partnership, an this time, announced that. remains definitely for think very

Siti Panigrahi

Thank you.

Operator

appears and gentlemen, come for And the participating in our Thank of we have conference. today's ladies it end you conference. to

now disconnect. may You

Twilio (TWLO) 26 Oct 202020 Q3 Earnings call transcript