TWLO - Earnings call transcript Q4 2020

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Operator

Good afternoon and welcome to Twilio's Q4 2020 Earnings Conference Call. My name is Jason, 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 earnings and afternoon for conference joining Twilio's fourth full and Good for thank us call. Thanks. year XXXX

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

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

We Q&A. Reinhardt, of Segment Twilio CEO Peter also joining for us

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

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

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

Jeff Lawson

today. and recognizing thanks work work for systemic the everybody States. here call call want of joining history civil isn't it's by story today. That's History write but in that Black to history, we're and deep less but United overt, Zilli intentional a and Black just and something movement, the Month the lives is I understanding XXXX, today's history the as ways, it Month through in racism it the there or Thanks past, Black the writing commitment history Doing contextualizing understanding overcoming on today of than the the to not history to Black today. past. that anti-racism of American begin impactful racism ever acknowledgment an surface Twilio's commitment a level in is how rights I've the future. differently of black thought in the history manifest History today is of less that better oppression continues I'm just Black of is

Now, on company to earnings.

year. quarter we the fourth strength throughout momentum Our and saw the continued

SIGNAL nearly we active delivered leading the the than with more touch year few incredible hosted more registrations. communications up and XX,XXX more developer full We market-leading year; over We XX% customers ended million total for with platform. accounts, this last first with our XX on Let at me our of We platform data the billion $X.X XXX,XXX than the virtual quickly year. than a customer combining Segment scale. in and ever acquired highlights revenue, growth

is generational there reinforce results front XXXX us. the massive a opportunity that of in idea Our

the building, that or empower is embrace company has software an what just developers decade. We their their and than software their pandemic, software anything to showed our of are that had not is more have companies unknown. that accelerated company game The why more at conditions going we competition their Companies digital XXXX a of companies during e-commerce is respond ability a Twilio there the overnight. the prepared And companies are and The that commerce plans. pandemic customers. known was the about the addressing experiences long businesses that changing adoption Whether it's to that are and Digital better more in it opportunity growth market. to in every a are companies that even business, to is a digital a or the they're digital digital hired fueling accelerate us here that is huge and the world been shift able for embrace accelerated more for and how that That's true excited are disrupt Healthcare in the so accelerate threatening to developers that change powering. ahead. embrace and industry to is telemedicine the pandemic their the needs are market their there stay that more agility, and booster back. else now is becoming pandemic upped more to that

In to use to for ways to stating XX% digital have negatively normal, in a Twilio's critical back. including launching digitizing meet revenue their customer to XX, February $X.X XXXX to seeks nearly loss scale. next see engagement inability of they in And billions representing found of human-centered to the customer are an engagement by a released and of digitally-enriched engagement with expect personalized, IT making customer semblance next embrace according leading report, that this change. new find businesses bespoke XX study than double to leaders not during them world evidences trend would not The Wednesday, to and reporting that IDC, competitive, the trillion, of by impacted recently business business, worldwide. going survival interactions companies less digital causing XXXX create technology expectations. annual design a at as more Deloitte to that exploring fact, was total investments state XX report digital will And spending XX% transformation of the months,

to in the to they've of their and to better wants. communication engagement that are has create the allows customers every customers experience, all every over increase engagement channels. effectively customer, engagement every expect world-class validate our with This forward, channel results leaders the moving the that companies out to multiple developers at Given building incredibly those platform engagement the where digital build to with customer. engage of unified enterprise. maintain what touch throughout to take their surveyed, customer are the been are, siloed We across to are customer organization's more companies provide interacting the world customers to why Segment, what business game who to a digital customer the valuable service customer help customer enterprises of products That's right meaningfully and data our our and serves Because over right bought, what XX% products looking their of the build data this Why? truly market need understand importance digital end-to-end platform, to a the the build, for, of investment acquired they brand market-leading company, companies' view understand right platform after lifecycle in or pandemic. the customer them is customer is nearly increased improve and a experiences points. end picture business it The differentiated success all interaction; that the we've all And is deliver time. cohesive because allows

developers. Of to have make all empower to course, this work, we

to Twilio world than build We continue using innovating developers to million XX they we're the of future tools have around more need. them and provide the customer engagement going to the

Our on them of the to developer ecosystem competitive is and advantages going for one we're to continue successful. long-term focus making Twilio

several turn our also report highlight first find website. wanted I that our Impact The George, our neighbors I communities. on it ever today, helping launched to which topics, including to on focus you and over our Before Report cover can we

In non-profit Twilio XXX helped people. fact, local in using million enterprises social reach XXXX, and governments

also and disclosures. our as new on Diversity latest and as Inclusion find well stack, some ESG will initiatives information You

to empowering the individual world, movement We also their employee every our to employee time income launched X% pledge good. WePledge for of do or to giving

more to Zoom, the XXXX. lead our to movement. Twilio all than our I'd couple in strategy former like technology, Governor to our welcome. join as In QX, Twilions, last WePledge of roadmap. X,XXX CTO and we hours Jeremiah million month, of to hired more Board Elysium, to And $X volunteered recent and Deval on and a Brazeau signed are Patrick, X%, than of Directors. As Massachusetts added There Pledge And Okta, we additions donated we

company. we stay in may Smith, be her outstanding customers, find extremely Deval who scale the In of George. a our on going success to the are company and for a success, tenure. on such Twilions as Karyn our you and as Officer, tremendous roles us critical that, to and half much our in the our and our leaving for latest generational results ensure in help year Double an advantage to And, Thank we senior during Karyn and several been important to her we hand well to part we recently Bain years. all I'm finally, such for year. Twilio a from We're has as to over for held continue public as company helping building team Capital. next deliver our beyond to community it leadership a is contributions additions have as doing be a senior Legal Deval his General just grateful and while, and leaders extremely to opportunity. the you smooth Jeremiah months. Fund leader I'll at With Impact legal for release coming will six will so and more. the Chief addition press that after broader the the out during of take public to seen experience, difficult grow and you, new excited at and our this while founded XXXX transition most Texaco to our such taking the Counsel Coca-Cola sector brought last Karyn executive

George Hu

about so team Thanks outstanding QX, great I'm XXXX. performance an in excited in had the wrapping up year Jeff. the

growing we we more know, in these in been and to side, As in believe and addition continue at growing but also we the early engaging partner in our focus presence, innings our still On are We four developers, the better tremendous saw to plan core national expansion, enterprise level. to while you on XXXX. XXXX, success to areas; capacity, more we've areas developers, on areas continue for and these focused in we sales ecosystem. our marketing invest four executive

Twilio the Engage virtual developers XX,XXX the nearly them hosted with events, team of connecting more, customer and engagement Twilio Everywhere, XXX using build customers sessions, including SIGNAL, help Center platform. Superclasses, Our and Engagement to future

Superclass And, of is with enterprises national relations engage Ask a largest for way, Your their developer SIGNAL, expanding future by users quadrupled drive Street Twilio empower Flex and Developer, they further about podcast developer to on YouTube to get team with a Journal and Our of the which, the of our great hosted developer new how build the community. number customer ever bestseller, event can engagement is the channel to book developers on new a thinking Jeff's solutions course, business way Wall them during launched engagement.

On world's as we more go-to-market to are the off in enterprise side, the the strategic paying our space investments companies. largest become

up of service XXXX, seven-figure transactions Twilio great QX, the including number with deals up was and customers XX% from with in the yields the enhance largest last year in in chose to offering. U.S., customer signed was over fact, who number the Global of bank XXXX. one We Chase, overall their JPMorgan some enterprise the XXXX XX% In

with of world's a We one deal signed retailers. also largest the

for the They to cloud. With to the in knew it emails holiday selected and SendGrid scale expected send. move on-premise a their multi-channel insurance was couldn't traffic volumes. surge solution their support support billions time WhatsApp And email SMS, journeys. new with Twilio Verify, partner for a several They engagement Twilio power for the the that their for support they their to We deliverability during solutions company and to to season, they of was P&C Email, looking relationship scale digital expanded Fortune to XXX customers. needed our to selected the

Video XXXX company expanded a tax to tax unified provide also Twilio better H&R season, wanted In H&R services our relationship appointments Block upcoming while company. a preparation financial single a virtual with Voice, for and for We preparation Fortune added experiences, tax preparation Block, We leveraging and the and and SMS, also leading using tax customer to experience. online platform. provide Chat are a

to most wants company. Twilio Twilio and America's and multiple Flex to are reps outdoor sale great solutions for seeing We and solutions within and telemedicine across early, excited seeing WhatsApp for addition GXK of Fortune the new as points. Camping into investments. insurance to a all great are customers will selected across and we were a rewarding expand World, build clients, we're Segment a video to talk are a with the with sales touch including allow our VIP while We Segment retailer focus signed enable understand in Camping leading strategy communication, recreational World and solutions digital markets from about invest and entered a on to presence of we deal key their it provider. looking extremely vehicle to accelerate quickly is efforts to those their XXXX relationship still digital-first and easily and loyal who experience who engagement Internationally, continue Camping for agent personalized They video domain appointments. to to we World's traction returns

pleased Our Deloitte a XX% expanding plays focus partnership great results of in increase much XXXX. systems the partner We've around we in top Digital joint and revenue involved And, fields that's this made world our but the welcomed I'm our in makes are global times of premier several a consulting progress, started with year. and each already times what of critical first different select we from integrator ecosystem industries. we this as XXXX, three and fourth and performance areas together had of In role seeing closed influenced GXK as our partners in getting course, reach quarter. We're so we're Again, great extremely our that the deals just opportunity as customers. influence in with exciting. four in

positioned ahead in invest pass With XXXX us. I'll to address opportunity to Khozema. to going over it thrilled going couldn't forward how are be for continue are areas I and the for beyond. to of We these huge more we that,

Khozema Shipchandler

Thanks XXXX, George of couldn't opportunity unprecedented and worth time our be a there done Jeff by plenty we sentiment. business. to echoing saw and during of digital continue Twilio's to scale and We acceleration start as I to of good is afternoon and XXXX. I'll be everyone. enter George's and execution in of year's work an prouder grow plenty

of and leadership to the successful products in building have as customer place platform. ensure this we to are opportunity enormous the We engagement leading continue the right right we take advantage

that to leverage also continuing As further, Delving on are to will processes, our to core I've enterprise as ERP, mentioned which focused previous calls, to bit and processes in company. as intelligence, greater create internally, data us an we're investing very on business including well the future. scaling our the quote-to-cash, improve lead a scale systems in other allow ultimately architecture we

further people, of both our through DEI, Additionally, we diversifying lens in base. continue to invest geographically employee the and

is on we exciting as continue running the on synergies product integration the And are we acquisition Segment working while planning, As some from Segment today, side, G&A great. integration independently some our George the well innovation mentioned, as early returns the on are organically-evolving side. as

executive I'm distance, sponsor As which heavily are involved specific is see products, quarters. opportunities and future the we start. a a integration excited a to tremendous daily Twilio. ahead The the the starting talk from in cultures continue the to which about will in sense energized for for process basis work, for on well-aligned but integration and and now. also terrific by opportunity to confirmed be can we We're off seeing incredibly joint I are values the

QX Segment, expansion closed Total not which X. net the across that November including million, based Now, we Remember DBNE. on was as $XX to to in Dollar for from broad-based year-over-year does impact grew business. XX% XXX% to on million $XXX continued an have numbers. rate revenue the see Segment strength

strong political the to a expected, a $XX had As revenue. of as million traffic contributing quarter result election,

XXXX, revenue traffic political and XX%. Segment QX Excluding in grew

of of we in For quarter International last and customer full of was QX, was XX% revenue quarter QX Revenue and in compared up compared for DBNE revenue in to year-over-year the from QX year, XX% approximately year represented in active billion our both XX% year. to delivered revenue, in the revenue accounts QX X% full quarter. Top-XX $X.XX XX% XX% of total last and XXXX. from down WhatsApp in last QX X% revenue contributed XX% XXX%. last

As a reminder, will forward, breakout we going percentage of as revenue. a longer no WhatsApp

with relationship great a have to continue We WhatsApp.

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

customers is this a profit gross to does and reminder, a fee impact pass-through direct dollars. As not

As of fees, implementation the out will breaking no of anniversary up this metric. the the come to we be we Verizon longer

we Fourth was that fees. further And if another States. was AXP an margin the However, do information believe in from by quarter approximately basis implement traffic points impacted and gross fees was coming gross ex-Segment, negatively by flat in months. happens, Twilio's the we'll will on margin, provide XX% approximately United XXX aided carrier call. quarter-over-quarter, upcoming non-GAAP political

than margin gladly discussed $XX recently, continued our growth QX and to a trade-off Non-GAAP down reaccelerated; forecasted gross a we've in driven continued accept. As than at million operating originally messaging mix as product trend in organic forecasted, approximately came revenue. stronger profit the has we'll of by that higher

Now, moving on guidance. to

guidance. Let to me relates different highlight few quickly it aspects a items of as

forward. will I'd First, going providing remind we everyone, only be to like quarterly guidance

may fourth any built go the off excluding quarter. does guidance political contribution. during our fees guidance this into the that traffic of not additional results, we effect Second, quarter this include AXP finally, And

as year Segment, to very originally operating some investments years And strong loss forecast including range centered we about intend close, million, to year-over-year million quarter, due make mentioned to results to systems. XXXX expect excited million. our the delivered previous of With making regards the people XXXX To for and we XX% COVID. investments So, in our these million still beyond. did materialize guidance calls, for last $XX in we to first operating $XX had are $XXX primarily we of of loss the and quarter XXXX, QX, and on not we of the for XX%. planned expect on as on revenue We total in first $XXX to we growth

and generational Operator, company open joining. for a right scale We line the of everyone With advantage for are thank please investments well wish that, making and you questions. the to today take the I opportunity.

Operator

Certainly. Derrick comes of the Company. [Operator Instructions] Your question line first and from from Wood Cowen

Your open. line is

Derrick Wood

getting Thanks new and your congratulations with along those been a developer the Great. authority to the the and everyone congratulations the Jeff, a book. I era. In we've finish wanted digital today's the on fantastic year. you about focused I mean, to of developers lines. lot on importance in more rise ask of to budget book, release hearing and question And the

you're great years it'd share buying in more behavior, to how involvement and ahead. to developer of gain what you hear trends wallet So, be terms in see particularly comes Twilio the helping in when seeing these it changes

Jeff Lawson

or about the instead of from get are would as in having having right a nearly had Thank a you, of They every of in accelerated new outcome, company think Derrick. and pick digital when Yeah, go that, chain. was we companies founded the started prototype would Twilio with the tools a of able multi-year some needs and know who way just developers become I And era risk, more Twilio millions for we've then just allows as competitive the more those in champions. that there, marketing of the build lot are We than to us growing in I that at time were got agile the that done. out really because and take really a and days difficulty] see with just something And XXX,XXX has And rather of other trend not building majority with to bring [technical contract developers and as look business of along rate two about developers and get and to power when brought a on. at COVID whether being influential why, also and to building IT spend that you agile them that importance dollar scale, the staying get goes prototype continue over have to logo pandemic a quickly more things technical very in over success. in mean, to industry, case, and that's tool that's tens a come think door, the and efficient a time which of for our companies us really moving the also that a even but combines treatment sales platform and started going as relationship spend the that's giant's of engine. to little spend It way you but the developer, I they of the importance prototype, become native of but while down, ones the I build to that the was every to turned dollars like of API in business that little or team beta economy. And expand know concerns and in but those, less business big had model. follow And think up accounts then Twilio. production our the to other responding barriers were how we that the the of especially, sign grown normal that project, only things so very even kind upfront it's the software over. along the at to digital that's Twilio the And on we go-to-market these use in the first developers that's we rollout third. really move changing successful adopt because second, i.e., to pace we the by supply in, digital at upon our to get sales companies, has one when hear a this presence the you digital how the relationship benefits are now we in how the that chain companies they conditions, the prominent early a building, kind this they the and look able expand companies, a of to vast bet make

Derrick Wood

for seen Khozema. Great. last that terms in I we've about of to definitely for directional on squeeze gross else Anything could changes how sequentially Thanks If and margin think gross thoughts The color. in out mix margins you one better few know call trended to the QX? I out for in shift sequentially called than Segment. quarters.

Khozema Shipchandler

about, fees, our I Derrick. as that said the by of dynamic it we political recently also we've remarks. was well. that re-accelerating that most as that really, messaging aided in quarter-over-quarter a we Day, mean, way margin Investor gross a Not was prepared talked as characterize had we've as business kind flat the had We've

aside AXP like in to we've think obviously. of I expect the dynamics, created developed in continue, of gross we messaging heft expect that gross the kicking putting trade-off, that's the sort be that so off. I mid-to-high just pressure and said Otherwise, And gross some on that we as but before margins, profits margins that's kind you to given XXs obviously, and like mean, we've downward should

Derrick Wood

Congrats guys. again. Thanks Great.

Operator

JPMorgan. question comes the from of next Murphy Your line Mark from

is open. line Your

Mark Murphy

tangible the processing estimate two-way Could Yes, portion mechanic Twilions. of use the are are seeing very starting and own an auto sensing our discussions us thank or what in emerging trend to creep it and of any maybe So into while kind two-way of it's to sporadically in understand experiences future there. or much just after is there you that some you help to congrats a you're wondering appliance? in buy from interested what bidirectional just if Jeff once we're in I I'm because you're messaging. the outlook types messages I'm today all of or the

Jeff Lawson

Yes. Thank you Mark. much, very

infancy traffic relatively I still our is much two-way, It's very think it's but you're right but though. recent years. part at a it's in been of growing its small

When was one experiences that appointments the brand. of actually remember I or text that. of use cases companies, will If text novel saw say a those such five, whatever. your a with package building years you with at this flight ago, to earlier enable very at top on and wealth It could appointment Twilio. to much lot sort of a of of with we company you a eight was some XXXX, types think when you that, status customers got update shipped or advisors does it's use maybe able it the about When delightful with it two-way and Stanley it, you you here about coordinate these the in of is the cases. of one emerging. And their be cases of text and of these or Morgan Twilio engagement. you was using surprising like, if with service that is service their to I'd to talked but starting and of help I was other bot reply a you now the course But a to usually of And experiences. need which it actually next wave to advisors the the And delightful, get it, being still messaging, to oh, actually with a nowhere. number SIGNAL, that is went or you're certain can innovation have you be reply replied use actually human Tesla company's you clients can listening and times either who

intelligence because blast multichannel right we've an them, that's that brings invested Twilio Twilio a contact are to AI bad the they and to experience a all And is. the to experiences only more to and which see that to you continue experience. number Flex customer and notification. we a so enable outbound the And two-way first conversational oftentimes, case, help solution and enable messaging sophisticated that in their is great spend in phone And think a augment crickets that messaging them that the acquire adopt like that -- growth much why earn messaging-based of communicate consumer can't designed to companies message Autopilot These for the those to about it Conversations conversations how engine. use area, center reply how even is that if of or as and this such products those improve get and companies the like it's communications with build or to two-way native reply,

Mark Murphy

very Thank much. Excellent. you

Operator

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

is open. line Your

Will Power

for to question. the can start kind Segment. basis love early intrigued what their maybe Thanks World contract that you're the what use to just that that then Great. these like. on of to Camping to was Yes, to any like does on just engagement one next that the of trying take customer we a it I'm I look cross-sell trying And early of get seeing color the use customers. around cases I'd understand with with progress combined look I'm to level? those perfect seems opportunity examples there, taking like on because comment engage data with the to

Peter Reinhardt

Hey, Peter here.

independently. still primarily So, Segment operating is

months mind of in Segment's keep Twilio year. part only for of two last the been Just that the

still early, though, execute very very well, So, to XXXX. a finish strong continuing to had

those has Outdoors. data. have Sam and Camping of disparate websites terms brands: Good of Camping three and Each Camping currently, customer World solid World, specifically, World Gander In

web, on and digital and draw going data mobile And all personalization allow Camping Segment from collected properties and what that be their new allow do in across to to increased is customer insights for way a consistent to experiences. all email is customers enable World the three so,

So, on kind address of to and continuing integration, provide can as together engagement long-term ahead sort the work the progress on to opportunity customer platform. potential we and more we leading the updates of of the generational to build us

Will Power

Okay, for could quick one I great. if in Khozema. I one, guess, maybe more fit

SMS you'd the out particular the significant and aside Just there political driver? looking sounds and call Video, QX in other surprises? like traffic, upside at putting else Flex, strong any Segment upside It of but between was terms anything

Khozema Shipchandler

continued across lot business, certainly see strength say, the it of I well, certainly -- a in did was would in The It That acceleration. broad-based pretty QX. Yes. messaging was QX. products

driver generally, what customer we growth. had a you that just as net and I then they're really is expansion, are looking we're was coming net for think And heard upside. customers finding strong And as Twilio. the great mean, that transformation, in I think So of new I to numbers, digital increasingly

for So, us. performance just great a around-the-board

Will Power

you. Thank Okay.

Khozema Shipchandler

Thanks Will.

Operator

question comes Fred next Your Macquarie. from line the Havemeyer from of

open. is line Your

Fred Havemeyer

such Hi, so congratulations and taking a for my thank strong you question on much quarter.

roll Twilio from the frankly, before. Segment of too. here natural, I've of a it for The considering out for to wanted on seems perspective I So, platform makes to the And also easy developers. is apps that because built developers ask just sense developer how particularly alignment

down experience these the are offering in lines, So, think software could on from comparison with be the benefits to your perspective? I'd some customer experience application like you a what approach other approach the an do approaching out who platform with to there ask, of customer platform-up vendors in

Jeff Lawson

Well, thank you, Fred.

the I in the decide power solving Peter's customers. that actually SMS, think the don't about We believe Voice problems the to and just, actually of think say, for or go world, hard pick, companies decisions I influence their technology vendors to strategies limited to data. And of they and customer you're companies how developers use they that's the right. really

great infrastructure many spans categories. great digital products I think digital to experiences that build and the

applying that that to come to think we and of a more with the way think there's future our which lot realm that build and opportunity business APIs, that's rapidly is approach wanting engagement. companies, to to the respectively, things like that, unlock usage-based opportunity the agile business that these think in built developers communications the again, see that And so, build and in, we through and engagements, have published more enable model customer developers' things us data, solutions production customer pricing models, about in to the to the to easy-to-adopt a of for developer documentation and order find this today. of and in And more I our we area way then of nature same because I for platform of as all influence rich prototypes it more and customers invest that take ability those need and customer companies is areas

Fred Havemeyer

you. Thank very It's helpful.

Operator

from comes the question line next from Marshall Your Meta of Morgan Stanley.

Your open. line is

Meta Marshall

expand kind first And force, GSI or sales ISV second speaks just Thanks. your back question, network customers a maybe Great. that of say even as question, points kind or how the cases their into to their too and then is in the you as cohort just informing think just early overall, that, as as experiencing? of your and of your it pain the Thanks. ramping kind of quicker? Maybe roadmap ramp that might that picking a on kind do that, up, enterprise is different be customers the to are use expansion accelerating you net rate

George Hu

This mentioned, and in mass the I'm early ISV is we're the front, We the still on innings. question. really opportunity. as glad the see Certainly, I you George. asked a GSI And

-- customer it and things largely, the with and picture which that to that like and it's And we with line that things that's There big product SI fully opportunity. that normal partners. some are are to for their aligned massive think, just things to customers. obviously want, on, deploy, make ISV those of our But wants. think in in we what is I we're is to broader their support what doing build our course what requirements speed. base easier the that working align some are broader this I aligns transformation largely see the of specific customers digital to as the And

think of -- talked as probably, of have business. I a in bit Khozema In the a that of terms our side, seasonal. about, is, the net that But strength expansion I we expansion think lot net certainly, just

about we've a this digital As talked lot acceleration.

that out. individual seeing we're customer that we're wouldn't that a realizing say seeing that noticeable we're think in really that that they shift I I play companies seeing think just I the about. that more results long-term opportunity importantly, to digital of move modes new and so we're engagements. new excited to supporting And is near-term broad the digital channels, these need times. deployment

Meta Marshall

congrats. Great. Thanks and

Operator

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

open. is line Your

Michael Turrin

there. Thanks Hey Good all. afternoon.

topline, perspective you and what's guide Anything I all QX ex-political. the Segment assumed? a month, have that up anything mentioned as just run you'll there. we there's On aware wondering a on or implied sequentially the builds look from the accounting-related at for but contribution us there. add rate if know Looks at an you can from like extrapolate extra bit QX of to to you around for start from be seasonal provided and

Khozema Shipchandler

breaking revenue out quarter. to I Khozema. million the the contribution does call. contribution at there's the But to se. per $XXX nothing out, is Segment we That this the those of provide idiosyncratic Michael, in We're to include this million directly. will, guiding your Hey question we're obviously answer Segment. on $XXX in but mean, QX course, not time, results Not call from

Michael Turrin

seems then obviously, And a Okay. Flex, on bigger contact have reached to cloud. the center tipping point market towards

for that traction like called we're you You in you're heading year to strong upcoming industries us? highlight cases demand can success or as add the here out with with Anything press the use there Flex Are the you'd certain into release. around environment? finding

George Hu

is towards the This is going in that market nail shift a the George. center you head contact Look, cloud. on think there massive hit I the

to are the here. with approach, want flexible are the companies shared-risk want not helping -- and approach, and that. both approach much architecture have, that's the forward resonant we with we this real approach much more more a to also buy a cloud not and and what a deliver allows technologies to more exactly use a them that an to also it's and more fantastic really needed legacy they -- we than don't story new that that that we think of propel move believe and beneficiaries It's have. the story that to product really I that to And looking a

story that's So, the think here. I ultimate

are and think, areas really honestly, strength, well but this mentioned And we're we specific other Similar of to spot. to our contact think, just mid-enterprise smaller in the as that well. context in be to space have we've work playing of of I several thousand seats bigger center that of times continue, terms we those story kind insurance that, industries trends In I in. in strength, few all, seems sweet size

Michael Turrin

Thanks. yet again, year to the nice work, all. close Impressive

Operator

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

open. is line Your

Matt Stotler

It you questions. being quarter, talked training to the Thank taking kind GSI. important guess in-house off, like as the partnership sounds about partnership, early, etc. very big some you Last rollout on for start the the deals. guys. my pretty Hey premier started of obviously, Deloitte just maybe you first touching of customers, closing I consultants,

quarter all kind hitting here? kind we the you isn't last Any on that feedback? cylinders kind of other exclusive. mentioned on of early are color partnership And of necessarily So,

to to being is some solutions in maybe love get I'd So, portfolio the relative how Deloitte Twilio there. positioned commentary around other

George Hu

Yes, you're mentioned, healthy, wins. say, in that's we according plan. Things a great to you did but as going customers, overall, would question. radical track get we're of think I are in-house on change several have Deloitte. we I strong, going with to talked days, those about, don't XX

we're partnership; other track hopefully, we're well. So, I as about that names that excited they'd I on you very the I the And are going on think well. portfolio things this think talk to excited year SI be very, them, think to, to if about And partnership. our

of healthy Flex partner certainly from well, lot So, we're going around seeing products. of all energy I and and and think our everything a is ecosystem

Matt Stotler

Great. you forward model how we And helpful. kind India. of in maybe to getting then, building into year, and like move if remaining have of any some specifically. opening then That's forward, one investments, look the about been talked for XXXX? Middle to pent-up in XXXX. are will, investments and pushed How just some you Hiring able of Khozema. of or of paused investments about last these those Since into infrastructure back like Excellence thinking as the layer Center the India you places

Khozema Shipchandler

several QX, say an partner systems in is I in I I'd another loss we continue processes. mentioned, to investing and Yes, to ecosystem, guided areas. is want as operating International mean, enterprise we one.

in, kind we you've in due a the last got same areas position. that that some pronounced delayed which to hope talked got to at we more degree So, to fashion. of year came in All loss COVID. that Obviously, also Segment, about a invest

a just to can we what the going work guiding bit is year. out a anything to continuation We're sense of And of last that to year. to you year, of our for that the investments ordinary, a were it a contribute get QX. of operating in guidance throughout stuff all the we're think providing are I from the more So, again, on wanting not little losses but

Matt Stotler

you Thank Understood. very much.

Khozema Shipchandler

Thanks Matt.

Operator

Your next line question Parker Stifel. from comes from Lane of the

is open. line Your

Parker Lane

on for thanks for my video moment. taking Hi, wanted the in a to dive I question. opportunity

options that's you many If you real hearing a approach your What's and feature demand product? distancing just video different of standpoint and maybe time there from category how other that explosive for helped from about offerings some are to you of in there customers, think about own are market? resonating your there the what the out the in out

Jeff Lawson

of what We're where the events Absolutely. use seeing we're really types Thank accelerated of use this is number COVID excited have really about the video is the And of cases think year. invigorated new past the a of area the Parker. And an of lot for opportunity. video you, solutions. been that cases I because need and new

probably use and and about a all we've experiences we meetings every the like these telemedicine. other allows accounts, these past, them to the software ability standalone embed them and create experiences are talked that the just in amazing And our of telehealth the differentiated One day in create platform from kind in of to similar directly experiences. video these to which is customers of one giving is

company, data and areas information there And like EMR so, one and telemedicine year, is video like a system things every administering doctors the the We're seeing that inside including great solution, tests like is in also directly the charts we example. remotely. use the and that patient into last day, strength EMR so scheduling. proctoring all the Epic, Like embedding that announced medical

help area. with from the and but video don't Some creating of giving limited prior not customer Prometric someone talked in go can prep terms a about in something into for about is chat like an physical talked And to right, and call. only or I another experience H&R tax really this to we call convenience being can high-touch actually others. area like customers. to a doing while another a one face-to-face I we your someone, have is care only computer, help, and of And a storefronts to call take interesting on test. that interesting Block, people a That's And

And if investment. so, with They And security. you're they a healthcare the seeing cases, we're compliance a availability. yes, these are things require you of areas think about high if require lot scale. require lot of use right, of with where these They customers we these utmost require the like, privacy that They know implementing are dealing that is that or importance areas tax Twilio and and cases these compliant, information, these secure, want to customers solutions. where are these to really in are turning see these use

Parker Lane

in Twilio to seeing workforces there of that I opportunity given helpful. love for is forward. discuss companies think implement and just hybrid we're environment really beta, new I'd early know it's for That's And are their to but a you the Frontline, lot that going it. then remains going hear the Got

Jeff Lawson

it's you Obviously, Yes, new for absolutely. the for about us. said, as Thanks excited really product Frontline. question. We're a

when a ATI customers. as choose in who have we And still of bring roll their stages to it adoption reminder, to to have it products, it's the we out, So, customers lifecycle. early the adopt implement out it,

are solely are their call computer mobile phone talk in that or -- the the with saw sales SIGNAL how actually store their wherever think certainly are there we retail especially Frontline customers athletes some John and work workers rollouts they are market. year, early you customers take Donahoe athletes they for their associates, to from now We said, seeing about this their I does technologies that pleased to what who we at from wherever customers. their the are. used their in The that Nike, and had time it walked so how change digital salespeople. customers their with And But in when customer that only workforce, using to e-commerce past are people engage the the had from with door in greet help you to the the And frontline happen. is is able really start a

can back they working serving or of the in and the so be And home working customers store. from

I whether desk it reception with make product, customer. with they knowledge the They from think it's some it's is and that variety build this sure it gotten we're even And very so adoption communications, early can seeing where And trend, to a two-way said, a They Frontline. of places customers, to whether in want we're track materially build company record like wanted using a it's working drivers, communications. of it opportunity do That's from so those but of of far wants relationships that the you the all whether compliant communications where to salespeople, retail very actually it. is workers history omni-channel delivery we've the way that rollout. days and happy doing

go. And so we're to excited going for where that's

Parker Lane

Thanks on again. Congrats quarter. the

Operator

comes question next from Valera from Company. Your & the line of Rich Needham

Your line is open.

Rich Valera

taking question business for impacted the Thank question. the that you of your A portion COVID. was adversely by on

of kind ride share, and what coming to you the where pre-COVID hospitality into cohort remind relative was Can that and today of travel. I percentage think COVID included kind levels? of business is you that us

Khozema Shipchandler

out We percentage Yes, the that relatively broken small. It's previously. this question. I'll Khozema. hadn't is take

ride-sharing hospitality well what still we particular, previously. modest industries, rebound some is in strong. we travel think that are fairly back those were pretty QX. All showed the that the still there down, think despite I then, is below and than would said XX% industries in Less concern around as say actually being some I I seeing was in investor that those results And results then pre-COVID-XX. said, and back

Rich Valera

a into have the environment follow-up And know just do that it. a And can vendors. product you been Teams then a Got that. guys Voice Trunking. Trunking SIP about quick providing of talk also of UCaaS some about I on, by the SIP There's wondering lot

Just the maybe opportunity Microsoft voice wanted specifically for broadly for thoughts guys? SIP more on your Teams Trunking and to get you

Jeff Lawson

in interface I'll scales world, elastically and question. have pre-buy product. Yes, fixed we've a countries this one around many of take to is the very amount an category where also lot Jeff. flexible you of a where beyond unlike capacity. exciting SIP us, Yes, solutions product a the Trunking is for It works got

Elastic in really are we've Trunking with flexible a in seen whether of to where cloud-based a deployments. home our power very who adopting lot -- environment, re-route cloud where ISVs certain who building a but also offices, those real well that's they're what can to product, that it's And need capacity with from fixed may up that they see a Our it Trunking say, reason their in or scale based and with that SIP whether to product, on cloud products, let's works a environments, that lot call time. for enterprises it, up need flexibility SIP that's especially in like SIP down. number way we down need workforce, software customers' there's Trunking. work They elasticity right, as needs stuff and it customers we traction that a a a only first location rushed in environment. need desks, of opposed it's where of you And to call and That's we

who for also upsell SIP Trunking a so the aren't particularly us us, door and And yet customers nice cloud, is for for in it nice foot because in really that gives to business something example, the Twilio's a them they the them contact can and leads do line. it a maybe conversation often lead interested center then already their to products, on-prem installations in becoming more to consume down for

customers of a based about opportunity. the variety hardware deployments, something a our whether the it's of buying. software SIP whether Trunking customers we that's think the on are with what can because wide interact SIP into so mean And variety cloud we on-prem, standards And can SIP that standards, deployment, plug and is SIP Trunking cloud-based solutions of wide it's that or product

Parker Lane

Great. Thank results. on the you for that and congrats great

Operator

Securities. Koontz comes from Your next Ryan the question of line Rosenblatt from

open. is line Your

Ryan Koontz

local the be if could spotlight have are little of thanks using you on my screen a to efforts, developers the local or contacts, you approach help limited where if are more after international you from country developers bigger that Thank you. us channel wonder that or go-to-market perspective, you'd question. hiring a Hi, of some feet these I companies go partners like your understand behind using with of ground local in are are we targeting staff ISPs? the kind or for think kind on channel bit. can the What I

George Hu

is spot the of that think point developers. It It's on. source efficient is I Well, Twilio go-to-market. at entry on of source with Everything point the into we Sure. developers do really starts customers. our the our

developers. any so about we it's with into or we domestic whether And market, when think international, start going

And our team global is so team. a developer

We multiple you follow these could of for better and do past physically whether them certainly all our and the if job developers much developers digital events producing that. around we also, of this in list, in developer of our to around But also they're and not channels developers active engagements, in all the world, a all have you'll the we I that content some year think virtual, languages. trying and course. are only the relevant being but reach places world, even all certain see see in geographies, And -- event

as to some them. account for or customers just We well we be more huge and efforts, even markets. all immense as America. whether well Latin Asia-Pacific as helping customers, emerging fantastic We've a in developers and of that's the EMEA prior with XXXX as I opportunity to that teams up leadership, us opportunity Behind that followed with those So, that our do other nature these within strategic or hired broader the see out both regions, think of our with in work there. there's greenfield --

up investing in starting for is, point. that in partners, room that, for well, a the you probably I is does a but now. of channel that playbook And And is winning internationally, which in as the so when think we're more say, would on, that I following and formula. future then nascent, And that's strategy but even still the leave our add course, certainly,

Ryan Koontz

in it these competitive regions or you. helpful, George. different you is Thank is Really homogenous? there Great. into, a different fairly And environment go

George Hu

that dynamics I that on digital bit plays bit all every and that's are Well, the a transformation, focus the different. the the is different, certainly, little little in consistent and think for developer, need thing markets. frankly, the But is a market well energy and

I of And so the consistency for that's we're, where us. think, point

Ryan Koontz

guys, Cool. Thanks lot, congrats quarter. a the on

Operator

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

Your line is open.

Alex Kurtz

growth year to what's Thanks you opportunity a whether question. obviously, next it's something driver, Yes. investments and could for maybe multiyear at the your really that can it ecosystem biggest could developer this one two or go-to-market international be pull, the because, to look country, if your reach there we year happening business were taking the every every that levers for it's region. or there's now model right accelerate a with that Jeff,

frame out. hear you to love that would So,

Jeff Lawson

you the Thank for Alex. Absolutely. question, Yes.

and So, we there's lot been levers pulling. of a think have we I pull, that can

I grow leaders think the investments the making number George have is one team great for and we go-to-market hiring that been theaters, to have. abroad, our which presence including

we've on the making progress proud very of been front. go-to-market And so the

years, we a continuing product around continuing But obviously, to then customers gate. presence very the in we to the to would even communicate grow to a the our make We great the channel, we've WhatsApp to users these things I making around progress places. talk thing have a just our world, product WhatsApp for customers need to invest end our out global other like And better with channel unlocker that their to lever, product a is very as in including and we're with instead investment say channels in with presence. we've for enables world. of WhatsApp products naturally continued as well, many a their of and adopting That's second SMS. something global grow that all say, over the so The market do pleased those been like is customers serve of, international local all as to audience them all as

Alex Kurtz

Thank you.

Operator

next question from line Patrick Securities. Walravens Your comes of the JMP from

open. Your line is

Patrick Walravens

congratulations organized rate. boss to most had? out boss as you. I'd lawyer Great. But And I ever was my and Smith. the here's let confident my me Karyn Was Jeff, companies based started when add Thank a doesn't net for at bigger, slow question you really just Most down your seem as you. Dollar with be get if case that expansion my they but look the like to Twilio,

and bigger? secret? your energy maintaining How that of the company what's as you So, keeps drive are getting level

Jeff Lawson

Well, thank you the for question.

you Sorry, boss? I missed saying that. Were Karen your first was

Patrick Walravens

yes, She was, How at Cooley that? is my Godward. boss. She funny was

Jeff Lawson

right. way, hilarious I No anecdote. dig that's hilarious. that. a All That's

we're of So, serving. and about I we're you Well, it's at mean, your not all, I'm first I scale. the it's really flattered. think, maintaining about and question thank But market and the question honored that team for the momentum building like

having to their serve teams a that new keep team that so second opportunity throughout many journey. things teams. a us problems which because of itself large the organizing feels And provide to it's we leaders into the to our And I solved can continue a an a wide our need that's of I our start-up very team small based to And the a on us obviously, pursuing to customer many building, and serve show engagement they're what very in operate like activity they're customers. each they because our think to is team ourselves to build the their and often for in what ear you thing say that building we and business use business there's drive to great close market in customers. innovate And truly small APIs. platform nature then to building coming unsolved that ground small products on us So, our structure would to the our can blocks and large closely keep of to the we're take. great is, customers company enables to and building, that's And hear opportunities fact related and customers they in so customers model, market, directions model, that platform to customers business variety

And visibility recent tremendous drive Frontline solved, into number in we've customers products And a provides Flex some and the further. you years. that our things built other so that that and us of then problems roadmap need which get big the our like unsolved

think all, together you team, innovate so all when you like, to and all if And And those quiet products the things this what to got to platform get -- those we those want build customers. the we get like that and business opportunity. I to like the model, belly, generational it's ability come a us It's in for gallop. the call structure to out things

So, that's what we're doing.

Patrick Walravens

you. Thank Great.

Operator

Oppenheimer. this afternoon comes from line Your final question of from Kidron Ittai the

Your line is open.

Ittai Kidron

to quite it. expanded I George, about year. things. in talk you've you could Made sales little substantially a about Clearly, bit questions. Thanks. capacity. wanted Maybe last dig it the Couple two of

you the and First the a hired of many them still them are with use is how how as And platform the second, ramp a right right from you focus across productivity it of starting of base? GXK, as the as think a bat how Meaning, product changing? versus is? starting multiple from the starting one all, about about with you standpoint, the thinking consistent case And a when point? point is how on then customer

George Hu

Great questions.

strong all we're On of of it that movement maybe the productivity, scale first in. one, capacity. certainly, size attribute normal playing fantastic sales that you like invested we've and even very also enablement our investments in size market things very, made a and as we've our largely where even you sales market the that the do speaks to I seen outsized and But And the you just we've think sales to I a the as in things just it really opportunities try A, kind B, great those force. to, team; of

It's our sales fantastic thrilled be how result. a real I performing. couldn't just more it's is team So, -- with

GXK. more In making adoption, progress that the say GXK in we're would terms of I

do. You've developer. seen that And just in the the hastily. what think to unlikely I numbers. we We're through that going a mean heart that of I abandon we're lot still starting the it's is them with of

like more saying, Absolutely. talk think the new go-to-market and come developers of Are and motion it because product. one? motion so that They with don't we start recently. times in you for to that. to opportunity a is huge the core of are want enterprises of use frankly, honestly, the in some they -- that negative as one don't we to meeting We see as more that us to advantage, want a with case. at of and just think hey, competitive start and other lot so we're a going a want But with kind leaves have state is, to so us And I day multiple in call strategic one those developer And fruitful mentioned. people untapped level, conversations the I've that, want our I forward. universal that for there had

Ittai Kidron

follow-up Makes it. a you, for side. Maybe sense. on hiring Got Khozema, the

be being the tail internally Needless you're I for to to with here, a not to the I is to risk able you chasing to that not that it exists needs with question some at plans able And seem whatever what to up is so I catches catching done You up. plans? a growth your your fast, point finally be business with trajectory? what say, remove up catch your bottleneck catch up growing But mean, is, guess and understand. to

Khozema Shipchandler

So, that. there's a concern global we we year, do lot think actually I hiring that and stuff it. to and don't to solve internally in necessarily Yes, of dynamics issue, an navigating and I don't think mean, just I internal around that terms had like the hard have obviously, the there's a pandemic was right? last with

think I catch through less year, the and we'll of three first then more quarters it or I back be we'll up on this So, think track.

it, particularly not So, worried about Ittai. I'm

Ittai Kidron

great it and guys, quarter Again, Thanks. congrats, good. keep up. Very

Khozema Shipchandler

Thank you.

Operator

and you call. today's concludes joining. That Thank concludes Q&A everybody today conference also for

now disconnect. may You

Twilio (TWLO) 18 Feb 212020 Q4 Earnings call transcript