Twilio (TWLO) 30 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Andrew Zilli	VP, IR
Jeffrey Lawson	Co-Founder, Chairman & CEO
George Hu	COO
Khozema Shipchandler	CFO
Michael Turrin	Wells Fargo Securities
James Wood	Cowen and Company
Taylor McGinnis	UBS
Meta Marshall	Morgan Stanley
Rishi Jaluria	RBC
Matthew Stotler	William Blair & Company
Samad Samana	Jefferies
Frederick Havemeyer	Macquarie Research
Aleksandr Zukin	Wolfe Research
Brent Bracelin	Piper Sandler & Co.
William Power	Robert W. Baird & Co.
Sitikantha Panigrahi	Mizuho Securities
Ryan Koontz	Needham & Company
Mark Murphy	JPMorgan Chase & Co.

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Twilio Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to Andrew Zilli, Vice President of Investor Relations and Treasury. Please go ahead.

Andrew Zilli

Ashley. Thanks, and Earnings joining Conference everyone, Second for you XXXX Quarter Call. thank afternoon, us for Twilio's Good

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

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

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

are reports information XX-K prove subject subsequent in incorporate filings, including today's to reference. SEC or actual these be Additionally, discussion and to uncertainties our forward-looking uncertainties financial and our by our our during partnerships, should quarter statements. Should acquisitions, some Form that which ability factors and included our statements, be the report the ending to financial our benefits those results and our risks affect and business connection service including ended particular, our our in financial contain to of considered network from differ with XXXX; A could particularly could XX, on on recent associated are gross other discussion XX-Q. may materially incorrect, to this responses and and Zipwhip Twilio's of those margin remarks impact should Segment our implied Form communications fees In of are results our most changes And and our risks, the that of these risks, materialize subject from projections pay our expected provider these and September or platform the impact change. by description of assumptions outlook we in assumptions. forward-looking on any manage for fees delivery transactions; assumptions and on

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

Jeffrey Lawson

Thanks, Zilli.

get we people to billion get today, your started on commitment answering globally. Before to and questions equitably touch X I vaccinated Twilio's helping wanted

readily in same in For here it vaccines Yet feel through like To ever was normal, of vaccines, partnered and role the our vaccine In of reminders. help to global vaccinate effectively people with to COVID-XX. people distribute time, of which We to million how importance ensure vaccine doses helping vaccine to to say educating on in helping the -- the to we middle-income proud I Twilio using technology chosen to have many, initiative the level in we've vaccines. United life distribute get countries, and low March, help and play billion of infecting the at In of COVID-XX critical just committed XXX now we higher the that greater world, expect to was to our the people influence more to and a to available, aim of vaccinating support reach and than seen billion X to to purchase money people the part without X.X vaccination education, against access organizations has sector. world, contribute and returning we largest XX the rates rippled countries least me, underscores Alliance, Gavi's originated or both them get and is largest coalition We're I'm and appointments which started variant, of to than $XX supporting lower-income global before. the the Vaccine to States. vaccination at with honored this program's the company has committed second world and Gavi, surprised June, program to we uses particularly COVAX, I'm to the also the the million proud goal with were people equitable goal in been our months, the Delta vaccinated the entire company XXX has product and our private tech product, unvaccinated the globally. short our vaccinated. that largest find X used

the when work see worldwide. Twilio of to As a are is I do of shareholder, this Twilions so and lead the you're build thank towards build part good can To there, impact, you. to company vaccinations humbled product, to and that having doing. impact you work we all these will times And I'm that have, continue out goal you. supporting an billion the we the of like It's X our proud our

open questions. like for to I'd up Now it

Operator

Instructions]. [Operator

from Turrin comes Wells Fargo question first Michael Securities. Your with

Michael Turrin

start to Segment. off wanted I with

expected You the mentioned interest lighter towards you're see fair ahead there we forward? of that what X given expecting. know have to feedback can change share it maybe that the you remarks to forward in the the a sequential that It growth, in I pull as data. we just this little you of co-selling. it's there can seems strong between would shape through we co-selling that, Are was It prepared just maybe of Is X? product going months tandem trajectory a or with maybe like start? synergies the of set points And work have assume in limited than maybe shift any

George Hu

excited co-selling take the a then market customer combined sales in interest I'll really talk mentioned as are letting very, on the sales Segment product, and to segment think about of the bring opening Khozema possible the believe both call, that power, very can as I many previous about our we I well. that of in the maximize customers, half force and think, and base. we really this up piece. And we growth and can sell from Segment by know the opportunity question to Certainly, first across forces our I educate the our maybe broad our customers Segment opportunity. our as George. is as we entire seeing as well sales forces We're as This

Khozema Shipchandler

Michael, this is Khozema.

In terms of the what I guess I I guide, reading you're is mean, it. much you're say into little would maybe I too think a

term a of see really I performance on XX%. the And well. optimistic about what think we in which really growth near of remain of think third strong XX% our guidance, for we just rate in quarter plus terms that over really it's I over growth to X over going next for XX% top to years as where we're provided I guidance term. term. and feel previously, example, medium the think we the really, long enhance will continue the of And Segment the And good about

Michael Turrin

was over was believe Yes, think pick a think towards time. just just -- segment reflective the the maybe of -- more QX. seems sequential, and rates sequential -- It's X% more comment like it's my just on increase my there's could reason there the growth to co-selling, just as up work I it thought I QX to you

just some call Khozema, out the or is talking regions mix drove well. a The hop investments Is observation the contributors to there off, of quite uptick you've as on other were specific that of then about, picked as ground-focused significantly international result I'll and well? that up in the as been there

Khozema Shipchandler

Yes.

okay. So

two So there. things

let say global first. is international, expansion. international uptick I'd there continued the So we our me a hit of on saw that benefit

a about acquisition. It revenue the that's in in As We past based we and Michael, On impact but investment. we got small classify areas of on that one was that, we've XXX% there. international contribution you'll there's late talked in of recall, a obviously, the ValueFirst. our focused did from small way very full that's it a of quarter QX, March, that top

few mean will ago, of just said. co-sell, Just for haven't started, show back about George way I weeks just to the time. what the some I bleed financials. part your it it to and take time of It in very we described. the period our right? mean basically started And for it up financials we won't excited a our into that you even some first we're in certainly, --

Operator

comes Derrick with Wood Cowen. from next question Your

James Wood

to Nice growth. organic reacceleration in a see

the And with then basis? get you? you the do to cases other would what areas kind outperformance are pulse, open you more it new maybe product SI partners a Or it contact them what talk say for solution were momentum seeing you Is strongest sounds areas use predominantly in doors instrumental? what becoming guys Can more lot in Just of a you like should kind about see the up on these quarter center? a of Partners.

Khozema Shipchandler

it. then and I'll partner Derrick, the to I'll it's on of it part, George side the take first Khozema. hand off

I a a On number that messaging quarters, Just Segment our results. And think we growth. think across And about this as really quarter. really just and customer in and well out I we've We several customers of while there's platform. digital of product our point that's the particularly can think to had we good for overall, I really, terms really business. the place strong how that of now I And to facets new is continues us, that's of towards customer for with the many outstanding our strength deliver significant experienced do really shift top one we that quarter broad-based transformation. things been had And net prior great as of driving talking that, expansion. so a taking secular Twilio accelerate had engagement

think I continuation of seeing that. we're a

George Hu

George. is This

front, as is and I prepared engagement really solution engine kind is these of center of And of think, to software. marketing kind of of up discussions that I Really our SI the on for building production a Twilio powered opportunity, be customers contact SIs. to engagement the custom On with whether types part we've opportunities or that continue builder the Twilio as around to a a this see through believed where of fit solutions. in customer relationships other a with SIs think types SI true. also builds customer other it's the But going is platform you been us the opening that's solution, center Flex remarks, has always contact broader lot great a a that's

James Wood

year-on-year. up double mean, George, if more. headcount I And squeeze was could I one almost your

curious roles acquisitions how some to just planning that be in to and built in second half. for a that. pretty the sales I'm if much hiring there's growth But contribute you've get continue course, to in to Of sense aggressive you're the capacity

George Hu

comment at Well, our level, sales we obviously, or the in we do invest numbers. continue specific macro But it. on to don't a capacity

people you in our is really that see that. broad-based of investment our is and think I is distribution overall -- growth part

excited the So about are we opportunity.

there that in believe I continue think we to engagement customer into in still untapped out we today. a the there invest large is market and it, opportunity

Operator

comes Your next question from with UBS. Taylor McGinnis

Taylor McGinnis

you dollar-based year? any growth when about be back maybe more curious sustainable that, you're hearing so for customers, can that guess, be first so and the year I'd rate, just since we've you you're what then potential year, seeing driving the this shift growth in different the mix half what messaging messaging in think So the And interesting trends far the this on from of saw speak to last uptick on half yet business net products relative to to seen messaging. beyond I levels guys in of up if expansion secondly strong seeing you was

Khozema Shipchandler

hand This the is I'll Yes. George I'll take Taylor. and Khozema, part the question, part. over for then first the second it of to

about terms that many the you're we've fact, And of really able question, side house. reaccelerating the first in have has prior periods. over that fantastic been right. that been on to progress part I it. I grow we've mean seen product in in the the of mean we messaging product and excited way the the So of really the of growth been

so to been think growth in see. exciting other leads additional And of super that that's And channels. opportunities to the some we

grow at services in our I certainly associated are think so those the see one application continue not those telephony-based about any that accelerated cost we other that what a levels structure, is with and equally revenues, and beyond to above area excited products. that we're

such products Flex really sort And more would so problem, those rate. our continue business are is that time, just in contributing of at include I for a characterize will have think or way. that example, to will We going core fast Segment. meaningful that is good in And include this how it, I growing over a

long. some -- just time statements. George? You're that take to to up in on it's balance, all start day for other the going problem our showing I'd pieces take But financial

George Hu

with us. confident -- would don't I Khozema my be scale, like continues for that be said. size strong even to performer answer messaging, its a think at very Certainly, and

I think for a and out and use service, reaching ton use ways operations, customers, there's companies there still finding whether when customers cases to customers, of for we it's new customer that looking there and talk out messaging, security.

globally, think is messaging an a opportunity going as to and I market for continue So to us. grow

Operator

Your with next Marshall Morgan question Meta Stanley. comes from

Meta Marshall

I wanted second ask a M&A to to about take just strategy.

past couple more extensions. of And the year, around platform years, since kind of been has the beginning more included of improvements For the or service or acquisitions continuity investments. of it's kind then

just so you have inorganically? those can balancing and and organically imperatives are what how And And you viewing do one I and strategic follow-up.

Jeffrey Lawson

Jeff. question. Meta, I'll answer the is this

our of customers road we where it think our I -- us customers look the way map. So go what know we terms our want to at product in is

going actually on manifests when to our to and that we're like our -- options. an are if accelerates at something And look presence. opportunities to those, pulling with what are always that evaluate do our to buying at running we out options road if consider. us that's these that hey, build, look where we those to geographies to board market, a sometimes can game road customers and see as be team, built it's map say, then we're go active are are we company that map think And and our our is the map I there's we something in would we're customers, and manifests ability a And great have going serve a road that the in that it if just go technology there map, And to that has accelerate we thing sometimes them time capabilities us additive, a deepen our smart our to is then great type road here and what of there our pursue. on

Meta Marshall

seeing could mean but on be embarking for maybe still people clearly, digital it DB&E fairly kind just that's a -- I you're And are Great. for transformation similar. initiatives, as of anybody,

changed initial to a is to Or Just out try build from initial changes Just transformation then with it are customers of bigger are you making get by purchase the Twilio. product initiatives one there? kind upfront? how sense the analysis of a or trying digital investments getting to and of kind any still, have where sense experimentation cohort of corporations seeing want I

George Hu

George. is This

that These given expand think start always we cases. really Twilio off thrived I land-and-expand then use and of the case a has one builders type that strategy work builders. other they use with with

I there. work the and the they expand that developers within change build little different shape product how particular love, some think maybe it a of we is fundamental we Twilio use our and introduce and height accounts. of more from other didn't customer emerge to really learn, of then typically pandemic certainly they a bit a they cases, developers saw year, during cases around urgency use last but the set

really platform of something and on to build the I going continue future. that the in magic we're to the think that's

Operator

question next RBC. comes Rishi Jaluria Your from with

Rishi Jaluria

buy guess versus related general I guess the Zipwhip. partnering. the color just build there's prepared on give the in I this more on remarks. question in why us questions two wanted Can a first, you And of little a with appreciate case, plans I to detail bit always maybe asset? ask or I the

us like more puts a size would maybe sense the models? for so deferred accurate growth rates a that in what can we in be takes just So terms be the then can understand our unaffected of you write-down. little and look bit I revenue But general guidance, And helpful. and of the give

Jeffrey Lawson

and you Jeff. I'll hand first is part it give to answer of part. I'll this the Rishi, for that second then Kho the

with we're essentially, relationships they which acquire really the are have for brought we CEO, decide particular, look, in They are to in the toll-free a that record did toll-free in And helping market So messaging, messaging North great track carriers. real to carriers toll-free of why productize Zipwhip? innovator it's the excited. to like sole a they Well, they has noteworthy channel America. John great And the things that Lauer, messaging. with

relationships fact points messaging to the America. And into the to have, North get the the that it they only they so way toll-free strength in are of

And ago. transaction we couple so weeks of the a just closed

order they are next towards. or entire with on the about I can bold So coming that a the when to evolve And about can they we that's as these identity, experience call, we're pharmacy lot now your that we starting and the ecosystem especially we business we're message we're innovation. get in say we kid's browser, each partnerships padlock. the to to big trusted that where and a world of a like our other to making school, of with the there's text but messages you in a communications know phone a great that going together, looks It's be do That's you in and big texting the and with sort continue calls, is name and not actually true. I with some part big, think of joint to how it's well, ideas. it's from a communications. web where much That's integrate plans calling making carriers better. that will going, with trusted And When Zipwhip think that execute think every ecosystem world like. every of trusted that make businesses what just be building how the And trust number, a the

where that's this Zipwhip is to part. we And this you every knows my Jose? second this this don't is of every to that like has validated person world that trusted padlock. know going this text, Who who -- or It's a it you about is? world is Kaiser's part Nowadays, spending us get see authentic, and if a I and is can think the calling be friend can secure hand like, message, for and about scary. text Kho call I'm big a And And communications. over it's

Khozema Shipchandler

we've impacts Rishi, acquisitions. with consistent now. It's anticipated operated very not financial prior any how with disclosing we're right

there's As consolidate. to, that through have integration still purchase to Jeff as working impacts we'll alluded we with deal plan, accounting the we're the

guidance QX. out to we'll when report And so we an just on clean, and our we locked it of keep obviously update that provide

Operator

with Blair. comes next from Stotler Matt William Your question

Matthew Stotler

would a kind you build first, to Journeys. here like like breadth guess, people forward. Obviously, what and touch seems that basis, the mean, feedback right? consumer to of would that. the interact I a opportunity to expect love pretty on to some if of marketing of things I it be just kind like looks with Segment about on journeys development. services that mean applications, brands even looking products I -- mentioned seeing But opportunity for you are you develop way think really seems with Obviously, building how interesting it interest you're and and from that daily this on substantial, So early going love get the to we

Jeffrey Lawson

This Matt. Jeff. is Thanks,

a app? their about points. you out browsing it's which they bought? different right the they interesting step Segment to allowing world is take the one website? as company cookies platforms, And it, companies data would browsers I third-party increase going to privacy as very saying rely it we or tailwinds very big get down they are on it. stance iOS, in thing, and say, you're that the with see -- long to customer. all that mobile is was, on platform. at How forcing their And touch shady can't across Segment, engagement are products that customer not all we're are like What have and in actually have And interestingly, customers. consumers, going the exciting looking these the to first-party a we that think engage that addition Journeys we're yes, And which is the to every consumers understand not some data are tactics will the the moves to I an they cracking time, governance, yesteryear. our this major whether Segment hard using deal they of that about every How information to and to better where from would now positive the for first-party don't using privacy on the their helping and look a a amount want. company think the model company. that say, improve how if of is data. of and that's so only have from And makes stuff right How at And at the And we're taken it's all have,

going of not are dive We kind of data those into all that stuff. brokers, weird to realm sketchy

helping And journey. focusing at so then build great have companies all their look a record on better great privacy-enabled they a track engagement, and data customer customer first-party

So them know better knowledge things all help with them doing the in engage so, succeed and can that to we are the about customer help journey, we customers. company what use if their serve we customer in its this that

it's thinks companies that attention. about, looks the we're that, towards marketing the browsing And What that's use intelligent helping engagement the we've customer That things through customer that build. keep of this -- customer then that's website, customer the why make leading help them Pay things. customer. way, every any them men's what about is, attention So second, customer, have if that are some companies move care. them then for journey. every women's the And better when harping Number a knowledge you a one, they're doesn't and that to for them this the e-mail way a task of paying intelligent really sense. is seen that all and your step shows that T-shirts? help they're send what your relationship you that just is of don't understand at building about idea the like, your I with hats. you -- X ideal doing company That make on that's think guide Don't not on customer you're

Segment use a And very what's brought where used and a that Journeys in that step in they Personas customer's companies take And fantastic the in to They natural of layer journey Journeys the them with the then customer direction. the doing. view what It's is much It to us information. take of was product way market into what so think of step and in product. to at that can allows build drive that I conceived step It next that's all then that you journey. a the segments already is cooperation need. every and at to with customers showing customers XXX-degree

Matthew Stotler

Right. Got to then got it. up. more And maybe follow one just it,

how you about changes company in that working on Any there, the together the the you and of the X R&D and Going separate the feedback quarter, change? -- of org will. then progress teams to kind on are last of talked the split commentary organizations, the structure early kind if

Jeffrey Lawson

reminder this alignment amount clarity and Absolutely. change more it's finding the a executive we're road Overall, Twilio the enabling maps We believe scale. to than and We business in And greater before. grow folks, continue many at to also a engagement the that better report discrete question. and visibility Thanks made leaders business the driving that X for is company, help level efficiently we're with the what's that changes going of happening to me. will we units align consolidating under -- well. the believe that for reorganization in

There's chart points and that time just has I'd say executing teams consider That's the can't as in one the result. And as has thing. you how think doing greater change same you're well. you so been are changed. a are all, insight and our received growing well company the And well keep in when org has all getting the moments and fast as been of the teams clarity, you need a the these are, I just to always reorganization when going consider and alignment organization

Operator

from Your next Jefferies. question comes with Samad Samana

Samad Samana

revenue carrier a could another on Maybe wondering Congrats value think guiding perspective, what Would on that maybe around like. us about for you a contextualizing quarter. looks growth Zipwhip. helpful little I more direct about great one Zipwhip's anything you're know maybe just talk strategic but as not having can was we And be I you the the bit of acquisition. if give connection.

Jeffrey Lawson

great the that of how with bringing in And where carriers the to disclosing value opportunity, or those -- having seeing valuable. America anything I direct watching places great carriers done to been think speak job like But can you better I more relationships I you Zipwhip the tremendously look, those with and and relationships direct don't of North building particular like there's connections. relationships in a together. build any have, having products market team rate there's products we're a and are growth lot to of X carriers. the now the and the We've and is John the and Well, cooperate numbers when that. direct general, team situated have think

just as part think ecosystem. of that, I And an so building that. Simple up the that's important

Samad Samana

if really just expansion, kind simplistic then a or kind of and And think just implies it approach from we strong about new of net customers quarter. new take maybe in Understood. business revenue the is

think I last even quarter. than stronger

seeing a in I the you some context new of customers if area more the a specific you in step-up of strength from the quarter. customers. it kind if revenue maybe products? wondering traditional Just -- of us could messaging about just So from side? new on other in give Was think was Are help there's maybe what around us terms new revenue

Jeffrey Lawson

of is on inorganic bit the strength that is a number I this mean a little general, growth and application would a as well top of in obviously, finding say business. but I seeing something doing has product across of board. And no how the you've e-mail product that, the that really of of what product, stuff. to lot the our I look the you crude, We've talked difference you that as And think last earlier, as if year then and give really the mean I it's or is contributed. which, organic I got and top then the Segment, a proud our mentioned well we're about inclusive that Yes. we're messaging really, will DBNE of broad-based of and number great some that sense areas other customers really, is, of SendGrid we're company, way it, traction rate, even services that doubt. well. Flex of the the new done kind incredibly In take but about well, I categories, think in mean, between the that as so. we're during basically, the reacceleration at On

to great wouldn't across so other in verticals, industries, to thing has results. board, delivering product, we're particular, And one say Segment messaging been just the had whatever, broad-based great seeing quarter. across I a than strength. point that any the But

Operator

Havemeyer from comes Macquarie. next Your with question Fred

Frederick Havemeyer

also I think here. I I about that it's your first but we've something interesting been don't about wanted talking much, to quite just think necessarily business. ask IoT It's

do businesses perceptions the like and IoT that business us some role Segment I'd to is in to overview collection a around general a you perhaps ask, And So how give initial of stands customer data going just space? can generally, Super also, in SIM? you play your utilization IoT think consider where

Jeffrey Lawson

Andrew IoT the seeing what Samsung, fantastic city is be world terms a happy just opportunity I think is with sense. Cohen, leader. are And I'll sense, industrial that by in And is of came leader, Jeff. This in saying areas new we're so objects actually is the who We as digitally the in a yet more we're who to start business. that Absolutely. to especially hired is have many really XG, from smart enabled physical moving the there

we in is of our what devices as like of I about. and going think -- like is IoT IoT consumers our think just really version like is smart that be home, watches to And that is X.X thermostats. the

that's to stage of, think, an I big So be early this outcome. is game long a going a

chips, or have don't carriers that a the us ends Super set a really scenes to excited on SIM a observations, world. different -- the vendor so what's that the can globally, based solves, And where cool to set device again, behind about you deploy SIM problem cards that have SIM And up is of the by what you as want in different customers we're led bring. different and the device to Super a of and we

a drastically You That's that it get out hardware, ship supply also it the really complexity, of same And field, the device to every means can that day. a want power manufacture in but and reduces to the software. chain. that that the connectivity better global once, and into put device device software

better performance powerful connectivity, that's is getting so The make the cost factory, and expensive connectivity opportunity that stories. once that manufacture. seeing continue their leave we're they -- Super SIM really of to the And because to time connectivity all so what the of a it devices the it's

get you've imagine IoT or dumpster or you truck that time to every to better technology. So trombone, want don't got connectivity an garbage you thing have remanufacture humidifier or

upgrade the silently Super it's that into That's and continually to something device, something set they able SIM because be is that connectivity is to cloud. to what the it can companies in want in the You their not enables continually do evolve background.

so is because struggled software narrowband supply in a oriented right proposition of I it up. And towards a And we things implementation far and industry value that that, point set industry a not energy a will durable come. much think of I actually that seen of now that we've slew we've enable expect some issues rollout that trend little that lower I the more in will of global and to to and the chains and scheme use that that's set things, innovation say, layer chain connectivity something use that especially cloud. and moved really like has get of will that's the the every manufacturing of I things seen IoT a think across the IoT that -- to But these wide long breadth years that. cases and the price as of a supply and devices are at back less took lines like industrial far in runs whole whole in IoT, XG challenged world they've

Frederick Havemeyer

you're wholesale give where on with update with question. Can you your materially at Syniverse agreement? relationship how And gentlemen, a AXP us Are an messages your point progressing? you is another routing for Syniverse

Jeffrey Lawson

that. take I'll

Syniverse we've for background, So worked time. just a long with for

ours So they've for been many a partner of years.

didn't And the we I'll closed but material thing business yet, partnership out change our to But that relationship. we -- where a pending. part is need hasn't the point been haven't still make really so like cementing there to as a fuels other about our

work produce as that lot that close we a a so house. forthcoming partnership of And still is we in that

Operator

Your Research. with next question Zukin from Alex comes Wolfe

Aleksandr Zukin

ones. of focused sort got I've two metrics

think I helpful. would pretty it be

there kind later not to it is going normalize back from just -- get to something just QX, help Because the maybe Michael's about of QX stepped a Just of XX%, to sequential in would for of a to Segment, X.X%. that the get patterns a and what in it we with QX for ahead I've high down we then understanding if heightened Segment, follow-up. Could quick question ourselves the the us And original this in teens, better seasonal year? business seasonality business. got understand growth

Jeffrey Lawson

on you Is to well? question now Do the follow-up as Segment? ask want that

Aleksandr Zukin

on follow-up No, The no. is AXP.

Jeffrey Lawson

Okay. question Segment the Well, me Alex. first, let take

like that say, per there's So necessarily se dynamic would a general, in I would to. not I point seasonal

quite in about several the this about acquisition I some the progressing, We announced. good business of they've mean, call. during we is think performing that times way feel noted is I that great that the products feel way that, of the as we've the general, course

would the think bit from and that which of with to of very things normalize we I you're downs sequential I little some optimistic forward. and just anything feel all seeing quarter-to-quarter, ups that noise, do of acquisition of we about Again, that, way is just is terms in going can headed business. the the a that expect that

really much that seeing So anything you're into sequentially. too wouldn't read I

Aleksandr Zukin

I'd that better for the a this Okay. on possible quarter understanding look appreciate, so a if we actually think, understand it And -- contribution. is because maybe about can get we talked it to But quarter case. better love last math, QX to ex AXP piece, if the do the just is or but you AXP guys just that's AT&T underlying then the I organically Verizon bit little QX, we accelerating AXP does like fees to growth the

Jeffrey Lawson

general, think that's I the mean in case. I

I there year and the look number that stuff a very think we've T-Mobile that you that I it's well. we're yes, why last you out Verizon without rate a But mean all not were to anymore. is which take this out would as you given if with obviously breaking it's aspect we broken and as to only. fees comparisons kind there. we've we're is really apples-to-apples, year, at out, of or the is growing what of organically base there in reacceleration AT&T and And the see from nicely

Operator

Bracelin Your next question comes Piper with from Sandler. Brent

Brent Bracelin

George move model highlighted Jeff to in to just via Conversations of a actually from There's customers without the API. back. SMS it What Is higher A demand the a nothing this use And more for or for from Conversations? to quarter, know I understand move. trying brand text than question messaging as also to the ability me volumes? pricing? a it get include Twilio industry fast messaging is how cases. does as personally could consumer wins really reply traditional on one-way versus to SMS to the a frustrating primarily Or new the X-way higher conversation couple you benefit

being adoption messaging so And get volumes to any love change kind the as and well. certainly to of for that up Conversations on Twilio but encouraged how brought more, would color see

Jeffrey Lawson

That's Yes. it. great answer a I'll is This Jeff. question, Brent.

how value. to add was get of X-way they back? about you back course, get then, reply. their to companies expect because dialogue easy consumers What product adding natural If first you it's high gone notification a think nothing. But about do and sometimes messaging experiences, strategy that You be the have step of to and usually it's

for to a rates expecting or to this the companies apply, Sometimes into may really, built Conversations, a system we've phone like call products on center question. line Flex get can why person back reach a and those And answers you focusing serving number. front that then customers. text their that is Conversations customer X-way been a of messages and contact And top their experience of on that able are turn that's it's Frontline data But the we've be so workers, for conversation. one-way

to channel. of by what we successful of door us opens that open b, for are But value you. thing enable see create A, company kind because into a the more have And to X-way to often actually the to to that with for first the their those the company it it the alert door us, great is value customers all outgoing have be I more X-way on so is get notification, add And software conversation messaging happier. it's to vehicles allows build types can for experience. think able conversations, that we customers that companies the be in products nontrivial those build because to the

a with in history company, there companies It's out channel having and a that of open is it's into use all that a a too. over history that relationship. want to companies That relationship in digitally it relationship. conversations, And building And of for are And now worker, to fullness companies X-way starts that those become a to it back are right of part is we're part customer we want bunch is of what And be to we're so They the valuable create. that a the messages, cases, actually the and how whether message, now dialogue. consumers. relationships just relationship. where not be of of someone a it's a delivery not transactional, someone And going is seeing in your see a you I messaging family thread. sales you about These think actually we're have salespeople alerts, friends it's of of to contact to relationship. that what their frontline with open places that whether we're helping that's look going new you that think conversation as lot center, that or a it's with field, a time, if the doing summary a and or turn can that your that good your turn Because phone, customers.

fact, build to and we're relationship. of company I services major the recently, saw financial that vision to really In talking a going was that's how they

that's with coming. that common really who that we're Frontline, with them see having of many things future on. it we're working And so with helping I all Flex, a and the think deliver And that conversation companies I'm Conversations with executives

Operator

Power Baird. Will with Your next comes question from

William Power

maybe questions. guess I two

efforts, great Live. First, I Jeff. was address. market the to how first, use for for just mentioned company's want to the you just It obviously that's of see. and ask opportunity really thinking probably I understand thanks vaccination remarks. trying Twilio to to prepared think the wanted you're all cases of in point for kind about guess, could I product? the kind Any to early I that better about

Jeffrey Lawson

Absolutely. Will. Thanks,

many, number companies can live many, have of have about audio think use cases one-to-few, I is hey, lot large-scale people of involved on broadcast a what for how audio And are how can at, video cases a interesting and also people. because a we're use were happening, scale, can like with looking grow. Or media many you really cases where I conversation. the live live or in experience. COVID. you live of do first thousands seeing have the look use at many webinar But And one-to-one interactive If that largely the Internet you of A now experiences for is

to And this Live video answer market the so interactive Twilio emerging is live of experiences.

things opportunities You're online see video. starting commerce like with happen to live

whole the audio got You've market.

for So launch Reddit Talk. was one of our that customers

their a communities. So Reddit into wanted voice to talk feature add

And so they that. Live Twilio used do to

lot like I X, at interactive but scale, a reference one actually seeing think what's lot Not X, to those but of possible. into -- scale, just very of the live to was Internet. to just broadcast the new at the time a experimentation COVID actually And experimentation X media launch. become so starting X we're okay, And we're I think to is a reality. the of the are beginning on there's into, X, accelerated of X -- -- of at that And customers

those powering many to And looking example, forward of we're Reddit. new so ideas, including, for

William Power

the just into I And great. us full of of how we guess That's the AXP and a as puts Any any to thoughts kind have margin other to frame that, takes then head quarter you be fees. maybe that help impact about guess Okay. for aside from gross I model around thinking outlook Khozema. moving But to QX? forward?

Khozema Shipchandler

a been great in any feel mean, I Not that We've there's performance say here. it's but in targeting real little kind about strong outlook to a us a framework long-term of say the we're in term wouldn't our fees little an we some around the I that XX% really. change XX%. focused XX% there still had I and Well, the and mixes and in the really there's about that we're thinking down product, such there's But clipped it ever I the gross the margins. bit. way to really not it. noise per Obviously, XX% which long-term mean bit. us different there's short anything then -- fact international, on Obviously, messaging increase se in wouldn't our from

Operator

next from Siti with comes Your Mizuho. question Panigrahi

Sitikantha Panigrahi

at are adoption And recent at you Flex cloud with looking wondering, I'm and center. into there's the the convergence of dig that to UCaaS vendors of UCaaS opportunity given vendor now also are How opportunity you want in kind how just contact CCaaS I the center contact there? consolidation? and looking

Jeffrey Lawson

Absolutely. This is Jeff.

or one momentum say customer got the of I'm on at it's proud the today's Airlines, fastest-growing or of the Flex major of adoption of broad think, I thanks you'd mentioned, first going. independently, incumbents know back with we're so don't how Flex, that I Lyft, bank it out or the disruptors fact well, particularly of happy with seeing adoption we cycle, are XXX wide berth we companies. we Flex digital wide Allianz market who a for Philippine Flex looked major adoption really is like the but we really in products that the right? if QX saw think adopting market. it. the announcement SaaS all, question. Shopify, And in and set separately, the that And retailer at So of you the its break the as We're that from the have We're Robinhood, we've in through I Fortune early happy by with look a

second of the was are the look, your greater that asked I out, about question trends someone Now going guessing that part for question. went in,

of or say that's moving I'd It's stages the so the around the market cloud. market cloud. in still only in of to First, early is the the XX%

legacy the take, on-prem, And on so market, still or of give solutions. XX% is

the And market is contact interesting what I see think the think big like that's UCaaS bit. because one I looking But we're and a of the at an also combination changing little centers as I opportunity. so

customers much firm. becoming that happy something to center engagement the we channels, And customers UCaaS Officer of money? changing do so is Chief it driver is customers, line closer top we're I And thought and is serve But and the center, from and of actually the you more experience, a the the call to like of the to of customer it's center much business closer serving How a of business. business. like experiences IT How the the become center center? seeing over when and is as desk save going customers Digital used digital side nature that's center. to side the typically call of center I contact point. channels to and thing to opposed the at cost revenue call drive that contact think looking repeat and in contact revenue be do think more start what desk phones the as we a the the that that Creating great the IT as the was that customer digital it's customer

I that companies. hardware well sit the to, situated think the given inside so that's to sell attach where to we're And given we who and we a trend products,

Operator

Your Needham. comes next question with from Ryan Koontz

Ryan Koontz

the terms your there? the Do of digital in U.S.? do How are the Or markets back in relative international of international the engagement circle these kind they adoption revenue want adoption some customer I advanced all see more U.S. you playing of strength up? to to them sets. and to characterize of across customer you view catch different

George Hu

This is George.

I of I argue. more in international other at platforms other parity of for definitely or would seen our we really place, WhatsApp, e-mail. North But our have and think ahead depends is say, technologies the America of some on any technology, any I advanced some would like SMS of it markets. adoption Certainly, like

of So I on think really depends part just the portfolio. it

Operator

from comes Mark with question last Your Murphy JPMorgan.

Mark Murphy

potential I'll for to add a non-desk by I world on And the you my that there with a more product. than in frontline we connect new understand congrats We've workers. strong workers Jeff, would the are consumers. an kind quarter. wanted been of app Frontline intrigued ask workers about the desk

it's feel see early, you've product progressing? do you build good how like you understanding So able pipeline still been pretty do that that some And to in area?

Jeffrey Lawson

Mark. Yes. Thanks,

interesting that Frontline app. where the things, a phone. track company easy that a where busy than native more where another often use a it's a the call with also are workers the building sit we've I And after as that after before, help workers is got experience I a we they with doing the help, do it's embed And basically most when to launched lot really they're all That's to chat are -- that opposed can are things as through there is -- take person use, areas ensure there's tool we're that is usually needs need think are that what it they you humans all mobile mentioned think as what observed category like and interact who the is seeing information -- Frontline. doing in call CRM there's And interesting compliance that's, doing sales basically a one or or who their businesses. about customer. is drop with on market used to maybe mobile They've non-desk that when need contact are customer if I that it's desk information Maybe cubicles doing, they basically, in with with and yet are or that number and customer. communicate many the that isn't a they're that communicate, a in of with, a personal now after finding set that in center do salespeople gets in native to place customer, customer observations of the now and right an job. call product people of really full-time home, you that area feels well, they're about so their interesting the in their many right? to the think, communications experience call of going there all is that with And a that with types also someone their which but the customers cases. but power engage whatever, they're need center. at usually to go, It's thing of And those there to large And call pocket, X One Frontline what sitting and phone is chat are to actually who interact I workers. of and who customers. as there's their you just phone

already indicates And communications. there types areas, care there Frontline and the that seeing companies are uncompliant GA. less health using use company major phone. using was about company not even a starting that way as do there, to engagement in to think, with be -- frontline -- other I that need interesting of we're isn't sales excited we're but set them, their product excited have with personal XXX empowered we're for just well a deploy the workers health use And that Very product I surface companies. it cases broad to just care the a where GA So effectively from customer to today, that -- to of great just Fortune lot to think seeing that yet, Frontline, company bring able will cases of the less these think scratching they we're and tools, I an talk but

Mark Murphy

it's the or a I that think of ongoing results done in absorbing And comfortable because remains just chance the in some are on guess, I'm for have future? those fees pretty the strength the way terms customers sort ROI is a of increased quick Did carriers from Khozema fees. the And that that increases one cost you to there'll one there AXP inferring be about with lift kind that so there who of high. of and it? fair the just, Is think some

Khozema Shipchandler

think our we this I or cases. certainly, their modeling ROI them think mean, additional is the doing see preclude high financial future, to enable the not other the hard Yes. to else. customers and on that all certainly it's whether based today, done. one don't is one anything I use But for not know doesn't fees it you It's in I incredibly but me I be of things we're think way mean see on about any as doing to the able something when what with to say we at time. and based or

Operator

conference this you Thank today's Ladies and participating. concludes call. for gentlemen,

may now You disconnect.

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