Twilio (TWLO) 10 Feb 222021 Q4 Earnings call transcript

Company Profile

Participants

Andrew Zilli	VP of Investor Relations
Jeffrey Lawson	Co-Founder and CEO
Marc Boroditsky	CRO
Khozema Shipchandler	CFO and COO
Samad Samana	Jefferies
Derrick Wood	Cowen and Company
Michael Turrin	Wells Fargo
Mark Murphy	JPMorgan
Meta Marshall	Morgan Stanley
Aleksandr Zukin	Wolfe Research
William Power	Baird
Ryan MacWilliams	Barclays
Frederick Havemeyer	Macquarie
Matt VanVliet	BTIG

Call transcript

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Operator

Good evening. My name is Chantal and I will be your conference operator today. At this time, I would like to welcome everyone to the Twilio Fourth Quarter and Full Year 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions]. [Operator President you Vice conference. begin Investor of Zilli, may Relations, your Andrew

Andrew Zilli

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

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

Joining for Jeff are Boroditsky, Q&A me Marc COO. Khozema and Shipchandler, Lawson, CRO; today Co-Founder and CEO;

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

should Twilio's expectations Additionally, XX, service and Twilio’s risks, may growth contain uncertainties XXXX, solutions, regarding gross and transactions, business delivery materially on delivering results non-GAAP from be Twilio's of to on projections our the customers, of financial of we beginning about today of the regarding forward-looking any including to subject XX-Q. and differ our those of our In by our reports description report this discussion included non-GAAP considered from on assumptions margin assumptions. targets, risks, materialize change. for subject our are XX-K affect and are statements our goals the prove information XXXX, annual A particular, that be regarding are in results financial impact our to on implied some and remarks impacts ability and the connection or risks and profitability recent fees communications to should other and And changes with meeting and statements. and Twilio's reference. these incorporate associated most manage expectations benefits on rates platforms assumptions actual privacy and of on the and margins Twilio financial products operating by our our certain changes SEC fees our could network future investments, March or Twilio's recent our statements, our impact Form partnerships gross pay in factors in and long-term incorrect, ending Form responses including the platform those and subsequent that outlook which could expectations and filings, in regarding our forward-looking uncertainties third-party acquisitions to these these provider Should quarter

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

Jeffrey Lawson

am Thank never excited investors of you, to great on today. here results about see company outcomes Zilli. I've I for you for continue I that growth right some am very built the sitting that the best-in-class been happy with generate future our than the more customers XXXX now.

digitally our view next unparalleled a as We builders. Twilio to the in vision. engagement and gives introduce deliver the setting connects customers company to personalized us business platform into customer an of intend the have data the true that journey, engagement customer leading combination their on the up to become awesome can leadership #X platform platform cloud. every of software that team, Segment's Twilio an communications truly We customer with chapter player cloud We're the relationships

beyond. company questions. With eager for open XXXX continue and to done, in the So is your the never our incredibly work let's and that, I'm building call

Operator

Instructions]. [Operator

Samana question Our from with Jefferies. comes Samad first

Samad Samana

Jeff, Maybe, year. more particular, the job us maybe that of how think It's adoption the traction shape that's organic good maybe more where just understand if company over growth. layer. Congrats And the a Or I'm in should to the we did to of know prepared an how And inflection we of I driver. infrastructure adoption? help as called rolling expressing, you just about should we changing? going the is the a Like that that strong from guys could the out. I you. for is on think curious solution-based really IDFA, the products how remarks, to about the solution at the are company think first the moving accelerating? you in finish for great reading the see as side

Jeffrey Lawson

Yes. Thank Samad. you,

X there's really going. introduction is is to the question, pleased layer of with think first I that all, how software our essentially, which So parts of

If talked better. quarter, we love about the example just look of Motors then think center bringing to that in talking I Vertu customers Segment. contact and great not Flex time, -- We've really that every right? we're the about at our but calls, a Flex, companies. Segment We're about you adopting Like some today, together this earnings make got

is and by with friction. Every companies industry, continent, developers around so those come at Global like every to company is a for Global the a XXXX move and answer contact strategy financial is Flex can to talking the about, their are contact then for center companies conversations such the and that’s ubiquity automaker Twilio leading it's in software the our up and whether understand is the having XXXX the because that Flex the in is building need From really every one world. it's up putting go is I mean, because Stripe engage and solve, move their see customers, have that about powerful And get with up this work chart platform. But combination. really And to that go And staff able they leading our with all need to customers. address adopting Twilio and Invisalign that platform, many what relationships way great to into shape ubiquitous and Twilio the them. and their things of process. I definitely the the the inside with engagement we them. by they many move their approach size, great stories. understanding services for why is mean they If with marketing, that so to up We're up the then process, initial that all you really, customers customer and our the initial look is up wins all in the used Nubank, communications traction CDP kinds things and And build so The is this their whether a so is across trying this different e-mail all sales customer we their customer center, needs. go Flex customers and expanding And that chain, others. we're in value leveraging engaging strategy to use of products. little do many messaging that's there’s

of like on part actually. testing consumers society think most the if question the second I regulation Internet, right, the happened provided deprecating in privacy. track, what on knew by pretty and and Look, privacy, [indiscernible] tailwind The and things is laws had IDFA tokens the investing right tracking they'd your that about be

is focus on we right customers’ this is track. fundamental to our the the to businesses forcing -- fundamental doing And what on of of customers the are business. So this

talk them, and I our to then do to to the my know we fundamental and at money understand Detroit. about customer talk customer is in that's grandfather, paint but what your think help sold of my is business about business, the to And store the hardware he going them. and has their

et first-party there product, actually have how website, to how that privacy, and engage as that signal the more what And compelling. and with cetera, all for they they use use their the buy, investing mobile so customers people data can their and experience their people use by they how in personalized what digitally app, their make companies to use return,

that’s the happy turn tells their trend. and follow rest that like that which whole turning more And journey. and is customers to more Segment This by is into on acquiring base and have going, putting X of if buyers that repeat build them ads. buying the them just and so ecosystem big you means companies loyal it's with then they’re coin again we customer sides products instead the CDP the believe a of us. I That helping a a direct-to-consumer a them then and is big change and same It’s engage market to will. That of our

Samad Samana

just very for Great. quick Khozema. follow-up That's helpful. Maybe a

getting from assumptions is IR I to by what team. around we're appreciate the organic growth. that? still leverage revenue just to -- assuming that. That the the outlook in us that But -- of are on ways to profitability maybe additional for company that understand mix? around OpEx the and going the can Or gross out you're should and what line? I allows get was you because How the think margin or XXXX, mainly help is numbers if you a about Maybe we the that know disclosures profitability very helpful what and come in First,

Khozema Shipchandler

question. Samad. you asking. Appreciate Thanks, the Thanks Yes. for

medium kind of So in combination term think of to short that the will and things, will then that a term. in out I out long it's some the play actually others play

growth think, go-to-market the our years. as I in least infrastructure. for that remarks enterprise the in good several improvements and second And of in year. So short And expect areas to a and and just areas that that enough really priority the just in our core remains made think actively of start operating historically about become are I cloud we're I of to and think that And of cost scale about the we now And past we've growth the my growth rate we've year. that that those invest -- been add the we in areas, what half been last one the And it's go-to-market, other But of point, to not of is think starts investing a what ERP international up to out that it, haven't I basically lower is this going investments historically. example lower is expenses. a the in the company. growth will to number historically. at where I But company, that in the project, trade-off operations. has moderate for seen rate going the got of that say from benefits come we're we I that in point bit of scaling live been In the would we the I calling Flex, be scale in we in efficient way to mentioned there think actually talked those we the little the think reaping which term certainly can we've the And the prepared goes particular, middle not than we more prioritize the the will. really over things at

out, real it our in And confident for move opportunity so and we we a we're XXXX. really efficiency profitability see as non-GAAP in ability

not as think over expect the an will us bounced time, we a also value moment to And short I improvements what very to provide period well. gross bring we're in margin to a But to that be we has Jeff levels improvement ago, opportunity because said onboarding customers, them by real time have and those them. up our term, onboard in period trade-off, the number Obviously, with do opportunity term, into provide would in that the I we and with actively for fact but in gross to that's margin the and the and we of strategy over really in grow a higher as consistent XX% medium stack, I make plus stand this think the why long customers and around from line have our customers think software like leverage that line. we company. as margin

Operator

from with next Cowen. comes Your question Derrick Wood

Derrick Wood

I been of kind Marc, see CRM on Nice out quarter. this guys this Congrats. strong or of journey build to applications. you mean, to have suite Jeff a

referenced You product and in has the this, certainly motion, matured portfolio and bit. quite up a

looking motion? kick what see of up in you perspective, So to be to like aggressive the in the you go-to-market from in new gear this XXXX? a stack, are planning how more up And into part XXXX, would a

Marc Boroditsky

front is are Derrick. This that the Boroditsky. Thanks. market in going questions. Great is way to It Marc in XXXX. and center we

are We in enabling sales the are days in on and final objectives week, kickoff and our the strategy. of this team up that the primary we're

to access engagement broadly the more to customer vision platform. and efficiently our e-mail the leveraging them So base customers sell installed through and of messaging on

with this quarter. across way customers. the their all on arc, announced control interest top It's more remember, hearing platform through by their engagement the end sizes, digital to of You their may over long-term of loyalty. we we resonating driven engagement, take the past with desire customer SIGNAL funnel engagement are And all the entire customers consumer

it's so are that training as they now in to to we opportunity team able XXXX, out sales the the supporting to And ensure today. are market we're doing ready as that we see looking significant our approach the and

Derrick Wood

predict more kinds comfortable Could Great. change behavior was approach order Great insights in versus what philosophy? new for consumption to gained guess changed in And the you better double-click How it of your Khozema. has you to on hear. with One have I are before? what here? guidance or your

Khozema Shipchandler

Yes. Great Derrick. question,

I we a you have run mean, case as usage know, if model. So business

little we usage we a predict in as more platform. And the a part, bit using over with end able as up we're that And patterns had to year, better For say time. insight the there I'd of our way each customers staff just passing lot most just have well. to

what the And team information, granular FP&A doing way is able we additional basically forecasting about more that which model we be collect fine-tuning in to we our could with that. end every can year. we're And do so up as

our are actuals, XX% And better XX% organically. to showing to that expected a QX continued refining ultimately to philosophy we of growth as guidance in provide we're investors more QX, also performance. earning then to for So you our a our not reported basically just and of approximation give saw XX% consistent with guide, but is also XX% on

too. was deliver get the think say, growth good from a we'll to plus to call for and that for we that setup account, obviously a confidence more XX% provides we our our target lot that now. on several that able I over it have do over And does a think feedback And would Derrick, important Segment take I years. I time. That investors out. just we us lastly, from obviously of be just analysts consistent and lot next our into of And it include

Operator

question Michael next Our comes Wells with Fargo Security. from Turrin

Michael Turrin

secondarily, is growth when forward. Maybe on relatnioship? clear way stepping But outstanding. we chance worth Is the back The ask those gross strength here ended to morning. can help flatten that to question my gross trajectory? least the on margins? saw messaging that the And there we about still margin. Clearly feels a the how are It's a no gross international that the call but gearing think the should is core asking tradeoffs margins is to here. is you partner Or maybe about Syniverse comment longer right improve there this can transaction or think and

Khozema Shipchandler

Yes. This is a great question, Michael.

I'll take answer question and moment. me then first, a one second the in fully more margin Let the gross

there some know we suggesting Syniverse. that to might buy first I press is Syniverse, So all, respect they're with of that

mutual in did MX of as merger this announcement come of a you market the path, that the a those agreement stand way for in that, as also it reflects minority worked an agreement That provide between today. is alternative Syniverse. was conditions parties. largely and morning a agreement not is technically to probably doing between that. some Syniverse investment termination see they that the We’re What result press which did The

going wholesale that's to we agreement be And that referenced historically, assuming. that’s the so much also we that place. now in commercial path very are The

intend to a the longstanding, be us us frankly, product a have And United been and very States. with to to Syniverse. continue partnership that for leverage great relationship We in able It's great that. we gives

in obviously, has in you're was business. respect the really of a in way business out that had the I international impact great the term sort to been of any to Jeff certainly it significant margins and others that, way medium result been business lower Marc a has of our with that us, really of that gross in products significant we the And With And number a alluded you volumes or other we relative I But like right, that near and margin want part past, this of up. see which really in reinvest. and some played about QX really to in to structurally, messaging don't in mean provide the broadly, for carries gross And of performing. and the off. you that business rewarded that that really, messaging clarity cranks some just profits more a more have out the as want I high-growth to. and we feel also we've and a conversations of bit we what So little gross took

to I us to an execute importantly, think most up you sort door installed is as are the base Marc in which and create at for alluded strategy. is

saw have the of on is Kind that of our last going on, organically application services is faster good that we disclosures, that rate. you a As of problem at XX% growing our the business a messaging actually last year. grew are page while also all

just we that's want of trade-offs so make. that to kind And

a short of tried disclosures, in in you we the confidence and you probably well. that fees as bit bounce will a like long of stuff around -- impact generate again, in confident and of As that we and as as XX%-plus grow into able over a we to that gross long we growth have about earlier, can continue off we time services to And AXP generate in up sense I lot feel be our see give application range will how we the little to term, that. that as But Segment, down. high we profit, some talked

Operator

Mark question with comes Murphy JPMorgan. next from Our

Mark Murphy

specific growth materially this materially level imagine are shed Segment Video, products. XX%. I voice, if outpacing. any that these products would certain above I'm of light below are can about you less organic some e-mail, growing about on Authy, any of I'm Khozema, wondering Flex, or

able if to there? of Just on outliers the any major comment curious you're

Khozema Shipchandler

Yes. will not product say disclosures. and Mark, mean going give here, appreciate you I asking our the answer I what but every breakdown Again, of the I'm the single and your referencing last to page go question. through question. just here's

of you that over business of as year, the moment basically pre-Segment, which, our category, number our see includes those spite on a growing basis, high big. The we services that's really business terms rate And incredibly our at is pre-SendGrid, products XX% that organically, rates, of If growing the at course any performance. a on rate. is at described business fact it's fast, look of just the really again can that, application grew you messaging the contribution, problem page that, its really just we which you messaging revenue in that growth super cost part of that ago non-telephony-based that faster have products, it's good in prior

take very it's even so out And for life customer going much in play some up out and in to that the though our is to in of it playing time base. statements, our financial

time that, is the now Segment quarter, years, a our prior we really amount it that we XX% numbers, has but really base inorganic And higher which, see quarter, since had it's significant can prior that don't in to do out the that Year-over-year because a we much that announced sequential break the plus be the was next was of X have off fantastic a frankly, really, can over confidence still in quite the that. you obviously, tremendous that strong. saw in that Beyond you in in also period we sequentially. growth

Mark Murphy

your had Jeff, I'm a That's very the sold a strategy. than be shifting rapidly R&D might rather up follow-up developer. toward how a that in as just quick products wondering investment more is for and helpful. And to you perhaps marketer mentioned

For instance, the and Engage of rather than the delivery insights, orchestration the product journey customer kind the messages of of messages.

Jeffrey Lawson

do up above the fortifications mean you well customer got the buyer of Meaning as in investments building And their they as have data going we've you're in, the Mark. that layers. technical we internal those to this the table, platform the for obviously, Thanks, a the private business or I developer, the core make a we the developers Yes, Segment, Yes. which center people, I Twilio. we to line want this APIs, can way for get But to is can do, purchase. like. a going sale they that way, make Twilio, there and are at see products about of with to the new are it technical are teams X purchase. a the products our contact all but developers products thing decision assisting communications maybe think with like support that’s telling way long that marketer believe can we is on pick

In important built that's fact, prototype. we've tell. the already And to

If you [indiscernible] to tell.

I do to -- be talked lot line owner they And owner like to business word, business team the leaders team. we're and is power would now sales another selling companies, IT the great. to Can we say, opposed like careers their and your it, a can of oh, As turn They would like this? sold yesteryear our the line do for it. this IT

technical now about got so also business the technical is more side line application of we And on contractors in can both magical of and proponents in that with area I investment Twilio owners. thing on team. have of think the Twilio sort And you've the the the

of are then combination champions why our our point of I developers, think and the stack software. bring through company winning it's up make into that’s on focused biggest making them chart, so a and them hearts much value as and some powerful we and in minds of we way the up

of solution. terms and can't flexibility, trying a just obviously type announcing to need also what and in you are We're companies like of those the to really products. I that customizability, we're we think for is application build very the developer-centric both are customize so products building turnkey also provide using, And in not

give company into of want in you We needs to of you the of for them are solution time. and trying to ample turn do the do go products long the build them out things period box, footprint to the they that while

art markets adoption, I I customers a et XXXX, approach this as they the think things, something see of are Global disruptors state get XXX the is customers, as they're don't with approach new that’s we serving digital your need our by evolve, working. of demand think You is as variety proven cetera. whether Fortune across by spectrum, wide young or the whether companies, the And

Operator

Our next question with comes Morgan from Stanley. Marshall Meta

Meta Marshall

Congrats. by questions. A you disclosure XX% XX% having of the the of or noted of there Global of XXXX. for of by of within a next of just couple years XXXX. customer couple win wanted is sense core get it the is some of the One, some about that to room driven to the growth And the kind rate your this is confidence set Global of about opportunity more

how you like of you've Jeff. Second just you confidence question, landed that Just maybe feel of get growth that said, trying XX% sense on much to rate? what already gives building you

solution enabled Or best You've Twilio help customers you're evangelism versus the you journey is of SIGNAL to why why customer and of even infancy customers to are finding still kind just its this happy their I that them? give competitors of have you provide do where in having about others? on you versus can made they're compelling that some with there. of at about it's a argument to some out a kind guess

Khozema Shipchandler

Yes.

the thanks So for question.

that, to me it part Jeff. and the of plus over XX% add and first I'll Let turn Marc then the have then to take dynamic, I'll

business years, in have well. look the ton ability of have as played confidence to you and way GXK. mean, the think the creative which to basically out, confidence of disruptors evolved I company digital have have our XX% number. that reason couple in at really since if the over concentration the that with a that were we give has So do really dynamics same at of over not we of are plus, just the a we us it's interesting I that like such level innovative But time, in that's in able do because we low multiple relatively terms and And IPO,

business used that our number The first if while different of and then, is look on customers, high. overall XX of at to the relatively more that over you it a distribution taken since years. And top shrunk our be number we've consistently has concentration in

you bucket. have some that so in companies And certainly, large

we also You these any of that is we're allows call already wide, really point serve is the that some that not industry, messaging digital that, off. rest taking But have one which who that in in disruptors concentrated the not now. means more We're lot overly into able addition us a to we've were to in customer. and any the a we grow one like business, sell that other But massively our that concentrated in bucket real I'd the customer lot say that is, second business. is talked about our thing in sell to customers. products messaging we're scale overly

an our as to I allows e-mail, ability services, with go well. another cross-sell interesting see and have for really up investment in thing, then we in back We're international the making do kind efforts. we've upsell, Segment, now our I would say go-to-market to to that off. starting the application this able third been is with obviously that And And our we're opportunity of think, past, of that with so called pay out kind

obviously You quarter most of velocity in that saw respect to recent the kick-off lot a investment. with

over there you there to that really to out that Marc, do lot continue I we And expect eager customers add that? world the to are anything obviously, are time. serve. to want see in so would of a And

Marc Boroditsky

remains where is important new up and footprint. question, Great logos Primarily an part Picking Khozema us up the existing Absolutely. of execution. landing our left Meta. still opportunity off, Yes. for our in beyond very massive

then a have still as customer, And as of relationship. opportunity a and e-mail we market all we've the or GXK that That's a true majority SMS times. with pointed the you landing of out, where to trustworthy across build So able out the have relationship initial build segments. a with of referenced being situation there couple to we

base, those entire then expand in enablers space packaged product the that have market. second build a results are lastly, to for reaching requirements. difference go for our And the to we footprint ISVs. there account. back The generating. the relationship many selling expanding commercial we're to solutions us full is They're [indiscernible] Like after that and recognizing continue our are the example, white across our customers that and of an against power we making we're opportunity dimension that And as

traction We kinds projecting are have our the in statements, with we We to other that announcement we progress like partners. we HGS. the their seeing HGS our with disclosures, last this customers recently with our this of XX like with what We're shared also over of pursuing of on with BPOs. and partners with helping are Flex. has get announced in organizations moving into and over into had more base you SIs to shared opportunities relationship are them significant We resellers a relationship prewritten like earnings

to accounts are on are these will, of adopters that a strategy, channel relying us if become Now platform. for you our

us. the still going think growth of in is we're So those to dimensions. be front And I largely, in all pursuing opportunity

Jeffrey Lawson

spend of metrics building we the mean, and their it happens on at spend to think kind decrease the picture -- increase look complete lifetime you And They've costs they what’s acting have. these can every every that I value, their their their to I people, to to got relationships less I at more what I accomplish, the retention rates, then right? Like and talk these increase particular, competitive bottom-up Meta, drive customer, with company understanding their to of this do need realizing have of I got customers. to answer our When that part Jeff. we pretty the what company. would acquisition the is companies pressures. about they advertising, to market imagine, increase is executives is are direct it the their extent dynamics, on that that to they've on what the marketing, kind customer mean less in to last most I'll customer oftentimes motion question way are outcome improve of customers their the executives customers. challenges. or much that their your our leading have business, evangelizing to is And need in of

and is the way in the build people And the of building more the bottom-up These their guacamole market, company. and can technology that them and It's I'll more blocks that you? companies of the of these been which are the the right? composability about They customers, products solve on want a companies platform, well was APIs, new a working always report old enabling Twilio these I And bringing fastest-growing innovate with hiring Twilio AWS, companies pretty new around I'll top-down go mean our that. future building than which our in. That is kind to Engage to the that your are so not. apps and about then it we like approach very technology just and course he's how to technologies of the tell lines and the you widespread, is talking education and shared to I okay, the of and the this Twilio, and both with engagement there's that's just APIs, forward. Flex value solve customers. just these value approach. I'm We're unlock here years. together of customers, I a to education space, take business controllable selling to APIs. does can like, top-down agility okay, and you the their telling me And been we've share integrating build no, building of developers, way getting the Really, and increase of our of saying, follow APIs. new our says hear everyone these products, And unlock we build about We're all Think not have of of think market the glad [indiscernible] things of front them want, and is space, was using we're go are education up lot to to some rid to to guacamole, knows bring interesting. what the over by I these it shared story to screen, or me actually for our to some experiences talking degree education like problems that evangelizing with a that them. and technology what felt So like and time was like, that and top that hear for software I'm like a illustrative provide more everyone company Frontline able -- but is CEO to you're is. the all got not. sort And We're with recognize the the these these several It's own this, when an whether And all are and doing, so on customers which just will Stripe, lunch you I you're in. we're a our business, evangelizing of APIs, customers. which company trying a are are and you the this of CEO Jeff, the was one it like CEO that the of moving with the it last screen, they've that of doing like is platforms it quick making monolithic selling large it interesting We're of now in ideas question you, problems. allow not

Operator

Research. Our next Wolfe comes from with question Alex Zukin

Aleksandr Zukin

X to ask maybe you questions. want I

quarter a right QX model just for a net is great mentioned organic volatility. made quarters. X particularly But now, what and right Segment dollar-based the a Khozema, in would, major such First to bucket, think of but way. relative a about follow-up about consumption-based I'll into the obviously, demand just kind and way inherent the one different to And somebody to QX? think that about and with better this, it between can know already on forward? very QX, least the to you some differences? you us model I you to, When guide it think, business -- but understand try expansion a help think you metric if were is components. not the any was at not Like going I QX you're various has differences -- the biggest us know different that's there you if forward And framework I don't what what's or how going the drivers help would, just maybe asked in going if understand, set the it's help just then

Jeffrey Lawson

business, took period to periods and you're are certain next. Yes. we the Appreciate domestic Alex, in business. space, good really in you driver down I a of usage-based see period that the period, international of being to really the customers lot that kind in most off. a certain materially are fact the that’s see going I little always bit And talked recent international those off, bit take to nothing asking. say period going questions. a changed this I would there. an you're going about up to see say you like whole to versus I of mean a demand one there's mean, is from in the

years based way different And that good XXXX investment into broad coming up that's of other. one we're beyond. process kind really to and totality across period about, different was of the so or feel point the business. in one number I we domestic we like QX, there's years. QX business that good we like of was feel necessarily really But an in made up was the the that, just it like to would good something obviously, strength one -- really and because goes the way thought really we really through set we've but trying picked -- and business multiple that a it's over that a or not And international

hard point strength the and about that one me had your think really to really business to for based one there good thing, it's broad is isn't we really performance. So, like I other the question, across feel than

with into have of separate that broken think think I'm I don't should on a tell Segment [indiscernible]. of for we that prospects disclosures to feel way today. the I going you layered is growth provided to kind about basis, getting that that about good you actually dive business. think I in, we that year-over-year have out respect But we here Segment really will the

respect I take that seeing we're comments that where we probably get you can traction probably the sequentially it the XX% think Marc and think messaging, do growth You and with of customers into trajectory it really strong fact exciting. which Jeff and sets like also can was can there, just not that And with growth headed. from really that Stripe going it of to tremendous in we forward. it's really, what this really with terms we with combining prospects really, combining And but is

Operator

from Will Our next with comes question Power Baird.

William Power

A of Yes. couple questions.

Khozema. for perhaps one First

like you drivers might messaging was have You what of else there's international piece behind that that but seen been a love might looks color like as sounds have that. pointed out, some this I growth international a bit. and drove in It acceleration? it other that of big the just to what of if accelerated messaging any clearly surge quite kind internationally

Khozema Shipchandler

say Yes. Thanks two are I’d for the question there dynamics. Will.

talk fruits that our investments. builds market obviously, international we is about a Marc I internationally. that great investment. quarters really think grow see [indiscernible] really to And in think the seen And markets. now, over of a starting first and international team we're our that, with lot the ability you've And I multiple to

the well, whose as happens in about but dynamic margin pretty to QX over really feel good we felt from way well, that to the all took that obviously as time the and great time, think too longer international time. period I lends and gross is dynamic there is, which stretch that was continue particular, volumes we about second and one really, the off in customer of

William Power

about just are Jeff, commentary, in think around strategic building bolster party some we you've pipeline for solidify further? data, on of areas broadly, more of further maybe and the but doesn't first then the the up And at kind pieces the mean could guess are referenced. position and growing that great. other natural, appetite do strategy maybe, your how Okay, think I mean, anything, that What that? here? that tangential I that And it necessarily M&A you looking there just

Jeffrey Lawson

question. the appreciate Yes,

execution. your revenue First bolster that We've what scale, got pieces sort of create products It’s expand are nicely. just all, that to of the like continued it? continue very

to how I think our or we when messaging promises promises continuing best-in-class best-in-class? sure I Segment, customer about, email bringing in. are make So from think fantastic is

of And pieces. got bringing them process we're a class best together. in got lot a in we've of we've lot the So products, of

it’s three is the very what the early got pillars Flex together, we've teams which And by the we're cycle engagement We've frontline in be just I way, engaged marketer, things center. think we've about when Frontline is then of platform, which still it in and our workers with ahead, the really like for can pieces got we've so got got the bringing contact used that. QX. announced like by sales and And these

and to to So more of customers. bring together, more those clearly, there's TAM those a And there's a lot lot of buyers there, products continuing already. we're there more and bring

obviously rich have there as accelerate out great going see them after. to we do roadmap, that I are there. I should of size, far company we're you acquisitions we're always game M&A sheet, any balance what's true, goal, bar and because any board. to course, always give a As there our great them. we willing strategic have But But pipeline, we particular of high but of things that also our it's other we going or will of be cultures, of and great course like Because companies, the answer our don’t aware give that the products out

Khozema Shipchandler

on on anything. message to going earlier. growing do reality we do and don't comment focused we’re opportunities, the be will rates on and one current which the bringing in that speculation There's very Hey there got. organic growth very, be want we'll we've we're the Will not is the to obviously lookout. I right is to may continue might, But attractive see just there necessary certainly We [indiscernible] our some now market in that that. add it business

Operator

Our comes with MacWilliams Barclays. Ryan question from next

Ryan MacWilliams

XXXX. XXXX Twilio’s end like in of the Global Looks customers presence since doubled

using to around still know idea I early, engagement Engage. strategy behind so the customer expectations how And but Jeff, congrats. as it's hear far, and platform? so Twilio about unified the come like their So love to of customers

Jeffrey Lawson

adding last because actually one the automation actionable XX the actually [indiscernible] start lifetime insights more actually that mean, And is trying and on using I are is [indiscernible], diversity them. CDP today marketers into And market software get focused that And out And a and we valuable we're increase the still after. it's looking many a most it data, accommodate most that like the there, the great buttons very not hard with do by make with And new on products approach just with historically, the CDP they about and Gets to in campaign, just data-centric of running customer? proven to we campaigns, the legacy marketing. of believe equation they analysis, that actually, in going designed by part there. incredibly they are and in right? modern for, it's to, marketers especially the driven driven by are like but type that marketing campaigns But Segment is Engage. needed every is are is there, market, you Absolutely. marketer. Engage. And after The marketing ways things a way just data open and customer who a get purchase, ago, that is send I doesn’t campaign they we're campaign. opportunity the how and interesting like whole the do set what like will that's see email, going already an they these But do that. were value, to still is marketing data it's already complex that they're they is clearly or to we're going part. traction that's think of just serve rich as today. of the years actually a staff way to we're the the use XX, multivariate and open the that's step by resonate that’s product setup already an that companies trained And more I are message I going data

is the traction it's going, enjoy the novel actually a at the feedback it excited think of already side it's on. day, the the But adding So we We're to the actually that going after, because gainer. the a have today, I onto is approach. the relatively execution going product customers, and market [indiscernible]. from and I And we think getting got that end we're it, market marker legacy what going by budget, big attractive we're the ultimately budget. where the that's think we're And the in marketing see part we've at unique we marketers really

Your second was question Ryan, it guidance…?

Ryan MacWilliams

No.

my for Khozema. one second Just

to Just hear profitability about non-GAAP pleased for operating fiscal 'XX.

as services gross here from Just getting forward the quarter-to-quarter. on a Like given about on being margin can can think some yearly forward, path the margin. margin can I totally we questions business? application in higher understand higher the here, from gross how think growth going it elevated vary about basis But we

Khozema Shipchandler

non good se that the progress ex totally gross very, not an on based margins. services, say, basis Ryan, we're year question. [indiscernible] kind per very fair that’s will the year Segment on and making going products to feel that I to is But is a of cross though, We're about application guide SendGrid. this we

at a in As rate much years than messaging business. faster the you our saw that growing fast our prior very disclosure grew

we as very optimistic target. way good feel about plus XX% So this would going. really, very feel prospects started. get I segment our we add, the about We continues, the very, To has already really to trajectory that feel which, Engage about good how is

of comfortable high to as with is margin I gross business time. period us factors think generating the profits, gross XX% over delivering from messaging over great what In little investors think high we confidence record feel on still in we that long we plus put get time plus the plus XX% combination we a time, meantime, that and so gives the very that well. And those think of period to as very are with down. we say about track a and number I as and will do we'll over good up I about bit But XX%

Operator

next question with Macquarie. Fred Havemeyer Our comes from

Frederick Havemeyer

and expanded a as as and people back ask, think certainly platform what's be or on since, about that I whenever and gloves, platforms next from to and what the on here? are happening with Founder, to businesses, platform are able thinking its a most or you're to to Twilio's lot products growth exciting your what you of iteration you and Twilio's heritage the coding recall Twilio excited XXXX. products And is put channel startups your disruptive what wanted I that Jeff, about you would gets perspective in build interesting, use

Jeffrey Lawson

think goes fantastic to question. Well. it That's our back really a about mission the I When company. it, of

think the see reason venues. I think and providers, upcoming we a software, in bit anybody world. idea we And of can And distribution become software will Anybody some you of that at goes for today of that a the builds last it right new inside the years. that But product. If a and mechanisms now developers, the underappreciated Internet I thousands really why can the so I out updated goes over unimaginable. when is seeing, startup is that and a a in And Ford, news incumbent our the is the a of the got and that big is up bringing bed data company A building the suits, comes like is world developers. mission to see I imagination variety previously thing, our It's of we reflects of And with in then what's idea. world a builders exciting actually of [indiscernible]. startup Twilio unlock of millions for out Internet, for some people love can about it you a great and build in it people it. the That billions I software this out the mission it notice, year talked so whole And and market, goes EV follow intended pretty that for more fun was that people becomes themselves. can mission And we in ideas. job is example. little the do. companies, thousands no or year, news world developer enters morning a new and built and happening last big on how importantly done unlock vehicle, the many EV with lot about markets and watching talk companies the are, that they're a the like great new get to the companies if coming execution. to more and or market, process, And practically or the related. of a an people about customers [indiscernible]. [indiscernible]. field of Internet evolve wide a in That And scale for what And ultimately

that get excited marked of about companies me businesses, their we so they tremendously builds, power imagination the that. bunch bought long, it for And is for to and so a they the for And app this app that gets of sold, an products a Twilio builders. that apps

the our competition, approach, hands our that's This answers centers Segment. do developers messaging. is yes. me where our going once had is the And various serve that's world's how go do that's we're help we have imagination of yes. -- customers or the [indiscernible] want APIs to that can't innovate our love we then This what Engage. That with like we this, unlocking our to that's or platform marketing customers this Twilio, idea to and the let’s oh, Flex, and to the customers like like, of giving that. want I told that's contact and that you Frontline, better So path and for is And they idea

of the you who step humanity market and of people a story addressable about that's think [indiscernible]. and that back like build If take the data where

Operator

from Our BTIG. Matt with next question comes VanVliet

Matt VanVliet

of implement follow-up sort maturity and you're is that that in kind talking idea. touched of to And to the idea companies How that the there smarter great When of to these parts the more customer individualistic maybe can a parts other it's and a terms one You've leverage of point they be your smarter, many cohesive enterprise, their the how Segment? as see CEO, to data to in Jeff of the at you ready organization Everyone next of together this end, But the that dramatically more maybe need is over date to rate realizes get high in very of years, reality, a and maybe on outreach. question. broadly wanted the little like much you little out technology to of talking is, of a are market? level the to maybe Segment? across at adoption Segment our pretty potential to bring it couple look more accelerate really companies education this up but a in of across seems it

Marc Boroditsky

to literally, then adopt? data going have We where place provide to need real take see case, added front of the the say opportunity entire couple the Boroditsky, cut that's and is be they the progress an to opportunity question customer from way are to customers. just The I’d to and relationship. customers to lens be of We all the interest customer, Marc understanding to regarding largest a earlier interaction whatever that able ready to small to you requirements comes your across able detailed question time market. us. employees in see sources great of the And the to started use ask, connect

move to business and that pm. their orientation of that be set requirements. to then respond requirements channel that, company of from order be and connecting So happen as whatever the to how the has imagine And that And to can building about strategic To to that a will connecting that part parts a can to understanding CRM, system, relationship. see to is we relationship. entire monitor app that greater across address commercial expanded be strategically way What more more able we the think have position connecting to use a for be get if that it customer case CDP runs of to customer in the will of customer's in able that interact. you the choice they the

shared be prepare able what to we in example, bought customer more an value they up expanded, new that and of and sell Vertu as that that that have to them calling kind seeing right there where the car caller strategic, past, to the they to in is bought requirements. order So, Motors Segment are than in, customer the today, there because likely fact and example, change, then have conversation implemented to with look We're in for what the them the understand car. lifecycle the see be digital agent to is, opportunity customer able full another the from

Matt VanVliet

and still sort increasingly And then, functionality? are top building replacing have guess legacy in I of maybe course rushed you run and or that customers realize on technology on the get what as to opportunities a can't they you now XX-year XX, partner or of a of where are beginning solutions anything and just Or more looking supposedly it do they their they Flex that at of what can the mean They it? what could the X, but going of it's, thought cloud on-prem was wanted seeing can't or perspective? augmenting holistically Are Twilio actually traditionally that the and configure business. pandemic hosted at Flex now side from

Marc Boroditsky

a solution. graduating, center in they smaller type In as I contact organization, but a of center lot interests up see healthy solution, support mark are their of implementations the it you [indiscernible] to fairly way it's as implementation base. call type of do their more And big this real agent by up And think move getting installed contact engagement or legacy larger customer more portion business the so we like a a customers, account. first have to a

Align, We and which implementation. has have replacement our with called on a prepared legacy going we're now is actually that very a able our and we regarding fairly But new remarks example customer digital shared legacy winning implementation. a for customer augmentation, The their facing business was forward. we a people standard challenges that to channels more in healthy their up their a more capabilities also implementation rapidly the remarks spin are of supplier new oriented replacement great that that adding that in requirements legacy parallel in example, that’s Twilio as is and

that's has Now, generation recognize not been helping [indiscernible]. of many and the manufacturers XXX to to win player range XXXX engagement And satisfied the not that to up going meet banks necessarily to going showing full next the way the customers fail. with for wait We're -- examples business, that to you're that people from we're legacy way the the we that in Fortune Global successfully overall, Fortune XXX have requirements. automotive led

Jeffrey Lawson

so was feature Matt. really thought Jeff I number of to to I and use talking the couple I we first This great had of stage I about all Procter hit try we properties. limitations We their their customer. was when the Intuit, a was of and At enterprise. one penetration just Segment customers, we And into strong their which great about Intuit had of interesting, add by Segment, Gamble acquisition, getting their know is of thing, Flex. SIGNAL the a across enterprise speaking a into have

that this We customer. have QX, financial signed quarter company services a announced we XXX Fortune that in banking

got we’ve who already. Segment customers So great using enterprise are

to systems early subsidiaries And need help the the think need a apparently. data more so that for I is are, brands the that they make have of more the platform sense the businesses, it. complex enterprises run, When customer the of implement, struck more was been by more more how the about we all

of been that's in I've interesting. market, traction So out the the that’s already acquisition by really surprised

Andrew Zilli

out a have know lot queue. I Great, the questions time. folks of we in there's are still of that

afternoon. this up catch you We will with

and joining the quarter. rest for everybody for catching of over the the you thank otherwise, So up

Operator

call. today's This concludes conference

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