TWLO Q2 2022 Earnings

Call Details

• Call Title: Twilio Inc. Q2 2022 Earnings Call
• Date: August 4, 2022 at 9:00 PM UTC
• Management Team:
  • Bryan Vaniman (SVP of Investor Relations and Corporate Development)
  • Jeff Lawson (Co-founder & CEO)
  • Elena Donio (President of Revenue)
  • Khozema Shipchandler (COO)

Call Summary

Financial Performance

• Reported revenue growth came in above the 30% organic revenue growth level referenced by investors during the call.
• International revenue represented 35% of revenue sequentially, which management said was flat quarter-to-quarter based on customer address metrics.
• Gross margin declined in the quarter and management attributed that decline largely to higher international messaging volume, which has structurally lower margins.
• The company highlighted an eight-figure Flex deal signed in Q2 with a Fortune 100 retailer that was an existing API customer and expands usage of Flex, video, and messaging.
• Zipwhip has been integrated into the company and management said the product and team performance is strong, but the business is not broken out separately.
• The Cineverse commercial agreement alongside an investment was described as accretive, but management said it should not be expected to materially move gross margins in the next quarter.

Guidance

• Twilio guided Q3 to a reported growth range of 30% to 32% and an organic growth range of 29% to 30%.
• Political messaging revenue is included in the Q3 guide, but management said political volumes tend to be more material in Q4 than in Q3.
• The company reaffirmed a commitment to be profitable in 2023 but did not provide a specific EBIT margin rate tied to that commitment.
• Management said they are guiding with the near-term expectation of some one-time charges (real estate and other non-cash items) affecting near-term operating results.
• FX impact is managed via a hedging program and was described as not material to results during the quarter.
• Management expects Engage GA in the second half of the year but emphasized continued beta learning and product shaping prior to GA.