TWLO Q2 2023 Earnings

Call Details

• Call Title: Twilio Inc. Q2 2023 Earnings Call
• Date: August 8, 2023 at 9:00 PM UTC
• Management Team:
  • Bryan Vaniman (SVP of Investor Relations and Corporate Development)
  • Jeff Lawson (Co-founder & CEO)
  • Elena Donio (President, Twilio Data and Applications)
  • Khozema Shipchandler (President, Twilio Communications)
  • Aiden Viggiano (Chief Financial Officer)

Call Summary

Financial Performance

• Total Q2 revenue was $1,038,000,000, representing 10% year-over-year growth on a reported and organic basis.
• Communications revenue was $913,000,000, up 10% year-over-year, and Data and Applications revenue was $125,000,000, up 12% year-over-year.
• Adjusted for the IoT and Value-First divestitures, Q2 revenue would have been $1,013,000,000, representing 11% year-over-year growth.
• Q2 non-GAAP gross profit grew 13% year-over-year, representing a non-GAAP gross margin of 52.2%, up 130 basis points year-over-year and down 10 basis points sequentially.
• Q2 non-GAAP income from operations was $120 million, representing a non-GAAP operating margin of 11.6%.
• Q2 free cash flow was $72 million, and free cash flow adjusted for $30 million of restructuring payments was approximately $100 million for the quarter.

Guidance

• Q3 revenue guidance is $980 million to $990 million, implying reported year-over-year growth of 0% to 1% and organic growth of 3% to 4%.
• Q3 non-GAAP income from operations is expected to be $75 million to $85 million, which includes approximately $10 million of Signal conference expenses.
• Full year non-GAAP income from operations guidance was raised to $350 million to $400 million based on first half performance.
• The guidance range explicitly assumes a modest few-hundred-basis-point headwind from crypto customers and a potential 100 basis point Q3 revenue headwind from 10-DLC compliance.