TWLO Q3 2020 Earnings

Call Details

• Call Title: Twilio Inc. Q3 2020 Earnings Call
• Date: October 26, 2020 at 9:00 PM UTC
• Management Team:
  • Jeff Lawson (Co-founder and CEO)
  • George Hu (COO)
  • Khozema Shipchandler (CFO)
  • Andrew Zilli (Vice President, Investor Relations & Treasury)
  • Libra Clemens (Chief Diversity, Inclusion, and Belonging Officer)

Call Summary

Financial Performance

• Total revenue for Q3 grew 52% year-over-year to $448 million.
• Dollar-based net expansion was 137% for the quarter.
• Political traffic contributed approximately $10 million or 2% to Q3 revenue.
• Revenue excluding political traffic grew 48% year-over-year in Q3.
• Revenue from the top 10 active customer accounts represented 14% of revenue, versus 15% last quarter and 13% last year.
• International revenue was 27% of total revenue in Q3, unchanged sequentially but down from 28% in Q3 2019.
• WhatsApp contributed approximately 6% of revenue in Q3, down from 7% last quarter, and Twilio stated it will stop breaking out WhatsApp contribution starting in 2021.

Guidance

• Twilio expects Q4 revenue of $450 to $455 million on a standalone basis, including A2P fees, representing 36% to 37% year-over-year growth.
• Twilio expects a Q4 operating loss in the range of $10 to $15 million.
• Guidance does not include the announced Segment acquisition and the company expects a modest top- and bottom-line impact from the deal in Q4.
• Going forward, Twilio will provide quarterly guidance only and will not provide multi-quarter financial targets.
• Medium-term guidance provided at the investor day was 30% organic annual revenue growth for the next four years and explicitly does not incorporate Segment.
• Twilio stated it intends to continue investing into 2021 and anticipates these investments will drive operating losses into next year.
• More information on Segment integration costs and financial impacts will be provided once the acquisition closes.