TWLO Q3 2022 Earnings

Call Details

• Call Title: Twilio Inc. Q3 2022 Earnings Call
• Date: November 3, 2022 at 8:30 PM UTC
• Management Team:
  • Bryan Vaniman (SVP of Investor Relations and Corporate Development)
  • Jeff Lawson (Co-founder & CEO)
  • Eyal Manor (Chief Product Officer)
  • Elena Donio (President of Revenue)
  • Khozema Shipchandler (Chief Operating Officer)

Call Summary

Financial Performance

• Twilio reported Q3 revenue of $983M, representing 33% year-over-year growth and 32% organic growth.
• Q3 operating loss was $35M on a reported basis and $6M excluding a $29M non-cash accrual for the employee sabbatical program.
• The company provided Q4 revenue guidance of $995M to $1.5B and implied full-year 2022 revenue of approximately $3.8B.
• Dollar-based net expansion was reported at 122% for Q3.
• Communications generated approximately $3.1B of last-12-month revenue as of Q3-22, with messaging delivering 64% of communications revenue.
• Twilio reported processing over 144 billion messages and hosting 54 billion voice minutes annually, and management stated sending over 127 billion emails monthly.
• Global 2K (G2K) customer count was 1,028 and those customers generated $216M of revenue in the quarter, representing over 20% of total revenue.

Guidance

• The company reiterated its commitment to deliver non-GAAP operating profitability starting in 2023.
• Q4 revenue guidance was given as $995M to $1.5B and Q4 operating loss guidance was an operating loss of $15M to $5M.
• Based on current guidance, full-year 2022 growth is expected to be approximately 34% year-over-year or 29% on an organic basis.
• Twilio withdrew its prior 30% organic revenue growth target and will guide quarter-to-quarter in 2023 due to macro volatility.
• The medium-term organic revenue growth target was stated as 15% to 25% annually, with software targeted at 30%+ annually.
• Management targets annual non-GAAP operating margin improvements of 100 to 300 basis points beginning in 2024 and through the medium term.
• Management said SBC will likely increase modestly in 2023 and the medium-term target for SBC is 15% to 20% of revenue.