TWLO Q3 2023 Earnings

Call Details

• Call Title: Twilio Inc. Q3 2023 Earnings Call
• Date: November 8, 2023 at 10:00 PM UTC
• Management Team:
  • Bryan Vaniman (SVP of Investor Relations and Corporate Development)
  • Jeff Lawson (Co-founder & CEO)
  • Khozema Shipchandler (President, Twilio Communications)
  • Aiden Viggiano (Chief Financial Officer)

Call Summary

Financial Performance

• Twilio reported Q3 revenue of $1.034B and non-GAAP income from operations of $136M.
• Q3 free cash flow was a record $195M, driven in part by heightened collections including a three day improvement in DSO.
• Non-GAAP gross profit in Q3 was $553M, representing a non-GAAP gross margin of 53.5%, up 270 basis points year-over-year and up 120 basis points sequentially.
• GAAP loss from operations in Q3 was $109M, which included $7M of restructuring and real estate impairment charges.
• Stock-based compensation was 17.9% of revenue in Q3, which management said is down 180 basis points year-over-year.
• Communications generated $907M of revenue in Q3 and comprised 88% of total company revenue in the quarter.

ARR / Recurring Revenue Growth

• Organic revenue growth in Q3 was 8% year-over-year on a consolidated basis and communications revenue grew 8% on an organic basis.
• Data and applications revenue was $127M in Q3, up 9% year-over-year.
• Q3 organic revenue growth excluding crypto customers was 11% year-over-year.
• Communications contributed 82% of non-GAAP gross profit for the company in the quarter.
• Management reported modest sequential improvement in TD&A bookings in Q3 but did not disclose absolute bookings amounts.
• Deferred revenue change was driven by data and applications in the quarter and management cautioned against over-indexing to a single-period change.