Twilio has released its Q1 2021 earnings this week and here are some of the notable highlights. If you haven’t read the research report, do check them outhere!
First quarter total revenue of $590 million, up 62% year-over-year, including $45 million from Twilio Segment. Excluding Segment, revenue grew 49% YOY.
First quarter total revenue dollar-based net expansion of 133%. This continues to be extremely strong as it’s hard for their customers to go backwards once they’ve experienced new ways of engaging one another. In their customer engagement report, 95% of respondents reported plans to increase or maintain their current communication offerings, with companies looking to add an average of four new channels (e.g. live chat, IVR, video, etc). A classic land and expand strategy, cross-selling value adding products once they land a contract.
More than 235,000 active customer accounts, as of March 31, 2021
Initiates Q2’21 guidance
Total revenue of $591 million to $601 million, including Segment, up 47% to 50% year-over-year. They guided conservatively in my opinion, as the economy reopens and uncertainty looms.
Non-GAAP loss from operations of ($27) million to ($22) million. Guided for operating loss as management plans to accelerate investments which was postponed due to COVID. These investments are largely centered on enterprise sales, Flex and new growth products, plus core systems and infrastructure.
Non-GAAP loss per share of ($0.16) – ($0.13)
Total customer counts at 235,000 (added 11,000 this quarter!)
Top 10 customer accounts continued its decline from 15% in Q1 2020 to 12% today, a good sign that they’re continuing to diversify their revenue streams.
Management highlighted great traction with Flex and Video, as well as strong demand for Twilio Segment. These 3 are going to be the next growth drivers for Twilio.
Twilio has recently been named one of the Fortune 100 Best Companies to Work For!
Some highlights from the earnings call:
First off, I want to say that Twilio has a different way of doing their earnings call, instead of beginning with prepared remarks that only talk positively about their company, they started straight into Q&A, giving analysts more time to ask their questions. I love how candid and open management is, both of which are very metrics for me when evaluating the management team.
Oh, and this was how the CEO began his shareholder letter 😂
Alright, let us dive into their earnings call!
Some insights into Segment since their acquisition:
“In terms of Segment, the people are very excited about it. I’ve had it come up in probably more than two-thirds of the calls I’ve been on with customers in the last 90 days. We’ve talked about Segment and the opportunity there. I think people are very excited about the idea of delivering much more personalized engagement.”
Twilio’s value proposition:
“I think as a platform play, you still leave white space for customers to go paint in to make it theirs. And that’s what they value. They want to build on top of their platform. And as a result of that, we give them that flexibility.
And that enables them to get outcomes that they can’t get with any other vendor, that also enables developers to continue to be our biggest champions inside of these accounts. And I think those are important things for us to continue to consider.”
One of the thing about Twilio is that it not only has a great product, but they also know how to sell this product, by running hackathons with their customers and raising awareness of what their solutions can do:
“We’ve had a hackathon program now that we’ve used successfully in the enterprise area directly with customers, and now we’re starting to do that with our partners. Obviously, when you’re building momentum with a large system integrator, a lot of the — a lot of what you needed to do is, first of all, get people internally just aware. There are — these are not simple entities or complex entities.
They have lots of groups and just kind of evangelizing internally the power of Twilio, and the Twilio message is really important. So bringing these hackathons we find is, generally speaking, a really good way to extend our reach, especially among the developers and the thought leaders within an organization, whether it’s a customer or an [Inaudible]. So we’re excited about that. But also, the — a lot of the times, these hackathons also yield really interesting IP or the beginnings of an interesting IP and whether that’s at the customer side or on a partner side.”