Twilio Inc. (NYSE:TWLO) Q3 2023 Earnings Conference Call November 8, 2023 5:00 PM ET

Company Participants

Bryan Vaniman – Senior Vice President-Investor Relations

Jeff Lawson – Co-Founder and Chief Executive Officer

Khozema Shipchandler – President, Twilio Communications

Aidan Viggiano – Chief Financial Officer

Conference Call Participants

Jeff Hickey – UBS

Meta Marshall – Morgan Stanley

Mark Murphy – J.P. Morgan

Nick Altmann – Scotiabank

Kash Rangan – Goldman Sachs

Michael Turrin – Wells Fargo Securities

Alex Zukin – Wolfe Research

James Fish – Piper Sandler

Derrick Wood – TD Cowen

Ryan Koontz – Needham & Company

Pat Walravens – JMP Securities

Ryan MacWilliams – Barclays

Fred Havemeyer – Macquarie Capital

Operator

Good afternoon and welcome to the Twilio Third Quarter 2023 Earnings Conference Call. All participants are now in listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the call over to Bryan Vaniman, SVP of Investor Relations. Please go ahead, sir.

Bryan Vaniman

Good afternoon, everyone, and thank you for joining us for Twilio’s third quarter 2023 earnings conference call. Our prepared remarks, earnings press release, investor presentation, SEC filings, and a replay of today’s call can be found on our IR website at investors.twilio.com. Joining me today are Jeff Lawson, Co-Founder and CEO; Khozema Shipchandler, President, Twilio Communications; and Aidan Viggiano, Chief Financial Officer.

As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings release and in our prepared remarks posted on our IR website. We will also make forward-looking statements on this call, including statements about our future outlook and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent Form 10-Q. forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements except as required by law.

And with that, I’ll hand it over to Jeff and the team, who will discuss our Q3 results, and then we’ll open the call for Q&A.

Jeff Lawson

Thank you, Bryan. And, thank you everyone for joining us today. Twilio delivered a strong third quarter, exceeding our revenue and non-GAAP profitability targets and generating another record quarter of non-GAAP income from operations and free cash flow. All told, we delivered $1.034 billion of revenue, $136 million of non-GAAP income from operations, and $195 million of free cash flow. On the back of our strong year-to-date results, we’re raising our full-year non-GAAP income from operations guidance to $475 million to $485 million. As you can see, the efficiency gains are rapidly showing in our quarterly results, reflecting the fundamental strength of our Communications business which represented 88% of our revenue in Q3. In fact, our Communications business was recently recognized by Gartner as a Leader in their first ever Magic Quadrant for CPaaS, a terrific recognition, indicative of our attractive market position and the strength of our platform.