Q1 2020 Earnings Call

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Yes populations, who may be severely impacted by the various.

Till he was also matching play donations two to one for charitable organizations focused on the covert 19 response, including the CDC Foundation Global release International give to Asia and international Medical Cart.

These acts are part of our initial response dependent but we are acutely aware of more need in communities around us and we'll continue our efforts to invest in our communities. During this time of need.

I also want to welcome a couple of new leaders of Twilio. We recently hired Christy late as our new Chief people officer and should be responsible for our global people team driving the company's talent development and acquisition strategy and growing the Trolio magic around the world.

We also welcomed Steve Q as our new Chief Security Officer to lead Toils Global Trust and security team responsible for corporate physical and cyber security. We're excited to have you both onboard.

Before I hand over to George I want to thank those who are on the front lines of this pandemic the medical professionals. The truck drivers the food delivery workers, the grocery store workers, the manufacturing workers and everyone else, who is playing a role in slowing the spread or providing us with the stock shelves in our local stores.

Thank you.

Thank you for everything you're doing for the rest of us.

With that I'll hand, it over to George George.

Thanks, Jeff our team delivered great results in the first quarter as our investments in go to market continues to extend our reach.

Customer engagement continues to be top of mind for companies and we are helping them drive new ways of digital engagement.

When we closed our offices in early March the team did a great job continuing to engage with our customers.

Our marketing team shifted several planned in person events to virtual with more than 30 virtual events Q2 from the Trillium engagement tenant programs to round tables for lunch and learns and our first ever virtual engage event that we held in mid April with more than 1500 registrations.

Our developer relations team also did a great job engaging our extensive developer community online retailing on TV and Twilio quest and more.

In fact, our developer community spent 150000 minutes plus watching our live video content. This quarter 528000 minutes watching on demand video content and averaged a total of nearly 100000 minute learning on Trolio quest.

Thanks for the entire team for being there to support our customers and developers throughout the changing environment.

I also want to thank our partner ecosystem for stepping up during this challenging time.

Providing needed implementation services and Twitter packages for mass alerts promote agent contact centers AI powered bots and more.

As you heard from Jeff covered 19 has drastically accelerated digital transformation projects across many industries, we are uniquely positioned to help with our complete customer engagement platform.

Fact, we saw a 25% increase in average daily sign ups from March 18th through April Thirtyth compared to the first 11 weeks for the quarter.

This is a great opportunity for us to introduce Trojan, new customers or expand with additional products with existing customers.

Whether it's adding video for Tele medicine voice for IDR for email for updates notifications. The current environment I presented multiple entry points for us that expand our long term opportunity.

But it's bigger than just individual channels as companies need to act quickly to move their contact centers to the cloud prior to this outbreak. It's estimated that of the roughly 15 million contact center seats in the market about 17%. We're in the cloud now it is expected to be 50% by 2025 and flex provides us the great opportunity.

I'd to help companies with this transition with a fully programmable contact center platform.

Let me discuss a few deals we signed in the quarter.

As you know expanding our international presence has been a key area of investment for us over the last couple of years, we've opened several new offices and the percentage of our total headcount outside the U.S. has increased from roughly 19% to 27% in just the past year.

This strategy is paying off as we continue to land and expand with some great International companies.

For example, we expanded our relationship with New Bank largest Fintech company in Latin America.

Eubank became a tulio email customer 2019, and turn to Tulio health and scaled our contact center to keep up with their growth in Q1, Eubank chose collect to power their several thousand contact center agents that are trusted programmable platform. Thanks to our team in Brazil for building such a great relationship with New Bank.

We also signed flux deals with AB inbev.

Fortune 150 conglomerate.

We entered into a new relationship with standard chartered Bank, a global 2000 company and leading international banking group with more than 87000 employees across 60 markets.

Standard chartered which has been in business for more than 160 years is an incredible example of digital transformation and they selected trolio to build their new enterprise messaging platform to provide the flexibility performance and scale they need to provide the best experience for their customers.

We expanded our relationship the fortune 100 brick and mortar and online retail company and it's been a customer for several years and a bread. Many of you have likely interacted with recently.

They are building a new work flow to expand our usage of Tulio SMS for their mobile and web applications.

New work flow will offer order and shipping notification via text messaging to get purchase through those channels.

Adding email to the platform has been very successful as it allows us to offer customers a single platform for their digital customer engagement and we continue to see email drive great new deals for US we entered into a new relationship with a large car manufacturer that needed a new platform and reliable deliverability of two factor authentication for their customers as their existing solution was not performing.

They selected Trolio as their platform of choice combining E mail and SMS to provide a more reliable and integrated solution to ensure a better experience for customers.

We also expanded our relationship with one of the world's largest consulting firms as they added E mail to power marketing campaigns and custom notifications across several products.

They chose trolio due to our ability to quickly integrate into key applications across our business in over 120 countries, enabling product into I'd, eight test and deploy with little friction.

Overall, we had a strong first quarter looking forward, we remain focused on supporting our customers through the current environment and ensuring our platform and our team are ready to support them as they adopted ASU environment, We're continuing our investment in our go to market efforts as we extend our enterprise present.

Expand internationally and grow our partner ecosystem.

We believe investing in these areas today will set us up for the long term.

Thanks to the entire team for delivering his great results and with that I'll hand, it over to consumer.

Thanks George.

Compared to 29% both last quarter and in Q1 29 gene.

Whatsapp contributed approximately 7% of revenue horizons, ATP or application the person messaging fee was implemented and February onest and contributed approximately 4 million to revenue.

As a reminder, this was a direct pass through to customers and did not impact gross profit dollars.

First quarter non-GAAP gross margin was 57% and it was negatively impacted by 70 basis points from 80 bps.

We will continue to provide the financial impacts of ADB throughout the remainder of 2020.

Non-GAAP operating profit came in at $6 million stronger than originally forecast.

Outperformance was primarily driven by revenue favorability as well as reduced travel and office expenses was slower than planned hiring.

Now, let me discuss guidance.

While we continue to see strengthen our business the macroeconomic environment remains dynamic.

We feel it best to employ prudence in our guidance velocity.

As such we are withdrawing guidance for the full year.

However, we are providing guidance for the second quarter and expect revenue of 365 million to 370 million, including ATP fees for growth of 35% year over year at the higher.

To date in Q2, we've continued to see a net increase in usage relative to our expectations and strong growth in the overall business a testament to our resilient model and broadly diversified customer base as Jeff said earlier, we believe we were built for this kind of environment.

We performed a variety of scenario analysis across used cases industry verticals and geographic mix to better understand possible impacts to our revenue.

While we're not going to get into the specifics of these scenarios our revenue guidance naturally takes into consideration headwinds from the more heavily impacted industries like travel hospitality and ride sharing.

As well as the offsetting benefits from customers in education, healthcare retail and others.

The note customers, we categorized in those specific impacted industries have averaged less than 10% of trulia revenue over the last several quarters.

That number excludes email.

In short there are puts and takes and so far we've seen workloads.

We expect a second quarter operating loss in the range of $15 million to $20 million.

As we discussed on our last earnings call, we view 2020 as year of investment portfolio.

Given the strength of our balance sheet as well as the size of the opportunity in front of US our intention is to continue investing through the cycle.

We believe this is in the best interest of Trolio, and our stakeholders and we will continue to generate elevated growth outcomes for the foreseeable future, enabling us to come out of this current environment in an even stronger position.

Let me give a brief update on each of the areas of investment we laid out on our last call for our R&D Center of excellence in India, where leasing office space, but for now we have virtually opened that office continued with our hiring plans and have on boarded a number of employees were currently working remotely.

We are continuing to higher for our go to market team with a focus on enterprise reps international expansion and flex specialists.

This remains a critical investment as we continue to drive deeper into the enterprise and become our customers platform of choice when it comes to digital engagement.

Lastly, we continue investing in our systems and infrastructure as Trillium continues to grow we want to leverage the benefits of scale.

We continue to invest and improvements in our billing systems quote to cash and other cross functional areas that have been prioritized across the company to better enable our employees.

We understand the ambiguity that exists in the world today as a result of cobot 19, but we're highly confident in the ROI. These investments will generate for the long term.

Additionally, with more than 1.8 billion in cash and cash equivalents in the balance sheet.

We feel we are in a position of strength to manage the business through this pandemic and come out stronger on the other side.

A few other items to discuss before opening the call. The questions are signal conference. Originally planned for me is now rescheduled as a virtual event for the week of September 28.

We're still working through the details of making this event virtual and the related costs will provide an update on our Q2 calls.

Keep in mind, we will likely reallocate some of the plan signal expenses to other marketing related areas.

We're also postponing our Investor day, which will also be virtual two alignment signal and are now targeting Thursday October onest.

Stay tuned for more information from the IR team.

Finally, I wish everyone, well and hope you are healthy and save.

Thank you for joining operator, please open the line for questions.

Okay again at this time with anybody would like to ask your question. Please press star one on your telephone keypad and again that would be star one on your telephone keypad.

Your first question comes from Nikolay Beliov from Bank of America. Your line is open.

Hi, Thanks for taking my questions.

Life results year guide and I hope everybody thick, then help it just wanted to dig into the use cases, when I think about two I think about putting manual schedule marketing operations and customer support.

Maybe you can help us give us the puts and takes in each of those and Kalgold laid out for you during the quarter and wall trends, you're seeing in the use cases.

What you saw in though in the model of Echo. Thank you Thats It for me.

Thank you Nicole this is Jeff level of because everyone's I guess sort of the coordination problem on the so called like usual for them or your ticket.

I think somebody else to use cases for some of the elevated use cases that we've seen so far Nikolai are really in categories. I would say so we talked about some of the headwinds for example, but I think on the other side in terms of like some offsetting benefits that we've seen or use cases in education healthcare retail.

Ill, which is more vertical look.

Relative to some of the areas that you called out and I think what we're seeing is is that through the first quarter certainly in the back end of that and then as well as we begin to start Q2, we've continued to see a slight net increasing usage relative to our expectations in part because of new use cases in some of those areas and.

I think all of that just kind of goes to the broad overall strength in India business.

The business is broadly diversified we have a very resilient model and customer base that spans geos industries and.

And verticals and so I wouldn't necessarily call out a specific use case, but I think we're seeing elevated activities in some of those areas obviously offset by.

Some of the others that we called out.

Yeah. This is George I'd add onto that I agree with 'cause ammo most of the the trends, we're seeing or by industry that said, we are seeing six used cases that are.

Opportunistically coming forward for us in under covered.

And these six our remote contact center self service contact with delivery distance learning Tele health and mass notifications and those are some of the emerging use cases that were seeing under covered.

Certainly not we saw the core core use cases that are going strong, but those are some new ones that we're excited about.

Perfect. Thank you guys.

Okay.

Your next question comes from Derrick Wood from Cowen Your line is open.

Great. Thanks, and congrats on the impressive acceleration in growth and take a big jump into new customer accounts in the quarter.

I wanted to.

You know touch on the sales strategy here.

Obviously theres a lot of disruption with how people are communicating you guys, you're talking about acceleration and digital transformation. I'm curious are you seeing sales engagements move out of just the developer and more into the C suite and I and I guess given this opportunity.

What are you going to lean and from a from a sales strategy standpoint.

Hi, This is George yes, Im really.

Im really glad that we really made the investments over the last few years now to both have the distribution as well as the the programs. The executive engagement program. So that we've built relationships with companies. So that we can basically be able to take advantage of.

This situation and what we're seeing is a growth really across the U.S industries I talked about we are engaging at a higher level than before because now what we're seeing his executive decisions coming down to hey, we've got to transform our contact center in 60 days in some cases or what have you.

But you know I would say this is really just much more building on the strategy. We've had now for a long time, which is to go into enterprise sell higher sell more strategically and so we're continuing to I think more execute the playbook that we've been preparing for our for several years, then fundamentally alter the playbook, except for really focusing on the use cases, which I think I'm very excited about.

We've really done I think is good job of training and arming our sales force to go prosecute these.

Can you use case as well.

Thank you.

Your next question comes from Michael Turin from Wells Fargo. Your line is open.

Thank you Karen your line is open our UN mute.

Nova Laundromat still engineering and hearing.

Go ahead sorry.

Oh, sorry about that pinball on the on the calls here.

Hey, you talked about flex in terms of the addition of some of the new features here and then the uptick in remote contact center demand.

Also came up is there anything else you can add just in terms of how you've been able to react given the contact center market in particular seems to be undergoing a pretty big transformation in terms of what's happening and it certainly seems to us like flexes is well suited to capture some of that.

Yes. This is George So in addition, I think having really.

A great product and platform in terms of being able to have flexibility and ability to deploy quickly which is I think perfect for this moment ability to support.

Work at home agents remote agents I mean, I think that this time was really tailor made for the flex value proposition, we augmented that by really.

Beefing up some of our.

Capabilities, our services capabilities and our partner capabilities. So internally we've created a program that we're calling this will be a lightning program, which is a set of services to help.

Flex customers get deployed very very quickly in some cases were able to turnaround somebody's emergency cases in just a few days on the platform, which is incredibly exciting and we're also seeing our partner ecosystem step up to help US editorial build program is starting to pay off as we saw in Q1 on north of 40% of our flux deployed.

What's involved to partner, which I think is a real a testament to the the work we've done to build not just the product in the platform and the engagement team on the sale side, but also.

Our partner ecosystem and we're excited about continuing.

Our progress there.

Thank you really really strong start to the year nice nice work.

Your next question will come from Matt Stotler from William Blair. Your line is open.

Hi, guys. Thanks for taking my questions. Congrats on the great results just a couple of quick ones for me. So one obviously strong results in Q1 sounds like usage as you said is above expectations and so far in Q2. When you look at a guidance for Q2 and think about what you're seeing with.

With customer behaviors, how much of your growth do you see coming from continued increasing usage at existing customers versus behaviors that youre seeing in terms of continuing to onboard new customers as we move into Q2.

Yes, I think Matt. Thanks for the question I think it to use it's a mix about honestly, what we're certainly seeing additional tailwind from education from healthcare from retail and some of the others that we talked about.

I think at some point those are going to moderate a little bit but at the same time. I think were is also going to happen is is that we're going to have some of the other use cases come back that have been.

Download it and so I think there are some puts and takes in the mix but.

As we said and done in our earlier remarks like what we've overall scene is is that theres sort of been a tailwind here.

I think in terms of the back half of the year, we're still cautiously optimistic about the way that things are going to play out there. We felt it was prudent to withdraw our guidance for that period, just given how dynamic things are but but we do remain cautiously optimistic and I would say certainly for the long term were as excited as we've ever been if not more excited.

Right right it's great.

And then just one more quickly on the on San grid or E mail in the quarter just wondering how that performed in Q1, what you're seeing there.

Given the environment and given all the Joe covered related emails that we're all seeing coming into our in boxes.

Yes, we don't breakout the sand grid business anymore, but it did continue to perform well in Q1.

Specific to cobot 19, email as well experienced similarly higher usage relative to what we talked about across the entirety of the business.

Hi.

Also just kind of bear in mind that the email businesses per that predominantly sold is buckets and so the revenue for that product doesn't fluctuate as much based on usage.

Right. Okay. Thanks for taking my questions.

Your next question will come from Pat.

Walravens from JMP Securities. Your line is open.

Hi add to this mark for Pat, adding so much for taking my question.

I'm just wondering in terms of the.

If you guys have any flexible painting kind of point, the S&P and gifting requests for flexible.

And then what's the policy there.

Yes, let me just make sure that I understood. The question have there been requests for flexible payment terms or have we seen any kind of deviations for SMB customers is that right.

Correct, yes.

Okay. We've received requests from a small number of customers around changes to payment terms or minimum commitments and we're evaluating those on a case by case basis, but.

So far we've not seen in an impact on the business from those requests.

And we've not seen a materially increase in delinquencies.

In our Dsos pretty stable and Theres no change in that really in Q1 relative to where it was that in Q4 19 or other quarters.

Okay. Thank you.

And your next question will come from meta Marshall from Morgan Stanley. Your line is open.

Great. Thanks.

Just wanted to dive into the the epic dealer kind of the tele health market.

I think epic or at least from from news reports have been using a different video solution previously in terms of what was that they were looking for.

And that kind of Megan transition to Antonio platform, and just level and engagement with kind of other tele health providers would be helpful. Thanks.

Hey, this is George I think that.

One of the nice I think benefits of the tailwind that we've seen isn't our video product, it's a product that.

I think really tailor made for this period of time in terms of being able to be.

A deployed very quickly like all of our products Thats consumption based so people can get started and try it without any barriers to entry and it's also a fantastic product that can scale incredibly well and deliver excellent quality and so I think that combination plus the fact that tulio is now.

At the compliance sports have been able to time gays I think the timing workout incredibly well.

And so it was industry entering part of that story is that again this started through the power of our developer community where.

A developer at epic.

Had a friend who was a huge truly enthusiast would actually used tulio video and recommended us.

To help address some of their challenges and they were able to through the power of our platform get up and running quickly try it for themselves the power of it.

And at that cycle end up being I think for us a relatively rapid cycle, because I think over the fundamental power of our business model at harvest platform model worked.

Hand in hand, with the investments we've made on enterprise side with the beta is so I think again this deal really speaks to the power of our model the strength of our strategy of having a multichannel or omnichannel strategy and the incredible combination has developed promotion plus the enterprise investments. We've made I think it's picked all those and we're really.

Reynolds be able to support an amazing organization like epic during this type of hundreds.

Great. Thank you.

Your next question will come from Citi.

Hey from Mizuho Your line is open.

Hi, Thanks for taking my question Glenn you all are doing well George just getting into your go to market Morrison given the changes.

Can you talk about how that changes may again, and you talked about opportunity mostly in the cloud contact center market.

Could you talk give some color what kind of discussing you're having with customer I can understand.

At this point some of the opportunity there to supplement their existing contact center and what are the long term opportunity you have there and the pipeline look like.

Yes, so great Great question, I'll look I would I went to extent back and say that overall as Jeff said this business environment is showing companies that they need to really doubled down and accelerate on their digital transformation that they need to be we all need to be communicating with our customer Lin digital channels more than ever and that could be.

The messaging that could be whats app that could be video and that could also be voice and in the contact center that all of these channels are incredibly important this period of time and the strength that we're seeing is really across multiple products not just the contact center and what's really fantastic about this opportunity for us is that certainly while it's challenging for our sale.

His team you know the Kingold is a customers. They are having you know obviously all of us or having our personal challenges with staying home that our sales team is doing an amazing job of engaging our customers are using executives you know and this age you're doing video calls with your customers in each other's homes are building deeper report I think theres some really.

Interesting opportunities being opened up to build deeper connection with customers. During this period of time in our Salesforce and taking advantage that now one of those opportunities. Absolutely is is the contact center and what we're seeing is that not across the board, but certainly for many companies that this this.

Current situation is causing them to rethink many aspects of their contact center I was talking to.

One of our one of our customers who in their contact center. They were there is and BPL and no suddenly they had to figure out how do we make sure there as always socially distance for their agents emitter agents know how do we support work at home agents as part of it. So there's a huge transformation happy in the contact center and Theres no doubt that this is going to accelerate the overall.

Migration of contact centers to the cloud and I think that we're benefiting from that.

Hopefully as much as anyone because of our business model and because of our technology model. So we're excited about these gains were excited about the transmission happening and we are engaging and I think that.

This is definitely an area that amidst a lot of challenges in certain industries. We're excited about.

Thank you.

Your next question comes from Mark Murphy from JP Morgan Your line is open.

Hey, Thanks to this has been to them on behalf of Mark Congrats on the quarter and thanks for taking your question clearly my one question for you is is there any way to disaggregate the upside versus your guidance between portfolio base and portfolio base send grid and and the variable portion because of timing just trying to figure was there any material.

In the contribution from variable revenue versus what you had expected before.

Yeah, we're not we're not disclosing those different buckets, I mean, I wouldn't I would say it this way that.

To reiterate a point that I made earlier that I think what we saw in Q1 was simply a reflection of broadly diversified customer base that.

Had a strong performance overall and we noted a few of the areas that were a more economically challenged and then some of the areas that that had tailwind but.

We don't break out those segments anymore.

Okay understood and one quick one for Jeff.

Hi, Jeff any thoughts on the on the synch acquiring additional interconnect business for Sep.

How could that shape.

The competitive environment in messaging going forward if at all.

Yes, hi, as a company we typically focus on the needs are customers have and billing software that helps customers to engage with their customers across a wide variety of touch points.

And I.

I think than when you look at our business.

Turning to our business is first the size of our App and the pace at which were growing at our scale and the diversification of all different products from our customers I think that we're in a very good position here in United States as well as globally to serve our customers needs and that's really focus on this following our customers and where they when they take us.

And just congrats guys.

Your next question comes from Heather Bellini from Goldman Sachs. Your line is open.

Great. Thank you I had two question I guess, Jeff just one would be for you or maybe for George just what do you think how do you think about what we're going through kind of making people even more cognizant of the need for kind of that those omnichannel touch points and give a sense, it's kind of where you would peg kind of.

Attrition.

Our pure real Omnichannel strategy before and how much that might be coming up and in conversations with people now and then the follow up after casino is just the ATP impact for the quarter. I think you said was 4 million.

And I think you said it went into effect in February does that mean, we should be expecting at 6 million dollar benefit that's embedded in guidance for the second quarter. Thank you.

Hey, Jeff on the parking at thanks.

I was again, let me say because that can be and I'll, let Jeff collaborative the first piece. The second piece, we didnt specifically call. It out for Q2, but you are in the ballpark.

Great great. Thanks.

Thanks, because they're not so have there for the first part of your question I mean, I think what you see going on right now is.

Twilio is becoming even more relevant so businesses in light of coven and it takes many shapes based on new type of company.

It is for the industry that they're in or whether at more digital transformation, but I think one thing is kind of clear that for companies who are engaged in a digital transformation that oftentimes. These projects are slated for yes quarters or years that we're going to want to take undertakes no. Many of you've got done in weeks and so this is going to be seen has the greatest.

No acceleration.

In many ways Tulio was built for this moment, we offer the three things that companies need as they are accelerating their digital plans, yes that is digital engagements on the channels, whether its voice or messaging or video or chancellor whatsapp or Facebook messenger with all these channels digital engagement as we've moved so many.

In person face to face workloads to digital workloads, we have the digital engagement across companies need.

Agility, so the ability to build quickly and to answer to changing conditions that obviously than.

One of the biggest thing thats going on in Q1, and Tulio provides the ability for organizations to be agile.

To build iteratively as they as the nature of what they need to building how they need to address the changing circumstances continues to evolve.

The third thing we offers cloud scale. This isn't the moment, where you can spend.

Months planning your capacity requirements and the racking up a datacenter to to plan for your peak you need to build something you need to deploy it.

You need to work pretty much.

And and Thats two of our scale, but also geographically to scale Enron and so twilio brings back to the table as well and so your all in all Twilio was built for this and whether its digital engagement agility and cloud scale. These are things that every company as needed weather regardless of the type of use case that is top of mind for.

Them right now and I believe the investment the companies are making are going to be durable like the changes that are occurring in our society right now I'm going to persist in many ways, yes, I think that many doctors' visits for example are going to stay as telehealth visits after coded is over and I think that many more new account E commerce or food delivery or curbside pick.

Couple of go out of these things that are getting normalized right now we'll start to become even more normal and so what is the the social distancing. There is going on right now is changing our behaviors and I think manuals behavioral change permanently or we can help companies to address those opportunities.

Thanks, Jeff.

Your next question comes from Alex Zukin from RBC Capital. Your line is open.

Hey, guys. Thanks for taking my questions.

And congrats on the on the performance to two for me, maybe first Jeff if we step back.

You called out a number of a growth vectors on this call attaching way more channels acceleration and new customer sign ups entry into new verticals, what sounds like from from George a bunch of new boutiques flex like use case categories. So I just wanted to ask you where is the biggest focus organizationally and which incremental growth vectors most either.

Exciting to you are you most enthusiastic about.

Thank you Alex.

First and foremost actually our focus for the business within the health and safety of our employees and our customers and actually energies and so I just want to.

Really emphasized so thats been priority number one for us not to this crisis. Yes, then as we think through partly number two is how we serve our customers and how do we help our customers to a much stronger through through this crisis.

We see a number of areas to address whether it is the new verticals that are horizon. So yes.

It wasn't actually because of Covanta, but it was a.

Really a coincidence that was fortuitous that we announced HIPPA supports and the ability to sign VA issues in the first week in February and that had been work with the long planned and plan to announce in that time period. It's obviously the timing was good for us to see a.

Very rapid rise in the number of medical oriented use cases that we can serve during this time.

But as you as George outlined before right. We do see really the 60 use cases that are driving a lot of opportunities right now.

And I see there's opportunities for Twilio and as soon as opportunities to serve our customers because they are under immense pressure that we configure their businesses and their organizations in order to serve their customers and to continue employing their people.

During this time and so that opportunity to serve our customers in the six use cases is.

Okay. Good business and it's also good way for us to serve our customers in tumor success. During this time.

And so I think about health care I think about.

Distance learning I think about automation.

But really our core products have stood up.

Very well as far as messaging as far as voice as far as email as the ways in which companies need to engage their customers. During these times and so we continue investing those and obviously, Georgia socks.

A bit about flex and some of the flex wins lease on the quarter, which is on some of the examples of organizations having to reinvent their contact center to accelerate their plans to move those contact centers and cloud and into software in order to allow them people for work from home to open up new channels to scale all many organizations all on scale.

That was unprecedented while at the same time, they're having to reconfigure where everybody is working.

So we were able to ride almost as customers.

Got it.

And then maybe just a follow up so for because Amer, if we think about the the overall revenue exposure to industries that maybe facing some headwinds versus industries that are seeing some tailwinds. How should we think about that backdrop, if theres any kind of high level percentages of exposure that you can provide.

Right and then.

New versus existing.

Kind of bookings trajectory meeting from new customers versus existing kind of the way, we think about that and than anything around seasonality for DB any outlook for next quarter in the second half and apologies in advance for the multi multi part question.

Okay. Thanks, Alex.

I guess I would start by saying that I think that were very well diversified across industries and so that helps to have a business model, that's like that and that's what I think creates a kind of performance that you saw invest in Q1 in terms of.

Some of the impacted industries, we called out in our earlier remarks that as it relates specifically to ride share travel and hospitality, which I think youve been more significantly impacted than others. There on a revenue basis less than 10% of our overall revenue over the last several quarters actually not just in Q1.

And thats, excluding email so I think in terms of that we feel pretty good about the diversity in the business and as we also noted.

If you look at some of the newer use cases that came on.

Typically in education healthcare retail.

Even in our Dot, Oregon, those have offset and then some some of the downside exposure that we saw in some of those impacted areas and so I think generally we feel pretty good.

And then finally I would just add I guess into Q2, I mean that trend is largely continued at least to date.

In terms of DB, any which you think is what you're getting out in terms of like seasonality and stuff like that we're not really providing any guidance around DB any that's not been our practice.

Historically again, we feel great about the overall diversity in the business and with that was able to drive in terms of DBSD and we'll stay focused there.

Perfect. Thank you guys congratulations again.

Your next question will come from.

Valera from Needham Your line is open.

Hi, guys designated truck onto a rich thanks for taking your question I'll Echo the graduates our remarks on the strong results in a quarter. So looking specifically at the geographic breakdown it looks like a reversal and recent trend where.

Where domestic grew faster than international in the quarter I'm really wondering what dynamics for our plan maybe from a product perspective.

Specifically, maybe clearing out email or sign grid.

If you could provide any color there would be much appreciated.

Yes, because Amy I mean, I wouldn't read too much into it honestly it was off.

About 100 dips relative to prior periods I would say it's in the ballpark of.

What we would have expected it to be I don't think there was any particular trend.

Relative to.

Any of our categories, there just lots of moving pieces and.

That can drive it one way or the other I think the fact that we saw strong growth in our us businesses on the back of some of the areas that we highlighted.

Particularly education and healthcare.

It's a good thing and I just wouldn't read much into geographic mix beyond that.

Okay. Great. Appreciate appreciate their response.

Your next question will come from Brent Bracelin from Piper Sandler Your line is open.

Good afternoon, everyone heard Jeff and because I'm on Jeff.

Really encouraging to see the division laid out the IPO and the diversity diversification strategy paying often in spades here. This quarter due to ask me in 2016, if a large operator via a customer I.E. Comcast I, probably would have said no.

My question for you is given we're seeing kind of this this covert induced acceleration in the digital opportunity.

Would you consider accelerating your build by strategy.

Why or why not there and then again one quick follow up for example.

Yes, Thank you Brent I.

I mean, I think bill by the tools together means everything and yes, we are accelerating our our build versus buy and we're sizing the business as you can see yeah, we're continuing to invest in the long term and I think it's the right thing to do because we see a lot of investment. So we can make both in terms of product and distribution as well.

Gives us building the core systems and crosses the business.

In order to continue scaling this company for a long period of time and so as we think about what's going on right right now.

The currency.

Pandemic environment, but also the long term 510 years from now we see this essentially as.

Just on point, a entry point for many even more long term opportunities both new kinds of customer relationships that were going to build new markets, we maybe able to participate in.

It also new products, new needs of our customers I'm going to emerge.

And we are in addition to and we're in a position to to be able to invest and that investment can be organic or can be inorganic, but we with the balance sheet that we have received this as an opportunity to invest and to emerge from the cover pandemic stronger.

Makes sense and Khazanah, just if I got this right. It looks like Whatsapp is 7% revenue in the quarter I think it was up and Thats up from 4% in the prior year.

That would put whatsapp materially higher year over year and at 100 million dollar plus run rate. So I guess my question is what's what's happening at what SAP what drove the strength. There if that is the right number and are there. Some new video use cases driving that any color on what drove the outperformance.

What that would be certainly helpful. This quarter. Thanks.

Yes, so just in terms of the number that you cited it was 7% of revenue.

And that's what we called out in our earlier remarks, it's predominantly want to use case around account verification. We have a strong relationship with that company, we work hard at it obviously everyday.

Have you get back on some of the specific numbers that you cited they sound Directionally right to me, but again I'd have to get back to you in terms of specifics, but I think we just maintain a good relationship with a company and as I said, we work hard at it.

Every single day, just one other thing I would add Jeff's remarks around bill by.

On the buy side in particular, Jeff mentioned, we have a billion eight on our balance sheet, which results in a position of strength.

We raise that money in part to be opportunistic for a time like this obviously, we could never have anticipated global pandemic.

When we did it but I think that leaves us in a pretty strong spot to be.

Opportunistic and we've got a lot of Optionality going forward.

And your final question for today will be from Rishi Jaluria from D.A. Davidson. Your line is open.

Hi, this actually philbrick be on her receive thanks for taking my question.

Keith can you just talked about what impacts you are seeing related to political activity in this environment Im just trying to get a sense of how how spend there is tracking relative to your expectations.

I'll give the high level I think as anticipated.

In politics, especially here in United States messaging is proving to be.

The effective medium for candidates to engage with reflecting voters.

Like I was in 2016, and 28 genetic 2020 will be a year of elevated spend.

By the political participants, we're not breaking out any predictions around that.

That category of our business, but I would say, it's playing out as we expected plywood this year.

Great. Thank you.

Yes, or no further questions I will turn the call back over to presenters for closing remarks.

Okay, all right thanks, everybody for joining today.

And we hope you are all staying safe and healthy and look forward to catching up with you over the next quarter or so.

Yes.

Thank you everyone. This will conclude today's conference call you may now disconnect.

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