Q4 2021 Twilio Inc Earnings Call

Speaker 1: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you.

Speakers remarks, there will be a question and answer session if you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question. Please press star one again thank you.

Andrew.

Speaker 1: Andrew Zulien, Vice President of investor relations, you may begin your conference.

Vice President of Investor Relations you May begin your conference.

Speaker 2: Thanks for the help. Good afternoon, everyone, and thank you for joining us for Twilio's fourth quarter and full year 2021 earnings conference call. Our prepared remarks, earnings press release, investor presentation, SEC filing, and a replay of today's call can be found on our IR website at investors.twilio.com. Joining me today for Q&A are Jeff Lawson, co-founder and CEO , Mark Boroditsky, the RO, and Jose Machitano, the OO.

Good afternoon, everyone and thank you for joining us for Twilio in fourth quarter and full year 2021.

Our prepared remarks earnings press release and Investor presentation.

Filings and a replay of today's call can be found on our IR website at investors Twilio Dot com joining.

Joining me today for Q&A, Jeff Martin <unk> founder and.

CEO , Marc Edwards E BRL interest me Mr. Kennedy.

Yes.

As a reminder, some of our commentary today, maybe in non-GAAP terms.

Speaker 2: As a reminder, some of our commentary today may be in non-guest terms.

Speaker 2: Reconciliation between our GAAP and non-GAAP results and further information related to guidance can be found in our earning question

Reconciliations between our GAAP and non-GAAP results and further information in relation to the guidance can be found in our earnings press release.

Additionally, some of our discussion and responses may contain forward looking statements.

Speaker 2: Additionally, some of our discussion responses may contain forward-looking patients which are subject to risks, uncertainties, and some...

Subject to risks uncertainties.

Speaker 2: In particular, statements about Twilio's outlook for the quarter ending March 31, 2022. Twilio's goals regarding delivering non-GAAP operating profitability beginning in 2023. Then meeting annual growth rates and long-term non-GAAP gross margin targets. Twilio's expectations regarding our products and solutions. Twilio's expectations regarding business benefits and financial impact. From our acquisitions and our partnerships and investments, including the associated transactions.

In particular, David and Victoria the outlook for the quarter ending March 31, 2020 again, Julian at all regarding delivering non-GAAP operating profitability beginning in 2023, <unk> annual growth rates and long term non-GAAP gross margin targets Julian as expectations regarding our products and solutions.

Expectations regarding business and financial impact.

Our acquisitions and our partnerships with investment including associated transaction.

Our expectations regarding the impact of recent and future privacy changes on certain third party platforms on Twilio and our customers actually have the ability to manage changes in network service provider.

Speaker 2: Our expectations regarding the impact of recent and future privacy changes on certain third-party platforms on Twilio and our customers, and Twilio's ability to manage changes in network service provider fees that we say in connection with the delivery of communications on our platform, and the impact of those fees on our growth margins are subject to change. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these four looking figures.

And you can actually deliver.

The delivery of the communications on a platform.

Our gross margin are subject to change.

Any of these risks materialize or should our assumptions prove to be incorrect actual financial results could differ materially from our projection or those implied by these forward looking statements.

Speaker 2: A description of these risks, uncertainties and assumptions, and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K and subsequent reports on Form 10-Q . And our remarks today should be considered to incorporate this information by reference.

A description of these risks uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K , and subsequent reports on Form 10-Q , and our remarks today should be considered to incorporate this information by reference.

Speaker 2: Four looking statements represent our belief in assumptions only as of the date such statements are made. We undertake no obligation to update any four looking statements made during this call to reflect events or circumstances after today, or to reflect new information or the occurrence of unanticipated events, except as required by law.

Forward looking statements represent our beliefs and assumptions only as of the date such statements are made we undertake no obligation to update any forward looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events.

As required by law.

Speaker 2: With all that out of the way, I'll hand it over to Jeff for some opening remarks, and we'll open the call for Q&A.

With all that I'll hand, it over to Jack for some opening remarks, and then we'll open the call for Q&A.

Speaker 2: Thank you, Billy. I am very happy with our 2021 results. Bill Thomas, some great outcomes for customers that continue to generate the best new cross-grown for investors that you see today. I've never been more excited about the future of the company that I am fitting here right now. We have an awesome leadership team, the combination of our leading out-of-communications platform.

I am very happy with our 2021 results.

Great outcomes for customers that continue to generate the best in class growth for investors that can see today I've never been more excited about the future of the company, but I am sitting here right. Now we have also the leadership team the combination of our leading communications platform Twilio segments number one customer data platform.

Speaker 2: Toyota's Segments number one customer data platform gives Toyota an underloved view of the customer journey setting us up as the company that can truly deliver from the customer engagement platform vision.

Daryl a view into the customer journey setting us up as the company that can truly deliver on the customer engagement optimization, we intend to become the software layer, but digitally connects every business their customers to introduce true personalized engagement and relationships in the next chapter of the plan.

Speaker 2: We intend to become the software layer that digitally connects every business to their customers.

Speaker 2: to introduce true personalized engagement and relationships in the next chapter of the time. We're builders, so our work is never done. And I'm incredibly eager to continue building the company in 2022 beyond. But that, let's open the call for your questions.

We're builders. So our work is never done and I'm incredibly eager to continue building the company in 2020, so it would be with that let's open the call for your questions.

Speaker 1: At this time, I would like to remind everyone in order to ask a question, pet star, the number one on your telephone keypad. Our first question comes from Samad, Samanna, with Jeffries, your line is open.

At this time I would like to remind everyone in order to ask a question, let's start with number one on your telephone keypad. Our first question comes from Matt.

Amanda with Jefferies. Your line is open.

Hi, good afternoon, congrats on the strong finish to the year, it's great to see the organic growth maybe Jeff first for you and just in reading over the prepared remarks, I think the company really did a good job of expressing moving from just the infrastructure side. It's more of the solution Blair I'm curious if you could maybe help us understand how.

Speaker 3: Hi, good afternoon. Congrats on the strong finish to the year. It's great to see the organic growth. Maybe Jeff first for you and just in reading over the prepare remarks.

Speaker 3: Yeah, I think the company really did a good job of expressing moving from just the infrastructure side to more of the solution player. I'm curious if you could maybe help us understand how the adoption is going for the more solution based products that the company is rolling out and how we should think about maybe the traction changing. I know you guys call that IDFA in particular as a driver. Like are we at an inflection where that's accelerating or how should we think about the shape of that adoption?

The adoption is going for the more solution based products that the company is rolling out and how we should think about maybe the traction changing I know you guys called out <unk> in particular as a driver.

At a inflection where that's accelerating or how should we think about the shape of that adoption.

Yes. Thank you so much so I think there's two parts to that question, which is essentially first of all really pleased with how the introduction of our software layer is going if you think about it look at some of the customers that we're talking about on our earnings call not just this time, but really every quarter. We've got great companies, we're talking flat segment like I love the Virtu.

Speaker 2: Yeah, thank you, Samad. So, you know, I think there's two parts of that question, which is essentially, first of all, really pleased with how the introduction of our software layer is going. You know, if you think about it, look at some of the customers that we're talking about in our previous calls, not just this kind, but really every quarter, right? We've got great companies for adopting West segment. Like I love the Virtue Motors example, we were talking about today, them bringing West and segment together to make a contact center better, you know, look at Stripe, adopting West for their contact center needs. And, you know, Flex Expanding in global 2000 financial services company, then a global 2000 auto maker, and, you know, new bank, many others, you know, in digitalized, putting in West for their property.

Motors example, we're talking about today.

Great.

Together, our contact center or better when you look at stripe adopting <unk> for their contact center needs.

And flex expanding global 2000 financial services companies and a global 2000 automaker is new baked any others.

Invisalign, putting a flat sport for their process.

Speaker 2: You know, we can come up with so many of the customer stories, but really the answers that are approached with aim and opt strategy is a great one because we're really used by so many companies around the world.

We can come up with so many of these customer stories, but really the answer is that our approach and strategy is a great. One because we'll use by so many companies around the world every industry every shape and size of the continent. I mean, this really is the need for things like E mail and messaging of SME business.

Speaker 2: Every industry, every shape and size, every trot method, I mean, this really is the need for things like email and messaging is so ubiquitous and developers bring things so little friction.

And does that first let me say with so little friction we're able to use those initial wins that initial traction we get to move up the value chain, where chart and move up the software stack.

Speaker 2: We're able to use those initial links, that initial facts that we get to move up, the value chain, we've got word charts, and move up the software staff to then go address the things that our customers have found us all. Either it's in the contact center, or there's no sales process, the marketing, and such a product. And that is really what the internet strategy that we're talking about is all about. Measureaging the ubiquity of TOLIO across all these some kinds of companies into building this customer engagement platform from the tomorrow conversations with customers, they all leave.

Then go address the things that our customers are trying to solve whether it's in the contact center, whether it's the sales process. Their marketing is that the product is that is really what what's the internal strategy that we're talking about is all about leveraging the ubiquity of twilio across mortgages the kinds of companies into building this customer engagement platform that conversations with custom.

They all need because they all have to go build great relationships with their customers. The way you do that is by understanding the customer and then engaging with that and Thats why I truly don't having the leading CVP to understand customers and a leading communications platform to go engage with them as.

Speaker 2: because they all have to go build great relationships with their customers. The way you do that is by understanding the customer and then engaging with them. And that's why Twilmeow having you leading CDP to understand customers and the leading communication spot where they go engage with them. And that's a such a powerful combination. The second topic question about IDFA and the KELOLAND provided by privacy. Look, I think society is on the right track.

Such powerful combination the second part of your question about I guess, a tailwind provided by privacy look I think society is on the right track, Greg investing in privacy Cafe regulation that was in and things like deprecate a tracking its okay, but if most consumers knew what had happened on the internet. They deplete barcode action. So we earn.

Speaker 2: Right, investing in privacy, passing regulation and laws, and things like deprecating, tracking tokens. But if most consumers knew what had happened on the internet, it'd be pretty barb on its actions.

Speaker 2: So we are on the right track and what we're doing is forcing customers to our

Right track and what this is doing is working with customers.

Our customers' businesses.

Speaker 2: to focus on the fundamental of this. The fundamental of this, I think about my grandfather, we sold meats to the hardware stores to trade. And what he doesn't do is, know your customers and then talk, you know, he thinks we need to know about their business and about how he's gonna help them. Like, that's the fundamental of the business. Understand this, that's where it's actually.

We get the fundamentals the fundamentals I think about my grandfather, we hope based hardware stores in Detroit.

And what do you have to do you know your customer and then meaningfully development. What are you going to help them, but that's the fundamentals of business.

And the customers.

Speaker 2: And so by investing in privacy, these companies have to actually use the first party data they have to help people use their products, help people use their websites, their mobile app, what they buy, what they return, et cetera. And use all that to signal to how they can digitally engage their customers and make that experience more personalized to the consumer. And so I believe that is a joke.

And so by investing in privacy is the company is tough to actually use the first party data there. So how people use their products how people use their website their mobile what they buy what they return et cetera, and use all that signal for how they can digitally engage with customers and making that experience more personalized and compelling and so I believe that in Brazil.

Speaker 2: Driving is semifesis!

That is a big trend coupled with the whole direct to consumer market.

Speaker 2: But again, it's like two sides of the same coin, too real. That means the company has to build their customer base and then engage them and send them into repeat happy oil buyers instead of just turning through customers among acquiring more by buying more hands. And I think that's a big change that's going on in the ecosystem that we, and segmented the CTP, and then with the rest of our products are helping the customers.

So again it is like two sides of the same quite well that means the company is to build the customer base and then engage them and turn them into repeat happy wildfires instead of just turning through customers and growing acquiring more by buying more assets. That's a big change that's going on in ecosystem that does that we segmented the CDP and then with the rest of our products are helping to power.

Great. That's very helpful. Maybe just a quick follow up for <unk> first I appreciate the.

Speaker 3: Great, that's very helpful. Maybe just a quick follow up for Kuzama. First appreciate the additional disclosures and the numbers around organic growth that was very helpful by you and the IR team. Maybe if I just, the outlook for getting to profitability in 2023, I know we're still a ways out from that, but can you maybe help us understand what the assumptions are around? Is that gonna come on the gross margin line or is that mainly because of op-ex leverage or revenue mix? I'm not sure. We think about what allows the company to get to that profitability and what you're assuming in that.

Additional disclosures in the end.

The numbers are on organic growth that was very helpful. By you and the IR team, maybe if I just.

The outlook for getting to <unk>.

Profitability in 2023, I know, we're still a ways out from that but can you maybe help us understand what the assumptions are around is that going to come on the gross margin line or is that mainly because of opex leverage our revenue mix. How should we think about what allows the company to get to that profitability and what youre assuming in that.

Yes. Thank you.

Speaker 2: Yeah, these two are next to the questions for the US team. So I think it's actually the combination of things, some that'll play out in the short term, and then others that'll kind of play out and then you need the long term.

The question I appreciate you asking it so I think it's actually a combination of things.

He will play out.

German than others.

The long term so the way to think about it I think at least for the short term is that largely.

Speaker 2: So the way to make a bad idea, I think at least for the short term, and the best improvement is largely to come from operating expenses.

Largely to come from operating expenses.

Speaker 2: And one of the things that I mentioned in my prepare remarks and that you talk about in the past is that you haven't been in the best thing the number of areas of the last several years. In particular, what we've been calling out historically has been like enterprise go to market, international go to market, and they've poured infrastructure. And.

Nathan I mentioned in my prepared remarks that we've talked about in the past is that we haven't been investing in a number of areas over the last several years in particular and what we've been calling out and historically its been flat enterprise go to market International go to market and then core infrastructure and we expect our rig cost growth in those areas.

Speaker 2: We need to expect a rate of crossroads in those areas to start to moderate basically in the second half of the year. And I think a good example of that is our ERP project which shows life in the middle of the year. And it's not to say that we're not going to invest in the other areas we will, but I think the lower, the rate of growth in the investments will be a little bit lower than what we've seen historically.

It just started to moderate basically in the second half of the year and I think a good example of that is our ERP projects, which drove life and the whole year and it's not to say that we're not going to invest in the other areas, we will but I think the lower the rate of growth and those investments will be a little bit lower than what we've seen historically.

Speaker 2: I would add to that, you know, up to this point, you really brighter that it's growth and the game and the company. And I think growth certainly remains a priority for the company and we, you know, actually make that trade off historically. But I think we're at the point now where you've got enough scale that we can actually start reaping the benefits of that scale and just become more efficient.

And I would add to that.

Up to this point, you really prioritize growth and scaling the company and I think growth certainly remains a priority for the company and to me.

And make that trade off historically, but I think we're at a point now where we've got enough scale that we could actually start reaping the benefits of that scale and to become more efficient in all of our operation. So you see a real efficiency opportunity as we look out and we're really confident in our ability for non-GAAP profitability in 2023.

Speaker 2: and our car operation. So you see a real efficiency opportunity as we go down and we're really confident in our ability for a non-gap profitability in 2023.

I think over time and medium to long term, we do expect improvements in our gross margin line as well.

Speaker 2: I think over the time, in the media and the long term, we do expect improvements to our gross margin line as well. Obviously, that number just found to run on from period to period in the short term. Metastrate off of the also actively making we like the fact that we're onboarding customers and have an opportunity to grow with them. But you know, very consistent with what Jeff said a moment ago, as we onboard the customers and really leverage this in and

That number does bounce around from period to period in the short term that's a trade off if you also actively.

The fact that we're onboarding customers and have an opportunity to grow with them, but very consistent with what Jeff said, a moment ago as we onboard those customers and really leverage the internet.

Speaker 2: and on strategy and bring them into higher levels with the software stack. I think we have a real opportunity to provide value to customers and I think that will provide a margin improvement for us as a company. And that's why we stand by our 60% while still we're talking about the gross margin line.

And our strategy and bring them into higher levels of the software stack I think we have a real opportunity to provide value to customers and I think that by the margin improvement for us as a company and that's why we stand by our 60% plus over time the gross margin line.

Thanks Mark.

Speaker 1: Your next session comes from Derek Wood with COAT. Your line is open. Great action.

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

Great. Thanks.

Speaker 2: And that's a nice, a strong quarter congrats. And Jeff, Jeff, you have to mark, I mean, you guys have been on this journey to build out this, this kind of CRM suite of applications. You reference this in and up motion. And the product portfolio was certainly matured quite a bit. So what would you like to see kick into a new gear in 2022?

Nice to see a strong quarter congrats.

Hi, Jeff, Jeff or Mark I mean, you guys have been on this journey to build out this kind of CRM suite of applications.

You referenced this ended up motion and the <unk>.

Product portfolio is certainly matured quite a bit.

And what would you like to see kick into gear in 2022.

Yes.

Erica Thanks, Great question Margaret it's the entry.

Speaker 4: Derek, thanks. Great question. This is the Mark word of the answer. It is fun center in the way that you're

It is centered in the winter in Europe .

Speaker 4: to matter of fact, we're the final days of our failed kickoff this week and the primary objectives that we're enabling to team on are the in- and that strategies, so leveraging our install base and access to customer efficiently for email and messaging to sell them more broadly on the vision of the customer gated platform.

Matter of fact.

Final days of our sales kickoff meeting.

Hi, Mary.

Jack.

We're enabling the team on our Internet strategy.

Leveraging our consolidated asset.

Because efficiency through email and messaging to sell them more broadly on the vision of a customer data platform.

Speaker 4: You may remember we announced the customer gave you a pack for the signal, the passport, it's resonating with customers all sides.

You May remember, we announced the customer engagement platform that signal of this past quarter is resonating with customers of all sizes.

Speaker 4: Wraven by, their precursors stick multiple to their digital??lated digits. A two final

Driven by their desire to take more control over their digital engagement customer.

Speaker 4: And we're hearing interest across the entire hour of their end consumer engagement from top of funnel all the way through long-term loyalty. So the training we're doing now as we're looking out to 2022 is supporting our failed team to ensure that they're ready and able to approach the opportunity that we see as a significant in the market today.

We are hearing interest across the entire R.

Their end consumer engagement.

Top of funnel all the way through long term loyalty.

The training we're doing now as we're looking out to 2022 supporting our sales team to ensure that they are ready and able to approach the opportunity that we see as significant in the market today.

Great Great to hear one for <unk>.

Speaker 5: Great, great to hear one for Kazama. Could you double click on the change in your guidance philosophy, how has your approach changed versus what it was before? And I guess what kinds of new insights have you gained or are more comfortable with in order to better predict consumption behavior?

You double click on the change in your guidance philosophy.

How has your approach changed versus what it was before and I guess, what kinds of new insights that you gained are more comfortable with in order to better predict the consumption behavior.

Yes, great question here, so as you know.

Speaker 4: Yeah, great question, Der. So as you know, we've run a usage base in this model from the most part, we do have a little bit of that.

A usage based model and those are a little bit of SaaS in there as well and I would say with each passing year, we had a lot more insight as to the way that customers are using our platform.

Speaker 4: in there as well. And I can say with each half a year, we just had a lot more inside the way that customers end up using our platform.

Speaker 4: And we're just able to better predict usage patterns over time. And so what we end up doing with our FDN18 is basically fine-tune that forecasting model every year. And as we could collect additional information, we're able to be more granular about the way to see if we can do that.

And we're just able to better predict usage patterns over time, and so what we ended up doing with our <unk> is basically June that forecasting model every year and as we could collect additional information where it needs to be more granular about the way you can do that so for Q1, and we are refining our guidance philosophy basically to provide.

Speaker 4: So for Q1, we are reclining our guidance law to be basically to provide guidance that is ultimately more consistent, not just with actual, but also to give investors a better approximation of our expected performance. And as you saw in our Q1.

And that is ultimately mortgage system.

Not just with actuals, but also to give investors a better approximation of our expected performance and as you saw in our Q1 guide.

Speaker 2: You know, we're showing continues growth 45 to 47 on the report.

Showing continued growth 45, 47% on a reported and then also.

Speaker 4: And then also 32 to 34% organically, I think it was important for us to call that out. That obviously doesn't include segment now. And we have a lot of confidence that will be able to deliver on our 30% plus where it's targeted over the next several years. And just lastly, I would say there is that, the odds you do get a lot of good feedback from our investors and some of our analysts. And we take that into account too. And I think it's just provided for a more consistent set of over time. Great, well done and great job.

<unk>, 32% to 34% organically I think it was important for us to call that out that obviously doesn't include segment now and we have a lot of confidence that we'll be able to deliver on our 30% plus growth target over the next several years and then just lastly, I would say garik that.

Yes, you do get a lot of good feedback from our investors our analysts and we take that into account.

I think this just provides for a market that's already.

Alright, well done and great job on the disclosures. Thanks.

Thanks Jerry.

Speaker 1: Our next question comes from Michael Turin with Wells Fargo Security. Your line is open. Hey there. Thanks. Good afternoon. Appreciate you taking the question.

Our next question comes from Michael <unk> with Wells Fargo Securities. Your line is open.

Hi, there.

Thanks, Good afternoon I appreciate you taking the questions maybe my least favorite question to ask on the call, but feels worth asking is on <unk>.

Speaker 5: Maybe my leaf theory requested to ask on the call but feels worth asking is on gross margin. Clearly the growth is outstanding. The gross margins are stepping back here. It's clear international messaging, strength is cheering forward. But how should we think about the trade-offs and when absurvises can help flatten that trajectory? And maybe secondarily we saw the centerverse transaction.

Most margin clearly the growth. This outstanding gross margins are are stepping back here, it's clearer international messaging strength is carrying forward, but how should we think about the tradeoffs and when App services can help flatten that trajectory and maybe secondarily, we saw the <unk> transaction.

Speaker 5: And to this morning, is there still a chance you can partner there or comment to improve the Corgrove margins? Or is that no longer the right way to think about that really?

This morning is there still a chance you can partner there or comment to improve the core gross margins or is that no longer the right way to think about that relationship.

Yes, that's a great question, Michael Let me take the second one first and then I'll answer the gross margin question more fully in a moment. So first of all with respect to universe. I know there is some press out there, suggesting that would be my five university of definitively not doing that.

Speaker 4: Yeah, there's a great question, Michael. Let me take a second one first, and then I'll let you know if there's more any question, more believe in moments. So, first of all, with respect to the universe, I know there is some press out there suggesting that we might fight the universe and you're definitively not doing that. What we probably did see in some of the press announcements morning is that the merger agreement between and three in centers, you know, from the termination as a result of the initial agreement between

We probably did see in some of our press announcement this morning.

The merger agreement between entry into universe.

Termination as a result of a mutual agreement between those part of it is that largely reflects market conditions as they stand today.

Speaker 4: though this part is, that's largely a reflect, you know, of our conditions as they stand today.

Speaker 4: The way that that agreement worked was, it did also provide an alternative path, which is a minority investment consumer, so that's now the path that we're gonna be pursuing. The commercial alternative.

Related to that agreement works was it did it also provides for an alternative path, which is a minority investment.

Mr Diversions of that now in the past that we're going to be pursuing.

Commercial wholesale agreement.

Speaker 4: that we also referenced historically. You know, that's very much in place. You have a great relationship with senators. It's been very long standing and we intend to continue that. And frankly, that partnership gives us a great product. You know, for us to be able to leverage it in the United States. So I don't really see the significant impact in the near or medium term as a result of any of that. I'm just going to provide you a little bit more clarity on some of what's been reported and speculated in picking that up.

You also referenced historically, that's very much in place we have a great relationship with senators.

Very long standing and we intend to continue that and frankly that partnership gives us a great product for us to be able to leverage it in the United States. So I don't really see a significant impact.

In the near or medium term as a result of any of that.

Wanted to providing tools and more clarity on some of what's been reported or speculated data with respect to gross margins more broadly.

Speaker 4: With respect to growth margins, more broadly, for all of them, if we have conversations with you and a number of others, you have to, obviously, we have been really, really hydrogens.

And we have conversations with you and a number of others obviously.

We have this really really high growth messaging business and we feel great about the way in which that business is performing and the way that it played out in Q4 was that our international volumes really really took off and I mean, you're right.

Speaker 4: And you know, we feel the rage about the way in which that business is performing. And you know, the way that it plays out when you keep more with that, our international volume really, really took off. And I mean, you're right. Like if that's part of the business carry a third-dollar gross margin structurally, certainly not as a semi-other product, that that Mark and Jack can lose you.

That part of the business carries a lower gross margin structurally certainly relative to some of the other products.

That market and John alluded to.

Speaker 4: But a messaging business also cranks out a really significant growth profits that we like and that we want to reinvest. And most importantly, it's the market losing to you. It creates an install date, which is sort of that current system door where I was to execute our, our in-n-up strategy.

But the messaging business also Frank.

Really significant gross profit that we like and we want to reinvest and I think most importantly is that mark alluded to preset installed base, which is sort of that credit wasn't the door for us to execute our Oregon and our strategy as.

Speaker 4: As you saw on the last page of the, you know, presentations, lawyers.

As you saw on the last page of the presentation disclosures, while all of that is going on in our application services are actually growing at a faster rate.

Speaker 4: While all that is going on, our application services are actually growing at a faster rate. You know, kind of the good problem that we have is that our messaging business organically also grew 52% last year and so.

Good problem that we have is that our messaging business organically also grew 52% last year. So that's just kind of a trade off that we wanted to take as long as we continue to generate high gross profit as long as we can generate renewed growth off of application services segment, we feel confident that over time.

Speaker 4: That's just kind of a trade off that we want to make. As long as we continue to generate a hybrid profit, as long as we can generate great growth, awesome.

Speaker 4: Application services and segments, we feel confident that over time we will be able to grow in that 60% plus range that I talked about earlier and we have a lot of confidence in that. But in the short term, you will see a bounce around a little bit up and down and again in our disclosure, we probably could try to use some sense of how to APC's and stuff like that and back and stuff. So very comprehensive.

We'll be able to grow into that 60% plus range that I talked about earlier.

And we have a lot of confidence in that but in the short term you will see it bounce around a little bit up and down and again in our disclosures, we probably try to give you some sense of how to <unk> and stuff like that impact as well.

It's a very comprehensive answer appreciate it thank you.

Thanks, Mike.

Speaker 1: Our next question comes from Mark Murphy with J.P. Morgan. Your line is open. Yes, thank you very much and I'll have my congratulations.

Our next question comes from Mark Murphy with Jpmorgan. Your line is open.

Yes, Thank you very much and I'll add my congratulations.

Speaker 2: Because I'm wondering if you can shed any light on any specific products that are growing materially above or materially below this organic rest level.

Because then I am wondering if you can shed any light on any specific products that are growing materially above or materially below this organic growth level of about 39% I would imagine flex video segment are outpacing.

Speaker 6: Well, about 39%. I would imagine a flex video segment or outpacing.

Speaker 6: I'm less certain about voice, email, author, some of this products.

I'm less certain about voice E mail off.

Some of those products.

Speaker 6: Just curious to be able to comment on any of the nature albires there.

Just curious if youre able to comment on any of the major outliers there.

Yes.

Speaker 4: I have a lot of questions. I mean, I'm not going to go through every single product and give the great them here, but here's what I will say and answer your question. You know, again, just referencing the last page of our Displosures.

I appreciate you asking the question.

We go through every single product that you get the breakdown here.

So I would say in answer to your question.

Yes, so again just referencing the last page of our disclosures as you look at our growth rate over the course of the prior year, we grew our messaging business.

Speaker 4: If you look at our growth rate, it goes across the prior year. Don't agree or maximum business.

Speaker 4: that incredibly by rate is 52% organically, you know, which on any basis is really super performance. And in spite of the fact that part of the business is growing really fast, our application services category, which includes the number of those products that you just referenced in a moment ago, basically.

Credibly high rate, 52% organically, which on any basis is really super performance and in spite of the fact that that part of it is just running really fast our application services category, which includes a number of those products that you just referenced a moment ago basically three segments present grid and non telephony based.

Speaker 4: 3 seconds, 3 second grid, and 9th to the left and 8th cross product.

Cost of products.

Speaker 4: You know, fast-rolling at a faster rate. The good problem that we have is that that messaging business, you, as you again, can see on that page from the threat of the economy, it's just really big. And so it's going to take some time for, you know, this in and of to play out in our financial state. And so you know, this is playing out very much to realize that our customer base.

Growing at a faster rate the good problem that we have is that messaging business you see you again.

That hany in terms of its revenue contribution it's just really big.

It's going to take some time for it.

Enough to play out in our financial statements, even though it is playing out very much in real life with our customer base.

Speaker 4: You know, beyond that, you also saw it in a product order or just a segment, I really can't tell if it's worth, you know, really significant growth sequentially, you know, here or here, obviously don't break that out because it's...

Beyond that you also saw in.

In the prior quarter in the segment I really can't really significant growth sequentially year over year, obviously, we don't break that out because of its inorganic in the prior period that you could see sequential.

Speaker 4: in our organic and the prior period that you could keep sequential was really, really strong. And now that it's in our numbers, we still have the tremendous amount of confidence in that 30% plus over the next three years, which, quite frankly, is all the much higher rates.

It is really really strong and now in our numbers, we still have a tremendous amount of confidence in that 30% plus over the next three years, which quite frankly is a much higher base.

Speaker 4: or you're dealing with that, the time that we, you know, so we can do that.

Probably beat that.

Since the time that we announced that we can do that.

Speaker 6: Thank you, that's very helpful. And as a quick follow up for you, you had mentioned the in and up strategy. I'm just wondering how rapidly perhaps your R&D investment is shifting to our products that might be sold more to a marketer rather than a developer. For instance, the customer journey insight, the engage product, the orchestration of messages rather than the delivery of messages.

Thank you that's very helpful and as a quick follow up for Joe.

You had mentioned.

Ended up strategy I'm, just wondering how rapidly perhaps your R&D investment.

Shifting toward products that might be sold more to a marketer rather than a developer for instance, the customer journey inside the engage product.

The orchestration of messages rather than the delivery of messages.

Yes. This is mark.

Speaker 2: Yeah, this is marketing. Even he was got investments in obviously our co-equipation spot in segment, the core customer data platform as well as the product building above those two layers. And the way I think about it, which is developers are assisting to fail and for the communication big-time products like developers can tend to have the long way, maybe the old way there, but for a product agent, a marketer, or even get a contact center buyer. You're just going to have a line of business on it, we're going to make sure.

We've got investments in obviously, our core communications product segment, the core customer data platform as well as new production building above those two layers.

And the way I would think about it which is developers are assisting the sale and the for communications polyps.

Products like developers can take us a long way, maybe all the way there.

A copy of the marketer or aimed at our contact center buyer given sort of have a line of business owner who's going to make final decisions.

Speaker 2: But with Tullio, they get the support of their internal technical teams on the purchase.

With Twilio they get the support of their internal technical teams on the purchase.

Speaker 2: Meaning the developers, the technical people out there at the table telling the business decision maker like, yeah, that's the number you want to do. We believe we can do it with Sly. Oh, that's remarkable.

Leaving the developers the technical people out there at the table, telling that the decision maker like yeah that thing that we wanted to do we believe we can do it's really all of that combined with the prototype.

And that supports the sale if you list as momentum for sale, but most of the world, where I talked to a lot of our sales leaders Mike.

Speaker 2: And that supports the sale. Do you list it as well?

Speaker 2: As opposed to the world where I talk a lot of our sales leaders in America, yes, there are your careers of higher companies. They would be selling your life business owner and life business owner would say, oh, this is great. Can we do this to make sure that they're at TTC? I think that TTC, you know, your arms folded is like, no, no, for another word, can't do it.

Yes, your careers like power companies, they would be selling you a line of business owner and aligned business owner would say can.

Can we do this may turn to their I think 19, ITT arms folded it right now, but in other words, Andrew and so you've got the tractor.

Speaker 2: And so you've got these factors on the technical team. And I think the magical thing about Puyo is that we can have proponents of Puyo both on the technical side and now with more investment in the sort of application area also with the NED and line of business owners. We use a political combination and that's why we focus so much on winning arts and minds and developers having to bring a field of the company and then making them some of our biggest champions as we make our way through and off your chart before and off the value stack software.

Okay.

And I think the magical thing about Julio is that we can have proponents deploy both on the technical side and now with more investment in these sort of application area also in the line of business. So let me give a powerful combination and thats why we focus so much on winning the hearts and minds of developers bring him into the company and then making them some of our biggest champion as we make our way through.

Through your chart with filling up the value stack of software.

Speaker 2: And so we are absolutely in both. And I also think of the application products that we're building are also very developed for centuries in terms of.

And so we aren't asking obviously in both and I also think of the.

Application products that we're building are also very developer centric in terms of customize ability flexibility of using <unk> to really build what companies need is or to those products. We're not trying to provide just a turnkey and like you can't customize the types of initiatives. We are trying to build products that will be.

Speaker 2: Customized ability, flexibility, using code to really build what companies need is for to those products. We're not trying to provide just a turnkey in like you can't customize the touch system. We're trying to build products that while they do the things you want them to do out of the box.

Do the things you want them to do out of the box.

Speaker 2: Give you ample work for it to go in and turn them into the solution that the company needs for a long period of time. You don't get boxed in your stuff or something that's not serving your needs as markets evolve, as customers demand these things, et cetera. And I think our approach is as proven by adoption by a wide-grinding customers, whether they're like, you know, young digital instructors or whether they're the, you know, the global $2,000,000, Fortune 500 companies, I think we see across the spectrum this approach is working.

You ample footprint to go in and turn them into the solution the company needs for a long period of time.

Phosphate and Youre stuck with something Thats, not serving unique as markets evolve as customers demanded savings et cetera.

I think our approaches as proven by the adoption by a wide variety of customers, whether they are young digital disruptors or whether the global 2000 Fortune 500 companies I think we see across the spectrum of this approach is working.

Very helpful. Thank you.

Our next question comes from meta Marshall with Morgan Stanley . Your line is open.

Speaker 1: Our next session comes from Meta Martial with Morgan Stanley . Your line is open. Great. Congrats. A couple of questions. One, you know, you noted disclosure of having about 36% of the global 2000. And just wanted to get a sense of is some of your confidence about the 30% growth rate for the next couple of years driven by room that there is within kind of this core customer set or is it by the opportunity to win some of the more of the global 2000. Just trying to get a sense of, you know, how much of it you feel like you've already landed that gives you confidence of that 30% growth rate.

Great. Congrats a couple of questions one.

Disclosure of having about 36% of the global 2000, and then just wanted to get a sense of some of your confidence about the 30% growth rates over the next couple of years driven by room that there is within kind of core customer set.

Or is it by the opportunity to win some of the more of the global 2000, I guess, just trying to get a sense of how much of it do you feel like you've already landed that gives you confidence of that 30% growth rate.

Speaker 1: Second question, maybe building on what you just said Jeff, you know, you made a compelling argument at Signal about why Twilio is best enabled to help customers on their customer journey versus some of the competitors out there. I guess are you finding with customers that you're even having to do some of this evangelism about why you versus others? Or it's still kind of in its infancy where they're just happy to have a solution that you can provide and give them. Thanks.

And the second question.

Maybe building on what you've just said Jeff.

<unk> argument that signal about why twilio as past enable to help customers on their customer journey versus kind of some of some of the competitors out. There I guess are you finding with customers that you are even having to do some others evangelism about why you versus others or it's still kind of in its infancy, where they're just happy to have.

Our solution.

Can provide and give them.

Speaker 4: Yeah, so maybe I think to the question, let me take the first part of the third percent plot that I mentioned, and then I'll mark that to that and we'll turn to the next job.

Yes.

Thanks for the question, let me take the first part of the 30% plus that Avonex and then I'll, let mark add to that and I'll turn it over to Jeff.

So in terms of 30% plus I mean, there's a reason we have such confidence in our ability to do that over multiple years. It is not.

Speaker 4: So in terms of the 30% plus, I mean, the reason we have such confidence in our ability to do that over multiple years, it's not just because we have problems with low concentration in GDK. But at the same time, we weren't able to do a ton of business.

Just because we have relatively low concentration and GK.

At the same time, and we were able to do a ton of business.

Speaker 4: That's really creative and innovative with digital instructors as well. And if you look at the way this company is involved with over, you know, basically with the idea of like a couple of dynamics played out, which I think are really interesting and give us the level of confidence that we have in that number. The first is that if you look at the distribution and concentration of our customers,

That's really creative and innovative digital disruptors as well and then if you look at the way that the company has evolved over.

Basically since the IPO like a couple of dynamics played out with some of you are really interesting and give us a level of confidence that we have in that number the first did.

If you look at the.

Distribution and concentration of our customers used to be relatively high and since then we've taken on more business in our top 10, while that overall number is consistently shrunk over a number of different tiers and so certainly you have some large companies in that bucket you also have.

Speaker 4: You know, it used to be relatively high. And since then, you've taken on more business in our top 10 while that overall number is just only strong over a number of different.

Speaker 4: And so certainly you have some large companies in that bucket. You also have good digital instructors in that bucket, where it was taking off. But the real point is that that...

Digital disruptors in that bucket, we're really taking off but the real point is that.

<unk>.

Speaker 4: Rep. of customer that we shared is massively wide.

Breadth of customer that we serve is massively y which means that we're not overly concentrated in any one customer or not to overly concentrated in any one industry.

Speaker 4: Which means that we're not overly concentrated in anyone's customer, we're not overly concentrated in anyone industry.

Speaker 4: And that breathed a lot of this, you know, to have this big road that's getting out.

That breadth allows us to grow our scaling out I'd say the second thing is that we've talked a lot about in the call already like our our messaging business, but in addition to our messaging business as we spent a lot more of the products that we're able to sell into these customers.

Speaker 4: I think the second thing is that we talk a lot about intercom ready like our messaging business, but in addition to our messaging business.

Speaker 4: Like we said a lot more of the products that we're able to tell them to these customers. And so our ability to now kind of go up back with our application services, segment with emails, I think allows for another interesting kind of off-cell process opportunities that we're able to do as well. And then I would say the third thing, and we've called this out in the past, is that

Our ability to now kind of go up that with our outpatient services segment with email I think allows for another interesting kind of upsell cross sell opportunity that we're able to do as well and then I would say the third thing and we called this out in the past is that.

You, obviously have in making an investment in our international go to market efforts are starting to see that pay off and you saw us take a philosophy in the most recent quarter.

Speaker 4: We obviously have been making an investment in our international good market efforts for starting to see that with payoff. Got to see a lot of takeoff velocity into the street supporter. I'm gonna respect that investment. And so I would expect to see that continue over time. And obviously, there are a lot of customers up there the world that we are really eager to serve. Mark, I'm gonna add and give that absolutely a great much of a meta.

With respect to that investment and so I would expect to see that continue over time, obviously, there are a lot of customers out there in the world.

We are really eager sir mark nomadic Indra, yeah, absolutely great question.

Picking up where academe desktop.

Speaker 4: Picking up for a podium, Zeptoff, the opportunity for us is still very massive beyond our 15th footprints of primarily landing in Losos, we made a important part of our team in that execution. So landing with SMS or email and then being able to build a trustworthy relationship with the customer as we've referenced a couple of times. That's a true situation across all of the market segments.

The opportunity for us is still very massive beyond our existing footprint, primarily landing new logos remain an important part of our execution.

Landing with SMS and E Mail, and then being able to build a trustworthy relationship with the customer as we've referenced a couple of times.

True.

Situations across also being market segment.

Speaker 4: And as you point it out, we still have a maturity of the G2K out there where we have opportunities to build that initial relationship.

And as you pointed out we still have a majority of the GTK out there, where we have opportunity to build that initial relationship.

Second dimension is expanding our footprint or reaching out to the full white spaces of the account.

Speaker 4: Second dimension is the standard footprint for reaching out to the whole white space of the account. And across our entire base, we have that opportunity to go back to the customer to continue to build our relationship and expand the commercial results that we're generating.

And.

Across our entire base.

Have that opportunity to go back to those customers continue to build our relationship and expand.

Commercial defaults are generating and then lastly, we recognize that there.

Speaker 4: And then lastly, we're recognizing that there are many invaders that are making a difference for us in the market. Like the example, we power quite a few IFDs, but it's only active to looking to get and to draw the partner as partners. We're helping them to get into more.

There are many enablers that are making a difference for us in the market I think the example, we powered <unk> excellent package solutions against private acquirements.

Partners, we're helping them to get into more of the base like we are also pursuing the Si.

Speaker 4: Like we also pursuing with FI and resellers that are projecting this into other types of opportunities, like what we shared in our facilities and our pre-approving payments.

And resellers that are projected to other types of opportunities like what we shared in our disclosures and our.

Statements.

Speaker 4: We are seeing traction with organizations like BTO.

We are seeing traction with organizations like Etfs and we shared with you on the last earnings announcements this relationship with <unk>, We recently announced relationship its outperformance.

Speaker 4: I will be shared with you on the last earnings announcement, this relationship with the HES, we recently announced relationship with self-formance and HES has had significant progress with over 20 of their customers moving over to class.

And Etfs.

Significant progress with over 20 of their customers moving over to Lasse and these are accounts that are relying on a channel strategy.

Speaker 4: Now these are accounts that are relying on a channel strategy if you want for us to become adopters of our platform. So we're going to be pursuing relevant in all those dimensions. And I think largely the opportunity is still in front of us.

<unk> <unk>.

Adopters of our platform. So we're going to be pursuing growth in all those dimensions and I think largely the opportunity is still in front of us.

This is Jeff.

Speaker 2: I don't mean that this is just all I've got answers. The last question about what extent are we evangelizing to our customers? I mean,

Our answer the last part of your question about to what extent of evangelizing our customers I mean.

Speaker 2: But what I look at is, you know, customers have what they need to accomplish, right? Like they've got their challenges, they've got their workers and their competitive pressures. And what that is, leaving most companies too is realizing that they need to have these direct lives you should support customers. When I talk to, you know, executives that, we try to companies can imagine, understand.

But when I look at it is customers have what they need to.

They've got their challenges they've got the end market dynamics, there are competitive pressures.

And what that is leading most companies too is realizing that they need to have these direct relationships, but when I talk to.

Executives that have been kind of a company you can imagine.

Understanding our customer.

Speaker 2: building that complete picture of the customer, and then acting on it.

Building, a complete picture of the customer and then obviously on it to improve the outcome of their business to spend less on marketing.

Speaker 2: to improve the outcome of their business, to spend less on marketing, to spend less on advertising in particular, to increase their retention rates, to increase their decrease in customer acquisition costs, increase the lifetime value. I mean, these are metrics that drive executives pretty much every kind of company. And I think in oftentimes what happens is the people that are bottom-up voting that we all have.

On advertising, if you were to increase the retention rates too.

There are a decrease the customer acquisition cost and increase the lifetime value.

The metrics that drive executives at pretty much every kind of company and I think in often times what happens is the people the more bottom up motion, but we will have.

Speaker 2: For tin it's hard to get mix it in in for not if I'm currently

People on the front lines were tasked with solving the problems of the Netherlands like recognizes actuarial consulting they bring twilio.

Speaker 2: And then we thought, well, with some more top down education around the market and new approach. And I think that's working very well. We have both a bottom-up and a top-down approach to our customers. I'll share a quick story with you, which I did, I felt was sort of illustrative of this, which is I'm just thinking we just got talking to CEO of one of our customers, a pretty large company, and education space.

And then with a walk with some more top down education around the market and new approach and I think that's working very well.

Bottom up and top down approach to our customers.

Quick story, with you, which is which I thought was sort of illustrative.

All of this which is interesting when you start talking to the CEO of one of our customers are pretty large company the tissue space.

Speaker 2: And they've been using our products for a second about our engagement software. They'll tell you about flex, the frontline, engage in all these new products that we've been bringing to the market for the last several years. And the CEO's got to be my track. We were all on the line and shared the screen, shared the screen on Zoom.

And they've been using our product growth tell them about our engagement.

I was talking about flex in frontline and engage in all these new products that we're bringing to market in last several years.

Youre exactly right.

All of our deposit and shared screen to screen.

Speaker 2: saying, I can't just talk about reporting. Because the old way of doing it was modeling apps from the new ways, composable APIs. Just here, I can't even read the APIs, are you?

Okay.

Nothing to report yet.

It was a model of the apps and the new way is composed of all API, Jeff Youre not getting rid of it are you.

Speaker 2: But I was like, there's no, of course not. We're building all this list operating APIs. We're mainly so that you can actually go build on how these platforms and unlock the things that you're trying to unlock by innovating these experiences together and hiring developers to go building for your customers.

First I would like that of course now we're building all of this with popcorn API, we're making it so that you can actually go build on top of these platforms and unlocked with things that youre trying to integrating these experiences together.

And hiring developers building for your customers and you could okay. Okay.

Speaker 2: And you could, okay, okay, shoot. I was glad to hear that. It was so interesting to be here at the CEO of I Get An Education Company.

I'm glad to hear that it was so interesting to me to hear the CEO of <unk>.

Vindication company.

Speaker 2: evangelizing to me the value of the idiotic, the value of the responsibility that it was momentized there, a lot of these ideas are now live streaming. Think about the fastest-growing companies in the software and technology space. Companies like AWS, like Twilio, like Stripe.

Angela I think to me.

Yeah.

The value of compose ability that it was more of a I'd say a lot of these ideas are now widespread I think about the fastest growing companies in the software and technology space companies like AWS like Twilio like stripe.

Speaker 2: These are API, these are the building blocks that allow companies to go build a future and innovate with their customers. Increase the agility of their company.

Our API is these are the building blocks that allow companies to go build their future and innovate with our customers increase the agility of the company.

Speaker 2: That is what customers want, and we're able to provide it to them. And well, there's always something we have a evangelism when you are kind of moving the technology all forward. It's not like we're just, you know, selling blockamoling and everyone knows what that is. It's just a question of whether you want to launch over not. Really, this is technology and how technology is enabling them to build a business, which does take more time and education than just selling blockamoling, but I like the business that we're in. As many ask by the way, if they don't help me, a friend of mine has had a friend of mine to bring a generation together.

That is what customers want and we are able to provide us with that.

There's always some degree of evangelizing.

When you are kind of moving the technology forward, it's not like we're just.

Selling guacamole and who knows what that is it's just a question of whether you want to watch over not really this is technology and how technology is enabling them to build their business, which does take more time and education than just selling guacamole, but I like the businesses that we're at.

Perfect. Thank you so much.

Speaker 6: Our next question comes from Alex Zuzin with Wolf Research. Your line is open. Hey guys thanks as much as I'd love to buy some guacamole because I'm sure it would be delicious. I want to ask you maybe two questions. First one on

Our next question comes from Alex Zukin with Wolfe Research Your line is open.

Hey, guys. Thanks, so much Jeff is I'd love to.

Brian and guacamole.

Because I'm sure it would be delicious.

I wanted to ask you maybe maybe two questions first one on.

A different way.

Speaker 2: What will you think about the major differences in demand drivers between Q3 and Q4? Obviously, it was just two very different quarters. Because, Amy, you mentioned, you know, it's a consumption-based business and inherent in that as some volatility. But just help us understand if you can or if you would.

When you think about the major differences in the demand drivers between Q3 and Q4, obviously it was just two very different quarters, because Amy you mentioned, it's a consumption based business and inherent in that is some volatility.

Help us understand if you can.

If you would.

Speaker 4: What were kind of the biggest differences? Like what made Q4 just such a great corner relative to Q3? And then the follow up is just how to think about now, particularly with segment going into the organic bucket. What's the right way for us to think about and model you guys do, but that any

We're kind of the biggest differences like what made Q4, just such a great quarter relative to Q3 and then the follow up is just how to think about now, particularly with segment going into the organic bucket, what's the right way for us to think about our model.

You guys do but with any.

Help there I think at least helps set the right model framework going forward.

Speaker 4: He helped there with, I think, at least helped set the right model framework going forward to better understand that the

Better understand that.

Hey, Alex.

Speaker 7: Hey Alex, those are these quick questions. Appreciate you. You asked me. I'm in space. I mean, there's nothing. From one period to the next. How is the fact that

Good questions appreciate you.

Are you asking.

Our space I mean theres nothing.

From from luxury to do that.

The fact that this.

Yes.

And you're always going to see like a little bit of an up and down.

Certain customers savings.

Domestic versus international mix.

Speaker 4: I think it's the most recent period international, like really so.

I'd say in the most recent period international and I'm really sorry.

But that we've made over over a number.

For a different years, but.

Speaker 4: We're different years, but you know, it's not like we're trying to international things out one period and you know, so domestic goes a different way or that one product set goes over the other. On base strength across the totality of the business was

It's not like we're trying to.

International picks up from here.

Domestic is a different way or that one product that goes one way or the other.

The strength across the totality of that.

The business was.

So it was really good in Q4, and we really like.

To set up coming into 2020 due in multiple years beyond really point to like that one.

Okay.

There really isn't one.

Broad based strength across the business.

Speaker 4: and just about the moments. I think with respect to the way that you should think about segmenting where the enemy, that part is closed or something.

And feel good about our performance I.

I think with respect to the way.

You should think about segment getting layered in any.

Separate disclosures on segments.

On a year over year basis.

Broken out.

Speaker 4: broken out. That's the DVD. They're new. I don't think I'm going to say is that we feel really good.

TBD Theyre, just theyre going to be I don't think I mean is there.

We feel really good.

Speaker 4: good about the growth prospects of that business. You can probably even do it in the fact that it was up 10% sequentially that we really liked the growth trajectory of where it headed. And if you can find that we're seeing tremendous traction in the customers there.

Good about the growth prospects of that business, you can probably implemented and the fact that it was up 10% sequentially that we really like the growth trajectory.

And I think.

And then that we are seeing tremendous traction.

And.

Customers there.

Combining our messaging, but also.

With respect to combining that with flagships.

Just really really exciting and we think that Texas is really really strong growth prospects going forward.

Speaker 4: really exciting and we think that this really really strong growth prospects and forward.

I'll just point out Alex one one additional.

Business.

Yeah.

Speaker 8: Indeed indeed. Well, thank you guys. Congratulations. Okay.

Indeed indeed.

Thank you guys congratulations.

Thanks Ross.

Willpower with bank your line is now.

Okay, great. Thanks, a couple of questions.

Speaker 4: Great. Thanks. The couple of questions. First one, the password for Zayma. You pointed the.

First one perhaps for <unk>.

You pointed out.

Accelerated it looks like quite a bit.

Speaker 4: I love it if there's just any other color as what the driver's behind that kind of serves an international messaging might have been and What else you might have seen internationally that drove some of that experience?

I'd love it if there's just any other color as to what the drivers behind that kind of surge in international messaging might've been and what else you might have seen internationally that drove some of that.

Acceleration.

Yes, thanks for the question Bill.

Speaker 4: I think there's two dynamics. I think the first is that, you know, if you get along with a follower of our job, it's late and we talk a lot about our international good market investments and Mark's bill was really great team internationally. And I think we're really certain to see the truth of that investment. And you've seen that, I think, over multiple quarters now with our ability to grow in international markets.

I'd say there is two dynamics I think the first is that yes.

Are you just keeping them on the color of ours, obviously, and we've talked a lot about our international go to market investments and Mark has built a really great team internationally and I think we're really starting to see the fruits of that investment.

And you've seen that I think over multiple quarters now with our ability to grow.

International markets I think the second dynamic is.

Speaker 4: I think the second advantage is that there was one customer in particular, whose volume really really took off. It's Q4, which we know pretty good about as well. That happened to the time to all that as well, but...

There was one customer in particular, just volume related really took off in Q4, which we know.

It's pretty good about as well.

That happens from time to time to do that as well but.

Speaker 4: Feel great about the way the international lens and I think those continue to

Feel great about the way the international land than we think.

Continued strength.

Speaker 4: Okay, great. And then maybe for Jeff, just building on some of the other commentary, just looking at your growing strategic position around first party data.

Okay, Great and then maybe for Jeff.

Just building on some of the other commentary just looking at your Youre growing strategic position around first party data.

The ended up strategy that you've referenced.

Speaker 4: You know, the in and up strategy that you referenced. You know, what are the pieces that you think could bolster that further? I mean, that's not necessarily need, you know, further solidify that. And I guess more broadly, maybe how do we think about, kind of the M&A pipeline and appetite here?

What are the pieces that you think could bolster that further I mean, thats, how I can necessarily need further solidify that and I guess more broadly maybe how do we think about kind of the M&A pipeline and appetite here.

Speaker 2: Yeah, thanks for all. Appreciate the question. Yeah, first of all, just sort of like one of the pieces that will stir it. And that's it. You know, continue to continue to continue to continue when we've got products.

Yes. Thanks Bill I. Appreciate the question first of all I'll, just sort of like what are the pieces the holster it.

I think youll continue applications, where we've got products that create revenue scale continue to expand very nicely. So when I think about how are we continuing to make sure our messaging products as best in class or best in class.

Speaker 2: that at crazy level still continue to expand very nicely. So when I think about, you know, how are we continuing to make sure our messaging probably is best in class or you know, probably is best in class.

Speaker 2: I think it's fantastic to read the stories as well. So we've got a lot of us in fast products. We've got a lot of pieces and we're in the process of bringing them together.

Segment, I think is fantastic the bigger customers as well so we've got a lot of best in class products, We've got a lot of pieces.

We are in the process of bringing them together and so when I think about what.

What does it looks like we're bringing the pieces together, we've got resellers of our engagement platform, we got engaged with the market or which is still very early in this cycle by what we just announced in Q4.

We've got frontline, which can be used by frontline workers and sales teams and things like that and then you got glass for the contact center. So clearly there is a lot of buyers there theres a lot of can there already and we're continuing to bring those together bring those products to them.

Speaker 2: to the context. It's clearly there's a lot of buyers there, there's a lot of hand there already and we're continuing to bring those together, bring those products to more and more and more customers. As far as I'm an anti-client, I mean, give the answer that I always give because it's true, it's that, you know, we always have an active game board because obviously if there are acquisitions out there that are excelling a roadmap, we should be willing to do them, but we also of course, thinking of high bar, great companies, great cultures, great products, we know that things that rich them, but we don't have any particular strategic goal or anything that we're going after, but you know, of course, like any company of our size and the value of she, you know, we're aware of what's happening. Hey, we'll all set one comment, which is just at the end there, which is, I think, current market there may be some track of opportunities and we'll be on the lookout, but the reality is we're very, very focused on our organic growth rates right now and when it continues growing business that we've got, we don't see a herd of need necessarily to do anything. Okay.

More and more and more customers as far as M&A pipeline I can give you the answer.

And that I always give because it's true.

We always have an active deepwater because obviously if there are acquisitions out there that are accelerating our roadmap, we should be willing to do them, but we also of course, maintaining a high bar of great companies by poachers type products and those are things that rich them, but we don't have any.

In particular strategic goal or anything that we're going after but of course like any company of our size and with our balance sheet wherewithal.

Speaker 4: Hey, well, all of a sudden, one comment, which I said at the end there, which is obviously in the current market, there may be some track of opportunities and we'll be on the lookout. But the reality is we're very, very focused on our organic growth rates right now and we want to continue growing business that we've got. We don't see a burden needing this to really do anything. And I was reading a reading that missed earlier, there's a speculation that we might purpose center of risk, we're certainly not going to do that.

Well I'll just add one comment with Justin at the end, there which is.

Obviously in the current market there may be some attractive opportunities and it will be on the lookout, but the reality is we're very very focused on our organic growth rates right now and want to continue growing the business that we've got we don't see a burning need to necessarily do anything demonstrate or a training of that missed earlier.

There is some speculation that we might purchase senators and we're certainly not going to do that.

Yes, I appreciate that thanks.

Thanks.

Our next question comes from Ryan Macwilliams with Barclays. Your line is open.

Speaker 1: Our next question comes from Ryan McLean. To Parklee, if your line is open.

Thanks for taking my question looks like Toyota presence in global 2000 customers doubled since the end of 2020. So congrats Jeff I know, it's still early but love to hear about the strategy and expectations behind engage and how customers. So far suddenly come around the idea of using twilio as their unified customer engagement platform.

Speaker 4: Next, take the question. Looks like Tuleo's presence in global 2000 customers doubled since the end of 2020. So congrats. Jeff, I know it's still early, but I'd love to hear about the strategy and expectations behind engage. And you know, how customers so far are going to come around to the idea of using Tuleo as their unified customer engagement platform.

Absolutely.

Speaker 2: Absolutely. I'll start with the beginning. I mean, the way we see the market is that, you know, historically, market migration products should focus on running the campaign. So, yeah, it's credit-less and it's a trend button.

The way, we see the market is that historically marketing automation products, we focus on running the campaign.

Larry.

And you get to see how they.

Speaker 2: and you get to see how many people open it, come to people open to the campaigns. And by that's the way they were designed, 15, 20 years ago. And that's still a part of the most popular of these years today.

I want to get it opened.

Okay.

But that's the way they were designed.

15, 20 years ago, and Theres still a product that most companies use data, but actually more.

Speaker 2: But actually, the more modern marketing facts is one that is driven not by campaigns, so by data, it's actually driven by a rich set of data about every customer who they are and sort of what message is gonna actually resume most of them. And by the way, I'll have no need for it.

Modern marketing stack is one that is driven off the campaign. So by David It's actually driven by a rich set of data on every customer who they are and sort of what message is going to actually resonate most of them already.

So we're looking for is it just.

As they open an email.

Speaker 2: Did they open an email? It's like, did they make a purchase? Did they increase the lifetime value? Are they actually more valuable customers? And these are the things like, you know, Compact, stuff, the campaign, multi-variant analysis, like, great marketers today are using data in incredibly interesting ways that the legend key marketing software just really isn't set up to accommodate. And that's the opportunity we're going.

The purchase of the increase the lifetime value actually more valuable customer and these are the themes like comp.

Complex that the campaigns multi variant analysis.

Great marketers today are using data incredibly interesting ways that the legacy marketing software just really is set up to accommodate and that's the opportunity we're going to.

And we're going to certainly very data centric approach to marketing in the belief that many marketers are already there and the ones that arent working.

Speaker 2: We're going to get to our very data centric approach to marketing. In the believe that many marketers are already there and once you aren't going to get their ever heard.

To get there.

And I think that's already proven out by the traction that the segments TVT has in the market because of CDP is actually how we break all that data into actionable insights for the marketer. The last step is just kind of seeing the campaign and Thats what were adding on with the gauge, but the hard part about that whole equation, if the data product and we already did it.

Speaker 2: And I think it's already proven out by this fraction that the second CDT has in the market, because the CDT is actually how we raise the momentum.

Speaker 2: to actionable incentives to the marketer. The last step is just trying to, you know, vaccine campaign, and that's what we're adding on with the Gage. But the hard part about that whole equation is the data part. And we already do that. We're already leading the market in that. And so adding actually the marketing execution side on to it is actually a relatively like this. So we're very excited by the feedback for getting smart early customers. We think that we've got a really novel and attractive approach. And ultimately, at the end of the day, and look, it is the same budget we're going after, the legacy funds enjoyed today because that's the marketer's budget. But I think that it's one of the markets is going. And I think we're going to be leading products.

And that so adding actually the marketing execution site onto it that's really helpful.

So we like it.

Excited by the feedback we're getting some early customers.

We've got a really novel and attractive approach and also at the end of the day the thing.

Budget, we're going after the legacy parts I'm joined today, because thats the marketer's budget.

But I think.

It's where the market is going and I think we're going to have a leading product.

As the market is getting you already see RBC traction in several markets going up.

Speaker 2: or the 18 ???? made up

Got it.

Second question you had this year.

With that.

Speaker 4: No, that was great color. I appreciate it. My second one for Kazama, just please hear about non-gap operating profitability for fiscal 23. Just getting some questions here on gross margin, like I completely understand how it can vary from quarter to quarter. But as we think about the path forward from here, can we think about gross margin being higher on a yearly basis going forward, given the elevated growth in the higher margin application services business?

Great color I appreciate it.

My second one for <unk>, just put them to hear about non-GAAP operating profitability for fiscal 'twenty three just getting some questions here on gross margin.

Completely understand how can vary from quarter to quarter, but as you think about the path forward from here can we think about gross margin being higher on a yearly basis going forward given the elevated growth in the higher margin applications services business.

Speaker 4: Yeah, I think it's a totally fair question. We're not going to guide you on a year-to-year basis per day on gross margins. What I will say though is that you feel very, very good about the progress that we're making on the Caucasian services.

Yeah, Hey, Ryan I think it's a totally fair question, we're not going to guide on a year to year basis per se on gross margins, but I will say, though is that we feel very very good about the progress that we're making on application services, that's kind of the non telephony based cost products that we have excess segment.

Speaker 4: That's kind of the non-solopony-based cost product that we have. Act segments, things, rate. As you start to close your, in the prior years, that grew at a much faster rate than even our very best from messaging business. So as that trajectory continues, we feel very good about the prospect.

As you saw our disclosure in the prior year that grew at a much faster rate than even our very fast growing messaging business and so as that trajectory continues we feel very good about the prospects you guys are.

Speaker 4: to get over 60% plus target. To which of that, we feel really, really good about the way the segment is going, and we feel very, very optimistic about how the engagement has already started. And so the combination of those factors I think this is very high confidence in 50% plus over time. In the meantime, as long as...

60% plus target, so, which I would add we feel really really good about the way. This segment is going and we feel very very optimistic about have engaged has already started and so the combination of those factors. I think this is very high confidence that 60% plus over time in the meantime, as long as the messaging business that we.

Speaker 4: The messaging business that we put on is generating fibrous profits.

But on that generate high gross profits.

Speaker 4: We are comfortable from period to period with that gross margin number, you know, about a little bit up and down, but over time, you know, we still feel very good about 60% thought up. And I think we have a great track record with investors of, you know, delivering what we say we'll do. And I think over time, we will get set. Well, it's a color. Thanks, Ed.

Im comfortable from period to period with that gross margin number about going a little bit up and down but over time, we still feel very good about Boston.

Our track record with investors are delivering what we say, we'll do and I think over time, we will pause.

Yes.

The color thanks, guys.

That's right.

Speaker 1: Our next question comes from Fred Halvmeyer with McGrary. Your line is open. Hey, thank you.

Our next question comes from Greg <unk> with Macquarie. Your line is open.

Okay. Thank.

Thank you Jeff truly those products platform certainly expanded a lot since I think its heritage as a.

Speaker 2: So our together is justice, and I'm really doing justice, so je?elir an uOr, yEiHeh YeeHeelf

Speaker 2: I think it's heritage is a platform and you know channel to be able to ritual people back in 2008.

Platform and channels to be able to recruit people back in 2008 and I wanted to ask from your perspective is.

Speaker 2: And I wanted to ask, you know, from your perspective is found under, whenever you put on your coding gloves and you're thinking about, you know, what's exciting on Toyars platform and what are the products that are disruptive or interesting or that you would use to build the next iteration that startups and growth businesses, what gets you most excited about what is happening with Toyars?

Whenever you put on your coating gloves, and Youre thinking about whats exciting until those platform and what are the products that are disruptive or interesting or that you would use to build the next iteration of startups and growth businesses. What gets you. Most excited about what is happening with trulia.

Well, that's a fantastic question.

Speaker 2: Well, that's a fantastic question. You know, when I think about it, it really goes back to the mission of our company. If you notice, we updated our mission last year. We talked about it a little bit in last year. We talked about it more in some upcoming venues. But like, we updated our mission and it really took us like the reason why I am so many at Toyota, get out of end of the morning. And it's a lot of imagination of the world's built.

Think about it really goes back to.

The mission of our company and if you notice we updated our Michigan last year, we talked about it a little bit.

Last year I will talk about it more in smart coming venues, but like we updated our mission. So let me just flex the reason why.

So many of its way to get out of inventory.

A lot of imagination of the world's builders.

Speaker 2: And what's so exciting about that mission is that people are, the humanity has been, the world that we teach today is created by people of those. And they're built for thousands and thousands of people.

And what's so exciting about that mission is that people are demanding.

What we see today is pretty much equal.

And then bill for thousands and thousands of years.

And what you see now happening in the world of software and the Internet.

Speaker 2: And what you see now happening in the world of software and you get in it, is people build it at a scale that was previously unimaginable.

People building at a scale that was previously unimagined.

Speaker 2: you know, a developer or a start-up or a company can build a product and if they build the right thing, millions or billions of people can become their customers practically over.

A developer or a start off or a company can build upon us and if.

We built the right thing millions or billions of people can become the customers' practically overnight.

Speaker 2: And that's been a scale of execution and an idea that I think has underappreciated in the world.

And that is the scale of execution and an idea, but I think it's underappreciated in the world.

Speaker 2: That's with software, the internet, and the distribution mechanism of the internet provides. Anybody can be available.

Software and the Internet and the distribution mechanism, but the Internet provides.

I think it can be a build.

Speaker 2: Anybody can unlock a new idea. And that goes for developers, that goes for a wide variety of builders and fun companies. That also goes to the companies themselves. And I love seeing, you know, when a startup enters a market it comes out with some great new big idea. And then the company tells us to...

Anybody can unlock a new idea.

And that goes for developers that goes for a wide variety of builders inside of companies, but also most of the companies themselves. So Eduardo skiing.

I'll start off and there was a market it comes out with some great New Big idea and then the incumbent followed suit.

Speaker 2: And actually, they start coming up to the big new grid at E. Like I've got another one, I've got another new EV market, for example, like, you know, four, so the great job bringing out cool new EV products and like, I've been trying it for a few days, but it's really cool to see how the market's evolved and software hopefully becomes this vehicle no fun intended for companies and people to change the world. And so it gets me tremendously excited about the product's portfolio level in that we get to unlock the imagination of the builders' lot.

It's just coming off the Big news, Great I got there have not been watching what's going on.

The market for example, with my board and a great job, bringing out quarterly EG Fox offer Detroit, but essentially this thing, but it's really cool to see how the market evolves and software hopefully becomes vehicles no pun intended for companies and people to change their vote.

And so it gets me tremendously excited about the products that truly is.

Is that we get a market imagination of the builder swap markets.

Speaker 2: And for civil law companies that they've sold, they bought a bunch of apps to talk to their business. My math for this, not for that. And then they had this idea that I was like, oh, we want to go, like, our customers want this, what's going to do that? And when you're going to go, like, we'll know. It tells me to do that.

In Brazil, along companies have been told because they bought a bunch of apps the tone of our business My math. So that's not flat and then they have this idea that we want to go but our customers want to do.

And whether you can talk to I don't know it doesn't do that.

Can you talk to US we can't do it.

Speaker 2: You told him no, we can't do it. And what I love is giving our customers the path to get.

A lot of giving our customers the past CES. This idea that we have for how we're going to better serve our customers. So we're going to out innovate our competition.

Speaker 2: This idea that we have for how we're going to better serve our customers or we're going to out innovate our competition.

Speaker 2: The answer is with Suleio, yes. And that's where he comes. That's our back on the pros, that's from, that's engaged, that is segment. This is unlocking the imagination of world developers and like, you know, like in the various towns of like, you know, marketing and contest centers and messaging or stuff. If you take a step back and think about the adjustable market of people who build, like that's the story of humanity. And that's what they've been talking about, building things like that.

Stores with Twilio, Yes, and Thats, alright, guys Thats our platform approach that's flat.

Gauge that as segment. This is unlocking the imagination, the world's developers and like if I could the various patterns of like marketing and contact centers and messaging.

If you take a step back and you think about the addressable market of people, who build but that's the story of humanity and that's my favorite part about building kit.

Speaker 2: Thank you. You know, when Twilio Intelligence for Voice is available to me, I'll spend a weekend hacking together project to order guacamole. So thank you. Oh, bruh. Hi.

Okay. Thank you.

Your intelligence for voice is available to me I'll spend the weekend Hatton together.

Projects, So order guacamole so thank you.

Our next question comes from Matt Van Fleet.

Speaker 2: with BTIG, your line is open. Yeah, thanks for taking the question guys. I just showed up on the quarter. You know, you kind of touched on parts of this, but wanted to maybe bring it together in one increase of question. When you look at segment and the rate of adoption across the enterprise, you know, it seems like

With BP <unk> your line is open.

Yes, Thanks for taking my question guys nice job on the quarter.

Great.

Touched on parts of this but wanted to maybe bring it together in one increase a question when you look at segment and the rate of adoption.

Across the enterprise it seems like the idea of maybe at the very high end Geoff to your point I was talking to a CEO . It's a great idea everyone realizes that they need more data to be smarter and more individualistic in terms of their outreach, but in reality, how many of these companies that you're talking to.

Speaker 2: The idea maybe at the very high end, Jeff, your point of talking to CEO , it's a great idea. Everyone realizes that they need more data to be smarter and more individualistic in terms of their outreach. But...

Speaker 2: In reality, how many of these companies that you're talking to are ready to implement, segment?

You are ready to implement segment, how much sort of a customer education and maturity level.

Speaker 2: How much of sort of a customer education and maturity level is broadly out in the market? And maybe the follow up to that is, is there potential that you can see this pretty dramatically accelerator over the next couple of years?

As broadly out in the market.

Maybe the follow up to that is is there a potential that you could see this pretty dramatically accelerate over the next couple of years as companies get a little smarter, maybe our technology, a little more up to date across other parts of the organization to really leverage segment.

Speaker 2: as companies get a little smarter, maybe our technology, a little more up-to-date across other parts of the organization to really leverage segments.

At March forward is key.

Speaker 4: As Mark Mkord is a great question. And it's a added lens to the earlier question regarding the opportunity to come up.

<unk> question.

And it's a blend to the earlier question regarding the opportunity in front of us.

And.

Speaker 4: The opportunity is accepted across the entire market. We see the interest that comes from small customers, little weeks of large customers. And you're explaining us, are they ready to adopt?

The opportunity is it cut across the entire market.

We see the interest income spread.

Small customers all the way to the largest customers and your <unk>.

Are they ready to adopt.

Speaker 2: And we see requirements that started to use K.

We see requirement to start at the use case for <unk>.

Speaker 4: or literally you need to be able to connect a couple of real-time data sources to be able to have an understanding of the customer and then provide whatever interaction that's gonna take place to progress custom relationships. So imagine if you will, connection to a CRM.

Literally the need to be able to connect a couple of real time data sources to be able to add.

Understanding of the customer and then hereby every interaction is going to take place to progressive customer relationships. So imagine if you will connect into our CRM.

Speaker 4: connecting to a point of sale system, connecting to whatever the app is that the company runs for business, but you'll get to that understanding and then be able to respond in the channel so that the customer's choice in order to be out there, in a mill for whatever they have that interact. And that's how they can be across the entire archive of the customer relationship. What we see happen is that we can move from that and you take organizations to strategically more and more of their customer requirements.

To the point of sale system connecting to whenever the App is that with the rest of the business.

You're going to get to that understanding and then be able to respond in the channels that the customers choice in order to get out.

Or does it have that interaction and that has it can be across the entire arc of the customer relationship. What we see happen is if we can move from that used to hearing adjacent to strategically more and more of their customer requirements.

Speaker 4: and be able to address a greater set of commercial requirements that position CBT as a strategic part of the way that they think about building an expanded related.

And being able to address a greater set of commercial requirements that physician PDP.

As a strategic part of the way that they think about building and expanding the relationship.

Speaker 4: So like an example, we share today, the virtue motor example.

Like as an example.

Sure today.

The virtue Motors example, where.

Speaker 9: where the implemented segments in order to understand.

Sure.

Ltd.

Segment in order to understand the call or in its calling is to be able to look up and see that they are in fact cut.

Speaker 9: the caller of calling in, they'll look up and see that they're in fact, and they've got the customer that bought from them in the past to go see what car they bought to know what the residual value is.

Customers that bought from us in the past because what car they bought to know what the residual value at the end.

Speaker 9: that then prepare the agent to be able to have the right conversation with that customer and be able to more than likely sell them another car.

Prepare the agent to be able to have the right conversations with that customer and be able to do.

More than likely sell them another spot where.

Speaker 9: We're seeing that kind of opportunity and to mutate it to expand it, to teach it full, customer life as I can depart.

We're seeing that kind of opportunity and use case into expanded strategic full customer lifecycle requirement.

Okay.

Great and then I guess on the flip side of the business are you still traditionally going in and replacing or sort of augmenting and building on top of.

Speaker 2: Great. And then I guess on the flex set of the business, are you still traditionally going in and replacing or sort of augmenting and building on top of legacy on-prem solutions that have just...

Legacy on Prem solutions that are just.

Speaker 5: maybe run their course of functionality. Or are you increasingly seeing opportunities where customers rush to get anything that was supposedly cloud or hosted at the beginning of the pandemic, but now realize that they can't configure it, they can't do actually what they wanted or what they thought it could, and are now looking at what flex and Twilio more holistic leak in mean as a five, 10, 15 year partner from the technology perspective.

Maybe run their course of functionality.

Or are you increasingly seeing opportunities where customers rush to get anything that was supposedly cloud or hosted at the beginning of the pandemic, but now realize that they.

They can configure it they can't do actually what they wanted or what they thought it could and are now looking at what flex and Twilio more holistically can mean.

510, 15 year partner from a technology perspective.

And in smaller customers.

Speaker 9: And in smaller customers, so think of this as like digital structure stuff to like a bin mark by the count. And we do have a fairly healthy approach to the business that is their first real implementation of a data context center type. So we can maybe not call it context center, by the way, they may call it their support.

So think of it as like digital Disruptors stuff too.

Okay.

You have a fairly healthy portion of the business that is their first real implementation of it.

Of any.

Contact Center solutions.

Contact center in Pennsylvania.

What are their customer engagement.

Speaker 9: or their customer gave you a solution. But it is going to move up to large organizations more legacy implementation. You actually see a lot more of this topic. We have a fairly healthy organization.

And as you move up in a larger organization, where legacy implementations that you actually see a lot more about me.

We have a fairly healthy augmentation.

Speaker 9: Business that you called out in our report that people are adding new channels and new capabilities in parallel with their legacy implementation.

A business that you called out.

In our remarks.

People are adding new channels and new capabilities in parallel with their legacy applications.

Speaker 9: So we're also winning more and more replacements of legacy implementation.

But we're also winning more and more replacement of legacy applications.

Speaker 9: The example that we share in our prepared remarks regarding the law, which is a great customer example, you know, a very digital-oriented business that has paid, like to speak, a supplier that actually takes some challenges.

The example that we shared in our prepared remarks regarding <unk>, which is a great customer example.

<unk> digital oriented.

Is that.

<unk> had a legacy.

Supplier.

<unk>.

Actually facing challenges and the customer was able to rapidly did not say replacement implementation constantly is now there.

Speaker 9: and the customer was able to rapidly did not say the placement implementation on CLEO that is now their standard for their requirements going forward.

Standard explore their requirements going forward.

Speaker 9: Now, that's not the way that you're necessarily going to win the business overall. We're not going to wait for people to fail. We're showing nothing, helping customers recognize that the next generation of engagement can't be satisfied with the legacy player in the way that's planned.

Now that's not the way that you're necessarily going to get the business overall, we're not going to wait for people to pay.

We're showing that and helping customers recognize that the next generation of engagement can't be satisfied with the legacy players the wages.

Speaker 9: And we have many examples that range from Fortune 100, Fortune 100 thanks to a low fortune 100, probably a low 2000 automotive manufacturer that has successfully influenced its flexibility to pull the barn.

And we have many examples that range.

<unk>.

Fortune 100.

Fortune 100 bank too.

Global Fortune 100, global 2000 automotive manufacturers.

<unk> successfully.

<unk> and flex to meet the full requirements.

Speaker 2: You know, Matt, this is Jeff, but I just thought I'd add one thing, which I thought was interesting. You know, when I was first getting to know Simon Man before we did that position, I was really struck by their penetration into the inner product.

Matt This is Jeff and I, just thought I'd add one thing, which I thought was interesting.

First getting those segments. So we did the acquisition.

Really struck by their penetration into the enterprise.

Speaker 2: And we've had a number of great enterprise customers.

And we've had a number of great enterprise customers.

Speaker 2: speaking about their competition of bus, you know, just said our signal. We had proctor Yamol, he was a great customer. We had Intuit, the PTO Intuit, Mariana Tessel on stage talking about their use of segment, the cost of their properties. You know, we have a Fortune 100 financial services company that we just know from this point that we find, in Q4, an ITU's logo and customer that we got great enterprise customers.

Speaking about their implementation Opex signal, we have Procter <unk> Gamble is a great customer we had intuit the CTO Intuit Mariana tussle on stage talking about their use of segments across all of their properties.

A fortune 100 financial services company that we just announced this quarter that we signed in.

In Q4, 19 use one of those customers, we've got great enterprise customers.

Speaker 2: where you think segment already. So I just, I'm struck by how early the need these enterprises has been apparent. When we think about the more complex businesses, the more subsidiaries that are, the more brands they run, the more, you know, systems they implement, the more the need is for a customer data platform to help them make sense of all of this. So I've been really surprised when it trashed, even before the acquisition, the segment already had in the market, and therefore they need to receive it.

<unk> segment already so.

I am struck by how early the need these enterprises have been apparent. So when you think about the more complex businesses more subsidiaries are the more brands they were on the more.

<unk> implemented the more the need is for a customer data platform to help them make sense of all of it. So I've been really pleasantly surprised by the traction even before the acquisition this segment already out in the market.

Good to see.

Alright, great. Thanks, Thank you very helpful.

Great.

Speaker 4: Great, we are up at time. I know there's a lot of folks that still have questions in the queue. We will catch up with you this afternoon. So otherwise, thank you everybody for joining and for catching up over the rest of the quarter. This can...

Our up at times, I know Theres, a lot of folks still have questions in the queue. We will catch up with you. This afternoon.

Thank you everybody for joining and we look forward to catching up over the rest of the partner.

This concludes today's conference call you may now disconnect.

Okay.

Speaker 10: The the.

Okay.

Okay.

Okay.

Okay.

Okay.

Okay.

Yes.

Thanks.

Yes.

Sure.

Okay.

Sure.

Sure.

Yes.

Yes.

Okay.

<unk>.

Yeah.

Thank you.

Sure.

Yes.

Yeah.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Okay.

Speaker 10: And.

Okay.

Yes.

[music].

Yes.

Sure.

Sure.

Yes.

Okay.

Yes.

Thanks.

Okay.

Yes.

Okay.

Okay.

Thanks.

Yes.

Yes.

Okay.

Yeah.

Yes.

Okay.

Thank you.

Okay.

Cool.