Products

• Twilio
  • Channels
    • Twilio Messaging (SMS, MMS, WhatsApp)
    • Programmable Voice
    • Programmable Video
    • Email (via sendgrid)
  • Services
    • Identity: lookup, verify, authentication
    • Twilio Conversation: cross-channel conversations between enterprise and customer
    • Orchestration: Studio, task router

Recent Acquisitions:

• SendGrid: email sender provider
  • Help Twilio expand to email messaging
• Zipwhip: direct carrier and leading provider of toll-free messaging
  • This acquisition can help Twilio reduce provider fees and consolidate market position
• Segment
  • Customer data platform, tracker each users behavior and actions
  • Help expand Twilio’s product line for communications to customers

Business Model

• Revenue
  • Usage based fees from software products (72%)
    • Programmable messing, programmable voice, programmable video
    • Pay per number of text msg sent or received
    • Pay per minutes of call duration activity
    • Pay per number of authentication via Verify
    • Prepaid via credits and revenue recognized after usage
  • 32% international revenue
  • Top 10 customer accounts represented 12% of revenue
  • Q3 – 2020 included $10mil of revenue from political traffic
• Cost of Revenue
  • Fees paid to network service providers
  • Cloud infra fees
  • Personnel for customer support
  • Data centers and hosting equipment

Core Metrics

• ARR: $2.7B (+53% YoY)
  • Q2 Total Revenue: $668M (+67% YoY)
  • Q2 Cost of Revenue: $337M (+76% YoY)
    • Attributable to increase in network service provider and increase in cloud infra fees
  • Q2 Gross Profit: $331M (+58% YoY)
  • Gross margin: 50% (52% last year)
• Customers: 240,000 (+20% YoY)
• NDR: 135%

Analysis

Growth is still very high but margins could be better. Current valuation of 23x multiple is actually quite cheap if you believe Twilio can maintain its growth rate and squeeze out its margins. In 3 years, Twilio could hit $8B revenue to become $160-200B (3x upside)