Twilio, Inc. Q1 FY2025 earnings call

• Twilio had strong Q1 revenue growth, reaching $1.172 billion, a 12% YOY increase, with double-digit growth and solid non-GAAP income from operations and free cash flow. • Focused on innovation with AI products like Conversation Relay, Generative Custom Operators, and new partnerships (e.g., ElevenLabs, Chelsea Football Club). • Strong go-to-market performance with ISVs showing revenue growth, self-serve leveraging AI for efficiency, and cross-sell/multi-product adoption increasing. • Notable customer wins, including an eight-figure deal with an identity platform and partnership with Chelsea Football Club. • Recognized as a leader in IDC and Omdia assessments, and hosting SIGNAL user conference to share innovations.

Twilio had revenue of $1.172 billion in Q1 2025, a 12% year-over-year increase. The Communications segment generated $1.097 billion in revenue, up 13% YOY. The Segment segment had revenue of $76 million, up 1% YOY. Non-GAAP gross profit for Communications was $277 million with a margin of 49.8%, while the Segment segment had a non-GAAP loss from operations of $2 million but expects break-even in Q2. Non-GAAP income from operations for the company was a record $213 million, up 34% YOY.

• Q2 revenue guidance: $1.18 billion to $1.19 billion (9-10% YOY growth). • Raised full-year organic revenue growth guidance to 7.5%-8.5% from 7%-8%. • Q2 non-GAAP income from operations: $195 million to $205 million. • Full-year non-GAAP income from operations: $850 million to $875 million. • Full-year free cash flow guidance: $850 million to $875 million.

• Macro environment uncertainty could impact customers and business, though no notable adverse impacts seen through end of April. • Gross margin headwinds from non-recurring hosting credits in prior year and higher mix of international messaging revenue. • Variability in gross margins due to messaging being a primary driver and where customers terminate messages.

Q: Breakdown of business use cases by sticky/strategic vs macro-susceptible?

A: Business has mixed impact from macro, with some use cases tied to transactional volumes (potentially impacted if volumes fall) and others tied to AI-driven customer care (potentially driving elevated volumes). Focus on controlling what's in our hands while monitoring macro.

Q: Cross-sell motion and sales team readiness?

A: Cross-sell is multi-year journey with AEs enabled on all products, customers demanding more Twilio products, and strong growth in mature add-ons. R&D investing in integrations to make experience frictionless, with strong growth in voice intelligence, Verify, and SMS pumping protection.