Twilio Inc. (TWLO) Earnings Call Transcript & Summary

Welcome, everyone, to Twilio's 2025 Investor Day. I'm Bryan Vaniman, Twilio's SVP of Investor Relations, Corp Dev and Treasury. Thanks to all of you who joined us here today in person. It is great to see so many familiar faces in the same room together. And thanks to everyone who's joining via the webcast. We appreciate all of you taking the time to learn more about Twilio, and we've got a ton of great content coming your way. But before we jump in, a bit of quick housekeeping. Everyone's favorite slide. We will disclose non-GAAP financial measures today, and you can find definitions and reconciliations in the Investor Day presentation posted on our IR website. We will also make forward-looking statements, including statements about our strategy, performance, results and targets, and actual results could differ materially from those described today. So please review the risk factors in our latest SEC filings. We're going to conclude today's presentation with a Q&A session. So if you are joining via the webcast and want to submit any questions, you can do so by e-mailing us at ir@twilio.com, and we'll be monitoring this throughout the event. We're going to target to end the content portion of the day by 5 p.m. Pacific Time, and we have a couple of planned breaks throughout the session. It's just to give folks time to stretch their legs. And then finally, if you're joining us in person here, we hope you stick around. We've got a great reception immediately following the presentation through those doors. So now without further ado, I'll turn things over to Twilio's CEO, Khozema Shipchandler.

Thanks, Bryan, and I appreciate all your hard work on pulling this event together. Welcome, everybody. It's great to be with you. We're really, really excited about telling you a little bit about our story and the way that we've kind of revamped things in and around Twilio. Here's the agenda that we're going to take you through today. So I'll really kick things off by getting into our vision and the path ahead. And then in the subsequent sections, you're going to hear us talk about our innovation engine, the market opportunity that we see in front of us, the way that we distribute our product and get it into the hands of everybody from a developer to the largest customers in the world. And then Aidan is going to bring things home in terms of how do we do this over a period of time within the context of our framework so that we continue delivering durable, profitable growth. And then I'll wrap things up before we get into Q&A. Now look, I've been at Twilio over 6 years. And I've been in the CEO job just going on -- just over a year now. And I can tell you very honestly that I've honestly never been more excited about the prospects of Twilio going forward than I am standing in front of you or virtually in the audience than I am today. And a big part of the reason for that is the names that are on this page today. So I'll let each of them introduce themselves individually to you, but these individuals have deep domain in technology. They have expertise in the functions that they represent, and they are world-class leaders, each and every one of them in their own right. And to be able to do it together with them day in and day out makes me incredibly excited in addition to the rest of the leadership team that we've got here at Twilio, plus, of course, the 5,500 employees that show up and work so hard for us every single day. So let me get a little bit into our vision. So our vision is as follows, and it is nothing short of ensuring that every digital interaction between a business and a consumer is amazing. Every digital interaction between a business and a consumer is amazing. That's what we're playing for. And the way that we get there is through the combination of communications in which we are the leader, plus contextual data without which you don't get the full consumer unlock in which we have one of the world's best data assets, and of course, AI. Now AI, as we'll talk about during the course of the presentation, as amazing as it is and as huge of an unlock as it is for so many of our customers, it's really something that helps activate the data. The data is the action, and I hope that's what you hear from us during the conversation today. Now importantly, in addition to the fact that we have these world-leading assets, we have this great vision. I'd also like to think that we've built up a fair amount of credibility with you all. So over the last few years, I mean, we've been really hard at work. And I think thematically, what you should really take away from the company is we've been operating with greater financial discipline, much greater operating rigor. And when it comes to innovation, the differences is that we're just very focused on a handful of key bets that we think are going to be really impactful and powerful for our customers. Now behind the scenes, we've done a lot of work. Okay. Some of it, quite frankly, very, very difficult, very painful, took its toll on our teams. No question about it. But during 2023 and during 2024, those actions, though hard, were necessary and got the company into a much better financial position. You'll see that in some of the operating results that I'll share with you in a moment. You'll see that in the strength of the balance sheet that we've got. And as we start thinking about 2025 and beyond, we're not going to lose any of that discipline and rigor that I spoke of a moment ago, but we are really going to ensure that we're putting the appropriate amount of focus on innovation. Ultimately, this is a technology company. It's one that was born through builders. Jeff and the co-founders of this company, like that was initially their vision, and we want to stay true to that. We have a real opportunity through innovation, through technology, but what I also want you to take away is, is that as innovative as we're going to be, this is also going to be an incredibly well-run company. And again, you'll see proof points of that in our financial statements. This is why we're going to win. There's a number of different factors here. Innovation is key. But operating in a market that is super massive and growing in which we are uniquely the leader definitely sets us apart. There's a lot of different ways that we can grow. I'll talk about those in a moment. Thomas will double-click on that with Chris. The distribution advantages that we have are, in fact, unique to Twilio, and we've been executing. Again, I hope what you take from the conversation is, is that the things that we say we're going to do, we've been doing them, and we're going to continue doing them to continue driving shareowner value. So let's start with innovation. So Twilio was founded a long time ago, back in 2008. The original kernel of the company was a voice API, and it was magic. It took a voice capability and democratized it for every single developer to be able to use software to be able to place a call. And while I'm not going to go through every single innovation that's on the chart, what I do want you to take away from it is, is that in every subsequent period, our innovation trajectory has, in fact, accelerated. Some of that has been done inorganically. Some of that's been pretty good. Some of that's been a mixed bag. But in general, the innovation velocity of the company has really sped up. In fact, in the last year alone, we've launched 251 unique SKUs. And in 2025, we're going to do even better than that. So the flywheel is spinning both for developers as well as for enterprises, some of the largest companies in the world. And to be sure, it's starting to include, increasingly, higher-margin software products that are additive to our communication stack and that we'll ultimately use to fulfill on this vision of communications plus contextual data plus AI. Now importantly, we're also not doing it alone. And so you see a number of important integrations that are on the page. It's not meant to be an exhaustive list, but it sure does help when you're not going to market alone. When you have hyperscalers and the big data warehouse companies who are working with you, innovating with you to be able to take these things to market, it also gives us leverage in terms of distribution. And so we're super proud to be able to partner with folks like these as well as all sorts of different partners that run the gamut from software ISVs to hyperscalers, to data warehouse folks, to good old SIs. And there are a number of folks in between that we're going to continue using to keep our distribution costs down but no less potent a force when our sellers go to market. And again, uniquely, Twilio occupies this space where we're able to combine communications, again, market-leading position, with contextual data, with AI. Now just to spend a moment on communications. There's a number of innovations. You can see those in red that we've launched just in the last year. Some of those go to expanding our channel presence. It's important for customers to be able to use multiple channels or to optimize the channels that they want to use to be able to deliver to the end consumer. But at the same time, we're also including a number of additive features that speak to the promise of what we can do in AI. And I'd say equally importantly, as you consider contextual data and artificial intelligence, we're pulling the thread across a platform where the data capabilities that we've been unlocking in Segment now right out of the box through the platform also get unlocked through communications and then again using AI. Inbal is going to unpack this slide in a lot more detail, but that just gives you a flavor of what's possible. Now of course, we were going to talk about AI. There's a ton that we're doing in and around AI, and we're very, very excited about some of the promise that we've already seen. I'm not going to go through the chart in exhaustive detail since there's a lot of numbers here, but here's 2 things that I want you to take away. On the left-hand side of the page, you see 4 boxes. And basically, every single one of those boxes speaks to an ROI that a customer is getting from us. Products sell when there's a return on investment by the buyer. And in every single one of these deployments, the ROI is massive. It's massive, and we're able to deliver it at a lower cost with more revenue back to the customer. And by the way, all of us benefit, too, because it's consumers. What that means is that we get a delightful experience on the other side, which has long been missing. Now on the right-hand side of the page, what I think is equally interesting is just the scale at which this is happening, again, at Twilio. So 90% of the Forbes 50 is building on Twilio. 9,000 companies in the AI space are building on Twilio. That gives us a real advantage as we start to think about the combination of communications, contextual data and AI in the way that we bring our products and services to market. And I think it's additional evidence the AI companies want to continue building with Twilio, which is super exciting for us. So that's innovation. Let me talk a little bit about how we're uniquely positioned. So we're in a huge market, $119 billion market by 2028. In fact, Chris and Aidan are going to talk to you a little bit in a moment about how that market is actually expanding even into a much larger pie when you combine all of the unique capabilities that Twilio brings. So it's great to be in a big market, to be a participant in that market. That means there should be a lot of great growth that's available to us. At the same time, though, it helps to be the leader. Whether it's Gartner or IDC or Omdia, when it comes to the products, the services, the features that we offer, to be noted as the market leader is a very, very powerful attribute when we go to market. But it's not just about having good stuff. It's also about being the market share leader. Being in a position of market share in which we're not only the leader, by the way, but also growing materially faster than every other company that you see on this slide while the analysts are fundamentally recommending Twilio in the first place gives us very distinct advantages as we go to market. But it's not just in CPaaS. As tough as it's been to kind of navigate some of the things with Segment, the reality is it's a great product. And there are verticals in which Segment has been incredibly powerful to unlock value for customers. Financial services companies, in particular, as you can see on the right-hand side, are getting an enormous amount of value. B2C users are getting an enormous amount of value. And so if we can take what works so well already about Segment, decompose aspects of it, pull it through the totality of our platform, that really gives us an additional unique advantage on top of the ones that we've already got. And then I think what's inevitable from Twilio's point of view is that this new market, customer experience as a service, which is what some of the industry analysts are starting to refer to it as, that's the one that really opens up for us. And importantly, it requires having CPaaS capabilities. It requires having CDP capabilities. It requires having to have CCaaS capabilities. We can check that box, too. And of course, it's going to involve AI. And I think the reason this really matters from a Twilio perspective is, is that as we go forward in kind of this age of AI, the 3 essential attributes that we really see, you're going to have to have cloud infrastructure. You're going to have to have data warehouse capability, and you're going to have to have a customer experience layer. That's what Twilio brings, that customer experience layer, which requires communications plus data plus AI to be able to deliver that unlock. We'll talk more about that during the course of the presentation. In terms of growth, so I talked a little bit about being in an expanding market. We'll talk more about some of the other levers that are available to us there. I think international, in particular, is an area in which we see a lot of opportunity. We're underpenetrated, quite frankly. Inbal is going to come up here and talk to you later about how we're innovating, and it's really going to be through the lens of delivering trusted, simple and smart solutions to our customers that they can go and take to market. And those 3 words actually matter quite a bit. It's not a cute tag line. It matters because that's the way that our customers evaluate the offering. They want it to be trusted. They want it to be simple. And in an age of AI, they want it to be smart. And then Chris and Thomas will talk about our unique advantages from a go-to-market perspective. Having the self-serve capabilities that we do, again, whether it's a builder, whether it's one of the largest enterprises who's still entering through a self-serve motion, really powerful. We've seen great success with cross-sell. That's an area we can do a lot better. And we've seen a lot of success with partners and ISVs, and we think we can perpetuate that momentum. So we also kind of think about this in the short term and the medium term. There's a number of things that we can do here that are available to us. Obviously, it all rotates around innovation and go-to-market. We're going to make great stuff, and then we're going to make sure that we sell it incredibly effectively. From an innovation perspective, the unified profile is really going to be at the center of this. If we can deliver a unified profile to every one of our customers that pulls in data and then sends it back out for activation, that is super powerful, and that is uniquely Twilio. We'll continue to add more and more and more channels as customers ask for them. And then from a go-to-market perspective, continuing the growth that we've got in self-serve and with cross-sell, again, we know how to do this, and so it's repeating the motion and standardizing it more and more and more. And then in the medium and the long term, of course, it's going to move much more towards AI assistance, the customer experience layer that I spoke of a moment ago. International is going to take a little bit of time. Partners is going to take a little bit of time, but we've got time because in the short term, we can still deliver a lot on behalf of our customers, reveal road map for them so that they can see exactly how we're building towards their businesses over time and then continue innovating behind that. So that's really, really exciting for us. Distribution advantages. When you have 320,000 customers, you have a huge advantage. When you have 10 million developers, you have a huge advantage. I talked about the 9,000 AI companies that are already building with us, huge advantage. I'm not going to rattle off every box. You kind of get the point. But these are built-in advantages that are, again, uniquely Twilio. Our ability to distribute at scale using the products and services that our customers are asking from us every single day, this built-in installed base presents a really unique advantage in the way that we go to market. That is super powerful, and we're doing it incredibly efficiently, importantly. Thomas will talk more about that in a few moments. The other thing is having partnerships with these folks, it's increasingly important. Again, I talked about the world from a Twilio world view in terms of you're going to have a cloud stack in your technology. You're going to have a data warehouse stack in your technology, and you're going to have to have a customer experience layer. And it sure is helpful to have partnerships with leading AI companies, leading cloud companies and leading data warehouse companies. We're super, super proud to call them partners. Again, not meant to be an exhaustive list. This will ultimately be in the hundreds, already is in many cases. And again, that provides us with leverage on the distribution as well as a way to kind of wrap the entire sale when we go to market. Finally, execution. As you probably saw from the release that we put out earlier, I guess, 30 minutes or so ago, we're seeing a little bit of momentum in our business. In Q3, we got back to double-digit growth after stabilizing the revenue line over a few quarters after it had fallen for a few quarters. In the most recent quarter, Q4, you saw that tick up just a little bit again. So we're seeing kind of a return back to double-digit growth. And while we don't necessarily have to underwrite at that level to deliver the results that I'll talk about in a moment, it gives us momentum. It puts some wind in our sales. It gives us advantages in terms of -- it just gives us a little bit of mojo, frankly, in terms of the way that we're able to get back to market. And that return to stabilization in double digit, that is how we're ultimately going to run the company going forward. That's how we're going to operationalize the actions, is against a double-digit kind of set of framing that we have inside the company. And we've also delivered meaningful leverage. This is a company that just a couple of years ago lost money. And in a very short period of time, we've delivered nearly $700 million in profits over a 12-month period and even more than that from a cash flow perspective. So this isn't just a growth story. In fact, it's a balanced story, one in which we believe we can drive double-digit growth, where we can drive meaningful operating leverage and to continue down that path to give even more of that back to investors. And we've taken a ton of actions. Okay. So you're all very familiar with the stuff, I think, on the left because we talk about these a lot during the course of our earnings calls and our meetings with many of you. Strategically and operationally, it's been super hard, but I think it's also been fruitful. It's been necessary. It's paid off in many respects. But we've also taken some really difficult actions from a leadership and governance side. You can see some of the new faces in the management team, like a complete refresh, reboot of the management team, taking some of the great folks that we already had, adding to them, augmenting in areas in which we knew we could be better, go-to-market, marketing, certainly in innovation. We've adopted some shareowner-friendly measures, especially around pay and compensation. We've added new Board members, including a shareowner representative who's in the room with us today, actually. We've separated the Chair and CEO roles in response to investor feedback, and we sunset the dual class. But we're not done with the changes that we think we can make from a governance perspective to make it increasingly shareowner friendly. And so as a proposal for the 2025 AGM, we're going to put back up a declassification proposal for our Board of Directors and to remove the supermajority provisions in our charter. So those 2 will be coming in addition to many of the hard things that we've done already. So sitting here today, we've made a ton of progress, a ton. But ultimately, we're just getting started. We are just getting started. There is so much more that we know that we can do. And this is the payoff, okay? This is what you should expect from our company going forward. On the non-GAAP margin line, 21% to 22% margins over the next few years. GAAP profitability. We were GAAP profitable in the most recent quarter Q4. And in every subsequent year thereafter, you should expect that we're GAAP profitable. $3 billion plus of cumulative free cash flow between now and 2027. SBC and dilution targets, again, in response to investor feedback, getting our SBC as a percentage of revenue down to about 10% and controlling our net burn at down below 3% by 2027. And in addition to all of that, from a capital allocation perspective, which I'm sure we'll talk more about during the course of the day, our Board has recently authorized a $2 billion share repurchase program. That will expire at the end of 2027. And in general, we're kind of targeting an average of 50% of our annual free cash flow to get return to shareholders between now and 2027. Be up in some years, be down in some years, but that's kind of the framing that we're going forward with against the $2 billion authorization. So very exciting financial backdrop to be excited about relative to all of the great things that we know we can do from a growth and innovation perspective. And importantly, these are the operating assumptions that we're using to come up with what I showed you on the prior page. So as I said, we're orienting the company to deliver against double-digit growth over time. And our model includes all of the OpEx investments that are required to deliver against that, importantly. Now we have a usage-based business. It's hard to call, okay? We established a framework for 2025. So we plan prudently. I think every one of you that covers us extensively like knows that we plan prudently because of the usage-based nature of our platform. And so what we've underwritten basically assumes that the revenue growth rates over the next few years are more or less consistent with what we've laid out in 2025. But here's the thing. Even absent revenue acceleration, you still get the 21% to 22% non-GAAP op margins. You still get the $3 billion plus of cumulative free cash flow over the time frame. And what you should also anticipate is that if we do consistently deliver against double-digit growth, the metrics in the prior page get better, more cash, more operating leverage. And that is, I think, a really, really strong framework to be able to deliver back to our investors. So we have a great day, as Bryan said at the very outset. That's a little bit about kind of the framing and the vision. And with that, I'd love to turn it over to Inbal Shani to talk about our innovation engine.

Well, thank you, Kho. Good afternoon, everyone. Are you ready for the most exciting part of our presentation today? So I'm thrilled to be here with all of you. It's hard to believe that it's almost been a year since I started this amazing journey with Twilio. But personally, for me, every day feels like day 1. On a personal note, I feel that all the previous work that I've done in cloud and developer productivity really ignited that passion in me to drive this groundbreaking work we're doing here at Twilio. And today, we're going to talk about a topic that is really close to my heart, which is why customers choose Twilio. And I'm very, very confident that as I talk about the solutions we've put in front of our customers and everything that is coming in 2025 and the years to come, you will understand why Twilio is the one that is paving the path for the future of customer engagement. So let's start with innovation. And Khozema mentioned 16 years of innovation. Innovation is at the heart of everything we do here. And we're innovating for one reason and one reason only. We're focusing on customers driving value out of the Twilio platform. We've been innovating on behalf of our customers, and we're far from being done. And when we're thinking about innovation and why we continue to innovate, what are these 2 grounding factors that we think about for everything we do? The first one is that every engagement between our customers and their customers matter because it's a golden opportunity for them to build both relationship and connections. And another thing we know best is builders. Kho mentioned 320,000 customers and accounts worldwide and more than 10 million builders that are using the Twilio platform every day. And this number continue to grow. So when we say we understand builders, trust us, we do. Also, when we're talking to our customers, they are telling us that basically, they have 2 reasons that they're looking to work with Twilio and other companies. And it's very 2 simple reasons. The first one is they want to make money. And the second thing, they want to save money. And from a Twilio perspective, that means that every interactions between them and our customer matter. And that's where we come in. And we are committed to investing in areas that matter more to our customers, which leads me to the innovation strategy we're going to talk with all of you today. So there are 3 elements that we're going to cover in the presentation today. The first one is about our innovation engine, which is working based on our 2 areas of leadership: CPaaS, which you can think about it as our traditional communication business, our channel offering, our add-ons to the channels, our CCaaS. And the second one is the customer data platform or the Segment CDP. But the future is all about bringing them together to drive our platform strategy with one goal in mind, and that is increasing customer adoption and delivering even higher value to all our customers. And the third one, because we talked about 16 years of innovation, is what is our systematic approach to long-term innovation and why we truly believe we will continue to lead. I know there have been a lot of questions throughout the year what is Twilio. So I want to take the opportunity here and say again and again. We're a platform company. We are a platform company. And going forward, we're going to be that trusted, simple and smart platform. So let's talk about what trust means. Trust means that we're building solutions that are reliable, that are available and that are secure. And then data, data and AI coming together to drive engagement with the smart capabilities that we're offering our customers and will continue to offer. And last but not least, because we said we understand builders. And today, builders are technical, non-technical. And data is an area that continues to grow and continue to evolve, continue to change. So how are we building the simple user experience, simple builder experience to make all our solutions easier to use? When we're talking internally in Twilio, instead of just talking about all the services and offering, we started saying Twilio is the product. And for us, it means we're defining this new category that is called customer experience, customer engagement, customer experience as a service. And it's an emerging category. It's still not fully defined, but we'll talk about how Twilio see that category. So I mentioned trust, and I want to spend a moment talking about why trust is our #1 priority. And for us, it's building on the right foundation. We started that work in 2023, and we spent the majority of 2024 continue to enhancing our platform. And we believe that trust is #1 differentiator when customers choose Twilio. And for us, it's focusing on things like uptime and security. And what we have done is double down on critical architecture and technology projects. And it's basically to deliver more efficiently, more quickly and more safely, both for our developers as well as for our customers, which leads me to the most critical week for every business, and that is Cyber Week, because Cyber Week is the highest communication traffic week of the year. And in that week, every interaction that is lost is a potential revenue loss for our business. But this year, we surpassed all previous performance numbers ever before. What it means to me is that our investment really paid off. And as an R&D leader, the first thing that I do is I make observation. So what happened during this amazing week? I think the first thing, we're able to meet 100% uptime. So it pays back all the investment we've done in our foundations, and our technology really pays back. But the other interesting observation is that customers' trust in Twilio went up. And you know what happens when customers trust Twilio more. They are more likely to purchase more Twilio. They scale their workload. They onboard on more services. And that drives revenue. But also for us, we earn the right to innovate. So when we were sitting down and thinking about what is that platform strategy that we're focusing on, we prioritize trust as our first pillar of our trusted, simple and smart platform. But other magical things happen when you're investing in your foundation. It helps to accelerate innovation. 251 platform improvement, services, new capabilities. I don't know about you, but I don't think this is something that many companies can claim that they can do in a year. We could. Now yes, I'll admit I'm biased, but I think we have an incredible R&D organization, an R&D organization that is really focusing on innovating on behalf of our customers. So let me give you some examples on things we have launched this year. We have a category in that category is called software attachment. So you can think about it as add-ons. When a customer is purchasing channels from us, they can add additional capabilities to really maximize and benefit from these channels. So this year, we have launched something that is called error remediation. And what it does, it gives the customers the ability to identify and troubleshoot issues. So let's say they send a message, and they don't know if the phone number that they send a message is exactly accurate or if the message was delivered, this engagement happened. And sometimes they'll get an error back, but they don't necessarily understand what that error means and what should they do with that. So this year, we provided insights and ability to understand what that error is and how to fix it. And then magical things happen because suddenly, there is better deliverability on messages that are happening as a part of that. But we continue also in that journey when it comes to our Segment CDP. And we continue to double down on robustness and flexibility, and we have launched Linked Audiences, which is the ability to create an audience from different data warehouse. Kho mentioned our partnership with AWS and Google and Snowflake and Databricks. So really bringing all the data warehouse to all customers that want to create audiences. And everyone is talking about AI. So I cannot not talk about AI. But we are able to deliver real value out of AI to our customers, and we have launched Unified Profile and Agent Copilot. And kind of 2 customers that jumps into mind that have adopted our Agent Copilot is Universidad Uk and Caring.com. And what they've seen is adopting our AI agent, is really they were able to drive agent efficiency but also keep a high CSAT. So our AI investment is really driving value to customers. But you're probably asking me, well, this is great, what about channels? Channels is the core of the CPaaS. It's the core of Twilio. So let's talk about channels. RCS is a new channel, which we have launched in 2024. It's still evolving. It's still shifting. It's still changing. But the core value proposition of RCS is all about branded. So think about the ability to add a name, to add a logo, maybe a personalized message to a customer. And that drives trust because now you recognize where that message came from. If you recognize where this message came from, you're more likely to engage. And one of our German financial services customers that have chosen to use RCS and Twilio have seen a 150% improvement on click rate, 150% improvement just by launching RCS. But we're not done. We continue to partner with Meta on WhatsApp. And it was both messaging and voice calling. And we continue enhancing this relationship with goal and one goal only, which is serving our customer preference because we know that customers want to get their message, want to get their engagement on their preferred channel. And some of our customers choose WhatsApp. We also partnered with Apple to deliver Apple business messages. We had a beta launch this year. And again, the goal is to make it branded. So what is the trend that we're seeing out of these channel launches that we have done this year is kind of 2 elements. The first one, we still see ourselves as responsible to serve our customers. And the customer preferences change. And where our customers are, we are. But also, we continue with our initial mission, which is abstracting complexity and building trust. So we are continuing to evolve our offering when it comes to channels and expansion, and we will continue to do so in 2025 as well. So like every good strategy, we have short-term, medium-term and long-term investment. When we're talking about the short term, we're really talking about everything that is our core foundation. It's our CDP investment. It's our CPaaS investment. It's the channel. It's over-the-top channels as well as our Segment capabilities. But in the medium term, we're starting making more and more investment towards our platform. So we're adding more AI-driven capabilities like traffic intelligence on top of our trusted, simple and smart platform. We're also going to continue introducing personalization. So we're going to introduce Unified Profile across all our channel offerings. But the way we're looking into kind of the medium-term investment, it serves the goal towards our long-term investment. And this is the new category, CX-as-a-service. And don't try to acronym it. It's impossible. I tried. But when we're thinking about CX-as-a-service, we're thinking about contextual data, communication, all powered by AI, coming together to build that platform. And we're pretty confident that all the investments we're doing in the medium term are going to pay off not just in the long term but also this year in 2025. And we are committed to serve the customer needs, the customer values that they want to get out of the solutions. Now I know that there is an urban legend that R&D organizations are going into a dark room, and then they talk about stuff. And then magical things happen, and suddenly, there is a strategy. Well, I want to burst that bubble. That is not the case. We spend a lot of time with customers. We spend a lot of time with industry analysts. And when we validated our assumption on our strategy with our customers and with the industry analysts, they all said, your strategy is in the right direction. But it's more than that. As Kho said before, our industry analysts recognize Twilio as a leader in both CPaaS and CDP. And it's kind of from -- on 2 main elements. The first one is what is our vision and our strategy. And the second thing is our ability to execute. Both are very, very critical. So for example, Gartner named us the Leader for CPaaS on their Magic Quadrant. And IDC named our CDP as a Leader. So the big point out of that is don't just take our words for it. Go talk to our customers. Some of them are going to be here today. And talk to the industry analysts and get their take why Twilio is the leader and will continue to be the leader. So I mentioned channels, CPaaS. I mentioned data. Let's talk about AI. There are many, many companies that are still looking for ways to monetize and benefit from AI. At Twilio, we truly believe we cracked that code years ago. And there are 3 main reasons why we believe we cracked that code because we see 3 ROIs for our customers on our platform. The first one is AI-driven capabilities. So think about services and offering where we are building for our customers that are powered by AI and how our customers are leveraging these capabilities to power their business. The second element is really these AI companies, agent companies that are building on Twilio as their back end. So companies are using the Twilio platform to build their own business, to build their own solutions. And the third one is all the partnership we have been doing with different AI companies. And Chris will go more into the details, but for example, we have partnered with OpenAI this year to launch Realtime API with them. And we continue to partner with the best and rising AI companies to offer all these solutions to our customers in the best possible way to drive value. And that is the key behind AI. It has to drive value to our customer. So we think that we put Twilio at the center of the AI value chain. And I mentioned data. And I mentioned AI. I want to tell you guys. It's not new. It's not new to Twilio. It is ingrained in our identity. And we have been delivering on ML and AI capabilities for years. And these experiments that you can see here, these are some that we have championed, and we have championed them through our incubation team. So you can think about our incubation team as kind of a lab team that is continuing to experiment. They have 5 to 6 experiments that are running every year. And some of them are coming to production. Some of them are not. But all of them are groundbreaking. And when we looked into these experiments, we figured out that some of these experiments, we should test internally because in Twilio, we believe we should eat our own dog food -- sorry, drink our own champagne. And we powered our internal teams and our internal capabilities using these AI agents. So today, we have AI agents that are handling 80% of our inbound leads that are going through our self-serve business. But we've done more. We also took it to our customer support team. And today, AI deflects 75% of the tickets that are coming through our support team, all of that by still keeping a high CSAT for our customers. Now down below here, you can see more examples of different experiments that we have been running. But think about incubation team, R&D team and internal teams all coming together to realize the power of AI on internal productivity and also testing our own products before we ship them to the customers. So let's recap our trusted, simple and smart platform, which are our innovation levers for 2025 and beyond. When we're talking about trust, besides investment in our initial foundation, it's all about trusted channels. It's the variety. It's the availability, and it's the security that we're providing across our channels. When we're talking about smart capabilities, we're talking about bringing data and AI to power these experiences to offer personalized engagement. And simple builder experience because there is no platform that cannot offer the next level of developer experience, the next level of builder experience, to make all the builders that are using the Twilio platform to do their day-to-day job, more productive, being -- offering shorter time to value and really realizing all the potential of all the offerings we have today and we will have in the future. Now instead of just telling, why don't we show you So in order to show you what are we working on and what is coming, I want to welcome the VP of Product, Data, Security and Identity, Robin Grochol.

Thank you so much, Inbal. Hello, everyone. So great to be with you all today. As Inbal said, Twilio offers the unique combination of communications, contextual data and AI, all in one platform. And I'm going to start by showing you how this powerful combination can dramatically change consumer experiences for the better. Let's start with something simple like shipment notifications. Now as consumers, this is something we all experience every day. These are notifications from the companies that we work with. But often they come to us as cryptic messages with links that look scary. And frankly, this is how a lot of phishing and smishing attacks start. So how can we take this and make it trusted, make it relevant and make it more engaging because in today's attention economy, every interaction between a brand and its customers matters? Twilio will enable businesses to incorporate consent, compliance and preferences into their communications. So something like shipment notifications can be delivered to each customer on the right channel at the right time automatically. Let's hone in on one customer, Brenda. Brenda has opted out of mobile app notifications, what we refer to as mobile push. But she's opted in to receiving e-mail and SMS. This is contextual data. It enables the company to honor Brenda's consent for shipment notifications or any other type of communication. So now that Brenda's consent is being honored, we can help a customer do even more. We can take what a business knows about its customers and provide personalized options for them. In this case, Brenda's address is close to a physical store location. So the business can offer the option to schedule a pickup at the store instead of a delivery. And with new capabilities in messaging like RCS and Apple messaging for business, businesses can use contextual data to surface rich content like the company's logo, a picture of the image that she just purchased, ensuring Brenda knows this communication is from a trusted brand. Zooming out, this is great for Brenda. But businesses need to be able to do this for every customer across a lot of different scenarios. And these capabilities, they exist today, but it's hard for companies to stitch this all together themselves, and many just can't do it. In 2025, Twilio is making this easier. We're adding automation and AI so that this isn't a nice to have. It's simply the way businesses do communication. And as consumers, wouldn't we all like this? So how exactly is Twilio adding contextual data to communications? Well, the heart of contextual data is what we call the Unified Profile. And I'm going to show you how Twilio is making it easy for all businesses to have these profiles. Our Unified Profiles, which come directly from our Segment technology, use data to give our customers a more holistic view of their prospects and customers. These profiles contain a rich set of traits, events, preferences and consent. But let's take a minute and show you how Twilio is making this easy. Now a Unified Profile often starts as an anonymous profile. So when a consumer is on a company's website or their mobile application, businesses can track their real-time engagement, like what pages they're interacting with, what items they might have added to their cart. So this is an example of what we might know about them right now. But let's say that customer goes on to purchase that item. They'll provide a personal identifier to the business like an e-mail address. Twilio uses this first-party data, in this case, an e-mail address. And through our powerful identity resolution service, it ties together what the business knows about them, including those previously anonymous behaviors and the other communication channels like their phone number and their WhatsApp ID. With that, we can also understand all of the related engagement across those communications channels, the e-mails opened, the video that they engaged with on the website. And with that resolved identity, we can help the business honor consent for regulatory and compliance reasons and also to ensure our customers' brand trust across all channels. Today, when a user says don't track me on a website or a mobile application, that consent signal is stored in Segment, and we allow customers to enforce it when activating to their destinations. In addition, Twilio communication provides an incredible AI-based Fraud Guard that verifies users of our messaging service so that companies can be confident that who they're sending to is a real person with a valid phone number. And by analyzing engagement across the customer's previous communications with an end user, Twilio can surface and automate preferences like the best time to send, increasing the likelihood of engagement. Now businesses often have customer data in cloud data warehouses. Think Snowflake, Databricks, AWS, Google. And what's so exciting is that the Unified Profile can just be connected to this data set without copying, which adds even more data that can be used for personalization. This here is an example of loyalty data that might be stored in the data warehouse. But this could just as easily be account information to enable B2B use cases, household information, purchase history, you name it. As businesses learn more about a consumer's behaviors and their characteristics, the Unified Profile sentiment, predictions and recommendations can be generated using our powerful AI models. This is done for each and every customer in the business' customer base. And this is a great time to remind you all that we take customer data privacy incredibly seriously. Our customers' data is exactly that. It's our customers' data. So that was a brief demo of what contextual data looks like at Twilio. Now I'm going to take us through another example. Here is an example conversation that any of us might experience today without contextual data. The business doesn't seem to know who the consumer is, and the consumer needs to do all the heavy lifting to achieve their goal. But with contextual data, those real-time activities, traits, preferences, all that we just saw in the previous demo, the conversation with an AI-powered virtual agent can go much smoother. The assistant can provide personalized responses and make sure that the consumer's issue gets resolved in just a few short messages. In addition, as the customer shares important information through this interaction, the data can be captured and can be used to make future interactions even better. It's this kind of high-value engagement that will motivate the consumer to continue engaging with the business. Again, businesses can do these things today, but it's hard. It's technical. It takes a lot of time. And in 2025, Twilio is making it easier with automation and AI capabilities. So again, this isn't a nice to have. It's simply the way businesses do communication. Now wait, there's a few more things I want to talk about. We are using AI to make every engagement better. And what I'm about to show you is available today. We offer AI-enabled capabilities to help our customers be more productive. We have AI helpers for developers to help them write code and implement faster. We have AI helpers for business users. In this case, it's a marketer who's building an audience with a simple line of text. These are available today. We're providing data and AI-driven insights to builders so that no matter what their technical expertise, they can use Twilio to build more effective engagement. Builders can also use voice intelligence, which is available today to analyze and interpret every customer interaction and ensure that every customer's voice is heard. By reviewing each conversation, customers gain a comprehensive understanding of customer interactions, allowing them to identify patterns, trends and other areas for improvement. We're helping customers make more data-driven and accurate predictions and recommendations about customer preferences. Ultimately, we're making it easy for businesses to know what each customer needs and wants, and this is available today. Lastly, we do all of this while keeping communications trusted and secure, protecting the data of businesses and their customers. So thank you all for having me with you today to show you these demos. And at this point, I'll turn the floor back to Inbal. Inbal?

Okay. Thank you, Robin. So now you can see why we're super energized, amazing innovation, amazing improvements to customer engagement. But it's all started with our strategy, our one trusted, simple and smart platform, which we believe is the most comprehensive CX-as-a-service platform. So before we kind of wrap this session, I do want to spend a little time talking about our long-term investment, which I kind of mentioned earlier. But I also mentioned that we talk to customers to understand what are these core value proposition, why customers choose Twilio. So we spend a lot of time talking to customers, and customers gave us 4 main reasons why they choose Twilio and for what they use Twilio. The first one is customer engagement. And customer engagement is all these engagements they're building with their customers, if it's through communication or customer data, how they're building these relationships and how they're creating these connections. The second thing that customers told us that they choose Twilio is for their developer productivity. Because we understand builders, we are building products with builder in mind, and builders are the ones that are using our platform every day. So they choose our products to enhance their developer productivity. And the third element, which is interesting, is all around abstracting complexity. We know that the world of communication is complicated. It's a regulated industry. There's a lot of work around compliance. It takes a lot to guarantee secure communication. And Twilio is taking that heavy lifting for the customers and is generating these solutions for them. And the last one is really around data activation. It can be customer data activation. It can be communication, all around driving these insights and engagement. But also, historically, you can think about Twilio as pieces and parts, which is great. Don't get me wrong. Because customers get endless flexibility, they can continue to innovate. They can continue building on top of platform, and they can build whatever solution they want. But one interesting insight that came from the conversation with customers is that they told us, Twilio guys, can you make it simple? And I understand the ask because in the world of builders, where builders are evolving, how we build our platform with simple in mind is becoming a key element to our strategy. And that's why you see simple at the center of our platform strategy. So for us, it means we're going to continue investing in these 4 elements. We are going to continue doubling down on the 4 main investment area in why customers continue to choose Twilio. But also, we're adding the element -- the fifth element to that, which is make it simple, continue enhancing developer productivity to fit to the builder of the future. And what you can see here is our 6 areas of value proposition that we're focusing on in 2025. The first one is cross-channel. So how to think about cross-channel is think about engagement that is more than one channel. It can be maybe an SMS and an e-mail or maybe an e-mail or voice, maybe SMS and voice. One of our customers that we talk to said, I want to send an SMS to a customer before I'm picking up the phone to call them, to let them know that I'm about to place a call. But today, I don't know if the message was sent, if it was delivered. Did the customer receive it? Can I place a call? Is everything happening. For us, cross-channel is all about enabling this experience and building this multichannel orchestration for our customers so they can benefit from the fact that they have more than a single channel through engagement. Now in order to do that, we need common data layer because that common data layer is really powering these engagements. They are driving the insights. And then Robin talked about personalization and how personalized experience really change the way customers are engaging with their businesses. So Unified Profile or you can think about it as know your customer better are powering all these engagements and then unified builder experience because builders are using our platform to innovate. And we have to guarantee that they can use the platform, they can get the most value out of that and also improve their productivity, continue improving that every day. And all of that together really lead us to personalized engagement. And we're going to leverage AI. We're going to continue to leverage AI to drive even more value, even more customer delight out of our platform. But if I need to summarize our platform vision, it's all around better orchestration. So you can see here a visualization of our platform. And for simplicity, when you look at the bottom, you can see here our CDP business. You can see our CDP offering. And we're going to continue offering that to our customers. So customers that are really looking for just the customer data platform, they can still get that. Here, you can see everything around our channel. This is our CPaaS. And customers that still want to continue and building just channels or getting add-ons, all that flexibility they want, it's still here for them. But we're also adding 2 main -- 2 layers into our platform strategy. And the first one is all about cross-channel orchestration because we want to be able to deliver more value and more engagement by connecting our customer data with communication data and channels to offer next-level experience. And on top of that, you could see the builder experience because, as I said, we're building for builders. A platform is built for builders and being able to create a unified builder experience that really leverage all this goodness that the platform has to offer, it's at the core of what does CX-as-a-service means for us and why this is our platform strategy. So when you think about communication, data and AI, this is really what creates this elegant Twilio platform that we're building for our customers. There are just 3 things that I want you to take away from this section today. Or if there are just 3 things you remember, let it be this. We're continuing to invest in our foundations. We're continuing investing in CPaaS. We're continuing investing in CDP to drive even more value to our customers. But we're also investing more in trusted channel, in simple builder experience and in smart data and AI capabilities to power that future of CX-as-a-service that is built on communication and data and AI. We're also not new to innovation. We have been innovating for the past 16 years, and we never really stopped. 16 years as an innovation company, we're far from being done because innovation is not what we do. It's who we are. And for us, the sky is the limit, and maybe not even the sky. So thank you so much for joining today, and I'm looking forward to answering some of your questions later on. But before we kind of go on a break, I do want you to hear from one of our customers. I'm excited to invite you the stage Alex Kvyat, who is Kaiser Permanente Executive Director for Digital Technologies and Business Capabilities. Okay. So let's get started. Are you ready?

Sure.

Why don't you share a little bit about your role, your group, what you do in Kaiser Permanente?

Well, Kaiser Permanente for folks who don't know, it's a health care organization providing health care -- affordable health care and value-based solution to 12.5 million members. My team and I are responsible for delivering digital platform and services, which engage the consumers and members on a daily basis. And on daily basis, I mean on a daily basis. There is no break in health care. It's 24/7. It's Sunday, Monday, Tuesday, any time of the week and 24/7 because your health care needs are always there.

They don't take a break, huh?

They don't take a break. So I know some of the partners and your customers at bank, what happens at night, well, you can't look at your 401(k). [ We will survive ]. If you're trying to schedule an appointment, when you're walking out of emergency room because somebody told you after you spent about 6 hours in the emergency room, somebody tells you, well, you need to follow up with your health care provider, with your primary. And you're trying to log in and now it's trying to send you OTP. That OTP doesn't come. That's why we need Twilio. That's why we need to have reliable partners, which we're bringing with Twilio.

That's great to hear. So maybe talk to us about in the perfect world, how would the customer experience, customer engagement would look like with the patient from you.

So when we talk about our experience with members or patients over the last couple of years, we're switching from thinking about it, oh, it's engagement. It's communication. It's about journey. It's about journey, starting from being able to schedule an appointment, get notifications that your appointment is about come, be able to send notification to the member, respond to the SMS saying to the provider, saying, I'm here. I'm ready to -- I'm working at the office. Get the instruction. Some of the larger hospitals have convoluted systems, right? So we send the notification which provides us a mapping capability to understand for -- especially for some specialties or unusual equipment where to navigate, right? So that's engagement. And then the ability to respond to the journeys of the users. I can give you a couple of examples where we implemented Twilio capability based on conversational SMS. One of the examples would be around surgical appointments. We all walk into the physician office and get the not such a great news that you might need a surgery. They spend 20 minutes with you, explains you the surgery. Your brain is feeling like crazy. And sometimes you ask the right questions, sometimes you don't. And you walk out. And then what you do, you're going to go to [ grab a ] Google or try to understand what physician is trying to say and try to self-service your capability. So we implemented a lot of capability where we allow to send you the information about your future surgical needs. We'll send you educational material. We'll e-mail where you've preferred to deliver a message. And we'll allow you to ask the questions, and we'll respond to those questions. All of that done with the help of Twilio and some of the Twilio capabilities.

That is really cool. So maybe kind of -- maybe an R&D question, trying to wrap it up. What do you think are the top way that businesses underutilize their developer teams today?

So I'm a developer. So it's near and dear to me. So one of the things we all try to, provide a lot of tools for our developers. So we're going to give them flexibility, simplification. I think what we need to do, and I think we are wasting a little bit of time for our developers, to ensure that they -- when they're ready to do their work, they have all the things they need to do available to them. Contact switching is the worst thing for developers. Imagine developers who can concentrate for 4 to 6 hours on the task in hand and have everything they need to do and have in their hands to be able to perform that work without contact switching. Their productivity will go up, right? I'm sure we're all seeing developers who get interrupted while they're debugging complex code to go answer the question or go to some meetings. Not a pleasant experience. And I think if we give the developers opportunity to do the work without interruption, at least as possible -- as much as we possibly can, I think it will improve significantly as the development opportunity.

Right. Keeping developers in that flow state, right? That's why for us, unified builder experience is a key to our platform strategy. Awesome, Alex. Thank you so much for joining us today. It was a pleasure talking to you.

Thank you.

Okay. So now I get the opportunity to let you all go stretch your legs, have some refreshment. We'll see you all in 10 minutes. Thank you. [Break]

All right. Welcome back, everyone. I love those customer videos. I hope everyone got some snacks and coffee to keep up with me. I am going to bring the energy, and I'm just going to warn you in advance, all right? So welcome back. Khozema talked about the corporate strategy, Inbal and Robin shared some of the product strategy and food demos, right? I'm going to talk to you now about the incredible opportunity we have here at Twilio. But first, maybe a little bit about me. So I'm Chris. I joined Twilio about 8 months ago after spending 6 years at Box, 5 as CMO, really helping them transform into a profitable growth company. Prior to that, I spent 13 years in Adobe in the pivotal time when they were moving to SaaS in the cloud. So as a former customer of Twilio, both CDP and comms products, I saw firsthand really the real business value we could drive. And I felt like I could join the organization, transform the business, help shape the strategy, messaging and execution. So let's jump right in. You heard this multiple times. Twilio is a market leader in communications. And this is a large and growing market, but we also lead in CDP. It's the combination of CPaaS plus CDP, which is creating this exciting category, call it, I don't know, Inbal going to try it, CXaaS, no, I can't do it, so customer experience as a service. And our unique combination of communications, data and AI capabilities really set us up to lead this in the future. So I'm going to cover three key topics. First, break down how we're sizing up the market opportunity with an updated TAM estimates and some of the trends that are happening. I'll dive into the personas Twilio reaches, how we're addressing and engaging them, and then we'll talk about the self-service go-to-market model and how we're really reaccelerating that. So I have the pleasure, I get to talk to a lot of customers. And when business talk about how they want to interact with their customers, they're all talking about creating these great experiences. They want to build customers for life. But to deliver a truly personalized human and memorable experience, brands need 3 things. And you've heard us talk about this, communication, the power of the interaction, contextual data really to inform the preferences, provide consent and AI to scale all of this. It's the combination of these three is what makes personalization at scale. It also happens to be our competitive advantage. So let's talk about some of the market trends we're serving as headwinds or tailwinds for us, right? Personalization at scale is something that matters today. Generative AI, of course, the marketing guys got to talk about Gen AI at some point in this presentation, right? It is unlocking amazing business opportunity, really become more efficient, scalar processes to drive better outcomes. But this also introduces significant cost. And the proprietary nature of customer data, like brands are not going to let this out of their infrastructure. Companies are never going to hand over their data to LLMs. So we often see customer interactions as the first common use case. Second, data. We're all drowning in it. Businesses are navigating the massive amounts of data that's being generated, but relying on a data warehouse alone is not enough. Robin shared how important it is really to understand who these users are, build a profile, have context around all those interaction points. This becomes critically important in an energetic world. So talking about agents, right, conversational agents. User experiences are dramatically upended by AI, leading to this resurgence of voice and messaging, right, as the primary interfaces. These create three macro trends that businesses that could deliver these experiences. It didn't even exist 2 years ago, 3 years ago, maybe not even 6 months ago, this is where we come in. So what's our opportunity? Today, we operate in 2 growing markets, which were the leader. You've heard us talk about this quite a bit, communications and CDP. As Kho shared before, we still have lots of growth, right, to have in these markets. We -- our plans and financial commitments are really based on the upside we see what's available here. As you've heard us talk about this notion of Gartner with the emerging marketer Gartner around CX as a Service, those trends that I just talked about a second ago are going to come into play in this new market. CX as a Service, all about delivering automated rich communications at scale across channels, really understanding those users and solving their business problems. And the good thing is like this sits right in the middle of our existing markets and what we're good at, right? CPaaS, CCaaS, contextual data, channel orchestration, AI agents, we are well positioned to really win this market. So we believe there's an incremental TAM of about $40 billion by 2028 to be addressed based on the innovation that Inbal just laid out a few minutes ago. So we play in this massive market. We serve a range of personas. We're often asked this question, are you still a developer company? 100%, yes. We're still a developer company, right? They will always be core to Twilio's growth. But that being said, we're more than just focusing on developer buyers, right? We're a platform. We solve lots of use cases. We engage with organizations across multiple departments. That means there's different buying cycles, and we have to be part of that. So here are a few examples. Allergan. They came to Twilio with a material business problem, right? They primarily sold their products to retailers, and they didn't have a direct relationship with their customers. So they had an AVP product, he wanted to solve that. So they designed a loyalty program. They rolled out Twilio segment. They got better at marketing. They really understood their customers, and they have seen $400 million in sales as a result of this program, $400 million. Reddit. Everyone knows Reddit, right? It's the front page of the Internet. They have 100 million daily active users on average. However, the sign-up process was complicated. They had a product manager who is accountable for the mobile sign-up completion rate. The issue was, it was a little complicated, like I said. And so they wanted to simplify this authentication process. They rolled out Twilio Verify and the Lookup API, 14% increase in mobile sign-ups in 2023, 14%. Sweetwater. Love this, like classic developer story, largest musical equipment supplier, was not set up for remote work. They were not alone during the pandemic, right? One of their developers came to our self-service -- online self-service website, built and rolled out a -- built a call center using Twilio Studio in 48 hours. They built a whole call center in 48 hours, and they did it through our self-service channel, right? Over time, and today, Twilio Power's 35,000 calls and 20,000 messages a day, and Sweetwater now owns almost every product in our suite. So the Twilio's buyer profile is varied, right? Serving developers remains core to our business. In fact, 65% of net new enterprise accounts in 2024 started in self-service, 65%, which is why -- it's our first growth. Self-service is the common on-ramp for developers, right? These are our most loyal advocates. These are the people who wear the T-shirt, they come to SIGNAL, our user conference. They're the builders. They follow us on social. They find Easter eggs in our [indiscernible]. And sorry, Thomas, they usually don't want to talk to a sales rep. But this is our heritage, right? We love it because it's both high growth and high margin, but it also gets our foot in the door with enterprises, allowing us to land and expand. So today, self-service represents 15% of our revenue. And we believe we can accelerate this by better engaging, enabling our builder community and making it easier to build with Twilio. The good thing is the work is already underway. We've seen this resurgence of self-service business this past year. We put together a cross-functional team really to focus on improving this. And you heard about this -- some of this from Inbal a little while ago, how do we improve the product experience? We added guided onboarding. We did automated error remediation, which she described. We unified the log in. We got more efficient in go-to-market. We started using AI agents to handle inbound. You saw the number, 80% of our inbounds now handled by AI. That's incredible. And we've got better marketing, right? More personalized marketing, more developer content, all leading to increased sign-ups. All this makes it easier to build with Twilio, but it also drives revenue for the company. So as you can see, we've seen a lot of progress. Consecutive quarters of revenue acceleration, 31% year-over-year growth for sign-ups, 43% year-over-year growth for account upgrades to paying customers. And I believe there's still further acceleration that we can do. Another tailwind. Again, we're talking a lot about AI. But the bright spot is self-service in our AI ecosystem. You heard Kho talked about it. We have 9,000 customers in the AI space utilizing Twilio services in 2024. 90% of the Fortune 50 AI start-ups are building on Twilio. Companies building in the AI space are driving $260 million a year in revenue. And we think that has a lot of growth potential. So the message here is we are the key building block of the AI stack. In the early days of Twilio, we saw Twilio became like core during the gig economy when they were building apps. Uber, Airbnb, DoorDash, right? Today, we're seeing a similar trend but with AI startups. AI start-ups need scalable programmatic infrastructure and they're turning to us for that, which is incredible. I want to share a little program that we ran. We recently ran this competition called AI Searchlight. And we invited start-ups who are building AI applications on Twilio to apply or be nominated. We were blown away. We had 500 submissions in the first 3 weeks. The start-up ecosystem are bringing their AI workloads to Twilio. Not only is this a signal amount of excitement around AI, it's really showing that Twilio is increasingly becoming the vital building block of the modern tech stack. So one more example. Many of you have probably heard this or written about it. Yes, we had some fun with OpenAI, right? Just before the holidays, they called, they reached out and said, "Hey, we're going to run this fun campaign, right?" We'll be launching free calling in WhatsApp as part of this 12 days of OpenAI holiday campaign. They bought a Twilio number, 1800 ChatGPT to power this. They've reached out and said, "Hey, let's partner and make sure we had the systems can handle the expected throughput on the day they did the announcement. There has been a ton of volume. I mean a ton of volume. And it's both calls and text. It's not just voice, it's calls and text. This is really just showing the power of the scale of the Twilio platform. And this is just -- we're just getting started with these type of partnerships. So before I bring the customer to the stage, maybe I can sum this up in three key takeaways, right? We have an opportunity to gain more market share in a growing CPaaS market where we're the leader, and we're well positioned to win in the customer experience as a service. The self-service motion drives substantial revenue, and we think there's significant upside. This motion remains core to our entry point for customers and developers are a persona Twilio can and will win. Lastly, AI start-ups are building on Twilio. We're seeing the significant traction around emerging AI companies. And I think Kho talked about it, they need a customer engagement layer. That is us. We're proving that we are going to be the core and we are the core building block of the modern tech stack. So now I'd like to bring one of the AI Searchlight winners to the stage, Adam Godson, CEO of Paradox AI. For context, you don't know what Paradox does, really cool story. They're redefining search with their AI recruiting assistant, Olivia, who automates recruiting tasks, makes hiring teams more efficient. They serve 500 companies around the world, and they're helping their customers save millions of hours of manual work each year. So I'd like to welcome Adam to the stage.

Thanks, Chris. I appreciate you having me.

All right. I really appreciate it. Thanks for coming. So maybe like share a little bit about what you're building, how you partnered with Twilio along the way? Love to hear a little bit about the story.

Yes. Of course, Paradox is conversational AI for recruiting. And we spoke specialize in companies that do frontline recruitment. So when you were a kid, maybe you want to apply for a job at McDonald's, they gave you a paper application. Today, they text. They point the wall and say, text Olivia, and Olivia will take care of it. And you can -- the entire interface is through messaging and people can get hired in a matter of minutes, not days or weeks. And for us, we've got a great story. I think I've learned today, you called it a self-service tier, but from a single engineer, Stephen Host, tinkering in 2017 for us then to reach a unicorn valuation in under 5 years from that and now sending over 150 million messages a month.

That's amazing. And again, going back to the power of self-service, developer, how easy to use, get onboarded, all of that. That's fantastic. So you have some pretty amazing customers like some pretty incredible brands, GM, Marriott, FedEx, right, using your AI assistance. Maybe like what are you hearing from them? How are you helping them with their recruiting efforts like maybe a little bit of context?

Yes, I don't think anyone looks at their job application experience, a candidate or a company that says, wow, that's amazing. We're serving that really, really well. There's a lot of friction in that process. And so we've taken that with modern technology. So one example is we sit on top of lots of systems like Workday and SAP. And when we use Twilio through messaging, we can get interview scheduled in about 90 seconds. Coming into that, it typically takes 5 to 7 days for companies doing that manually. So being able to compress that in the middle of the process and others have been able to automate the process almost completely being able to go all the way from an initial engagement to a conditional interview with lots of integrations in about 10 minutes.

So you go from like multiple days to like 10 minutes of being able to complete that process.

Absolutely. It's not sort of an incremental change for our clients. It is a massive step change and really just rethinking how, frankly, an old process gets done and just doing it much faster through messaging and the compliance and the safety that's provided by Twilio is incredibly valuable to us.

Yes. I mean I think there's like this prevailing thought too that maybe only voice is going to benefit from this. We have talked about this notion of like two-way conversational AI. Maybe give us a little -- your thoughts on that.

Yes, absolutely. For us, there are so many micro transactions in a recruiting process. It's asynchronous. So asking a simple question, hey, are you open to relocation? Getting an answer. And guess when people think about what to wear to the interview, when they get the interview reminder. And so being able to do that two-way, get questions answered automatically through conversational AI, where do I go, what do I wear, what's the culture like, what questions should I ask? Those types of things just take all the service load off of talent acquisition teams and put them in an automated fashion and make the experience better for everyone, candidates, recruiters, hiring managers and everyone in the process.

Yes, that's incredible. Well, I know we'd asked -- one question I've got for you, which we had some fun around this. So what is your favorite app -- AI app?

Honestly, my favorite AI is the one you have with you. I sort of like my favorite camera. It's about being in the moment, something in the flow of work. And so being able to use AI in something I already have rather than to scramble to the other TAM, scramble to the new app and use AI in some context, I'm not in. It's about using AI where I am in the flow of what I'm doing.

Love it. Well, Adam, we really appreciate you coming, and I appreciate the partnership with Twilio.

Yes. Thanks, Chris. Appreciate it.

Okay. As I bring my partner [indiscernible] on stage, I mean, I think that's a great testament to our self-service opportunity and channel. Unicorn 5 years later found us through self-service and set up that way. So incredible. I'm really excited about the opportunity, but I would like to turn it over to our CRO, Thomas Wyatt, to talk us through the growth engine. So thanks, Thomas.

Thank you. Appreciate it. Good afternoon, everybody. I'm thrilled to be here for my first Investor Day here at Twilio, having joined the company just about a year ago with a background of general management and product and go-to-market leadership roles across companies like Cisco, but also fast-growing data and AI platform companies as well. But probably the most notable thing about my background is I am a 2-time former Twilio customer. And the real opportunity I saw was from the outside looking in a company with an incredible reach from a communication platform perspective, combined with rich customer data and knowing what AI is going to do to generate the next generation of consumer experiences, like putting those pieces together to me was incredibly inspiring. So that's why I'm thrilled to be a part of this team. Now over the last year, I've had a great opportunity to meet with hundreds of customers. And my biggest takeaway from those conversations is customers really love Twilio. They want to do more with us, whether it's for personalized marketing campaigns, whether it's customer care use cases with virtual agents or innovations around conversational commerce. Twilio is at the heart of so much of this innovation that's happening. So the topics that I'm going to cover today are twofold. The first is just giving everybody a baseline of who is the profile of our customer. And then secondly, we're going to drive into the growth drivers of propelling the company forward. So first off, we talked a lot about the fact that we're a leading communications platform company with 320,000 customers. And a lot of times, they do start in self-service, and we've heard a lot about that today. But the reason why they grow to become very large customers for us is that they're investing heavily in driving more volume, more channels and more premium software features on top of the platform. And by doing so, over the years, we've grown to we have 84% of the Fortune 500 companies are now powered by Twilio. And who are these companies? Well, these are the world's largest brands across all different geographies, verticals, whether it's technology, financial services, health care, retail, and we're seeing really fast growth in the marketing and automation industry as well. What's more interesting, though, is if you actually look at the customer cohorts themselves, and the area that I'm most excited about is the growth in our large customers. As you can see from this, we have over $550 million-plus accounts. And it's actually the fastest-growing cohort within our large customer base. And why is that? Well, our customers start with 1 or 2 channels and then from there, continue to add on. And I'll talk a little bit about some examples of that today. But as Inbal laid out so eloquently earlier, this is a powerful distribution channel. And when you think about all of the new innovation we can add through cross-selling opportunities to these 320,000 customers, that's exciting. So we have 5 key growth levers that we're focused on to drive the business. Chris talked a little bit about self-service already. I'm going to touch on cross-sell, international expansion, the role of our partner ecosystem and how we're doing all of this in an efficient way. So the area that I'm most excited about from a growth perspective is the cross-sell opportunity. And this was really compelling because we have such a large distribution base. But think of this, 63% of our customers today only have one Twilio product. But 90% of our revenue comes from customers that have 2, 3, 4 and 5 products. And you can see the revenue uplift if we can get customers doing that second, third, fourth and fifth product. And we're seeing it. Cross-selling motion is starting to really work for us. And I'll give you a few examples of this. It's very common with the marketing use case that you'd want to have both SMS and e-mail and you'd want to personalize that. That's a natural connection of adjacencies that we have within our products or the cross-sell motion around customer care, the notion of voice, interacting with a virtual agent in personalization and connecting that with e-mail as follow-up. These are all the common use cases that the next-generation AI assistance are being built on top of, which provides us a great opportunity for cross-sell. Another big lever within cross-sell is just selling more premium software on top of the existing channels that we already have, whether that's SMS or voice, what we're finding is adding premium features allows us to get quick sales cycles. It's fast payback for our customers in terms of ROI, and it comes with a higher gross margin. You can see the growth that we're seeing in our add-on software. Some of the best performing are Verify and Lookup in voice recording, and I just want to take the example of Verify for a second. Verify is one of the fastest-growing product lines in the company, and we can charge a pretty significant premium for it. And many customers use this because it helps with authentication services. And interestingly, Forrester just did a study recently, taking a composite view of a number of Verify customers to try to figure out what the ROI is for a typical deployment. And if you look at that composite customer, 4,000 employees, $1 billion in revenue, they typically send out about 8 million SMSs a year. The problem, 23% of those are associated with fraudulent activity. And this is where Verify comes in. It's designed to combat that fraud. And this is where customers make that investment, and you can see the return on investment here, $2.4 million, 174% ROI, and this makes it a relatively easy extension to what was traditionally just SMS or voice. Let me give you an example of how this works in the real world. This is a customer of ours, an U.S. airline customer, been with us about 5 years. And they started with a very simple use case. They just needed simple alerts and notifications. And then over time, their volume expanded as their business grew. But more interestingly, they started adding the premium features. SMS pumping protection. They've added RCS for travel notifications. Now they're adding Verify services as well for authentication. And what was a $10,000 customer just 5 years ago is $10 million-plus customer today. And this is a common example of what we're seeing which making that $550 million plus customers a reality. And the fact that they can do it in a short period of time is really where the magic is. So the second key growth area I want to talk about is the international opportunity. And this is one where we actually think is a bit underpenetrated relative to the potential. We all know that Twilio has strong market share in the United States. And outside of the U.S., it's about 35%. But that 35% is growing faster than the company average overall. Now what we're doing internationally from a strategy perspective is we're focusing on a very country-specific go-to-market motion. We're looking at specific use cases in specific countries within key verticals where we have very strong product differentiation. And by doing so, what we're seeing is we're getting repeat customers in particular verticals, in key regions, and that's creating a repeatability that allows us to scale and grow efficiently. We're also leveraging our balance sheet. It's a competitive advantage that we can secure supply globally and help our customers consolidate their spend. We're investing in local data centers with product availability that allows us to give our customers more choice and how their data is processed and where it's processed. So from an international perspective, you should think of us from a go-to-market is focusing with discipline. We're going to go after healthy growth, but we're going to do it in a disciplined way where the unit economics makes sense for Twilio. Now let's talk a little bit about partners. This is a critical force multiplier for us. We have thousands of partners building on top of Twilio today. One of the most important cohorts of that is the ISV community. It's a big part of our business. And they're both customers and partners, and they span so many different verticals. You think technology, but it's commerce, it's customer care, it's energy. And those ISVs are not just customers, they're partners because they combine with our core capabilities can add more value to our customers. I'll give you a great example. Marketing -- our marketing ISVs are very strong partners for us when it comes to the CDP business. The combination of a data platform from Twilio combined with marketing automation, that serves the need for most CMOs. We'll talk about our cloud partners. The cloud marketplaces are a great distribution channel for us. Today, both our SendGrid business and the segment business, both have meaningful growth coming from the cloud marketplaces like Amazon, like Google. And we talked a little bit earlier about the importance of the data warehouse partners in the ecosystem as well, particularly now with our advanced interoperability between CDP and data warehouses, this opportunity to integrate and helps leverage go-to-market motion between both companies as well. The last key area I want to talk about is the system integrators. And this is one where I think has much more potential over time. The benefit of the system integrator is that they actually have a lot of end customer relationships, particularly internationally that we might not have as much reach. And they're able to bring and source opportunities, but also localize and optimize our solution specifically for those -- the needs of those markets. But as Inbal talked a lot about our solution and how we're integrating more capabilities and orchestration, when you think about the next-generation applications and agents that are being built, our customers are going to need to integrate Twilio with other third-party technologies. And that's really where system integrators add a lot of value, and they can make a lot of money working with Twilio in this process. So as you can see from the numbers here, if you look at the three growth levers I just talked about, self-service, cross-sell, ISV, they're growing faster than the company average in each of these cases, and they're making up a significant part of our revenue. And we expect that to continue for the foreseeable future. Now we talked a lot about the growth levers for the top line. The other thing that I want to land here today is just the fact that we're doing -- we're building the engine in an efficient way. And it starts with our go-to-market coverage. As we are building a more integrated trusted, simple, smart platform, it's important that we align our go-to-market motion in a unified way as well, so we show up to our customers with one voice of one Twilio. And the first step that we took was integrating our go-to-market organization, our sales, services, our global operations teams into one unified organization, which allows us to have a lot more horizontal capabilities around enablement, around solution marketing. But in addition to that, we will, this year have two dedicated sales teams, one for communications, one for segment. Each of them have their own dedicated growth targets that we're focused on, and that will continue. But we've also implemented a significant sales compensation incentive to enable more cross-sell and encourage it between the two sales teams, along with the product integrations. And so we think that will unlock additional leverage in our cross-sell motion. The other thing that's important to understand is that we're getting more efficient in the way we're generating revenue. The peak revenue spend, we're down significantly in the spend in terms of sales and marketing relative to our growth, down 37%. But more importantly, our communications AEs, our segment AEs, they're 20% plus more productive this year than they were last year. What's also interesting to note is that the number of sales headcount is down 50% from where it was in 2022. So we're growing, but we're doing more with less. And one of the ways that we're doing more with less is using our own technology, our own AI and our own automation to power the Twilio AI assistance that's helping our sales team be more productive. From a pre-sales perspective, from a post-sales perspective, I'll give you a few examples. All of the inbound traffic that comes in to our self-service channel, now 80% of it is actually interacting with an AI assistant that's helping a user get through the buying journey. That's pretty powerful. Or if you think about a customer who's in our product, in our console and has the common questions that we can answer with the AI assistant, well if they engage, there's a 75% deflection rate. And it's not just helping us be more efficient, customers love it. They don't have to wait to talk to anybody. And these are just examples of how we're trying to build world-class experiences. And more importantly, it's an example for our customers to follow our lead and do the same with the Twilio technology. So to summarize our go-to-market strategy holistically. Number one is massive opportunity in cross-sell. This is the one that I think is really, really going to unlock for us over the next couple of years. International expansion, the partner ecosystem, those are force multipliers that I think will help us scale over time. And then lastly, but very importantly, we will continue to be investing in our own AI and automation to drive an efficient go-to-market and ultimately build world-class customer experiences. Speaking of world-class customer experiences, I would like to invite up a world-class customer, Zendesk. Most of you guys know Zendesk, they are one of Twilio's longest-standing customers, but more importantly, this is the award-winning customer service software company in the world, 200,000 customers trust you. And so I want to welcome Tom Eggemeier, the CEO of Zendesk, who is here today to join us for a few questions. Tom? Great to see you. How are you doing?

Good. It's good to be here. It is interesting though. I'm getting excited about all this innovation on stage, and then I see these enormous Excel models out there. And instead of writing down the innovations, I see specific cells being changed. I assume, for you, Kho, it's going up and those -- the models going up. I don't know if that's a good thing or a bad thing. This is the advantage of being private. You don't have to worry about those monstrosity models on Excel right now.

Awesome. Well, Tom, we'd love to hear a little bit about Zendesk mission. And maybe if you can also touch on the volume that you guys deal with in terms of customer interactions, that would be great.

Sure. So Zendesk is focused on employee and customer service. Our mission is to power exceptional service for every person on the planet. We have over 100,000 customers, and we process actually about 3 trillion, always got to get it right. I always want to say 3 billion, but 3 trillion annual requests. Now like we heard today about AI. AI is a big focus of ours, and we believe we're leading the way in the AI revolution and customer service. Just a data point for all of you. We ended 2024 with over 10,000 AI customers, and we're going to end up 2025 with over 20,000 of our 100,000-plus customers using AI. It's really transforming how they're doing business. And what's really important is we just like you have self-service to enterprise customers. And so we've got to help them on that journey from kind of traditional CX to an AI CX powered world.

Sounds awesome. Can you talk a little bit about voice and the role that's playing in customer support? It's kind of getting a renaissance again. And I'm just curious, what's your role in Zendesk's role in playing with voice?

So I've got a little experience in voice. For those of you who don't know, I was actually the President of Genesis up through 2019. So it's kind of funny. 2009 to 2019 as with Genesis. And every year, people said voice contact center seats are going to go down. And every year, they went up. And I'm understanding the trend is continuing. What we're seeing is for the last 15 years, I heard about how help desks and contact centers were going to come together, but we didn't see a lot of that on the ground. However, we're starting to see that convergence of contact centers and help centers. In fact, right now, 52% of customer journeys have telephony or voice involved in some way. So I think this just really, really highlights the needs that customers, consumers want an omnichannel experience, where they want to have e-mail, messaging, real-time communications like you're talking about an AI agent once, but then ultimately, they might want to go to voice.

No, that sounds good. One of the things that we wanted to unpack a little bit was the importance of our relationship. It's been almost 12 years now. And you guys are one of the...

Older than both of us, right? 12 years or so.

Yes. But maybe you could just talk a little bit about how the partnership has evolved and where you see the value with the Twilio?

So we've been partners for over 10 years. I've been the CEO of Zendesk for about 2, and I really appreciated the partnership. We have a suite of products. And so we go to our 100,000 customers and say, you can get everything from our suite of products. And a core part of that is our Zendesk Voice. And so if you look at the 100,000 customers that we have, we think we have a target addressable market of 80,000-plus customers with Twilio. And what we're getting out of Twilio is we can drive growth, retention in this omnichannel experience with our customers. Two major focuses in the partnership, I think, for 2025 is, one, increase our go-to-market reach. And we think, again, voice is cool again. It's going to be more and more important that we have the voice channel because if we don't have the voice channel, CCaaS providers are going to come in and attack us from a help desk AI digital channel perspective. And so we're really partnering well on the go-to-market in 2025. The second thing we're partnering well is we think voice QA, quality assurance, voice bots or voice AI agents are really going to disrupt telephony over the next couple of years. And we're partnering with you on that, leveraging the Twilio platform. And so when you think about why Twilio, I'd say three reasons. Number one, we have to support a huge, huge customer base. And we're never going to have the amount of engineers that we want on voice. And so we are leveraging the Twilio voice programmable platform to go get a head start on that. It's a phenomenal foundation. Second thing is reliability and global compliance. I think we're -- I'm going to get the number wrong, you're going to correct me, Thomas, but we're in like 78 countries together around the world, and there's telecom regulations. We got to make sure there's availability, latency, all these boring things, what they really, really matter. And Twilio gives us that. And the third thing, I'm sure it never happens, but the one time it happens when something goes down, we need great support. Our customers expect instantaneous support because we're a customer support team. And we've got great partnership on quick issue resolution. So those are the three things why we've continued the 12-year partnership and we think it's going to really grow this year.

That's been fantastic. And this is just such a great example of how Zendesk is both a customer and a partner and vice versa. So it's been so fun to spend time with you, Tom. So one last question, I have a more fun one. Favorite recent customer experience just top of mind?

I'll maybe even give me as a consumer, and it's more about what the -- you talked about real-time communications, you guys talked about AI, and it's more like there's just a huge opportunity. I think it's going to be a tailwind for the industry. I was a consumer a couple of weeks ago looking for a mattress, okay? And there's the standard matrix in the Lux version. And so I put into the AI agent, the bot, what's the difference between the Standard and the Lux version? I got like 5 pages of text, okay, comparing them. And it was not a Zendesk AI agent. It was not anything built on Twilio, I'm sure as well. And it's pretty frustrating experience because the technology exists right now to go give me a really good compare. And so ended up going through the 5 pages. I figured out, I wanted the standard, not the Lux. I save $300 after spending like an hour trying to figure out the difference. And I then said, "Hey, I ordered it and they said, now call 1-800 number for delivery. And I'm here like, wow, this is just not the power of AI and the power of customer service that you could do between Zendesk and a Twilio partnership. And so I think you're going to hear a lot of hype out there about AI. I think the hype is real, and the TAM is still big. This is a well-known mattress company who are still not connecting the dots between real-time customer service, real-time communications, I would have much rather got a message, a text just in the bot when do you want some delivery. And so there's still just a huge opportunity out there.

That's such a great story for what not to do.

Exactly.

Tom, it's been a real pleasure. Thank you so much for being here. We love the partnership. You guys are awesome.

Thanks, Thomas.

All right. Well, that leads us to our next break. So we have about 10 more minutes, take you stretch legs, and then we're going to have Aidan come up and do a deep dive on the financials. Thanks, everybody. [Break]

All right, everyone. We're going to get started again. You can take your seats. Great. I think most folks are back. So thanks again for joining us today. As you've hopefully gathered from today's presentation, a lot has changed at Twilio since our last Investor Day. Over the past 2 years, we've undergone a significant transition, and we've repositioned the company to deliver increased value for our shareholders. So I'm really excited to spend some time with you today going through our financials in more detail, discussing the actions that we've taken to improve our performance and highlighting what it means in terms of the opportunity ahead. So let's jump in. I'm going to start with the preliminary view of how we performed in Q4. So we closed the year strong, and we expect to deliver another quarter of double-digit revenue growth and strong profitability. Preliminary Q4 revenue growth was 11%. And the growth acceleration was really driven by strength in messaging and in e-mail as well as a record-breaking Cyber Week, as Inbal talked about. On non-GAAP profit, we expect to modestly exceed the top end of our range with upside somewhat limited by some nonrecurring expenses that we incurred in the quarter. And on cash, we expect to land within our range, the guidance range that we provided. And as we talked about on our Q3 earnings call, in Q4, we incurred some -- and made some prepayments to some of our larger vendors, and that played out in our cash flow in the quarter. But we also expect to hit a very important milestone on GAAP profitability. We expect to deliver our first ever GAAP profit quarter in the company's history, well ahead of previous expectations. So I'm going to share more about Q4 during our earnings call in February. But all in all, it was a great quarter in a really strong way to end the year for Twilio. So as I said, since our last Investor Day, we've undergone a transformation as a company, a transformation that has yielded significantly better financial outcomes. Twilio was a company that was losing money, and it was using cash. Well, the new Twilio generates meaningful levels of cash flow and non-GAAP profit and has recently driven a reacceleration in growth rate. Now there's a lot of hard work, a lot of really tough decisions that went into enabling that outcome. But we're fundamentally a more financially sound company today, having gone through that transformation. And then metrics tell the story, right? When you look at this period of time, we took significant actions to rightsize our cost base. We've generated an incremental $700 million in revenue while at the same time, reducing our OpEx by over $300 million. This enabled us to improve our annual free cash flow by over $1 billion in just 2 years. But we also focused on reducing stock-based compensation and dilution. SBC as a percentage of revenue is down 8 points. And we returned $3 billion to shareholders in the form of share repurchases over the last 2 years. And finally, we made a ton of progress on the GAAP profit line. We achieved, as I said, our first ever GAAP profit quarter in Q4, well ahead, again, of expectations. Now while there's more work to be done for sure, we're really pleased with the progress that we've made. These results highlight our ability to execute effectively and with discipline across various growth scenarios while still investing in the business to maintain and expand our leadership position. So here are the topics that I'll walk you through today, starting with a double-click on the current revenue profile of our business. So as many of you know, the vast majority of Twilio's revenue is usage-based. Well, that led to some variability in our revenue and our growth rate over the last couple of years. Through much of 2022 and 2023, we navigated macro headwinds, which resulted in a slowdown in our growth rate. In mid-2023, we started to see those headwinds abate, and communications volumes stabilized, but our growth rate was still declining modestly. As we moved into 2024, we saw our growth rates stabilize. And most recently, our efforts to -- on go-to-market execution and driving focused innovation are starting to contribute towards growth acceleration. And we now have 2 consecutive quarters of double-digit growth. When you look at our revenue on a product basis, messaging remains the primary revenue contributor. Although if you look on the right side of the chart, we've seen fairly balanced performance across most of our products. Messaging growth accelerated in the second half of 2024. You saw that impact on the company growth rate. That was really driven by strength in our self-serve and our ISV channels, both Thomas and Chris kind of talked you through those earlier. E-mail also grew double digits, really driven in part by the cross-sell efforts that Thomas talked about. And as referenced earlier, we're also seeing strong contributions from software add-ons. They're creating additional growth opportunities beyond our core communications channel. And that's attractive, right? Because all of these high-growth software add-ons carry software like gross margins. Now from an industry perspective, we've seen strength across our largest verticals. If you look at the chart, our top 5 verticals all generated double-digit growth over the last 12 months. Tech remains our largest vertical, though I will say that includes a fairly wide variety of sub-industries, IT services, software, so Martech is in there, some others as well. But you also saw strength in financial services, professional services, health care, retail and e-commerce, point being. It's not just 1 or 2 industries where we're seeing strength. It's pretty broad. Okay. So we talked about our current revenue profile between what I just covered and what Thomas and Chris covered earlier. Now I'm going to talk to how we plan to drive accelerated revenue growth going forward. So as we mentioned on our Q3 earnings call, we're guiding to 7% to 8% revenue growth for 2025. That's obviously below our most recent growth trends. But we think it's smart to continue to plan prudently just given that the majority of our revenues are usage-based. And therefore, they're harder to predict over longer periods of time. That's the reality of a consumption revenue model. But we're focused on the growth levers that we can control. And we're orienting the business and running the business for double-digit growth. So let's get into the levers. Starting with the market. Just given our leadership positions, both in scale and the technology across CPaaS and CDP, we play in two large markets that continue to exhibit healthy rates of growth. As you heard from Chris earlier, the combination of communications and CDP represented $86 billion market opportunity today. That provides significant headroom for us to grow with the market, take additional share and grow in areas where we're currently under-penetrated. Thomas talked about international as an example there. And as we execute against the product road map that Inbal laid out, we believe that will unlock an additional opportunity in conversational AI and orchestration with a TAM totaling nearly $160 billion by 2028. On the product innovation side, we're taking a balanced approach. Inbal talked about all of our initiatives. So I'm not going to go through these in detail. But across all of these investment areas, we will be financially disciplined. And we're also fine-tuning our sales motions really to drive expanded product adoption. Thomas and Chris laid out self-serve, cross-sell, ISVs, they've all performed really well for us, and they continue to be an opportunity for us going forward. Okay. So let's transition to profitability and cash flow. We remain committed to delivering further improvements to our operating margins and our free cash flow while still reducing equity compensation and dilution. I'm going to walk you through the progress that we've made to date as well as the additional initiatives that we're taking to drive further operating leverage in the business moving forward. Okay. Starting with gross profit and gross margin, really three points I want to hit on, on this page. First, our gross margins have been relatively stable over the last several quarters, improving modestly since 2022. So there's some consistency there. Second, we continue to focus on gross profit dollar generation and driving strong unit economics versus managing to a gross margin outcome. And then lastly, if you look at the right side of the chart, most of our products carry software like gross margins. That provides some stability. Now messaging is the outlier, and that product will always have a mix effect on our gross margins in any given period. It's largely a function of where messages are terminating geographically, which are customers control, we can't control. Now as we think about these higher-margin channels, these products create the potential for modest gross margin expansion over time as we think about the execution of our road map as well as cross-sell opportunities. Now that's not something that we're planning for today, nor is it something that we think happens in the near term. But over time, we think that's an opportunity. Now given messaging is such a large portion of the business, we continue to maintain a sharp focus on unit economics. So as we've laid out in the past, while international messaging carries lower gross margins, it remains strong on a unit economic basis. And the U.S. remains strong on both a unit economic and a gross margin basis. Since lapping the introduction of A2P fees in 2022, we've actually seen messaging gross margins increase modestly. Now this is in part a result of termination mix tilting more domestically than internationally. But it's also a reflection of the quality of our platform and the discipline that we've exhibited in pursuing messaging growth in different markets. Okay. So while gross margins have remained fairly consistent over the last couple of years, we've driven a meaningful change in our operating expenses over the same time frame. In just 2 years, our non-GAAP operating margins have expanded by 18 points. And our non-GAAP profit is up 75% on an LTM basis. We've taken a lot of costs out of the business. And we committed -- we're committed to continuing to drive cost out. Now how did we get here? Really through a series of programmatic efforts, and those efforts will continue. 2023, 2024, they were predominantly focused on organizational rightsizing. We reduced the size of our workforce by about 40%. We evolved to a remote first way of working. That allowed us to reduce our real estate footprint. And we started to recognize efficiencies from early investments in automation and AI, although it's very early days there. As we look ahead, we'll continue to get operating leverage. But our focus will shift from organizational rightsizing to driving productivity and efficiency. We'll remain committed to getting segment to breakeven in the second quarter, so next quarter. We talk a lot about workforce planning over the last year or so. And we'll be implementing these plans over the next couple of years to really take advantage of lower cost geographies and to drive greater efficiencies in our team, things like span of control, which we're really not optimized on today. And then finally, AI and automation remain a real opportunity. So you heard from Thomas earlier about the work that we're doing in go-to-market around customer support, around customer service. There's so much more we can do here, whether it's developer productivity or back-office operations, we're really just getting started. So as a result, we see significant opportunities to continue to expand our margins through continued growth and cost discipline, we see a path to 500 to 600 basis points of non-GAAP operating margin expansion over the next 3 years, resulting in a 2027 target of 21% to 22% non-GAAP OM. And we're targeting GAAP profitability for fiscal year 2025 and every year thereafter. This is ahead of our planned time line, a testament to the pace of the progress that we've made. And that translates to more cash. We're targeting $3 billion plus in cumulative free cash flow between 2025 and 2027. That gives us flexibility to pursue a balanced capital allocation strategy while maintaining a strong balance sheet, which I'll cover on shortly. Now there's a lot of words on this page. But in the interest of time, we just thought it would be helpful to give some additional color on some of the other cash flow drivers that we don't talk about as often. I'm going to hit on three here, but you have the information. First, prepayments. We expect to continue to pursue prepayments with certain carriers and cloud providers. Those are done to secure favorable terms for Twilio. Smart thing to do, we'll continue doing it. It can create quarterly variability, but again, it's really done to secure favorable terms. Second, we'll make our first payment associated with our new cash bonus program that we introduced in 2024 in the first quarter, so this quarter and every first quarter thereafter. That's fully reflected in our framework. And then lastly, we remain in an advantageous cash tax position. We don't anticipate a material change to our noncash -- or our cash tax payments over this time frame, the framework period just given our NOL balance. Okay. Transitioning to stock-based compensation. This is another multiyear effort that we've undertaken and another one where we're still not done. We went from 22% to 14% of revenue, and we remain committed to bring SBC down further. Now the amount of work that has gone into reducing our equity compensation isn't fully reflected here just given the lagging nature of how SBC accounting works. So what shows up in our results tends to understate the magnitude of the changes that we've made. Where you really see the progress is on the next page. This page reflects our annual equity grants to employees. So we anticipate that our annual grants will be down over 70% in 2025 versus 2022 levels. And we've accomplished this through a series of actions. We reduced the size of our workforce. We eliminated equity for certain roles. And we shifted our compensation mix away from equity towards cash by introducing a cash bonus program in 2024. In 2025, we'll make more changes. We'll shift to a 3-year grant versus a 4-year grant historically for our refresh grants. We'll drive further differentiation by location. And we'll focus on hiring in geographies where cash is preferred to equity. Again, that's all part of our workforce planning strategy. So a lot of actions to date, and we're committed to managing equity compensation responsibly going forward. And this is what it yields. So for 2027, we are targeting SBC as a percentage of revenue of about 10%, which is at the low end of the range that we provided historically of 10% to 12%. In terms of dilution, we're managing the business to net burn, which we define as the number of employee shares granted, net of an estimated forfeiture rate just based on historically what we've seen and divided by the prior year share count. This is the number that we can control today. And note that, that net burn rate does not include any dilution benefit from prior or future share repurchases. Now we've made a lot of progress on net burn over the last several years. And while our formal target is less than 3% net burn in 2027 based on the changes that we're making in 2025 and taking into consideration today's stock price, it's likely that we'll also achieve that target in '25 and '26. And we've rightsized -- as we've done that, as we've rightsized OpEx, as we've reduced our equity compensation, we've been able to accelerate our path to GAAP profitability. As I said, we expect to be GAAP profitable in Q4 '24. That's 2 years sooner than we originally anticipated. Okay. Finally, I wanted to provide an update on the progress that we've made in segment. We're delivering on the commitments that we laid out at the start of the year, including significantly improving our data warehouse interoperability and reducing customer time to value. So segment is now interoperable with all the leading data warehouses. While at the same time, customers are leveraging AI and use case Copilots to get to value in 30 to 60 days versus 6 to 9 months prior. We also remain committed to getting that business to breakeven next quarter. But I think more importantly, as you've heard from everyone today, the data asset that segment brings to Twilio is a core component of our strategy going forward. And it's one that differentiates Twilio, allowing us to unlock an opportunity in CX as a Service. Okay. I'm going to bring it home with the financial framework. Starting with 2025. So we expect to deliver a strong combination of growth and margin expansion in '25. For the full year fiscal year, we're guiding to 7% to 8% organic revenue growth, alongside $825 million to $850 million in both non-GAAP income and free cash flow. As it relates to Q1, we're not going to get into that today. We'll provide our Q1 guidance on our earnings call in February. On capital allocation, with the strength of our balance sheet and the strength of our ongoing free cash flow generation, we have a lot of flexibility on how best to leverage our capital. We intend to pursue a balanced approach to capital allocation, focused on long-term value creation and really assessed across these three pillars: one, organic investments in product innovation; second, additional capital returns to shareholders; and then third, potential strategic M&A. In terms of capital returns, as Khozema said earlier, we're targeting to average -- to return an average of 50% of annual free cash flow to shareholders in the form of share repurchases. This commitment is reinforced by a $2 billion share repurchase authorization that expires in 2027 that was recently approved by our Board, signaling their confidence in our strategy and the opportunity ahead. This is in addition to the $3 billion of share repurchases that we did in 2023 and 2024. At the same time, we're applying a disciplined approach to investing organically, really to ensure that we maintain and expand our technology leadership position. And we'll also opportunistically consider disciplined M&A, focused predominantly on tech and talent tuck-ins that are growth accretive and/or accelerate our product road map. Okay. So putting it all together, here's our consolidated financial framework and set of targets that we're committing to over the next several years. We believe that this framework represents the new Twilio, striking a strong balance between durable growth, accelerated profitability, attractive cash flows and disciplined capital allocation, which we believe is the best path forward to driving value for our shareholders. So thank you for your time today. I'm going to turn it back to Khozema for some closing remarks.

Great. I'll just wrap it up. We really want to get to your Q&A. Just to kind of -- I skip the slide there. Okay. So just to get into a few things that we've kind of talked about during the course of the afternoon. So different company. You heard from Aidan that this is sort of a new Twilio, right, one where discipline, rigor, focus, like those are really the calling cards of the company going forward. And that financial discipline and operating rigor that we spent a lot of time talking about in the first part of the presentation, you should expect those to continue forever. You should expect those two things to continue forever where we really want to press on is on innovation. This is ultimately an innovation story. It's a technology company. You heard from all of our speakers today about the kinds of value we can unlock for our customers that's deeply rooted ultimately in ROI. And we have a unique opportunity based on our assets and our team to be able to deliver that. Now the proof is, the credibility behind it is, is that a lot of the hard work that we've undertaken over the last several years, '23 and '24 in particular, that's paid off. That's paid off with a much stronger P&L, a very, very strong balance sheet. And so we're starting to put points on the Board based on the discipline and the focus that you've seen from us over the last several quarters, including recent revenue acceleration. In '25 and beyond, like what we're going for, it is ambitious. It's also aspirational in some respects,; it's really fortified by credibility. Credibility around our ability to regrow, credibility around expanding our margins and knowing how to do that with real levers behind it, and in particular, our ability to increase the amount of free cash flow that we generate for share owners and then buying back some of that stock so that we can continue reinvesting back into the company. And the framework that we laid out earlier, I just thought I'd spend another moment reiterating these points that we are reorienting the company to deliver on double-digit growth over time. And as I said earlier, the model that we laid out with all of the targets they're in, they contemplate what's required to be able to get to those double-digit growth rates. But we've got a usage-based business that comes with a certain amount of inherent unpredictability, variability in some cases. And so we've underwritten something that's more in that 7% to 8% range that we talked about in our 2025 framework as well as kind of thereabouts is where we're planning for the next couple of years. But no matter what, what you get is 21% to 22% non-GAAP op margins. No matter what, you get $3 billion plus of cumulative free cash flow between now and 2027. And importantly, if we are able to reaccelerate growth and deliver at double-digit rates, those numbers get better. Those numbers get better, you'll get additional operating leverage, you'll get additional free cash flow. I thought I'd wrap up with this, we like to tell the same things to you all that we tell to our employees, that we tell to our customers and all of our other stakeholders. We view ourselves in the middle of a 3-year story arc. And I realize we just gave you a framework that's '25 to '27, but we kind of evaluate the company along these dimensions in terms of the way that we're running the place day-to-day. So in 2024, like we're lucky, really. Like we had great assets, we had great product market fit. We had a great culture. And those are things that we don't take for granted. But we did have to rebuild the foundation a little bit. There were aspects of Twilio that weren't fully optimized, that weren't fully working. So we spent a lot of our time rebuilding the foundation. 2025, like we know what we need to do. Like we have the right products. We have the right strategy. We have the right team. We already have the best assets. So 2025 is a year of execution for us. It doesn't require a lot of change. It doesn't require a lot of thinking. It requires a lot of doing. And we know what to do, we know how to do it, and we want to do it with the team members that we've got. So 2025 is really a year of execution. And if we execute well, which we are committed to doing for you all, after that, we can just write our own story. 2026 and beyond, we just continue to accelerate behind the great products, great teams and great solutions that we offer to our customers. So we think we're in a great spot. We're really, really excited about the progress that we've made. We are by no means whatsoever, resting on our laurels. I think everything is in front of us, and we're very, very excited about delivering that for our customers, for our investors and of course, for our employees. So with that, I'll turn it back over to Bryan, who's going to get us set up here for Q&A.

All right. We have -- we've got about 45 minutes. We have a couple of runners in the crowd. So if you do have questions, raise your hands. We'll give you a mic. Please announce your name, your firm and jus limit yourself to one follow-up question. As a reminder for folks that are tuned in on the webcast, ir@twilio.com is the e-mail if you want to send those. And finally, we will release our Q4 results and 2024 results on February 13 after market close. So we just ask that you please refrain from asking specific questions about those results apart from the preliminary numbers that Aidan walked you through. And with that, I think we're ready to get started. Runner, why don't we start with Mark Murphy.

Is it on?

It's on.

Mark Murphy with JPMorgan. And first off, congrats on a great finish to the year. And also looking back on it, congrats on the decision to buy back so much stock in the 40s, 50s and 60s that ended up being pretty accretive. But I was hoping you could double-click on the ISV cohort sales, up 15% year-over-year. It's a pretty big chunk of the business. What are the needle movers in there? Is it Zendesk? Is it Klaviyo? Is it Braze? Is it AirShip? Is it something else? And was there much of a reembrace of Twilio after you kind of disengaged on some of your products they might have viewed competitively. So I'm just trying to understand, because it looks like a big driver of the reaccel. Have you recaptured share with those companies? Or is it more the new ISVs that you've added on top?

Thomas, do you want to take that?

Yes. Yes, happy to take that one. So the ISV total is a relatively long tail business for us. We have a lot of large ISVs that are generating a significant amount of spend with us. But we also have a smaller set that is also critical to our growth overall. But I will say a couple of things have happened. One is we have seen more ISVs add more channels and doing more premium add-on features. For example, SMS Pumping Protection and Verify are 2 examples of where add-ons on top of traditional SMS has been a big driver. We're also seeing the add-ons of our CDP business, some of the advanced orchestration capabilities we have there. So in general, I'd say the real value driver for ISV is the continued new premium software capabilities we're adding on and the fact that they're consolidating more spend with us and adding a second and third channel, which we think is pretty robust.

I think one other part of your question, Mark, was the disengaging or you said it very diplomatically. The -- it helped. I think it helped. I mean I think competing with customers in certain product areas is tough, right? And instead, I think retrenching from some of those where, I think, they had really compelling product, and instead, as Thomas laid out, partnering with them in a much more fulsome way, I think that's a much better hand for us, and we can grow with them over time.

Right over here?

Perfect. Arjun Bhatia with William Blair. I appreciate the event here. I want to start. I think throughout the kind of presentation, you said you aspire to be a double-digit growth business, but I think the targets that you put out were still in that high single-digit range. So when you think about the variables and the factors that determine whether Twilio can get to double-digit growth or remains in single-digit growth, what would be the major factors that you're kind of looking to between macro and your internal execution, go-to-market and growth priorities that you laid out here?

Ko, do you want to take that?

Yes, I can start and Aidan, if you want to.

Yes.

We're not depending on macro. I mean I think we're kind of planning for like a neutral macroeconomic environment, like that's always sort of been a planning assumption. I think for us, ultimately, it comes down to -- there's a page that I shared in the presentation in which we laid out some short-term and then medium-term dynamics in terms of go-to-market innovation. Like ultimately, this is an innovation company, right? It's a technology company. And if we make great products that customers find really compelling and then we distribute them really effectively, it's not complicated, right? Like at some level, like that's what customers really value. I think what's been really great for us over the last few quarters, and I think Inbal and Thomas and Chris all represented it as part of like customer dialogue that they've had, and I would certainly share all of that sentiment, like the translatable ROI that a customer can tell us, okay? So this is not us doing the math for them. It's all of that, right? It's their math and demonstrating the ROI that they're getting out of the products and services, like as long as we can continue to grow that, I think that is ultimately the unlock to be able to produce durable double-digit growth over time.

In front.