A：Twilio's ISV and self-serve customers have driven growth with revenue more than 20% year over year. The company also saw growth in cross sell and solution selling, with notable wins and a 9 figure renewal across multiple products with a leading cloud provider.

A：Twilio's innovation bets on new capabilities like conversational AI and branded communications have started to pay off, enhancing the Twilio platform's offering to businesses.

A：Twilio is seen as having the potential to be the customer experience layer of the internet, bringing together essential capabilities like multi-channel communications, contextual data, and AI-driven orchestration to enable stronger and more meaningful business-customer relationships.

A：Go-to-market execution was a key driver of results, leading to several notable customer wins including a 9 figure renewal and the largest deal in the company's history, as well as other notable wins with companies like Gens, Par-K AI, and Paychex.

A：Twilio's self-serve model experienced a year-over-year usage growth of more than 20%, with customers like a leading AI model company scaling from a single product use to a six-figure multi-product customer.

A：The first quarter's agent productivity solution performance was positive, with the signing of the first set of deals, notably by Inhabit, a leading property management software company, to transform their customer experience.

A：Twilio's investments are paying off with strong customer demand for voice, conversational AI, and RCS, resulting in a mid-teens revenue growth year over year in the voice business, and significant growth in call volume and conversation relay usage.

A：In Q3, RCS became generally available worldwide with a more than doubling of messaging volume. Branded experiences helped consumers trust communicating brands, with companies likeParticle using RCS for event invitations and reminders. Twilio's Verify product grew over 25% year over year, indicating rising demand for trusted communication. The acquisition of Stitch, an identity platform for AI agents, was announced to enhance digital interactions with next-generation authentication capabilities. Twilio was recognized as a Best Workplace for Innovators by Fast Company. Financially, Twilio reported record revenue, income from operations, and free cash flow. The dollar-based net expansion rate was 109%, and non-GAAP gross profit and income from operations grew. Non-GAAP operating margin expanded by 190 basis points to 18%. Twilio also completed $350 million in share repurchases.

A：The acquisition of Stitch was made to augment Twilio's ability to enable amazing digital interactions by delivering next-generation authentication capabilities tailored for the era of generative AI. The rationale is that authentication is a critical and foundational step in the customer journey, enhancing customer engagement. Financially, the acquisition is not expected to have a material impact on Twilio's financials going forward, as the revenue and profitability in the P&L from Stitch are considered immaterial in the context of Twilio's overall scale. The acquisition was made for less than $100 million, indicating a relatively small tech and talent acquisition.

A：Twilio had a record third quarter with record revenue of $1.315 billion, up 13% year over year on an organic basis. Income from operations was $235 million, and free cash flow was $248 million. The company drove top line performance through broad-based go-to-market execution. Messaging revenue grew in the high teens, and voice revenue growth accelerated to the mid-teens, the fastest in over six years, supported by strong growth from voice AI customers. Software add-on revenue growth also accelerated, led by Verify. Non-GAAP gross profit and income from operations were up, and non-GAAP operating margin expanded. GAAP income from operations was $41 million. Twilio generated free cash flow of $248 million, completed $350 million in share repurchases, and had year-to-date share repurchases of $657 million.

A：For Q4, Twilio has initiated a revenue target of $1.31 to $1.32 billion, indicating 9.5% to 10.5% reported growth and 8% to 9% organic growth. Q4 revenue guidance includes $22 million in pass-through revenue from incremental U.S. carrier fees, compared to $20 million in Q3. This resulted in an increase to full-year 2023 organic revenue growth guidance to 9% to 10%, up from 9% to 10%, and reported revenue growth to 12.4% to 12.6%, up from 10% to 11%. The Q4 non-GAAP income from operations is expected to be between $230 to $240 million. Full-year non-GAAP income from operations guidance has been raised to $900 to $910 million, from $850 to $875 million previously. The full-year free cash flow guidance has been raised to a range of $920 to $930 million, from $875 to $900 million previously, reflecting strong cash generation year-to-date.

A：The strong net customer addition number was primarily due to the ending of free tiers for email and marketing campaign APIs, which led to many small accounts becoming active accounts and driving a big part of the quarter-over-quarter growth. There has not been any churn associated with the price increase over the last quarter.

A：The self-service business showed particular strength, generating a lot of new customer logo acquisitions, with the voice AI capabilities proving to be quite attractive and driving business growth. The enterprise new business team also had a very strong quarter, suggesting encouraging signs overall on customer acquisitions.

A：Voice adoption has shown strength with a mid-teens growth rate, which is the company's fastest in over three years. The cohort of voice AI customers grew nearly 60% year over year, and the top 10 largest voice AI startups experienced a 10x increase. The company is excited about this accelerated growth and its impact on the self-serve business, with the sales channel growing significantly.

A：The voice AI segment is still relatively small within the company's overall business, but it has shown a healthy performance across the entirety of the voice business. The voice business encompasses a wide variety of customers, industries, and use cases, which the company is encouraged by, especially given its position at the center of the AI value chain.

A：The sequential growth in the non-messaging business was primarily driven by email customers, as the company removed its free tier and saw smaller customers convert onto the platform as active accounts. Even adjusting for this, there was a quarter-over-quarter growth in gross margins. The positive gross margin benefits from the voice segment are expected to be sequential, with the company focusing on cross-selling and upselling its software and add-on products, which have high margins.

A：The company has been successful in growing its ISV cohort, with many customers starting in self-serve and then expanding through these partnerships. ISV relationships have been a key driver for the recent large deal mentioned, which was a material renewal with a customer the company had been working with for some time. The details of this financial deal were not disclosed, but the renewal signifies a significant and positive outcome for the company.

A：The performance in the holiday season is expected to be tied to trends in 4 Q, where volumes are typically influenced by the holiday season. Early signs suggest a solid guide for 8 to 9% organic revenue growth. The performance is expected to be broad-based with specific mentions of sales channel performance and product growth. Factors such as accelerated sales through ISVs and software add-on products, along with strong growth in the messaging and voice products, are anticipated to contribute to the revenue guide. Industries such as tech, healthcare, professional services, retail, and e-commerce are also showing healthy volumes.

A：Within the company's business, standout performance areas include broad-based growth with ISV self and software add-on products, notably products like verified. Sales have been driven by the go-to-market team and the sales team, with particular acceleration noted in the voice AI startup customer volume. The company's biggest products in messaging and voice grew in the mid to high teens, with much of the voice growth attributed to the aforementioned voice AI startup customer volume.

A：The adoption of new products such as conversational intelligence and conversational relay among traditional non-AI parts of the customer base has been positive. There has been solid traction with enterprise and ISV customers, resulting in multi-product growth, especially with add-ons. The company's agent productivity solution has seen early traction, integrating core capabilities of voice, SMS, email, and chat into a unified experience, powered by conversational relay to create virtual agents for customer care and pre-sales use cases.

A：The recent net dollar-based retention uptick was primarily due to underlying expansion, rather than pricing. The price increase in June around Business Messaging did not have a material impact on the quarter. Although there was a contraction in churn, the one impact from ISVs in Q2 was noted to have a 100 basis point impact quarter over quarter. However, even adjusting for that, DBN or dollar-based net expansion was up slightly.

A：The impact of AI voice startups on the company's business is increasing as more voice AI agents are going into production. Although still a relatively small contributor, the company is encouraged by the adoption trends and is positioned at the center of the AI value chain. The integration of AI into the company's multi-product offerings, like conversation relay and agent productivity solutions, is anticipated to drive additional growth. However, this growth remains relatively small in the broader context of the company's operations.

A：The momentum for international messaging continued in Q3, and the competitive landscape appears to be favorable. The company is winning more market share with international messaging, and it seems that the market is becoming less price-sensitive. The exact factors driving this may share are not specified in the provided text, but the company's ability to leverage its offerings in a growing AI value chain is expected to contribute to this positive trend.

A：The company plans to focus on investments that align with their current operational expenses (OPEX) envelope. Specific investments include advancements in identity, with an inorganic investment announced today in Stitch, an identity company. The emphasis is on delivering platform value in an authentic experience through the platform in a more agency-focused future.

A：The new customers adopting voice AI are a mix of both. Some are existing enterprise customers who have strategic relationships with Twilio and have been using a little bit of voice, which has led to an acceleration in their use of voice AI. The other segment consists of new customers who are engaging with voice AI and are doing more with voice, contributing to the company's growing self-service business.

A：The company is running the Go to Market organization more efficiently, which has helped scale up operations. They've been able to use their own technology effectively, with an AI assistant powering pre-sales motion, handling the majority of inbound leads, customer onboarding, and upgrades. This has allowed for productivity gains and the ability to scale without needing to significantly increase capacity. Going forward, they'll continue to invest in capacity as needed, ensuring an efficient growth trajectory.

A：The encouraging signs for RCS in the long term include its branded nature, which is considered higher efficacy and more trusted compared to other communications platforms.

A：The key drivers of the business's strength include durable top line growth, a mix shift, an AI story, margin expansion, cost discipline, and capital returns. To think about the steady state prefa per share growth profile, one should consider a framework of financial discipline, operating rigor, and strategic investments that drive ongoing leverage and free cash flow.

A：The company's investments in AI and identity are expected to improve efficiency and drive cost discipline, while also providing a foundation for future growth. These investments include tech and talent acquisitions to enhance existing capabilities and increase leverage and cash flow going forward.

A：The company's strategy for stock buybacks is to increase activity when the stock is deemed a good value, using a framework that guides these decisions. Investments in AI, automation, and stock buybacks are expected to drive ongoing leverage, free cash flow, and support the company's growth trajectory.

A：The company is investing in its operations to simplify the self-serve experience continually, making compliance hurdles easier to overcome, and embedding AI capabilities into the console for a more fluid and simpler customer experience.

A：The company is enhancing the self-serve experience internationally to make it even simpler for customers to get up and running. This approach is expected to position the company as a preferred vendor globally. The company selectively invests in countries like Australia, Japan, and Singapore and is encouraged by the customer excitement and trends in AI adoption both with and without Twilio's services.

A：Efforts to improve cross-selling to existing customers include a sales motion that leverages innovation in products, which are designed to work together with various primitives and channels. This enables the go-to-market team to offer compelling solutions and business outcomes. Marketing programs and compensation plans are aligned to drive this performance, and there is significant upside potential to get a broader set of customers to consume more Twilio services.

A：Self-service has been an effective tool for customer acquisition and growth by increasing efficiency in managing the customer funnel, utilizing AI for faster onboarding and upgrades, and improving the value and ROI for customers. This leads to quicker realization of benefits, faster expansion, and a stronger growth flywheel that aids in scaling into the enterprise and developing strategic relationships over time.