Good afternoon. Welcome to Twilio's Q4 2020 earnings conference call. My name is Jason, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I will now turn the call over to Andrew Zilli, Vice President of Investor Relations and Treasurer. Mr. Zilli, you may begin. Thanks. Good afternoon, everyone, thank you for joining us for Twilio's fourth quarter and full year 2020 earnings conference call. Our results press release, SEC filings, and a replay of today's call can be found on our IR website at investors.twilio.com. Joining me virtually today are Jeff Lawson, Co-Founder and CEO, George Hu, Chief Operating Officer, and Khozema Shipchandler, Chief Financial Officer. We also have Peter Reinhardt, CEO of Twilio Segment, joining us for Q&A. As a reminder, some of our commentary today will be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our discussion and responses may contain forward-looking statements which are subject to risks, uncertainties, and assumptions. In particular, our expected business benefits and financial impact from the Segment acquisition and our expectations around the impact of the COVID-19 pandemic on our business, results of operations and financial condition, and that of our customers and partners, is subject to change. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K and subsequent reports on Form 10-Q, and our remarks during today's discussion should be considered to incorporate this information by reference. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. With that, I'll hand it over to you, Jeff. Thanks, Zilli, and thanks, everybody, for joining the call today. I want to begin today's call by recognizing that it's Black History Month here in the United States Doing the work of overcoming systemic racism is the work of understanding Black history. Not just the surface-level history or the story of the civil rights movement, but understanding the deep history of oppression and racism that manifests today in less overt, less intentional ways, but is just as impactful on Black lives today. Black history isn't something of the past. It continues through today, and there's an acknowledgment that we're writing Black history and American history today. Twilio's commitment to anti-racism is a commitment to write a better future. That's how I'm contextualizing Black History Month in 2021 differently than I've ever thought of it in the past. Now, on to company earnings. Our fourth quarter continued the strength and momentum we saw throughout the year. Let me quickly touch on a few of the highlights for the full year. We delivered nearly $1.8 billion in total revenue, up 55% over last year. Incredible growth at this scale. We acquired Segment, combining the market-leading customer data platform with our leading communications platform. We ended the year with more than 221,000 active customers and more than 10 million developer accounts, and we hosted our first-ever virtual SIGNAL with more than 32,000 registrations. Our 2020 results reinforce the idea that there is a massive generational opportunity in front of us. We have long known that there is a huge shift to more digital experiences and that every company is becoming a software company, and that has been fueling our growth for more than a decade. What 2020 showed us is just how true it is that companies that embrace building, that embrace software agility, that empower their developers, are the companies that are prepared for the unknown. Whether it's a pandemic, more competition in the market, or anything else that is threatening to disrupt an industry or a business, the companies that embrace software are able to accelerate their ability to respond to the changing conditions in their market. The pandemic accelerated change overnight. Healthcare had to accelerate the adoption of telemedicine and commerce companies accelerated their e-commerce plans. Companies that hired more developers and upped their digital game during the pandemic are not going back. The pandemic was a booster, and now they're even better at addressing the digital needs of their customers. Digital is here to stay, and there are more and more digital businesses in the world that Twilio is powering. That's why we are so excited about the opportunity ahead. In fact, according to IDC, investments in digital transformation will nearly double by 2023 to $2.3 trillion, representing more than 50% of total IT spending worldwide. Deloitte recently released a report stating that during the next 18- 24 months, they expect to see leading companies embrace the bespoke for billions trend by exploring ways to use human-centered design and digital technology to create personalized, digitally enriched interactions at scale. Twilio's annual State of Customer Engagement Report, launching next Wednesday, February 24th, evidences this change. The study found that digital engagement was critical to survival in 2020, with 96% of business leaders reporting that not digitizing customer engagement would've negatively impacted their business, including making them less competitive, causing a loss of revenue, and an inability to meet customer expectations. As the world seeks to find a new semblance of normal, businesses are not going back. Given the increased importance of digital engagement to company success moving forward, nearly all business leaders surveyed, 95%, expect to increase or maintain their organization's investment in customer engagement after the pandemic. This is why we've been building out our customer engagement platform that truly serves the end-to-end life cycle of all customer engagement in the enterprise. We have called Segment the market-leading customer data platform to provide a unified customer view to help companies better understand customers and engage more effectively over digital channels. Why? Because companies need to understand who their customers are, what products they're looking for, what products they've bought, and where customers are interacting with their brand across multiple touchpoints. Our platform allows the developers of the world to build, to take all of those bits of data that are siloed throughout the company, build a cohesive picture of the customer, build a world-class customer service experience, and deliver the right communication over the right channel at the right time. The end game is to meaningfully improve every interaction every business has with every customer. That's incredibly valuable to enterprises because it allows them to create differentiated customer experiences, and our results validate that this is what the market wants. Of course, to make all this work, we have to empower developers. We have more than 10 million developers around the world using Twilio to build the future of customer engagement, and we're going to continue innovating to provide them the tools they need. Our developer ecosystem is one of the long-term competitive advantages for Twilio, and we're going to continue to focus on making them successful. Before I turn it over to George, I also wanted to highlight that we launched our first ever impact report today, which you can find on our website. The report covers several topics, including our focus on helping our neighbors and communities. In fact, in 2020, nonprofits, social enterprises, and local governments using Twilio helped reach 266 million people. You'll also find information on our latest diversity and inclusion stats, as well as some new ESG initiatives and disclosures. We also launched our WePledge movement for employee giving to the world, empowering every individual employee to pledge 1% of their time or income to do good. As Twilions, we volunteered more than 7,800 hours and donated more than $1 million in 2020. Atlassian, Zoom, Okta, and Pledge 1% all signed on to join the WePledge movement. There are a couple of recent additions to Twilio I'd like to welcome. In Q4, we hired Jeremiah Brazeau as our CTO to lead our technology, strategy, and roadmap. Last month, we added Deval Patrick, former Governor of Massachusetts, to our board of directors. In addition to his public sector experience, Deval held senior executive roles at Texaco and Coca-Cola, and most recently, founded the Double Impact Fund at Bain Capital. Jeremiah and Deval are just the latest additions to our leadership in the last year, as we brought on several new senior leaders who will be critical to our success as we continue to grow and scale the company. Finally, you may have seen in our press release that our Chief Legal Officer, Karyn Smith, will be leaving the company after 6.5 years. Karyn has been a tremendous leader for Twilio and such an important part of our success, from building out our legal team to taking us public and more. I am extremely grateful for her contributions to the company during her tenure. Karyn is going to stay on for a while we find our next general counsel and ensure a smooth transition in the coming months. Thank you to all Twilions for helping deliver such outstanding results and doing so much to help our customers, as well as the broader community, during such a difficult year. We're extremely excited for 2021 and beyond as we take advantage of this generational opportunity. With that, I'll hand it over to you, George. Thanks, Jeff. I'm so excited about the great performance the team had in Q4, wrapping up an outstanding year in 2020. As you know, in addition to growing our sales capacity, we've been focused on four core areas, developers, enterprise presence, international expansion, and growing our partner ecosystem. We saw tremendous success in these areas in 2020. We still believe we are in the early innings. We plan to continue to invest in these four areas for 2021. On our marketing side, we continue to focus on developers while also engaging more and more at the executive level. Our team hosted 285 virtual events, including SIGNAL, Engage Everywhere, Superclasses, Twilio Engagement Center sessions, and more, connecting with nearly 40,000 customers and developers to help them build the future of customer engagement using the Twilio platform. Our developer relations team hosted the largest Superclass event ever during SIGNAL, quadrupled the number of users on Twilio Flex, and launched a new developer podcast and YouTube channel to drive further engagement with our expanding developer community. Of course, Jeff's new book, Ask Your Developer, which, by the way, is a Wall Street Journal business national bestseller, is a great way to engage with enterprises and get them thinking about how they can empower their developers to build solutions for the future of customer engagement. On the go-to-market side, our investments in the enterprise space are paying off as we become more strategic to the world's largest companies. In fact, in 2020, the number of transactions with Global 2000 customers was up 76% over last year, and the number of seven-figure deals overall was up 93% from 2019. We signed some great enterprise deals in Q4, including one with JPMorgan Chase, the largest bank in the U.S., who chose Twilio to enhance their customer service offering. We also signed a deal with one of the world's largest retailers. With the surge in traffic during the holiday season, their on-premise email solution couldn't scale to support their volumes, and they knew it was time to move to the cloud. They selected Twilio SendGrid for the deliverability and scale needed to support the billions of emails they expected to send. We expanded our relationship with a Fortune 500 P&C insurance company that was looking for a partner to support their multi-channel digital engagement journeys. They selected Twilio for SMS, Verify, email, and WhatsApp to power several new solutions for their customers. We also expanded our relationship with H&R Block, a leading tax preparation and financial services company, and a Fortune 1000 company. In preparation for the upcoming tax season, H&R Block wanted to provide better virtual tax preparation experiences while leveraging a single platform. They added Twilio Video for online tax prep appointments and are also using Voice, SMS, and Chat to provide a unified customer experience. While it is still early, we are seeing great traction as we signed a deal with Camping World, America's leading recreational vehicle and outdoor retailer, and a Fortune 1000 company. Segment will enable Camping World to quickly and easily understand who their most loyal customers are across domains to allow a personalized, rewarding experience across all of Camping World's digital touchpoints. Internationally, we continue to invest to expand our presence in key markets, and we're seeing great returns from those investments. We entered into a new relationship with a G2K insurance provider. They were looking to accelerate their efforts to focus on a digital-first engagement strategy and selected Twilio to build multiple solutions, including WhatsApp within Flex for agents and sales communication, video solutions for sales agents to talk to VIP clients, and video solutions for telemedicine appointments. Our partner ecosystem plays a critical role in expanding our reach around the world and in different industries. In 2020, consulting partners influenced three times as much revenue as 2019, were involved in 50% of our top Flex deals, and had a 4x increase in influence with G2K customers. Of course, we welcome Deloitte Digital as our first premier global systems integrator, and we're already seeing great results from that partnership as we closed several joint deals together in the fourth quarter. Again, I'm extremely pleased with the performance this year. We've made great progress, we are just getting started in each of our focus areas, and that's what makes this opportunity so exciting. We are going to continue to invest in these areas going forward to address the huge opportunity ahead of us. I couldn't be more thrilled for how we are positioned for 2021 and beyond. With that, I'll pass it over to Khozema. Thanks, George. Good afternoon, everyone. I'll start by echoing Jeff and George's sentiment. I couldn't be prouder of Twilio's execution in 2020. We saw a year's worth of digital acceleration during an unprecedented time. As we enter 2021, there's plenty of opportunity and plenty of work to be done to continue to grow and scale our business. We have the right leadership and the right products in place to ensure we're successful to take advantage of this enormous opportunity as we continue building the leading customer engagement platform. As I've mentioned on previous calls, we're also very focused on scaling our systems and processes, which will ultimately lead to greater leverage in the future. Delving in a bit further, we're investing to create an enterprise data architecture internally, including our ERP, business intelligence, quote-to-cash, as well as continuing to improve other core processes that allow us to scale the company. Additionally, we continue to invest in people, both geographically and through the lens of DEI, further diversifying our employee base. As George mentioned, the early returns from the Segment acquisition are great. While Segment is running independently today, as we continue our integration planning, we are working on some integration on the G&A side, as well as some exciting organically evolving innovation synergies on the product side. As the executive sponsor for the integration work, I'm heavily involved in the process, and the integration is off to a terrific start. The cultures and values are incredibly well aligned, which we could sense from a distance, but are seeing confirmed on a daily basis now. We're also starting to see specific opportunities for joint products, which we will talk about in future quarters. I continue to be excited and energized about the tremendous opportunity ahead for Twilio. Now, onto the numbers. Total revenue for Q4 grew 65% year-over-year to $548 million, including $23 million from Segment, which closed on November 2. Dollar-based net expansion rate was 139%, as we continued to see broad-based strength across the business. Remember that Segment does not have an impact in DBNE. As expected, political traffic had a strong quarter as a result of the election, contributing $23 million to revenue. Excluding Segment and political traffic in Q4 2020, revenue grew 52%. For the full year, we delivered $1.76 billion in revenue, up 55% year-over-year. DBNE for the full year was 137%. Revenue from our top 10 active customer accounts represented 13% of revenue in Q4, compared to 14% both last quarter and Q4 of last year. International revenue was 27% of total revenue in Q4, compared to 27% last quarter and 29% in Q4 2019. WhatsApp contributed approximately 5% of revenue in Q4, down from 6% last quarter. As a reminder, going forward, we will no longer break out WhatsApp as a percentage of revenue. We continue to have a great relationship with WhatsApp. As our business has scaled, coupled with the strong revenue diversification, disclosing the contribution from a single customer is less meaningful. Verizon's A2P fees contributed approximately $14 million to revenue. As a reminder, this fee is a direct pass-through to customers and does not impact gross profit dollars. As we come up to the anniversary of the implementation of the Verizon fees, we will no longer be breaking out this metric. However, we do believe another carrier will implement fees in the coming months, and if that happens, we'll provide further information on an upcoming call. Fourth quarter non-GAAP gross margin was approximately 56% and was negatively impacted by 150 basis points from A2P fees. Twilio's gross margin, ex-Segment, was approximately flat quarter-over-quarter, aided by political traffic in the United States As we've discussed recently, organic gross margin continued to mix down as the growth of our messaging product has re-accelerated, a trend continued in Q4, and a trade-off we'll gladly accept. Non-GAAP operating profit came in at approximately $13 million, stronger than originally forecasted, driven by higher than forecasted revenue. Moving on to guidance. Let me quickly highlight a few items as it relates to different aspects of guidance. First, I'd like to remind everyone we will only be providing quarterly guidance going forward. Second, this guidance does not include any additional A2P fees that may go into effect during the quarter. Finally, we built this guidance off of our fourth quarter results, excluding the political traffic contribution. For Q1, we expect total revenue of $526 million-$536 million, including Segment, for year-over-year growth of 44%-47%, and we expect a first quarter operating loss in the range of $15 million-$20 million. With regards to our operating loss guidance for the first quarter, as mentioned on previous calls, some of the investments we planned on making last year did not materialize as we had originally forecasted due to COVID. We still intend to make these investments in 2021, primarily centered on people and systems. To close, we delivered very strong results in 2020, and we are excited about 2021 and the years beyond. We are making the right investments today to scale the company and take advantage of a generational opportunity. With that, I wish everyone well, and thank you for joining. Operator, please open the line for questions. Certainly. At this time, as a reminder, in order to ask a question, please press star, then the number one on your telephone keypad. Once again, that is star, then the number one on your telephone keypad if you would like to ask a question. To remove your question, press the pound key. We will now pause for just a moment to compile the Q&A roster. Your first question comes from the line of Derrick Wood from Cowen and Company. Your line is open. Great. Thanks. Congratulations to everyone with the fantastic finish to the year. Jeff, congratulations on the release of your new book. I wanted to ask a question along those lines. In the book, you focus a lot on the rising importance of the developer, and we've been hearing about developers getting more budget authority in today's digital era. It'd be great to hear what you're seeing in terms of changes in buying behavior, particularly when it comes to developer involvement and how you see these trends helping Twilio gain more wallet share in the years ahead. Thank you, Derrick. Yeah, I think one of the things that Twilio really bet upon when we founded the company was that developers would become even more influential as companies had to turn to digital, had to become more agile, and had to really build for this digital era. Because developers are the ones who know the tool chain, they know how to get things done. When the barriers come down, i.e., instead of having to go spend tens of millions of dollars and sign a contract up front for some giant multi-year IT project, but rather get started with little risk, spend a dollar or two building a prototype, that the outcome, the benefits of being able to move quickly in that way of building and moving from a prototype to a beta to a production rollout with ease and little treatment along the way, that that would just take over. I think that we were very right about that in the early days of Twilio, along with other companies in this API economy. That's why as the pace of business has accelerated and the importance of digital has grown to nearly every kind of business and every kind of industry, well, developers are able to pick up the tools and the new software supply chain that Twilio was [audio distortion]. The big logos. You also hear about the digital native companies that adopt Twilio. We now have over 220,000 companies. The vast majority of those, we were brought in by a developer. That's how the relationship started. They bring us in, they build that prototype, they see that early success, then we follow in with our sales team, and we expand the relationship over time to make them successful in the first use case, in the second, and the third. That's really the power of the platform business model. It combines a very efficient go-to-market engine. We spend less on sales and marketing than a lot of other companies, especially anyone growing at our rate and scale. That allows us to not only get in the door, but also expand our presence in that account because we've got those technical champions. I think that's a trend that's just going to continue. As you look at COVID and you look at how the importance of building and staying agile and responding to changing conditions, whether it's something like a pandemic or just the normal competitive concerns that are out there, that developers get even more prominent as time goes on. Great. Thanks for that color. If I could squeeze one in for Khozema. The gross margin definitely trended better than we've seen sequentially the last few quarters. I know you called out Segment. Anything else to call out in terms of mix shift changes sequentially and how to think about directional thoughts on gross margins for Q1? Not really, Derrick. The way that we characterized it was that we've had kind of a flat quarter-over-quarter gross margin dynamic that was aided by political fees, as we said in our prepared remarks. We've also talked about, as most recently at the Investor Day, that we've had a re-accelerating messaging business as well, that's created some downward pressure on gross margins. We like that trade-off, obviously, just given the habits that we've developed in messaging and the gross profits that that's kicking off. Otherwise, we kind of expect gross margins to sort of be in the mid to high 50s, as we've said before, and I think you should expect that to continue, putting aside like A2P dynamics, obviously. Great. Thanks again. Congrats, guys. Your next question comes from the line of Mark Murphy from JP Morgan. Your line is open. Yes, thank you very much, and congrats to all the Twilions. Jeff, I'm interested in the trend you're seeing in two-way or bi-directional messaging. Can you help us understand or just estimate what a portion of messages you're processing today that are two-way, and maybe what types of discussions are emerging to use it in the future? In fact, we're kind of sensing it's starting to creep into some of our own experiences sporadically once in a while from the auto mechanic or after I buy an appliance. I'm just wondering if there's any tangible outlook there. Yeah. Thank you very much, Mark. I think you're right. It's still very much at its infancy, though. A relatively small part of our traffic is two-way, but it's been growing in recent years. If you think about it, five, maybe eight years ago, it was sort of novel when a company could text you the status update of a flight or your package shipped or whatever, and we saw a lot of customers building those types of use cases on top of Twilio, and when you got that, it was like, oh, that was delightful. Of course, if you replied to it, usually the reply went nowhere. Now you're starting to get the next wave of innovation with messaging, which is actually certain times you can actually reply to it, and either a bot or a human being will actually be listening and be able to help you with that engagement. I'd say this is still very much emerging, but it's one of these surprising and delightful experiences you have with a brand that does that. I remember at SIGNAL in 2019, I talked about some of these companies, some of these experiences. When you need a service appointment at Tesla, and you can text with the service advisor to coordinate that appointment, or with one of the earlier, actually, use cases here, Morgan Stanley, who is using Twilio to enable their wealth advisors to text two-way with their clients, and a number of other such use cases. We continue to see more growth in this area because it is such a great experience. When you think about how much companies spend to acquire a customer and to get their phone number and earn the right to communicate with them, only to blast them a message that the consumer can't reply to, or if they reply, it's like crickets, and how bad of an experience that is. That's why we've invested in products like Twilio Conversations that enable those two-way multi-channel communications, and Flex for the contact center that enable those sophisticated messaging-based conversations as a messaging-native solution, or even Twilio Autopilot that brings the intelligence of an AI conversational engine. These are all designed to help companies to adopt and build two-way messaging experiences that augment and improve oftentimes the first use case, which is that outbound notification. Excellent. Thank you very much. Your next question comes from the line of Will Power from Baird. Your line is open. Oh, great. Thanks for taking the question. Yeah, I'd love to maybe start on Segment. I'm just trying to get any color we can on the early progress you're seeing there, what the early use cases on a combined basis look like. I was kind of intrigued with the comment around the contract with Camping World. That seems like one of these perfect examples of the opportunity to use that customer data, then to engage with those customers. I'm just trying to understand what does that cross-sell look like to take it to that next engagement level? Hey, Peter here. Segment is still operating primarily independently. Just keep in mind that Segment's only been part of Twilio for the last two months of the year, still very early. Continuing to execute very well, though. Had a strong finish to 2020. In terms of Camping World specifically, currently Camping World has three brands, Camping World, Good Sam, and Gander Outdoors. Each of those have disparate websites and siloed customer data. What Segment is going to do is allow all that customer data to be collected from the three digital properties in a consistent way and allow for Camping World to draw new insights on all their customers and enable increased personalization across web, email, and mobile experiences. As we progress on the integration, we can provide more updates on sort of the long-term potential to address the generational opportunity ahead of us and continuing to work together to build the leading customer engagement platform. Okay, great. I guess if I could fit in one more quick one, maybe for Khozema. Just looking at the strong Q4 upside and putting aside Segment and the political traffic, anything else you'd call out in terms of a significant upside driver? It sounds like SMS was there, but between Video, Flex, any other particular surprises? Will, it was pretty broad-based strength across the business, I would say, in Q4. The messaging product certainly did see a lot of acceleration. That continued certainly in Q4. That was a driver of upside. I think just generally, we had really strong net expansion, as you heard in the numbers, and great net new customer growth. I think what we're finding is that as customers are looking for digital transformation, they're increasingly coming to Twilio. Just a great around the board performance for us. Okay. Thank you. Thanks, Will. Your next question comes from the line of Fred Havemeyer from Macquarie. Your line is open. Hi. Thank you so much for taking my question, congratulations on such a strong quarter. I wanted to ask from the perspective of a developer for you, because I've built apps using Twilio before, and frankly, your platform just makes sense for developers. The alignment of Segment also seems particularly natural, considering how easy it is for developers to roll that out, too. Along these lines, I'd like to ask, what do you think could be the benefits in your approach to offering the customer experience platform with a platform-up approach in comparison with some of the other software vendors out there who are approaching customer experience from an application-down perspective? Well, thank you, Fred. I think you're right. We believe in the power of developers to influence the technology decisions that companies pick, the vendors they decide to use, and actually the strategies of the companies, and actually how they go about solving really hard problems for their customers. I don't think that's limited to just, say, SMS, voice, or computers world, customer data. I think that the infrastructure to build great digital products and great digital experiences spans many categories. As we think about our platform and customer engagement, I think that it is a rich area of opportunity for us to invest in order to unlock developer influence and developers' ability to build the future of these companies in the same way that we have with communications and customer data, respectively. Which is easy to adopt APIs, usage-based pricing models, published documentation, and things like that enable developers to come in, rapidly build solutions to the things that companies need built, and then take those prototypes all the way through to production, because that's the agile nature of business today. I think that there's a lot of opportunity to find more and more areas that we see customers wanting this approach and applying our business model to more and more of the realm of customer engagement. It's very helpful. Thank you. Your next question comes from the line of Meta Marshall from Morgan Stanley. Your line is open. Great, thanks. As a first question, just as you expand your GSI and ISV network and even your kind of enterprise sales force, how is that informing the roadmap? Just the different pain points that your customers might be experiencing. Then as a second question, just on the net expansion rate kind of picking back up. Do you think that that speaks to the cohort is kind of accelerating in their ramp, or is it too early to kind of say that overall customers are ramping into their use cases quicker? Thanks. Yeah, this is George. Certainly on the GSI and the ISV front, I'm glad you asked the question. We see a massive opportunity, and as I mentioned, we're still really in the early innings. I think that it largely aligns, their requirements align to what the broader customers want, which is obviously to support the digital transformation of their customers. That's fully in line with what we see as this massive opportunity. There are some specific things that we are doing to make the product easier to deploy, to bill, and things like that for some of our ISV and SI partners, and those are things that we're working on in just normal course and speed. The big picture is that it's largely, I think, aligned with what our broader customer base. Wants. In terms of the net expansion side, I think that certainly a bit of that is, as Khozema talked about, seasonal. Probably, I think we just have a lot of strength in our business. As we've talked a lot about digital acceleration, I think that we're seeing that play out. I wouldn't say that we're seeing a noticeable shift in individual customer deployment times. I just think that we're seeing companies really realizing that they need to move to these new digital channels, new modes of digital engagement, and that is supporting the broad near-term results and more importantly, the long-term opportunity that we're so excited about. Great. Thanks and congrats. Your next question comes from the line of Michael Turrin from Wells Fargo Securities. Your line is open. Hey there. Thanks all. Good afternoon. On the Q1 guide for top line, you mentioned that builds on Q4 ex political. Looks like up just a bit sequentially from there. Anything at all you can add around the Segment contribution and what's assumed? I know you'll have an extra month, wondering if there's anything from a seasonal or accounting-related perspective for us to be aware of as we look at the implied run rate you provided and start to extrapolate from there. Hey, Michael, this is Khozema. Not per se. We're obviously guiding $526 million-$536 million in revenue in the quarter. That does include the contribution from Segment. We're not breaking out the Segment contribution at this time. We will, of course, provide those results on the Q1 call. There's nothing idiosyncratic to call out, to answer your question directly. Okay. Then on Flex, obviously the contact center market seems to have reached a bigger tipping point towards cloud. You called out strong traction with Flex in the press release. Anything you can add as we're heading into the upcoming year around the demand environment? Are there certain use cases or industries you're finding success with that you'd like to highlight here for us? This is George. I think that you hit the nail on the head, that there is a massive shift going in the contact center market towards cloud. I think that's the story here. We are both beneficiaries of that, and then we believe also helping to propel that forward with this fantastic product that we have, the architecture we have. It's a really resonant story with companies that are looking to move to the cloud and don't want to use the legacy technologies, and also want a new approach, a much more flexible approach, a much more shared risk approach, and an approach that allows them to really deliver exactly what they need and not have to buy more than that. I think that's the ultimate story here. In terms of specific areas of strength, we continue, I think, to work really well in that kind of mid-enterprise size contact center, that several thousand seat space seems to be our sweet spot. We have strength in, we've mentioned insurance a few times, and other industries as well. Similar to that, but those are all, I think honestly, smaller trends in the context of just this bigger story we're playing in. Impressive close to the year, yet again. Nice work all. Thanks. Your next question comes from the line of Matt Stotler from William Blair. Your line is open. Hey, guys. Thank you for taking my questions. I guess to start off, maybe just touching on the Deloitte partnership, obviously very important as the first kind of premier GSI. Last quarter, you talked about the rollout of the partnership being pretty early, some lighthouse customers, training consultants, et cetera. Sounds like you've started to close some big deals. Are we kind of hitting on all cylinders here? Any other kind of color on early feedback? You kind of mentioned that the partnership last quarter isn't necessarily exclusive, would love to get some commentary around how Twilio's being positioned relative to maybe other solutions in the Deloitte portfolio there. That's a great question. I would say overall we're on track with Deloitte. Things are healthy, strong, going according to plan. I don't think you're going to have radical change in 90 days, but we talked about, as you mentioned, lighthouse customers. We did get several of those wins. I think that if you talk to them, they'd be excited about the partnership. We're excited about the partnership. I think that things are going very well. I think we're on track this year to hopefully add other SI names to our portfolio as well. I think everything is healthy and going well, and we're certainly seeing a lot of energy from partner ecosystem around Flex and all of our products. Great. That's helpful. Maybe just one for Khozema. Middle of last year, you talked about some investments getting paused or pushed into 2021, hiring and infrastructure building in places like India. Since then, some of those investments have been able to move forward, like the opening of the Center of Excellence in India specifically. How are you thinking about any remaining pent-up investments, if you will, and how these kind of layer back into the model as we look forward to 2021? Yeah, as I mentioned, we guided to an operating loss in Q1. We want to continue investing in several areas. I'd say enterprise is one, international is another, partner ecosystem, systems processes. Kind of the same areas that we talked about last year that we hope to invest in in a more pronounced fashion. All that got delayed to some degree due to COVID-19. Obviously, you've also got Segment, which came in at a loss position. I think all of that is going to contribute to our operating losses a little bit throughout the year. We're not providing guidance for the year, but you can get a sense of it from what we're guiding to in Q1. Again, the investments aren't anything out of the ordinary, more just a continuation of stuff that we were wanting to work on last year. Understood. Thank you very much. Thanks, Matt. Your next question comes from the line of Parker Lane from Stifel. Your line is open. Hi, thanks for taking my question. I wanted to dive in on the video opportunity for a moment. If you think about the explosive demand of that category and just how many different options there are out there for customers, what are you hearing in real time about your own product? What's resonating from a feature standpoint and maybe your approach to video that's helped distancing you from some of the other offerings out there in the market? Absolutely. Thank you, Parker. We're really excited about the video opportunity, and I think this is an area where COVID really invigorated the number of use cases and the need for new types of video solutions. What we're seeing is a lot of new use cases that have been accelerated because of the events of the past year. One of them is one we've talked about in the past, which is telehealth and telemedicine. Similar to all of our APIs, giving customers the ability to embed these experiences directly in the other software and create these experiences that are differentiated from just kind of a standalone video platform like we probably all use every day in our meetings, allows them to create these amazing experiences. Telemedicine is a great example. Like last year, we announced Epic, the EMR company, embedding video directly into the EMR medical system that doctors use every day, so that the charts and the data and the patient information is all there inside that one solution, including things like scheduling. We're also seeing strength in areas like proctoring and administering tests remotely so people don't have to go into a physical storefront to take a test. That's an interesting area, and we talked about Prometric in a prior call and others. Another one we talked about is HR Block, right? Doing tax prep and getting help with something like that from the convenience of your computer, while not being limited to, like, I can only call someone, or I can only chat with someone, but actually have a face-to-face video call. This is another interesting area to help in the terms of customer care and really creating a high touch experience for customers. These are the areas where we're seeing a lot of investment. If you think about these use cases, right, they require a lot of high availability. They require scale, they require security, they require compliance with things like, if you're dealing with healthcare or tax information, customers want to know that these are secure, that these are compliant, that privacy is of the utmost importance in these use cases. These are areas where we see customers really turning to Twilio and implementing these solutions. Got it. That's really helpful. I know it's early and remains in beta, but I'd love to hear just the opportunity you think there is for Twilio Frontline, given the new hybrid environment that we're seeing a lot of companies discuss they're going to implement for their workforces going forward. Absolutely. Thanks for the question. We're really excited about Frontline. Obviously, as you said, it's a new product for us, so it's still in the early stages of the adoption life cycle. As a reminder, when we have API products, customers choose to adopt it, implement it, bring it out, roll it out to their customers, and so it does take some time for customer rollouts to happen. That said, we are really pleased with the early start that Frontline is seeing in the market, and I think that there is certainly a change in how the workforce, especially that of Frontline workers, are actually using digital technologies to engage with their customers. We saw at SIGNAL this past year, we had John Donahoe from Nike talk about how their retail sales associates, people who used to only work in the store and greet you when you walked in the door, are now able to help their customers from their e-commerce customers, from wherever the customers are sitting at their computer or their mobile phone, and wherever the athletes are. The athletes are what they call their salespeople. They can be working from home and serving customers or working in the back of the store. I think this trend, whether it's delivery drivers, whether it is retail salespeople, whether it is even knowledge desk workers working from a variety of places, using omnichannel communications to actually do two-way communications, build relationships, and where the company wants to track those communications. They want a record of it. They want it to make sure it's compliant, and doing it all in a way where they can build some of the history of that customer. That's the opportunity that we're seeing with Frontline. Like you said, it's the very early days of that product, but we're very happy with the reception we've gotten so far from its early customers, the adoption and rollout, and so we're excited for where that's going to go. Thanks again. Congrats on the quarter. Your next question comes from the line of Rich Valera from Needham & Company. Your line is open. Thank you for taking the question. A question on the portion of your business that was adversely impacted by COVID. I think you included kind of rideshare, hospitality, and travel. Can you remind us kind of what percentage of the business that was coming into COVID and where that cohort is today relative to pre-COVID levels? Yeah. This is Khozema. I'll take the question. We hadn't broken out that percentage previously. It's relatively small. I think there was some investor concern around that back in Q1, and I think as the results showed back then, despite those industries being down, the results were still pretty strong. All that said, I would say that we are seeing some modest rebound in those industries, travel and hospitality in particular, and then ridesharing is still fairly well below pre-COVID-19. Less than 10% is actually what we said previously. Got it. Just a quick follow-up on, I want to talk about SIP trunking. There's been a lot of talk about providing voice into the Teams environment by some of the UCaaS vendors, and I know you guys have a SIP trunking product that can also do that. Just wanted to get your thoughts on the opportunity for SIP trunking broadly and maybe Microsoft Teams voice more specifically for you guys. This is Jeff. I'll take the question. SIP trunking is an exciting product category for us, where we've got a very flexible product. It works in many countries around the world via one interface, and also scales elastically. Unlike a lot of solutions where you have to pre-buy a fixed amount of capacity, our Elastic SIP Trunking product, that's what we call it, is called that for a reason, in that it can scale up and down based on customers' needs in real time. That works really well in cloud environments, as opposed to a fixed location where there's only a certain number of desks, let's say. In a cloud environment, you may need that burst capacity, burst up and down. That's why we've seen a lot of traction with our SIP trunking product, especially with ISVs who are building cloud-based software products. Also with enterprises who need to power, in a very flexible way, their workforce, whether it's a work from home environment, they need to reroute that stuff, or whether it's offices, but they need a lot of flexibility and elasticity to those deployments. That's where we see customers adopting SIP trunking. SIP trunking is a really nice business for us, and particularly because it gives us also a nice foot in the door for customers who aren't yet in the cloud, to sell them something that they do already consume for their on-prem installations, and then can often lead to them becoming interested in more Twilio's products. For example, maybe it leads to a contact center conversation down the line. That's where we think about the opportunity. Because SIP trunking is based on SIP standards, customers can plug our SIP trunking product into a wide variety of deployments, whether it is a cloud deployment, whether it is something on-prem. The SIP standards mean that we can interact with a wide variety of both hardware, software, and cloud-based solutions that the customers are buying. Great. Thank you for that. Congrats on the great results. Your next question comes from the line of Ryan Koontz from Rosenblatt Securities. Your line is open. Hi, thanks for the question. I wonder if you could spotlight your international go-to-market efforts. From my kind of limited perspective, I think you'd be hiring local feet on the ground or behind the screen with local contacts, targeting developers that are in-country. Are you using more of a channel approach where these are channel partners that have developers on staff to go after local companies, or are you using some of the bigger ISVs? I wonder if you could help us kind of understand a little bit. Thank you. Sure. Well, I think that the point on developers is spot on. Everything we do at Twilio starts with developers. It is really the source of our efficient go-to-market. It's the source of our entry point into customers. When we think about going into any market, whether it's domestic or international, we start with developers. Our developer evangelism team is a global team. We have events all around the world, whether they're some of the Engage events, this past year being virtual, of course. If you follow our developer evangelists, you'll see them not only physically in all these geographies, but also in all the digital channels that are relevant for developers all around the world. We certainly see our developers active and producing content and trying to reach developers in multiple places and languages. I think also we could do even a much better job of that. I think there's a huge greenfield opportunity for us to do even more with developers out there. Behind those efforts, we followed up with our account teams that work with our strategic customers as well as emerging customers in these markets. We've hired some fantastic leadership, both prior to and as well as within 2020, and that's helping to grow our major theaters, whether that be EMEA or Asia-Pacific or Latin America. We just see immense opportunity in all of them. That is the playbook for now. When you add in the partners, which is, I would say, even more nascent, probably, internationally, but still a strategy that we're investing in and following up on. I think that is a winning formula. Certainly that, of course, does leave room in the future for channel as well. That's our starting point. Great. Really helpful, George. Thank you. Is there a different competitive environment in these different regions you go into, or is it fairly homogenous? Well, I think that certainly every market is a little bit different, frankly. The dynamics are a little bit different. The thing that's consistent is the need for digital transformation, the energy and focus on the developer, and that plays well in all markets. That's where I think the point of consistency for us. Cool. Thanks a lot, guys. Congrats on the quarter. Your next question comes from the line of Alex Kurtz from KeyBanc Capital Markets. Your line is open. Yeah. Thanks for taking the question. Jeff, if we were to look at your international business and the opportunity there to be a multi-year growth driver, what's the biggest one or two levers that you could pull, whether it's investments this year for next year or maybe there's something happening right now with your developer ecosystem that could really accelerate it? Obviously it's a go-to-market model that can reach every country, every region. Love to hear you frame that out. Absolutely. Thank you for the question, Alex. I think there's a lot of levers that we can pull, and we have been pulling. I think number one is the go-to-market investments that George and team have been making to grow our presence abroad, including hiring great leaders for the theaters, which we have. Very proud of the progress we've been making on the go-to-market front. The second thing I would say is product, and continuing to grow our product presence in all these places. Obviously, we serve customers all around the world who need to talk to their customers all around the world, so we have a very naturally global product just out of the gate. Continuing to invest in those products to make them even better for the local audience is something that we've continued to do for many years, including things like adopting other channels, like our investment in WhatsApp as a channel that enables customers to communicate with their end users over WhatsApp instead of, say, SMS. That's a great unlocker of global market as well, and we're very pleased with the progress we've been making with WhatsApp as a channel, as a lever to grow our international presence. Thank you. Your next question comes from the line of Patrick Walravens from JMP Securities. Your line is open. Oh, great. Thank you. Jeff, let me add my congratulations to Karyn Smith. Was my boss when I started out as a lawyer and was the most confident, organized boss I'd ever had. Here's my question for you. Most companies slow down as they get bigger, but that really doesn't seem to be the case with Twilio, like if you just look at your dollar-based net expansion rate. What's your secret? How are you maintaining that level of energy and drive as the company keeps getting bigger? Thank you for the question. Sorry, I missed that. Were you saying Karyn was your first boss? She was, yeah, at Cooley Godward. She was my boss. How funny is that. No way. That's hilarious. Sorry, I missed that. That's a hilarious anecdote. Your question, about maintaining momentum at scale. Well, I think first of all, thank you for the question, and I'm honored and flattered, but it's really about the team that we're building and it's about the market we're serving. The team that we're building, obviously having great leaders throughout the company and organizing ourselves into small teams, and each small team feels itself like a startup that's pursuing the opportunity to serve our customers. I think that small teams structure enables us to innovate and to continue to drive new products for our customers, and to truly keep our ear to the ground, to keep our teams close to customers. The second thing I would say is, it's great to operate in a very large market, because in a large market, there's so many opportunities to serve customers and so many directions you can take. That's closely related to our platform business model, which is, in a platform business model, we provide building blocks that customers can use to build a wide variety of things in their customer engagement journey. Based on that activity and what we hear customers coming to us and what they're building, they often show us unsolved business problems that they need solved because of the very nature of the fact that they're building on our APIs. That provides us some tremendous visibility into the big unsolved problems that our customers need solved, which then drive our roadmap further, and you get things like Frontline and Flex and a number of the other products that we've built in recent years. All in all, I think those things all come together to build what we call this generational opportunity. It's like those things come together, the platform business model, the team, the structure, and the ability for us to innovate and get those products out to customers. It's like if you got a Clydesdale, you want to gallop. That's what we're doing. Great. Thank you. Your final question this afternoon comes from the line of Ittai Kidron from Oppenheimer. Your line is open. Thanks. Made it. Couple questions, George. I wanted to dig in a little bit about the sales capacity. Clearly, you've expanded it quite substantially last year. Maybe you can talk about two things. First of all, how the productivity of the ramp is, and how consistent is it across the hired base? Second, from a customer standpoint, when you focus on the G2K, how is the starting point with them changing? Meaning, how many of them are still starting with one product versus thinking about you, right from the bat as a platform and thinking about you as a multiple use case, right as a starting point? Great questions. On the first one, I just think it really speaks to the size of our opportunity and the size of the market movement that we've seen very strong productivity even as we've invested in our sales capacity. Certainly, we've made the normal or maybe even outsized investments in things like sales enablement and all those kind of things that you do as you try to scale sales force. I largely attribute it to, A, a great team and also, B, just a fantastic market that we're playing in. I couldn't be more thrilled with how our sales team is performing. It's a real fantastic result. In terms of the G2K adoption, I would say that we're making more progress in G2K. You've seen in the numbers. We're still starting with a lot of them through the developer. I think that it's unlikely we're going to abandon that, honestly. That is just the heart of what we do. A lot of times developers come in and they want to start with one product. They want to start with one use case, and honestly, we don't see a negative in that. We think that that is, frankly, our competitive advantage, and it leaves just a huge untapped opportunity for us going forward. Are there more enterprises that we're meeting with and saying, hey, we want to talk to you at a more strategic level, day one? Absolutely. I've had multiple of those conversations recently. I don't want to state that as like the new go-to-market core motion for us, because I think that the developer motion is so fruitful and so universal as some of the other people on the call have mentioned. Got it. Makes sense. Maybe a follow-up for you, Khozema, on the hiring side. You seem to be chasing your tail here, and you're not able to catch up. Needless to say, with the business growing so fast, I understand. I guess the question is, what is it that needs to be done internally to remove whatever bottleneck exists to finally catching up with your plans and what is the risk that you not being able to catch up with your plans at some point catches up with your growth trajectory? I don't think there's an internal issue, and I don't think there's actually a lot that we have to do internally to necessarily solve it. Obviously, we had to contend with the global pandemic last year, right? That was hard, and just in terms of navigating the dynamics around hiring and stuff like that. I think we'll catch it up more or less, through the first three quarters of this year, and then I think we'll be back on track. I'm not particularly worried about it, Ittai. Very good. Again, congrats guys. Great quarter and keep it up. Thanks. That concludes Q&A today and also concludes today's conference call. Thank you everybody for joining. You may now disconnect.