Good day, and thank you for standing by. Welcome to the Twilio Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during your session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bryan Vanaman, Senior Vice President of Investor Relations and Corporate Development. Please go ahead. Good afternoon, everyone, and thank you for joining us for Twilio's Second Quarter 2025 Earnings Conference Call. Joining me today are Khozema Shipchandler, Chief Executive Officer, Aidan Viggiano, Chief Financial Officer, and Thomas Wyatt, Chief Revenue Officer. As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings presentation posted on our IR website at investors.twilio.com. We will also make forward-looking statements on this call, including statements about our future outlook and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent Form 10-K and our forthcoming Form 10-Q. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements except as required by law. With that, I'll hand it over to Khozema and Aidan, who will discuss our Q2 results and will then open the call for Q&A. Thank you, Brian. Good afternoon, everyone, and thank you for joining us today. Twilio had a strong Q2, reaching over $1.2 billion in revenue and achieving another quarter of double-digit revenue growth and year-over-year growth acceleration. We also delivered another record quarter of both non-GAAP income from operations and free cash flow. Q2 marked an important milestone as our Segment business delivered non-GAAP income from operations for the first time, surpassing our Q2 break-even target that we established early last year. Our strong performance this quarter reflects our continued progress in driving greater operating efficiencies, our focused product-led innovation, and solid commercial execution. In Q2, we delivered a fourth consecutive quarter of accelerating messaging growth, as well as double-digit voice growth. We are demonstrating not just our market-leading scale in our core communications market, but also our pace of innovation, which is allowing us to take share. This is also evident across our go-to-market levers, as self-serve ISVs, international, and communications software add-ons each delivered double-digit revenue growth. Our multi-product customer count also grew double digits. During the quarter, we had several notable wins, including Centerfield, Henry Schein One, JustFab, Manus AI, Nooks AI, the Phoenix Suns, and Postscript. We also had another great quarter of large deal activity with ISV and technology customers. In fact, in communications, the number of large deals closed of $500,000 or more increased 57% year-over-year. This momentum is reflected in our dollar-based net expansion rate of 108% in Q2, our best rate in over two years. In self-serve, our voice channel was a bright spot, driven by a variety of factors, notably the surge in voice AI startups who are building on Twilio. In May, we held our annual user conference, Signal, bringing together nearly a thousand attendees in San Francisco for a preview of our next-generation customer engagement platform. During the event, I had the opportunity to engage with many of our customers and heard countless stories of how Twilio continues to bring more ROI to businesses. It was evident that the power of combining communications plus contextual data plus AI through our product innovations and platform is driving meaningful value for brands, and that Twilio is increasingly becoming the infrastructure layer for customer interactions. Twilio is not just a company of and for builders, but a company that our customers can build their businesses on for years to come as they navigate AI and every other technological evolution they will encounter. At Signal, we also showcase new products designed to help brands create modern, intelligent customer experiences, all built on the Twilio platform and tailored to meet customers wherever they are in their journey. We announced the general availability of Conversation Relay, which empowers developers to create robust natural voice AI agents using their choice of LLM. More importantly, it is the first step toward realizing our vision of powering context-aware virtual agents across every Twilio conversation channel. Conversation Relay is generating a lot of customer interest, and during its first quarter of general availability, we completed nearly 1 million calls. As an example, in Q2, we signed a Conversation Relay deal with a leading fintech company that will leverage Conversation Relay to automate their three most common customer care requests: credit limit inquiries, card tracking, and installment payments. Within two weeks, they validated the solution and began scaling to production, demonstrating both the speed and impact of Twilio's AI-powered automation. We're powering innovation for both enterprises and the newest AI startups with our scalable and trusted communications infrastructure, orchestration, and observability. True to our roots, these features are as extensible and configurable as any other part of the Twilio stack, something customers value when much of the conversational AI ecosystem is focused on black-box solutions, vendor lock-in, and extensive professional services integrations. We also announced that Conversational Intelligence, already generally available for voice, now supports messaging conversations in private beta. It has already seen an 86% increase in account usage year-over-year. This powerful feature unifies conversational data across voice and messaging for human and AI agents, giving brands a cross-channel view of the customer. It highlights the value of previously inaccessible conversational and contextual data by equipping sales and CX teams with holistic insights from every touchpoint, allowing them to deliver seamless, personalized experiences which lead to a better relationship with brands. Conversational Intelligence also includes built-in AI agent observability, allowing brands to analyze AI agent interactions, customize call scoring, generate competitive intelligence, and detect customer intent through natural language understanding. We've also continued to innovate across our trusted core channels. A few weeks ago, WhatsApp Business Calling via Programmable Voice became generally available, enabling businesses to engage directly with consumers on WhatsApp through a single, seamless conversation, whether via messaging or voice. We're also seeing momentum with RCS adoption currently available in select markets, with a full GA in the coming months. RCS is already delivering strong results, transforming standard notifications into trusted and branded communications. One of Twilio's longtime customers, Fresha, a leading booking platform for the beauty and wellness industry that facilitates over 700,000 appointments daily, adopted RCS with no code changes and saw an immediate, measurable impact. With Twilio, Fresha achieved a 99.2% message delivery rate and saw a 41% read rate, with RCS messages achieving a 6% increase in appointment confirmations and a 7% uplift in customer reviews. With Twilio's Segment, we announced event-triggered journeys at Signal, and the feature officially went live just a few weeks ago. Now, journeys will create rich contextual payloads that combine information from not only the triggering events, but also from the data stored in the warehouse and everything in the Segment customer profile. For example, when an online shopper has abandoned their cart, a business can see exactly which items are in the cart and all their key details, like name, price, size, color, image, and if that customer is a loyalty member with rewards points they can use towards their purchase. With event-triggered journeys, Twilio's Segment creates a complete view of the customer, allowing brands to respond dynamically to moments that matter, whether it's an abandoned cart, a missed form submission, or a key onboarding milestone. At Signal, we welcomed Microsoft's CEO, Satya Nadella, as part of our keynote to announce a multi-year strategic partnership between Twilio and Microsoft. The collaboration unlocks the potential for more than 10 million Twilio developers and thousands of Microsoft-managed customers to build the future of conversational AI. All of these enhanced capabilities are paramount for our customers. Twilio's 2025 State of Customer Engagement report recently found that 88% of consumers are more likely to buy when engagement is personalized, but 44% of brands struggle with executing at this level. This data illustrates the magnitude of the opportunity as companies are still figuring out how to evolve their customer experiences, especially given the opportunities presented by generative AI. Twilio's platform delivers the set of tools and infrastructure businesses need to modernize and help brands ultimately deliver personalization at scale to drive more ROI. Our commitment to delivering enhanced product innovation and customer value is also continuing to get recognition and reinforces the power of the Twilio platform and our leadership in the market. Recently, Gartner named Twilio a leader in the CPaaS Magic Quadrant for the third consecutive year and number one in three of the five use cases in the CPaaS Critical Capabilities Report. Omdia named Twilio a CPaaS Universe leader. I'm very pleased with the hard work of our team, and today's results underscore the strength of the Twilio platform and the progress we've made as a company. I'd like to turn it over to Aidan, who will walk you through our financial results. Thank you, Khozema, and good afternoon, everyone. Twilio had a strong second quarter, delivering our fourth consecutive quarter of double-digit revenue growth and year-over-year growth acceleration. For Q2, we generated record revenue of $1.228 billion, up 13% year-over-year, both on a reported basis and an organic basis. We also generated record non-GAAP income from operations of $221 million and free cash flow of $263 million. Revenue in our communications business was $1.153 billion for the quarter, up 14% year-over-year. We've continued to drive accelerated levels of growth as we execute against a focused set of go-to-market initiatives across ISVs, self-serve, cross-sell, and international expansion. As Khozema mentioned, messaging revenue growth accelerated for the fourth consecutive quarter, while we generated double-digit voice revenue growth for the first time in two years. Strong uptake among AI startups in our self-serve business contributed to the acceleration in voice revenue growth. In early June, Verizon raised its A2P messaging fee rate, which contributed $6 million in incremental pass-through to our reported communications and total revenue for the quarter. Consistent with how we handled A2P messaging fees when they were first instituted by U.S. carriers, in order to provide a consistent comparison of the business's underlying growth rate, we exclude the revenue from these incremental A2P carrier fees when calculating our organic revenue growth until we have lapped the comparative period. As a reminder, we passed these fees through at 0% gross margin. Segment revenue for the quarter was $75 million flat year-over-year. Our Q2 dollar-based net expansion rate was 108%, reflecting the improving growth trends we've seen in our communications business over the last several quarters. Our DBNE rate for communications was 109%, and the DBNE rate for Segment was 95%. Pass-through revenue from incremental carrier fees contributed roughly 60 basis points to both total and communications DBNE in the quarter. We delivered non-GAAP gross profit of $623 million, up 8% year-over-year. This represented a non-GAAP gross margin of 50.7%, down 260 basis points year-over-year and 60 basis points quarter-over-quarter. As Khozema mentioned, we are taking share in our core communications market, led by accelerating messaging and voice growth. We saw our messaging revenue mix increase by 260 basis points year-over-year, which was the primary driver of our gross margin decline in Q2. The balance of the gross margin decline was driven by the $6 million of increased carrier fees and FX, given our international carrier costs are paid in local currency. Our revenue was not materially impacted by FX, as we bill primarily in U.S. dollars. We're taking steps to stabilize and improve gross margins, including both price and cost actions. We have announced price increases in both messaging and voice in the U.S., and we're also investing at the platform level to ensure we're delivering our services efficiently. Notably, we continue to generate strong growth in both non-GAAP income from operations and free cash flow. Excluding the impact of carrier fees, we would expect our pricing and cost actions, as well as our continued growth in our higher margin products, to help stabilize gross margins over the near term. Non-GAAP gross margin for communications was 49.2%, and non-GAAP gross margins for Segment were 74.3%. Non-GAAP income from operations came in ahead of expectations at a record $221 million, up 26% year-over-year, driven by strong revenue growth and ongoing cost discipline. Our non-GAAP operating margin of 18% was up 180 basis points year-over-year and down 20 basis points quarter-over-quarter. The sequential decline was due to anticipated costs incurred from our annual merit increases, along with expenses for our Signal conference. In addition, we generated $37 million in GAAP income from operations, our third consecutive quarter of GAAP operating profitability. Non-GAAP income from operations for communications was $281 million. Non-GAAP income from operations for Segment was $6 million, which exceeded our break-even target originally introduced in March 2024. Earlier this year, we realigned our business unit structure into a functional support model, and we continue to integrate Segment with our communications capabilities to deliver one trusted, smart, and integrated platform. Because of this, beginning in the third quarter, we no longer plan to disclose our results by business unit. Stock-based compensation as a percentage of revenue was 12.1%, up 30 basis points quarter-over-quarter and down 150 basis points year-over-year. As we noted on our Q1 earnings call, the modest sequential increase in stock-based compensation is due to the timing of our annual refresh grants during the second quarter. We generated record free cash flow of $263 million in the quarter. Additionally, we purchased $177 million of shares in the second quarter, bringing our year-to-date share repurchases to $307 million through the end of Q2. Moving to guidance. For Q3, we're initiating a revenue target of $1.245 billion- $1.255 billion, representing 8%- 9% organic growth and 10%- 11% reported growth. Based on our first half performance and Q3 guidance, we're raising our full-year 2025 organic revenue growth guidance to a range of 9%- 10%, up from 7.5%- 8.5% previously. We're initiating a reported revenue growth range of 10%- 11%, which includes the contribution from incremental increases to carrier fees. Our revenue guidance assumes $20 million in pass-through revenue from incremental carrier fees in both Q3 and Q4. Turning to our profit outlook. For Q3, we expect non-GAAP income from operations of $205 million- $215 million. We are maintaining our full-year non-GAAP income from operations range of $850 million- $875 million, as we're taking the opportunity to make some accelerated R&D investments in response to strong customer demand in voice, RCS, and our AI offerings. Based on our strong cash generation during the first half of the year, we're raising our full-year free cash flow guidance to a range of $875 million- $900 million, up from $850 million- $875 million previously. I'm very pleased with the accelerated revenue growth we delivered in the second quarter, as well as our ongoing cost discipline that is driving strong profitability and free cash flow. We had a strong first half of the year, and we will continue to focus on what we can control as we seek to drive durable revenue growth and strong operating profit and free cash flow generation throughout 2025. With that, we'll now open it up to questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Meta Marshall of Morgan Stanley. Your line is now open. Great, thanks. This is Jamie on for Meta. I guess maybe just to start off, can you speak to the traction or where you're seeing the most traction with ISVs? Hi, this is Thomas Wyatt. Just to comment on that, we're seeing it across verticals, financial services, healthcare, professional services. What we're seeing is the use cases often start with messaging and from there adding second and third channels, whether it be voice or now more importantly with RCS. By the combination of that, the Twilio platform providing orchestration capabilities across that with some of our newer products like Conversational Intelligence allows our ISV customers to get a true representation of the level of engagement a consumer has with its brand. We're really encouraged by our ISV growth. It continues to grow above the company averages. Got it, thanks. Just as a quick follow-up, is there any impact from the price increase in the quarter? Not material, no. Great, thanks again. I'll jump back in queue. Thank you. Our next question comes from Jim Fish of Piper Sandler. Your line is now open. Yeah, thanks for the question, guys. I was going to start with a different one, but just given we brought up the price increase here, you implemented it here in the U.S. on the messaging side. Can you walk us through why now for a price increase and just making sure that this wasn't tied to, you know, the Verizon A2P increase and that this is actually incremental to that? I guess why now and making sure this isn't just, you know, a fee raised because your costs are getting raised as well? Hey, Jim, I'll start and then I'll hand it over to Thomas. I want to be clear that the price increase that we did in the U.S. for messaging was not tied to the A2P fee increase that came through from Verizon. Those two things are separate and distinct. I just wanted to make that clear. I'll hand it over to Thomas to talk about timing and why we felt it was prudent to do so. Yeah, raising the list price, particularly in North America for our messaging business, really reflects mainly on our self-service business, which is growing very fast. We think we have pricing power in that capability. We also think the pricing does help us with some of our enterprise deals as well over time, but they're on a bit different renewal contract timeline, so it'll be sort of a modest increase over time for them. Got it. Your customer additions have been really strong and even stronger than last quarter. I guess where are these customers coming from, though they seem to be coming in at a smaller rate? How much of it is tied towards that voice AI opportunity or AI opportunity generally? We're seeing broad strength coming in from our self-service channel. There's been a number of innovations that we've made in terms of reducing the friction of the onboarding and the setup for our self-service, which has really dramatically increased the conversion rate of free users into paid users that upgrade. In addition to that, we introduced a new service for our email customers only that moves it from free to more of a free trial type service, and that's added some additional. This is one of the strongest quarters we've had in years related to new customer acquisition, and we really had a strong new business in our enterprise segment quarter as well. Thank you. One moment for our next question. Our next question comes from Michael Turrin of Wells Fargo Securities. Your line is open. Hey, great. Thanks very much. I appreciate you taking the questions. I was just hoping, I mean, you gave a lot of useful breadcrumbs at the Investor Day a while back on some of these aspects, but I'd just be curious to get your updated view around the durability and drivers of growth profile you're delivering or guiding for double-digit organic growth at the high end for the full year now. The commentary around actions you're taking to deliver stabilization on the gross margin side, are those fairly immediate for us to consider when we're kind of updating models from here going forward, or is there time to impact for some of those for us to consider as we're rolling it all forward? Thanks very much. Sure. Hey, Michael, this is Khozema. I'll take both answers, and Aidan and Thomas can add to it as they want. I'd say on the growth side, we feel pretty good about it. Growth has been pretty durable across a number of different industries. Obviously, it's going to be a little bit harder in the back half just because of the compares, but I would say growth feels durable. We're obviously not guiding beyond the current period, but we felt pretty good about what we've experienced in the first half. I think we've seen resilience in a number of different areas. There's no one thing particularly to point to in terms of where that strength has come from. It's industry-based, it's customer-based, it's geo-based, and that all feels pretty good. In terms of gross margins, as Aidan pointed to in the context of the prepared remarks, we are seeing a little bit of a mixed dynamic there, and FX clipped us as well. Of course, you've got the Verizon fee thing. More to your question, we are taking some actions. Let me start on the pricing side. We already talked about some of the price increases that we've undertaken. As Thomas said, a lot of that will be geared towards what we experience on the self-serve side. To the extent that we have a lot more self-serve ads, you'd certainly see that faster. With respect to other customers, it's going to happen more in the context of their renewal cycles and stuff like that. That'll happen more modestly over time, I would say. On the cost side, there's also a number of actions that we're taking there as well. I would say they largely have to do with optimization of our platform and the way that the costs show up there so that we're using it more efficiently. I do think those things, as well as the fact that we've got a number of higher gross margin products that are growing very, very nicely, all of that will allow us to, in kind of the near term, stabilize gross margins, but over time for that to inflect up a bit. Maybe the one thing I'll add, Michael, just as it relates to the fees. We had one month of an impact of the new or the increased Verizon fees in Q2. We will have a full quarter effect of that in Q3 and Q4. All else being equal, we would expect it to be about $20 million of an impact in those quarters and roughly 50 basis points of a margin impact associated with that. Again, importantly, as it relates to those fees, we pass them through at 0% gross margin. It kind of grosses up our revenue, doesn't impact gross profit dollars, and it has no impact on our ability to generate profit dollars or free cash flow dollars going forward. Thank you. One moment for our next question. Our next question comes from Mark Murphy of JP Morgan. Your line is now open. Thank you so much. Khozema, we're witnessing some pretty incredible advancements in voice from the foundational AI model providers. Today was a good example with the GPT-5 demo session. Since they are the ones handling all the voice synthesis and the speech parts of the equation, can you just help us understand which parts of this voice AI wave do those companies want Twilio to handle? For instance, do they mostly want you to handle a phone call, or are they asking you to stream the audio to and from the bot, or routing calls? What is it that they're relying upon Twilio for? Good question, Mark. It's the full gamut, and it really depends a lot on the customer and their specific use case. At sort of the bare metal version, we're providing the voice infrastructure. They'll write on our rails, we'll provide the calling capabilities, and they'll provide some of the intelligence on top of that. In the most extreme example on the other side of it, you'd have our Conversation Relay product, which incorporates the voice activities, all of the voice intelligence that goes with that, the recording capability, the context awareness. Then you've got a lot of different things in between. For example, we talked about Conversational Intelligence that allows us to capture context from the different calls. Mark, it depends on the customer, really. I would say for some of the more AI-forward or AI-native companies, it tends to be more the voice infrastructure side. I think when it tends to be more enterprises or, let's say, more digitally native companies that are perhaps not AI-based, it tends to be our fuller stack, but it really runs in between. No matter what, obviously, we're incredibly excited about taking on those volumes. Voice overall is gross margin accretive for us, which I think is attractive, and getting it back to double digits, I think, is really important. Thank you, Khozema. As a quick follow-up, maybe for Thomas or Aidan, I did notice in the customer wins that RCS is being mentioned twice, and you know, I understand a lot of it's probably earlier in a pilot phase, but are you seeing anything there that would cause you to think that messaging customers are going to expand toward RCS maybe a little faster than you expected? We're definitely encouraged with the trends that we've seen around RCS adoption, particularly this past quarter. A lot of our ISV customers are beginning to add a bit of their percentage of their traffic over to the RCS channel, and they're getting really excellent results. We talked about a little bit of that in the prepared remarks with Fresha. I think we're still in the early innings, but we believe that the holiday season coming up will be a really great proof point for RCS because the deliverability, the read receipts, the branded capabilities stand out compared to SMS. Thank you. Thank you. Our next question comes from Taylor McGuinness of UBS. Your line is now open. Yeah, hi, thanks so much for taking my question. Just maybe on the revenue outlook for this year. If I look at the implied organic guide, it looks like at the high end, it implies growth around 7% for 4Q compared to the 8%- 9% in 3Q. I know that there's a bit of a tougher compare as we get into 4Q. I guess anything to flag, right, in terms of potential opportunities that might be incremental in 4Q versus 3Q, and then how to think about that tougher compare and seasonality as well too. Thanks so much. Hey, Taylor. Yeah, I think you hit on the key point there. I'd say we're really pleased with how we started the year. We've delivered four consecutive quarters of accelerating double-digit growth. That feels really good. I think as we've talked about, it's pretty broad-based in terms of where we're seeing it come from, in terms of the go-to-market channels, in terms of the products, in particular, messaging and voice, in terms of the regions, et cetera. As we think about the second half of the year, we do have tougher comparisons. As a reminder, we did have some messaging headwinds, in particular, political traffic in the third quarter and fourth quarter of last year. We also had some improving go-to-market performance along with the new platform innovations that we introduced last year, like the deliverability dashboard that helped customers remediate messaging errors. Those two things create a bit of a tougher comparison for messaging as we face into the second half of the year. We feel really good about the momentum we've had to date, again, around self-serve, cross-sell ISVs, international. We think that we believe that that'll help us generate durable, profitable growth over the course of this year and into next year. Great, thank you so much. Thank you. Our next question comes from Alex Zukin of Wolfe Research. Your line is open. Yeah, hey guys, thanks for taking the question. Just maybe a quick two-parter for me. Khozema, maybe on voice first, kind of how did it perform relative to your expectations in the quarter? As we think about that channel and the volume that you're seeing from it, kind of how do we think about the aspiration for how it can contribute to kind of both top-line growth over the course of maybe the next two quarters, but even beyond that? Then maybe on the gross margin side, we're talking about kind of sustainability or stability, if you will. If we just do kind of like an almost non-GAAP adjustment for gross margins from an FX and from an A2P perspective, what was the actual kind of sequential degradation on that basis? How do we think about the kind of longer trajectory when you start layering in tailwinds from voice? Let me start on the first, and I'll let Aidan give you some of the math on the gross margin adjustment. As it relates to voice, I would say it's performing really well. I think we've talked a little bit about our expectations about a voice renaissance, particularly behind a lot of the voice AI use cases that you're seeing. I think the early indication is that we're starting to see some of that. A lot of the voice volumes that we're seeing are really being built on demand from voice AI type customers, but they're also coming from a lot of other customers, which is also encouraging. We've launched a number of products recently as well, like Conversation Relay, Conversational Intelligence, that also help add to the mix in terms of why voice is an important channel and how it's being used. Obviously, just as it relates to the broader environment, voice is being heavily utilized in a variety of AI-based use cases. I think that gives us a lot of encouragement in terms of the way that it's been performing, the way that it contributes. The hard thing for us is obviously that the messaging business is still extremely large. It tends to be, it has been forever the largest piece of the business, and it continues to grow at very, very fast rates. The fact that growth, relative to any product, eclipses the growth rate of any other, it's always going to impact our margin mix. All the same, given the performance in voice, that'll have some uplift, and over time, I think it'll start contributing. Hey, Alex, I'll comment a bit. Actually, just to Khozema's point on the messaging mix, we included a page in our presentation that shows messaging's kind of mix as a percentage of total Twilio revenue. You can see how that has increased as that business has grown faster than the overall company. You can see that would have a negative mix effect. To answer your question, which was sequentially, how do we think about non-GAAP gross margins adjusting for fees and FX, it would have been roughly flat quarter-over-quarter relative to Q1. The fees were roughly 30 basis points of a headwind in Q2, and the balance, there was some mix in there as well, but actually FX made up most of the balance, so roughly flat quarter-over-quarter. Flat's the new up, guys. Thank you. Thank you. Thanks. Our next question comes from Joshua Riley of Needham. Your line is open. All right, thanks for taking my questions. How are you thinking about the balance of market share growth for messaging in international markets relative to the pricing considerations there and the lower gross margin versus the U.S. business? How much did maybe outperformance in international messaging impact the Q2 messaging gross margin? Maybe I kind of want to start with the gross margin piece. We don't break out messaging in particular, but the company, let me just give you a little bit more color on gross margin. For the year, year- over-y ear in Q2, we were down 260 basis points. Messaging increased almost 3% year- over- year as a percentage of our total revenue. That alone had a 150 basis point impact on the company, just the fact that it mixed higher. You had, if you listen to my prior answer, the fees and the FX, which really made up the difference in terms of the year-over-year walk. Those were primarily what drove the gross margin decline year-over-year. I'll kick back over to Thomas to talk about the internationals. Yeah, just from a go-to-market perspective in general, we're looking at messaging and voice and trying to consider the full balance because in practice, a lot of our customers, we're really trying to drive more of a cross-sell, multi-product type of adoption. Oftentimes, customers land with messaging and then add voice. We've seen that acceleration, particularly in the last couple of quarters, just taking self-service globally, for example. Voice has been the fastest channel of growth for us. As we talked about in Investor Day, 63% of our enterprise customers started in voice or, sorry, started in self-service. We see that trend continuing, and we want to grow market share as much as possible to continue to build that platform layer and deliver orchestration. Sometimes it's easier to land internationally in messaging and then add voice in other channels as we go. We've seen really good growth in international in the last couple of quarters. Awesome. Just a quick follow-up on the product development and AI. How are you prioritizing product investments relative to the efficiency that you need for the 2027 financial targets that you put out there? Just to make sure I understand your question, you're asking how are we prioritizing R&D investments as it relates to our op margin targets, i.e., are we attempting to be more efficient on that line? Yes, exactly. Just given that there's all these incremental opportunities for AI product development, was that factored into the financial target for 2027? Yeah, I mean, I'd say by and large, yes. Obviously, we have a framework out there. I'm not going to necessarily provide updates on that one way or the other, but I think what we talked about in the context of the current call is that in the short term, we saw an opportunity to put a little bit more emphasis on R&D dollars to be able to accelerate our growth. I think the results of which have been in the current year that we've been able to take up our cash flow and profitability guidance pretty consistently over a period of time. Obviously, revenue has gone up as well. I think so long as the investments that we make support our ongoing ability to generate free cash flow, we'll look at that balance very carefully. I don't see anything that's in there that gives me cause for concern. Awesome. Thank you. Thank you. Our next question comes from Siti Panigrahi of Mizuho. Your line is now open. Oh, great. Thank you. Khozema, I have a high-level question on AI. If you look at 2021 and 2022, you know, the opportunity from COVID for Twilio, just like a billion-dollar revenue you are adding every year. When you look at agentic AI or even voice AI opportunity, all that, how big that could be, you know, and over what timeframe? Do you think this is more like multiple of that opportunity over a longer timeframe, or any color would be helpful? I think that it's hard for me to kind of put dollar figures to it specifically, but I think what it is is going to be materially TAM expansive. I think that every single AI capability that gets added, it's beneficial to Twilio fundamentally. I'll start at the bottom. I think every one of these companies that we're seeing, for the most part, they attach themselves to Twilio just given our brand, our performance, and we're a very attractive entry point, as Thomas alluded to a moment ago, in terms of self-serve, which is where a lot of these, if not the majority of these customers, end up starting. I think if you look at the opposite end of the spectrum, so perhaps enterprises, I think enterprises as well, as they start to figure out what it is that they're going to do with AI, in so many different cases, they're either turning to Twilio or turning to partners of Twilio, which is also additive ultimately to Twilio in terms of the size of the opportunity that we see going forward. I certainly think that AI has been a contributor in terms of the way that we've been growing the company over the last several quarters. I think it's been a tailwind for us. More importantly, it really positions us in the center of the AI value chain ultimately because we can be both an infrastructure provider as well as a full-stack solutions provider at the platform in which we're orchestrating channels, we're orchestrating context, and we're allowing our customers to be able to really personalize interactions. Just given the gamut of opportunities that I see, I think that it is really TAM expansive, and over time, it'll add material dollars to the top line. That's a helpful color. A quick follow-up, your voice is around 12% of revenue. If you think of SIP trunking, how big is that of the voice business? Yeah, we don't give the breakdown there. You know, we give the kind of breakdown of voice periodically. Voice infrastructure tends to be the contributor, and obviously, it's driving the margins of voice, and so you can take some signal from that, but we don't provide a breakdown beyond that. All right. Thank you. Thank you. Our next question comes from Arjun Bhatia of William Blair. Your line is now open. Yes, perfect. Thank you so much. Khozema, I think the incremental R&D investments certainly make sense, right, especially if you're seeing traction. I'm curious, though, like when you think about just breaking it down, where exactly those go? Is that just incremental engineers? Is that some infrastructure? What do you think it kind of adds from a product platform perspective that you don't have today? I think it's going to be predominantly in engineering. Obviously, we're all experiencing this huge AI opportunity that we spoke of just a moment ago in answer to some of the other questions. I think the customer reactions that we got at our Signal conference in the U.S., our Signal conference in Brazil, really speak to the size of the opportunity that our customers are talking to us about. This is kind of a once-in-a-generation technology paradigm, and you don't want to lose a step, obviously, when these things are happening. We're not going to make irresponsible investments. We're going to continue to generate strong operating profit dollars, strong cash flow. I think when opportunities like this come along, especially that are perhaps once in a generation, it is important to make sure that you stay ahead of them so that you can capture the fullness of the opportunity. What we're doing is not more complicated than that. Again, we're going to make responsible investments, but it's really behind AI, and it's going to be predominantly in engineering. If I could just add to that, Khozema, just from a customer's perspective, they're really pushing us continued acceleration around RCS and voice AI capabilities, and we're just seeing such a strong demand for that that any additional acceleration in the roadmap will benefit us over time. Okay, perfect. Understood. One of the other things that kind of stuck out from Signal, I think, was just the integration of customer profiles from Segment into the comms business along with the rest of your technology. I know you gave some kind of use steps on relaying and Conversational Intelligence earlier, but I'm curious how customers are responding to that integration of profiles. Is that something they're already taking advantage of? Is that something that's still up to time, and how might it kind of enrich the broader comms platform? Yeah, I mean, Thomas and I can both speak to it. I think from my perspective, every customer conversation I've had since the Signal event that we had in the U.S. has probably started with a conversation about Conversation Relay. That's customers asking about it, not me pitching it. I'd say that's pretty encouraging in terms of the kinds of things that they want to be able to do with our stack. That is by far the most integrated version that we've got, and it's kind of the most fully featured capability that we offer. Equally, we're seeing a lot of uptake with Conversational Intelligence, for example, different kinds of software add-ons that fundamentally utilize Segment capabilities, data capabilities that integrate with our communications. Those are in very high demand as well. Those are growing very nicely. I would say, in general, the combination of our data business with our communications business has been extremely well received by customers and, more importantly, is driving a lot of ROI for them. I'll just add an example. You know, this particular quarter, we had a leading fashion retailer that was expanding with us using Agent Copilot, and it's really the use cases enhancing agent productivity, reducing customer wait times, and ultimately reducing the number of seasonal hires the customer needed to bring on to handle peak periods. This is just an example of the Twilio architecture of being able to have a platform with multiple channels and driving personalization from Segment across every channel. We think that's a unique value proposition, and our customers are loving that. All right, perfect. Thank you so much. Thank you. Our next question comes from Patrick Walravans of Citizens Bank. Your line is open. Great. Thank you so much. Congratulations, you guys. Khozema, it's been almost five years since Twilio acquired Segment. I just thought, since you're not going to break it out anymore, maybe we could do just sort of a, how did the evolution of this space impact this business? Is it just that the CDP market really shifted towards data platforms like Snowflake and Databricks, or was it something else? What happened to that space? I think the original thesis for us when we bought Segment was that more intelligent communications were going to be the future of this company. I think, you know, putting aside some of the other developments that have happened in the broader CDP landscape, which are, frankly, in some ways, less the focus for us, the opportunity to be able to drive intelligent conversations, intelligent communications, highly personalized interactions between our customers and consumers, like that was always the goal when we bought the company. I think we're really starting to see the fruition of, you know, that original strategy. We've launched a number of different products that integrate the two capabilities natively in singular APIs. I think that's really exciting. It makes it easier for customers to adopt, obviously. Every quarter, we've added increasingly richer capabilities so that our customers in the context of communications can use contextual data to be able to derive, you know, richer and richer understanding of what their consumers are doing to be able to drive higher personalization. I'd say, again, putting aside what's happened in sort of the broader CDP, the strategy of the company had been to fundamentally integrate a CDP into the communications business, and that's what we've done. I think based on the traction that we're seeing with it, that's really exciting. Awesome. Right. Aidan, if I could ask a follow-up, you commented in your prepared remarks that for the gross margins, we are investing at the platform level to ensure we're delivering our services efficiently. That caught my attention. What are those investments? Let me give you an example. For our email platform, for example, or email product, we're in the process of migrating off of legacy data centers to cloud. That takes a little bit of time. That probably takes several quarters, and there's a period of time in which you have a double bubble of cost. We did this with Segment, actually, in 2024, if you recall. We're in the process of doing the same thing for email. Again, a little bit of cost and margin headwind in the short term, but it's the right long-term play. That's an example of something that would fall into that bucket. The other things we're doing, like on the messaging side, we're looking to establish more direct connections. That's something that we're kind of continuously doing as we operate around the world. We're also leveraging our balance sheet where it makes sense to do so in terms of prepaying carriers to secure better pricing. A number of different things, but that just gives you some examples, Pat. Awesome. Thank you both. Thank you. Our next question comes from Jackson Ader of KeyBanc Capital Markets. Your line is now open. Thanks for taking our questions, guys. Good evening. On the AI voice piece, is this a separate competitive environment from the rest of your business? Are you competing more on your like-for-like capabilities with point solutions in that area? Not as much as you might think. I mean, clearly, there are a ton of voice AI vertical companies that are out there. I'd say in so many of those instances, we shared some stats at our Investor Day, like some really, really compellingly high stats that so many of those companies are building on our infrastructure. In the first instance, that's pretty compelling. I think the tricky thing is that for a lot of companies that you might think we would end up competing with, our ability to use our CDP, this kind of goes to the prior question as well, our ability to use our CDP to be able to drive context inside of those interactions, as you've got voice-to-voice or agent-to-human, whatever the paradigm is, in terms of those interactions, I think that gives us a bit of a leg up. If a customer comes to us and says, "Hey, look, we've already got an LLM that we've got credits with. We want to be able to integrate that with you guys," we are open season on that, and we certainly support a wide variety of different LLMs that we will integrate to rapidly. If they want to go in the opposite direction, which we're seeing a lot of too, like with Conversation Relay, for example, we'll support that all day long as well. It really kind of runs the gamut. It's a pretty exciting time, Jackson. Maybe a stat to give you: we have a number of different AI startups that were founded in just the last three years, spending over $1 million with us today. Our top 10 startups in that cohort have a blended gross margin of over 80%. There's a lot to be excited about here. Nice. Okay, quick follow-up on pricing. In a future state where hopefully your multi-product customers have a more cohesive contract structure, let's say, how do you view your ability to drive pricing maybe in that future? Thanks. I would say, I think in the short term, what we're trying to do is really grow into multiple products, right? I think just given the number of customers that we have today for which that opportunity exists, that's kind of our initial approach. The second thing is that as it relates to sort of the broader AI opportunity, that also presents a pretty compelling opportunity. Those two actions alone, because of the fact that they're gross margin accretive, I think will add accretion over time. You've got this messaging mix dynamics, which is kind of putting that aside, assuming that that was at level loaded, you'd see gross margin accretion just as a result of those things. As it relates to price on sort of the core stack, the reality is actually that we raise price periodically on list pretty regularly. It does take time, especially with some of our larger enterprise customers, for that to bleed through, but you see the more immediate impact in self-serve. Understood. Thank you. Thank you. Our next question comes from William Power of Baird. Your line is now open. Okay, great. Thanks. Maybe a follow-up first just on, you know, guidance and implications for the second half of the year. I may have missed this, but, you know, the messaging price increase, you know, it's occurring in the U.S. What kind of tailwind or impact does that have on guidance for the second half? You know, Khozema, in your prepared remarks, I think you talked about, you know, some real improvements in large, you know, deal traction year-over-year. I just wondered if, you know, there was anything else you could unpack there, any common factors, what's kind of helping, you know, drive that? Thanks. Maybe Thomas, do you want to speak to the large deal activity, and then I can pick up? Absolutely. The large deal activity has been one of the brighter spots of the business for the last few quarters, but I think this quarter in particular, it stood out with 57% growth in customers spending over $500,000 with us in the quarter. Just in general, this speaks to the nature of a lot more of our platform selling, cross-selling motion, where oftentimes customers are landing with messaging, increasing their volume, and then we're seeing them add more software capabilities on top of messaging. We had a really strong quarter with products like Verify and FraudGuard, for example. Of course, we've talked a lot about voice today. Importantly, the voice add-ons are doing quite well on top of the voice infrastructure components, which is critical. Those combinations together are allowing us to drive much larger deal sizes, and we're seeing that whether it's in our ISV business or whether it's in our direct business globally. On the pricing question, we don't anticipate it really having a material impact over the balance of the year. It's North America only, and it primarily affects our self-service customers, as Thomas mentioned. It will have a bit of an impact, but nothing material at the consolidated level. It will take some time to work its way through the renewal cycles with some of our bigger customers. Okay, thanks. Thank you. Our last question comes from Derrick Wood of TD Cowen. Your line is now open. Great, thanks. Khozema, could you comment on the robo-call market? It seems like volumes are growing at a decent clip in the U.S. this year. Just how much of robo-call type use cases go through your voice business, and what's your approach to this market longer term, especially in the age of AI? Yeah, there are different kinds of robo-calling, obviously. The fraudulent stuff, we take really, really significant compliance measures to ensure that traffic does not run through our platform. As it relates to robo-calling more generally, I'd say it's not a big piece of what we ultimately do. What we're doing in large part is a lot of the voice infrastructure. If you want to call this robo-calling, there are instances in which there will be phone call notifications that happen when there are deliveries scheduled or notifications required about a specific expertise that's being delivered. I can think of a handful of examples off the top of my head that involve stuff like that. As it relates to AI, I would say that's not really the thing that creates the AI opportunity for us, meaning it's not robo-calls. It tends to be more sophisticated use cases that are around customer care or service. Obviously, inside of the company, we do some customer care stuff with our voice AI stack, and we also do some inbound sales prospecting with it. Understood. If I could squeeze one more in, there were a bunch of regulatory changes in a number of countries in recent months, including new sender ID registration rules and new KYC requirements. Just wondering, did things like this have any impact on your business, whether from a sales cycle or cost of sale perspective? Just anything to flag and potential disruption from regulatory changes like this or potential positive impact? Thank you. I think that, you know, over time, I would imagine that there's some positive benefits here. I think in the short term, the short answer is no. We don't see a lot of impact as a result of different regulatory changes. We're very proactive with regulators in effectively every market. We typically have pretty advanced notice. We're typically participating in the way in which a lot of this regulation gets shaped. Being the largest provider globally, regulators are often coming to us asking about, you know, what makes sense, what doesn't make sense, how do we protect the consumer. We're obviously in favor of anything that ultimately does end up protecting the consumer, just given that it protects the ecosystem more broadly. I would say short term, no impact. Longer term, probably a mild positive impact because it reinforces compliance in the ecosystem more broadly. Thank you. Thank you. This concludes the question and answer session. I would now like to turn it back over for closing remarks. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Good Day, and thank you for standing by. Welcome to the Twilio Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during your session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bryan Vanaman, Senior Vice President of Investor Relations and Corporate Development. Please go ahead. Good afternoon, everyone, and thank you for joining us for Twilio's second quarter 2025 earnings conference call. Joining me today are Khozema Shipchandler, Chief Executive Officer, Aidan Viggiano, Chief Financial Officer, and Thomas Wyatt, Chief Revenue Officer. As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings presentation posted on our IR website at investors.twilio.com. We will also make forward-looking statements on this call, including statements about our future outlook and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent Form 10-K and our forthcoming Form 10-Q. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements except as required by law. With that, I'll hand it over to Khozema and Aidan, who will discuss our Q2 results and will then open the call for Q&A. Thank you, Brian. Good afternoon, everyone, and thank you for joining us today. Twilio had a strong Q2, reaching over $1.2 billion in revenue and achieving another quarter of double-digit revenue growth and year-over-year growth acceleration. We also delivered another record quarter of both non-GAAP income from operations and free cash flow. Q2 marked an important milestone as our Segment business delivered non-GAAP income from operations for the first time, surpassing our Q2 break-even target that we established early last year. Our strong performance this quarter reflects our continued progress in driving greater operating efficiencies, our focused product-led innovation, and solid commercial execution. In Q2, we delivered a fourth consecutive quarter of accelerating messaging growth as well as double-digit voice growth. We are demonstrating not just our market-leading scale in our core communications market, but also our pace of innovation, which is allowing us to take share. This is also evident across our go-to-market levers as self-serve ISVs, international, and communication software add-ons each delivered double-digit revenue growth. Our multi-product customer count also grew double digits. During the quarter, we had several notable wins, including Centerfield, Henry Schein One, JustFab, Manus AI, Nooks AI, the Phoenix Suns, and Postscript. We also had another great quarter of large deal activity with ISV and technology customers. In fact, in communications, the number of large deals closed of $500,000 or more increased 57% year- over- year. This momentum is reflected in our dollar-based net expansion rate of 108% in Q2, our best rate in over two years. In self-serve, our voice channel was a bright spot, driven by a variety of factors, notably the surge in voice AI startups who are building on Twilio. In May, we held our annual user conference, Signal, bringing together nearly 1,000 attendees in San Francisco for a preview of our next-generation customer engagement platform. During the event, I had the opportunity to engage with many of our customers and heard countless stories of how Twilio continues to bring more ROI to businesses. It was evident that the power of combining communications plus contextual data plus AI through our product innovations and platform is driving meaningful value for brands, and that Twilio is increasingly becoming the infrastructure layer for customer interactions. Twilio is not just a company of and for builders, but a company that our customers can build their businesses on for years to come as they navigate AI and every other technological evolution they will encounter. At Signal, we also showcased new products designed to help brands create modern, intelligent customer experiences, all built on the Twilio platform and tailored to meet customers wherever they are in their journey. We announced the general availability of Conversation Relay, which empowers developers to create robust natural voice AI agents using their choice of LLM. More importantly, it is the first step toward realizing our vision of powering context-aware virtual agents across every Twilio conversation channel. Conversation Relay is generating a lot of customer interest, and during its first quarter of general availability, we completed nearly 1 million calls. As an example, in Q2, we signed a Conversation Relay deal with a leading fintech company that will leverage Conversation Relay to automate their three most common customer care requests: credit limit inquiries, card tracking, and installment payments. Within two weeks, they validated the solution and began scaling to production, demonstrating both the speed and impact of Twilio's AI-powered automation. We're powering innovation for both enterprises and the newest AI startups with our scalable and trusted communications infrastructure, orchestration, and observability. True to our roots, these features are as extensible and configurable as any other part of the Twilio stack, something customers value when much of the conversational AI ecosystem is focused on black-box solutions, vendor lock-in, and extensive professional services integrations. We also announced that Conversational Intelligence, already generally available for voice, now supports messaging conversations in private beta. It has already seen an 86% increase in account usage year-over-year. This powerful feature unifies conversational data across voice and messaging for human and AI agents, giving brands a cross-channel view of the customer. It highlights the value of previously inaccessible conversational and contextual data by equipping sales and CX teams with holistic insights from every touchpoint, allowing them to deliver seamless, personalized experiences which lead to a better relationship with brands. Conversational Intelligence also includes built-in AI agent observability, allowing brands to analyze AI agent interactions, customize call scoring, generate competitive intelligence, and detect customer intent through natural language understanding. We've also continued to innovate across our trusted core channels. A few weeks ago, WhatsApp Business Calling via Programmable Voice became generally available, enabling businesses to engage directly with consumers on WhatsApp through a single, seamless conversation, whether via messaging or voice. We're also seeing momentum with RCS adoption currently available in select markets, with a full GA in the coming months. RCS is already delivering strong results, transforming standard notifications into trusted and branded communications. One of Twilio's longtime customers, Fresha, a leading booking platform for the beauty and wellness industry that facilitates over 700,000 appointments daily, adopted RCS with no code changes and saw an immediate, measurable impact. With Twilio, Fresha achieved a 99.2% message delivery rate and saw a 41% read rate, with RCS messages achieving a 6% increase in appointment confirmations and a 7% uplift in customer reviews. With Twilio Segment, we announced event-triggered journeys at Signal, and the feature officially went live just a few weeks ago. Now, journeys will create rich contextual payloads that combine information from not only the triggering events, but also from the data stored in the warehouse and everything in the Segment customer profile. For example, when an online shopper has abandoned their cart, a business can see exactly which items are in the cart and all their key details, like name, price, size, color, image, and if that customer is a loyalty member with rewards points they can use towards their purchase. With event-triggered journeys, Twilio Segment creates a complete view of the customer, allowing brands to respond dynamically to moments that matter, whether it's an abandoned cart, a missed form submission, or a key onboarding milestone. At Signal, we welcomed Microsoft CEO Satya Nadella as part of our keynote to announce a multi-year strategic partnership between Twilio and Microsoft. The collaboration unlocks the potential for more than 10 million Twilio developers and thousands of Microsoft-managed customers to build the future of conversational AI. All of these enhanced capabilities are paramount for our customers. Twilio's 2025 State of Customer Engagement report recently found that 88% of consumers are more likely to buy when engagement is personalized, but 44% of brands struggle with executing at this level. This data illustrates the magnitude of the opportunity as companies are still figuring out how to evolve their customer experiences, especially given the opportunities presented by generative AI. Twilio's platform delivers the set of tools and infrastructure businesses need to modernize and help brands ultimately deliver personalization at scale to drive more ROI. Our commitment to delivering enhanced product innovation and customer value is also continuing to get recognition and reinforces the power of the Twilio platform and our leadership in the market. Recently, Gartner named Twilio a leader in the CPaaS Magic Quadrant for the third consecutive year and number one in three of the five use cases in the CPaaS Critical Capabilities report. Omdia named Twilio a CPaaS universe leader. I'm very pleased with the hard work of our team, and today's results underscore the strength of the Twilio platform and the progress we've made as a company. I'd like to turn it over to Aidan, who will walk you through our financial results. Thank you, Khozema, and good afternoon, everyone. Twilio had a strong second quarter, delivering our fourth consecutive quarter of double-digit revenue growth and year-over-year growth acceleration. For Q2, we generated record revenue of $1.228 billion, up 13% year- over- year, both on a reported basis and an organic basis. We also generated record non-GAAP income from operations of $221 million and free cash flow of $263 million. Revenue in our communications business was $1.153 billion for the quarter, up 14% year- over- year. We've continued to drive accelerated levels of growth as we execute against a focused set of go-to-market initiatives across ISVs, self-serve, cross-sell, and international expansion. As Khozema mentioned, messaging revenue growth accelerated for the fourth consecutive quarter, while we generated double-digit voice revenue growth for the first time in two years. Strong uptake among AI startups in our self-serve business contributed to the acceleration in voice revenue growth. In early June, Verizon raised its A2P messaging fee rate, which contributed $6 million in incremental pass-through to our reported communications and total revenue for the quarter. Consistent with how we handled A2P messaging fees when they were first instituted by U.S. carriers, in order to provide a consistent comparison of the business's underlying growth rate, we exclude the revenue from these incremental A2P carrier fees when calculating our organic revenue growth until we have lapped the comparative period. As a reminder, we pass these fees through at 0% gross margin. Segment revenue for the quarter was $75 million, flat year- over- year. Our Q2 dollar-based net expansion rate was 108%, reflecting the improving growth trends we've seen in our communications business over the last several quarters. Our DBNE rate for communications was 109%, and the DBNE rate for Segment was 95%. Pass-through revenue from incremental carrier fees contributed roughly 60 basis points to both total and communications DBNE in the quarter. We delivered non-GAAP gross profit of $623 million, up 8% year- over- year. This represented a non-GAAP gross margin of 50.7%, down 260 basis points year- over- year and 60 basis points quarter- over- quarter. As Khozema mentioned, we are taking share in our core communications market, led by accelerating messaging and voice growth. We saw our messaging revenue mix increase by 260 basis points year-over-year, which was the primary driver of our gross margin decline in Q2. The balance of the gross margin decline was driven by the $6 million of increased carrier fees and FX, given our international carrier costs are paid in local currency. Our revenue was not materially impacted by FX, as we bill primarily in U.S. dollars. We're taking steps to stabilize and improve gross margins, including both price and cost actions. We have announced price increases in both messaging and voice in the U.S., and we're also investing at the platform level to ensure we're delivering our services efficiently. Notably, we continue to generate strong growth in both non-GAAP income from operations and free cash flow. Excluding the impact of carrier fees, we would expect our pricing and cost actions, as well as our continued growth in our higher margin products, to help stabilize gross margins over the near term. Non-GAAP gross margin for communications was 49.2%, and non-GAAP gross margins for Segment were 74.3%. Non-GAAP income from operations came in ahead of expectations at a record $221 million, up 26% year- over- year, driven by strong revenue growth and ongoing cost discipline. Our non-GAAP operating margin of 18% was up 180 basis points year- over- year and down 20 basis points quarter- over- quarter. The sequential decline was due to anticipated costs incurred from our annual merit increases, along with expenses for our Signal conference. In addition, we generated $37 million in GAAP income from operations, our third consecutive quarter of GAAP operating profitability. Non-GAAP income from operations for communications was $281 million. Non-GAAP income from operations for Segment was $6 million, which exceeded our break-even target originally introduced in March 2024. Earlier this year, we realigned our business unit structure into a functional support model, and we continue to integrate Segment with our communications capabilities to deliver one trusted, smart, and integrated platform. Because of this, beginning in the third quarter, we no longer plan to disclose our results by business unit. Stock-based compensation as a percentage of revenue was 12.1%, up 30 basis points quarter-over-quarter and down 150 basis points year-over-year. As we noted on our Q1 earnings call, the modest sequential increase in stock-based compensation is due to the timing of our annual refresh grants during the second quarter. We generated record free cash flow of $263 million in the quarter. Additionally, we purchased $177 million of shares in the second quarter, bringing our year-to-date share repurchases to $307 million through the end of Q2. Moving to guidance. For Q3, we're initiating a revenue target of $1.245 billion- $1.255 billion, representing 8%- 9% organic growth and 10%- 11% reported growth. Based on our first half performance and Q3 guidance, we're raising our full-year 2025 organic revenue growth guidance to a range of 9%- 10%, up from 7.5%- 8.5% previously. We're initiating a reported revenue growth range of 10% - 11%, which includes the contribution from incremental increases to carrier fees. Our revenue guidance assumes $20 million in pass-through revenue from incremental carrier fees in both Q3 and Q4. Turning to our profit outlook. For Q3, we expect non-GAAP income from operations of $205 million- $215 million. We are maintaining our full-year non-GAAP income from operations range of $850 million- $875 million, as we're taking the opportunity to make some accelerated R&D investments in response to strong customer demand in voice, RCS, and our AI offerings. Based on our strong cash generation during the first half of the year, we're raising our full-year free cash flow guidance to a range of $875 million -$ 900 million, up from $850 million- $875 million previously. I'm very pleased with the accelerated revenue growth we delivered in the second quarter, as well as our ongoing cost discipline that is driving strong profitability and free cash flow. We had a strong first half of the year, and we will continue to focus on what we can control as we seek to drive durable revenue growth and strong operating profit and free cash flow generation throughout 2025. With that, we'll now open it up to questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Meta Marshall of Morgan Stanley. Your line is now open. Great, thanks. This is Jamie on for Meta. I guess maybe just to start off, can you speak to the traction or where you're seeing the most traction with ISVs? Hi, this is Thomas Wyatt. Just to comment on that, we're seeing it across verticals, financial services, healthcare, professional services. What we're seeing is the use cases often start with messaging and from there adding second and third channels, whether it be voice or now more importantly with RCS. By the combination of that, the Twilio platform providing orchestration capabilities across that with some of our newer products like Conversational Intelligence allows our ISV customers to get a true representation of the level of engagement a consumer has with its brand. We're really encouraged by our ISV growth. It continues to grow above the company averages. Got it, thanks. Just as a quick follow-up, is there any impact from the price increase in the quarter? Not material, no. Great, thanks again. I'll jump back in the queue. Thank you. Our next question comes from Jim Fish of Piper Sandler. Your line is now open. Yeah, thanks for the question, guys. I was going to start with a different one, but just given we brought up the price increase here, you implemented it here in the U.S. on the messaging side. Can you walk us through why now for a price increase and just making sure that this wasn't tied to, you know, the Verizon A2P increase and that this is actually incremental to that? I guess why now and making sure this isn't just, you know, a fee raise because your costs are getting raised as well? Hey, Jim, I'll start and then I'll hand it over to Thomas. I want to be clear that the price increase that we did in the U.S. for messaging was not tied to the A2P fee increase that came through from Verizon. Those two things are separate and distinct. I just wanted to make that clear. I'll hand it over to Thomas to talk about timing and why we felt it was prudent to do so. Yeah, the raising list price, particularly in North America for our messaging business, really reflects mainly on our self-service business, which is growing very fast. We think we have pricing power in that capability. We also think the pricing does help us with some of our enterprise deals as well over time, but they're on a bit different renewal contract timeline, so it'll be sort of a modest increase over time for them. Good. Your customer additions have been really strong and even stronger than last quarter. I guess where are these customers coming from, though they seem to be coming in at a smaller rate? How much of it is tied towards that voice AI opportunity or AI opportunity generally? We're seeing broad strength coming in from our self-service channel. There's been a number of innovations that we've made in terms of reducing the friction of the onboarding and the setup for our self-service, which has really dramatically increased the conversion rate of free users into paid users that upgrade. In addition to that, we introduced a new service for our email customers only that moves it from free to more of a trial, free trial type service, and that's added some additional. This is one of the strongest quarters we've had in years related to new customer acquisition, and we really had a strong new business in our enterprise segment quarter as well. Thank you. One moment for our next question. Our next question comes from Michael Turrin of Wells Fargo Securities. Your line is open. Hey, great. Thanks very much. I appreciate you taking the questions. I was just hoping, I mean, you gave a lot of useful breadcrumbs at the Investor Day a while back on some of these aspects, but I'd just be curious to get your updated view around the durability and drivers of growth profile you're delivering or guiding for double-digit organic growth at the high end for the full year now. The commentary around actions you're taking to deliver stabilization on the gross margin side, are those fairly immediate for us to consider when we're kind of updating models from here going forward, or is there time to impact for some of those for us to consider as we're rolling it all forward? Thanks very much. Sure. Hey, Michael, this is Khozema. I'll take both answers, and Aidan and Thomas can add to it as they want. I'd say on the growth side, we feel pretty good about it. Growth has been pretty durable across a number of different industries. Obviously, it's going to be a little bit harder in the back half just because of the compares, but I would say growth feels durable. We're obviously not guiding beyond the current period, but we've felt pretty good about what we've experienced in the first half. I think we've seen resilience in a number of different areas, so there's no one thing particularly to point to in terms of where that strength has come from. It's industry-based, it's customer-based, it's geo-based, and that all feels pretty good. In terms of gross margins, as Aidan pointed to in the context of the prepared remarks, we are seeing a little bit of a mixed dynamic there, and FX clipped us as well. Of course, you've got the Verizon fee thing. More to your question, we are taking some actions. Let me start on the pricing side. We already talked about some of the price increases that we've undertaken. As Thomas said, a lot of that will be geared towards what we experience on the self-serve side. To the extent that we have a lot more self-serve ads, you'd certainly see that faster. With respect to other customers, it's going to happen more in the context of their renewal cycles and stuff like that. That'll happen more modestly over time, I would say. On the cost side, there's also a number of actions that we're taking there as well. I would say they largely have to do with optimization of our platform and the way that the costs show up there so that we're using it more efficiently. I do think those things, as well as the fact that we've got a number of higher gross margin products that are growing very, very nicely, all of that will allow us to, in the near term, stabilize gross margins, but over time for that to inflect up a bit. Maybe the one thing I'll add, Michael, just as it relates to the fees. We had one month of an impact of the new or the increased Verizon fees in Q2. We will have a full quarter effect of that in Q3 and Q4. All else being equal, we would expect it to be about $20 million of an impact in those quarters and roughly 50 basis points of a margin impact associated with that. Again, importantly, as it relates to those fees, we pass them through at 0% gross margin. It kind of grosses up our revenue, doesn't impact gross profit dollars, and it has no impact on our ability to generate profit dollars or free cash flow dollars going forward. Thank you. One moment for our next question. Our next question comes from Mark Murphy of JP Morgan. Your line is now open. Thank you so much. Khozema, we're witnessing some pretty incredible advancements in voice from the foundational AI model providers. Today was a good example with the GPT-5 demo session. Since they are the ones handling all the voice synthesis and the speech parts of the equation, can you just help us understand which parts of this voice AI wave do those companies want Twilio to handle? For instance, do they mostly want you to handle a phone call, or are they asking you to stream the audio to and from the bot, or routing calls? What is it that they're relying upon Twilio for? Good question, Mark. It's the full gamut, and it really depends a lot on the customer and their specific use case. At sort of the bare metal version, we're providing the voice infrastructure. They'll ride on our rails, we'll provide the calling capabilities, and they'll provide some of the intelligence on top of that. In the most extreme example on the other side of it, you'd have our Conversation Relay product, which incorporates the voice activities, all of the voice intelligence that goes with that, the recording capability, the context awareness. Then you've got a lot of different things in between. For example, we talked about Conversational Intelligence that allows us to capture context from the different calls. Mark, it depends on the customer, really. For some of the more AI-forward or AI-native companies, it tends to be more the voice infrastructure side. I think when it tends to be more enterprises or, let's say, more digitally native companies that are perhaps not AI-based, it tends to be our fuller stack, but it really runs in between. No matter what, obviously, we're incredibly excited about taking on those volumes. Voice overall is gross margin accretive for us, which I think is attractive, and getting it back to double digits is really important. Thank you, Khozema. As a quick follow-up, maybe for Thomas or Aidan, I did notice in the customer wins that RCS is being mentioned twice, and I understand a lot of it's probably earlier in a pilot phase, but are you seeing anything there that would cause you to think that messaging customers are going to expand toward RCS maybe a little faster than you expected? We're definitely encouraged with the trends that we've seen around RCS adoption, particularly this past quarter. A lot of our ISV customers are beginning to add a bit of their percentage of their traffic over to the RCS channel, and they're getting really excellent results. We talked about a little bit of that in the prepared remarks with Fresha. I think we're still in the early innings of, but we believe that the holiday season coming up will be a really great proof point for RCS because the deliverability, the read receipts, the branded capabilities stand out compared to SMS. Thank you. Thank you. Our next question comes from Taylor McGuinness of UBS. Your line is now open. Yeah, hi. Thanks so much for taking my question. Just maybe on the revenue outlook for this year. If I look at the implied organic guide, it looks like at the high end, it implies growth around 7% for 4Q compared to the 8%- 9% in 3Q. I know that there's a bit of a tougher compare as we get into 4Q. I guess anything to flag in terms of potential opportunities that might be incremental in 4Q versus 3Q, and then how to think about that tougher compare and seasonality as well, too. Thanks so much. Hey, Taylor. Yeah, I think you hit on the key point there. I'd say we're really pleased with how we started the year. We've delivered four consecutive quarters of accelerating double-digit growth. That feels really good. I think as we talked about, it's pretty broad-based in terms of where we're seeing it come from, in terms of the go-to-market channels, in terms of the products, in particular, messaging and voice, in terms of the regions, etc. In terms of as we think about the second half of the year, we do have tougher comparisons. As a reminder, we did have some messaging headwinds, in particular, political traffic in the third quarter and fourth quarter of last year. We also had some improving go-to-market performance along with the new platform innovations that we introduced last year, like the deliverability dashboard that kind of helps customers remediate messaging. Those two things kind of create a bit of a tougher comparison for messaging as we face into the second half of the year. We feel really good about the momentum we've had to date, again, around self-serve, cross-sell ISVs internationally. We think that we believe that that'll help us generate durable, profitable growth over the course of this year and into next year. Great. Thank you so much. Thank you. Our next question comes from Alex Zukin of Wolfe Research. Your line is open. Yeah, hey, guys. Thanks for taking the question. Just maybe a quick two-parter for me. Khozema, maybe on voice first, kind of how did it perform relative to your expectations in the quarter? As we think about that channel and the volume that you're seeing from it, kind of how do we think about the aspiration for how it can contribute to kind of both top-line growth over the course of maybe the next two quarters, but even beyond that? Then maybe on the gross margin side, we're talking about kind of sustainability or stability, if you will. If we just do kind of like an almost non-GAAP adjustment for gross margins from an FX and from an A2P perspective, what was the actual kind of sequential degradation on that basis? How do we think about the kind of longer trajectory when you start layering in tailwinds from voice? Let me start on the first, and I'll let Aidan give you some of the math on the gross margin adjustment. As it relates to voice, I would say it's performing really well. I think we've talked a little bit about our expectations about a voice renaissance, particularly behind a lot of the voice AI use cases that you're seeing. I think the early indication is that we're starting to see some of that. A lot of the voice volumes that we're seeing are really being built on demand from voice AI type customers, but they're also coming from a lot of other customers, which is also encouraging. We've launched a number of products recently as well, like Conversation Relay and Conversational Intelligence, that also help add to the mix in terms of why voice is an important channel and how it's being used. Obviously, just as it relates to the broader environment, voice is being heavily utilized in a variety of AI-based use cases. I think that gives us a lot of encouragement in terms of the way that it's been performing, the way that it contributes. The hard thing for us is obviously that the messaging business is still extremely large. It tends to be, it has been forever the largest piece of the business, and it continues to grow at very, very fast rates. The fact that growth, relative to any product, eclipses the growth rate of any other, it's always going to impact our margin mix. All the same, given the performance in voice, that'll have some uplift, and over time, I think it'll start contributing. Hey, Alex. I'll comment a bit. Just to Khozema's point on the messaging mix, we actually included a page in our presentation that shows messaging's kind of mix as a percentage of total Twilio revenue. You can see how that has increased as that business has grown faster than the overall company. You can see that would have a negative mix effect. To answer your question, which was sequentially, how do we think about non-GAAP gross margins adjusting for fees and FX, it would have been roughly flat quarter-over-quarter relative to Q1. The fees were roughly 30 basis points of a headwind in Q2, and the balance, there was some mix in there as well, but actually, FX made up most of the balance, so roughly flat quarter-over-quarter. Flat's the new up, guys. Thank you. Thank you. Thanks. Our next question comes from Joshua Riley of Needham. Your line is open. All right. Thanks for taking my questions. How are you thinking about the balance of market share growth for messaging in international markets relative to the pricing considerations there and the lower gross margin versus the U.S. business? How much did maybe outperformance in international messaging impact the Q2 messaging gross margin? Maybe I kind of want to start with the gross margin piece. We don't bring up messaging in particular, but the company, let me just give you a little bit more color on gross margin. For the year, year-over-year in Q2, we were down 260 basis points. Messaging increased almost 3% year- over- year as a percentage of our total revenue. That alone had a 150 basis point impact on the company, just the fact that it mixed higher. You had, if you listen to my prior answer, the fees and the FX, which really made up the difference in terms of the year-over-year walk. Those were primarily what drove the gross margin decline year- over- year. I'll kick back over to Thomas to talk about the internationals. Just from a go-to-market perspective in general, we're looking at messaging and voice and trying to consider the full balance because in practice, a lot of our customers, we're really trying to drive more of a cross-sell multi-product type of adoption. Oftentimes, customers land with messaging and then add voice. We've seen that acceleration, particularly in the last couple of quarters. Taking self-service globally, for example, voice has been the fastest channel of growth for us. As we talked about in Investor Day, 63% of our enterprise customers started in voice or, sorry, started in self-service. We see that trend continuing, and we want to grow market share as much as possible to continue to build that platform layer and deliver orchestration. Sometimes it's easier to land internationally in messaging and then add voice in other channels as we go. We've seen really good growth in international in the last couple of quarters. Awesome. Just a quick follow-up on the product development and AI. How are you prioritizing product investments relative to the efficiency that you need for the 2027 financial targets that you put out there? Just to make sure I understand your question, you're asking how are we prioritizing R&D investments as it relates to our op margin targets, i.e., are we attempting to be more efficient on that line? Yes, exactly. Just given that there's all these incremental opportunities for AI product development, was that factored into the financial target for 2027? Yeah, I mean, I'd say by and large, yes. Obviously, we have a framework out there. I'm not going to necessarily provide updates on that one way or the other, but I think what we talked about in the context of the current call is that in the short term, we saw an opportunity to put a little bit more emphasis on R&D dollars to be able to accelerate our growth. I think the results of which have been in the current year that we've been able to take up our cash flow and profitability guidance pretty consistently over a period of time. Obviously, revenue has gone up as well. I think so long as the investments that we make support our ongoing ability to generate free cash flow, we'll look at that balance very carefully. I don't see anything that's in there that gives me cause for concern. Awesome. Thank you. Thank you. Our next question comes from Siti Panigrahi of Mizuho. Your line is now open. Oh, great. Thank you. Khozema, I have a high-level question on AI. If you look at 2021 and 2022, you know, the opportunity from COVID for Twilio, just like a billion-dollar revenue you are adding every year. When you look at agentic AI or even voice AI opportunity, all that, how big that could be, you know, and over what timeframe? Do you think this is more like multiple of that opportunity over a longer timeframe, or any color would be helpful? I think that it's hard for me to kind of put dollar figures to it specifically, but I think what it is is going to be materially TAM expansive. I think that every single AI capability that gets added is beneficial to Twilio fundamentally. I'll start at the bottom. I think every one of these companies that we're seeing, for the most part, attaches themselves to Twilio just given our brand, our performance, and we're a very attractive entry point, as Thomas alluded to a moment ago, in terms of self-serve, which is where a lot of these, if not the majority of these customers, end up starting. If you look at the opposite end of the spectrum, so perhaps enterprises, I think enterprises as well, as they start to figure out what it is that they're going to do with AI, in so many different cases, they're either turning to Twilio or turning to partners of Twilio, which is also additive ultimately to Twilio in terms of the size of the opportunity that we see going forward. I certainly think that AI has been a contributor in terms of the way that we've been growing the company over the last several quarters. It's been a tailwind for us. More importantly, it really positions us in the center of the AI value chain ultimately because we can be both an infrastructure provider as well as a full-stack solutions provider at the platform in which we're orchestrating channels, we're orchestrating context, and we're allowing our customers to be able to really personalize interactions. Just given the gamut of opportunities that I see, I think that it is really TAM expansive, and over time, it'll add material dollars to the top line. That's a helpful color. A quick follow-up, your voice is around 12% of revenue. If you think of SIP trunking, how big is that of the voice business? Yeah, we don't give the breakdown there. You know, we give the kind of breakdown of voice periodically. Voice infrastructure tends to be the contributor, and obviously, it's driving the margins of voice, and you can take some signal from that, but we don't provide a breakdown beyond that. All right. Thank you. Thank you. Our next question comes from Arjun Bhatia of William Blair. Your line is now open. Yes. Perfect. Thank you so much. Khozema, I think the incremental R&D investments certainly make sense, right, especially if you're seeing traction. I'm curious, though, if you think about just breaking it down of where exactly those go, is that just incremental engineers? Is that some infrastructure? What do you think it kind of adds from a product platform perspective that you don't have today? I think it's going to be predominantly in engineering. Obviously, we're all experiencing this huge AI opportunity that we spoke of just a moment ago in answer to some of the other questions. I think the customer reactions that we got at our Signal conference in the U.S., our Signal conference in Brazil, really speak to the size of the opportunity that our customers are talking to us about. This is kind of a once-in-a-generation technology paradigm, and you don't want to lose a step, obviously, when these things are happening. We're not going to make irresponsible investments. We're going to continue to generate strong operating profit dollars, strong cash flow. I think when opportunities like this come along, especially that are perhaps once in a generation, it is important to make sure that you stay ahead of them so that you can capture the fullness of the opportunity. What we're doing is not more complicated than that. Again, we're going to make responsible investments, but it's really behind AI, and it's going to be predominantly in engineering. If I could just add to that, Khozema, just from a customer's perspective, they're really pushing us for continued acceleration around RCS and voice AI capabilities, and we're just seeing such a strong demand for that that any additional acceleration in the roadmap will benefit us over time. Okay, perfect. Understood. One of the other things that kind of stuck out from Signal, I think, was just the integration of customer profiles from Segment into the comms business along with the rest of your technology. I know you gave some kind of use steps on relaying and Conversational Intelligence earlier, but I'm curious how customers are responding to that integration of profiles. Is that something they're already taking advantage of? Is that something that's still to come, and how might it kind of enrich the broader comms platform? Yeah, I mean, Thomas and I can both speak to it. I think from my perspective, every customer conversation I've had since the Signal event that we had in the U.S. has probably started with a conversation about Conversation Relay. That's customers asking about it, not me pitching it. I'd say that's pretty encouraging in terms of the kinds of things that they want to be able to do with our stack. That is by far the most integrated version that we've got, and it's kind of the most fully featured capability that we offer. Equally, we're seeing a lot of uptake with Conversational Intelligence, for example, different kinds of software add-ons that fundamentally utilize Segment capabilities, data capabilities that integrate with our communications. Those are in very high demand as well. Those are growing very nicely. I would say, in general, the combination of our data business with our communications business has been extremely well received by customers and, more importantly, is driving a lot of ROI for them. I'll just add an example. You know, this particular quarter, we had a leading fashion retailer that was expanding with us using Agent Copilot, and it's really the use cases enhancing agent productivity, reducing customer wait times, and ultimately reducing the number of seasonal hires the customer needed to bring on to handle peak periods. This is just an example of the Twilio architecture of being able to have a platform with multiple channels and driving personalization from Segment across every channel. We think that's a unique value proposition, and our customers are loving that. All right, perfect. Thank you so much. Thank you. Our next question comes from Patrick Walravens of Citizens Bank. Great. Thank you so much. Congratulations, you guys. Khozema, it's been almost five years since Twilio acquired Segment. I just thought, since you're not going to break it out anymore, maybe we could do just sort of a, how did the evolution of this space impact this business? I mean, is it just that the CDP market really shifted towards data platforms like Snowflake and Databricks, or was it something else? What happened to that space? I think the original thesis for us when we bought Segment was that more intelligent communications were going to be the future of this company. I think, putting aside some of the other developments that have happened in the broader CDP landscape, which are frankly, in some ways, less the focus for us, the opportunity to be able to drive intelligent conversations, intelligent communications, highly personalized interactions between our customers and consumers, like that was always the goal when we bought the company. I think we're really starting to see the fruition of that original strategy. We've launched a number of different products that integrate the two capabilities natively in singular APIs. I think that's really exciting. It makes it easier for customers to adopt, obviously. Every quarter, we've added increasingly richer capabilities so that our customers in the context of communications can use contextual data to be able to derive richer and richer understanding of what their consumers are doing to be able to drive higher personalization. I'd say, again, putting aside what's happened in sort of the broader CDP, the strategy of the company had been to fundamentally integrate a CDP into the communications business. That's what we've done. I think based on the traction that we're seeing with it, that's really exciting. Awesome. Right. Aidan, if I could ask a follow-up, you commented in your prepared remarks that for the gross margins, we are investing at the platform level to ensure we're delivering our services efficiently. That caught my attention. What are those investments? Let me give you an example. For our email platform, for example, or email product, we're in the process of migrating off of legacy data centers to cloud. That takes a little bit of time. That probably takes several quarters, and there's a period of time in which you have a double bubble of cost. We did this with Segment actually in 2024, if you recall, and we're in the process of doing the same thing for email. Again, a little bit of cost and margin headwind in the short term, but it's the right long-term play. That's an example of something that would fall into that bucket. The other things we're doing, like on the messaging side, we're looking to establish more direct connections. That's something that we're kind of continuously doing as we operate around the world. We're also leveraging our balance sheet where it makes sense to do so in terms of prepaying carriers to secure better pricing. A number of different things, but that just gives you some examples, Pat. Awesome. Thank you both. Thank you. Our next question comes from Jackson Aider of KeyBanc Capital Markets. Your line is now open. Thanks for taking our questions, guys. Good evening. On the AI voice piece, is this a separate competitive environment from kind of the rest of your business? Are you competing more on, you know, your like-for-like capabilities with point solutions in that area? Not as much as you might think. I mean, clearly, there are a ton of voice AI vertical companies that are out there. I'd say in so many of those instances, we shared some stats at our Investor Day, like some really, really compellingly high stats that so many of those companies are building on our infrastructure. In the first instance, that's pretty compelling. I think the tricky thing is that for a lot of companies that you might think we would end up competing with, our ability to use our CDP, this kind of goes to the prior question as well, our ability to use our CDP to be able to drive context inside of those interactions, as you've got voice-to-voice or agent-to-human, whatever the paradigm is, in terms of those interactions, I think that gives us a bit of a leg up. If a customer comes to us and says, "Hey, look, we've already got an LLM that we've got credits with, we want to be able to integrate that with you guys," we are open season on that, and we certainly support a wide variety of different LLMs that we will integrate to rapidly. If they want to go in the opposite direction, which we're seeing a lot of too, like with Conversation Relay, for example, we'll support that all day long as well. It really kind of runs the gamut. It's a pretty exciting time, Jackson. Maybe a stat to give you: we have a number of different AI startups that were founded in just the last three years, spending over $1 million with us today. Our top 10 startups in that cohort have a blended gross margin of over 80%. There's a lot to be excited about here. Nice. Okay. Quick follow-up on pricing. In a future state where hopefully your multi-product customers have a more cohesive contract structure, let's say, how do you view your ability to drive pricing maybe in that future? Thanks. I think in the short term, what we're trying to do is really grow into multiple products, right? I think just given the number of customers that we have today for which that opportunity exists, that's kind of our initial approach. I think the second thing is that as it relates to sort of the broader AI opportunity, that also presents a pretty compelling opportunity. Those two actions alone, because of the fact that they're gross margin accretive, I think will add accretion over time. You've got this messaging mix dynamics, so just kind of putting that aside, assuming that that was level loaded, you'd see gross margin accretion just as a result of those things. I think as it relates to price on sort of the core stack, the reality is actually that we raise price periodically on list pretty regularly. It does take time, especially with some of our larger enterprise customers, for that to bleed through, but you see the more immediate impact in self-serve. Understood. Thank you. Thank you. Our next question comes from William Power of Baird. Your line is now open. Okay, great. Thanks. Maybe a follow-up first just on guidance and implications for the second half of the year. I may have missed this, but the messaging price increase, it's occurring in the U.S. What kind of tailwind or impact does that have on guidance for the second half? Kozema, in your prepared remarks, I think you talked about some real improvements in large deal traction year-over-year. I just wondered if there was anything else you could unpack there, any common factors, what's kind of helping drive that? Thanks. Maybe Thomas, do you want to speak to the large deal activity, and then I can pick up? Absolutely. The large deal activity has been one of the brighter spots of the business for the last few quarters. I think this quarter in particular, it stood out with 57% growth in customers spending over $500,000 with us in the quarter. In general, this speaks to the nature of a lot more of our platform selling, cross-selling motion, where oftentimes customers are landing with messaging, increasing their volume, and then we're seeing them add more software capabilities on top of messaging. We had a really strong quarter with products like Verify and FraudGuard, for example. Of course, we talked a lot about voice today. Importantly, the voice add-ons are doing quite well on top of the voice infrastructure components, which is critical. Those combinations together are allowing us to drive much larger deal sizes. We're seeing that whether it's in our ISV business or whether it's in our direct business globally. On the pricing question, we don't anticipate it really having a material impact over the balance of the year. It's North America only, and it primarily affects our self-service customers, as Thomas mentioned. It'll have a bit of an impact, but nothing material at the consolidator level. It'll take some time to work its way through the renewal cycles with some of our bigger customers. Okay. Thanks. Thank you. Our last question comes from Derrick Wood of TD Cowen. Your line is now open. Great, thanks. Khozema, could you comment on the robo-call market? It seems like volumes are growing at a decent clip in the U.S. this year. Just how much of robo-call type use cases go through your voice business? What's your approach to this market longer term, especially in the age of AI? Yeah. There are different kinds of robo-calling, obviously. The fraudulent stuff, we take really, really significant compliance measures to ensure that traffic does not run through our platform. As it relates to robo-calling more generally, I'd say it's not a big piece of what we ultimately do. What we're doing in large part is a lot of the voice infrastructure. If you want to call this robo-calling, there are instances in which there will be phone call notifications that happen when there are deliveries scheduled or notifications required about a specific expertise that's being delivered. I can think of a handful of examples off the top of my head that involve stuff like that. As it relates to AI, I would say that's not really the thing that creates the AI opportunity for us, meaning it's not robo-calls. It tends to be more sophisticated use cases that are around customer care or service. Obviously, inside of the company, we do some customer care stuff with our voice AI stack. We also do some inbound sales prospecting with it. Understood. If I could squeeze one more in, there were a bunch of regulatory changes in a number of countries in recent months, including new sender ID registration rules and new KYC requirements. Just wondering, did things like this have any impact on your business, whether from a sales cycle or cost of sale perspective? Just anything to flag and potential disruption from regulatory changes like this or potential positive impact? Thank you. I think that, you know, over time, I would imagine that there's some positive benefits here. In the short term, the short answer is no. We don't see a lot of impact as a result of different regulatory changes. We're very proactive with regulators in effectively every market. We typically have pretty advanced notice. We're typically participating in the way in which a lot of this regulation gets shaped. Being the largest provider globally, regulators are often coming to us asking about what makes sense, what doesn't make sense, how do we protect the consumer? We're obviously in favor of anything that ultimately does end up protecting the consumer, just given that it protects the ecosystem more broadly. I would say short term, no impact. Longer term, probably a mild positive impact because it reinforces compliance in the ecosystem more broadly. Thank you. Thank you. This concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.