Q1 2022 Earnings
Prepared Remarks
May 4, 2022

1

Legal Disclaimer
This document contains forward-looking statements that are subject to known andunknown risks, uncertainties, assumptions and other factors that may cause actual
results or outcomes to be materially different from any future results or outcomes
expressed or implied by the forward-looking statements. In particular, statements about
Twilio’s outlook for the quarter ending June 30, 2022, Twilio’s annual revenue run rate
based on first quarter results, Twilio's goals regarding delivering non-GAAP operating
profitability beginning in 2023 and meeting annual growth rates and long-term
non-GAAP gross margin targets, Twilio’s expectations regarding our products andsolutions, including the demand for our products and solutions based on
macroeconomic trends and survey results, Twilio's expectations regarding businessbenefits and financial impacts from our acquisitions and our partnerships andinvestments, including the associated transactions, our expectations regarding theimpact of recent and future privacy changes on certain third party platforms on Twilio
and our customers, and our ability to manage changes in network service provider feesthat we pay in connection with the delivery of communications on our platform and theimpact of those fees on our gross margin are subject to change.
Should any of these risks materialize, or should our assumptions prove to be incorrect,
actual financial results could differ materially from our projections or those implied bythese forward-looking statements. A description of these risks, uncertainties andassumptions and other factors that could affect our financial results are included in our
SEC filings, including our most recent report on form 10-K and subsequent reports onform 10-Q. Forward-looking statements represent our beliefs and assumptions only asof the date such statements are made. We undertake no obligation to update any
forward-looking statements made in this document or during the earnings call to reflect
events or circumstances after today, or to reflect new information or the occurrence of
unanticipated events, except as required by law.
This document also includes certain non-GAAP financial measures. Reconciliations
between our GAAP and non-GAAP results and further information related to guidance
can be found in our earnings press release.

2

Jeff Lawson, Co-founder and CEO
We delivered a strong quarter of results, with $875 million
in revenue, growing 48% year-over-year. We’recontinuing to execute against our long-term strategy andare delivering robust top-line growth at scale as we
address the tremendous opportunity ahead of us. We
remain confident that we will deliver 30%+ annual organic
revenue growth through 2024 and beginning with full year
2023 results, our goal is to deliver annual non-GAAP operating profitability consistently
going forward.
With the leading cloud communications platform, and Twilio Segment, the #1 customer
data platform in worldwide market share, Twilio has an unparalleled view into thecustomer lifecycle setting us up as the company who can deliver a single, unified
customer engagement platform to enable one-on-one personalization at global scale. To
get there, we must execute at speed and scale while delivering on our growth andprofitability targets. In order to deliver on this, we’re excited to announce that Elena
Donio will become Twilio’s President of Revenue. Elena has resigned from Twilio's
Board of Directors and, effective today, assumed responsibility for all go-to-market
functions. She will report to me and join Twilio’s E-Team.
I had reached out to Elena to ask her to consider this role as I realized that her strategicand operational skills were an excellent fit for Twilio. In addition to having been aremarkable public company executive leader, Elena’s insights on our Board have been
instrumental at every stage of Twilio’s growth over the last six years. I was delighted that
Elena agreed to take on this role as a key member of our executive team.
Elena’s career spans 25 years at multiple tech companies with a track record of productinnovation and enterprise GTM leadership at global scale. At SAP Concur, in her role as
President, Elena oversaw all of go-to-market, product and engineering. Elena drove
sustained growth for Concur over the years across markets, channels, and geographies
and assumed the President role when Concur was acquired by SAP for more than $8B.
During her time as CEO of Axiom, revenue doubled as the business further penetrated
the Fortune 1,000 across several key industries. Elena is ready to hit the groundrunning as our new go-to-market leader. She loves our company culture and believes
strongly in Twilio’s incredible market opportunity.

3Marc Boroditsky has decided to step down from his role as CRO, effective today. We
are grateful to Marc for his enormous contributions to Twilio over the past seven years.
Under Marc’s leadership, our revenue and market penetration saw impressive growthfrom $277M and over 36,000 customers in 2016 to $2.8B and more than 256,000
customers in 2021.
We continue to improve and scale the fundamentals of our customer engagement
platform by investing in our cloud communications infrastructure and channels such as
messaging, voice, email and video while pouring energy and resources into our newer
data and engagement layers such as Segment, Flex, Frontline, and Engage. Notably
this quarter, we announced that Twilio Frontline, our programmable mobile-first solution
for sales and relationship managers, is now generally available, including new features
such as native voice calling, HIPAA-eligibility and a web interface.
As we build the next chapter of Twilio to offer the leading customer engagement
platform trusted by developers, companies, and now marketers globally, I’m energizedby the demand we’re seeing across industries and around the world. Our continued
growth further demonstrates the breadth and scale of the Twilio platform and use cases
as businesses everywhere are reimagining the way they work, think, do business andengage. That said, as I mentioned in my remarks last quarter, I’d like to provide further
context on three macro trends that are creating tailwinds for Twilio.
The first trend is continued digital transformation, which impacts how companies
acquire, retain, and drive revenue growth in a digital world. Clearly one of the biggest
changes spurred by the pandemic has been the immediate and massive shift to digital.
Our 2022 State of Customer Engagement Report, which surveyed 3,450 leading B2C
decision makers across industries and 4,500 consumers globally, found that companies
expect their investment in digital customer engagement to nearly double by 2025.
Interestingly, the companies that invested the most in digital customer engagement
have reaped substantial benefits and have seen revenue growth of 70% on average.
Because Twilio typically sits in the front-of-house for our customers, we're a part of their
growth strategy, which is a major area of continued investment.
The second trend is consumer privacy. Third-party cookies, which are now blocked by
Firefox and Safari, will also be blocked by Google Chrome by the end of 2023. Brands
are being forced to completely rethink their customer and revenue growth strategies in
the face of this digital advertising privacy shake-up. As the #1 CDP in market share,
Twilio Segment is helping customers drive efficiency and effectiveness of advertising
campaigns that can no longer rely on third-party cookies. And most companies are still4

just getting started. Over half of businesses we surveyed aren’t ready and over 80% arestill reliant on third-party cookies. Moving to first-party data enables companies tocontinue to grow their customer base and revenue, while complying with new
regulations, laws, and platform policies – all driven by consumers' desire for privacy.
Our communications APIs then provide effective ways to engage customers outside ofads.
The third trend driving customers to Twilio is the direct-to-consumer model (DTC). The
DTC movement enables businesses to build direct, personal and memorable
relationships with their customers versus renting their customers from intermediaries inthe supply chain like advertisers, retailers, wholesalers and distributors. DTC is not only
disrupting how brands engage, interact with and market to customers, but it’s critical todriving loyalty and increasing profit margins traditionally paid in fees to intermediaries.
As businesses continue to digitize and consumers go online for everyday interactions
and purchases, it’s opened doors for any company to leverage technology and data tounderstand their customers and build brand loyalty. This is not just startups. It's also
global corporations, reinventing themselves to prevent disruption. Major brands like
Allergan have successfully implemented the DTC model atop Segment as a way todrive new growth and revenue streams. When they go on this journey, they need a CDP
and direct communications channels such as messaging.
At the core of these three trends is data. That’s why we’ve seen such growth acrossthe Segment platform. By the end of 2021, Segment processed over a trillion events
per month, and we expect these volumes to continue to grow substantially. Data is thecurrency of the digital era, and we’re in the midst of a battle over who owns it and what
it’s worth as companies shift from relying on third-party to first-party data. Companies
owning and activating their own first-party data is how companies are going to win.
This is why I have so much conviction in the future of Twilio and the vision to become
the world’s leading customer engagement platform trusted by developers, companies
and marketers globally. As the leading cloud communications platform and customer
data platform, Twilio has an unparalleled view into the customer lifecycle setting us up
as the company who can deliver a single, unified customer engagement platform toenable one-on-one personalization at global scale. We’re on a journey to democratize
customer engagement the way we democratized cloud communications and Segment
democratized customer data and we’re just getting started!

5

Elena Donio, President of Revenue
I am excited to be joining Twilio to lead our go-to-market
efforts, as we continue our journey to become the world’s
leading customer engagement platform. As a Twilio
Board member since 2016, I’ve had regular discussions
with customers, investors and Twilio employees, and I’mconvinced that we’re on a trajectory to dramatically alter
the landscape of how businesses interact with theircustomers to create lifelong, unbreakable relationships of
mutual value.
We have a solid foundation to build from, as evidenced by our continued momentum inthe first quarter. Our go-to-market team delivered a great start to the year andcelebrated a number of wins, as our customers are continuing to rely on Twilio to help
put digital customer engagement at the forefront of their businesses. Our investment
priorities – software solutions, enterprise growth, international expansion, and buildingout our partner ecosystem – are producing great results, and put us in a strong position
to continue to drive elevated levels of growth going forward. Even as a Board member,
I've been so impressed by our GTM team here at Twilio, and I'm excited to be leading
this amazing group now and to share some of their recent successes with you here.
The first quarter saw a return to in-person events, which enabled our teams to spend
more time in the field meeting with customers, discussing how Twilio can help redefine
their customer engagement initiatives. Based on these discussions, and my own
conversations with customers over the years, it’s clear that Twilio’s focus on helping ourcustomers leverage their first-party data to build trusted, lifelong relationships with theircustomers, continues to resonate and is becoming a key focal point for all businesses.
As the leading provider of communications APIs, supported by Twilio Segment’s leading
customer data platform, we’re providing the key ingredients to help our customers use
communications and data to add intelligence to every step of the customer journey.
Twilio Segment continues to be a key topic in many of our customer conversations, ascompanies are struggling to navigate privacy changes such as Apple’s IDFA updates
and Google’s planned deprecation of cookies. Going forward, companies will need torely on their own first-party data to build one-to-one relationships with their customers,
and increasingly, they’re looking to Twilio Segment as the foundation of their customer
engagement strategies. That’s why a significant physical and online commercebusiness recently selected Twilio Segment as their CDP. The retailer has long had

6issues with manual data collection and unifying a single view of the customer. ThroughTwilio Segment, they will now be able to integrate all customer touchpoints into a unified
profile and activate real-time one-to-one customer journeys across email, social andweb platforms. We also extended our relationship with Vivid Seats, who’s leveraging
Twilio Segment to develop a rich, 360-degree view of their individual ticket buyers todrive personalized marketing experiences, connecting fans to the live events, artists andteams they love. We also expanded our relationship with one of the world's largest
consumer goods companies. They wanted to create a single view of the customer
across their different brands and selected Twilio Segment to create brand specificaudiences based on historical customer data to optimize their return on marketing
spend.
Companies are increasingly requiring highly flexible, omnichannel customer service
solutions to power critical touchpoints with their customers, and that’s why we’re so
excited about Flex. We entered into a new relationship with Compass, a real estatetechnology company that provides an end-to-end platform that empowers residential
real estate agents to deliver exceptional service to home buyers and sellers. Compass
was looking for a way to support and track the variety of requests coming in from theirbrokerage business - a network of 26,000+ real estate agents. They selected Flex to
power their internal service desk because it provided them with the flexibility andprogrammability they needed to design a unique experience for their internal support
teams and real estate agents. In EMEA, Galileo Global Education, one of the biggest
private education groups in the world, has integrated Flex with Salesforce and createdcustomized workflows to help their agents improve conversion rates and waiting time. In
LATAM, we closed a Flex expansion deal at Nubank, the largest fintech company in
Latin America and one of the most innovative companies in the world, which continues
to place their trust in Twilio to power their customer engagement.
Our core communications products continue to benefit from significant global demand,with Messaging, Voice and Account Security all delivering a number of impressive winsin the quarter. We expanded our relationship with a Fortune 500 financial services
company who is using Twilio Conversations for multichannel customer engagement andgroup chat, so that financial advisors and their extended teams can interact directly with
their clients. In Japan, we extended our relationship with FIXER Inc., a leading cloudservice vendor that is using Programmable Voice to make outbound calls to homecaregivers multiple times a day to check on the condition of patients.
Twilio's partner ecosystem is a crucial component of our go-to-market strategy. We
recently partnered with the California Department of Public Health on the Vaccinate ALL

7

58 Campaign - a campaign focused on delivering high-quality outreach and education to
Californians and combating COVID-19 misinformation. Twilio worked closely with ourplatform partner Meta on the backend technology using the WhatsApp Business API,and in turn, the State of California partnered with Accenture to integrate and implement
the full stack including Twilio. Thanks to this partnership, California is the first state in
the country to launch a tool of this kind.
We recently announced an expansion of the partnership between Google Cloud, Sabio,
and Twilio, enabling customers to rapidly build, deploy, and iterate Google Cloud
Contact Center AI capabilities with the programmable power of Twilio Flex. Deploying
this solution enables customers to deliver key enhancements using conversational
virtual agents across all channels, with real-time assistance for agents, all via a single
agent desktop and using CCAI insights to drive continuous improvements. The
strengthened partnership enables a single cloud platform capable of delivering highly
personalized and intelligent contact center capabilities that effectively engage
customers.
The last six years on the Twilio Board have been an enormously rewarding ride –watching Twilio grow, scale, create career moments for unbelievably talented people,
launch new products and delight customers – while doing our part as a Board toencourage bold goals and responsible plans. When Jeff approached me about this role,
I told him that his was the only call I'd answer for an operating role because Twilio is the
only place I'd be willing to pour more of myself into. And the reasons aren't so different
from why I joined the Board. Limitless opportunity, amazing people, and a role in which I
believe I can be useful.
Forever a student, I'm studying Twilio through a new lens now. What I know is that there
is no company better poised to lead through the next stage of digital evolution and there
is no company better positioned to listen to what our customers and the world’s end
users, the people that experience the brands that we support, need from our industry.
Customer experiences can be better, and faster, with less friction, and more
personalization. The world’s developers are the ones dreaming about what thoseexperiences can look like. And the world’s developers turn to Twilio.
Our principles in go-to-market will always evolve to meet the demands of ourcustomers. Twilio started with developer love as the heart of the company. It's been thecore of what we've built, how we've built, how we've sold, and how we've grown. You
make different decisions when the developer is at the center. You build great
scaffolding, but you allow them to paint the fresco. You don't try to answer all of the8questions about what they might need. You build a framework for exploration andexperimentation. You help uncover the powerful data that builders can put to work.
But you also recognize that there are multiple doors into every organization. And it's
incumbent upon us to open those unique doors – whether developers, line-of-businessowners or executives. CMOs, CROs, CIOs, call center leaders and more are presiding
over a set of opportunities, problems, clients and teams. We will meet them where they
are, at their front doors, to help them build their future for customer engagement.
We have exciting work ahead, we have a terrific team, we have customers that trust us,
and we have a great opportunity to win the customer engagement space. I can't wait to
get to work.

9

Khozema Shipchandler, COO
Twilio delivered another strong quarter of results in Q1.
We are pleased with our ability to continue to provide
elevated growth at scale as we achieved a $3.5B annual
revenue run rate in the quarter.
Revenue for the first quarter grew 48% year-over-year to$875 million, coming in slightly ahead of our guidance. As
we mentioned last quarter, we refined our guidance approach to provide guidance thatis more consistent with actual results and that played out this quarter. The following
items are included in Q1 revenue:● $32 million from Zipwhip, including $14 million in 10DLC A2P fees;● $21 million from all other acquisitions closed after January 1, 2021, excluding
Zipwhip; and,● $42 million from U.S. 10DLC A2P fees within the core Twilio messaging
business, excluding Zipwhip, consisting of approximately $30 million from AT&T
and T-Mobile and $12 million from Verizon.
Excluding the items listed above, first quarter organic revenue growth was 35%
year-over-year. We are pleased with the growth of the business at this scale, especiallywhen considering the difficult comparisons we are facing in the first half of this year.
The dollar-based net expansion (DBNE) rate was 127%, as we continue to see strength
across existing customers on our platform. As a reminder, Zipwhip and all otheracquisitions closed after January 1, 2021 are not included in our DBNE this quarter.
Revenue from our top 10 active customer accounts represented 11% of revenue in Q1,
compared to 12% last quarter and 12% in the first quarter of 2021. We’re continuing tosee elevated growth in our international business on the back of the investments we’vebeen making, and this remains a massive opportunity moving forward. In Q1,
international revenue was 35% of total revenue, compared to 34% last quarter and 29%
in Q1 2021. During our closing process for Q1, we identified a misclassification of asubset of domestic customers for Q4 2021, which caused the international revenue mix
to be overstated and the domestic revenue mix to be understated in that quarter. We
have updated the revenue mix in the earnings presentation to reflect this change, and10

the 34% that I referenced for Q4 2021 is the revised international revenue mix number.
Note that total revenue was unchanged.
As noted last quarter, we saw some friction from the 10DLC A2P registration process,which continued to moderate domestic growth in Q1. With the March 1, 2022
registration deadline behind us and the majority of our traffic having completed the initialprocess, we expect our domestic messaging business to normalize through theremainder of the year.
First quarter non-GAAP gross profit grew 41% over last year, and non-GAAP grossmargin was 52.6%, up approximately 130 bps from last quarter. U.S. 10DLC carrier fees
reduced gross margin by approximately 350 basis points in Q1. While we are pleased
with the improvement in non-GAAP gross margin sequentially, we continue to have avery robust messaging business that is the main driver of gross margin in the shortterm, and as a result, we expect to see continued fluctuation in our gross margins in thenear term. Messaging is a very effective entry point into customers and a criticalchannel for customer engagement. It provides a tremendous opportunity for us togenerate long-term value as we look to cross-sell our software products over time.
First quarter non-GAAP operating profit came in at $5 million, ahead of our guidance
primarily due to an uptick in attrition we have experienced recently, consistent with what
has been reflected in the market more broadly. That being said, we continue to see
strength in our offer acceptance rates as we attract great new talent into the business.
Moving to guidance, for Q2 we expect total revenue of $912 million to $922 million, for
year-over-year growth of 36% to 38%. We expect second quarter organic revenue
growth of 27% to 29%, which excludes revenue from acquisitions made after April 1,
2021, as well as estimated revenue from U.S. 10DLC A2P carrier fees. As a reminder,
our 30%+ organic growth target through 2024 is on an annual basis and we remain
confident in achieving this target. For 2022, the setup in the second half of the year
provides for a more favorable comparison.
We expect a second quarter non-GAAP operating loss of $35 million to $40 million.
While we’re continuing to make certain investments, primarily in headcount, we remain
on track and committed to delivering annual non-GAAP operating profit in 2023 andbeyond - exclusive of potential future M&A. To reinforce our commitment to annual
non-GAAP operating profit in 2023 and 30%+ annual organic growth through 2024, theTwilio Board recently granted performance-based equity awards to our executive teamthat are directly tied to these metrics.

11Overall, we delivered solid results in the first quarter, and we are excited about theremainder of 2022 and beyond, as we help companies around the world develop moremeaningful relationships with their customers. And I’m especially enthusiastic about theaddition of Elena to our management team to help us become the world’s leading
customer engagement platform.

12