Categories Earnings Call Transcripts

Twilio Inc. (TWLO) Q1 2021 Earnings Call Transcript

TWLO Earnings Call - Final Transcript

Twilio Inc. (NYSE: TWLO) Q1 2021 earnings call dated May. 05, 2021

Corporate Participants: 

Andrew Zilli — Vice President of Investor Relations and Treasurer

Jeff Lawson — Founder, Chief Executive Officer and Chairman

George Hu — Chief Operating Officer

Khozema Shipchandler — Chief Financial Officer

Analysts: 

Meta Marshall — Morgan Stanley & Co. LLC — Analyst

Samad Samana — Jefferies, LLC — Analyst

Frederick Havemeyer — Macquarie Capital (USA) Inc. — Analyst

Brent Bracelin — Piper Sandler & Co. — Analyst

Alex Zukin — Wolfe Research — Analyst

J. Derrick Wood — Cowen — Analyst

Ryan MacWilliams — Stephens Inc. — Analyst

Michael Turrin — Wells Fargo — Analyst

Pinjalim Bora — J.P. Morgan — Analyst

Presentation:

Operator

Good day and thank you for standing by. Welcome to the Twilio Q1 2021 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to Andrew Zilli, Vice President of Investor Relations and Treasury [Phonetic]. Sir, please go ahead.

Andrew Zilli — Vice President of Investor Relations and Treasurer

Thanks, Lee. Good afternoon everyone and thank you for joining us for Twilio’s first quarter 2021 earnings conference call. In an effort to make our call more efficient, we are using a new approach today by posting our prepared remarks on our IR website and using today’s call for Q&A only. In addition to our prepared remarks, our earnings press release, SEC filings and a replay of today’s call can be found on our IR website at investors.twilio.com.

Joining me today for Q&A are Jeff Lawson, Co-Founder and CEO; George Hu, COO; and Khozema Shipchandler, CFO. As a reminder, some of our commentary today may be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Additionally, some of our discussions and responses may contain forward-looking statements, which are subject to risks, uncertainties and assumptions. In particular, our expected business benefits and financial impacts from the Segment and ValueFirst acquisitions and the Syniverse partnership, including the associated transactions, our expectations around the impact of the COVID-19 pandemic on our business, results of operations and financial condition, and that of our customers and partners is subject to change. And our ability to manage changes in network service provider fees that we pay in connection with the delivery of communications on our platform and the impact 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 by these forward-looking statements. A description of these risks, uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K and subsequent reports on Form 10-Q. And our remarks during today’s discussion, should be considered to incorporate this information by reference. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events except as required by law.

With that, I’ll hand it over to Jeff for a brief statement and then we’ll open the call for Q&A.

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Thank you, Zilli. Before going into the Q&A I wanted to acknowledge that over the past year fighting COVID-19 each country and region has had good times and bad times. While many places are trending well and we feel like we hope we can see the light at the end of the tunnel, the response to COVID-19 is of course not over and the tragedy of this pandemic remains an evolving situation and uneven on a global level. So I wanted to take a moment to share my heartfelt sorrow and support for our colleagues, friends and families in India, who we know are fighting a tremendous outbreak along with our colleagues, friends and family in Brazil, Colombia, Mexico. It’s a reminder that this pandemic is not over and will not be over. So, every country, every city, every community in the world [Indecipherable] we are truly in this pandemic together as a global community.

Twilio has created several programs to help communities in the hardest-hit regions providing additional matching funds organizations such as Aid India COVID-19 Relief Program, Give2Asia and Direct Relief. It is more important than ever to help every country combat this pandemic and we hope that these efforts will help provide funds towards that cause and I invite everybody listening today to picture in [Phonetic] your support as you can. Thank you.

Now let’s open the call for questions.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Meta Marshall from Morgan Stanley. Your line is now open.

Meta Marshall — Morgan Stanley & Co. LLC — Analyst

Great. Thanks for the question and congrats on the quarter. Maybe a higher-level question. I wanted to get a sense of what your customer conversations are like. I imagine, a year ago it was, help me get through the next two weeks to maybe six months ago it was like help me get through COVID to now people are really starting to embrace digital transformation and think longer term. But just is that something that we just hypothesize or you’re actually seeing in customer conversations? And how does Segment change that conversation? Thanks.

George Hu — Chief Operating Officer

This is George. Why don’t I [Phonetic] start. We absolutely are continuing to see the conversations around digital transformation, digital acceleration. What we’ve talked to — what I’ve talked to a lot of customers about is now that they see kind of the end of the pandemic in sight, they’re not foreseeing that digital is going away for them. They see a lot of the transitions that have happened to digital, whether it’s telemedicine or digital relationships, and financial services are going to continue. And so they’re looking for us to be strategic partners to help them move to the new world and — with technologies like Conversations and Flex and other things that we’ve been working on.

In terms of Segment, the people are very excited about it. I’ve had to come up in probably more than two-thirds of the calls there have been with customers in last 90 days where we talked about Segment and the opportunity there. I think people are very excited about the idea of delivering much more personalized engagement and the idea of Segment as a foundational component that is very interesting to a lot of customers. So we’re excited about that and the opportunity for us going forward on that front as well.

Meta Marshall — Morgan Stanley & Co. LLC — Analyst

Great. Thanks.

Operator

Thank you. And your next question comes from the line of Samad Samana from Jefferies. Your line is now open.

Samad Samana — Jefferies, LLC — Analyst

Hi. Great. Thanks for taking my questions and congrats on the strong quarter. Maybe the — first on the enterprise sales hiring side. I saw in the prepared remarks that the Company has caught up. But maybe how should we think about the hiring from here and how the productivity ramp looks for those new direct — those enterprise sales rep hires?

George Hu — Chief Operating Officer

Yeah. We’re absolutely on track with our sales hiring. We continue to invest in capacity to match the — frankly the incredible opportunity that we see in front of us. And in terms of the productivity, that has continued to be strong and the ramp times are consistent. So we haven’t really seen a significant shift as we added capacity which is — I think just really speaks to the demand out there and the size of the opportunity.

Samad Samana — Jefferies, LLC — Analyst

Great. And then maybe just a follow-up on the decision to split the R&D organization that was discussed then and how we should think about that impacting the innovation cycle going forward?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Yeah. Thanks for the question, Samad. This is Jeff. I’ll take that one. So we’ve got a very broad set of products and a very broad customer base all around the world. And so we thought the way to best serve the broad set of customers and the broad set of products was to break it out to three [Phonetic]. So Twilio Core Communications platform, our Data Platform and our Core Platform. And we’ve got great leaders for a lot of these things. And you could see a lot of synergies between like all the things we’re doing in communications, which is the core business, all the things we’re doing with data and Peter from Segment leads the data team. And then the core platform is sort of how we build internally and all the platforms that support the growth of all of our engineering units. And so by dividing and conquering, we think we can actually tackle more to continue our track record of innovation and continue to serve our customers at scale. And so I’m really appreciative of team [Phonetic] in the company and looking forward to building the next great set of products with the great set of leaders we have.

Samad Samana — Jefferies, LLC — Analyst

Sure. It allows us to spend more time [Phonetic] rather than listening to you guys read.

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Fantastic.

Operator

Thank you. Your next question comes from the line of Fred Havemeyer from Macquarie. Your line is now open.

Frederick Havemeyer — Macquarie Capital (USA) Inc. — Analyst

Hey. Thank you very much for the time here. I’m interested in some of the acquisitions and investments that you recently have been making including Syniverse and ValueFirst. Can you help us understand how these acquisitions, investments and partnerships could help your overall cost structure, both domestically and internationally?

And secondly on this topic, could you tell us about how these investments could benefit your customers across areas such as pricing and also reliability of services?

Khozema Shipchandler — Chief Financial Officer

Yeah. That’s a good question. This is Khozema. I’ll start. So I think from a cost structure perspective, obviously having local presence in markets and being able to do some consolidation within our supply chain is always going to yield some cost synergies. And so we definitely have an eye on that in terms of some of the ways that we’re looking at it.

I think beyond that, I think, if you look at some of the more recent things like, whether it’s in Mexico or whether it’s in India, that also gives us enhanced geographic footprint. So, it allows us to better meet [Phonetic] consumer demand in some of those markets as well.

And then from a pricing perspective, I mean I wouldn’t say there is a big change in pricing relative to M&A. I mean, it obviously remains a competitive pricing landscape. But I think we feel good about the way that we’re positioned and I think this allows us to continue to geographically expand.

Frederick Havemeyer — Macquarie Capital (USA) Inc. — Analyst

Thank you.

Operator

Thank you. Your next question comes from the line of Brent Bracelin from Piper Sandler. Your line is now open.

Brent Bracelin — Piper Sandler & Co. — Analyst

And I’ll echo comments of appreciation on the new format, super efficient and super helpful. Maybe, Jeff, I’ll start with you. We’re six months now into the Twilio Segment kind of combinations here. My question for you, what are you most excited about and most pleased with during the first six months of the integration here? And then, I know it’s early, but we’re seeing some interesting personalized messages come out to interesting [Phonetic] Flex Segment integrations. And then secondly, what are you most excited about, now that you know what you own here, looking out over the next couple of years?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Yeah. Thank you for the question. Well, first of all the nuts and bolts of integration are hard, but they’re going really well. Been really pleased by just the great culture of our teams working really well together and teams that see the opportunity and see the way we approach customers in the markets that we’re serving, I see those things really well aligned. And so super happy with Peter, the leadership team at Segment and all the folks who joins Twilio with that acquisition.

But talking about the opportunity ahead, look, I think we are seeing — we are seeing this come up in so many conversations with customers that maybe in the past before we had Segment as part of our portfolio, wouldn’t have organically come up. But now that Segment is here, really seeing that become a major part of the conversation we’re having with customers, because every company that I talk to seems to be struggling with, like, how do I build this one picture of my customer based on data that is spread across all these different — not just systems they have and they had that problem. They have got separate system for marketing and a separate system for the contact center and a separate system for commerce but also across business units. [Indecipherable] an acquisition here, we got to integrate their view of the customer and we’ve gone to these different structures inside the company and they all use different systems.

And so there is question of how do you actually build that profile of your customer and you understand your customer. The story that is being told by all the data that customers are giving up by how to use a website, how to use your mobile app, what things they bought, what things they’ve returned etc. that story is resonating with customers because they all see that problem, but then not just how do you make sense of that data, how do you act on it.

And that’s where Twilio comes in. How do you actually really engage in communications, whether it’s marketing, during your sales process, getting your support or in product how do you tailor and make all that stuff dynamically personalized to every single customer to optimize their chances of becoming a repeat buyer, becoming a loyal customer of yours. And that’s something we see so many companies wanting to do, struggling to do and looking to us to help them to do. And so, when I look forward to what we’re going to do with the Segment, I see a tremendous focus area across pretty much every industry to help them solve this problem.

Brent Bracelin — Piper Sandler & Co. — Analyst

Interesting. Big problem, but certainly big opportunity. Khozema one quick one for you. AT&T and T-Mobile joined the price increase party that I think Verizon kicked off last year. How should we kind of think about the framework around what type of growth rate that could have an influence here on Q2? It looked like the guide did not include any sort of impact on that price increase. You have two carriers instead of one raising price. Just trying to think through how should we think about that impacting Q2 or should we just kind of wait a quarter and wait till we see actually what happened? Just curious to hear your thoughts and guidance here on that price increase.

Khozema Shipchandler — Chief Financial Officer

Yeah. I mean we left it out of the guide on purpose just so that it wouldn’t be that confusing and we wouldn’t have to deal with all the kind of puts and takes. So you should look at the guide as being clean and excluding those impacts. I would say you should largely expect them to be kind of in the ballpark as is what we saw previously with Verizon. But we’ll provide a lot more detail on that when we do the Q2 call and we’ll give you the exact numbers at that time.

Brent Bracelin — Piper Sandler & Co. — Analyst

Got it. Makes sense. Thank you.

Khozema Shipchandler — Chief Financial Officer

Yeah.

Operator

Thank you. Your next question comes from the line of Alex Zukin from Wolfe. Your line is now open.

Alex Zukin — Wolfe Research — Analyst

Yeah. Thanks for taking [Phonetic] the question. I’m going to — instead of asking about typical Dollar-Based Net Expansion question to Khozema, I’ll do just two very big picture product questions. Jeff, maybe just for you first. If we take a step back [Indecipherable] components of your business, you’re now getting into a point where you’re able to do potentially intelligent messaging solutions where you can effectively have a customer to send a message when a certain action takes place like a car is left abandoned. And that — the value-added component of that message for that customer is a lot higher than potentially some others. So I guess the question is, are you able to now start thinking about different pricing or different unit economics depending on the type of message that you’re helping a customer deliver?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Thanks, Alex. I think there is like two ways of thinking about that. One is our role as a platform. And as a platform you support many different use cases. And even within the things like messaging, there’s different use cases for messaging and in fact messengers may have different performance characteristics. Some customers might value speed of delivery where others might value things like bulk deliveries. And so there is a way to thinking about how do you segment in the product itself at the platform layer and then there is a way of saying, okay, but in order to actually do a specific use case, you often have software that’s powering the customer integrations. To use an example, you had integration of your shopping cart. And the business logic of that integration and the business logic of that intelligence is in many ways of getting the value proposition from the platform itself. And so, as you see what we’re doing with, for example, Flex that’s what we’re building. We’re building that the value proposition of a contact center on top of the [Indecipherable] and you see that our marketing campaigns products as well.

And so I think when you think about our core communications platform, you get the sense of the economics are tied to the underlying capabilities in the platform. And then when you look at the engagement platform that sits above it, the economics are more closely tied to the value proposition that we’re creating with the software. But I also think that part of Twilio’s unique value proposition gets that very closely aligned to make it their. And that’s what value they want to build on top of our platform. And as a result of that we give them that flexibility and that enables them to get outcomes that they can’t get with any other vendor that also enables developers to continue to be our biggest champions inside of these accounts. And I think those are important things for us to continue to consider.

Alex Zukin — Wolfe Research — Analyst

That makes perfect sense. And then another again kind of big picture question, if you think about the [Indecipherable] the demise of — potential demise of third-party cookies, it’s our thesis that we’re entering the world where [Indecipherable] first-party data is going to rapidly accelerate in strategic performance. You guys mentioned — I think, George, you mentioned that Segment is now in two-thirds or was in two-thirds of your customer conversations. I guess a couple of angles around this question. Is this something — is this future world, I think you contemplated when making that acquisition? Are you just now reaping an even greater amount of strategic benefit? Just talk to us about how you think about Segment in this new world both integrated with the rest of your solutions for the platform, but also on a standalone basis with respect to strategic investment and all those things?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

This is Jeff. I’ll answer. [Technical Issues]

George Hu — Chief Operating Officer

Go ahead, Jeff. I’ll chime in.

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Well, I’ll give my point of view, and I’ll let George give his point of view. Collaboration of who is going to answer is harder in this virtual world. My point of view is, yes, we did think about the importance of first-party data and how every company is having to become great digital marketers and great digital executers and you can certainly rely on some of the, let’s say, [Indecipherable] ways of acquiring and re-engaging your customers when you’ve got a lot of third-party data floating around out there. And so we did believe — we do believe that the CDP market in and of itself as a standalone becomes ever more important to companies, not just because of the plurality of systems yet to figure out how to make sense of but also because outside the walls it’s getting more complex to actually target and reach your own customers.

So it becomes even more important that once you meet a customer whether it’s new marketing or they buy something whatever it is that you do a really good job of continually engaging them because going back out to try to re-acquire that customer is getting harder and harder and harder. And so companies have to treat their existing customers incredibly well and those relationships are getting even more valuable. And then you add in all the value of and then integrating that journey that’s going to achieve that using Twilio’s customer engagement cloud that is the next level of benefit on top of [Indecipherable].

George Hu — Chief Operating Officer

I think Jeff said it really, really well and I would say we’re having — certainly a lot of these conversations that I’m talking about are largely customers — a lot of customers are learning about our acquisition, interested in our strategy and we’re having the broad conversation. But we’re definitely seeing interest on both fronts of both the standalone CDP conversation as well as the potential for intelligent engagement that’s built when you have the customer data and all the engagement channels together. So I think there is potential of both standalone and integrated and I think that’s one of the things that we’re excited to continue to build on going forward.

Alex Zukin — Wolfe Research — Analyst

Congrats. Just amazing execution, as always.

George Hu — Chief Operating Officer

Thank you.

Operator

Thank you. Your next question comes from the line of Derrick Wood from Cowen. Your line is now open.

J. Derrick Wood — Cowen — Analyst

Hi. Thanks for taking my questions and congrats on a great quarter. We get a lot of questions from investors on how to think about consumption growth trends across various use cases as the economy opens up. So, Jeff, it’s great to hear what you’re seeing from the COVID impact of use cases and travel hospitality ride sharing. And then get a sense of with the opening of the economy, how that impacts some of the use cases that got catalyzed from COVID. So really just trying to get an understanding of how those net out as we navigate through the opening of the economy. And maybe put that in context with how you guys guided for Q2, which assumes flat to up $10 million in sequential revenue?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Absolutely, yes, I will answer that. So the — what I would say is like you get this usage pattern. And so you’ve got two categories, like all the clock back to year ago. You have a category of digitization of lots of interactions. That was really the path that society was on and every industry was on because of digital transformation like the big secular trend. Then those got accelerated. And so a lot of things that we’re seeing, like on the workflows between ordering online and picking up in the store and things like that, are getting far more used now than they would have before or telemedicine — saw a huge acceleration of adoption of telemedicine. And those workflows provided consumers in a lot of cases like a much more convenient path and these are things that these organizations, whether it was healthcare doing telemedicine or retailers doing really good online order pickup, take workflows, these are things that were on their path anyway, just got accelerated, which I think we’re seeing is a retraining like of consumers to expect new types of experiences. And those are going to continue and the competitive dynamics of keeping those features and making them better, making them ever easier, I think those are going to continue.

Then you’ve got the category of industries that were negatively impacted by COVID, I think, travel, hospitality, things like that. And those obviously saw a decline in their usage in 2020 and now I think we’re starting to see the early signs of the recovery impacting those industries. [Indecipherable] talking about people returning to travel as they are getting vaccinated and how hard it is to get rental car and how airplanes are not full. And so as we see the return of those industries, I think that we will continue to see both the return of volume and usage but also new use cases because many of those industries have to now go build trust with their consumers and say, hey, it’s safe to do these things again. Hey, trust us of the brand you’re going to return to as you start doing things like traveling and eating out or whatever it is. And so we’re seeing, not just the return of the old use cases, but I think also new engagement strategies that these companies have in order to build trust and loyalty in their customer bases that in many ways they have to kind of reengage with and reacquire.

J. Derrick Wood — Cowen — Analyst

I guess maybe I’ll throw it to Khozema on the revenue guidance. I’ve got some questions on just, if you look at the sequentials, it’s flat to slightly up. Historically you’ve seen some good sequential seasonality in Q2. I know you may have conservatism in there, but any other puts and takes to call out for Q2?

Khozema Shipchandler — Chief Financial Officer

Yeah, I mean, let me just add to what Jeff said and then I’ll directly take your question. So I would say in general what our guidance contemplates is sort of a world without COVID in a way, I mean, notwithstanding what Jeff said at the outset of the call. I mean obviously there is a lot going on globally and I certainly don’t want to take anything away from that and the impact that that’s having on people.

But generally speaking, the way that we’re looking at things is as if COVID is starting to wane and we see durability in some of the positively impacted industries, we see recovery in some of the negatively impacted industries. And so, in general, I think as we start to think about a world post-COVID we do see a lot of general strength in the business very kind of broadly diversified across industries and geos and company shapes and sizes.

As it relates to Q2 specifically, I mean we feel good about the guide. I mean, obviously, we’re still up in the quarter based on the guide 47% to 50%. The world is a very, very complicated place right now. There’s a lot of moving pieces. And so I think we’ll wait and see how things exactly play out, but we feel good about the way that we guided, the way the things are positioned and we feel great about the long-term prospects of the business and certainly in the short and medium term.

J. Derrick Wood — Cowen — Analyst

Right. Yeah, 50% growth pretty amazing. So congrats again. Thanks, Jeff.

Khozema Shipchandler — Chief Financial Officer

Thanks, Derrick.

Operator

Thank you. Moving on, your next question comes from Ryan MacWilliams. Your line is now open.

Ryan MacWilliams — Stephens Inc. — Analyst

Thank you. [Indecipherable] Dollar-Based Net Expansion question, but knowing that this metric can fluctuate, especially with the SendGrid compare year-over-year, but anything to comment on here? [Indecipherable] in the quarter and maybe any read-throughs to the following quarters?

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Yeah, you certainly hit one of the nails on the head. I mean I would say in general, like 133% like DBNE is still really, really strong. So whether you look at it on a year-over-year basis or you look at it on a sequential basis, maybe I’ll start with the latter. So on a sequential basis, you obviously don’t have like the political dynamic, right, in a non-election year. And so that’s going to drive it down a little bit and then we’ve also lapped Verizon carrier fees. And so one year away from that that’s going to have a little bit of an impact as well. And then really the third dynamic is what you said a moment ago in terms of SendGrid.

So I would say kind of a normalized basis, you might think about 130%s, but I mean we feel great about the printed number of 133% and we’re really, really happy with the way that our expansion rate has been going.

Ryan MacWilliams — Stephens Inc. — Analyst

Thanks. And just [Indecipherable] support global vaccine distribution, from a financial perspective I was just wondering did vaccine distribution delivery materially impacted results on the quarter?

Khozema Shipchandler — Chief Financial Officer

I wouldn’t say it impacted our financials materially. As I said a moment ago, like, I think we’re really looking at the world both in terms of our Q1 as well as the way that we guided into Q2 based on a world in which COVID is sort of a thing that’s starting to wane a little bit and we just see broad based things across the business. And any one use case is relatively de minimis.

Ryan MacWilliams — Stephens Inc. — Analyst

This is done. Okay.

Khozema Shipchandler — Chief Financial Officer

Thanks.

Operator

Thank you. We have a follow-up question — your next question comes from Michael Turrin from Wells Fargo Securities. Your line is now open.

Michael Turrin — Wells Fargo — Analyst

Hey, there. Thanks everyone. Appreciate you taking the questions. George, the Deloitte hackathon you mentioned in the materials stood out as interesting. I’m wondering if you could talk more about what events like that could maybe open up and how that can help with the push in targeted verticals, specifically healthcare seems interesting there? But anything you can add around context is helpful.

George Hu — Chief Operating Officer

Yeah. Thanks for the question. We’ve had a hackathon program now that we’ve used successfully in the enterprise area directly with customers and now we’re starting to do that with our partners. Obviously when you’re building momentum with a large systems integrator, a lot of the — a lot of what you need to do is first of all get people internally just aware. These are not simple entities, they are complex entities, have lots of groups and just kind of evangelizing internally the power of Twilio and the Twilio message is really important.

So bringing these hackathons we find is, generally speaking, a really good way to extend our reach, especially among the developers and the thought leaders within an organization whether it’s a customer or an SI like Deloitte. So we’re excited about that. But also a lot of the times these hackathons also yield really interesting IP or the beginnings of interesting IP and that’s on the customer side or on the partner side.

And with an entity like Deloitte the opportunity to create vertical IP, I think, is very, very interesting especially around Flex, which is a big focal point for a lot of our SI discussions. So it remains to be seen obviously how all these things play out. There is usually a pretty significant path between a hackathon and obviously real IP. But we’re excited about the opportunity, whether it’s with Deloitte or with others to go down this path, repeat that, continue to evangelize, get the flywheel going and continue to do more work with them. I mean, we really are fired up about the potential of this partnership. We’re seeing some traction already. And this is just another — kind of another brick on the path to — on the path to building a really successful long-term enterprise playbook.

Michael Turrin — Wells Fargo — Analyst

Yeah, makes — makes a lot of sense. Just quick for Khozema. Can we go back to ValueFirst for just a moment. I’d just be curious if there’s more you can add on that answer internationally. I know that’s been one of a few focus areas. And then anything you can add on any contribution, I don’t know what the timing specifically looks like, but any contribution you saw or would expect to see is helpful.

Khozema Shipchandler — Chief Financial Officer

Yeah. Just to take the latter part of the question first, very de minimis contribution in the current quarter and it will be relatively de minimis contribution going forward as well. So we’re not necessarily calling it out.

I mean I would say ValueFirst kind of fits into one of the questions I was asked earlier, in terms of just broader trends that we’re seeing in supply chain. I mean when we see a unique asset that we think, on the one hand gives us a particularly interesting entry into a geo and it’s not limited to India. Obviously — although India is obviously a huge consumer market. But I’d draw Mexico into the same category, which is why we did the deal there too. But India, Mexico, large consumer markets, opportunity for some cost capabilities. And then with these acquisitions, we always get awesome local teams.

And so it’s really just a combination of those things. But from a financial perspective, I think this is like an added portfolio, but nothing that you should really think about in terms of having an outsized impact on our financials at all.

Michael Turrin — Wells Fargo — Analyst

Okay. Helpful. Keep up the pace. Thanks. Thanks everyone.

Khozema Shipchandler — Chief Financial Officer

Thanks.

Operator

Thank you. Your next question is from Mark Murphy from J.P. Morgan. Your line is open.

Pinjalim Bora — J.P. Morgan — Analyst

Hey. This is Pinjalim on behalf of Mark. Congrats on the quarter, guys. Jeff, a high-level question again for you. From a product strategy point of view, how do you think about kind of accelerating usage of Twilio core communications by developers, just the usage of that?

Do you think like server-less or function is an important strategy to drive speed to market for developers or maybe the studious way to go to democratize the usage beyond developers? Or now that you have Segment, maybe you can actually tap into a broader local customer engagement solution. I’d love to hear your thoughts around that.

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Absolutely. So first of all I’d say we’re really pleased with the adoption of Twilio and all of our products by developers and I think that’s going very well. Developers continue to pull us into the live journey of opportunities at every kind of company that you see us posting up as new customers.

As far as smoothing out, I don’t necessarily draw a straight line between low code, no code and like getting more developers and more accounts in the platform. Yeah, I think low code, no code are tools and when the problem you have fits well into —

George Hu — Chief Operating Officer

Hey, guys. It seems like — this is George, it seems like there might be a problem with Jeff’s line. So, obviously I can’t completely anticipate his train of thought there. But certainly —

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Can you hear me? Can you hear me now?

George Hu — Chief Operating Officer

You are back. Perfect. Thanks.

Jeff Lawson — Founder, Chief Executive Officer and Chairman

Yeah. Zilli [Indecipherable] my phone connected to my car and that is exactly what happened because someone just [Indecipherable]. So, fantastic. Good to know that that’s a way earnings calls can fail.

So back to what I was saying, I don’t know where I last you. But essentially low code, no code is a tool that is set to what allows you to build your use case faster, more reliably because it’s hosted for you and you have to provision an infrastructure then developers want to use it [Indecipherable] developers. But it’s a right tool for right job and we’ve seen a lot of uptake of studio for workflows and other things that are more client side and more deeply embedded. May not be the right tool, but we are definitely committed to the road map of using low code no code and what I call yell [Phonetic] code each for the right things that enables the developers and the various participants at the company to do the task that they need to do.

And by the way that includes taking things like Flex, which really accelerate our customers time to deploy these solutions, but then still give them the flexibility to go invoke functions or new studio to build that IVR, build that chatbot flow and plug it into the right spot. And so I would say I think we’re using low code no code effectively today and we’ve got a natural roadmap for how we can see there are more and more use cases and more and more customers to be using that. But we are very happy with the adoption that the developers are already doing on Twilio across those solutions including a lot of them who aren’t using no code because they are writing code more broadly.

Pinjalim Bora — J.P. Morgan — Analyst

Understood. Thank you.

Andrew Zilli — Vice President of Investor Relations and Treasurer

Great. And that will do it for today’s call. So really appreciate everybody joining today and look forward to catching up with you throughout the rest of the quarter.

Operator

[Operator Closing Remarks]

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