Twilio Inc.

Good afternoon and welcome to Twilio's Q4 2020 earnings conference call. My name is Jason and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I will now turn the call over to Andrew Zilli, Vice President of Investor Relations and Treasury. Mr. Zilli, you may begin.

Thanks. Good afternoon, everyone, and thank you for joining us for Twilio's fourth quarter and full year 2020 earnings conference call. Our results press release, SEC filing, and a replay of today's call can be found on our IR website at investors.twilio.com. Joining me virtually today are Jeff Lawson, co-founder and CEO, George Hu, COO, and Kozema Ship Chandler, CFO. We also have Peter Reinhart, CEO of Twilio Segment, joining us for Q&A. As a reminder, some of our commentary today will be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Additionally, some of our discussion and responses may contain forward-looking statements, which are subject to risks, uncertainties, and assumptions. In particular, our expected business benefits and financial impact from the segment acquisition and our expectations around the impact of the COVID-19 pandemic on our business, results of operations and financial condition, and that of our customers and partners is subject to change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K and subsequent reports on Form 10-Q. And our remarks during today's discussion should be considered to incorporate this information by reference. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. With that, I'll hand it over to you, Jeff.

Thanks, Billy, and thanks, everybody, for joining the call today. I want to begin today's call by recognizing that it's Black History Month here in the United States. Doing the work of overcoming systemic racism is the work of understanding Black history, not just the surface-level history or the story of the civil rights movement, but understanding the deep history of oppression and racism that manifests today in less overt, less intentional ways, but is just as impactful on Black lives today. Black history isn't something of the past. It continues through today, and there's an acknowledgement that we're writing Black history and American history today. Twilio's commitment to anti-racism is a commitment to write a better future. That's how I'm contextualizing Black History Month in 2021 differently than I've ever thought of it in the past. Now, on to company earnings. Our fourth quarter continued the strength and momentum we saw throughout the year. Let me quickly touch on a few of the highlights for the full year. We delivered nearly $1.8 billion in total revenue, up 55% over last year. Incredible growth at this scale. We acquired Segment, combining the market-leading customer data platform with our leading communications platform. We ended the year with more than 221,000 active customers and more than 10 million developer accounts. And we hosted our first ever virtual signal with more than 32,000 registrations. Our 2020 results reinforce the idea that there is a massive generational opportunity in front of us. We have long known that there is a huge shift to more digital experiences and that every company is becoming a software company. And that has been fueling our growth for more than a decade. And what 2020 showed us is just how true it is that companies that embrace building, that embrace software agility, that empower their developers, are the companies that are prepared for the unknown. Whether it's a pandemic, more competition in the market, or anything else that is threatening to disrupt an industry or a business, the companies that embrace software are able to accelerate their ability to respond to the changing conditions in their market. The pandemic accelerated change overnight. Healthcare had to accelerate the adoption of telemedicine, and commerce companies accelerated their e-commerce plans. Companies that hired more developers and upped their digital game during the pandemic are not going back. The pandemic was a booster, and now they're even better at addressing the digital needs of their customers. Digital is here to stay, and there are more and more digital businesses in the world that Twilio is powering. That's why we are so excited about the opportunity ahead. In fact, according to IDC, investments in digital transformation will nearly double by 2023 to $2.3 trillion, representing more than 50% of total IT spending worldwide. And Deloitte recently released a report stating that during the next 18 to 24 months, they expect to see leading companies embrace the bespoke for billions trend by exploring ways to use human-centered design and digital technology to create personalized, digitally enriched interactions at scale. Twilio's annual State of Customer Engagement Report, launching next Wednesday, February 24th, evidences this change. The study found that digital engagement was critical to survival in 2020, with 96% of business leaders reporting that not digitizing customer engagement would have negatively impacted their business, including making them less competitive, causing a loss of revenue and an inability to meet customer expectations. And as the world seeks to find a new semblance of normal, businesses are not going back. Given the increased importance of digital engagement to company success moving forward, nearly all business leaders surveyed, 95%, expect to increase or maintain their organization's investment in customer engagement after the pandemic. This is why we've been building out our customer engagement platform that truly serves the end-to-end lifecycle of all customer engagement in the enterprise. We have called Segment the market-leading customer data platform to provide a unified customer view to help companies better understand customers and engage more effectively over digital channels. Why? Because companies need to understand who their customers are, what products they're looking for, what products they've bought, and where customers are interacting with their brand across multiple touchpoints. And our platform allows the developers of the world to build, to take all of those bits of data that are siloed throughout the company, build a cohesive picture of the customer, build a world-class customer service experience, and deliver the right communication over the right channel at the right time. The end game is to meaningfully improve every interaction every business has with every customer. That's incredibly valuable to enterprises because it allows them to create differentiated customer experiences. And our results validate that this is what the market wants. Of course, to make all this work, we have to empower developers. We have more than 10 million developers around the world using Twilio to build the future of customer engagement, and we're going to continue innovating to provide them the tools they need. Our developer ecosystem is one of the long-term competitive advantages for Twilio, and we're going to continue to focus on making them successful. Before I turn it over to George, I also wanted to highlight that we launched our first ever impact report today, which you can find on our website. The report covers several topics, including our focus on helping our neighbors and communities. In fact, in 2020, nonprofits, social enterprises, and local governments using Twilio helped reach 266 million people. You'll also find information on our latest diversity and inclusion staff, as well as some new ESG initiatives and disclosures. We also launched our We Pledge movement for employee giving to the world, empowering every individual employee to pledge 1% of their time or income to do good. As Koreans, we volunteered more than 7,800 hours and donated more than $1 million in 2020. and Atlassian, Zoom, Okta, and Pledge 1% all signed on to join the We Pledge movement. There are a couple of recent additions to Twilio I'd like to welcome. In Q4, we hired Jeremiah Berzow as our CTO to lead our technology strategy and roadmap. And last month, we added Deval Patrick, former governor of Massachusetts, to our board of directors. In addition to his public sector experience, Deval held senior executive roles at Texaco and Coca-Cola, and most recently founded the Double Impact Fund at Bain Capital. Jeremiah and Deval are just the latest additions to our leadership in the last year, as we brought on several new senior leaders who will be critical to our success as we continue to grow and scale the company. And finally, you may have seen in our press release that our chief legal officer, Karen Smith, will be leaving the company after six and a half years. Karen has been a tremendous leader for Twilio and such an important part of our success, from building out our legal team to taking us public and more. I am extremely grateful for her contributions to the company during her tenure. Karen is going to stay on for a while while we find our next general counsel and ensure a smooth transition in the coming months. Thank you to all Tullians for helping deliver such outstanding results and doing so much to help our customers as well as the broader community during such a difficult year. We're extremely excited for 2021 and beyond as we take advantage of this generational opportunity. With that, I'll hand it over to you, George.