Specialist
Divisional leader at Vodafone Group plc (SP 1) and senior executive at Presidio Inc (SP 2)
Agenda
- Twilio's (NYSE: TWLO) operating environment – QoQ and YoY demand trends across SMS, voice, video, email and messaging APIs (application program interfaces)
- Flex CCaaS growth prospects – enterprise go-to-market and necessary product improvements
- Twilio Engage adoption expectations
- 2022 outlook – competitive landscape and CaaS convergence
Questions
1.
Could you outline the usage trends you noticed across Q4 2021 and any early indicators of what we could expect for Q1 2022? What are you noticing across the key channels that Twilio utilises?
2.
Would you say the return to momentum in Q4 2021 was across all channels? Was it dominated by messaging and SMS?
3.
Mladen, could you discuss usage trends for Q4 2021 and early indications for Q1 2022? Are you noticing anything unique across core APIs [application program interfaces] within the CPaaS business?
4.
How do you expect the usage mix to evolve within messaging over the next 1-2 years between SMS and non-SMS-type channels? Do you expect more OTT [over-the-top] channels such as WhatsApp, Facebook Messenger or Apple Business Chat to start gaining messaging share, or do you think SMS will be the primary channel within the overall messaging bucket longer term?
5.
Can you comment on any increases on the video side? It seems very nascent in terms of usage relative to the other channels. Is that increasing yet or is it still very small vs usage elsewhere, considering the API that Twilio offers?
6.
Do you have anything different to say around messaging inclusive of text, SMS as well as those over-the-top channels such as Apple Business Chat, WhatsApp and Facebook Messenger? Do you expect traditional SMS to shrink as a mix of messaging usage? If not, why might messaging remain the primary channel within that?
7.
To what extent could messaging increasingly become a commodity regardless of end-customer demand if messaging growth does sustain over the next 1-2 years? There seems to be room for CPaaS competitors to cut on price per message and you mentioned they’re shifting around in the termination charges in terms of the carrier relationships. Could the top line growth continue, but with margins compressing over the next 1-2 years? To what extent could margin growth slow for messaging?
8.
It seems healthy and as the market saturates there’s more price compression. Considering the pricing declines that have been experienced, could the carrier take a greater proportion of the termination charge or could competitors lower the market price average to the extent that it meaningfully offsets volume increases? Alternatively, do you think volumes will more than offset price decline for a sustainable future in messaging?
9.
Who do you consider to be Twilio’s biggest competitor in new but high growth markets such as APAC or Africa? If the company is going to represent 70% of the population and maybe close to that proportionally in terms of overall CPaaS usage longer term, is the company as well-positioned as in these markets as it has been in North America and EMEA? Alternatively, might local competitors not allow it market leadership?
10.
You mentioned a continued softening around new logos for Flex. Could you elaborate on what’s happening with Flex around how much growth shifted in Q4 2021 relative to Q3? How does that inform your 2022 expectations?
11.
Do you think it’s likely Twilio can become more out of the box, considering players such as it and Amazon Connect have prided themselves on being a fully customisable option that allows R&D teams to sandbox what they want to put into a solution? Would Flex becoming more out of the box make it more expensive than before – at least upfront – given that a lot of the programmability came with a discount in the upfront form?
12.
Is Twilio Engage ultimately the Segment acquisition productised under the Twilio brand? What customer interest have you gauged? Is it more for new logos vs existing Flex customers, in the sense that the existing ones probably already poured all their customer data into Salesforce or HubSpot? What inning are we in with Twilio Engage’s potential opportunity?
13.
What are the biggest reasons that you think customers might be hesitant around taking on the Twilio Engage product add-on? Is there anything that’s lacking? Is there any go-to-market flaw on around new logos or existing Flex customers that prevent some being fully interested?
14.
It seems Mladen is facing some softness on the new logo side for Flex and Engage. Pankaj, how did Flex adoption from a demand standpoint play out over the last 3-4 months?
15.
You mentioned there are prospects for high growth, but that CPaaS remains in the driver’s seat. Do you expect Flex plus Engage will be greater than 50% of Twilio’s overall revenues, or will it always be an API- and CPaaS-first business?
16.
How is the competitive landscape evolving, if competition in the sector will always remain Twilio’s main issue? What are you noticing from Microsoft, given its announcements at the Ignite conference around a more full-fledged CCaaS product? What about Amazon with Connect? Do you expect the two big tech companies will try to disrupt this market area?
17.
What’s Twilio’s biggest moat? Demand seems likely to be good for the next few years. How do you expect the company’s positioning to evolve, given this longer-term risk of very intense competition? Does it have enough of a moat to remain relevant?
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