Twilio secured a seven-figure deal with IBM in its fiscal Q2, CEO Khozema Shipchandler revealed when reporting the vendor’s earnings.
The “key win” came in Twilio’s Segment business, which has been plagued over recent months, and was its largest deal of the quarter.
Shipchandler was speaking as Twilio revealed sales of $1.08bn for the quarter ending 30 June, up four percent year on year. Segment accounted for $75.2m of total revenue.
“The communications business is performing very well and in our Segment business, we're focused on executing on our commitments,” he said.
“While reducing non-GAAP operating losses in Q2, we saw continued signs that Communications growth is stabilizing, including quarter-over-quarter improvement in international trends.
“I'm encouraged that our more disciplined approach is unlocking teams to innovate on the critical areas that will enable Twilio to power the future of customer engagement.”
Both the Communications and Segment divisions reported growth, but the former outpaced the latter at four percent and three percent, respectively.
The modest revenue growth was outweighed by a GAAP operating loss of $19m, but this was done from $141.8m in the same quarter last year.
The tone of the call suggested Twilio may be turning a corner, with sales topping guidance and beating analyst expectations. The vendor’s share price jumped as much as seven percent in after-hours trading, despite yesterday’s huge Wall Street sell-off amid recession fears.
However, there is still work to be done, particularly with Segment.
Segment’s operating loss was pegged at $15.8m, but this was using a more favourable non-GAAP accounting method. Twilio does not publish GAAP profit for individual divisions. This was, however, compared to a $21m loss in the previous quarter.
“We made solid progress in improving customer time to value and executing on data warehouse interoperability,” Shipchandler said when speaking on Segment.
“We also made significant improvements in our cost profile in Q2 and lowered our non-GAAP operating losses by 25% quarter over quarter.”
He also revealed that 40 percent of Q2 deals were multi-year, compared to 17 percent in Q2 last year.
The improvement was largely attributed to improved customer onboarding and faster time-to-value, particularly around customer use cases.
However, there was a cautious tone about not expecting too much too soon from Segment. Shipchandler said that growth will likely be “muted” for the foreseeable future.
