Twilio has secured the largest-ever win for its customer data platform (CDP): Segment.
Khozema Shipchandler, CEO of Twilio, shared the news during a company earnings call.
While the CEO didn’t expand much further, he confirmed that the new customer is one of the world's largest financial services companies.
The megadeal is a welcome boost for Twilio’s Segment business, which dropped one percent in year-over-year (YoY) revenues.
However, its deferred revenue build appears strong, with implied billings rising by 20+ percent. That suggests that Twilio’s Segment business is seeing a bottom.
Also, it's on track to achieve breakeven in Q2, with Twilio much more positive over the CDP's future than just 12 months ago.
Back then, Twilio arranged an operating review of the platform to outline that future, pinpointing several improvement opportunities.
Since, the company has acted on those opportunities, and Shipchandler isolated three key reasons why he is much more optimistic about the platform’s future.
"Number one, we're seeing a lot more stickiness in terms of the deals because they are more multi-year," he said.
Number two, we've done some work on the technology side to get customers activated much more quickly so that they're getting ROI. I think that certainly helps.
"And then, three, the way in which it now interoperates with some of the data warehouses, which was long a request from customers… all of that is in place," concluded Shipchandler.
Across all its offerings, Twilio achieved double-digit revenue growth for a successive quarter, with earnings up by 11 percent YoY, rising to $1.195BN.
Yet, perhaps most notably, Twilio delivered quarterly GAAP operating profitability for the first time in its history in Q4. As per Shipchandler, that's far ahead of his initial target when replacing Jeff Lawson as CEO last year.
Blending Its Portfolio: Twilio’s Ongoing Challenge
Twilio has always done an excellent job of attracting customers of all shapes and sizes. From standalone developers to large enterprises, its install base is deep.
Indeed, 90 percent of the Forbes 50 AI start-ups are building on Twilio.
However, by its own admission, the company has not been so good at blending its portfolio. So, it's landing lots of great customers but not expanding on them.
Thankfully, this is changing. That’s evident in its dollar-based net expansion rate increasing to 106 percent last quarter, representing its best performance since Q1 of 2023.
