Twilio Inc. (TWLO) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Twilio Inc.'s Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Rodney Nelson, Vice President of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us for Twilio's Second Quarter 2026 Earnings Conference Call. Joining me today are Khozema Shipchandler, Chief Executive Officer; Aidan Viggiano, Chief Financial Officer; and Thomas Wyatt, Chief Revenue Officer. As a reminder, we will disclose non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings presentation posted on our IR website at investors.twilio.com. We will also make forward-looking statements on this call, including statements about our future outlook and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent Form 10-K and our forthcoming Form 10-Q. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements, except as required by law. With that, I'll hand it over to Khozema and Aidan, who will discuss our Q2 results, and we'll then open the call for Q&A.

Thank you, Rodney. Good afternoon, everyone, and thank you for joining us today. Twilio had an exceptional second quarter. We delivered $1.5 billion in revenue, accelerating organic growth to 17% year-over-year while non-GAAP gross profit growth also accelerated to 18% year-over-year. We generated $285 million in non-GAAP income from operations and $353 million in free cash flow. Twilio's momentum is strong. We're executing with precision and innovating across the board to power customer conversations in the age of AI. During the quarter, we hosted our annual user conference, SIGNAL, which is always the highlight of my year. I love connecting with customers one-on-one and hearing firsthand why these brands choose Twilio as their foundational infrastructure. We are proud to have had brands like AWS, Centerfield, Cobalt, Deepgram, IBM, Nestle, PGA of America, Rivian, Sierra and Stripe take the stage to share how Twilio is driving ROI for their businesses as they build for the next era of customer engagement. This year's SIGNAL was especially memorable because we announced the general availability of Twilio's next-generation platform. Our conversations layer, which includes Conversation Memory, Conversation Orchestrator, Conversation Intelligence, Conversation Relay and Agent Connect provide the building blocks customers need to deliver context-rich conversations over a consumer's lifetime. As an example, to drive conversion and scale revenue, leading automotive fintech company, Car Finance 247, joined our private beta program, a move that quickly evolved into a 7-figure deal to implement the new Twilio conversations layer. Their AI assistant, Carla, has already handled nearly 300,000 customer conversations. Customers who engage with Carla convert to approved leads 1.6x faster, delivering a multimillion dollar annual revenue uplift across their core commission and ancillary offerings. While our new products have only been in the hands of customers since May, these early stories validate that businesses need Twilio's conversational infrastructure that both serves humans and agents as they navigate a hybrid agentic era. The newly redesigned Twilio Console also launched in May, giving customers a single command center to manage all of their Twilio workloads. It has an intuitive UX, frictionless trials to encourage experimentation, AI-guided onboarding and one central billing experience. This is all in service of making it easier to build with Twilio, and the refreshed console bolsters our acceleration in self-serve and will make multiproduct adoption more seamless. Since the launch, a majority of existing customers have migrated to the new console, and we are seeing a 90% plus uplift in conversions when compared to the old console. We continue to see strength across the business, highlighted by robust messaging growth even as carriers have raised their fees on our customers. While these pass-through costs carry no direct impact on Twilio's profitability, we do recognize the pressure it creates for our customers, specifically small businesses. Our Twilio platform strategy equips our customers with complete access to a variety of channels, empowering our customers to diversify their engagement strategies, maintain cost efficiency and reliably reach their own customers. Our go-to-market focus on multiproduct adoption is working well, and we saw continued strength across our platform, including messaging, voice and software add-ons during the quarter. The team signed an 8-figure deal with a leading AI company and other key wins with All Nippon Airways, Atlassian, Eltropy, Kixie, Lirio, Medibank, Olo, OpenEvidence, Orionai Solutions, Vozzi and Xplor Technologies. Revenue growth from multiproduct customers is accelerating, illustrating that our customers are continuing to use multiple products within the Twilio platform to power personal multichannel communications. Let me walk you through a few examples. Olo, a digital commerce platform for restaurants, signed a cross-sell deal to expand their utilization of messaging and voice. Olo is leveraging Twilio's communications infrastructure to power real-time order notifications and seamless delivery updates across its restaurant network. We also landed a 7-figure deal with Eltropy, an agentic AI platform for credit unions and community banks to leverage Messaging, RCS, Voice and Branded Calling across the platform. Eltropy also built its AI voice agent using Conversation Relay to help financial institutions deliver better consumer experiences, accelerate resolutions, reduce operating costs and create a scalable AI-powered contact center from day 1 or another win was with a leading home improvement retailer who signed a 7-figure deal to utilize Messaging, Voice and Branded Calling. By consolidating its legacy communication traffic onto Twilio, the company is now able to streamline North American delivery logistics, leveraging trusted voice capabilities and rich RCS 2-way interactions to optimize transactional order notifications and appointment scheduling. Another great win from the quarter was with a leading HR and payroll technology platform, which signed a 7-figure deal to leverage Twilio Messaging and Verify to scale their unified employee engagement infrastructure. They are embedding messaging directly into their mobile application to power secure 2-way employee communications and batch-workforce text alerts while using Verify to deliver seamless 2-factor authentication for payroll access. And Atlassian, a leading provider of AI-powered collaboration and team productivity software, utilizes Twilio's communications infrastructure to deliver contextual, AI-powered, omnichannel support within its new Customer Service Management app. This partnership helps Atlassian reimagine customer experiences with complete context while scaling global channel coverage via Twilio's Flex SDK & Super Network. So that's the power of Twilio. Just as we've abstracted the complexities of global telecom for 18 years, we're now helping our customers abstract the complexities that come with creating omnichannel agentic conversations. And these innovations continue to earn praise from leading industry analysts. During the quarter, Twilio was named a Leader by Gartner in the 2026 Magic Quadrant CPaaS Report, scoring the highest in ability to execute. Additionally, Twilio was also named a Leader in the 2026 IDC MarketScape for AI-enabled CDP. In summary, there is tremendous momentum building across our business from landmark enterprise wins to an 8-figure deal with an AI company. Twilio is empowering the next generation of companies with our world-class infrastructure that's delivering measurable ROI in the AI era. Our next-generation conversational platform is live. Our refreshed console is accelerating adoption and our customer momentum has never been stronger. We remain focused on strong execution while building the future of customer engagement. And with that, I'll turn it over to Aidan.

Thank you, Khozema, and good afternoon, everyone. Twilio had an exceptional Q2, delivering record revenue of $1.5 billion, up 22% year-over-year on a reported basis and 17% year-over-year on an organic basis, which excludes incremental U.S. carrier pass-through fees. Non-GAAP gross profit growth accelerated to 18% year-over-year. We also generated record non-GAAP income from operations of $285 million and record free cash flow of $353 million. Top line performance was driven by strong volumes and solid go-to-market execution, resulting in another quarter of organic revenue growth acceleration. We saw strong customer additions in the quarter, aided by the release of our new Conversations Layer and Twilio Console. Our self-serve channel delivered revenue growth of 30% plus, while ISV revenue grew 25% plus. We are also seeing continued strength across the product portfolio. Messaging revenue growth was 28%, driven primarily by strong volumes and aided by growth in WhatsApp and RCS. Incremental carrier fees contributed roughly 10 points to Messaging's growth. Voice growth accelerated above 20% year-over-year, driven by a balance of volume growth and software add-ons, including triple-digit growth in Branded Calling and Conversational Intelligence. Finally, total software add-on revenue grew 25% plus, led by Verify, which accelerated to 30% plus growth. Our Q2 dollar-based net expansion rate was 116%, reflecting the improving growth trends we've seen in our business over the last several quarters. Incremental carrier fees contributed roughly 5 points to DBNE. We delivered record non-GAAP gross profit of $736 million with growth accelerating to 18% year-over-year, our fifth consecutive quarter of accelerating non-GAAP gross profit growth. This was driven by continued momentum in our higher-margin products in addition to our proactive efforts to deliver meaningful cost efficiencies. Non-GAAP gross margin was 49.1%, down 160 basis points year-over-year and 50 basis points quarter-over-quarter. We incurred incremental U.S. carrier pass-through fees of $71 million, which drove the year-over-year and quarter-over-quarter declines. Without these incremental fees, non-GAAP gross margins would have been up 60 basis points year-over-year and up 30 basis points quarter-over-quarter. Q2 non-GAAP income from operations came in ahead of expectations at $285 million, up 29% year-over-year, driven by strong gross profit dollar growth and continued cost leverage. Non-GAAP operating margin was 19%, up 100 basis points year-over-year and down 80 basis points quarter-over-quarter. Our Q2 non-GAAP operating margin includes a roughly 90 basis point headwind from incremental U.S. carrier fees. We generated $85 million in GAAP income from operations. This was impacted by a prepaid asset impairment of $33 million. This write-down did not impact our Q2 non-GAAP results or free cash flow and will not impact future results. Additionally, GAAP net income was positively impacted by a onetime noncash benefit of $944 million due to a valuation allowance release against certain U.S. federal and U.S. state deferred tax assets. The release did not have an impact on our non-GAAP results. Q2 stock-based compensation as a percentage of revenue was 9.5%, down 270 basis points year-over-year and 20 basis points quarter-over-quarter. We generated record free cash flow of $353 million in the quarter. Additionally, we completed $66 million in share repurchases in Q2 and have roughly $800 million remaining on our current authorization. Turning to guidance. For Q3, we're initiating a revenue target of $1.505 billion to $1.515 billion, representing 16% to 16.5% reported growth and 11% to 12% organic growth. Our Q3 reported revenue guidance assumes $56 million in incremental U.S. carrier fees. As a reminder, our organic revenue excludes the contribution from incremental increases to U.S. carrier fees. Moving to the full year. We're encouraged by the broad-based trends we saw in the first half. For the full year, we're raising our organic revenue growth range to 13% to 13.5%, up from 9.5% to 10.5% previously. We are raising our reported revenue growth range to 18% to 18.5%, up from 14% to 15% previously. In addition, we continue to expect full year non-GAAP gross profit growth to be similar to our organic revenue growth rate. Our full year revenue guidance assumes approximately $250 million in incremental pass-through revenue from U.S. carrier fees. As a reminder, while the pass-through fees have no impact on our gross profit, income from operations or free cash flow dollars, they do impact our margin rates. For modeling purposes, we would expect the incremental fees to reduce our full year 2026 non-GAAP gross margin by roughly 210 basis points when compared with our full year 2025 non-GAAP gross margin, all else equal. Turning to our profit outlook. For Q3, we expect non-GAAP income from operations of $285 million to $295 million. We are raising our full year 2026 non-GAAP income from operations range to $1.135 billion to $1.155 billion, up from $1.08 billion to $1.1 billion previously. Similarly, we are raising our full year free cash flow guidance to $1.135 billion to $1.155 billion. I'm very pleased with the accelerated revenue and gross profit growth we delivered in the second quarter as well as our ongoing financial discipline that is driving strong profitability and free cash flow. We remain focused on our key go-to-market initiatives and delivering the essential infrastructure that will help our customers win in the AI era. And with that, we'll now open it up for questions.

[Operator Instructions] Our first question comes from the line of Alex Zukin of Wolfe Research.

Truly congrats on the quarter. I guess if last quarter, there was a lot of questions of whether or not AI is creating durable tailwinds for your business, it doesn't feel like that's a question anymore. But I guess if I think about where you're seeing it most pronounced, whether in the Messaging and the Voice really across the business, what is happening in the messaging business? Because it seems like it's coming in ahead of expectations now kind of a second straight quarter. So like what's driving that? And longer term, kind of what did you see differently this quarter from Voice, the Voice AI cohort specifically versus your expectations?

Alex, this is Khozema. Thanks for the question. A lot there. So I would say kind of in general, maybe let's just start there, like obviously, we saw very good strength in Messaging, very good strength in Voice. And I would say Messaging, it's still pretty early days in terms of like AI tailwinds starting to show up. They are happening. But I think most of the activity continues to be in Voice. Obviously, you're familiar with a lot of the trends that are happening in Voice right now with various kinds of both scaled companies as well as a lot of the Voice AI start-ups, just a lot of traction, and we're obviously fortunate that most of these companies are choosing Twilio as their Voice infrastructure. I would say more broadly, if you kind of go back to SIGNAL even, so the channel story has definitely been good for us. I'd say, in addition to that, the conversation suite that we launched at that time, that obviously incorporates AI in the different categories there. We're definitely seeing some traction with it. I would specifically point to Conversation Memory and Conversation Intelligence, which definitely got a lot of attention from customers incorporate different AI attributes. And then several of our software add-ons that also incorporate AI, that did pretty well as well. So I guess maybe to sum it up, and I'll turn it over to Thomas, if he wants to provide more detail. Generally speaking, I guess, I would call it broad-based strength across both channels and some of the newer products.

Alex, it's Thomas here. I just want to touch a little bit on the cohort part of your question. And so I'll give you 2 examples. The first one is a horizontal conversational AI company that started with Twilio in Q1 of 2025. Think of this as a low 6-figure quarterly spend with Twilio that largely started with Voice. From there, the spend on connectivity since then has more than tripled and the spend on software add-ons have gone from effectively nothing at the start to over $0.5 million a quarter run rate. And so this is now a $6 million annual run rate customer growing 65% a year. That's one example of an AI native. Another is a verticalized conversational AI company. 2024 Q1 started with us with $200,000, same thing, Voice, Messaging expansion. And now they're a $9 million customer with software add-ons growing 100% a year. So you can kind of get a sense for the production scale that these things are starting to happen at.

That's excellent. Aidan, maybe just a quick one for you. Obviously, Dollar-Based Net Expansion, biggest run-up we've seen. Maybe just touch on that and gross profit dollar growth and gross margins continue to accelerate kind of what's the -- is there any onetime there? Or should we expect that to continue through the back half of this year?

Yes, on Dollar-Based Net Expansion. So fees did help that number. In full transparency, they contributed about 5 points to that number. But we did see DBNE accelerate even adjusting for the fees. It was about 1 point better quarter-over-quarter. And really, in terms of what's driving it, just healthy growth with our existing customers. In particular, I would say ISVs had a very strong quarter where we're seeing meaningful expansion rates. And in addition to that, revenue growth from multiproduct customers is accelerating, which is helping expansion within our installed base. As it relates to gross profit, I would say it's a couple of things in terms of what's driving the acceleration. First, strength in our higher-margin products, right, Voice software add-ons like Verify or some of our voice software products, strength in our support and services organization, all of those pieces of the business are very high margin. So that helps on the gross profit growth side. But in addition to that, we continue to focus on optimizing costs. So e-mail margins continue to improve as we lap the cloud migration project that we undertook really to optimize our hosting environment. And we also continue to pursue things like direct connections with different carriers around the world. We announced in late March that we became the first cloud communications provider to secure direct connections for 10DLC and toll-free messaging with all major U.S. carriers. Things like that help us drive efficiency in our Messaging business. So I'd say it's a combination of mix as well as cost efficiencies. In terms of how to think about it going forward, no change to kind of what we've said. We expect gross profit to grow at a similar rate to organic revenue.

Our next question comes from the line of Taylor McGinnis of UBS.

Congrats on the quarter. Just as we look at the 3Q guide, it implies that the strength that you saw in the first half of the year is going to continue into the second despite some of the tougher compares. So could you touch on the drivers underpinning that guide? It seems like it assumes that messaging growth can maintain the levels that we've seen, excluding A2P fees. But you also mentioned things like 30% plus verified growth and an acceleration in self-service. So maybe you can just unpack how you're thinking about growth across the different segments because it seems like you're seeing strength in a bunch of different areas.

Yes, sure. I'll start. So I'm not going to get into each of those pieces for Q3, but what I'll talk about is how we -- how they performed in Q2. So 17% growth overall, incredibly strong. Perhaps more importantly, gross profit growth accelerated to 18%. And we look -- and when we look at the drivers of that, on a sales channel basis, ISVs and self-serve continue to perform very well. ISVs were 25% plus, self-serve, 30% plus. Products were very strong. Messaging, 28%. And I'd say that's volume in the Messaging business as well as some of our other newer channels like WhatsApp and RCS contributing well, albeit off of a smaller basis. Voice was above 20% in the quarter. That's both the channel as well as some of the software add-ons that Thomas was talking about a minute ago. And then software add-ons overall were very strong. So it's pretty broad-based. And when we look at it by industry, same thing, right? Tech, financial services, health care, all very strong. So we feel good about the setup for Q3. We are flowing some of that goodness through to our guidance. We're guiding 11% to 12%, which is the highest guidance that we've offered in 3 years. Now that said, I recognize we beat by 5% plus in Q1 and Q2. We don't expect that to be the new norm for the business. We do face some more challenging comparisons in Q3 and Q4 in Voice and software add-ons. They started to accelerate in the back half of last year. So we are facing into that a little bit as well.

Our next question comes from the line of Samad Samana of Jefferies.

I'll echo the congrats on the strong quarter. Great results. Maybe just on the Voice AI strength, how much of that is new customer acquisition and onboarding with them lighting it up versus existing customers expanding into Voice AI products? And then to the extent that you can break it out, I mean, how concentrated is that Voice AI strength? Or is it relatively broad-based? And then I have one follow-up.

Samad, it's Thomas. The strength in Voice AI is broad-based across all of our channels. I do want to highlight, though, self-service, Voice, in particular, was very strong growth with over 50% year-over-year. So a lot of these customers are originating as Voice customers in the self-service channel. And as I mentioned in a couple of examples earlier, we're just seeing them start with Voice and then expand to other channels as well. Messaging is the natural follow-up, RCS, et cetera. So if you look at it from the purely AI natives, we're seeing that as well as the larger, more established ISVs where they're adding Voice into more of their agentic autonomous customer engagement type workflows. Great example of that was the Atlassian work that we're doing with the partnership there about embedding a lot of our Voice AI capabilities directly in their Customer Service Management platform that they just launched. So it is pretty broad-based across enterprise, ISV large as well as the AI natives.

Our next question comes from the line of Elizabeth Porter of Morgan Stanley.

I wanted to follow up on the new console where you noted that the majority of existing customers have migrated and the conversion is more than 90% higher. Just what precisely is the conversion metric measuring? And since it is still pretty new, should we be thinking about kind of the second product attach starting to be an uplift to revenue with a 2027 contributor? Or how do we think about the timing of the feature changes and when they can start to benefit?

Yes, Elizabeth, as Khozema mentioned earlier, the conversion rate that we're seeing on the one Console is largely because we've reduced a lot of the friction in the process of signing up with Twilio, getting started, setting up their first campaigns or messages, et cetera. What we're seeing is in the top of the funnel, really strong conversion rates from the launch in May all the way through Q2. That those -- a lot of that's experimentation that starts to result in production workloads getting online. Those are all good leading indicators for us in future revenue realization as those customers go more into volume. But just reducing the friction upfront and having that conversion rate all the way through the funnel is what we're looking for, and the leading indicators are quite positive.

Our next question comes from the line of Callie Valenti at Goldman Sachs.

Congrats on the quarter. When you look at your pipeline today versus a year ago, what inning do you think we're currently in, in kind of seeing this uplift to the Voice ecosystem as a result of AI, both with AI natives and maybe as other businesses adopt AI as well? And what factors do you kind of consider when measuring the durability of this tailwind and ability for Twilio to benefit kind of regardless of where the value accrues in the rest of the stack?

Yes. Good question, Callie. This is Khozema. I would say it's pretty early innings, very early innings, as a matter of fact. I mean, like one way to kind of conceptualize it is that if you just think about like the number of Voice AI interactions that you yourself have had. My guess is it's like probably less than 5 or 6 over the last year or so. That's certainly the case for me. And so I think the reality is that while we're seeing pretty good growth right now, like a lot of this volume is still very much on the come. Now the reason that you do get customers to end up choosing this stuff, especially like in our suite with Conversational Intelligence and Memory, it has the benefit of doing 2 things. One is that it's driving high ROI. Otherwise, they wouldn't buy it in the first place, obviously. But the second thing is that it actually also allows them to reduce their token spend because there's this notion of context that's being used to drive the Memory, to drive the Intelligence. And by using context, you don't have to kind of scour the history of the Internet. You're just using what's relevant for that particular consumer interaction. And so as we think about like durability going forward, I mean, I would imagine like there are probably going to be some ups and downs as the AI story unfolds. But the secular tailwind, I think, is very clear. The ROI that we're seeing with customers is also very clear. And so I would imagine that given that it's early innings, given that we're seeing very high ROI, both in terms of revenue uplift and cost reduction with our customers, there's significant durability, not just into like 1 or 2 years, but for many, many years going forward.

Our next question comes from the line of Jackson Ader of KeyBanc Capital Markets.

I was curious about the split between net new revenue and the existing net retention rate. If I just do a quick glance in the last few quarters, it's been -- you grow at 15%, 16% organically and the net retention rate is about 5% or 6% below that at 110%, 111%. And I'm curious, as you add on these both like new channels and new customer acquisition channels are improving, should we expect that the growth over and above the net retention rate could start to widen relative to history?

Yes. Jackson, you're very, very hard to hear. So we think we got the question. Basically, I'm going to summarize it as follows, that you're asking about what's the difference between DBNE and the overall growth rate, especially when you adjust for fees. I think that's the gist of it. And I think that there's 2 things going on. So one is that, as Aidan said in her answer to a prior DBNE question, like we're definitely seeing strength in same-store sales. So we did see an improvement in that quarter-on-quarter and a number of these customers that have been with us for a very long time, like they continue growing and obviously contributing to the overall organic growth rate. In addition to that, like we're also seeing like a lot of new customers, right? So Thomas gave you a number of examples. We gave you a number of examples in our prepared remarks, like those guys are obviously starting to contribute to the delta, if you will, between DBNE and our overall organic growth rate. And that's a great setup for us, obviously, right? Because if you kind of follow that story that Thomas gave you a second ago about that customer that started with us 1 to 2 years ago, they were like close to kind of zero in spend, started with one product, started adding multiple products over time, like that's another factor that I think plays into the durability that we see over time. And so these NPCs, new kind of paying customers, as we call them internally, they'll turn into expansion customers over time.

I'll just add one more quick data point on that. We are seeing, for example, our largest customer cohort, the $1 million-plus customers, that's growing over 20% as well. It's another example of the expansion that we're seeing.

Our next question comes from the line of Nick Altmann of U.S. Bancorp.

Awesome. I wanted to follow up on Elizabeth's question on the new console. And the first part is just how much of the acceleration in multiproduct revenue in the quarter would you attribute to the new Twilio Console? And the second part is, I understand it's early, but how meaningful do you believe the new console can be to driving multiproduct revenue mix higher in the near term, especially as it relates to some of the higher-margin offerings such as the software add-ons, Voice, et cetera?

Yes. In terms of your first question, Nick, it very little. It didn't contribute much at all in terms of multiproduct revenue in the quarter.

I will say, Nick, we are very optimistic about what it will do as customers are signing up in the new console, as I mentioned, going through the conversions, the upgrades to a place where they're activating their first product. One of the benefits of the new console is that we have credits available for customers to try multiple products as part of that one console experience. And as they're activating the first channel, they can start the second channel, the third channel, et cetera, with some of those credits. So we're going to begin to see that play out. I know it's hard to predict exactly when and what the implications will be from a revenue realization perspective, but the feedback we're getting from users have been really positive.

Our next question comes from the line of Derrick Wood of TD Cowen.

Congrats from me. Khozema, OpenAI recently announced a new product called Presence, and they mentioned an early focus was using their speech model for voice and text Conversational Interactions, I think inside customer support and customer experience settings. I mean with this backdrop, how do you see kind of OpenAI as a customer, a partner or a competitor? And what are some of the new opportunities that you could target with them given the innovation with their models and now at the application layer?

Yes. I would say this is not unique necessarily to OpenAI, but a number of folks that we work within the ecosystem, they probably fit all of those descriptions based on different characteristics at different times. I think, by and large, partner in this case. I mean I think for the most part, like what we see and hear expressed from customers is that they prefer working with a neutral party. And so being able to integrate from whatever LLM or data model of their choosing, being able to integrate off of whatever data warehouse, being able to integrate off of whatever context layer, being able to integrate off of whatever cloud. So I think we're going to stick to our positioning as being kind of the Switzerland of it all. And customers are going to make decisions and they're going to change those decisions pretty rapidly, right? And you already see this a lot with companies. And I would certainly put Twilio in the mix, too, like we're constantly experimenting with different models and as different ones improve or the cost characteristics change or whatever, I think having neutrality be the calling card of the company, I think that best situates us going forward. And then if a customer wants to avail themselves of a particular tool, perfect. They can integrate to us either way, and they can get up and running with Twilio.

Yes. Just to add to that, at SIGNAL, we did announce a number of integrations with AI model providers, Codex being one of those as well as Claude Code and Vercel, Replit, Figma, all those different Cursor. So we are, as Khozema said, focusing on bringing Twilio into the agent builder tool set so that it's easier for people to be able to build and integrate their AI agents directly with Twilio Communications and Infrastructure. And we're doing the same thing with the Microsoft, the AWS, et cetera, as well. So back to the point of you got to reach the end user at some point on their device and Twilio Super Network connects very nicely into those AI frontier model infrastructure.

Our next question comes from the line of Siti Panigrahi of Mizuho.

Great. You guys position Twilio as more like a neutral infrastructure provider in this agentic era, now integrating with LLMs and other data warehouse. But how do you see as some of the like system of records company like Salesforce, ServiceNow and other front office company, they try to get into this space. Do you see more of them as more of a competitive threat? Or do you see more as a complementary solution to that?