How Do They Make Money?

TWLO 2023 Annual report https://investors.twilio.com/static-files/9bf15d10-7a03-4fe2-a251-4f4531aedb89

Twilio is a B2B company that helps businesses communicate with their customers. They have two business units: Communications and Data & Applications.

Communications is further broken down into three groups: Messaging, Voice, and Email, Marketing Campaigns, Flex, and User Identity and Authentication

They track the following Key Business Metrics:

• Active Customer Accounts (256K in 20221, 290K in 2022, 305K in 2023)

• Revenue (2.8B in 2021, 3.8B in 2022, 4.1B in 2023 61%/35%/9% growth rate)

They make money from one of two models:

• Usage-based model

  • SMS and Voice Services: Companies pay Twilio each time they send an SMS or make a voice call using Twilio’s infrastructure. The pricing varies depending on factors like the destination country and message type.

  • API Usage: Twilio offers APIs for SMS, voice, email, video, and other communication services. Businesses pay based on how much they use these APIs, typically with a pay-as-you-go model.

• Subscription Revenue

  • Twilio Segment: After acquiring Segment, a customer data platform (CDP), Twilio expanded its offering to include data integration tools. Segment operates under a subscription model where businesses pay for access to the platform based on the volume of data processed or managed.

  • Twilio Flex: Flex is Twilio’s customizable cloud-based contact center platform. It’s offered with a subscription pricing model where companies pay for each agent using the platform, either by user count or usage time.