TWLO customer concentration

Uber was 12% of revenues in the March 2017 quarter. They aren’t losing all of Uber’s business, probably about 25-30% of their business will be lost in 2017. This is 25-30% of what TWLO forecasted when they put their original guidance together. BTW, on the call TWLO mentioned that they acquired Grab as a customer. Grab is the Uber of Asia and has a network of 700,000+ drivers (that’s the number that I remember).

WhatsApp was 5% of revenues in the March 2017 quarter.

Their 3rd largest customer was not mentioned by name and they were 2% of revenues.

The rest of their 40,000+ customers taper off in a very long tail.

They added about 4000 new customers in the quarter (about 300+ by acquistion and the rest organically).

Other than WhatsApp, it is unlikely they TWLO will lose customer business due to in-house technology development. The question is whether others can effectively compete with TWLO which might commoditize their services. TWLO doesn’t seem to think that this will happen. I don’t know one way or the other.

Chris

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Chris,

That is the first genuinely positive spin on the quarter that I have heard. Yes, there are no more huge customers to cause paranoia and disaster.

Uber is a special case however. My understanding is that Uber is going to not use competitors, but in certain territories and use cases to start communicating in app. Meaning, no need for a service that Twilio offers, and the communication is handled directly through the Uber app.

This was a competitive means of communicating that analysts brought up a few months ago as something that has just started, and that it would potentially take business from Twilio as an alternative means of doing what Twilio does (both technologies having trade offs).

So the loss of Uber has multiple layers to it from a competitive advantage perspective.

This said, TWLO’s long-term future is in the enterprise. Doing things for enterprises such as they did for ING. That is where TWLO has enormous value, high switching costs, and produces large revenues and margins. Disrupting and either displacing (or consolidating) expensive (and most disparate and patched together) telephone communication systems in call centers.

For those interested, we discussed this yesterday using a very insightful, but frighteningly long article, but worth the read, if one wants to understand Twilio’s true potential: http://discussion.fool.com/i-think-we-largely-pegged-twilio-here…

That is what gets Twilio to the promise land. That road is still open and available.

As such, what I am most interested in is what new enterprises did Twilio land as customers this quarter?

Anyone listen in? Any names given?

Tinker

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