Twilio’s second SIGNAL Singapore event in October underscores the vendor’s aspirations to build its global presence and grow its international revenue. SIGNAL Singapore was the second of three regionally focused events Twilio held in 2024.
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Summary
Twilio’s second SIGNAL Singapore event in late October underscores the vendor’s aspirations to build its global presence and grow its international revenue, which in 3Q24 represented 35% of its total global revenue of $1.13bn, or $396.8m. In lieu of its global SIGNAL event, which is held in the US, SIGNAL Singapore was the second of three regionally focused customer and partner events Twilio held in 2024 – the others were in Sao Paulo, Brazil, and London, UK – following on from the two regional events it hosted in 2023 (London and Singapore).
Asia Pacific and Japan is the fastest-growing region for Twilio, despite market complexity
Twilio CEO Khozema Shipchandler told the SIGNAL Singapore audience that Twilio expects Asia Pacific and Japan (APJ) to be its fastest-growing region. Meanwhile, Robert Woolfrey, vice president of the Communications business in APJ, told analysts at the event’s co-located analyst session that Twilio is growing its business with all its existing customers in the region. The company acknowledges the country-level complexities of operating in APJ, which means tailoring its go-to-market strategy on a per-country basis. For instance, countries such as Australia and New Zealand are more enterprise-driven markets where Twilio can engage directly with brands. In other countries, such as India, Twilio finds it makes more sense to work with partners such as independent software vendors (ISVs) or resellers (for example, Japanese telco SoftBank is a reseller partner) to engage with enterprise customers. It’s a different story again in China, where Twilio is focusing on helping Chinese businesses to reach and operate in international markets, rather than providing services domestically.
India represents a good example of how Twilio has pivoted its go-to-market strategy to effectively engage in an attractive, yet challenging market: Twilio opened a virtual office in Bengaluru in April 2020, at the height of the COVID-19 pandemic, before acquiring the Indian-based communications-platform-as-a-service (CPaaS) provider ValueFirst in March 2021. In April 2023, it sold ValueFirst to another Indian CPaaS vendor, Tanla Mobile. Woolfrey says complex regulatory requirements and extremely competitive pricing were two of the factors governing Twilio’s decision to work with ISVs in India instead. Twilio customers in India include some of the largest e-commerce providers. One of the largest corporations in India is using the vendor’s Segment customer data platform (CDP) to provide its customers with more personalized marketing campaigns and customer engagement. Since deploying Segment, it has seen a 250% increase in its marketing ROI and a 200% increase in conversions.
When speaking with SIGNAL Singapore attendees, two key themes emerged. The first was their lack of awareness of the breadth of Twilio’s product portfolio until the event. Some of the attendees that Omdia spoke to were genuinely surprised at what Twilio offers, which means that despite its already significant market outreach efforts, the vendor still has plenty of opportunity to expand its use – and regional SIGNAL events have a role to play.
The second theme was a welcoming of Twilio’s announcement, concurrent with SIGNAL Singapore, that it will continue to support its Twilio Video product in perpetuity, based on customer feedback. One regional Twilio customer, which is using Twilio Video for customer verification, told Omdia at SIGNAL that it had started shopping around for alternatives when Twilio previously announced its end of life (EOL) in November 2023, but is happy that the vendor is continuing the product. It seems Twilio has in this case avoided customer churn. However, the challenge for Twilio is that the uncertainty the EOL announcement roused within its customer base means it has to defend itself against moves in the interim by other vendors to sell their video offerings to Twilio Video customers.
Twilio has progressed toward profitability in 2024
In addition to Shipchandler taking over the reins as CEO in January, it made three other key C-suite hires, announced in May, who were also in attendance at SIGNAL Singapore – Chris Koehler as chief marketing officer, Inbal Shani as chief product officer for Twilio Communications, and Thomas Wyatt as president of Segment. All three come from former (i.e., Box, GitHub, and Amazon Web Services) or current (i.e., Cisco and People.ai) Twilio customers. This means that, in addition to their techco credentials, they have customer-based insights and connections that will be invaluable to Twilio as it continues to focus on transforming its strategic direction, go-to-market approach, and product roadmap, to enable customers along their journey to deliver personalization at scale. The vendor reiterated that it is committed to delivering product innovation, financial discipline, and operating rigor.
Twilio could achieve its profitability target in 4Q24, with its losses narrowing significantly year-on-year in 3Q24, down to $4.9m, from $108.9m in 3Q23. The Communications business is delivering the majority of revenue to Twilio, generating 93.5% of the vendor’s revenue in 3Q24, and growing 10% year-on-year; by contrast, Segment revenue growth was flat.
Following its decision earlier this year to keep Segment, after a comprehensive review of the business, Twilio has doubled down on its messaging around “building personalization at scale” – including at SIGNAL Singapore. “Building personalization at scale” is centered on the Segment CDP; it means making it easier and quicker for enterprises to gather customer data from multiple sources (in addition to the channel data from its communications channels), contextualize that data to provide personalized engagement experiences to their customers on the communications channels they prefer, and harnessing AI to do so – all in a way that engenders consumer trust. Woolfrey said that Twilio’s Consumer Preferences Study 2024 found that 86% of respondents in APJ expect brands to use their preferred communications channel, and 56% will not purchase from brands they do not trust.
Twilio’s relatively new Unified Profiles (launched in beta in March 2024) is one of the key products underpinning that higher level of AI-enhanced personalization. Kathryn Murphy, Twilio’s Senior Vice President of Product, highlighted Unified Profiles at SIGNAL Singapore, along with a suite of other AI- and GenAI-based capabilities, including Agent Copilot, AI Predictions, Predictive Audiences, Generative Audiences, and Linked Audiences – and previewed more that are in beta.
The vendor has several products focused on helping brands to build customer trust, including Verify Fraud Guard, which allows brands to block suspicious SMS messages being sent from their Verify service. Verify allows brands to verify their customers using multiple channels, including two-factor authentication messages sent by SMS, voice, and WhatsApp. Twilio said that just under half a billion fraud attempts were blocked globally between June 2022 and July 2024 using Verify Fraud Guard.
Alongside other vendors in the industry, Twilio is developing branded calling and messaging products, which will again help its enterprise customers to provide a more trusted experience to consumers. Given the high incidences of robo calling and SMS spam, consumers are wary of answering a call or responding to a text message. Enterprises will be able to use these types of services to verify to their customers that they are receiving communications from a legitimate brand, which will raise consumer trust, improve the customer experience, and increase consumer engagement.
There was also messaging at SIGNAL Singapore around the vendor’s “better together” approach – that is, the synergies inherent in combining the capabilities of Twilio’s Communications products with those of Segment. For example, there is value to be unlocked by adding data and intelligence about customers’ communications behaviors to the Unified Profile to further enhance the customer experience. This is a product direction that Twilio is exploring, and one that could potentially be a unique differentiator for the vendor.
Meanwhile, Twilio has also rolled out internal initiatives aimed at supporting or enabling its transformation, including leveraging its own products to better market to, engage with, and support customers. The vendor uses these results as valuable proof points in customer conversations, highlighting the benefits that are possible across Twilio’s platform.
Appendix
Further reading
Mobile Messaging Traffic and Revenue Forecast: 2024-29 (November 2024)
Consumer Mobile Messaging 2030 (October 2024)
Messaging Apps Users, Traffic and Revenue Forecast: 2024-29 (October 2024)
Digital Consumer Insights: Advanced Communications and Messaging (September 2024)
“Twilio Analyst Summit 2024: CPaaS is Twilio’s core, but consumer engagement is its future” (June 2024)
Omdia Universe: CPaaS Platform Providers, 2023-24 (November 2023)
Author
Pamela Clark-Dickson, Principal Analyst, Advanced Messaging and Communications