Yahoo Finance

Aidan Viggiano

Thank you, Khozema, and good afternoon, everyone. Twilio had a strong start to 2025, delivering our third consecutive quarter of double-digit revenue growth and year-over-year growth acceleration. For Q1, we generated revenue of $1.172 billion, up 12% year-over-year, record non-GAAP income from operations of [$213 million] and $178 million of free cash flow.
Revenue in our communications business for the quarter was $1.097 billion, up 13% year-over-year. This was driven by the continued progress we're making across our go-to-market growth levers, including ISVs, self-serve, cross-sell, and international expansion. We also saw strong growth in messaging both in the US and internationally.
Segment revenue for the quarter was $76 million, up 1% year-over-year. We are seeing continued improvement in leading indicator metrics including AE productivity and win rates, as well as a meaningful reduction in churn and contraction in the quarter, which hit its lowest level since Q1 2023.
Our Q1 dollar-based net expansion rate was 107%, reflecting the improving growth trends we've seen in our communications business over the last several quarters. Our dollar-based net expansion rate for communications was [180%], and the dollar-based net expansion rate for segment was 94%.
We delivered non-GAAP gross profit of $602 million, up 6% year-over-year. This represented a non-GAAP gross margin of 51.3%, down 270 basis points year-over-year and 60 basis points quarter-over-quarter. The year-over-year decline in gross margin was primarily driven by nonrecurring hosting credits we received in the year-ago quarter as well as a higher mix of international messaging revenue in communications in the quarter.
The sequential decline was driven by the acceleration in international messaging in Q1. Despite the mix effect on gross margins, international unit economics remain strong. Non-GAAP gross margin for Communications was 49.8% and non-GAAP gross margin for Segment was 74%. Non-GAAP income from operations came in ahead of expectations at a record $213 million, up 34% year-over-year, driven by strong revenue growth and ongoing cost discipline.
Our non-GAAP operating margin of 18.2% was up 300 basis points year-over-year and 170 basis points quarter-over-quarter. In addition, we generated $23 million in GAAP income from operations.
Non-GAAP income from operations for Communications was $277 million and non-GAAP loss from operations for Segment was $2 million. Segment operating losses improved sequentially as a result of ongoing cost discipline and gross margin improvement in the quarter, and we remain on track to achieve breakeven non-GAAP income from operations for Segment in Q2.
Stock-based compensation as a percentage of revenue was 11.9%, down 120 basis points quarter-over-quarter and 330 basis points year-over-year as we continue our efforts to reduce equity compensation. We anticipate a modest increase in this percentage in Q2 due to the timing of our annual refresh brands. We generated free cash flow of $178 million in the quarter despite making $122 million payment related to the payout of our annual cash bonus program.
This headwind was partially offset by strong collections and timing of payments during the quarter. Finally, in January, our Board authorized a $2 billion share repurchase program expiring at the end of 2027 and we are targeting to return an average of 50% of our annual free cash flow to shareholders from 2025 to 2027.
We began executing on this program following our Q4 earnings release in February. We repurchased $130 million of shares in the first quarter, and we executed more than $90 million of additional repurchases in April.
Moving to guidance. We're encouraged by the growth acceleration we delivered over the last three quarters. And as we look ahead, we're optimistic about our ability to execute against the things we can control. And we're also mindful of rising macro uncertainty and the potential impact it could have on the health of our customers' businesses and our own. As Khozema mentioned, we have not seen any impact on our business through the end of April, and we'll continue to monitor the situation closely.
Customer engagement and usage remain healthy but we're taking a prudent approach to our outlook and only flowing through a portion of our Q1 beat into our full year outlook, allowing us to navigate any potential macro risk over the balance of the year.
For Q2, we're initiating a revenue target of $1.18 billion to $1.19 billion, representing year-over-year growth of 9% to 10%. Based on our Q1 performance and Q2 guidance, we're raising our full year 2025 organic revenue growth guidance to a range of 7.5% to 8.5%, up from 7% to 8% previously.
Turning to our profit outlook. For Q2, we expect non-GAAP income from operations of $195 million to $205 million, reflecting incremental costs associated with our annual merit increases, along with expenses for our SIGNAL conference, which we're hosting later this month. We're also raising our full year non-GAAP income from operations to the range of $850 million to $875 million. Similarly, we're raising our full year free cash flow to the range of $850 million to $875 million.
I'm very pleased with the accelerated revenue growth we delivered in the first quarter as well as our ongoing cost discipline that is driving strong profitability and free cash flow. We had a strong start to the year, and we will continue to focus on what we can control. As we seek to drive durable revenue growth continued operating leverage, and strong free cash flow generation throughout 2025.
And with that, we'll now open it up to questions.

Question and Answer Session

Operator

(Operator Instructions) Meta Marshall, Morgan Stanley.
Michael Turrin, Wells Fargo Securities.

Michael Turrin

Okay, great. Thanks, appreciate you taking the question and nice job with the results. I think the overall question is just tied back to some of the items you're mentioning, specifically on drivers of upside to growth in the Communications segment, you saw in Q1?
And then just in terms of lining up what we have Q1 and Q2 with the rest of your guidance, the second half as a more conservative growth assumption, I'm wondering if that's tough compares, if there's anything macro embedded there? Just anything else for us just to consider as we work throughout the course of the year and are updating our models accordingly as well.

Aidan Viggiano

Sure. Yes, so in terms of starting with Q1, I'd say it was similar to what we saw in Q4 and Q3. It was pretty broad in terms of the strength that we saw across the business. It was our third consecutive quarter of double-digit revenue growth. Messaging, in particular, were strong, both US, and internationally.
And when you look at it by industry, we saw all of our top five verticals grow, financial services, tech, professional services, retail, e-commerce, and we saw those trends continue through April. And so you're seeing that kind of influence our guidance for Q2. We're guiding to 9% to 10%, that's up from 8% to 9% last quarter.
Now while customer engagement, usage of our products remain healthy, we are taking a prudent approach to our forecast, and we only flowed through a portion of our Q1 revenue beat which we think allows us to navigate macro risks as we think about the balance of the year. To be clear, we're not trying to signal that the second half looks weaker today than it did when we gave guidance a quarter ago, the implied reduction in the second half revenue is simply conservatism related to factors beyond our control. So that's what you're seeing there, Michael.

Operator

Nick Altmann, Scotiabank.

Nick Altmann

Awesome. Khozema, I wanted to ask about the resurgence in voice driven by generative AI. You outlined conversation [indiscernible] win with Sierra and then some new voice intelligence features, which is all really interesting. Can you maybe just talk about how you see voice playing out over the medium term? I mean today, it seems like it's more of a driver on the generative AI native customer side, but perhaps you're seeing greater interest from some of your long-time customers, which can surface cross-sell opportunities.
So any broader thoughts on the resurgence in voice would be great? And just any medium-term high-level thoughts as you guys start to see more voice traction here?

Khozema Shipchandler

Yeah. Sure, Nick. I mean I'd say, by and large, today, what you're seeing play out is really animated by AI. Like voice still has some of the hangover, right, from robo calling and stuff like that in terms of like a pure-play channel, but as it relates to AI, so many of these interactions take place through voice that I think that's what ends up driving a lot of the recent resurgence, a lot of the interest. Obviously, you've got thousands of start-ups who are building their own voice AI capabilities. And so I think that's pretty exciting and very interesting for the channel.
So I think that, that is the basis of really what we're seeing. And I think we're seeing it in a number of different pockets. I think that what's exciting for me about it is, is that much in the same way that you saw for the preponderance of our business, that's going to end up translating into more meaningful interactions through SMS and e-mail over time as well. So I think voice is interesting, at least right now, and I think it will be for a sustainable period of time. But I think even more interesting is some of the cross-channel applicability that goes beyond that.
One last thing I'll add is, we talked a little bit about, I think Thomas did during our Investor Day about how customers see higher ROI when they use multiples of our products. And I think one other anecdote with voice there is, is that we do see much higher ROI with customers when they're using voice in conjunction with one of our other channels.
And so we have seen some ongoing and increased, I would say, customer interest along those lines. And so I think that's pretty interesting, too. And then finally, as Branded really takes off, I think that's ultimately what becomes the defense against stuff like robo, and I think that allows the channel to kind of come back overall.

Operator

Meta Marshall, Morgan Stanley.

Meta Marshall

All right. It's got the unmute to work and so I hang up. I appreciate the question. Maybe first question, just can you give a sense of -- you've seen this uptick in kind of multiproduct adoption, just kind of where you're seeing kind of that greatest attach? And then maybe second, just particularly with these ISV relationships expanding and kind of continuing to have better growth kind of internationally.
Just does it change your perspective on what markets internationally are the most attractive?

Thomas Wyatt

Hi Meta, it's Thomas Wyatt here. So just to touch on the multiproduct adoption. We're seeing it broadly both in terms of customers adding second and third channels. For example, if they were a voice, they're adding messaging and e-mail and a lot of consolidation of spend there.
And the other big area that we're seeing it is the add-on software, the advanced features on our voice products as well as our messaging like SMS pumping protection and Verify are growing much faster than the company average. So those combination is really what's driving a lot of the cross-sell and solutions motion.
And then in the ISV channel, we're definitely seeing more expansion. Again, another example where Khozema mentioned before around voice, a lot of our ISVs that were primarily messaging customers are now adding voice for customer care use cases, as an example, in broadening out their spend with us. And that's happening in international markets as well as domestically.

Operator

Mark Murphy, JPMorgan.

Mark Murphy

It's nice to see the revenue acceleration in this kind of an environment and coming with the margin expansion, so congrats on that. Khozema, I wanted to ask you on the communications side. It's great to see all these multiple new AI logos. And I think especially the Sierra, because it's just a coveted logo and a high-growth company.
Can you help us understand in a case like that, how exactly are they using Twilio? What I mean is it -- like is it tied to the front end of the launch cycle through authentication? Or is it something that's going to align with more with ongoing usage, whether it's for Sierra or for other AI companies? Then I have a quick follow-up.

Khozema Shipchandler

Yeah. Good question, Mark. So it varies a little bit from customer to customer. I would say that in the majority of use cases, especially as companies are getting started, they are very eager to get their products out into the marketplace. They need infrastructure and our voice infrastructure is obviously very strong.
And because of our well-known brand and our high quality, I think a lot of these AI companies end up attaching themselves to our voice stack. So I would say that, that is like a very initial kind of entry point where customers attach themselves.
Thomas alluded to another one of them, which is once they start using it, a lot of these companies end up being voice AI agents, voice intelligence is very powerful in that environment. Like a lot of these deployments end up being customer care.
But during the course of those customer care engagements, you obviously do want to learn a lot about those interactions so that you could end up serving your consumer base a lot better over time. And so I think that provides an avenue for us effectively to cross-sell voice intelligence and then fundamentally incorporate more of our segment capabilities over time, too.
And then I would say, kind of the third version of it is, and this is sort of on the other side of the continuum. But increasingly, we're getting excited as well is where a customer and this is kind of irrespective of channel, but I'll just stick with voice right now, where they're using voice, they're using our unified profile vis-a-vis segment.
And then whether it's our technology, whether it's one of our partners technology, they're combining it with AI to be able to put their own capabilities out there in the world. And like Cedar which was one of the customer references that we provided this time. I'd say they're a very good example of being able to solve patient care in their environment by using that full string of capabilities.

Mark Murphy

Okay. That's very helpful. And then, Aidan, I was listening closely to all your comments on the macro environment. And I appreciate the way you're handling the derisking going forward. But when we think about transactional volume level, there's a lot of companies having issues.
JetBlue, Southwest, Delta, Starbucks, McDonald's, Lululemon, shipping freight is down. So I mean I'm just trying to understand, are you not seeing any impact of less consumers taking flights or less people dining out or anything like the transactional confirmation messages, even the marketing messages via e-mail or -- because I think you said even in April or are you saying there is some slowdown there you're just making up for it in some of the stronger vectors?

Aidan Viggiano

No, we're not seeing a slowdown, Mark. And obviously, like different industries make up a different portion of our revenue. I'd say like travel tends to be one that's a bit smaller in terms of our overall revenue mix. But we're obviously looking at the business in depth daily, right, daily volumes by country, daily volumes by industry, by sales channel, by customer level trending. So it's really grounded in data, and it incorporates what we're seeing through April, and it's still quite robust.
But we know that we're operating in a nuanced environment for sure. And given that we believe it's prudent to build in a sensible amount of conservatism and that's what you're seeing in the back half of the year, right? We only flow through a portion of our Q1 revenue beat. We're not yet seeing impacts on our business, but we're watching it very, very closely.

Operator

Alex Zukin, Wolfe Research.

Alex Zukin

I guess maybe a quick one for me is maybe just double down or double click on some of the gross margin headwinds that you saw in the quarter? And I asked about that because if I look at the delta this quarter between gross profit dollar growth and top line growth, it's a lot larger than we've seen in the last few quarters. So I know that we usually don't kind of talk about guiding to that metric going forward.
But just given that divergence, I want to understand that if it's possible, how that -- how do we see that trending over the course of the next few quarters such that better appreciating kudos to everything you guys have done on the operating margin front, it's been amazing. But just wanting to understand kind of quality of revenue as we -- the quality of revenue dollar growth as we look at the rest of the year, how that should shape and flow based on what you're seeing today?

Aidan Viggiano

Yes. Let me describe a little bit what happened on gross margins. So importantly, we continue to be disciplined in the pursuit of the business that we go after, including maintaining price discipline, and we look at unit economic threshold. We shared some of that at our Investor Day earlier this year. The lower gross margins in the quarter were primarily a function of two things.
So we had some [indiscernible] of hosting credits that occurred in the first quarter of last year. And then we had higher international messaging mix. And that's a growth priority for Thomas and the team. We know that we're underpenetrated from an international perspective. So that's a focus for the team. And we saw good performance there in the quarter.
And in particular, we saw that this is the first quarter in over two years where international termination mix increased year-over-year versus the US. So you're seeing that kind of impact the gross margins. As we think about it going forward, so long as messaging makes up more than half of our revenue is going to be the primary driver of gross margins in any given quarter.
Over time, as we cross-sell into non messaging products, as we continue to innovate, we do think there's an opportunity to expand to higher gross margins. But in the near term, like messaging will be the factor, and it's really a function of where our customers are terminating their messages, which we don't have control over.

Alex Zukin

Got it. And then just any trends to kind of walk through in terms of how to shape that for the rest of the year?

Aidan Viggiano

We don't guide into gross margin. So there will be a little bit of variability quarter-over-quarter. I'll just say again, it comes down to messaging and termination mix, but we don't give a forecast on gross margins.

Operator

Joshua Reilly, Needham.

Joshua Reilly

So I guess what are you seeing in terms of carrier support for RCS messaging outside the U.S. versus here domestically? And maybe any thoughts on how this channel will scale between the U.S. and international markets?

Khozema Shipchandler

Yes. I think it's relatively early days still. I think we're investing from our perspective in the channel. We are seeing a little bit of customer adoption. My guess is, is that you personally don't receive a lot of RCS capable messages, sort of in the rich context that has been promised.
I mean they're labeled a little bit differently, especially on an Android device. But in terms of the rich capabilities, those aren't really coming across yet.
I think they're compelling, obviously, if they really start to kind of take off. And I think we are seeing some instances in which when you pair it both with branding as well as some of those rich capabilities, it does that deliver a pretty awesome experience. All of that said, I think that from our perspective, we're cautiously optimistic about the way that, that ends up contributing over time. I think it's really the ecosystem that's got to mature. Carrier support is in different places, I would say, Apple is in a slightly different place in terms of the way that it ends up working with iOS.
And so I think until such time that there's broad supportability from carriers, which there's not yet until there's kind of broad support from various other technology ecosystem partners, which there's not yet I think it's still going to be relatively muted.
But I think over time, there's potential there. And again, we've talked to a number of investors about this over the years, we're cautiously optimistic. I do think Twilio with communications data and AI is well positioned when that time comes, but that's kind of where we are today.

Joshua Reilly

Got it. That's helpful. And then just a quick follow-up on free cash flow. How should we think about the linearity for the balance of the year here? And any factors we should be considering as we balance out our models?

Aidan Viggiano

Yes. So as it relates to free cash flow, we increased our guidance range for the year by $25 million so it's $850 to $875, we delivered $175 million. In the first quarter, it was slightly better than expected but a relatively lower cash quarter just given the timing of our bonus payout.
As we think about Q2 we would expect -- we did see some working capital tailwinds in Q1. That was what drove kind of the slightly better-than-expected performance. I'd expect some of that to come back in Q2. So I would expect Q2 free cash flow to be more in line with Q2 non-GAAP income guidance. And then as we think of the balance of the year, you could obviously then do the math on what it implies for the second half given the $850 to $875 for the year.

Operator

Samad Samana, Jefferies.

William Fitzsimmons

This is Billy Fitzsimmons on for Samad. A 2-part question here. First, it's been a little over 2 years since we saw this level of active customers added quarter-over-quarter. Can we kind of break down what's driving that? [indiscernible], primarily a result of the AI self-serve investments you made and called out in the prepared remarks with that ISV momentum, that strength of adding new logos, something else or kind of all of the above?
And then second and kind of expanding on that, and I'm not asking for guidance here, just generally and qualitatively. To what extent did the macro dynamics in early April, so early second quarter that we're seeing other companies call out impact or not impact the momentum you're seeing with getting new customers on the platform?

Thomas Wyatt

Billy, this is Thomas here. I just want to touch on the first part of the question, which is the -- where we're seeing the customer growth. And absolutely, we are really pleased with the growth we had in the quarter, although you know we have 300,000-plus customers. So a lot of our revenue comes from the existing customer base. But we've seen the self-service channel is really accelerating.
And we touched about a lot of the reasons why.
Some of that is the AI start-ups and some of it is just a lot of people are building more voice enabled applications and they're using Twilio to do it. And some of those are larger direct customers as well that are new. So our new business machine is working better than it's been in years, and so we're pretty excited about the momentum from customers' perspective.

Aidan Viggiano

Yes. And as it relates to April, I'll just kind of reiterate what I said before. We're looking at the business on a number of different dimensions, really not seeing any kind of slowdown relative to the macro. It's grounded in data through yesterday, and it incorporates kind of, again, contributes, industry views, customer level views so that's the latest we have. We're continuing to monitor it daily, just given the usage-based nature of our business.
But there's really not anything I'd specifically call out through April.

Operator

Jim Fish, Piper Sandler.

James Fish

One of your ISVs announced around CEP solution and it kind of brings in the coopetition question. I guess, how are you framing this relationship now and that it won't disrupt the segment strategy while keeping everybody happy on the API side of things?

Khozema Shipchandler

I don't think it's going to disrupt it much, honestly. Like I think there's always been coopetition in the space in a number of different ways. And I just don't think it's a material dynamic in the way that we think about the business. I don't think it's material in the way that we think about our forecast with customers and it's obviously our job to make sure that we're providing compelling solutions. But in terms of impact, I think it would be pretty de minimis.

James Fish

Got it. And Aidan, for you, just on capital use here, we're roughly $2 billion net cash. You guys have said, hey, we want to be smart about how we use it and kind of earn the right around M&A. But as you think about that international arena around messaging, in particular, does it start to make sense to look into tuck-ins there to get you a stronger foothold internationally on the message routing side? Or how are you thinking about even accelerating the buyback opportunity given sort of the market reset?

Aidan Viggiano

Yes. So from a buyback perspective, we've been out in market. We've to date -- year-to-date, I'd say, purchased $220 million plus, I mean, $225 million worth of shares back. We have some flexibility in the timing of that as it relates to the $2 billion authorization that goes through 2027. So we're in market and we disclose those numbers.
So we'll continue for there so long as we think it makes sense and is attractive for the company.
From an M&A perspective, we kind of talked about it at Investor Day as well. We're being opportunistic from an M&A perspective. There's nothing in particular that we'll signal today or call out. We're always looking at what might make sense for the business, but we'll be disciplined, really focused more right now on kind of tech or talent tuck-ins to help accelerate our road map, but nothing more really to offer beyond that today, Jim.

Operator

Arjun Bhatia, William Blair.

Arjun Bhatia

Perfect. Thank you and congrats on the nice start to the year. One question for you because I just -- if we just zoom out for a second, I think Twilio has evolved quite a bit over past several years. Now if we go into this more volatile macro environment, and we do start to see consumption trends and transactional volumes get impacted. How should we think about Twilio in terms of the use cases that you're powering now?
Like what portion, whether qualitatively or quantitatively is more sticky, more strategic, more recurring versus a portion of your usage that's maybe a little bit more susceptible to macro or maybe something like factor authentication. I'm curious how you would break apart the business along those 2 dimensions there.

Khozema Shipchandler

Yes. It's a fair question. I mean, I guess, I'll give you as much color as I can. I think first of all, just to kind of reiterate a point that Aidan has made a few times, like at least through April, like we haven't really seen any impacts to the business. Like no one here is pretending that it would be not a -- that there wouldn't be any impact if the economy kind of went in a really different direction.
But at least based on the trends that we're seeing in our business, like we're just not seeing it materialize yet.
I think there's going to be puts and takes depending on how it plays out. I mean, I think the one thing -- and this is not the perfect analogies so just bear with me, but if you look back to like what transpired during COVID and a lot of companies were like forced to change their engagement models and the ways in which they were kind of deploying like we were obviously a beneficiary of that. Now a lot of that was driven by moving from sort of the physical world to the digital world. But the reality is that companies have to engage with their customers in some form or fashion to be able to sustain their own businesses, right? And so to the extent that we're super tied to transactional volumes and those [indiscernible] fall, yes, I mean, I think we would probably see an impact to our business in some ways.
On the other hand, I do think that there's also an opportunity for -- especially in the age of AI, right, as a lot of things are starting to happen. There's also an opportunity for elevated volumes as it relates to things like customer care, where you're using a combination of voice and our unified profile some AI to kind of activate. So I think it's kind of balanced going forward. I mean we're innovating on sort of the basis that the macro is going to be hard to call, and we're going to kind of plan for the things that are under our control. But I think it's a mixed bag.
And I do think that there are going to be some puts and takes, and we're not macroeconomists ourselves. And so that's why we're watching it all carefully. But so far, so good. And I think based on the stuff that we've got I think there's a real opportunity for it to kind of play out in that way, too.
All of that said, we obviously put out a financial framework, and we feel pretty good about it. And we're going to make sure that we manage the business with discipline, and you'll continue to see that from us going forward.

Arjun Bhatia

Perfect. That's helpful. And then just maybe a question on the cross-sell motion. Clearly, it's something you're focusing on and you're incentivizing your sales team to go after that motion. I'm curious how the sales team is reacting to it?
How well equipped you feel they are to sell other products like Verify and others and how that's impacting the size of customer that you're going after you move the market into the enterprise? Any color there would be helpful.

Thomas Wyatt

Yes. So this is definitely a multiyear journey that we're on, around cross-sell motion. We just get better at it every quarter incrementally. A lot of it is starting with enablement and making sure that all of our AEs have are ramped up on all of the products in the portfolio. And more importantly, though, customers are coming inbound and have the demand and interest in consuming more of Twilio across multiple channels, across some of our advanced add-ons in the feature.
So that actually makes it pretty easy for the AEs to be able to have those conversations.
And then from an R&D perspective, we're putting a lot of investment into integrating the technologies deep more deeply together to make the experience more frictionless. So like I said, we're seeing really strong growth in the most popular mature add-ons that we have around voice intelligence Verify and SMS pumping protection. And we're really excited about bringing personalization in as well from our unified profile capability and connecting that to use cases like we talked about around voice and ConversationRelay and AI assistance. So we're pretty pleased, but it's a multiyear journey, but we think this is one of the most, I think, productive growth levers we have over the next 3 years.

Operator

(Operator Instructions) Patrick Walravens, Citizens.

Patrick Walravens

Great. And congratulations on the third quarter of acceleration. So at the Investor Day, you heard with us that for Q3, hopefully I have this right. Growth by product was led by e-mail at 11%, smaller products at 10, messaging 8 and voice 6. And then growth by industry was led by retail 14, health care 13, financial services 12, professional services 12, and IT 10.
I was just wondering if you could share with us how those things have changed?

Aidan Viggiano

Yes. So those were Q3 LTM. We don't provide this quarter-to-quarter. We do provide.

Patrick Walravens

Yes. No, I don't expect the numbers -- if the order change.

Aidan Viggiano

Yes. I would say that on the industries, we saw strength in those top 5. So we called out our top 5 communications verticals. You mentioned the technology, financial services, professional services, health care and then retail and e-commerce. And in first quarter, they all grew very well.
From a product perspective, I'd say messaging was in particular, very strong this quarter, and we saw both U.S. and international messaging grow quite well. So beyond that, like I would say, pretty much in line with what you saw at Investor Day.

Patrick Walravens

[Tom], go ahead.

Thomas Wyatt

One more point, I think it's worth noting. We've talked a lot about the growth of self-service in the quarter, which was excellent, but also large deals in the quarter. Our communications business, in particular, [ 500,000-plus ] customers grew 37% year-over-year. So that's another grid motion that we're seeing as well.

Patrick Walravens

(technical difficulty) maybe this question is for you. So how should investors think about competition? So when you have these big deals, how does the competition play out?

Thomas Wyatt

I think it's interesting because from a Twilio perspective, competitors, depending on what channel you are talking about maybe different but a lot of the conversations that when we have around platform and how Twilio can be a partner for our the largest, we're having a conversation that spans multiple channels and a set of software capabilities that are differentiated.
For example, if you want to personalize your communications, really, there isn't another player that can also do that with the combination of [indiscernible] can do plus the communication channels that we do have. So when we think about it, there's always going to be the tactical competitors in individual channels, but our strategy is to really tell the bigger story and differentiate through the capabilities that are more broad and that sets us up for above average win rates against our competitors.

Operator

Michael Funk, Bank of America.

This is Matt on for Mike. Congrats on the strong start of the year. Maybe just one for Khozema. Voice, obviously transactional and then e-mail more marketing driven, but can you help us better understand the breakdown of use case mix across transactional versus marketing in the messaging product line?

Aidan Viggiano

Yes. So we haven't given that -- what we said historically, this is Aidan, by the way, Matt, not that you couldn't tell that from the voice. We've said it's roughly kind of evenly split between verification use cases, customer notification type use cases as well as marketing. So roughly 1/3, 1/3, 1/3. And that's kind of roughly the same today.

Operator

Thank you. And with that, this concludes the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Everyone, have a great day.