Good afternoon, and welcome to the Twilio Science Definitive Agreement to Acquire SendGrid Conference Call. My name is Chantal, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I will now turn the call over to Greg Kleiner, Vice President of Investor Relations and Treasurer.
Mr. Kleiner, you may begin.
Thank you. Good afternoon, everyone, and thanks for joining us on such short notice. As you've seen by now, we've announced the signing today of a definitive agreement to acquire SendGrid. Joining me today to discuss the transaction are Jeff Lawson, Twilio's Co Founder and CEO Sameer Dholakyeb, SendGrid's CEO and Lee Kirkpatrick, Twilio's CFO. Please note that both companies are still in a quiet period post the Q3 and will report earnings on November 6.
We will not be discussing Q3 results for either company at this time beyond the commentary provided in the announcement press release issued earlier today. In addition, since the acquisition is not expected to close until the first half of twenty nineteen, we will not be providing detailed guidance for the combined entity at this point. Some of our discussion and responses to your questions may contain forward looking statements, including, but not limited to, statements regarding our future performance, including our market opportunity, market trends, the anticipated benefits from the proposed combination, our ability to integrate the companies, customer adoption of our products, the benefits from our business model, our delivery of new products or product features and our ability to execute on our combined vision. Forward looking statements may contain words such as believes, anticipates, estimates, expects, intends, aims, potential, will, would, could, considered, likely and words and terms of similar substance used in connection with any discussion of future plans, actions or events identifying forward looking statements. All statements other than historical facts, including statements regarding the expected timing of the closing of the proposed transaction and the expected benefits of the proposed transaction are forward looking statements.
These statements are based on management's current expectations, assumptions, estimates and beliefs. While Twilio believes these expectations, assumptions, estimates and beliefs are reasonable, such forward looking statements are only predictions and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Finally, the discussion regarding the acquisition is for informational purposes only and is neither an offer to purchase nor solicitation of an offer to sell any securities nor is it a substitute for any offer materials that Twilio and its acquisition subsidiary will file with the SEC. No offering of securities shall be made except by means of a prospectus, meeting the requirements of Section 10 of the U. S.
Securities Act of 1933 as amended and otherwise in accordance with applicable law. The proposed transaction involving Twilio and SendGrid will be submitted to the stockholders of Twilio and SendGrid for their consideration. In connection with the proposed transaction between Twilio and SendGrid, Twilio intends to file a registration statement on Form S-four and joint proxy statement prospectus forming a part thereof, and each of Twilio and SendGrid will mail the joint proxy statement prospectus to their respective stockholders. This report is not a substitute for the registration statement and joint proxy statement prospectus that Twilio and SendGrid will file with the SEC or any other documents that Twilio or SendGrid may file with the SEC or send to stockholders of Twilio or SendGrid in connection with the proposed transaction. Before making any voting decision, Twilio's and SendGrid's respective investors and stockholders are urged to read the registration statement and joint proxy statement prospectus, including any amendments or settlements thereto regarding the proposed transaction when they become available they will contain important information.
Investors and security holders will be able to obtain free copies of the registration statement, the joint proxy statement prospectus when available and other relevant documents filed or that will be filed by Twilio or SendGrid with the SEC through the website maintained by the SEC at www.sec.gov. They may also be attained for free by contacting Twilio Investor Relations by email at irtolio.com or by phone at 415-801-3799 or by contacting SendGrid Investor Relations by email at irsendgrid.com or by phone at 720-588-4496 or on Twilio and SendGrid's websites at investors. Twilio.com and investors. Sendgrid.com, respectively. With that, I'll now turn the call over to Jeff.
Thank you, Greg, and welcome, everybody. We're incredibly excited to announce this proposed acquisition. The rationale is quite simple. By adding the leading email API provider to the Twilio family, we believe we can create the unquestioned platform of choice for developers and businesses looking to transform their customer engagement. This is an important day for the employees, customers and shareholders of both companies as the combined company can accomplish this mission much faster than either could accomplish on our own.
The 2 companies have a great deal in common. We share the same vision, the same model and the same values. We share the same vision, to create powerful communications experiences for businesses by enabling developers to easily embed communications into the software that they're building. Ultimately, our mission to fuel the future of communications requires us to power all of the key communications channels for our customers. We started Twilio by building voice, then SMS, video, web and mobile chat, channels like Facebook Messenger, WhatsApp and more.
Along the way, email has always been something that customers have asked us about. And they've always recognized and we've always recognized its importance as a vital communications channel for companies around the world. SendGrid's TAM is currently estimated at over $10,000,000,000 Since the launch of our engagement cloud, we're increasingly having higher level, more strategic conversations with executives about how to reinvent their customer engagement. And more often, these discussions are touching upon email as well. This has become even more apparent since the launch of Flex, our contact center application platform, as email is consistently one of the top requests from customers in our beta program.
Throughout the years, we've always seen SendGrid doing an amazing job for their customers and in the developer community, so it's a natural extension of our strategy. We share the same model as well. For both of us, it starts by empowering the developer through a low friction go to market model. You can see the power of this in our financial statements, but it also shows in the developer community. I'm very proud of the reputation that we've built over the years with developers through an open, honest and authentic engagement model.
And I think it's fair to say that one of the few companies that has also succeeded in winning the hearts and minds of developers is SendGrid. The parallel in our models also extends to the evolution of our products as well. We started with the programmable communications cloud and then evolved to add new engagement cloud to drive higher level functionality still in a programmable way. And SendGrid did the same. They started with an email API and are now adding value to their customers at a higher level through the marketing campaigns product.
The alignment of our products is remarkable, both at the programmable communications cloud layer and at the higher level engagement cloud layer as well. And finally, we share the same values as well. SendGrid has their 4 Hs and we have our 9 things. But at the core, the individual values share a lot of the same concepts, a devotion to customer success, humility and honesty. This shared culture was key in our consideration leading up to this deal.
To all of the Grittters listening today, I look forward to meeting you over the coming months. I believe this is going to be an amazing combination, and I can't wait to see what we can build together. So what does the future look like? SendGrid will continue to run as an independent unit with the existing management team intact and Sameer leading the way. We're excited to add the SendGrid talent to the Twilio family.
SendGrid's business is working quite well and we have no intention of disrupting that motion. There are also a number of areas where we see significant revenue and go to market opportunities, like energizing the combined developer communities and cross selling across both organizations. So with the same mission, the same model and the same values, the power of this combination is obvious. We are the leading communications platform powering voice, messaging, video and more. And by adding the leading email API provider as well, we can accelerate our mission to fuel the future of communications.
Sameer, let me turn the call over to you.
Thanks, Jeff. This is indeed an amazing day for SendGrid customers, employees and shareholders. Our vision has always been to be the world's most trusted customer communications platform and I couldn't be more excited as we work towards combining our companies to solve even more problems for our customers. Email is indeed a vitally important communications channel for customers around the world. And when combined with Twilio's platform, the opportunities for collaboration across our product lines and cross selling throughout both customer bases are just tremendous.
This combination can allow us to fulfill our vision significantly faster than we could have accomplished by ourselves. I'd like to thank all the gritters for all of your hard work to get us to this point in our story, of which I am so proud. And I believe this next chapter will be even more exciting. We've also been humbled to serve our more than 74,000 customers. Thanks to you for the trust you have placed in us thus far in our journey, and I believe deeply that our newly combined company can enable you to be even more successful driving engagement and growth with your end customers.
And I echo Jeff's sentiment, I can't wait to see what we can build together. Now let me hand the call over to Lee.
Thank you, Samir. We're all very excited as well. Under the terms of the definitive agreement, Twilio will acquire SendGrid for approximately $2,000,000,000 This will be an all stock transaction at an exchange ratio of 0.485 Trilio shares per SendGrid share. This equates to approximately $36.92 per share for SendGrid shareholders based on today's closing prices. The acquisition is expected to close in the first half of twenty nineteen.
Our two companies have a powerful financial profile. If you annualize the Q2 2018 non GAAP results for both companies, you get revenue at $734,000,000 gross margin of 59% and an operating profit of $18,000,000 As Greg mentioned earlier, we will not be providing updated guidance at this point for either company's Q3 results or what the combination will look like at closing. Both companies will report their Q3 earnings as regularly scheduled. I will point out that business remains very healthy at both Twilio and SendGrid. As part of the announcement today, both companies have communicated that they've exceeded the guidance presented as part of their respective Q2 earnings cycle.
You should expect our priorities remain the same. We are focused on revenue growth rather than operating margin expansion given the tremendous opportunity ahead of us. Our goal will be to create revenue synergies. There's an opportunity for cross selling across both customer bases and applying best practices from our go to market teams. Just note that it will take some time to put these plans in motion.
It is not our goal to create expense synergies as any savings would be reinvested in supporting the growth of the combined entity. We will present combined guidance upon closing. We encourage you to review SandGrid's most recent public results and financial guidance, including their comments regarding their long term outlook. And with that, I'd like to open up the call for questions.
Your first question comes from Mark Murphy with JPMorgan. Your line is open.
Yes. Thank you. So I believe that together you're going to have more than 100,000 customers. And I'm curious, I guess, how we should think about the overlap between the customer bases, especially when we look at the enterprise customers?
Thanks, Mark. This is Jeff. So obviously, we were curious about that as well. And we hired a third party firm to do some preliminary analysis of just that question. And we believe that the customer overlap is relatively small.
And that's part of the reason why we believe that we can deliver some nice revenue synergies over time.
Okay. So Samir, Centred has executed very well, as has Twilio. And the companies just have so many parallels. I think people have wondered out loud in the past about this combination. So I'm curious for you, what did your decision tree look like, I guess, selling for 14% premium and it's all stock versus seeing where SendGrid shares maybe would have ended up if you had continued to grow the top line at 25% or 30%, something like that for a few more years.
How did you reason your way through that?
Yes. Thanks, Mark. The decision for us, and there's a very important part of this, which is it's 100% stock transaction, and that was critical to us. We were not looking to end the value creation. We believe that deeply that this pro form a company is going to create a lot of shareholder value in the future.
And as owners in the company of this new pro form a company, we're going to be able to enjoy in that for all of our existing shareholders. So that was a big part of the logic in doing the transaction.
Okay. One final one, Lee. You disclosed that both companies are going to exceed their Q3 guidance. And I understand there's not going to be much detail beyond that. But just given the extreme volatility that we've had in technology stocks, especially in the last couple of weeks, could any of you comment on whether the spending environment maybe felt any different in any way at all in September or whether in the last couple of weeks these topics of interest rates or trade and tariff talk is kind of any having any tangible impact on any of your customers or end markets?
Yes. Hi, Mark. Yes, as you said, I'm not going to go into any more detail. We will talk about Q3 results as scheduled on November 3 and November 6. However, we did want to make it pretty clear that both companies continue their strong execution, so that's why we made that statement.
Thank you very much.
Your next question comes from Alex Zukin with Piper Jaffray. Your line is open.
Hi, thanks for taking my question. This is Taylor Reiners on for Alex. I was just my question was mostly centered around why now? And then given the synergies around marketing and selling to developers, how are you thinking about the potential for sales and marketing synergies going forward? And could it be possible to accelerate SendGrid's growth profile?
Thanks.
Yes, this
is Jeff. I'll answer why now. It's we've had e mail on the back of our mind for a long time. We've been seeing SendGrid execute, and it's something that we have been hearing from our customers. But I would say that as we've been executing our go to market, as we've been moving our products up into the engagement layer of things.
We started having more strategic conversations with our customers and executives of our customers, and we're hearing more and more that need and that desire by customers to want to bring all of their most strategic communications under one platform and to buy them from 1 company and to be able to integrate those even more easily. And that's why this has increasingly made more and more sense as time has gone on as we continue that execution. Was there a second part to your question, Taylor?
Yes. So I was just wondering, is there a potential, just given the synergies around sales and marketing, do you see can you talk about that a little bit more? And is there a possibility to see SendGrid's growth rate kind of accelerate from where it's at right now?
Sure. I can answer that. We do see revenue synergies here to be had. Obviously, the ability to cross sell each other's products into each other's customer bases, we think that that is going to provide a lot of opportunities. But of course, it'll take some time to unlock that.
It's a long term playbook. So I wouldn't expect that to unfold overnight.
Excellent. Thank you.
Your next question comes from Pat Walravens with JMP Securities. Your line is open.
Great. Thank you. I have 2. My first one is sort of technical, so I'm not sure who to have answered. But I mean, Byron is on both boards and owns, I'm doing my math right, close to 20% of SendGrid.
So how did you guys adjust for that in making this decision? Well, Byron recused himself of all aspects of this conversation, as you can imagine he would. And so this was a decision that was made completely independent of Byron. We also have Jeff Epstein, our Board, who has an affiliation with Bessemer. He was also in the queue.
So this decision was made completely by the 2 companies without the involvement of anyone related to Bessemer. Okay. So that's the easy one. And the second part, Jeff, is the rationale totally, right? No brainer.
The $2,000,000,000 I don't know, right? So if we gave you $2,000,000,000 could you have built something similar? Well, I think the value that we see in this combination is the sizable customer base that SendGrid has that is already powering part of their most strategic communications through SendGrid. And so in addition to the technology here, there's also the sizable customer base momentum that SendGrid has that makes this combination particularly powerful to create the unquestioned leader in the space. And sure, anything with time and money is possible, but it just pushes out the time frame for you to get that value.
And we see this as an opportunity to accelerate our lead in the market and to create that platform for customer engagement that will just be unquestioned as the leader.
Your next question comes from Michael Turrin with Deutsche Bank. Your line is open.
Hey, guys. Thanks for taking my question. I just kind of wanted to follow on what Pat was just asking with maybe a bit of a different twist. When you're talking about the strategic rationale behind this transaction and what Twilio gains from owning SendGrid versus partnering,
I just wanted to maybe hear
a little bit more color there. And what made email potentially a more difficult channel or further down the road map as a channel that you've built out versus some of the other solutions you've already laid onto the platform?
Yes, absolutely. I mean, we started Twilio with sort of the real time communications like the phone call. And then from there, we went into SMS, which was kind of natural because it also hung off the same phone number that you might use for phone calls. And then we looked at other forms of real time communication. You think about phone call, which is voice, video is a natural extension.
And then the messaging apps or chat, web, the mobile chat is a natural extension of SMS. And so we've listened to our customers and extended our product in natural ways that is adjacent to our existing products very naturally in every step of the way.
Meanwhile, while
we were doing that, SendGrid was executing on the email front. And I think they were executing on email in parallel to us executing on these other real time communication channels that are grounded in more of the telecommunications up. And so it's more of a matter of we were focused on the markets that we were with a sizable TAM, they were focused on the markets that they were with their sizable TAM, doing that in parallel. And now is the right time to make sense to bring those together to create the yet larger platform.
Okay. That's great. Thanks.
Your next question comes from Ittai Kidron with Oppenheimer. Your line is open.
Yes. Hi, guys. First of all, congratulations. People seem to forgot to mention that. I did want to ask about the technology side of the equation.
Jeff, you've been very proud about the super network that you've kind of built the fuzzy logic behind that makes everything works. Is there any way to for Send to leverage the app or vice versa in a way that gives you even more pricing power out there and improves margins longer term? It's interesting, Itay. And I think the parallels between our businesses actually go beyond what we've even spoken to so far because it also goes down into technical execution of these products. I mean, just like building a global super network to power voice and SMS with the world's carriers, email has a similar dynamic of deliverability with the world's ISPs.
And so Samir and team have built this super network, if you will, of email delivery, which it takes a tremendous amount of expertise and technology to be able to deliver on. And so I think the parallels there are pretty substantial. Interesting. And I'll
just add to that for some of the other Go ahead. The complexity in building that e mail infrastructure at scale to be able to deliver 45,000,000,000 emails per month to ISPs with very sophisticated machine learning systems that sit at the edge of their networks to ensure that a customer's e mail makes it into the inbox is non trivial. And that's taken us nearly a decade to build out to get the coverage and the long tail of these inbox service providers around the world. And I think a huge part of why each of us, respectively, never went into the other's market, We looked over at building a super network with hundreds of carriers globally around the world, and that looked very difficult to do. And I think the same is true on the other side.
Got it. Maybe a follow-up on this. As you look at your individual R and D plans as they were laid out for the next couple of years, Did any of you had any plans to keep going to each other's backyard? And would those expenses now be something that could be pushed to the bottom line? Or you think more likely reinvested in other areas I think that you can be honest about it.
I think strategically, we've seen this opportunity. But from a financial impact standpoint, I don't believe there's anything that's meaningful
to talk about. Got it.
Very good. All right. Congrats, guys. Good
luck. Thank you. Thank you, Matt.
Your next question comes from the line of Rishi Jaluria with D. A. Davidson. Your line is open.
Hey, guys. Thanks for taking my questions. Two quick ones. First, I mean, SendGrid, as I look through some of the investment materials, it's 99% self-service business. Obviously, Twilio is on self-service, developer focused model, but probably a little bit different.
Can you give us a sense for how you would think about maybe changes or adaptations in the go to market for SendGrid? And then I
have a follow-up from that.
Yes, absolutely. This is Jeff. What we see in our Developer First go to market is really the core motion that we have is taking that self-service developer led energy and then turning it over time into larger and larger, more strategic initiatives inside of our customers' businesses. And I don't see any reason why that same approach, that same motion won't work for SendGrid's products as it has worked for Twilio's products over time. Got it.
Okay. And as we look through SendGrid, a meaningful the biggest chunk of their revenue is the email API side. But as you alluded to in the earlier part, there is a big percentage of their revenue that's coming from email marketing and campaigns. Can you give us a sense of for maybe how that promotional side of the business fits in with Twilio as being this core cloud communications platform as a whole? Thanks.
I think what you may be getting out there, Rishi, is how marketing campaigns fits into the engagement cloud vision that's kind of squarely fits into how do we help build on top of these very powerful APIs and the communication layers that apply them to help transform our customers' engagement model with their end users. So how do you orchestrate these digital conversations at scale across multiple channels? That's our that would be an opportunity for the slot, I think, very nicely, logically and conceptually with the work that Twilio has been doing here at the engagement
Your next question comes from Nikolay Beliov with Bank of America. Your line is open.
Hi, guys. Thanks for taking my question and congrats. As both companies, both Twilio and SendGrid move up to higher level products, Twilio Flex that introduces a new set of competitors and send great marketing campaigns, maybe you guys begin to compete more with Salesforce with that target.
How do you guys need to tweak the
go to market motion to be able to compete with that set of new competitors?
This is Jeff.
I mean, I think our go
to market motion is working, but we keep investing in it, which is that the magic of our model is that it's a developer first go to market. So the developers are the ones bringing us into their organizations to come and solve problems that they see that they can solve with their code. And as they do, the developers get the ball rolling, and that leads us to more and more deeper integrations into the company as well as more strategic problems we can solve for the company. So our developer first go to market is working quite nicely, and we continue to scale it up in the companies of really every shape and size. What started maybe 10 years ago was the tech first Silicon Valley companies.
We're really seeing play out in companies of every shape and size and every vertical, whereas they have to compete in the digital world, they hire software developers and those software developers bring in Twilio and SendGrid to help solve those problems. And then that gets our foot in the door and allows us to have a conversation about how they're seeing the world, what problems they need solved and how APIs and our strategy can actually be a better way for them to solve those problems, and it's working very nicely.
Yes. I realize that, Jay, but like when you go and sell like a 3,000 user call center deal or like millions of e mails competing with Salesforce exact targets. It's probably a new set of a buyer like like pushing to that type of engagement with you guys?
Well, what you've seen, for example, with our Engagement Cloud and with Twilio Flex is that the same developer motion gets the process started inside of the customer as it has with core APIs. And even our Flex customers, generally speaking, the developers are the early advocates of using Twilio inside of the company. Now I agree with you that if it's a multi thousand person contact center, the developer is not going to making the final decision, absolutely. But to actually get the ball rolling and become that internal champion to socialize and champion the idea inside the company and then having our sales team come in, work with the developers and work with the rest of the people in the organization, the other stakeholders, that's a powerful motion. And I think you've seen that play out not just at Twilio SendGrid, but other sort of API developer type organizations like AWS as well.
It's a powerful motion and it starts tactically, but it can become very strategic in these big purchases that companies are making. But it's really powerful
to have that developer be
the internal advocate and be pushing for the solution. And by the way, it's not just the advocacy of the developer. It's the fact that you can take and prototype out the idea and should be able to show that off internally as a on one side, we can kind of trust slideware. But on the other side, we've got a working prototype that we can actually look at and feel and play with, put in front of some customers even before we make the decision. That's powerful because that derisks a decision for a company.
And I think that that motion, that developer first, that lower friction, easy to play with, easy to prototype, lower the barriers. That is the essence of that developer first go to market that we've seen be so successful in a variety of scenarios.
Thank you. That's helpful. And from a developer perspective, my understanding is if you're not Java, you can read the Twilio documentation and you can be programming Twilio into the application the same day or the next day. I'm not familiar with SendGrid. Is there like a developer needs to go through a different process?
And is it like relatively more easier or more difficult to program SendGrid versus Twilio?
Yes. No, thanks for the question. It's nearly identical from the beginning. The ease of use, ease of deployment, ease of prototyping has been core. We had
a whole initiative around something
we called sign up to send, which is from the time somebody hits our website to be able to have the system sending emails on their behalf through their application needed to be done literally in hours or less. And so it's the exact same sentiments and at the soul of what we're trying to do, empower these developers, make it easy so that they can get started and seeing value same day.
Got it. Thank you, guys.
Your next question comes from Tom Roderick with Stifel. Your line is open.
Hey, gentlemen. Thanks for the chance to ask the question here. I'll welcome my sentiments and congratulations on the deal. It makes a ton of sense. Sameer, we've spent a lot of time together.
I know you've taken this question a lot as to, hey, when did you possibly get into the messaging market, get into Twilio's backyard. And Jeff, I'm sure you've answered the same question from the other side by email. So now that you don't have to answer those questions anymore, I'm curious about how you think about some of the other channels going forward, whether that's social, in app notification, all sorts of places you can go. But as you think about your respective customers, what's the future look like as you sort of expand into the next generation of notifications and messaging by other additional channels? Tom, this is Jeff.
I guess I'll take over answering that question now. With Twilio, we already have a plethora of these channels built into our platform, right? So in addition to voice and SMS, we have Facebook Messenger, we have WhatsApp, we have a variety of those chat applications, we also have in app chats for web and mobile, in app video, Google RCS. And so we've got a plethora of these channels already built into our platform that allow us to power really any kind of communications inside of apps, outside of apps, inside of their app, inside of the social apps, like every variety, every permutation there, we're converging on being able to power because what we find in our customer base is that our customers' enterprises need to follow their customers and follow their customers' preferences of where they want to communicate with brands and companies. And every company is trying to keep up with this ever increasing pace of technological evolution.
It is incredibly hard. And so by investing in one platform that covers all the different mediums where they might meet their customers is tremendously valuable for our customers.
Yes. That proliferation, Dom, of channels, places over which end users or consumers are wanting to get their messaging or engage with their the brands they love, it just continues. And so I think having a single platform, a single company that can provide that was a huge part of the logic for us coming together.
Perfect. And Jeff, just a quick follow-up on that point. Since you have a number of the channels already checked off, curious if you could just help me understand sort of what the B2C versus B2B mix is on your side? I know for SendGrid, of course, it was more B2C centric. But going forward, there's a broad applicability as we've seen in
some other businesses out there in software to take this
to the corporate and enterprise market out there in software to take this to the corporate and enterprise market for real time alerts, verifications, critical messaging. How do you think about that prospect? Yes, absolutely. I mean, I think similarly, most of our customers tend to be using Twilio to engage with their customers. While we do have some customers that are using it for more internal workflows or internal collaboration scenarios, I'd say the vast majority of Twilio's customers take Twilio and use it in some way, shape or form to communicate better with their customers.
And that's what we call customer engagement. And the reason is sort of obvious, right? The way in which you communicate with your customers is incredibly strategic. That's one of the most important things that companies do is build a great voice with their customers, highly engaging great customer experiences. I mean, those are the words you hear coming out of the mouths of the C suite at nearly every consumer company about how they're going to differentiate the market and how they're going to have customers love working with their brand and their product.
And unlike collaboration, which is sort of the behind the firewall internal thing and there are a lot of use cases there, don't get me wrong, but it's sort of generally a little less strategic for most customer most companies. The other thing I'll say is it probably skews for both of our models towards consumer because we both have usage based revenue models. And so while we have companies who use Twilio and I'm sure SendGrid internally, they're probably less we see them as less revenue because the numbers are just smaller. And so the engagement customer use cases will just sort of bubble to the top of our consciousness because of that.
Yes. I completely agree. The B2C will certainly continue to be large. B2B, the business use cases, SaaS companies, other platforms, and they want to use us as infrastructure needs are certainly great opportunities and have been and will continue to serve those. But I agree with Jeff, the predominance, the volume and therefore, the revenue and the transaction based model comes from these B2B costs.
Outstanding. Really helpful. I look forward to following the evolution. Thank you, guys.
Thanks, Tom.
There are no further questions at this time. Thank you for participating in today's conference. You may now disconnect.