Alex Zukin — Analyst, Wolfe Research
Hey, guys. Truly congrats on the quarter, thank you for taking the question.
I guess, if last quarter there was a lot of questions of whether or not AI is creating durable tailwinds for your business, it doesn't feel like that's a question anymore. I guess, if I think about where you're seeing it most pronounced, whether in the messaging and the voice really across the business, what is happening in the messaging business? It seems like it's coming in ahead of expectations now, kind of a second straight quarter. What's driving that? Longer term, what did you see differently this quarter from the voice AI cohort specifically, versus your expectations?
Khozema Shipchandler — CEO, Twilio Inc
Hey, Alex, this is Khozema. Thanks for the question. A lot there. I would say kind of in general, maybe let's just start there. Obviously, we saw very good strength in messaging, very good strength in voice. I would say messaging, it's still pretty early days in terms of AI tailwinds starting to show up. They are happening, but I think most of the activity continues to be in voice. Obviously, you're familiar with a lot of the trends that are happening in voice right now with various kinds of both scaled companies as well as a lot of the voice AI startups. Just a lot of traction, and we're obviously fortunate that most of these companies are choosing Twilio as their voice infrastructure. I would say more broadly, if you kind of go back to SIGNAL even, the channel story has definitely been good for us.
I'd say in addition to that, the conversation suite that we launched at that time, that obviously incorporates AI in the different categories there. We're definitely seeing some traction with it. I would specifically point to Conversation Memory and Conversation Intelligence, which definitely got a lot of attention from customers, incorporate different AI attributes, and then several of our software add-ons that also incorporate AI. That did pretty well as well. I guess maybe to sum it up, and I'll turn it over to Thomas if he wants to provide more detail. Generally speaking, I guess I would call it broad-based strength across both channels and some of the newer products.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Hey, Alex, it's Thomas here. I just want to touch a little bit on the cohort part of your question, I'll give you two examples. The first one is a horizontal conversational AI company that started with Twilio in Q1 of 2025. Think of this as a low six-figure quarterly spend with Twilio that largely started with voice. From there, the spend on connectivity since then has more than tripled, and the spend on software add-ons has gone from effectively nothing at the start to over a half a million dollars a quarter run rate. This is now a $6 million annual run rate customer growing 65% a year. That's one example of an AI native. Another is a verticalized conversational AI company.
2024 Q1 started with us with $200,000, same thing, voice, messaging expansion, and now they're a $9 million customer with software add-ons growing 100% a year. You can kind of get a sense for the production scale that these things are starting to happen at.
Alex Zukin — Analyst, Wolfe Research
That's excellent. Aidan, maybe just a quick one for you. Obviously, dollar-based net expansion, biggest run-up we've seen. Maybe just touch on that. Gross profit dollar growth and gross margins continue to accelerate. Was there any one time there, or should we expect that to continue through the back half this year?
Aidan Viggiano — CFO, Twilio Inc
On dollar-based net expansion, fees did help that number. In full transparency, they contributed about five points to that number, but we did see DBNE accelerate, even adjusting for the fees. It was about a point better quarter-over-quarter. Really, in terms of what's driving it, just healthy growth with our existing customers. In particular, I would say ISVs had a very strong quarter, where we're seeing meaningful expansion rates. In addition to that, revenue growth from multi-product customers is accelerating, which is helping expansion within our installed base. As it relates to gross profit, I would say it's a couple of things in terms of what's driving the acceleration. First, strength in our higher-margin products.
Voice, software add-ons, like Verify or some of our voice software products, strength in our support and services organization, all of those pieces of the business are very high margin, so that helps on the gross profit growth side. In addition to that, we continue to focus on optimizing costs. Email margins continue to improve as we lap the cloud migration project that we undertook really to optimize our hosting environment. We also continue to pursue things like direct connections with different carriers around the world. We announced in late March that we became the first cloud communications provider to secure direct connections for 10DLC and toll-free messaging with all major U.S. carriers. Things like that help us drive efficiency in our messaging business. I'd say it's a combination of mix as well as cost efficiencies.
In terms of how to think about it going forward, no change to kind of what we've said. We expect gross profit to grow at a similar rate to organic revenue.
Alex Zukin — Analyst, Wolfe Research
Excellent. Congrats, guys.
Taylor McGinnis — Analyst, UBS
Yeah. Hi. Thanks, guys. Congrats on the quarter, and thanks so much for taking my question. Just as we look at the 3Q guide, it implies that the strength that you saw in the first half of the year is going to continue into the second, despite some of the tougher compares. Could you touch on the drivers underpinning that guide? It seems like it assumes that messaging growth can maintain the levels that we've seen, excluding A2P fees. But you also mentioned things like 30%+ verified growth and an acceleration in self-service. Maybe you can just unpack how you're thinking about growth across the different segments, because it seems like you're seeing strength in a bunch of different areas.
Aidan Viggiano — CFO, Twilio Inc
Yeah, sure. I'll start. I'm not going to get into each of those pieces for Q3, but what I'll talk about is how they performed in Q2. 17% growth overall, incredibly strong, perhaps more importantly, gross profit growth accelerated to 18%. When we look at the drivers of that, on a sales channel basis, ISVs and self-serve continue to perform very well. ISVs are 25%+. Self-serve, 30%+. Products were very strong, messaging, 28%. I'd say that's volume in the messaging business as well as some of our other newer channels like WhatsApp and RCS contributing well, albeit off of a smaller basis. Voice was above 20% in the quarter. That's both the channel as well as some of the software add-ons that Thomas was talking about a minute ago. Software add-ons overall were very strong. It's pretty broad-based.
When we look at it by industry, same thing, right? Tech, financial services, healthcare, all very strong. We feel good about the setup for Q3. We are flowing some of that goodness through to our guidance. We're guiding 11%-12%, which is the highest guidance that we've offered in three years. Now that said, I recognize we beat by 5%+ in Q1 and Q2. We don't expect that to be the new norm for the business. We do face some more challenging comparisons in Q3 and Q4 in voice and software add-ons. They started to accelerate in the back half of last year. We are facing into that a little bit as well.
Samad Samana — Analyst, Jefferies
Hi, good evening, thanks for taking my question. I'll echo the congrats on the strong quarter. Great results. Maybe just on the voice AI strength, how much of that is new customer acquisition and onboarding with them lighting it up versus existing customers expanding into voice AI products? To the extent that you can break it out, how concentrated is that voice AI strength, or is it relatively broad-based? I have one follow-up.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Hey, Samad. It's Thomas. The strength in voice AI is broad-based across all of our channels. I do want to highlight, though, self-service, voice in particular, was very strong growth with over 50% year-over-year. A lot of these customers are originating as voice customers in the self-service channel. As I mentioned in a couple examples earlier, we're just seeing them start with voice and then expand to other channels as well. Messaging is the natural follow-up, RCS, et cetera. If you look at it from the purely AI natives, we're seeing that, as well as the larger, more established ISVs, where they're adding voice into more of their agentic, autonomous customer engagement type workflows.
Great example of that was the Atlassian work that we're doing with the partnership there about embedding a lot of our voice AI capabilities directly in their customer service management platform that they just launched. It is pretty broad-based across enterprise, ISV large, as well as the AI natives.
Elizabeth Porter — Analyst, Morgan Stanley
Great. Thanks so much for the question. I wanted to follow up on the new console where you noted that the majority of existing customers have migrated and the conversion's more than 90% higher. Just what precisely is the conversion metric measuring? Since it is still pretty new, should we be thinking about kind of a second product attach starting to be an uplift to revenue with a 2027 contributor? How do we think about the timing of the feature changes and when they can start to benefit? Thank you.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Yeah, Elizabeth. As Khozema mentioned earlier, the conversion rate that we're seeing on the one Console is largely because we've reduced a lot of the friction in the process of signing up with Twilio, getting started, setting up their first campaigns or messages, et cetera. What we're seeing is in the top of the funnel, really strong conversion rates from the launch in May all the way through Q2. A lot of that's experimentation that starts to result in production workloads getting online. Those are all good leading indicators for us in future revenue realization as those customers go more into volume. Just reducing the friction up front and having that conversion rate all the way through the funnel is what we're looking for, and the leading indicators are quite positive.
Callie Valenti — Analyst, Goldman Sachs
Hey, team. Thank you for taking the question, and congrats on the quarter. When you look at your pipeline today versus a year ago, what inning do you think we're currently in and kind of seeing this uplift to the voice ecosystem as a result of AI, both with AI natives and maybe as other businesses adopt AI as well? What factors do you kind of consider when measuring the durability of this tailwind and ability for Twilio to benefit kind of regardless of where the value occurs in the rest of the stack? Thank you.
Khozema Shipchandler — CEO, Twilio Inc
Yeah, good question, Callie. This is Khozema. I would say it's pretty early innings. Very early innings, as a matter of fact. One way to kind of conceptualize it is that if you just think about the number of voice AI interactions that you yourself have had, my guess is it's probably less than five or six over the last year or so. That's certainly the case for me. I think the reality is that while we're seeing pretty good growth right now, a lot of this volume is still very much on the come. The reason that you do get customers to end up choosing this stuff, especially in our suite With Conversation Intelligence and Memory, it has the benefit of doing two things. One is that it's driving high ROI, otherwise they wouldn't buy it in the first place, obviously.
The second thing is that it actually also allows them to reduce their token spend because there's this notion of context that's being used to drive the memory, to drive the intelligence, and by using context, you don't have to scour the history of the internet. You're just using what's relevant for that particular consumer interaction. As we think about durability going forward, I would imagine there are probably going to be some ups and downs as the AI story unfolds. The secular tailwind, I think, is very clear. The ROI that we're seeing with customers is also very clear.
I would imagine that given that it's early innings, given that we're seeing very high ROI, both in terms of revenue uplift and cost reduction with our customers, there's significant durability, not just into one or two years, but for many, many years going forward.
Jackson Ader — Analyst, KeyBanc Capital Markets
Great. Thanks for taking our questions, guys. I was curious about the split between net new revenue and the existing net retention rate. If I just do a quick glance at the last few quarters, you grow at 15%, 16% organically, and the net retention rate's about 5% or 6% below that at 110%, 111%. I'm curious, as you add on these both new channels and new customer acquisition channels are improving, should we expect that the growth over and above the net retention rate could start to widen relative to history? Thank you.
Khozema Shipchandler — CEO, Twilio Inc
Jackson, you're very, very hard to hear. We think we got the question. Basically, I'm going to summarize it as follows, that you're asking about what's the difference between DBNE and the overall growth rate, especially when you adjust for fees. I think that's the gist of it. I think that there's two things going on. One is that, as Aidan said in her answer to a prior DBNE question, we're definitely seeing strength in same store sales. We did see an improvement in that quarter-on-quarter, and a number of these customers that have been with us for a very long time, they continue growing and obviously contributing to the overall organic growth rate. In addition to that, we're also seeing a lot of new customers, right? Thomas gave you a number of examples.
We gave you a number of examples in our prepared remarks. Those guys are obviously starting to contribute to the delta, if you will, between DBNE and our overall organic growth rate, and that's a great setup for us, obviously, right? Because if you follow that story that Thomas gave you a second ago about that customer that started with us one to two years ago, they were close to zero in spend, started with one product, started adding multiple products over time. That's another factor that I think plays into the durability that we see over time. These NPCs, new kind of paying customers, as we call them internally, they'll turn into expansion customers over time.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
I'll just add one more quick data point on that. We are seeing, for example, our largest customer cohort, the $1 million+ plus customers, that's growing over 20% as well. Another example of the expansion that we're seeing.
Nick Altmann — Analyst, U.S. Bancorp
Hey, awesome. Thank you. I wanted to follow up on Elizabeth's question on the new Console. The first part is just how much of the acceleration in multi-product revenue in the quarter would you attribute to the new Twilio Console? The second part is, I understand it's early, but how meaningful do you believe the new Console can be to driving multi-product revenue mix higher in the near term, especially as it relates to some of the higher margin offerings, such as the software add-ons, voice, et cetera? Thank you.
Aidan Viggiano — CFO, Twilio Inc
Yeah. In terms of your first question, Nick, very little. It didn't contribute much at all in terms of multi-product revenue in the quarter.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
I will say, Nick, we are very optimistic about what it will do as customers are signing up in the new Console, as I mentioned, going through the conversions, the upgrades, to a place where they're activating their first product. One of the benefits of the new Console is that we have credits available for customers to try multiple products as part of that one Console experience. As they're activating the first channel, they can start the second channel, the third channel, et cetera, with some of those credits. We're going to begin to see that play out. I know it's hard to predict exactly when and what the implications will be from a revenue realization perspective, but the feedback we're getting from users has been really positive.
Derrick Wood — Analyst, TD Cowen
Great. Congrats from me. Khozema, OpenAI recently announced a new product called Presence, and they mentioned an early focus was using their speech models for voice and text conversational interactions, I think inside customer support and customer experience settings. With this backdrop, how do you see OpenAI as a customer, a partner, or a competitor?
What are some of the new opportunities that you can target with them, given the innovation with their models and now at the application layer?
Khozema Shipchandler — CEO, Twilio Inc
Yeah, I would say, this is not unique necessarily to OpenAI, but a number of folks that we work with in the ecosystem, they probably fit all of those descriptions based on different characteristics at different times. I think by and large partner, in this case. I think for the most part, what we see and hear expressed from customers is that they prefer working with a neutral party. Being able to integrate from whatever LLM or data model of their choosing, being able to integrate off of whatever data warehouse, being able to integrate off of whatever context layer, being able to integrate off of whatever cloud. I think we're going to stick to our positioning as being kind of the Switzerland of it all. Customers are going to make decisions, and they're going to change those decisions pretty rapidly, right?
You already see this a lot with companies, and I would certainly put Twilio in the mix too. We're constantly experimenting with different models, as different ones improve or the cost characteristics change or whatever, I think having neutrality be the calling card of the company, I think that best situates us going forward. Then if a customer wants to avail themselves of a particular tool, perfect. They can integrate to us either way, and they can get up and running with Twilio.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Just to add to that, at SIGNAL, we did announce a number of integrations with AI model providers, Codex being one of those, as well as Claude Code and Vercel, Replit, Figma, all those different, Cursor. We are, as Khozema said, focusing on bringing Twilio into the agent builder tool set so that it's easier for people to be able to build and integrate their AI agents directly with Twilio communications and infrastructure. We are doing the same thing with the Microsofts, the AWS, et cetera, as well. Back to the point of you got to reach the end user at some point on their device, and Twilio Super Network connects very nicely into those AI frontier model infrastructure.
Siti Panigrahi — Analyst, Mizuho
Great. Thank you. You guys position Twilio as more like a neutral infrastructure provider on this agentic era, now integrating with LLMs and other data warehouse. How do you see as some of the system of records company, like Salesforce, ServiceNow, and other front office company, they try to get into the space? Do you see them as more of a competitive threat, or do you see more as a complementary solution to that?
Khozema Shipchandler — CEO, Twilio Inc
Again, Siti, I would say being neutral has its advantages here. I would say on a different day, they could be a complementor, they could be competition. By and large, we see these guys as complementary, to answer your question. In the case of both of the companies that you mentioned, we do have integrations to both. To the extent that a customer of ours wants to be able to integrate to one of those different systems of record and then be able to use the rest of somebody else's AI tool set, Twilio is perfectly situated for that. We can sit in the middle. The good news for us is that to be able to drive any intelligence, you got to have context and you got to have a channel. No matter what, Twilio wins.
In those two cases, as I said, we integrate to both.
William Power — Analyst, Baird
Okay, great. Thanks. Congratulations on the results, and really nice to see that sustained gross profit growth too. I just wanted to come back to the Q2 upside, matching the upside you had in Q1. It sounds like it's pretty broad-based, but I guess anything in particular you'd call out that might have been an upside surprise? I guess, part two, it'd be great to get any color you can share just on the sources of the messaging strength and kind of where RCS is playing out within that.
Aidan Viggiano — CFO, Twilio Inc
I don't know that I would say there was much in terms of a surprise, Will. I think we've performed pretty well across broad number of industries, broad number of products, broad number of sales channels. We feel pretty good about that, and we feel pretty good about the setup for the back half of the year. As it relates to messaging, maybe I'll start, but then Thomas can certainly jump in. Broad based, I'd say extra fees, it grew about 18%. The fees are contributing about 10 points to the growth of the messaging business. We saw healthy contribution from some of the smaller components of the business. WhatsApp and RCS are growing very quickly. That was good to see.
When we look at it by industry within messaging, I'd say tech, financial services, professional services, healthcare, retail, e-commerce, they all generated meaningful double-digit growth. Pretty broad in terms of the industry look there. From a sales channel perspective, ISVs were very strong as well as self-serve. Maybe the other angle I'd look at is use cases. Again, ISV speaks to one use case. Our Verify product growing 30%+ speaks to another in terms of authentication. It was pretty broad-based on the messaging side as well. We do see some growth with the AI natives on that channel as well, though I would say that the volume that we see from AI companies on messaging is much more a traditional use case that they're using the messaging channels for.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
The only thing I'd add to that is just the fact that we are seeing, because of the new platform, the conversations capabilities that we just launched, there is a trend toward consolidating spend with Twilio. A lot of our enterprise and ISV customers who may have been multi-sourced are beginning to converge more on our platform and take advantage of some of the software add-ons that we've recently introduced. A good example of that is the work that we're doing with OpenEvidence, which is an AI decision platform for physicians. They chose Twilio largely because of the reliability, performance, and global reach that we have that's just unmatched when you combine that with a software orchestration layer that sits on top.
Joshua Reilly — Analyst, Needham
Great. Thanks for taking my question. Just one from me. In terms of the voice AI startup customers, do you have a feel for how much of their traffic is on your platform versus their appetite to send traffic via any of your competitors? How would you expect as these startups mature to continue having such a large share of volume on your platform versus, would you think they would try to diversify their traffic a bit? Thank you, guys.
Khozema Shipchandler — CEO, Twilio Inc
Well, I think, the answer to that is partly embedded in what Thomas said a second ago. The trend we're seeing is sort of the opposite of what you said a second ago, which kind of implies diversification. Instead, we're seeing consolidation because to be able to take full advantage of our conversation suite and, in particular, if you think about an AI native, they want to be able to use context. They want to be able to use the infrastructure to be able to create that AI experience on the other side, without which they can't really do it. We don't have a measure per se of where their different pockets of spend are, but to maximize their ROI, I'd say consolidation is probably where it's headed, not the other way around.
Arjun Bhatia — Analyst, William Blair
Perfect. Thank you. I'll add my congrats here. I'm curious just where we are kind of in the cross-sell motion. I know that's been a pretty big initiative. It seems like a lot of the growth in individual channels is certainly coming through volume expansion and consolidation. From a go-to-market perspective, are we starting to see cross-channel, cross-sell, or is that a benefit that's maybe still ahead of us?
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Yeah. Hey, Arjun. We're absolutely seeing the cross-sell momentum and the upsell momentum in the business. Some of the examples that we shared so far are examples where customers have started with either messaging or voice and then separately added the second or third channel because they want to be able to communicate with memory and orchestration capabilities and the observability layer of insights that understand sentiment across those channels that can then be integrated between the brand and the consumer on personalizing those engagements. We are seeing it, whether it's the AI natives who started with voice, as I mentioned, that have added more WhatsApp or other types of chat-based services through messaging.
We've also seen it with the largest ISVs who are rolling out Branded Calling when they started with messaging, or they're adding Flex embedded into their core platform when they might have been a messaging-only customer. The channels are happening and the software upsells you've seen were 25%+ growth this quarter. We're seeing great momentum on upsells.
James Fish — Analyst, Piper Sandler
Hey, guys. Nice quarter. Just maybe circling back on Will's prior question. Look, small part of the business, but how should we be thinking about RCS at this point in terms of what you're seeing on volumes and what we could see in terms of a margin profile within the messaging business as a result? Within ISVs, is there a way to think about what you're seeing in terms of the underlying mix of your products at this point? Thanks, guys.
Khozema Shipchandler — CEO, Twilio Inc
I didn't understand the second question. On the first question with respect to RCS, the way I would characterize it is growing very fast off of a pretty small base. I think, we kind of remain optimistic about what RCS can do. Obviously, it's got some awesome characteristics. The product itself is very attractive, but it's still relatively small in the scheme of things. Again, growing very, very fast.
Aidan Viggiano — CFO, Twilio Inc
From a margin perspective, just assume it's roughly in line with the rest of messaging. I think on product mix in ISVs, I'm not sure if we caught the question, but yeah, I'd say it continues to be a broad mix of messaging, voice, email use cases across a plethora of ISVs from the long tail up to bigger enterprises. In addition, I'd say we're seeing them more and more regularly adopt some of our software add-ons.
Speaker — Analyst, JPMorgan
This is Brian on for Samik. Thank you for taking my question. For Orchestrator Memory and Intelligence, is early adoption coming mainly from existing customers replacing orchestration and context layers they build in-house, or is it coming from customers standing up entirely new AI workflows? Which motion is reaching production faster? Thank you.
Thomas Wyatt — Chief Revenue Officer, Twilio Inc
Yeah, it's a good question. I would say it's a bit of a mix. What we've seen is the initial conversation rollout of customers, the ones that participated in our private beta program, who have now gone into production, and we're starting to see at-scale volumes. We talked about Car Finance as an example of that, a seven-figure deal is resulting to it. That's an example of existing process that can be dramatically improved with Twilio's core capabilities that are now being offered. At the same time, there are some smaller AI-native type companies that are building on top of this as a new offer as well, and that could be for both customer support use cases, but also for AI sales outbound use cases as well. It's improving the customer experience and reducing the cost to serve to offer these virtual agents, whether they're voice-centric or messaging-centric.
It is a pretty good balance. It is early days, but we're seeing the consolidation of the traffic and volumes of spend getting onto the Twilio channels, and we're starting to see the software being rolled out into production use cases.
Koji Ikeda — Analyst, Bank of America
Thanks so much. Just one question from me. One of the message it sounds like I'm hearing from you is that the future is really about humans and agents operating together. When we do our checks, and frankly, even when we listen to other management teams from other tech companies, they're calling out that agents are spooling up their own actions in whatever workflow that they're addressing. When I think about Twilio, does the long-term opportunity for you scale more with AI agent-driven actions? Or is it more with traditional human-driven actions, but at a much higher monetization level? Thank you.
Khozema Shipchandler — CEO, Twilio Inc
I think it's going to be both. Again, the reality of where we are today, and I'm going to say probably for the next couple of years, it's going to be mostly human-oriented. The vast majority of interactions each of us has in our daily lives, probably every person on this call, is still mostly human to human. That said, you're seeing a tremendous amount of that get augmented with AI, and the future that we're certainly building towards anticipates that a huge portion of that volume ends up flipping to human to agent and agent to human. I still think it's going to be a while before it's fully agentic, agent to agent kind of stuff.
For a lot of these transactions that we're talking about that are very high value, high stakes, especially in financial services and healthcare, they do require a lot of these different capabilities where you've got to be able to validate what's going on, and given the fact that it is high stakes, you want a human in the loop. That's kind of what we're building towards. We're starting to see a lot of that stuff take off, but it's early days, and I think that's what gives us confidence that there's real durability here over the next several years.
Speaker — Analyst, Citizens
Thanks for taking the question. This is Pete on for Pat. Just one question. Is there any commentary you can provide on how we should think about the timing of AI contributing more meaningfully to revenue or its current scale?
Khozema Shipchandler — CEO, Twilio Inc
Well, as I said a second ago, I think that it's pretty early days in terms of the AI story more broadly. I think that we're starting to see an indication that AI can be a meaningful contributor. It's certainly starting to animate a lot of the voice AI commentary that we've given previously, but it's early innings, and we think there's a very durable tailwind here, and our expectation is that as interactions move from human to human to agent to human, that provides a lot of durability for the business on the one hand. Most of the interactions that we're seeing today are on the voice channel. We would expect that a lot of those move over to other channels over time, too, which also generates pretty good durability for the business.
Parker Lane — Analyst, Stifel
Hi, good afternoon. Thanks for taking the question here. Aidan, one for you. I understand that the AI natives are a smaller and newer cohort for you all, maybe comment on the DBNE characteristics you're seeing of those companies that fall into that category and how that's rolling forward into your outlook for the year.
Aidan Viggiano — CFO, Twilio Inc
I'd say DBNE characteristics are very strong. As Thomas talked about, he gave examples of some AI companies and their expansion path on Twilio. Once they come in, they typically come in on a channel. Then they'll grow on that channel, they'll expand into software products, they may adopt a second channel. DBNE is way higher than the average for the company for that cohort, that's factored into the guidance that we're providing for the back half of the year.
Andrew King — Analyst, Rosenblatt
Hey there. Thanks for taking my question. I, too, will echo the congratulations on the strong quarter. Just wanted to dive in a little bit more on Nick's question. Can you give us a little bit more idea or any more color on how the free token usage has progressed versus how you've seen it internally? Any particular products that are driving a significant amount of engagement from customers with those free tokens? Thank you.
Khozema Shipchandler — CEO, Twilio Inc
Are you talking about in terms of the usage by customers?
Andrew King — Analyst, Rosenblatt
Yes.
Khozema Shipchandler — CEO, Twilio Inc
The free credits or the free trial platform?
Andrew King — Analyst, Rosenblatt
The free credits.
Khozema Shipchandler — CEO, Twilio Inc
Oh, yeah.
Andrew King — Analyst, Rosenblatt
The free trials.
Khozema Shipchandler — CEO, Twilio Inc
Okay. Thanks for clarifying. I would say in general, the experience that we're seeing on the Console has certainly been above our expectations. We just launched it during SIGNAL. We've already talked about some of the conversion rates. We've already talked about most customers kind of moving over to that Console, and the Console itself has a lot of attractive characteristics, of which the free trials is one. As Thomas said a second ago, it definitely allows customers to experiment with a bunch of different things. We guide them through those experiences based on what their stated use cases are.
I think what we're more encouraged about over time is that based on the way that the Console's architected and based on the way that we guide the experience, it's our expectation that that would certainly allow for better cross-sell and upsell adoption over time, and that's kind of what we're expecting will happen over time.