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Why Is Twilio (TWLO) Up 1.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Twilio (TWLO - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Twilio due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Twilio Q1 Earnings and Revenues Beat Estimates
Twilio delivered better-than-anticipated first-quarter 2021 results. The company posted non-GAAP earnings of 5 cents per share for the quarter, while the Zacks Consensus Estimate was pegged at a loss of 10 cents. However, the non-GAAP bottom-line figure is a penny lower than the year-ago quarter’s earnings.
Twilio’s quarterly revenues surged 62% year over year to $590 million and also surpassed the Zacks Consensus Estimate of $533.4 million on increase in clientele and the Segment buyout. Segment contributed $44.6 million to the company’s total revenues. The growing adoption of Twilio Flex is also a tailwind.
Twilio is benefiting from the accelerated digital-transformation projects across many industries owing to the remote-working wave amid the COVID-19 pandemic. Organizations are reconfiguring their set-ups for a work-from-home operational environment and making nearly 100% e-commerce a reality.
Quarterly Details
Twilio’s top 10 active customer accounts contributed to 12% of its total revenues, down from the 13% seen in the previous quarter and 15% in the year-ago quarter. The company’s dollar-based net expansion rate was 133% in the reported quarter, down from the 139% registered in the previous quarter and 143% in the year-ago quarter.
Twilio’s active customer accounts increased to more than 235,000 as of Mar 31, 2021, from 221,000 at the end of fourth-quarter 2020 and 190,000 at the end of first-quarter 2020. In the first quarter, Twilio added more than 14,000 active customers.
Operating Results
Non-GAAP gross profit climbed 57.6% year over year to $306.6 million. However, gross margin contracted 200 basis points (bps) to 55%.
Twilio registered first-quarter non-GAAP operating income of $17.3 million, marking a strong improvement from the operating income of $6.1 million posted in the year-ago quarter. Non-GAAP operating margin advanced 100 bps to 3% from the year-earlier quarter’s 2%.
Balance Sheet
The company exited the January-March quarter with cash and cash equivalents plus short-term marketable securities of $5.71 billion, up sequentially from $3.04 billion.
During the quarter, the company generated $4.5 million of cash from operational activities.
Outlook
Twilio issued a bleak bottom-line outlook for second-quarter fiscal 2021. The company forecasts non-GAAP loss per share between 13 cents and 16 cents.
We believe the company’s drab bottom-line outlook reflects elevated spending on its expansion plans. Twilio has entered into new product and geography markets to sustain its high growth momentum.
For the current quarter, the company anticipates revenues between $591 million and $601 million. It estimates non-GAAP loss from operations in the range of $22 million to $27 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -24.35% due to these changes.
VGM Scores
At this time, Twilio has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Twilio has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Twilio (TWLO) Up 1.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Twilio (TWLO - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Twilio due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Twilio Q1 Earnings and Revenues Beat Estimates
Twilio delivered better-than-anticipated first-quarter 2021 results. The company posted non-GAAP earnings of 5 cents per share for the quarter, while the Zacks Consensus Estimate was pegged at a loss of 10 cents. However, the non-GAAP bottom-line figure is a penny lower than the year-ago quarter’s earnings.
Twilio’s quarterly revenues surged 62% year over year to $590 million and also surpassed the Zacks Consensus Estimate of $533.4 million on increase in clientele and the Segment buyout. Segment contributed $44.6 million to the company’s total revenues. The growing adoption of Twilio Flex is also a tailwind.
Twilio is benefiting from the accelerated digital-transformation projects across many industries owing to the remote-working wave amid the COVID-19 pandemic. Organizations are reconfiguring their set-ups for a work-from-home operational environment and making nearly 100% e-commerce a reality.
Quarterly Details
Twilio’s top 10 active customer accounts contributed to 12% of its total revenues, down from the 13% seen in the previous quarter and 15% in the year-ago quarter. The company’s dollar-based net expansion rate was 133% in the reported quarter, down from the 139% registered in the previous quarter and 143% in the year-ago quarter.
Twilio’s active customer accounts increased to more than 235,000 as of Mar 31, 2021, from 221,000 at the end of fourth-quarter 2020 and 190,000 at the end of first-quarter 2020. In the first quarter, Twilio added more than 14,000 active customers.
Operating Results
Non-GAAP gross profit climbed 57.6% year over year to $306.6 million. However, gross margin contracted 200 basis points (bps) to 55%.
Twilio registered first-quarter non-GAAP operating income of $17.3 million, marking a strong improvement from the operating income of $6.1 million posted in the year-ago quarter. Non-GAAP operating margin advanced 100 bps to 3% from the year-earlier quarter’s 2%.
Balance Sheet
The company exited the January-March quarter with cash and cash equivalents plus short-term marketable securities of $5.71 billion, up sequentially from $3.04 billion.
During the quarter, the company generated $4.5 million of cash from operational activities.
Outlook
Twilio issued a bleak bottom-line outlook for second-quarter fiscal 2021. The company forecasts non-GAAP loss per share between 13 cents and 16 cents.
We believe the company’s drab bottom-line outlook reflects elevated spending on its expansion plans. Twilio has entered into new product and geography markets to sustain its high growth momentum.
For the current quarter, the company anticipates revenues between $591 million and $601 million. It estimates non-GAAP loss from operations in the range of $22 million to $27 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -24.35% due to these changes.
VGM Scores
At this time, Twilio has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Twilio has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.