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Twilio (TWLO) Q2 Earnings and Revenues Top Estimates, Up Y/Y
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Twilio (TWLO - Free Report) reported better-than-expected second-quarter 2020 results and issued an upbeat guidance for the third quarter.
The company posted non-GAAP earnings of 9 cents per share for the June-end quarter, while the Zacks Consensus Estimate was pegged at a loss of 9 cents.
The non-GAAP bottom-line figure also soared 200% from the year-ago quarter’s 3 cents. This year-over-year upsurge was mainly driven by stellar revenue growth and efficient cost management.
Twilio’s quarterly revenues surged 46% year over year to $400.8 million and also surpassed the Zacks Consensus Estimate of $367.6 million on increase in clientele and the Sendgrid buyout. The growing adoption of Twilio Flex is also a tailwind.
During the reported quarter, the company witnessed waning demand from ride-sharing, hospitality and travel industries, which have been hit hard by the pandemic-led global lockdown. However, increased demand from health care, education, retail and crisis management organizations offset the negative impact of the aforementioned factors to a large extent.
Additionally, Twilio is benefiting from the accelerated digital-transformation projects across many industries in the wake of the global lockdown. Organizations are reconfiguring their set-up 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 15% of its total revenues, flat sequentially, and up from the prior-year quarter’s 13%. WhatsApp represented approximately 7% of revenues during the second quarter.
The company’s dollar-based net expansion rate was 132% in the reported quarter, down from the prior-year period’s 141%.
The company’s active customer accounts increased to more than 200,000 as of Mar 31, 2020 from 190,000 as of Jun 30, 2019. In the second quarter, Twilio added more than 10,000 active customer.
Operating Results
Non-GAAP gross profit climbed 36.9% year over year to $224 million. However, gross margin contracted 300 basis points (bps) to 56% mainly due to a 100-basis point negative impact from Application to Person or A2P fees.
Twilio’s second-quarter non-GAAP operating income witnessed a five-fold jump to $9.5 million from the year-ago quarter’s $1.5 million. Non-GAAP operating margin expanded 100 bps to 2%.
Balance Sheet
The company exited the reported quarter with cash and cash equivalents plus short-term marketable securities of $1.9 billion, up sequentially from $1.84 billion.
During the first half of 2020, the company generated $13.9 million of cash from operational activities.
Outlook
Twilio issued an encouraging guidance for the September-end quarter.
For the quarter, the company anticipates revenues between $401 million and $406 million. The Zacks Consensus Estimate is pegged at $375.4 million. It estimates non-GAAP operation loss in the range of $10 million to $15 million. The company also forecasts non-GAAP loss per share between 5 cents and 9 cents. The Zacks Consensus Estimate for the same is pegged at a loss per share of 7 cents.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
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Twilio (TWLO) Q2 Earnings and Revenues Top Estimates, Up Y/Y
Twilio (TWLO - Free Report) reported better-than-expected second-quarter 2020 results and issued an upbeat guidance for the third quarter.
The company posted non-GAAP earnings of 9 cents per share for the June-end quarter, while the Zacks Consensus Estimate was pegged at a loss of 9 cents.
The non-GAAP bottom-line figure also soared 200% from the year-ago quarter’s 3 cents. This year-over-year upsurge was mainly driven by stellar revenue growth and efficient cost management.
Twilio’s quarterly revenues surged 46% year over year to $400.8 million and also surpassed the Zacks Consensus Estimate of $367.6 million on increase in clientele and the Sendgrid buyout. The growing adoption of Twilio Flex is also a tailwind.
Twilio Inc. Price, Consensus and EPS Surprise
Twilio Inc. price-consensus-eps-surprise-chart | Twilio Inc. Quote
During the reported quarter, the company witnessed waning demand from ride-sharing, hospitality and travel industries, which have been hit hard by the pandemic-led global lockdown. However, increased demand from health care, education, retail and crisis management organizations offset the negative impact of the aforementioned factors to a large extent.
Additionally, Twilio is benefiting from the accelerated digital-transformation projects across many industries in the wake of the global lockdown. Organizations are reconfiguring their set-up 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 15% of its total revenues, flat sequentially, and up from the prior-year quarter’s 13%. WhatsApp represented approximately 7% of revenues during the second quarter.
The company’s dollar-based net expansion rate was 132% in the reported quarter, down from the prior-year period’s 141%.
The company’s active customer accounts increased to more than 200,000 as of Mar 31, 2020 from 190,000 as of Jun 30, 2019. In the second quarter, Twilio added more than 10,000 active customer.
Operating Results
Non-GAAP gross profit climbed 36.9% year over year to $224 million. However, gross margin contracted 300 basis points (bps) to 56% mainly due to a 100-basis point negative impact from Application to Person or A2P fees.
Twilio’s second-quarter non-GAAP operating income witnessed a five-fold jump to $9.5 million from the year-ago quarter’s $1.5 million. Non-GAAP operating margin expanded 100 bps to 2%.
Balance Sheet
The company exited the reported quarter with cash and cash equivalents plus short-term marketable securities of $1.9 billion, up sequentially from $1.84 billion.
During the first half of 2020, the company generated $13.9 million of cash from operational activities.
Outlook
Twilio issued an encouraging guidance for the September-end quarter.
For the quarter, the company anticipates revenues between $401 million and $406 million. The Zacks Consensus Estimate is pegged at $375.4 million. It estimates non-GAAP operation loss in the range of $10 million to $15 million. The company also forecasts non-GAAP loss per share between 5 cents and 9 cents. The Zacks Consensus Estimate for the same is pegged at a loss per share of 7 cents.
Zacks Rank and Other Key Picks
Currently, Twilio carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Benefitfocus , Cogent Communications Holdings (CCOI - Free Report) and Synaptics (SYNA - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>