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Twilio (TWLO) Stock Rallies 13% on Upbeat Q3 Sales Outlook

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Shares of Twilio (TWLO - Free Report) rallied 13% last Friday after the cloud-communications platform provider reported preliminary third-quarter sales results that exceeded the Zacks Consensus Estimate.

In a SEC filing, the company said on Oct 1 that its third-quarter revenues will come in above the previously-guided range of $401 million to $406 million. The Zacks Consensus Estimate for quarterly revenues is pegged at $403.7 million, suggesting 36.8% growth from the $295.1 million reported in the year-ago period.

Twilio has been benefiting from the accelerated digital transformation projects across a number of industries in the wake of the pandemic-induced lockdown. Organizations are reconfiguring their set-up for a work-from-home operational environment in a bid to make nearly 100% e-commerce a reality.

The company witnessed waning demand from ride-sharing, hospitality and travel industries, which have been hit hard by the global lockdown, during the first and second quarters. However, increased demand from health care, education, retail and crisis management organizations more than offset the negative impact of the aforementioned factors.

Twilio Inc. Price and Consensus

Twilio Inc. Price and Consensus

Twilio Inc. price-consensus-chart | Twilio Inc. Quote

Twilio’s second-quarter revenues had 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 was also a tailwind.

The company had 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. Non-GAAP bottom-line results 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.

For the third quarter, Twilio forecasts non-GAAP loss per share between 5 cents and 9 cents. The Zacks Consensus Estimate for the said quarter is pegged at a loss per share of 6 cents.

Twilio currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Zoom Video Communications (ZM - Free Report) , salesforce.com, inc. (CRM - Free Report) and Synaptics Incorporated (SYNA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Zoom, Salesforce and Synaptics is currently pegged at 25%, 18%, and 10%, respectively.

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