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Twilio (TWLO) to Invest $750M in Telecom Firm Syniverse

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Twilio Inc. (TWLO - Free Report) recently announced a partnership with IP Packet Exchange provider, Syniverse, to increase innovation in the mobile communications space. Twilio will also invest up to $750 million in Syniverse, becoming a minority stakeholder at the company. Notably, there will be no changes in the holding of Carlyle Group (CG - Free Report) , which is currently the majority stakeholder at Syniverse.

Notably, the partnership will allow Syniverse to access and leverage Twilio’s enterprise and API services to help mobile network operators and enterprises deliver stronger and more scalable mobile communications for their customers.

Syniverse is one of the world’s largest players in the communications infrastructure space for more than 30 years. Hence, the partnership will support Twilio’s customer engagement platform and API service expertise to reach Syniverse’s wide range of customers.

As part of the partnership, Syniverse will process, route and deploy application-to-person (A2P) messages within the range of Twilio’s customers and mobile network operators.

Twilio Inc. Price and Consensus

Twilio Inc. Price and Consensus

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

Twilio has been continuously making investments to meet the requirements of a broader range of global developers and enterprises. Furthermore, it is making strategic alliances and hiring more employees outside the U.S. office to enhance international operations.

In further efforts to fortify its platform, Twilio has made a number of selective acquisitions and strategic investments in businesses and technologies. By acquiring Segment last year, Twilio further strengthened its customer engagement platform. Moreover, with the acquisition of SendGrid in 2019, the company bolstered its omnichannel communication capabilities by enhancing its Programmable Communications Cloud software.

Twilio has been witnessing tremendous demand for its programmable voice and messaging products, which is favoring its top-line performance. Furthermore, its consistent efforts in developing innovative use case products will continue to boost revenues in the long run.

Notably, Twlilio’s main business, Programmable messaging, is likely to witness tremendous growth as the global A2P SMS market is anticipated to reach $101 billion by 2030, representing a CAGR of 4%, according to a report by Transparency Market Research.

Importantly, Twilio’s valuation surged from $15 billion to more than $67 billion within a year owing to the rise in demand for cloud services resulting from the pandemic-induced work-from-home and learn-from-home wave.

However, increased spending and investments toward enhancing the product portfolio and expanding across newer markets are likely to dampen Twilio’s profitability in the near term. Nonetheless, we believe that with a sustained focus on developing products, along with global expansion plans and partnerships with the likes of Syniverse, Twilio is well poised to grab the opportunities provided by the markets it operates in.

Zacks Rank and Stocks to Consider

Twilio currently has a Zacks Rank #5 (Strong Sell).

A couple of better-ranked stocks in the broader technology sector are Skyworks Solutions (SWKS - Free Report) and Shopify Inc. (SHOP - Free Report) , each 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 Skyworks Solutions and Shopify are currently pegged at 18.98% and 32.5%, respectively.

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Twilio Inc. (TWLO) - free report >>