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Twilio (TWLO) Down 31.6% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Twilio (TWLO - Free Report) . Shares have lost about 31.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Twilio due for a breakout? 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 drivers.
Twilio Q4 Loss Narrower Than Expected, Revenues Up Y/Y
Twilio delivered better-than-anticipated fourth-quarter 2021 results. The company reported a non-GAAP loss of 20 cents per share for the quarter, a penny lower than the Zacks Consensus Estimate of a loss of 21 cents per share. However, the bottom-line result compared unfavorably with the year-ago quarter’s non-GAAP earnings of 4 cents per share.
The cloud-based communications platform-as-a-service provider reported revenues of $842.7 million, which improved 54% year over year and surpassed the consensus mark of $768.9 million. Twilio Segment contributed $57.4 million to total revenues. The company’s newly acquired Zipwhip business contributed $31.8 million to total revenues.
Twilio has been benefiting from the constant expansion of its international business and the continuous acceleration of digital transformation projects across several industries. The top line was primarily driven by the enhancement of customer experiences across various product portfolios like Segment and Flex, which are its fastest-growing software-as-a-service products at present.
Quarterly Details
Twilio’s dollar-based net expansion rate was 126% in the reported quarter, down from 131% in the previous quarter and 139% in the year-ago quarter.
The company’s active customer accounts increased to 256,000 as of Dec 31, 2021 from 221,000 at the end of fourth-quarter 2020. Twilio Segment customer accounts were included in the active customer accounts.
Operating Results
Non-GAAP gross profit climbed 40.7% year over year to $432 million. However, non-GAAP gross margin contracted 500 basis points (bps) to 51%.
Twilio reported fourth-quarter non-GAAP operating loss of $27.2 million, far below the year-ago quarter’s operating income of $12.8 million. Non-GAAP operating margin contracted 500 bps to -3% from the year-earlier quarter’s 2%.
General & administrative expenses on a non-GAAP basis increased 18% to $78.5 million and accounted for 9% of the quarterly revenues.
Research & development expenses on a non-GAAP basis surged 46% year over year to $145.9 million and made up 17% of the quarterly revenues.
Non-GAAP sales & marketing expenses surged 84.2% to $234.8 million and represented 28% of the fourth-quarter revenues.
Balance Sheet
The company exited the October-December quarter with cash and cash equivalents plus short-term marketable securities of $5.36 billion, down from $5.39 billion at the end of the third quarter. As of December 31, 2021, Twilio’s long-term debt was $985.9 million.
In full-year 2021, the company used $58.2 million of cash from operational activities.
Full-Year Highlights
For full-year 2021, Twilio reported revenues of $2.84 billion, up 61% year over year. Twilio Segment contributed $200.9 million while Zipwhip contributed $55.4 million to total annual revenues.
For 2021, Twilio’s dollar-based net expansion rate was 131%. The company reported a non-GAAP loss of 25 cents per share compared with 2020 earnings of 23 cents per share.
Non-GAAP gross profit jumped 54.4% year over year to $1.52 billion. However, non-GAAP gross margin contracted 300 bps to 53% in 2021.
Geographically, 34% of revenues stemmed from outside of the United States in 2021, up from 27% in 2020.
Guidance
Twilio forecast non-GAAP loss per share between 22 cents and 26 cents for the first quarter of 2022. The Zacks Consensus Estimate for the same is pegged at a loss per share of 10 cents.
For the current quarter ending Mar 31, 2022, the company anticipates revenues between $855 million and $865 million, suggesting year-over-year growth of 45-47%. The Zacks Consensus Estimate is pegged at $808 million. Management estimates non-GAAP loss from operations in the range of $27 million to $32 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.43% due to these changes.
VGM Scores
Currently, Twilio has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 #4 (Sell). We expect a below average return from the stock in the next few months.
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Twilio (TWLO) Down 31.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Twilio (TWLO - Free Report) . Shares have lost about 31.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Twilio due for a breakout? 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 drivers.
Twilio Q4 Loss Narrower Than Expected, Revenues Up Y/Y
Twilio delivered better-than-anticipated fourth-quarter 2021 results. The company reported a non-GAAP loss of 20 cents per share for the quarter, a penny lower than the Zacks Consensus Estimate of a loss of 21 cents per share. However, the bottom-line result compared unfavorably with the year-ago quarter’s non-GAAP earnings of 4 cents per share.
The cloud-based communications platform-as-a-service provider reported revenues of $842.7 million, which improved 54% year over year and surpassed the consensus mark of $768.9 million. Twilio Segment contributed $57.4 million to total revenues. The company’s newly acquired Zipwhip business contributed $31.8 million to total revenues.
Twilio has been benefiting from the constant expansion of its international business and the continuous acceleration of digital transformation projects across several industries. The top line was primarily driven by the enhancement of customer experiences across various product portfolios like Segment and Flex, which are its fastest-growing software-as-a-service products at present.
Quarterly Details
Twilio’s dollar-based net expansion rate was 126% in the reported quarter, down from 131% in the previous quarter and 139% in the year-ago quarter.
The company’s active customer accounts increased to 256,000 as of Dec 31, 2021 from 221,000 at the end of fourth-quarter 2020. Twilio Segment customer accounts were included in the active customer accounts.
Operating Results
Non-GAAP gross profit climbed 40.7% year over year to $432 million. However, non-GAAP gross margin contracted 500 basis points (bps) to 51%.
Twilio reported fourth-quarter non-GAAP operating loss of $27.2 million, far below the year-ago quarter’s operating income of $12.8 million. Non-GAAP operating margin contracted 500 bps to -3% from the year-earlier quarter’s 2%.
General & administrative expenses on a non-GAAP basis increased 18% to $78.5 million and accounted for 9% of the quarterly revenues.
Research & development expenses on a non-GAAP basis surged 46% year over year to $145.9 million and made up 17% of the quarterly revenues.
Non-GAAP sales & marketing expenses surged 84.2% to $234.8 million and represented 28% of the fourth-quarter revenues.
Balance Sheet
The company exited the October-December quarter with cash and cash equivalents plus short-term marketable securities of $5.36 billion, down from $5.39 billion at the end of the third quarter. As of December 31, 2021, Twilio’s long-term debt was $985.9 million.
In full-year 2021, the company used $58.2 million of cash from operational activities.
Full-Year Highlights
For full-year 2021, Twilio reported revenues of $2.84 billion, up 61% year over year. Twilio Segment contributed $200.9 million while Zipwhip contributed $55.4 million to total annual revenues.
For 2021, Twilio’s dollar-based net expansion rate was 131%. The company reported a non-GAAP loss of 25 cents per share compared with 2020 earnings of 23 cents per share.
Non-GAAP gross profit jumped 54.4% year over year to $1.52 billion. However, non-GAAP gross margin contracted 300 bps to 53% in 2021.
Geographically, 34% of revenues stemmed from outside of the United States in 2021, up from 27% in 2020.
Guidance
Twilio forecast non-GAAP loss per share between 22 cents and 26 cents for the first quarter of 2022. The Zacks Consensus Estimate for the same is pegged at a loss per share of 10 cents.
For the current quarter ending Mar 31, 2022, the company anticipates revenues between $855 million and $865 million, suggesting year-over-year growth of 45-47%. The Zacks Consensus Estimate is pegged at $808 million. Management estimates non-GAAP loss from operations in the range of $27 million to $32 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.43% due to these changes.
VGM Scores
Currently, Twilio has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 #4 (Sell). We expect a below average return from the stock in the next few months.