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Twilio (TWLO) Jumps 12% on Q4 Earnings Beat, Strong Guidance
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Twilio (TWLO - Free Report) shares soared 12.4% during Wednesday’s extended trading session after the company reported better-than-expected results for the fourth quarter of 2022. The strong forecast for the first quarter of 2023 also boosted investors’ confidence, driving the stock’s prices higher in the after-market trade.
Twilio reported non-GAAP earnings of 22 cents per share for the fourth quarter. The bottom line compared favorably with the Zacks Consensus Estimate of a loss of 9 cents per share as well as the year-ago quarter’s loss of 20 cents. The year-over-year growth in non-GAAP earnings was primarily due to higher revenues and cost savings through headcount reductions.
Revenue Details
The cloud-based communications platform-as-a-service provider reported revenues of $1.02 billion. The figure improved by 22% year over year and surpassed the consensus mark of $998.9 million.
TWLO 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, Flex and Engage, which are its fastest-growing software-as-a-service products at present.
Twilio’s dollar-based net expansion rate was 110% in the reported quarter, down from 122% in the previous quarter and 126% in the year-ago quarter. The company’s active customer accounts increased to 290,000 as of Dec 31, 2022 from 280,000 at the end of the third quarter of 2022 and 256,000 as of Dec 31, 2021.
Operating Results
The non-GAAP gross profit climbed 20% year over year to $518 million. However, the non-GAAP gross margin remained flat at 51%.
Twilio reported a fourth-quarter non-GAAP operating income of $32.9 million, while it reported an operating loss of $4.5 million in the year-ago quarter. The non-GAAP operating margin was 3% for the fourth quarter.
General & administrative expenses on a non-GAAP basis increased 11.5% to $87.5 million and accounted for 8.5% of the quarterly revenues. Research & development expenses on a non-GAAP basis surged 21.7% year over year to $177.6 million and made up 17.3% of the quarterly revenues.
Non-GAAP sales & marketing expenses declined 6.4% to $219.8 million. The same represented 21.5% of fourth-quarter revenues.
Balance Sheet
The company exited the October-December 2022 quarter with cash and cash equivalents and short-term marketable securities of $4.16 billion, down from $4.21 billion at the end of the third quarter of 2022. As of Dec 31, 2022, TWLO’s long-term debt was $987.4 million.
First-Quarter 2023 Guidance
Twilio forecast non-GAAP earnings between 18 cents and 22 cents per share for the first quarter of 2023. The Zacks Consensus Estimate for the same is pegged at a loss of 2 cents per share.
For the current quarter ending Mar 31, 2023, the company anticipates revenues between $995 million and $1.005 billion, suggesting year-over-year growth of 14% to 15%. Management estimates the non-GAAP income from operations in the range of $45-$55 million.
Zacks Rank & Stocks to Consider
Currently, Twilio carries a Zacks Rank #4 (Sell). Shares of TWLO have declined 60.2% over the past year.
The Zacks Consensus Estimate for Clarivate’s fourth-quarter 2023 earnings has remained unchanged at 17 cents per share over the past 60 days. For 2022, earnings estimates have been revised a penny northward to 81 cents per share in the past 60 days.
Clarivate's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.4%. Shares of CLVT have fallen 33% in the trailing 12 months.
The Zacks Consensus Estimate for RingCentral's first-quarter 2023 earnings has revised a penny upward to 62 cents per share in the past 60 days. For 2023, earnings estimates have been revised to $2.85 from $2.84 30 days ago.
RingCentral’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 10.1%. Shares of RNG have plunged 73% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised northward by a penny to $2.02 per share over the past seven days. For 2023, earnings estimates have moved upward by a penny to $9.18 per share in the past seven days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 21.5% in the trailing 12 months.
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Twilio (TWLO) Jumps 12% on Q4 Earnings Beat, Strong Guidance
Twilio (TWLO - Free Report) shares soared 12.4% during Wednesday’s extended trading session after the company reported better-than-expected results for the fourth quarter of 2022. The strong forecast for the first quarter of 2023 also boosted investors’ confidence, driving the stock’s prices higher in the after-market trade.
Twilio reported non-GAAP earnings of 22 cents per share for the fourth quarter. The bottom line compared favorably with the Zacks Consensus Estimate of a loss of 9 cents per share as well as the year-ago quarter’s loss of 20 cents. The year-over-year growth in non-GAAP earnings was primarily due to higher revenues and cost savings through headcount reductions.
Revenue Details
The cloud-based communications platform-as-a-service provider reported revenues of $1.02 billion. The figure improved by 22% year over year and surpassed the consensus mark of $998.9 million.
Twilio Inc. Price, Consensus and EPS Surprise
Twilio Inc. price-consensus-eps-surprise-chart | Twilio Inc. Quote
TWLO 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, Flex and Engage, which are its fastest-growing software-as-a-service products at present.
Twilio’s dollar-based net expansion rate was 110% in the reported quarter, down from 122% in the previous quarter and 126% in the year-ago quarter. The company’s active customer accounts increased to 290,000 as of Dec 31, 2022 from 280,000 at the end of the third quarter of 2022 and 256,000 as of Dec 31, 2021.
Operating Results
The non-GAAP gross profit climbed 20% year over year to $518 million. However, the non-GAAP gross margin remained flat at 51%.
Twilio reported a fourth-quarter non-GAAP operating income of $32.9 million, while it reported an operating loss of $4.5 million in the year-ago quarter. The non-GAAP operating margin was 3% for the fourth quarter.
General & administrative expenses on a non-GAAP basis increased 11.5% to $87.5 million and accounted for 8.5% of the quarterly revenues. Research & development expenses on a non-GAAP basis surged 21.7% year over year to $177.6 million and made up 17.3% of the quarterly revenues.
Non-GAAP sales & marketing expenses declined 6.4% to $219.8 million. The same represented 21.5% of fourth-quarter revenues.
Balance Sheet
The company exited the October-December 2022 quarter with cash and cash equivalents and short-term marketable securities of $4.16 billion, down from $4.21 billion at the end of the third quarter of 2022. As of Dec 31, 2022, TWLO’s long-term debt was $987.4 million.
First-Quarter 2023 Guidance
Twilio forecast non-GAAP earnings between 18 cents and 22 cents per share for the first quarter of 2023. The Zacks Consensus Estimate for the same is pegged at a loss of 2 cents per share.
For the current quarter ending Mar 31, 2023, the company anticipates revenues between $995 million and $1.005 billion, suggesting year-over-year growth of 14% to 15%. Management estimates the non-GAAP income from operations in the range of $45-$55 million.
Zacks Rank & Stocks to Consider
Currently, Twilio carries a Zacks Rank #4 (Sell). Shares of TWLO have declined 60.2% over the past year.
Some better-ranked stocks from the broader technology sector are Clarivate Plc (CLVT - Free Report) , RingCentral (RNG - Free Report) and ServiceNow (NOW - Free Report) , each 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 Zacks Consensus Estimate for Clarivate’s fourth-quarter 2023 earnings has remained unchanged at 17 cents per share over the past 60 days. For 2022, earnings estimates have been revised a penny northward to 81 cents per share in the past 60 days.
Clarivate's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.4%. Shares of CLVT have fallen 33% in the trailing 12 months.
The Zacks Consensus Estimate for RingCentral's first-quarter 2023 earnings has revised a penny upward to 62 cents per share in the past 60 days. For 2023, earnings estimates have been revised to $2.85 from $2.84 30 days ago.
RingCentral’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 10.1%. Shares of RNG have plunged 73% over the past year.
The Zacks Consensus Estimate for ServiceNow's first-quarter 2023 earnings has been revised northward by a penny to $2.02 per share over the past seven days. For 2023, earnings estimates have moved upward by a penny to $9.18 per share in the past seven days.
ServiceNow's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.9%. Shares of NOW have plunged 21.5% in the trailing 12 months.