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Twilio (TWLO) Up 10.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Twilio (TWLO - Free Report) . Shares have added about 10.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Twilio due for a pullback? 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 catalysts.
Twilio Surpasses Q2 Earnings and Revenue Estimates
Twilio reported better-than-expected results for the second quarter of 2023, wherein non-GAAP earnings of 54 cents per share surpassed the Zacks Consensus Estimate of 29 cents. In the year-ago quarter the company incurred a loss of 11 cents. The year-over-year rise 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 registered revenues of $1.04 billion. The figure improved by 10% year over year and outshined the consensus mark of $984.5 million.
TWLO has been benefiting from constant expansion of its international business and 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. These are its fastest-growing software-as-a-service products at present.
Twilio’s dollar-based net expansion rate was 103% in the reported quarter, down from 106% in the previous quarter and 123% in the year-ago quarter. The Zacks Consensus Estimate was pegged at 101%.
Active customer accounts increased to 304,000 as of Jun 30, 2023, from 300,000 at the end of first-quarter 2023. The figure was 275,000 as of Jun 30, 2022. The consensus mark stood at 306,350 for the reported quarter.
Operating Results
Non-GAAP gross profit climbed 12.7% year over year to $541.9 million. Non-GAAP gross margin expanded 100 basis points to 52%.
Non-GAAP operating income was $120.1 million against the year-ago quarter’s non-GAAP operating loss of $7.3 million. Non-GAAP operating margin was 12%, up from 1% in the prior-year quarter.
General & administrative expenses on a non-GAAP basis decreased 16.7% to $73 million and accounted for 7% of quarterly revenues. Research & development expenditures on a non-GAAP basis dipped 9.9% year over year to $150.6 million and made up 15% of quarterly revenues.
Non-GAAP sales & marketing costs declined 15.1% to $198.1 million. The same represented 19% of second-quarter revenues.
Balance Sheet
The company exited the June quarter with cash and cash equivalents, and short-term marketable securities of $3.68 billion, down from $3.95 billion at first-quarter 2023 end. As of Jun 30, 2023, TWLO’s long-term debt was $988.2 million.
During the first six months of 2023, Twilio used $14.2 million worth cash for operating activities.
Third-Quarter 2023 Guidance
For the current quarter ending Sep 30, 2023, the company anticipates revenues to be between $980 million and $990 million, flat to up 1%. Twilio forecast non-GAAP earnings in the range of 33-37 cents per share. Management estimates non-GAAP income from operations in the $75-$85 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 28.45% due to these changes.
VGM Scores
At this time, Twilio has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Twilio has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Twilio belongs to the Zacks Internet - Software industry. Another stock from the same industry, Pinterest (PINS - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Pinterest reported revenues of $708.03 million in the last reported quarter, representing a year-over-year change of +6.3%. EPS of $0.21 for the same period compares with $0.11 a year ago.
For the current quarter, Pinterest is expected to post earnings of $0.21 per share, indicating a change of +90.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +12.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Pinterest. Also, the stock has a VGM Score of B.
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Twilio (TWLO) Up 10.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Twilio (TWLO - Free Report) . Shares have added about 10.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Twilio due for a pullback? 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 catalysts.
Twilio Surpasses Q2 Earnings and Revenue Estimates
Twilio reported better-than-expected results for the second quarter of 2023, wherein non-GAAP earnings of 54 cents per share surpassed the Zacks Consensus Estimate of 29 cents. In the year-ago quarter the company incurred a loss of 11 cents. The year-over-year rise 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 registered revenues of $1.04 billion. The figure improved by 10% year over year and outshined the consensus mark of $984.5 million.
TWLO has been benefiting from constant expansion of its international business and 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. These are its fastest-growing software-as-a-service products at present.
Twilio’s dollar-based net expansion rate was 103% in the reported quarter, down from 106% in the previous quarter and 123% in the year-ago quarter. The Zacks Consensus Estimate was pegged at 101%.
Active customer accounts increased to 304,000 as of Jun 30, 2023, from 300,000 at the end of first-quarter 2023. The figure was 275,000 as of Jun 30, 2022. The consensus mark stood at 306,350 for the reported quarter.
Operating Results
Non-GAAP gross profit climbed 12.7% year over year to $541.9 million. Non-GAAP gross margin expanded 100 basis points to 52%.
Non-GAAP operating income was $120.1 million against the year-ago quarter’s non-GAAP operating loss of $7.3 million. Non-GAAP operating margin was 12%, up from 1% in the prior-year quarter.
General & administrative expenses on a non-GAAP basis decreased 16.7% to $73 million and accounted for 7% of quarterly revenues. Research & development expenditures on a non-GAAP basis dipped 9.9% year over year to $150.6 million and made up 15% of quarterly revenues.
Non-GAAP sales & marketing costs declined 15.1% to $198.1 million. The same represented 19% of second-quarter revenues.
Balance Sheet
The company exited the June quarter with cash and cash equivalents, and short-term marketable securities of $3.68 billion, down from $3.95 billion at first-quarter 2023 end. As of Jun 30, 2023, TWLO’s long-term debt was $988.2 million.
During the first six months of 2023, Twilio used $14.2 million worth cash for operating activities.
Third-Quarter 2023 Guidance
For the current quarter ending Sep 30, 2023, the company anticipates revenues to be between $980 million and $990 million, flat to up 1%. Twilio forecast non-GAAP earnings in the range of 33-37 cents per share. Management estimates non-GAAP income from operations in the $75-$85 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 28.45% due to these changes.
VGM Scores
At this time, Twilio has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Twilio has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Twilio belongs to the Zacks Internet - Software industry. Another stock from the same industry, Pinterest (PINS - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Pinterest reported revenues of $708.03 million in the last reported quarter, representing a year-over-year change of +6.3%. EPS of $0.21 for the same period compares with $0.11 a year ago.
For the current quarter, Pinterest is expected to post earnings of $0.21 per share, indicating a change of +90.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +12.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Pinterest. Also, the stock has a VGM Score of B.