Shares of Twilio Explode After Company Posts a Beat in Q1

Shares of communications software company Twilio were soaring on Wednesday in after-hours trading this week after the company posted its first quarter financial results. Both revenue and net income for the quarter topped what analysts had expected.

For the first quarter the company reported a loss of $94.8 million, or 68 cents a share. This is compared with a loss of $36.5 million, or 31 cents a share, in the year-ago quarter. Revenue climbed 57% to $364.9 million from $233.1 million a year ago.

Analysts surveyed by FactSet were expecting a loss of 11 cents a share on sales of $331 million.

Twilio also reported over 190,000 active customer accounts at the end of the quarter, while analysts polled by FactSet had expected 185,595.

Looking ahead, Twilio’s forecast for the second quarter is projecting a loss of 11 cents to 8 cents per share on an adjusted basis, and $365 million to $370 million in revenue. Analysts polled by Refinitiv had been looking for an adjusted loss of 13 cents per share on $336.9 million in revenue.

Founder and CEO Jeff Lawson said on the earnings call, “As you can tell from the numbers, Q1 was a strong quarter for the Company, both before the COVID-19 impact again and as the impact we’re starting to be felt across society. Our diversified customer base currently consists of over 190,000 organizations spanning many industries, countries and company sizes. From start-ups to Fortune 500s, non-profits and even government bodies, this diversification served us well during this period of time, while some customers saw declines, others saw growth. As you can imagine, customers in the hospitality and travel have exhibited very unusual patterns during this period. First, there were spikes in volume as airlines and hotels dealt with rebookings and canceled flights during the transition from pre-COVID-19 into travel restrictions and shelter-in-place protocols. Then, there was a sharp decline as business slowed. Another example is that ridesharing saw a large decline during this time, with offsets in many cases by sharp increases in demand for food delivery, curbside pickup and retail logistics. In addition, telehealth and work-from-home contact centers saw a pickup of adoption during this time.”

“While we are cautiously optimistic, no one can predict what exactly will transpire in the back half of the year given the uncertainty of the macroeconomic environment. So while we are certainly seeing headwinds to our business in certain industries, we believe that we have a resilient business model because of our diversified customer base. And long term, we expect that usage and many of the impacted industries will return and others that may be newer use cases will continue to grow in importance. We also saw other use cases where a project that was slated for some time in the future became we need this now. And we made several product announcements in the quarter to strengthen our offerings.”

Disclaimer: We have no position in Twilio Inc. (NYSE: TWLO) and have not been compensated for this article.