Twilio Shares Collapse After Stellar Earnings Report

It was on Wednesday that Twilio Inc. released quarterly results, sending shares down as much as 7% in after-hours trading when Wall Street digested the numbers.

The surprising thing about this is that the company had a good quarter. In fact, Twilio said, “We had a great quarter.”

Second-quarter results beat analysts’ expectations and the company also announced for the first time that it had reached a $1 billion annual revenue run-rate.

So why were shares sinking? The Federal Reserve has decided to cut interest rates by 25 basis points and this may have contributed to market instability according to Twilio CEO Jeff Lawson, who spoke to MarketWatch.

“We had a great quarter. Everything else is just speculation,” Lawson said.

For the second-quarter, the San Francisco-based company reported net income of 3 cents a share, compared with a loss of 3 cents a year ago. Revenue jumped 86% to $275 million from $147.8 million in the year-ago period.

The company also has 161,000 customers now compared with 57,000 a year ago.

Analysts surveyed by FactSet were waiting for earnings per share of 2 cents on revenue of $264 million.

Looking ahead, the cloud platform is expecting revenue of $286-289 million and adjusted EPS of 1 to 2 cents for the third quarter. Analysts are waiting for sales to come in at $285.6 million and non-GAAP earnings of 1 cent per share.

For the fiscal 2019 period, Twilio anticipates top line in the range of $1.113-1.119 billion compared to $1.11 billion estimated by the analysts. The company expects non-GAAP earnings to be between 17 to 18 cents per share, surpassing 12 cent street estimates.

Twilio shares are up 56% this year so far.

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