Twilio Inc (TWLO) stock surges 19% after solid cloud sales guidance

February 10, 2022 08:01 AM PST | By Rupam Roy

Twilio Inc (TWLO) stock surges 19% after solid cloud sales guidance — Image source: Source: TippaPatt, Shutterstock

Fourth-quarter earnings, guidance

The company's fiscal 2021 fourth-quarter revenue surged 54% YoY to US$842.7 million, beating analysts' estimates, while its full-year revenue jumped 61% YoY to US$2.84 billion, it said in its earnings report on Wednesday.

Twilio, founded in 2008, reported a net loss of US$291.39 million or US$1.63 per share, against a loss of US$179.35 million, or US$1.13 per diluted share in the year-ago quarter. On a non-GAAP basis, it reported a loss of US$0.20 per share, better than estimates.

The company now expects its revenue to be between US$855 million and US$865 million in the first quarter of fiscal 2022, representing an increase of 45% to 47% YoY, respectively.

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Reasons for robust guidance

Twilio has attracted many cloud software customers lately. Twilio's services include application for sending texts and emails. The San Francisco, California-based company now has a dominant presence in the business-to-consumer communications market.

Many analysts believe the company’s booming business could be due to the pandemic. But Twilio CEO Jeff Lawson believes the shift toward digitalization as a permanent one.

Lawson added that the company sees robust growth opportunity in the market as companies look to use data to engage with their customers. He said that more businesses are going online, which is good news for the company.

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Twilio (TWLO) stocks soars after reporting strong quarterly earnings on Wednesday

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What's next?

Lawson is positioning Twilio to compete against big rivals like Adobe Inc (ADBE), Salesforce.com, Inc (CRM), etc., with a slate of acquisitions for aiding to its existing technology.

The company expects a non-GAAP operating profit in 2023, indicating growth even without the pandemic boom that helped software companies last year. However, Twilio’s guidance excludes the effect of any future acquisitions.

Additionally, the company said on Wednesday that it anticipates its organic revenue to grow at a rate of 30% or more in the next three years.

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Bottomline

The TWLO shares traded at US$241.75 at 7:10 am ET on February 10, up 19.67% from their previous closing price of US$202.01. However, the stock price declined 53.36% over the past 12 months, mostly this year due to a broad slump in the tech sector.

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