Posted on Friday, Feb 19th 2021
Communications PaaS player Twilio (NYSE: TWLO) recently announced its fourth quarter results that surpassed market expectations. The market was impressed with its performance and the company saw its stock soaring to record high levels in the after-hours trading session.
For the fourth quarter, Twilio’s revenues grew an impressive 65% over the year to $548.1 million, surging ahead of the market’s forecast of $454.8 million. EPS was $0.04 per share, shattering the market’s expectations of a loss of $0.08 per share.
Among key metrics, its active customer accounts grew by 13,000 to 221,000. The company ended the quarter with 4,629 employees. Dollar-based net expansion rate, which is calculated using total revenue, was 139% compared to 125% a year ago.
Political activity contributed $23 million in revenues for the quarter, and Facebook’s WhatsApp messaging app contributed 5% of revenue, down from 6% in the third quarter.
It ended the year with revenues growing 55% over the year to $1.76 billion and an adjusted net income of $0.23 per share.
Twilio expects to end the first quarter with revenues of $526-$536 million and a loss of $0.12-$0.09 per share, which was significantly ahead of the Street’s forecast of revenues of $484.12 million and a loss of $0.02 per share.
Twilio’s Social Initiatives
Recently, Twilio announced that it was teaming up with the Norwegian Refugee Council (NRC) to help with digital transformation of services world-wide as well as speeding up the delivery of humanitarian aid. Last year, nonprofits, social enterprises and local governments using Twilio reach 266 million people. It also launched its WePledge movement, which empowers every individual employee to pledge 1% of their time or income to do good. Twilio’s employees volunteered more than 7,800 hours and donated more than $1 million in 2020. Other companies joining the movement included Atlassian, Zoom, Okta, and Pledge.
Twilio made several senior management hires as well. It hired Jeremiah Brazeau as its CTO to lead its technology strategy and roadmap. Last month, it added Deval Patrick, former Governor of Massachusetts, to its board of directors.
Twilio continued to expand its partner network during the quarter. Last year, consulting partners influenced three times as much revenue in 2019, and were involved in 50% of its top Flex deals. It recently added Deloitte Digital as its first premier global systems integrator. Deloitte Digital’s Twilio practice will provide access to the full Twilio product suite, which includes the contact center solution Twilio Flex, Twilio communication platform, and API services. Twilio’s partner program enables organizations to become consulting partners, offer professional services, and become technology partners by embedding Twilio connectivity into their enterprise applications.
Twilio has a very successful PaaS strategy. Back in 2014, when I had spoken with its CEO Jeff Lawson, it had over 400,000 developers. Recently, Twilio recorded more than 8 million developers globally supporting more than 795 billion interactions across its platform. Read more about my views on the importance of a PaaS strategy here: Cloud Stocks: Which SaaS Players Will Win in PaaS.
Its stock is currently trading at $443.41 with a market cap of $71.2 billion. The stock had climbed to a 52-week high of $457.30 earlier this month. It hit a 52-week low of $68.06 in March last year amid all the market turbulence.
Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company. Photo credit: Ken Yeung /Flickr.com. This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . 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Zscaler Focuses on Federal Agencies . Coupa Launches PaaS Strategy . Analysis of BlackLine’s Kyriba Partnership . PagerDuty's Expanding Integration Portfolio . Analysis of Tenable's Accurics Acquisition . Upstart’s Improving AI Algorithm in FinTech Consumer Lending . Analysis of C3.ai's Growing Partnerships . Analysis of Veeva's Learnaboutgmp Acquisition . Analysis of Adobe's Frame.io Acquisition . Snowflake Focuses on the Financial Services Sector . CrowdStrike Expands Government Offerings . Zoom Focuses on Expanding Reseller Offerings . Dropbox Focuses on Content Creators with New Product . Analysis of Okta's atSpoke Acquisition . Sumo Logic Leverages Red Hat Marketplace . Analysis of Dynatrace's SpectX Acquisition . Tuya Prepares to Address the Chip Shortage . Analysis of Appian's Lana Labs Acquisition . Analysis of Qualtrics's $1.125B Clarabridge Acquisition . Fastly Addresses Latency Issues for Developers . Alarm.com Leverages AI for Growth . Analysis of IBM's Rego Acquisition . 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Smartsheet Focuses on PaaS Growth . C3.ai Expands Enterprise and Public Sector Presence