Twilio CFO Breaks Down Big Q1 Revenue Beat and 2020 Expectations

Shares of Twilio surged on Thursday as several analysts raised their outlooks for the fast-growing cloud communications firm.
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In a highly uncertain time, Twilio  (TWLO) - Get Report says it’s rising to the occasion.

Shares of the cloud communications firm shot up 37.14% on Thursday to $168.04 after its healthy first quarter earnings report, which showed 57% year-over-year growth in revenue and 23% growth in active users.

“We kind of feel like Twilio was built for a moment like this: We have cloud scale, we operate with speed and we have software agility,” CFO Khozema Shipchandler told TheStreet.

Unlike other tech firms, which have declined to provide specific guidance for the current quarter, Twilio gave investors a detailed picture of what results for the current quarter will look like. 

The company guided for sales of between $365 million and $370 million quarter ending in June and a non-GAAP loss per share of between 8 cents and 11 cents, ahead of consensus estimates of $337 million and a non-GAAP loss of 13 cents. But Twilio also withdrew its full-year guidance owing to uncertainty.

“As we look into Q2, we have a robust data set and see more or less the same trajectory,” as the March quarter, Shipchandler added.

With offices closed and certain industries hit particularly hard by the coronavirus -- hospitality, travel and ridesharing, to name a few -- Twilio noted broad-based growth in demand across many different sectors last quarter, with particularly high demand in healthcare and education. Shipchandler added that the most negatively impacted industries make up less than 10% of Twilio’s overall revenue.

As various industries recover and people return to work, Twilio’s growth will “moderate” at some point, Shipchandler said. But analysts believe much of the rapid tech adoption taking place this year will be permanent.

“We don’t think you should be afraid to buy [Twilio] here, because … the disruption from Covid-19 is probably the biggest possible accelerant TWLO could have ever asked for,” wrote Cowen analyst J. Derrick Wood wrote on Thursday, raising his price target to $180 from $135 with an outperform rating. A number of analysts also raised their price targets for Twilio following its first quarter release. 

“Hospitality, travel, ridesharing -- these industries will come back eventually,” Shipchandler said. “Some of these other use cases are secular trends. Healthcare’s telehealth moment is probably now.”

Full-year financial results may be difficult to predict at this stage, but Twilio sounded confident that it will emerge from the current crisis well-positioned for the long term.

Shipchandler said he remains “cautiously optimistic” that the macroeconomic environment will improve in the second half of this year, and cited Twilio’s balance sheet -- it has $1.8 billion in cash and cash equivalents on hand -- noting that the company has no plans to slow investments in key areas of its technology.

Twilio shares are up 66% year to date.