Twilio Falls as Fourth-Quarter Loss Widens, Guidance Misses

Twilio, the San Francisco provider of communications software and services, reported a wider fourth-quarter net loss, and stronger-than-expected revenue and adjusted net income. But guidance missed.
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Twilio  (TWLO) - Get Report, the San Francisco provider of communications software and services, reported a wider fourth-quarter net loss, and stronger-than-expected revenue and adjusted net income, on 62% higher revenue.

The fourth-quarter net loss was 66 cents a share compared with a loss of 47 cents in the year-earlier quarter. The latest adjusted profit was 4 cents a share. Revenue reached $331.2 million from $204.3 million. A survey of analysts by FactSet produced consensus estimates of a loss of 56 cents a share, or an adjusted profit of 1 cent a share, on $313 million of revenue.

However, Twilio guided for a net loss in the current quarter and for the year, while analysts were expecting positive adjusted earnings for both periods.

At last check, Twilio shares were trading down 3.5%. They closed the regular Wednesday session down 3.6% at $127.15. In 2020 through Tuesday, Twilio stock had risen by more than a third.

The company's technology enables developers to add communications channels like voice, text, chat, video and email to applications. Via those applications, businesses can communicate with customers in the ways they deem most beneficial.

In the run-up to Twilio's earnings report, a number of analysts weighed in.

On Jan. 31, Cowen's J. Derrick Wood started coverage of Twilio with an outperform rating and a $150 price target.

Wood said the company is “just scratching the surface” of a large total addressable market. And the 7 million developers on its platform are an under-appreciated asset that “will become increasingly important as developers are more instrumental in digital projects.”

On Jan. 28, Wells Fargo initiated Twilio at overweight with a $155 price target.

And on Jan. 27 Alex Zukin at RBC affirmed the company at outperform and lifted his price target to $140 from $125. 

"The company seems very positive on 2020, noting no macro or demand concerns, nor any changes in the competitive environment," Zukin wrote. "They noted analyzing weekly reports on communications volume, and seeing no declines in activity."

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