Twilio (TWLO) Q1 Earnings Report Preview: What To Look For

Radek Strnad /
2023/05/08 4:48 am EDT

Cloud communications infrastructure company Twilio (NYSE:TWLO) will be reporting earnings tomorrow afternoon. Here's what to look for.

Last quarter Twilio reported revenues of $1.02 billion, up 21.6% year on year, beating analyst revenue expectations by 2.43%. It was a mixed quarter for the company, with accelerating customer growth but underwhelming revenue guidance for the next quarter. The company added 10,000 customers to a total of 290,000.

Is Twilio buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Twilio's revenue to grow 14.5% year on year to $1 billion, slowing down from the 48.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.21 per share.

Twilio Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 5.9%.

Looking at Twilio's peers in the software development segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. F5 Networks delivered top-line growth of 10.9% year on year, beating analyst estimates by 0.62% and Cloudflare reported revenues up 36.8% year on year, missing analyst estimates by 0.22%. F5 Networks traded up 0.52% on the results, Cloudflare was down 23.2%. Read our full analysis of F5 Networks's results here and Cloudflare's results here.

There has been a stampede out of high valuation technology stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.54% over the last month. Twilio is down 11.9% during the same time, and is heading into the earnings with analyst price target of $82.2, compared to share price of $52.55.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.