What To Expect From Twilio’s (TWLO) Q1 Earnings

Radek Strnad /
2022/05/03 7:11 am EDT
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Cloud communications infrastructure company Twilio (NYSE:TWLO) will be reporting results tomorrow afternoon. Here's what investors should know.

Last quarter Twilio reported revenues of $842.7 million, up 53.7% year on year, beating analyst revenue expectations by 9.53%. Despite the solid top-line growth, it was a mixed quarter for the company, with a very optimistic guidance for the next quarter but a decline in gross margin and a slowdown in customer growth. The company added 6,000 customers to a total of 256,000.

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 46.4% year on year to $863.8 million, slowing down from the 61.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is 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 11.3%.

Looking at Twilio's peers in the software development segment, only F5 Networks has so far reported results, with revenues decreasing 1.71% year on year, and in-line with analyst estimates. The stock was down 12.7% on the results. Read our full analysis of F5 Networks's earnings results here.

There has been a stampede out of high valuation technology stocks and software stocks have not been spared, with share price down on average 16.9% over the last month. Twilio is down 32.5% during the same time, and is heading into the earnings with analyst price target of $293.6, compared to share price of $117.8.

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.