What happened
Shares of Twilio Inc. (TWLO 1.76%) have climbed 159.1% so far in 2018, according to data from S&P Global Market Intelligence, thanks largely to a pair of exceptional quarterly reports from the digital communications specialist.
More specifically, Twilio soared more than 20% the day after its stellar fourth-quarter 2017 report in mid-February, then continued to drift higher over the next few months before enjoying a similar pop following its first-quarter 2018 announcement in May.
So what
Twilio stock has continued to rise on the heels of the latter report, in which the company revealed its quarterly revenue had climbed 48% year over year to $129 million, translating to an adjusted net loss of $0.04 per share. For perspective, most investors were modeling a much wider net loss on sales of $116 million.
But apart from simply outpacing expectations, what is making investors so crazy about this yet-to-be-profitable business? For one, revenue growth is handily outpacing Twilio's actual customer growth -- with the latter most recently increasing 33% year over year to just under 54,000. This indicates that not only are new customers realizing the utility of its core cloud-communications products, but existing customers are also proving a lucrative source of incremental growth as they buy into Twilio's other offerings.
Now what
Perhaps most exciting, Twilio stock still trades modestly below its post-IPO highs set in late 2016 -- only now, investors are buying a significantly stronger business with incredible momentum. That's not to say Twilio will continue to skyrocket indefinitely (for better or worse, we'll likely see another big move when it posts second-quarter results next month). But as Twilio works to effectively disrupt the enormous IT communications industry, I think its gains are only the beginning in a much longer story.