One of this year's hottest stocks is only getting hotter. Shares of Twilio Inc. (NYSE:TWLO) soared 25% last week after the cloud communications services provider posted another blowout quarter. Twilio stock has more than tripled this year -- skyrocketing 228% -- and naturally hitting all-time highs along the way.

Revenue growth is accelerating, clients continue to lean on Twilio for their in-app communication needs, and once again the niche leader boosted its full-year outlook. Fears that developers would follow the lead of Uber and Lyft and kick the tires of rival offerings to Twilio's detriment surfaced last year, but the tech darling's heady growth has crushed those concerns. Twilio is rolling, and it's hard to bet against a stock that has moved sharply higher every month so far in 2018.

Demo of Twilio Flex in action.

Image source: Twilio.  

Making the right connection

The second quarter was flawless. Total and base revenue rose 54%. Twilio was modeling just 35% to 37% in growth back in May. With 41% growth in the fourth quarter of last year and the 48% it checked in with for this year's first quarter, Twilio is coming off of back-to-back quarters of accelerating growth. Twilio had posted only one period of accelerating top-line growth as a public company before this recent positive run.   

It's too soon to value Twilio based on its profitability, but the modest $0.03 a share in adjusted earnings that it just reported for the second quarter is still notable. The profit reverses a year-ago loss. Twilio's guidance and analyst expectations were calling for an adjusted loss. 

Twilio is now up to 53,985 developers relying on its in-app solutions, 32% more than a year earlier. That revenue is once again outpacing client growth is a bullish sign, as it shows that clients are funneling more traffic through the platform and adding new components or migrating to new platforms, including the Twilio Flex programmable contact center vertical. Twilio's dollar-based net expansion rate hit 137% in the second quarter.

Twilio is lifting its targets. Management now expects an adjusted profit per share between $0.02 and $0.04 for all of 2018, a reversal of the small deficit it was originally modeling. The $585.5 million to $589.5 million that it's now targeting in annual revenue is a huge upgrade from the $538 million to $544 million that it was aiming for just three months earlier. The guidance that it's initiating for the current period is also well ahead of where Wall Street pros were parked. 

It's not surprising to see analysts once again jacking up their expectations in light of another quarterly blockbuster showing. J.P. Morgan, Canaccord, and Baird all boosted their price targets, and they all continue to have bullish ratings on the stock. Twilio turning profitable on an adjusted basis came earlier than the market expected, but it's the strengthening pace of the top-line growth that's ultimately exciting growth investors.