What happened

Shares of Twilio (TWLO 1.28%) gained 24.7% in January, according to data from S&P Global Market Intelligence. The online communications software company's stock has been super hot even when confidence in the overall market has wavered, and its momentum continued in January as the broader market rebounded from its late 2018 sell-offs.  

TWLO Chart

TWLO data by YCharts.

Check out the latest Twilio earnings call transcript.

Strong sales and earnings momentum and what looks like a long runway for growth have helped push the stock up more than 660% from its $15 IPO price in 2016. This impressive performance also meant that the company's all-stock acquisition of email API and marketing company SendGrid, which closed on Feb. 1, was announced in mid-October and initially valued at $2 billion, was a $3 billion deal when it was all said and done.

People using laptops and tablets.

Image source: Getty Images.

So what

Twilio provides cloud-based messaging and call software; it has seen adoption for its services in popular and fast-growing apps like Uber, Airbnb, and Facebook's WhatsApp power the business to strong growth. The company's customer base is growing at a rapid clip (rising 31% year over year in the September quarter to surpass 61,000). Strong earnings performance and expectations that there are still plenty of untapped monetization opportunities that could increase the business' average revenue per customer are translating to market-crushing stock performance. 

Now what

Twilio is set to report fourth-quarter earnings after market close on Feb. 12. The company is guiding for sales to come in between $183 million and $185 million, representing year-over-year growth of roughly 60% at the midpoint of the target. Adjusted earnings per share are expected to be between $0.03 and $0.04, up from an adjusted loss per share of $0.03 in the prior-year period.