Cloud communications specialist Twilio (NYSE:TWLO) reported results on Tuesday, covering the first quarter of fiscal year 2019. Here's a closer look at the company's recent fortunes.

Twilio's first-quarter results: The raw numbers

Metric

Q1 2019

Q1 2018

Year-Over-Year Growth

Revenue

$233 million

$129 million

81%

Net income (loss) attributable to common shareholders

($36.5 million)

($23.7 million)

N/A

GAAP earnings per diluted share

($0.31)

($0.25)

N/A

Data source: Twilio.

What happened with Twilio this quarter?

  • Rising share counts often work against a company's reported EPS, but it works the other way around for net losses. For Twilio, a 23% dilutive year-over-year increase in the number of shares resulted in losses per share growing much slower than the plain bottom-line net losses did.
  • Twilio is leveraging its raging revenue growth to power even sharper boosts to the company's growth engines. Research and development expenses doubled compared with the year-ago period, while sales and marketing budgets rose by 118%.
  • A lot of the growth came from the recently closed acquisition of marketing email expert SendGrid. Twilio's revenues increased by 60% on an organic basis. The buyout also more than doubled Twilio's customer base. Without SendGrid, Twilio's customer count rose 31% year over year, or 10% in the first quarter alone, landing at 71,000 clients. SendGrid alone added another 84,000 names to that list.
  • The dollar-based net expansion came in at 146%, unchanged from the previous quarter, but up from 132% in the first quarter of 2018. Any reading above 100% indicates that customers who are renewing their Twilio contracts are increasing the size of their agreements.
  • The fading importance of Twilio's formerly largest customer, ridesharing service Uber, was underscored by the fact that Uber wasn't mentioned even once across the earnings report and the conference call. Twilio used to provide key metrics calculated with and without the impact of Uber's shrinking presence, but those days are over now.
Two young professionals doing business together, sharing a phone and a computer.

Image source: Getty Images.

What management had to say

In the earnings call, CEO Jeff Lawson highlighted the impact he expects from a new development platform called Flex:

Q1 was the first full quarter of general availability for Flex. The feedback from our early customers has been great. As a developer myself, I know that when introducing a new product, the most important thing is getting the underlying architecture right. And our early customers are telling us that our application platform architecture is right. And we're listening to those customers and building on our road map for additional features and functionality based on their feedback.

If Lawson is reading those tea leaves right, Twilio appears to have a winner on its hands in Flex. It remains to be seen how the developer-friendly platform might affect the company's customer growth over time.

Looking ahead

Twilio raised its full-year revenue guidance by 3.4% based on the first quarter's results and overall business trends. Adjusted earnings are now expected to land near $0.12 per share for the full year, a 20% increase from the 2019 guidance Twilio provided three months ago.

On the road to those goals, Twilio's management guided second-quarter revenue to roughly $263.5 million, and adjusted earnings should stop in the neighborhood of $0.03 per share. In the year-ago period, those figures were $148 million and $0.03, respectively.