Many fast-growing tech companies have seen their stock prices soar recently. Investors are attracted to them for their rapid revenue growth and resilient business models. If growth stocks' strong performance recently has you taking a second look at these disruptors, here are two high-quality companies in this category that are worth analyzing: Twilio (NYSE:TWLO) and Roku (NASDAQ:ROKU).

Twilio is a provider of cloud-based communication tools and services for developers, and Roku is the leading TV operating system in the U.S. Both of these growth stocks have business models built to last. Additionally, each one operates in a space with huge potential for market expansion.

A bar chart with a line highlighting a growth trend

Image source: Getty Images.


Have you ever wondered who makes the technology behind the communication tools built to help you get notifications and ask questions at companies like Lyft, Airbnb, Yelp, and Shopify? The leader in this space is Twilio, who provides the technological backbone for the customer communication at each of the companies just mentioned. Twilio powers a wide-ranging set of tools for digital communication, including automated SMS messages, voice and video chat, instant messaging, and more for many of the world's top tech companies. 

Twilio offers two pricing structures for customers: monthly recurring charges and pay-as-you-go charges. This means Twilio's business model is highly scalable. The company can add customers and grow revenue within existing customers using the technology it has already built.

Twilio saw revenue jump 57% year over year in Q1 as active customer accounts rose 23%. Revenue growth also benefited from a robust dollar-based net expansion rate (a key metric that compares total revenue from customers that have been with the company for a year to the revenue generated from those customers in the year-ago period) of 143%. Excluding incremental revenue from the company's acquisition of email communications company SendGrid, this rate was 135% in Q1.


Connected TV, or internet-based TV, has seen significant growth for over a decade now. While Netflix is the most well-known beneficiary of consumers' rapid adoption of connected TV (CTV), one much smaller business looks exceptionally well positioned to benefit from the maturity of CTV over the next decade: Roku.

As the top CTV platform in the U.S. with an audience of an estimated 100 million people, Roku has become a vital platform for every streaming service to be on. Further, unlike Netflix, the company benefits from growth in both subscription video on demand (SVOD) and ad-supported video on demand (AVOD) since Roku's business model enables it to take a share of both subscriptions and advertising spend on its platform.

Roku's revenue has been soaring, rising 55% year over year in Q1. While this growth is expected to decelerate amid business lockdowns and social restrictions that have limited marketing spend, the company's leadership position in this nascent space positions Roku well for long-term growth as SVOD continues to grow and as marketers shift their ad budgets from traditional TV to streaming TV.

Investors will get a closer look at both of these companies' recent business performance in the coming weeks. Twilio is scheduled to report its second-quarter results on Aug. 4, and Roku reports its quarterly results the following day.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.