What happened

Shares of Twilio (NYSE:TWLO) rose 12.9% in October, according to data from S&P Global Market Intelligence. For context, the S&P 500 (including dividends) fell 2.7% last month.

In 2020, shares of the cloud-based communications platform provider have gained a whopping 178% through Monday, Nov. 2. The broader market has returned 4% over this period. 

Close-up of a person typing on cell phone with chat box icons above the screen.

Image source: Getty Images.

So what

We can attribute Twilio stock's strong October performance to its continued pandemic-powered upward momentum. The COVID-19 crisis has increased the number of people performing many activities from home, driving companies to accelerate their digital transformations. 

On Oct. 26, Twilio reported robust third-quarter results. This event, however, did not contribute to the stock's rise last month. In fact, shares fell 4.8% the next day thanks to lower fourth-quarter earnings guidance than Wall Street expected. 

In Q3, Twilio's revenue soared 50% year over year to $448.0 million, easily beating the $409.8 million analyst consensus estimate. Adjusted earnings per share increased 33% to $0.04, surpassing the Street's expectation of an adjusted loss per share of $0.03.

TWLO Chart

Data by YCharts.

Now what

Management guided for fourth-quarter revenue of $450 million to $455 million, representing growth of 36% to 37% year over year. It also expects to post an adjusted loss per share of $0.11 to $0.08, compared to adjusted earnings per share of $0.04 in the year-ago period. 

This outlook doesn't include the contribution from customer-data platform Segment, which Twilio is acquiring in a $3.2 billion deal that's expected to close in the fourth quarter.

Prior to the company's release of its Q3 results, Wall Street had been modeling for Q4 adjusted EPS of $0.01 on revenue of $436.9 million.

 
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