What happened
Shares of Twilio (TWLO 5.00%) rose 244.4% across 2020's trading, according to data from S&P Global Market Intelligence. The company delivered a stellar performance as conditions created by the coronavirus pandemic accelerated its growth.
Social distancing and work-from-home initiatives boosted demand for Twilio's software for creating programmatic email, text, and voice communications, and drove strong top-line growth. The company's share price is now up by roughly 1,300% over the last three years.
Image source: Getty Images.
So what
Though the pandemic and the challenging economic conditions it wrought made many businesses hesitant to adopt new software systems, Twilio continued to add new customers at a mid-single-digit percentage rate sequentially in each of its four reported quarters last year. It also posted strong organic dollar-based net expansion rates each quarter, as existing customers significantly increased their spending with the company amid their efforts to cope with the year's unprecedented operating conditions. Successful acquisitions further strengthened its outlook.
The tech company delivered its most recent results in October, reporting that in the third quarter, it boosted its net customer count by 4% on a sequential basis, and that its net expansion rate climbed 137% year over year. Sales for the period hit $448 million, up 52% year over year.
Now what
Twilio stock has continued to climb early in 2021 -- by roughly 6.4% in January's trading so far.
For 2020's fourth quarter, Twilio has been guiding for sales in the range of $450 million to $455 million, representing growth of roughly 36.5% year over year. The company anticipates it will report a non-GAAP (adjusted) per-share loss of between $0.08 and $0.11, based on an outstanding share count of 153 million.
Twilio has a market capitalization of roughly $57.8 billion and trades at approximately 26 times this year's expected sales. The company has a growth-dependent valuation, but it should have opportunities to continue capitalizing on the shift of commerce and communications to digital channels.
