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Why Twilio Stock Popped Today

By Evan Niu, CFA - Feb 18, 2021 at 12:03PM

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The communications technology specialist reports strong fourth-quarter results.

What happened

Shares of Twilio (TWLO 1.19%) have popped today, up by 7% as of 11 a.m. EST, after the company reported fourth-quarter earnings. The results topped expectations, and revenue guidance for the first quarter was also strong.

So what

Revenue in the fourth quarter increased 65% to $548.1 million, utterly destroying the consensus estimate of $454.9 million in sales. That included $23 million from Segment, which Twilio acquired in November. That all resulted in adjusted earnings per share of $0.04, while Wall Street was expecting the communications technology company to report an adjusted net loss of $0.07 per share.

Employee working on a laptop with the Twilio logo

Image source: Twilio.

"Twilio's 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue," CEO Jeff Lawson said in a statement. "These results reinforced that we are addressing a generational opportunity, and with our acquisition of Segment and strong traction with Flex, we are building the leading customer engagement platform to improve every interaction that businesses have with their customers."

Twilio finished the year with over 221,000 active customers, up from 179,000 at the end of 2019. Dollar-based net expansion rate in the fourth quarter was 139%, showing that Twilio continues to grow relationships with existing customers.

Now what

Outlook for the first quarter calls for revenue of $526 million to $536 million, well above the $487.2 million in sales that analysts are modeling for. That should result in an adjusted net loss per share of $0.09 to $0.12, which is worse than the $0.02 per share in adjusted losses that the market is expecting.

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