Twilio's (TWLO 2.59%) fourth-quarter performance posted impressive results. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on Feb. 16, Motley Fool contributor Brian Withers discusses Twilio's quarterly results and why some investors are bullish that the tech stock could soar even higher.
Brian Withers: We're going to talk Twilio, ticker symbol TWLO. By now, you've probably heard the results of the quarter. We covered it on the Motley Fool Live "Weekly Earnings Show" on Friday, and it was a beat on the topline. But, the thing that I especially like was management reconfirmed their 30% plus topline organic growth over the next three years. An analyst poked into management on the earnings call and said, "Well, why are you so confident in this goal?" You know what, the management team spent a really good time answering this question in detail and I wanted to share that with you. First, the company has only 36% of the Global 2000. There's opportunity to grow with the number of customers in the top 2,000 companies around the world. But, there's much more. The concentration of customers in the top 10 has dropped significantly. Back in 2016, when Uber (UBER 1.95%) was a Twilio customer, they were spending a ton of money on the platform and their top 10 customers accounted for 31% of revenue. Today, it's only 12. That consumer concentration has really been spread out. I got a couple of slides to share with you as well. Here we go. Dollar-based net expansion continues to be super high. Hundred and twenty-six is not too shabby, even though it's a little bit below where it was last quarter. They had political spend in fourth quarter 2020, which didn't repeat in 2021. They have their core messaging platform. You can see the revenue contribution on the left. Their core messaging products account for 50% of the revenue and its growth rate is 52%. But what's really cool are the high-end application services, which only account for 12% of the revenue, but they're growing even faster than their messaging services. What are some of these application services? Twilio Flex, that's their call center in a box that we can customize and really get up to speed. They have Twilio Frontline, which helps Salesforce (CRM +0.20%) and marketing teams interact with customers. Then over here, based on Twilio's, this segment, which is their customer data platform, built on top of that is this Twilio Engage, which helps build marketing campaigns and just about any channel that you're in. Some of these higher-level services, which are actually more profitable than their messaging services, they're really just getting started.
