There was a bloodbath on the stock market on May 4 as the Dow Jones Industrial Average shed over 1,000 points, or 3.12%, in what was the worst single-day drop for the index since 2020. Tech stocks also took a big beating, with the Nasdaq Composite down nearly 5% in a single session.

Shares of cloud communications company Twilio (TWLO 1.59%) certainly felt the broader market sell-off, losing 1.5% of their value. Twilio's drop, however, wasn't as severe as that of the broader market thanks to the company's stronger-than-expected first-quarter 2022 results, which were released after the market closed on May 4. Let's look at Twilio's latest numbers and see why it may be a good idea to buy the stock right now.

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Twilio surprises Wall Street and guides strongly

Twilio's first-quarter revenue increased 48% year over year to $875 million. This includes $32.2 million in revenue from Zipwhip, which was acquired in July last year, which means that its top line increased 35% on an organic basis. Wall Street was looking for $864 million in revenue from Twilio, but an increase in the company's customer base and higher spending by its customers led to a better-than-expected performance.

The bottom-line performance was the icing on the cake. Twilio was originally expecting a loss of $0.24 per share in the first quarter, but it surprised investors with break-even adjusted earnings. The company, whose application programming interfaces (APIs) allow companies to embed voice, messaging, and video capabilities into their apps so that they can connect with their customers, saw its active customer base swell 14% year ove year to 268,000 at the end of the previous quarter.

Twilio's dollar-based net expansion rate came in at 127% for the quarter. This metric measures the company's ability to drive incremental spending from its active customer base. In simple words, the dollar-based net expansion rate increases when Twilio customers increase their usage of a product or buy additional services from the company. A reading above 100% indicates that spending by active customers is increasing.

More importantly, Twilio's guidance suggests that it will continue growing at an impressive pace. The company expects revenue to increase 37% year over year in the second quarter to $917 million at the midpoint of its guidance range. Organic growth is expected to come in at 28% over the prior-year period. What's more, Twilio CEO Jeff Lawson said on the company's latest earnings conference call that he expects annual organic revenue growth to remain at 30%-plus levels through 2024.

Additionally, Lawson sees Twilio achieving annual non-GAAP operating profit from 2023. Analysts are also expecting the company to post an adjusted profit of $0.24 per share next year, compared to this year's forecasted loss of $0.38 per share. It wouldn't be surprising to see Twilio achieving these ambitious growth targets given the pace of growth of the industry it is operating in.

The big picture points toward better times ahead

According to a survey carried out by Twilio, companies are expected to double their investment in digital customer engagement by 2025. That's because customers adopting digital platforms to connect with their customers are witnessing a 70% average increase in revenue.

This isn't surprising, as going digital gives companies the flexibility to remain in touch with their customers through different channels, such as text, messaging, voice, video, and social media. The cloud-based platforms that Twilio provides also provide other advantages over traditional call centers, such as lower costs of setup and maintenance, as well as the ability to scale up operations quickly.

Not surprisingly, the cloud-based contact center market in which Twilio operates is expected to grow at an annual pace of nearly 22% through 2026, according to Mordor Intelligence. The market was valued at $16 billion in 2020 and is expected to hit $52 billion in 2026, indicating that Twilio is sitting on a massive opportunity that should help it sustain its eye-popping pace of growth.

And given that this cloud stock is trading at just 6.1 times sales right now, it appears to be a screaming buy, as growth investors can lap it up at a major discount over last year's sales multiple of 17.5.