UPDATED 21:00 EST / AUGUST 06 2018

CLOUD

Twilio’s stock jumps 19% as it easily beats earnings estimates

Twilio Inc. is rocking it with another positive earnings report today that brought it to the verge of profitability, sending its stock soaring in after-hours trading.

The company posted second-quarter earnings before certain costs such as stock compensation of 3 cents per share on revenue of $147.8 million, up 54 percent from the same period a year ago. That easily surpassed Wall Street’s expected loss of 5 cents per share on revenue of $131 million. The company still had a net loss of $24 million, or 25 cents a share, according to traditional accounting principles.

Twilio’s share price skyrocketed in the after-hours trading session, up more than 15 percent. Update: On Tuesday, shares closed up almost 19 percent.

“Our core voice and messaging products grew rapidly once again, and the positive customer response to Flex further reinforces our Engagement Cloud strategy,” Twilio Chief Executive Jeff Lawson said in a statement.

Twilio, which provides cloud-based communications services to help enterprises manage their text and telephone infrastructure, has rapidly emerged as one of Wall Street’s darlings since its initial public offering in 2016. Its stock price is up 146 percent since the start of the year, closing up 2 percent in regular trading, to $63.27.

The company still has lots to prove, however, even as it nears profitability. It must show it can acquire more customers, while also scaling up business operations and absorbing the cost of the infrastructure required to do so. It must also make sure existing customers don’t leave, or at least add new ones faster than they do.

The good news for Twilio is that it’s looking more than capable of achieving this, said Holger Mueller, principal analyst and vice president of Constellation Research Inc.

“Twilio keeps growing, as enterprises are building their next generation applications that include capabilities related to communications,” Mueller said. “This shows communications platform-as-a-service market is rapidly becoming an important segment with significant live customers and revenues. CXOs want to be a part of a large customer base with attractive features and capabilities coming from their vendor that allow them to deploy the next-gen apps.”

And Twilio once again showed its ability to attract new customers in the previous quarter. In a conference call, Lawson revealed the company now has 57,350 active customer accounts, up from 43,431 a year ago.

One reason the customers keep on calling could be the steady release of new features Twilio is adding to its platform, and it had more news on that front today. In the hours before its latest earnings report, the company announced a new integration with AWS Polly, a text-to-speech service offered by Amazon Web Services Inc. that uses deep learning to synthesize speech.

With this, Twilio users get access to more than 50 human voices in 25 different languages, which developers can use to interact with end users of the applications they build. Polly will also allow developers to use Twilio’s Programmable Voice feature to alter variables such as the volume, pitch and pronunciation of the voices, the company said.

Looking ahead to its third quarter, Twilio had more good news for investors. The company said it’s expecting adjusted earnings of 2 to 3 cents per share on revenue of between $150 million and $152 million. Wall Street was forecasting revenue of just $136 million.

Image: Ken Yeung/Flickr

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