Cloud communications company Twilio Inc. did better than expected in its third quarter, but investors weren’t cheering.

In its second earnings report since going public in June, the company posted a loss of 4 cents per share on $71.5 million in revenues, a year-on-year increase of 62 percent and roughly $7 million higher than its second-quarter earnings. Wall Street had been expecting a loss of 8 cents a share on $67.2 million in revenue.

Despite the earnings beat, Twilio’s shares fell by about 8 percent in initial after-hours trading today before recovering to about a 1 percent drop. In regular trading, shares fell 4.5 percent, to $32.60.

One factor in the stock’s decline could be the prospect that “locked-up” shares that couldn’t be sold until a period after the initial public offering soon will be sold, flooding the market with shares and putting pressures on the stock price.

Another issue could be short-sellers, who try to profit by borrowing shares they hope will fall so they can buy them at the lower price and then return them to the owner. According to Reuters, short-sellers bought up a large portion of Twilio’s recent new offering of 7 million shares, allowing them to make new short bets, which can drive share prices down.

The share decline follows a previous slump in share price in October after the company filed for the $400 million second public offering. Overall, Twilio’s price has been steadily falling since its peak at the end of September when it reached nearly $70 per share. Since then, the price has dropped by roughly half that number.

During today’s call with investors, Twilio Chief Executive Jeff Lawson (above) noted that Twilio came in “well ahead” of its guidance, and he credits Twilio’s popularity with developers with the company’s success. Lawson mentioned one business that used Twilio’s tools to deflect call volume from its call centers by proactively following up with customers through SMS text messages instead.

“This is another great example of the growing influence of developers in large organizations, as the business leads tapped the development team to create these additional customer service options,” Lawson said. “After surveying the landscape for a vendor that could deliver a two-way SMS solution on a global basis, the development team chose us, given our ease of use and the resulting speed to market we were able to provide.”

Lawson later expanded on Twilio’s developer focus during a Q&A session in which an investor asked about the company’s traction with big enterprise customers.

“The way I would think about our approach to the enterprise is probably a little different than many traditional enterprise software company’s or even SaaS companies,” Lawson said. “We have this developer-first go-to-market, and our goal is to have Twilio in the tool belt of every developer in the world. Then when that developer is at work and they see a problem that they can solve with communications, they’re going to pull out Twilio and solve that problem, and that’s what we’re seeing right now in the enterprise.”

Image courtesy of Twilio