Cloud communications service leader Twilio Inc. delivered solid third-quarter results today, beating expectations thanks to what it said was strong customer momentum.

But the company’s earnings forecast for the next quarter came in light, sending its stock down slightly after hours.

Twilio reported a profit before certain costs such as stock compensation of 4 cents per share on revenue of $448.8 million, up 52% from a year ago. That was well ahead of Wall Street’s forecast of a loss of 3 cents per share on revenue of $409.79 million.

Twilio said the revenue growth was thanks to strong customer momentum, noting that it now boasts more than 208,000 active customer accounts, up from 172,000 a year ago.

Twilio Chief Executive Jeff Lawson (pictured) waxed positive about this company’s performance in a statement: “Our performance in the third quarter is further evidence that Twilio’s platform provides three things that every company needs today — digital communications, software agility and cloud scale.”

Twilio provides these via a flexible set of cloud services that can be used to build a chat function into a mobile app, process support calls made to a contact center or send email marketing campaigns, for example. But it’s expected that Twilio will soon build upon these capabilities as it recently made a big acquisition of data platform startup Segment Inc., for which it paid $3.2 billion.

Segment’s platform makes it possible to pull customer records from disparate systems within a company and merge them unto a single dataset that’s easier to work with. Retailers could then use it to match Google Analytics website visit logs with in-store purchase records to get a more complete picture of people’s buying preferences.

The acquisition suggests that Twilio wants to move further up the value chain by helping customers pull data from its communications services, which can be a valuable source of information when used for customer-facing tasks such as processing support requests.

During the quarter Twilio also held its annual Signal developer and customer conference, where it announced some major platform enhancements designed to help enterprise businesses communicate better with their customers. They included a new offering called Twilio Video WebRTC Go, which gives developers a free toolkit to create and launch one-to-one video applications, and Event Streams, which is an API that aggregates data from all Twilio-powered experiences to deliver real-time monitoring and reporting across all communication channels.

Analyst Holger Mueller of Constellation Research Inc. was enthused by Twilio’s performance, noting that the company has grown its revenue by 250% in the last two years, reaching over $400 million for the first time.

“Twilio is doing something right, that is, enabling infinite connectivity for modern applications,” Mueller said. “Enterprises need this in the era of digital transformation, and even more so in the pandemic world. The company has also managed to cut its losses as a percentage of its revenue, which is another good sign for investors. The main concern now is that its sales and marketing expenses are growing faster than its research and development costs, which could be a cause for concern if it goes on for too long.

For the current quarter, Twilio said it is expecting a loss of 8 to 11 cents a share on revenue of $450 million to $455 million. Wall Street was expecting fourth-quarter earnings of a penny a share on revenue of $436.8 million.

Photo: JD Lasica/Flickr