Twilio Inc. shares plunged in late trading today after the communications tools provider said it expects revenue to be somewhat lower than expected by analysts in its second quarter.

For its first quarter that ended March 31, Twilio reported a profit before costs such as stock compensation of 47 cents per share, up from breakeven in the first quarter of last year, on revenue of $1.01 billion, up 15% year-over-year. Analysts had expected earnings of 21 cents per share on revenue of $1 billion.

Twilio ended the quarter with more than 300,000 active customer accounts, up from 268,000 as of the end of March 2022. The company’s dollar-based retention rate was 106%, down from 127% last year. Twilio did note that results from acquisitions closed after Jan. 1, 2022, did not affect the metric calculation in either period.

The quarter saw Twilio announce a share repurchase program, with $1 billion on the table to repurchase outstanding Class A common stock. The company plans to buy back $500 million in the program’s first six months and, as of today, has repurchased $250 million in stock.

Twilio also announced in February that it was laying off 17% of its workforce in an effort to reduce costs. The job cuts were on top of Twilio’s previously announced layoffs of 11% of its workforce in November. About 1,400 employees were planned to be cut in the company’s latest round of layoffs.

“We’ve structured our business with the aim of enabling Twilio to operate profitably in any financial climate and our first quarter non-GAAP income from operations is a strong signal of our ability to do so,” Jeff Lawson, Twilio’s co-founder and chief executive officer, said in the company’s earnings release. “The operational and organizational changes we initiated in the first quarter are beginning to yield results — enabling our teams to execute with focus and the company to deliver an accelerated path to meaningful profitability.”

For the second quarter, Twilio expects adjusted earnings of 27 to 31 cents per share on revenue of $980 million to $990 million. Earnings per share at the midpoint, 29 cents, was dead on what analysts were expecting, but the revenue outlook was below an expected $1.05 billion.

By no means was the revenue outlook miss huge — $10.05 million from a company turning over nearly a billion a quarter — but it was enough to prompt investors sell off Twilio stock, with the company’s shares plunging over 14% in late trading.

Image: Twilio