Shares in Twilio Inc. were down nearly 10% in late trading today after the communications tools provider forecast lower-than-expected revenue in its next quarter.

For the quarter that ended Dec. 31, Twilio reported adjusted earnings per diluted share of 86 cents, up from 22 cents in the same quarter of last year, on revenue of $1.08 billion, up 5% year-over-year. Both were beats, as analysts had been expecting 58 cents and $1.04 billion.

Twilio had more than 305,000 customers as of the end of December, up from 290,000 as of the end of 2022. The company’s dollar-based net expansion rate was 102% in the quarter, down from 110% a year prior. Twilio saw net cash provided by operating activities of $222.5 million in the quarter.

For the full fiscal year 2023, Twilio reported adjusted earnings per share of $2.45, up from a loss of 15 cents per share a year prior, on revenue of $4.15 billion, up 9% year-over-year. Communications revenue rose 9%, to $3.86 billion. Twilio’s “Segment” revenue, previously known as data and application, rose 7% year-over-year, to $295.3 million.

Recent business highlights include the resignation of Twilio co-founder and Chief Executive Officer Jeff Lawson in January following pressure from activist investors. In addition to giving up the top job, Lawson also resigned from Twilio’s board of directors, where he had served as its chairman.

“The time has come for me to pass the reins of this extraordinary company to a new CEO to lead Twilio through its next chapter,” Lawson said in a statement.

Lawson was replaced by company executive Khozema Shipchandler, who also assumed a seat on the board. “As I step into the CEO role, I am focused on continuing to build on the considerable growth and operating improvements we’ve made across the board, plus taking a fresh look at the areas of the business that are underperforming to realize the full potential of our business,” Shipchandler said at the time.

Although Shipchandler has only been in the hot seat for a little over a month, his first outlook could have been better.

For its fiscal 2024 first quarter, Twilio said it expects adjusted earnings per share of 56 to 60 cents on revenue of $1.025 billion to $1.035 billion. Analysts were looking for revenue of $1.05 billion. The company is also forecasting revenue growth of 2.3% in the quarter, down from the 15% growth in recorded in the first quarter of 2023.

Image: Twilio