Shares in Twilio Inc. were up over 10% in late trading today after the communications tools provider reported better-than-expected earnings and revenue in its fiscal 2024 third quarter and revised its forecast upward for the rest of the year.

For the quarter that ended on Sept. 30, Twilio reported adjusted earnings per share of $1.02, up from 58 cents in the same quarter of last year, on revenue of $1.134 billion, up 10% year-over-year. Both figures came in ahead of the 86 cents per share and revenue of $1.09 billion expected by analysts.

Twilio’s strong figures were driven by customer growth, with the company reporting over 320,000 active customer accounts as of the end of September, up from 306,000 as of the end of September 2023. The company’s customers were mostly sticking around, with Twilio reporting a dollar-based net retention rate of 105%, up from 101% in the year prior.

Net cash provided by operating activities in the quarter was $204.3 million, up from $189.1 million in the September quarter of 2023 and free cash flow in the quarter was $195.2 million. Twilio ended the quarter with $584 million in cash and cash equivalents on hand, along with $2.114 billion in short-term marketable securities.

Business highlights in the quarter included Twilio signing a partnership with Xero Ltd. that sees the integration of Twilio’s communications capabilities into Xero’s new Just Ask Xero feature that allows users to manage tasks seamlessly across mobile, WhatsApp and email. Additionally, a new deal signed in the quarter will see a major global airline use Twilio’s RCS branded messaging for travel notifications, enhancing customer engagement.

Twilio also expanded existing relationships, securing significant deals with companies, including Insider and Halara, for global messaging scalability. In another major deal, Twilio signed an eight-figure, multiyear agreement with a leading cloud software provider in the beauty and wellness industry, consolidating their SMS services and adding voice intelligence.

“Twilio continues to operate with financial discipline, operating rigor and focused innovation, which has enabled us to deliver a strong third quarter of double-digit revenue growth and solid free cash flow generation,” Chief Executive Khozema Shipchandler said in the company’s earnings release. “Twilio is uniquely positioned to bring the power of communications, plus contextual data, plus AI together to drive better customer experiences.”

For its fiscal fourth quarter, Twilio expects to see adjusted earnings per share of 95 cents to $1 on revenue of $1.15 billion to $1.16 billion.

Photo: Twilio