Twilio
TWLO
delivered better-than-anticipated fourth-quarter 2020 results. The company posted non-GAAP earnings of 4 cents per share for the quarter, while the Zacks Consensus Estimate was pegged at a loss of 8 cents. The non-GAAP bottom-line figure is flat, year on year.
Twilio’s quarterly revenues surged 65% year over year to $548.1 million and also surpassed the Zacks Consensus Estimate of $454.6 million on increase in clientele and the Segment buyout. The growing adoption of Twilio Flex is also a tailwind.
Twilio is benefiting from the accelerated digital-transformation projects across many industries owing to the remote-working wave amid the COVID-19 pandemic. Organizations are reconfiguring their set-ups for a work-from-home operational environment and making nearly 100% e-commerce a reality.
Twilio Inc. Price, Consensus and EPS Surprise
Twilio Inc. price-consensus-eps-surprise-chart
|
Twilio Inc. Quote
Quarterly Details
Twilio’s top 10 active customer accounts contributed to 13% of its total revenues, down from the 14% seen in the previous quarter as well as the year-ago quarter. WhatsApp represented approximately 5% of revenues during the fourth quarter compared with the year-ago quarter’s 6%.
The company’s dollar-based net expansion rate was 139% in the reported quarter, up from the prior-year period’s 125%.
Twilio’s active customer accounts increased to more than 221,000 as of Dec 31, 2020 from more than 179,000 as of Dec 31, 2019. In the fourth quarter, Twilio added more than 13,000 active customers.
Operating Results
Non-GAAP gross profit climbed 62.1% year over year to $306.6 million. However, gross margin contracted 100 basis points (bps) to 56% mainly due to a 150-basis point negative impact from Application to Person or A2P fees.
Twilio registered fourth-quarter non-GAAP operating income of $12.8 million, marking a strong improvement from the operating loss of $3 million posted in the year-ago quarter. Non-GAAP operating margin improved to positive 2% from negative 1% in the year-ago quarter.
Balance Sheet
The company exited the October-December quarter with cash and cash equivalents plus short-term marketable securities of $3.04 billion, down sequentially from $3.3 billion.
During 2020, the company generated $32.7 million of cash from operational activities.
Outlook
Twilio issued a dismal bottom-line outlook for first-quarter fiscal 2021.The company forecasts non-GAAP loss per share between 9 cents and 12 cents. The Zacks Consensus Estimate for the same is pegged at a loss per share of 4 cents.
We believe the company’s drab bottom-line outlook reflects elevated spending on its expansion plans. Twilio has entered into new product and geography markets to continue its high growth momentum.
For the current quarter, the company anticipates revenues between $526 million and $436 million. The Zacks Consensus Estimate is pegged at $484.1 million. It estimates non-GAAP loss from operations in the range of $15 million to $20 million.
Zacks Rank and Stocks to Consider
Twilio currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include
Zoom Video Communications
ZM
,
Facebook
FB
and
Apple
AAPL
. While Zoom sports a Zacks Rank #1 (Strong Buy), Facebook and Apple carries a Zacks Rank #2 (Buy) at present. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The long-term earnings growth rate for Zoom, Facebook and Apple is currently pegged at 25%, 19.2% and 11.5%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report