Fubotv earnings beat by $0.10, revenue topped estimates
Investing.com - Needham maintained its Buy rating and $125.00 price target on Twilio (NYSE:TWLO) stock despite the shares falling approximately 13% in premarket trading following its second-quarter earnings report. The stock has shown remarkable strength with a 101.86% return over the past year, and InvestingPro analysis suggests the stock remains undervalued, with analyst targets ranging from $75 to $170.
Twilio delivered what Needham described as "an impressive Q2" with revenue exceeding expectations by $40 million, or $34 million when excluding incremental A2P (application-to-person) fees that generate no gross margin contribution. The company maintains a healthy gross profit margin of 50.55% and generated $4.58 billion in revenue over the last twelve months.
The company experienced a 260 basis point year-over-year increase in messaging mix, creating a 150 basis point headwind to gross margin, with management guiding for even higher A2P fees quarter-over-quarter for Q3.
Needham believes Twilio continues to gain market share in messaging both domestically and internationally, though the acceleration of international messaging presents an additional margin challenge as it carries lower gross margins than U.S. messaging.
On a positive note, Needham highlighted continued momentum for Twilio’s AI voice solutions, which it expects to grow in the product mix over time and contribute positively to margins due to their margin-accretive nature. For deeper insights into Twilio’s AI initiatives and financial health (rated as GOOD by InvestingPro), including 12 additional ProTips and comprehensive valuation metrics, check out the Pro Research Report available exclusively to InvestingPro subscribers.
In other recent news, Twilio reported its fourth consecutive quarter of growth acceleration with a year-over-year revenue increase of 13%, surpassing consensus estimates by 3.4%. The company also provided revenue guidance for the third quarter that exceeded expectations. Despite these positive results, Twilio’s stock faced a decline following the earnings report. Analysts from Goldman Sachs maintained their Buy rating with a price target of $145, while JMP Securities reiterated a Market Outperform rating with a $165 price target. William Blair also reiterated an Outperform rating, citing Twilio’s growth and margin expansion potential. Additionally, Twilio launched three new platform features to enhance customer engagement, including Event Triggered Journeys, Data Residency for Email, and WhatsApp Business Calling. These developments reflect Twilio’s ongoing efforts to strengthen its market position and expand its service offerings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.