SAN FRANCISCO - Twilio Inc. (NYSE:TWLO), a leading customer engagement platform, reported first-quarter earnings that surpassed analyst expectations; however, the company's stock fell sharply due to its weaker-than-expected revenue guidance for the upcoming quarter.
For the first quarter ended March 31, 2024, Twilio announced an adjusted EPS of $0.80, which was $0.21 higher than the analyst consensus of $0.59. The company's revenue reached $1.05 billion, slightly above the consensus estimate of $1.04 billion and marking a 4% increase compared to the same quarter last year.
Despite this beat, Twilio's stock dropped approximately 6% following the announcement, primarily driven by its second-quarter revenue forecast that fell short of Wall Street expectations. The company provided Q2 guidance with an EPS range of $0.64 to $0.68, aligning closely with the consensus estimate of $0.65. However, projected Q2 revenues of $1.05 billion to $1.06 billion were below analysts' predictions of $1.08 billion.
Khozema Shipchandler, CEO of Twilio, commented on the results: "We are operating with greater financial discipline and focus on innovation than ever before." He highlighted that "Our solid first quarter results build on the momentum we've delivered over the last several quarters," emphasizing continued progress on profitability and significant free cash flow.
Twilio's active customer accounts grew from over 300,000 in March 2023 to more than 313,000 in March 2024, indicating a steady increase in its customer base year-over-year (YoY). The company also improved its GAAP loss from operations by 84% YoY and reported an organic revenue growth of 7%.
Looking ahead to fiscal year 2024, Twilio raised its non-GAAP income from operations guidance to a range of $585 million to $635 million and reaffirmed its full-year organic revenue growth guidance of 5% - 10%. These projections suggest that while Twilio is anticipating growth in operational income, it faces challenges in meeting top-line revenue expectations set by market analysts.
Investors reacted negatively to the cautious outlook for revenue growth despite Twilio's positive performance in earnings per share and operational improvements this quarter. As market participants adjust their positions based on future expectations, Twilio will continue focusing on driving leverage and making strategic investments aimed at re-accelerating growth over time.
The company has also been active in capital return initiatives; it has completed approximately $1.5 billion in share repurchases under its authorized program and plans to finish another $1.5 billion before year-end.
Twilio's financial discipline and operational rigor have positioned it for profitability; however, investors remain watchful as they weigh near-term revenue forecasts against long-term strategic goals.
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