Twilio Beats the Street on Revenue to Post Strong Earnings

Twilio has exceeded expectations on Wall Street on revenue in its Monday released second quarter earnings after the closing bell. Immediately its share price moved higher in trading after hours prior to pulling back to its closing price of Monday.

The company, which specializes in cloud-communications posted revenue that reached $64.5 million and an 8 cents per share loss. Twilio beat expectations on revenue by more than 10%. Analysts expected a 14 cents a share loss with revenue of as much as $58.22 million.

Twilio stock in June was sitting at $15 per share when it held its IPO. Over the past two months, shareholders in the company have enjoyed themselves with shares on Monday closing at $42.63.

In addition to beating on revenue, the company also made an announcement that it had more than 30,780 active accounts on June 30, in comparison to 21,225 on the same day one year ago.

Twilio issued is guidance expectations of $63 million to $65 million for revenue during the third quarter with EPS at the same time of 9 cents to 10 cents.

The full year guidance for the company for 2016 revenue was $253 million to $257 million.

In addition, the report touted the company’s new relationship it formed with Facebook offering integration of the Messenger platform along with a partnership with Amazon to deliver its SMS messages for its Simple Notification Service.

Despite pushing the price of its shares up by 184%, investors expressed concerns related to concentration of revenue. A large portion of revenue at Twilio is in the hands of only a few customers. In addition, many of its large customers feeding Twilio have yet to sign contracts that are long term with the company.

In addition, Twilio separated its report on earnings into two different sections with base revenue and total revenue. Its variable accounts are more apt to have substantial fluctuations in their usage from period to period, said the company.

Twilio services 9 variable accounts that represent 13% of its overall revenue. The instant message app WhatsApp represents a significant portion of the 13%.

Jeff Lawson the CEO at Twilio stressed that its investors can count on the growth of the company but should not expect it to be linearly. He said that during the earnings call on Monday.

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David Glass

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