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Cloud communications infrastructure company Twilio (NYSE:TWLO) announced better-than-expected results in Q2 CY2024, with revenue up 4.3% year on year to $1.08 billion. The company expects next quarter's revenue to be around $1.09 billion, in line with analysts' estimates. It made a non-GAAP profit of $0.87 per share, improving from its profit of $0.54 per share in the same quarter last year.
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Twilio (TWLO) Q2 CY2024 Highlights:
- Revenue: $1.08 billion vs analyst estimates of $1.06 billion (2.4% beat)
- Adjusted Operating Income: $175.3 million vs analyst estimates of $141.6 million (23.8% beat)
- EPS (non-GAAP): $0.87 vs analyst estimates of $0.70 (24.2% beat)
- Revenue Guidance for Q3 CY2024 is $1.09 billion at the midpoint, roughly in line with what analysts were expecting
- Gross Margin (GAAP): 51.3%, up from 48.7% in the same quarter last year
- Free Cash Flow of $197.6 million, up 11.4% from the previous quarter
- Net Revenue Retention Rate: 102%, in line with the previous quarter
- Customers: 316,000, up from 313,000 in the previous quarter
- Billings: $1.08 billion at quarter end, up 3.7% year on year
- Market Capitalization: $10.12 billion
Founded in 2008 by Jeff Lawson, a former engineer at Amazon (NASDAQ:AMZN), Twilio (NYSE:TWLO) is a software as a service platform that makes it really easy for software developers to use text messaging, voice calls and other forms of communication in their apps.
Communications PlatformThe first shift towards voice communication over the internet (VOIP), rather than traditional phone networks, happened when the enterprises started replacing business phones with the cheaper VOIP technology. Today, the rise of the consumer internet has increased the need for two way audio and video functionality in applications, driving demand for software tools and platforms that enable this utility.
Sales GrowthAs you can see below, Twilio's revenue growth has been decent over the last three years, growing from $668.9 million in Q2 2021 to $1.08 billion this quarter.
Twilio's quarterly revenue was only up 4.3% year on year, which might disappoint some shareholders. However, its revenue increased $35.45 million quarter on quarter, a strong improvement from the $28.9 million decrease in Q1 CY2024. This is a sign of acceleration of growth and very nice to see indeed.
Next quarter's guidance suggests that Twilio is expecting revenue to grow 5.4% year on year to $1.09 billion, in line with the 5.2% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 6.6% over the next 12 months before the earnings results announcement.
Customer Growth Twilio reported 316,000 customers at the end of the quarter, an increase of 3,000 from the previous quarter. That's a little slower customer growth than last quarter but in line with what we've observed in past quarters, suggesting that the company still has decent sales momentum.
Key Takeaways from Twilio's Q2 Results It was good to see Twilio beat analysts' billings expectations this quarter. We were also glad its revenue and operating income outperformed Wall Street's estimates. Next quarter's revenue guidance was in line, which shows that the company is roughly on track. Overall, this was a solid quarter for Twilio. The stock traded up 6.1% to $59.75 immediately after reporting.
