Twilio Inc. Posts Q2 Beat; Guidance Muted

Shares of Twilio Inc. (TWLO) were down 18.6% on Friday, after the company reported stronger-than-expected Q2 results but provided a muted earnings guidance versus the Street expectations.

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Over the past year, shares of the U.S.-based cloud communications platform have jumped 30.5%.

The company reported an adjusted loss of $0.11 per share, beating analysts’ expectations of a loss of $0.13 per share. The company reported a loss of $0.09 per share in the prior-year period.

However, revenues jumped 67% year-over-year to $668.9 million and exceeded consensus estimates of $598.37 million. (See TWLO stock charts on TipRanks)

Additionally, the company reported over 240,000 active Customer Accounts including the Twilio Segment customer accounts at the end of the quarter versus 200,000 accounts reported in the prior-year quarter.

Twilio CEO Jeff Lawson commented, “Companies across industries are adopting our platform to drive better, more personalized levels of customer engagement, and we remain convinced that we are in the midst of a massive shift that is driving a generational opportunity for Twilio.”

Looking ahead, the company provided guidance for the third quarter. The company forecast adjusted loss in the range of $0.14 to $0.17 per share, while the consensus estimate is pegged at a loss of $0.07 per share. Revenues are forecast to grow between 50% and 52% and be in the range of $670-680 million, versus the consensus estimate of $636.4 million.

Following the Q2 results, KeyBanc analyst Steve Enders reiterated a Buy rating on the stock with the price target of $445 (19.1% upside potential).

Enders forecasts the company will report a loss of $1.24 per share for the third quarter of 2021.

Consensus among analysts is a Strong Buy based on 21 Buys and 2 Holds. The average Twilio price target of $456.15 implies 22.1% upside potential to current levels.

Twilio scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.