Cloud-based communications specialist Twilio (NYSE:TWLO) reported second-quarter results after the closing bell on Monday. The company continued to grow sales at a breakneck speed and net losses moved closer to the breakeven line. Moreover, Twilio's management raised guidance targets for the full year.
Here's a closer look at Twilio's second quarter.
Twilio's second-quarter results: The raw numbers
|Revenue||$95.9 million||$64.5 million||49%|
|Net loss||$7.1 million||$11.0 million||(35%)|
|GAAP net loss per share attributable to common shareholders||$0.08||$0.45||(82%)|
DATA SOURCE: TWILIO.
One year ago, Twilio had 72.8 million common shares outstanding alongside 48.5 million shares of preferred stock. All of the preferred shares have since been converted into ordinary common stock, for a grand total of 90.9 million common shares in the second quarter of 2017. This significant change in Twilio's shareholder structure goes a long way toward explaining the large drop in losses per common share.
What happened with Twilio this quarter?
- Twilio now serves 43,400 active customers, a 41% increase over the year-ago period.
- The company introduced 42 new products at the recent Signal conference, including new speech-recognition tools and a simplified computing platform called Functions, which removes the need for server management from the client's operating process.
- The research-and-development budget rose 71% higher year over year, outpacing the hefty revenue growth by a wide margin. Meanwhile, general and administrative costs dropped 59% lower.
What management had to say
In a prepared statement, Twilio CEO Jeff Lawson celebrated the volume of product introductions at the Signal conference before moving on to counting his customers.
"Once again this quarter, we saw a large number of companies across a variety of industries place their trust in our platform," Lawson said.
IMAGE SOURCE: GETTY IMAGES.
The company offered the following guidance for the third quarter:
- Total revenue should land near $92 million, a 28% year-over-year increase.
- Adjusted net losses per share should decrease from $0.13 to roughly $0.08. This figure is based on a common share count of 92.5 million, up 10% from 83.9 million in the third quarter of 2016.
Extrapolating these business trends to the full fiscal year, Twilio raised its full-year revenue guidance from approximately $359 million to $373 million. That would amount to a 35% increase over total sales in fiscal year 2016.
On the bottom line, non-GAAP net losses per share should now stop near $0.23, a $0.05 improvement from the last full-year guidance update but still a deeper loss than last year's $0.16 per share.
The evolving relationship with its largest customer, Uber, is putting pressure on Twilio's top-line growth this year, but the company is making up for that issue by picking up thousands of smaller clients.
10 stocks we like better than Twilio
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Twilio wasn't one of them! That's right -- they think these 10 stocks are even better buys.