Financial Data and Key Metrics Changes - Twilio reported Q1 2025 revenue of $1,172,000,000, representing a 12% year-over-year increase, marking the third consecutive quarter of double-digit revenue growth [5][15][20] - Non-GAAP income from operations reached a record $213,000,000, up 34% year-over-year, with a non-GAAP operating margin of 18.2%, an increase of 300 basis points year-over-year [15][18][20] - Free cash flow for the quarter was $178,000,000, despite a $122,000,000 payment related to annual cash bonuses [19][20] Business Line Data and Key Metrics Changes - Revenue from the Communications business was $1,097,000,000, up 13% year-over-year, driven by growth in messaging both in the U.S. and internationally [15][16] - Segment revenue was $76,000,000, reflecting a 1% year-over-year increase, with improvements in leading indicator metrics such as AE productivity and win rates [16][18] - The dollar-based net expansion rate for the Communications segment was 108%, while the Segment's rate was 94% [17] Market Data and Key Metrics Changes - All top five verticals, including financial services, tech, professional services, retail, and e-commerce, experienced growth in Q1 [29][30] - International messaging revenue mix increased year-over-year for the first time in over two years, contributing to the overall growth [60] Company Strategy and Development Direction - The company is focused on innovation, particularly in AI-driven products, and aims to enhance customer relationships through its platform [7][8][10] - Twilio is leveraging partnerships, such as with Eleven Labs, to enhance its AI voice capabilities and expand its product offerings [8][9] - The company is committed to maintaining price discipline and pursuing growth in international markets [60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q2 and the remainder of the year, noting that there have been no significant adverse impacts from the macro environment as of April [6][21] - The company is taking a prudent approach to its outlook, incorporating conservatism in its guidance due to potential macro risks [21][30] - Management highlighted strong customer engagement and usage, indicating a healthy business environment despite broader economic uncertainties [21][52] Other Important Information - Twilio was recognized as a leader in the IDC MarketScape for CPaaS and by Omnia for its CDP universe leadership [10] - The company authorized a $2,000,000,000 share repurchase program, targeting to return an average of 50% of annual free cash flow to shareholders from 2025 through 2027 [20] Q&A Session Summary Question: What drove the upside to growth in the Communications segment in Q1? - Management noted broad strength across the business, particularly in messaging, with all top five verticals showing growth [28][29] Question: How do you see voice playing out over the medium term? - Management indicated that voice, driven by AI, is gaining traction, with increased interest from both new and existing customers [34][36] Question: Can you elaborate on multi-product adoption? - Management reported strong growth in customers adding multiple channels, particularly in advanced features and software add-ons [41][42] Question: How are you addressing competition in the market? - Management emphasized the importance of providing compelling solutions and differentiating through a broad set of capabilities [110] Question: What is the breakdown of use case mix across transactional versus marketing in messaging? - Management stated that the use case mix is roughly evenly split between verification, customer notification, and marketing [116]

Q1 2025 Earnings Results May 1, 2025 This presentation and the accompanying conference call also contain operating metrics, including Active Customer Accounts and Dollar-Based Net Expansion Rate. We rely on assumptions to calculate these metrics, they are calculated using internal company data that has not been independently verified, and they are not based on any standardized industry methodology. More information about these operating metrics can be found in the Appendix. This presentation and the accompa ...

Financial Performance - Twilio reported Q1 2025 revenue of $1.17 billion, representing a 12% year-over-year growth[7]. - GAAP income from operations improved to $23 million, a $67 million increase compared to Q1 2024[7]. - Non-GAAP income from operations reached $213 million, up from $159.6 million in Q1 2024, reflecting an 18.2% margin[8]. - Revenue for Q1 2025 was $1,172,463, an increase of 12% compared to $1,047,050 in Q1 2024[36]. - Gross profit for Q1 2025 was $581,567, compared to $544,041 in Q1 2024, reflecting a gross margin improvement[36]. - Net income attributable to common stockholders for Q1 2025 was $20,017, a significant recovery from a net loss of $55,349 in Q1 2024[36]. - Non-GAAP net income per share attributable to common stockholders for Q1 2025 was $1.14, compared to $0.80 in Q1 2024, reflecting a strong year-over-year growth[42]. - GAAP net income attributable to common stockholders for Q1 2025 was $20,017, a significant improvement from a loss of $55,349 in Q1 2024, with a net income margin of 1.7% versus a loss margin of 5.3%[41]. Customer Metrics - Active customer accounts increased to over 335,000, up from more than 313,000 a year ago[8]. - The Dollar-Based Net Expansion Rate was 107% for Q1 2025, compared to 102% in Q1 2024[8]. - Active Customer Accounts at the end of the reporting period are defined as accounts generating at least $5 of revenue in the last month, with a focus on maintaining and growing these relationships[31][34]. - The Dollar-Based Net Expansion Rate is calculated by comparing revenue from Active Customer Accounts year-over-year, indicating growth in existing customer revenue[33][34]. Guidance and Future Expectations - Twilio raised its full-year organic revenue growth guidance to 7.5% - 8.5% from the previous 7% - 8%[11]. - For Q2 2025, Twilio expects revenue between $1.18 billion and $1.19 billion, with a year-over-year growth of 9% - 10%[12]. - Non-GAAP diluted earnings per share guidance for Q2 2025 is projected to be between $0.99 and $1.04[12]. Cash Flow and Financial Health - Free cash flow for Q1 2025 was $191,042, slightly up from $190,123 in Q1 2024, demonstrating stable cash generation from operations[39]. - The company reported net cash provided by operating activities of $191,042 for Q1 2025, compared to $190,123 in Q1 2024, indicating stable operational cash flow[43]. - Cash and cash equivalents increased to $467,094 as of March 31, 2025, compared to $421,297 at the end of 2024, reflecting better liquidity[38]. - Total assets as of March 31, 2025, were $9,814,715, a slight decrease from $9,865,472 as of December 31, 2024[38]. - Total liabilities decreased to $1,810,424 as of March 31, 2025, from $1,912,506 as of December 31, 2024, indicating improved financial health[38]. Expenses and Investments - The company continues to invest in research and development, with expenses of $254,295 in Q1 2025, slightly down from $260,457 in Q1 2024[36]. - GAAP research and development expenses for Q1 2025 were $254,295, with non-GAAP research and development expenses at $161,438, representing 13.8% of revenue[40]. - GAAP sales and marketing expenses for Q1 2025 were $212,113, with non-GAAP sales and marketing expenses at $164,977, accounting for 14.1% of revenue[40]. - GAAP general and administrative expenses for Q1 2025 were $92,077, with non-GAAP general and administrative expenses at $62,179, representing 5.3% of revenue[40]. Shareholder Actions - The company initiated a share repurchase program of up to $2 billion, with $130.2 million repurchased in Q1 2025[10].

Core Viewpoint - Twilio Inc. is set to report its first-quarter 2025 earnings on May 1, with expectations of improved earnings and revenue compared to the previous year, despite facing some macroeconomic challenges [1][10]. Earnings Expectations - Twilio anticipates non-GAAP earnings per share between 88 cents and 93 cents, with a consensus estimate of 92 cents, reflecting a 15% increase from last year's 80 cents [1]. - The company expects revenues between $1.13 billion and $1.14 billion, with the consensus estimate at $1.14 billion, indicating an 8.5% improvement from the previous year's $1.05 billion [1]. Recent Performance - In the last four quarters, Twilio has beaten the Zacks Consensus Estimate three times, with an average surprise of 17.8% [2]. - The company has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell), indicating uncertainty regarding an earnings beat this time [3][4]. Influencing Factors - Twilio's first-quarter results are expected to benefit from ongoing digital transformation efforts and partnerships with independent software vendors [5]. - New product launches, including AI enhancements and integrations with OpenAI's Realtime API, are anticipated to positively impact performance [6]. - The company added approximately 5,000 new clients in the last quarter, bringing the total active customer count to 325,000, which is likely to continue in the upcoming quarter [7]. Cost Management - Twilio's bottom line is expected to benefit from cost-saving initiatives, including workforce reductions and office closures, with employee count decreasing from 5,867 to 5,535 year-over-year [9]. Market Performance - Over the past year, Twilio's shares have increased by 58.3%, outperforming the Zacks Internet – Software industry's growth of 21.9% [11]. - Currently, Twilio is trading at a forward 12-month price-to-sales (P/S) ratio of 3.01X, which is lower than the industry's 4.88X [13]. Competitive Position - Twilio is recognized as a leader in customer engagement and communications, offering a programmable communications cloud that is widely used by major companies [17]. - The company's developer-friendly platform and extensive API ecosystem provide a competitive edge, allowing for customizable communication solutions across more than 180 countries [18].

Core Viewpoint - Twilio is set to report earnings on May 1, 2025, with projected earnings of $0.92 per share, reflecting a year-over-year growth of 15% and quarterly revenue expected to reach $1.14 billion, up 8.54% from the previous year [2]. Group 1: Recent Performance - Twilio's stock closed at $95.07, showing a +1.65% increase from the previous day, outperforming the S&P 500's gain of 0.74% [1]. - Over the past month, Twilio shares have declined by 8.14%, which is worse than the Computer and Technology sector's loss of 6.23% and the S&P 500's loss of 4.77% [1]. Group 2: Earnings Estimates - For the full year, Zacks Consensus Estimates project earnings of $4.20 per share and revenue of $4.78 billion, indicating increases of +14.44% and +7.18% respectively from the prior year [3]. - Recent changes in analyst estimates for Twilio suggest a favorable outlook on the company's business health and profitability [3]. Group 3: Valuation Metrics - Twilio is currently trading at a Forward P/E ratio of 22.28, which is lower than the industry average of 25.94, indicating a potential discount [6]. - The company has a PEG ratio of 1.18, compared to the Internet - Software industry's average PEG ratio of 2.13, suggesting Twilio may be undervalued relative to its growth expectations [7]. Group 4: Analyst Ratings - The Zacks Rank system currently rates Twilio at 4 (Sell), with a recent 2.95% decline in the Zacks Consensus EPS estimate [5]. - The Zacks Industry Rank places the Internet - Software industry in the top 36% of all industries, indicating a relatively strong position within the Computer and Technology sector [7][8].

Core Viewpoint - Twilio's stock has experienced a significant decline of 40% from its 52-week high, attributed to market uncertainty and a mixed quarterly report, but the growing adoption of AI tools presents a potential investment opportunity [2][3]. Financial Performance - In Q4 2024, Twilio reported an 11% year-over-year revenue increase and a 16% rise in non-GAAP earnings to $1.00 per share, although earnings fell short of the $1.03 per share expectation [4]. - The company anticipates a revenue growth of 8% to 9% year-over-year for Q1 2025, with earnings projected at $0.90 per share, below the consensus estimate of $0.98 per share [5]. Market Opportunities - Twilio's demand for AI-focused communication tools is increasing, leading to a larger share of customer spending and improved cross-selling statistics, with a 16% year-over-year increase in active customers purchasing add-on products [6][7]. - The company estimates an addressable revenue opportunity of $119 billion by 2028 from existing markets, with an additional $39 billion from conversational AI over the next three years [9]. Growth Potential - Twilio ended 2024 with nearly $4.5 billion in revenue, with AI expected to drive substantial growth in both revenue and earnings by attracting new customers and enhancing cross-selling opportunities [10]. - The non-GAAP operating margin was 16% in 2024, projected to rise to 21% to 22% by 2027, indicating solid earnings growth potential [12]. Valuation - Assuming earnings reach $6.22 per share in 2027 and trade at a forward earnings multiple of 24, Twilio's stock could potentially rise to $149, representing a 69% gain over the next three years [14]. - Currently trading at 20 times forward earnings, the stock presents a favorable buying opportunity ahead of its upcoming quarterly results [15].

It's common for investors to look at their portfolios and wonder "What if..." For example, you might wonder what your portfolio would be worth if you'd sold a certain stock or two. Or what would have happened if you'd bought a certain stock. Let's use the example of Twilio (TWLO -0.54%), a company specializing in communication capabilities for businesses -- such as facilitating communication between a company and its customers. How would you have done if you'd bought into Twilio five years ago? Well, from A ...

Twilio Inc. (TWLO) has had a tough run this year, with the stock falling 18.2% year to date. That’s worse than the broader Zacks Internet – Software industry, which fell 11% during the same period. Compared to key competitors like Microsoft Corporation (MSFT) and Cisco Systems, Inc. (CSCO) , Twilio’s slump appears even more pronounced.Twilio Stock YTD Price Return PerformanceImage Source: Zacks Investment ResearchThis steep decline raises the question: Should investors cut their losses and exit, or is TWLO ...

Core Viewpoint - The sell-off in AI stocks presents a potential buying opportunity for long-term investors as valuations have dropped significantly due to macroeconomic concerns and a global trade war [1][2]. AI Industry Overview - The agentic AI market is projected to grow at a compound annual growth rate of nearly 44% [4]. - AI adoption is expected to continue increasing, particularly with the introduction of AI agents that can operate autonomously [3]. Company Analysis: Snowflake - Snowflake operates a data cloud platform that consolidates data for business insights and application development, now incorporating AI tools to enhance customer capabilities [5][6]. - The Snowflake Intelligence platform allows users to create data agents that can analyze and act on insights, integrating with third-party tools [7]. - Snowflake's remaining performance obligation (RPO) increased by 33% year-over-year to $6.9 billion, indicating strong future revenue growth potential [9]. - Analysts predict a 40% increase in Snowflake's bottom line for the current fiscal year, followed by a 37% increase in the next [10]. - The 15% decline in Snowflake's stock price this year may present a buying opportunity for investors [11]. Company Analysis: Twilio - Twilio's stock has decreased by 23% in 2025, now trading at an attractive valuation of 19 times forward earnings [12]. - Twilio's revenue grew by 11% year-over-year in Q4 2024, driven by increased spending from established customers [13]. - The company has a dollar-based net retention rate of 106%, reflecting improved customer engagement [13]. - Twilio is leveraging AI to enhance customer experiences and is developing the Twilio AI Assistants platform for autonomous agent capabilities [15]. - Twilio's active customer accounts increased by 20,000 year-over-year, indicating strong demand for its services [16]. - Analysts forecast an acceleration in Twilio's earnings growth, supported by its attractive valuation and AI-driven business enhancements [18].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Twilio (TWLO), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank for making informed investment decisions [1][5][10]. Brokerage Recommendations - Twilio has an average brokerage recommendation (ABR) of 2.00, indicating a Buy, based on recommendations from 27 brokerage firms, with 14 Strong Buy and 2 Buy ratings, accounting for 51.9% and 7.4% of all recommendations respectively [2][5]. - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [5][10]. Analyst Bias - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell," indicating a misalignment of interests between these firms and retail investors [6][7][10]. - This bias can lead to misleading recommendations, making it essential for investors to validate these ratings with their own analysis or other reliable tools [7][10]. Zacks Rank Comparison - The Zacks Rank, which classifies stocks from 1 (Strong Buy) to 5 (Strong Sell), is presented as a more reliable indicator of near-term price performance compared to the ABR, as it is based on earnings estimate revisions [8][9][11]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in analysts' earnings estimates, which correlate strongly with stock price movements [12][11]. Current Performance of Twilio - The Zacks Consensus Estimate for Twilio's current year earnings remains unchanged at $4.22, suggesting that analysts have steady views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, Twilio currently holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [14].