Financial Data and Key Metrics Changes - Twilio reported Q1 revenue of $1,172,000,000, representing a 12% year-over-year increase, marking the third consecutive quarter of double-digit revenue growth [6][18] - 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 [21][22] - Free cash flow for the quarter was $178,000,000, despite a $122,000,000 payment related to annual cash bonuses [22][23] 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 [18][19] - 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 [19] - The dollar-based net expansion rate for the Communications segment was 108%, while for Segment it was 94% [20] Market Data and Key Metrics Changes - All top five verticals, including financial services, tech, professional services, retail, and e-commerce, experienced growth in Q1 [32] - The company noted strong international messaging growth, which is a focus area for expansion [20][61] Company Strategy and Development Direction - Twilio is focused on innovation, particularly in AI-driven products, and aims to enhance customer relationships through its platform [9][10] - The company is leveraging partnerships, such as with Eleven Labs, to enhance its AI voice capabilities [10][11] - Twilio is committed to returning 50% of its annual free cash flow to shareholders from 2025 through 2027, with a $2,000,000,000 share repurchase program authorized [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q2 and the remainder of the year, despite acknowledging a dynamic macro environment [8][25] - There have been no notable adverse impacts on the business through April, but the company is monitoring the situation closely [8][25] - The guidance for Q2 revenue is set at $1,180,000,000 to $1,190,000,000, representing year-over-year growth of 9% to 10% [26] Other Important Information - Twilio was recognized as a leader in the IDC MarketScape for CPaaS and by Omnia for its CDP universe leadership [12] - The company is hosting its user conference, SIGNAL, to share more innovations and partnerships [12] Q&A Session Summary Question: Drivers of upside to growth in the Communications segment - Management noted broad strength across the business, particularly in messaging, with all top five verticals growing [31][32] Question: Resurgence in voice driven by generative AI - Management highlighted increased interest in voice capabilities, particularly in customer care applications, and noted higher ROI for customers using multiple products [36][39] Question: Multi-product adoption and international market attractiveness - Management indicated broad adoption of multiple products, with significant growth in advanced features and ISV relationships expanding internationally [45][46] Question: Impact of macro dynamics on customer momentum - Management stated that they are not seeing any slowdown in customer acquisition or transactional volumes, monitoring the situation closely [79][80] Question: Gross margin headwinds - Management explained that lower gross margins were due to non-recurring hosting credits and a higher mix of international messaging, which is a growth priority [60][61] Question: RCS messaging support - Management expressed cautious optimism about RCS messaging, noting that broad carrier support is still developing [68] Question: Free cash flow expectations - Management increased the free cash flow guidance for the year to $850,000,000 to $875,000,000, with expectations for Q2 to align with non-GAAP income guidance [71][72] Question: Customer growth drivers - Management attributed customer growth to self-service channel acceleration and increased demand for voice-enabled applications [77][78] Question: Coopetition in the segment strategy - Management indicated that coopetition is not expected to disrupt their strategy significantly, focusing on providing compelling solutions [83][84]

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 Financial Performance - Total revenue reached $1172 million, a 12% year-over-year increase[8] - Non-GAAP gross profit was $602 million, resulting in a non-GAAP gross margin of 513%[8] - Non-GAAP income from operations amounted to $213 million[8] - Free cash flow stood at $178 million[8] Segment Performance - Communications revenue was $1097 million, with a year-over-year growth of 13%[11] - Communications non-GAAP gross profit was $546 million, yielding a non-GAAP gross margin of 498%[11] - Communications non-GAAP income from operations was $277 million, resulting in a non-GAAP operating margin of 253%[11] - Segment revenue was $76 million, a 1% year-over-year increase[15] - Segment non-GAAP gross profit was $56 million, with a non-GAAP gross margin of 740%[15] - Segment experienced a non-GAAP loss from operations of $2 million, resulting in a non-GAAP operating margin of (20%)[15] Guidance - Q2 2025 total revenue is projected to be between $1180 billion and $1190 billion, representing a 9% to 10% year-over-year increase[20] - Full year 2025 organic revenue growth is expected to be 75% to 85%[21]

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].