Why Twilio Stock Exploded Higher on Friday

Core Insights - Twilio's stock surged 18.5% after reporting a significant earnings beat, with earnings per share at $1.25 and revenue at $1.3 billion, surpassing analyst expectations of $1.07 per share and $1.25 billion in revenue [1][3][6] Financial Performance - Revenue increased by 15% year over year, driven by strong performance across various customer segments, including start-ups, enterprises, and ISVs [3] - Non-GAAP earnings rose by 22% year over year, while GAAP earnings improved from a loss of $4.9 million a year ago to a profit of $40.9 million [3] - Free cash flow grew over 30%, reaching $247.5 million for the quarter [4] Future Outlook - Twilio is forecasting over 12% growth for Q4 and expects to end the year with positive free cash flow between $920 million and $930 million, an increase of up to $45 million from previous guidance [5][6] - Analysts predict Twilio's earnings could grow by 41% annually over the next five years, suggesting the stock may be undervalued despite a market cap of $20.4 billion and a price-to-free cash flow ratio of about 22 times [7]