I know Saul and others have moved on, but TWLO has been a long term source of discussion on this board, so I thought I would mention their latest report to see what others think. Stock was down AH and today on forecasted future losses, but I think there were some positive things in this report.
Specifically, this quote from Jeff Lawson:
As I’m sure you’ve noticed, we have an ambitious investment plan for 2020. While we could take a profit this year, I think, that would have been a wrong decision. With a generational opportunity to disrupt not just communications, but also customer engagement software, the right decision is to invest for long-term growth and market capture, and that’s what we intend to do.
More than doubled the number of 7 figure deals compared to 2018
Signed a deal with Paypal
Have converted several former Sendgrid customers to the full Twilio platform
Dollar-based net expansion calculated using base revenue of 124% in Q4
Gross margins of 57%
Heavy investments to open in India
Revenue up 65% YoY (including Sendgrid)
Taking out sendgrid, it was just up 36% YoY
Sendgrid revenue alone was up 30% YoY
Projecting 30-31% growth for 2020
Now jumping into the quarter. Q4 base revenue, including Twilio SendGrid grew 65% year-over-year to nearly $307 million. Organic base revenue was $253 million, up 36% year-over-year, strong growth against a difficult comparison from last year. As you’ve heard, Twilio SendGrid had a great finish to the year, delivering nearly $54 million of revenue in the fourth quarter, up more than 30% over last year. Total Q4 revenue was $331 million, up 62% year-over-year and 36% organically. For the full-year, we delivered total revenue of $1.13 billion, up 75% over last year and 47% on an organic basis. SendGrid contributed $177 million since the February 1st acquisition date. This will be the last quarter that we break out SendGrid revenues separately.
So it does seem that the growth story has permanently changed, but unlike some other companies we follow, they are being open and honest about it, not trying to hide it and pretend its something else.
I can understand why some on this board have moved on to the high growth companies that make TWLO look weak. But at a >$1 Billion revenue company, +30% growth is uncommon. I am ok with holding long term options on TWLO but do think other companies will provide better returns for 2020.
Any other thoughts?