WOW twillio

Just incredible.

https://investors.twilio.com/all-news/press-release-details/…

Total revenue of $204.3 million for the fourth quarter of 2018, up 77% from the fourth quarter of 2017 and 21% sequentially from the third quarter of 2018.
Base revenue of $186.2 million for the fourth quarter of 2018, up 77% from the fourth quarter of 2017 and 21% sequentially from the third quarter of 2018.

64,286 Active Customer Accounts as of December 31, 2018, compared to 48,979 Active Customer Accounts as of December 31, 2017.
Dollar-Based Net Expansion Rate was 147% for the fourth quarter of 2018, compared to 118% for the fourth quarter of 2017.
1,440 employees as of December 31, 2018.
Announced Chee Chew as Chief Product Officer.
Added to the leadership in our go-to-market organization by naming Chetan Chaudhary as Global Vice President of Partners and adding David Parry-Jones as Regional Vice President of EMEA Sales.
Welcomed technology pioneer Donna Dubinsky to the Board of Directors.
Closed the acquisition of SendGrid, the leading email API platform, expanding the reach of our platform.

-e

32 Likes

Not sure about WoW but just catching up…
Twilio said it lost $47.2 million, or 47 cents a share, in the quarter, compared with a loss of $18.9 million, or 20 cents a share, in the fourth quarter of 2017. Plus lowered guidance for Q1. Down around 4% AH…

2 Likes

Based on what I can tell, TWLO is guiding for 74% revenue growth (204.3MM vs 115.24MM) next quarter.

What will be beneficial to understand on the call is how to split out SendGrid from TWLO to track growth. Part of the 77%, I’m thinking, is SendGrid, but I’m not sure how much.

Just a Fool, Long TWLO

2 Likes

It was definitely a WOW for TWLO. Revenue growth continued to accelerate from 68% to 77%. Just amazing. The full year 2019 guidance is for 74% base revenue growth but this includes SendGrid for 11 months in 2019 that wasn’t there in 2018 so we will need to see exactly what they are actually guiding.

Chris

2 Likes

Sorry

Q ending March 31 2019 guiding for $225MM
Q ending March 31 2018 revenue was $129MM

Hi Chris,

I don’t even look at guidance any more because these companies all guide as low as possible so they can beat guidance by a bunch and raise guidance every quarter. It’s a waste of time.

Saul

11 Likes

I don’t even look at guidance any more because these companies all guide as low as possible so they can beat guidance by a bunch and raise guidance every quarter. It’s a waste of time.

You’re right, many companies have been beating guidance and TWLO has beaten revenue guidance 100% of the time, I think. I still like to look at it because it can give an indication of the minimum growth that we might expect.

Chris

5 Likes

Guidance does matter to a point. Arista/ANET lowering guidance was referenced by a lot as to why they sold out of their position.

Apparently about 170m of the 2019 1.07b guidance is sendgrid.

So legacy twilio finished 2018 at 650m.
If you subtract out 170m in sendgrid that means legacy twilio guidance is 900m or 38% y/y.

That better be a heckuva lowball, otherwise the benefits of the sendgrid acquisition are not at all obvious.

Will have to read CC for more color.

Dreamer

3 Likes

Pretty amazing quarter at first glance. TWLO has produced some unbelievable reports in the last year (what a ride it’s been in last 12 months). Truly rarefied air in terms of revenue acceleration like this.

I have not listened to the cc, but whenever I think TWLO may be reaching a vaulation plateau, I remind myself how much this market segment is projected to grow for the next few years. We are still in the early innings. And TWLO is leader by far. Add in Sendgrid and Flex, and TWLO should have an amazing runway for the next few years…

I added slightly in after hours as well. TWLO is my largest holding (mostly due to share appreciation in last 12 months), although NTNX is quickly catching up again and I’m guessing will overtake it in the next 2-3 quarters.

Best of luck,
Stephen

2 Likes

In the call management agreed with an analyst estimate of Organic growth of TWLO at 45% (for full year 2019) and send grid slowing to 25% from last year’s 30% yoy. When asked about the slowing organic growth management said this level (45%) growth at $1B is impressive. Well SHOP rev grew 59% to $1.07B this year and will probably grow 43% again next year. Hope TWLO can match that.

7 Likes

I had to wait to reply to this post as I added to my Twilio position after it reported on Tuesday and needed to comply with Motley Fool trading restriction policy before posting.

I wanted to add a bit to what Saul said regarding guidance.

I don’t even look at guidance any more because these companies all guide as low as possible so they can beat guidance by a bunch and raise guidance every quarter. It’s a waste of time.

  1. When a company gives guidance for the following quarter and is giving that guidance on a date well into the quarter it probably already has a pretty good idea where it will finish the quarter. One of my favorites in this category is Arista Networks. The company does not give full year guidance and only guides for the current quarter. This past quarter Arista reported on Thursday, February 14th, and issued guidance only for Q1. In essence this is six week guidance!

Maybe 40 years ago before companies had access to instantaneous data on shipments and order information you might be able to say there was some risk to that forecast. Now with the up to the minute info that most CFO’s have access to Arista & Twilio are essentially predicting what will happen in the next six weeks when they issue guidance mid-quarter.

  1. Someone already mentioned this & I would like to elaborate specifically from the sales side of things.

Twilio management has to be cognizant of “integration issues” when they issue guidance based on the merger with Sendgrid.

Having participated, a time or two, in sales integration of two companies coming together can enlighten one as to the fun and games that exist when two companies combine and quotas have to be assigned to folks in two sales teams that are becoming one.

First, like two snorting herds of buffalo, the sales team from each individual company begins to engage with each other. There is a lot of stomping, kicking, and marking of territory that goes on. Feeling each other out trying to figure out who is who in what will be the new zoo.

At the end of this management decides the best way to make this all work strategically is to provide lower quotas or higher incentives in the short-term. It is a short-term tactic to try and achieve a long-term objective of sales force synergy and customer satisfaction. It does not cost the company very much to do this and reduces the risk of problems with merger integration.

Management must give guidance to the investor community that is consistent with the overall company budget and quotas that will be assigned across the company’s sales organization. It does not have to be exact but it can’t wildly divergent from the internal company plans for growth.

So my guess is that the guidance we received from Twilio management for the full year of 2019 is consistent with the quotas that are being established within the company now. As the company goes forward and each successive quarter goes from a “forecast” to an “actual” management may update guidance to a higher growth rate.

The bottom line is there is no sense in throwing further turbulence into a mix of trying to get two sales teams to join forces with quotas that may appear unrealistic just to appease the appetites of Wall Street analysts. So the company issues annual guidance consistent with internal metrics and moves on.

As I said upfront, I added to my position on the weakness. (Now Twilio is 2.5% of my portfolio and 4% of the cost basis of the portfolio.)

Frank - long ANET, long TWLO, see profile for all holdings

31 Likes