Jeff Lawson, CEO of Twilio.
Scott Mill | CNBC
Twilio Shares fell as much as 14% in extended trading on Tuesday after the communications software developer released second-quarter guidance that fell short of analysts’ estimates.
Here’s how the company did it:
- Merits: 47 cents per share, adjusted, versus 21 cents per share expected by analysts, according to Refinitiv.
- Revenue: $1.01 billion versus $1.00 billion expected by analysts, according to Refinitiv.
Twilio said second-quarter adjusted earnings will be 27 to 31 cents a share on revenue of $980 to $990 million, up 4% to 5%. Analysts polled by Refinitiv had expected adjusted earnings per share of 29 cents on sales of $1.05 billion.
Consumer-facing usage has waned, though Twilio isn’t losing market share, Jeff Lawson, Twilio’s co-founder and CEO, said in a conference call with analysts. Twilio still sees weaknesses in the social media, e-commerce and cryptocurrency space, said Aidan Viggiano, Twilio’s chief financial officer.
Customers are budget conscious and carefully evaluating their spending due to the larger economy, Viggiano said.
At the same time, Twilio has been busy increasing the effectiveness of its sales force, said Elena Donio, Twilio’s president of data and applications.
But it’s not like business is faltering. Twilio sold its Verify authentication service to “a very large AI company,” Lawson said.
According to a statement, first-quarter revenue rose nearly 15% year over year. The company’s net loss increased to $342 million, or $1.84 per share, from $222 million, or $1.23 per share, in the year-ago quarter.
Twilio said in February it would cut about 1,500 employees, or about 17% of its workforce. The company also announced it would buy back up to $1 billion of its stock.
Operating loss included $121.9 million in severance and other expenses related to the layoffs and $21.8 million in rent reduction expenses related to office closures. Research and development, sales and marketing, and general and administrative expenses were lower year-over-year.
During the quarter, Twilio added approximately 10,000 active customer accounts, totaling over 300,000, beating the consensus of 295,400 among analysts polled by StreetAccount.
Before the after-hours move, Twilio shares are up 14% in 2023, while the S&P 500 index is up 7% this year.
REGARD: We’re focused on really looking at our investments, says Jeff Lawson, CEO of Twilio