Twilio stock falls on weaker-than-expected revenue forecast

Twilio shares fell as much as 14% in extended trading on Tuesday after the developer of communications software issued a forecast for the second quarter that trailed analysts’ estimates.

Here’s how the company did:

• Earnings: 47 cents per share, adjusted, vs. 21 cents per share as expected by analysts, according to Refinitiv.
• Revenue: $1.01 billion, vs. $1.00 billion as expected by analysts, according to Refinitiv.

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Twilio said adjusted earnings in the second quarter will be 27 cents to 31 cents per share on $980 million to $990 million in revenue, implying 4% to 5% growth. Analysts polled by Refinitiv had been looking for 29 cents in adjusted earnings per share on $1.05 billion in revenue.

Consumer-facing usage has been moderating, although Twilio is not losing market share, said, Jeff Lawson, Twilio’s co-founder and CEO, said on a conference call with analysts. Twilio is still seeing weakness in social media, e-commerce and cryptocurrency, said Aidan Viggiano, Twilio’s finance chief.

Customers are being conscious of their budget and carefully examining their spending because of the larger economy, Viggiano said.

At the same time, Twilio has been busy increasing the effectiveness of its salespeople, said Elena Donio, Twilio’s president of data and applications.

Revenue in the first quarter increased by almost 15% year over year, according to a statement. The company’s net loss widened 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 that it would cut about 1,500 employees, or around 17% of its workforce. The company also said it would buy back up to $1 billion of its shares. Its operating loss included $121.9 million in severance and other expenses related to the layoffs and $21.8 million in lease impairment charges tied to office closures.

During the quarter, Twilio gained about 10,000 active customer accounts, reaching a total of over 300,000, above the 295,400 consensus among analysts polled by StreetAccount.

Prior to the after-hours move, Twilio shares were up 14% in 2023, while the S&P 500 index is up 7% this year.

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