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Twilio Inc TWLO provided preliminary financial results for the fourth quarter on Thursday.After the market close on Thursday, Twilio introduced new financial expectations in a regulatory filing. The company said it now expects fourth-quarter revenue growth of approximately 11% year-over-year, up from prior guidance of 7% to 8%.Twilio said it now expects adjusted income from operations for the fourth quarter to be above the top end of its prior guidance of $185 million to $195 million. The company also antic ...

Twilio (TWLO) stock jumped in late trading after the communications software maker gave an optimistic long-term profit forecast and reported preliminary fourth quarter results. In a filing late Thursday, Twilio said it expects to report Q4 sales growth of 11% year-over-year when it publishes full results next month. Analysts polled by FactSet are expecting Twilio to post sales of $1.16 billion, up 10%. The company also said it expects "non-GAAP income from operations for the fourth quarter of 2024 and fisca ...

Financial Guidance - The company forecasts its adjusted operating margin to widen to between 21% and 22% by 2027, higher than Visible Alpha's consensus of 19.68% [1] - The company aims to generate $3 billion in free cash flow over the next three years, compared to approximately $692 million for 2022-2024, exceeding Visible Alpha's consensus of $2.76 billion [2] - For 2025, the company expects $825 million to $850 million in free cash flow and adjusted operating income, with 7% to 8% year-over-year revenue growth, slightly above Visible Alpha's consensus [4] Stock Performance - The company's stock price rose as much as 8% in extended trading following the release of its investor event presentation [2] Strategic Focus - The company's CEO emphasized that 2025 will be a year of execution, with the goal of writing its own story from 2026 onwards [3] - The company did not provide a revenue growth target for 2027 during the investor event [3] AI and Enterprise Growth - Over 9,000 AI companies, including OpenAI, are building on the company's services, with plans to attract more large enterprises [5] - The company is open to expanding its customer base, including both AI companies and large enterprises [5]

Group 1 - Twilio's stock closed at $113.88, reflecting a +1.73% change, outperforming the S&P 500's 0.88% gain [1] - Over the past month, Twilio's stock has increased by 2.05%, while the Computer and Technology sector gained 0.37% and the S&P 500 gained 1.17% [1] Group 2 - Twilio is set to release its earnings on February 13, 2025, with projected EPS of $1, indicating a 16.28% increase year-over-year [2] - The consensus estimate for Twilio's revenue is $1.16 billion, representing a 7.56% increase compared to the same quarter last year [2] Group 3 - Recent shifts in analyst projections for Twilio are important for investors, as positive revisions indicate a favorable outlook on the company's business health and profitability [3] Group 4 - Adjustments in earnings estimates are linked to stock price performance, and investors can utilize the Zacks Rank for actionable insights [4] Group 5 - Twilio currently holds a Zacks Rank of 2 (Buy), with the Zacks Consensus EPS estimate remaining unchanged over the last 30 days [5] Group 6 - Twilio's Forward P/E ratio is 25.65, which is lower than the industry's Forward P/E of 28.86, indicating a valuation discount [6] - The PEG ratio for Twilio is 0.61, compared to the Internet - Software industry's average PEG ratio of 2.19 [6] Group 7 - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 36, placing it in the top 15% of over 250 industries [7]

Company Overview - Twilio is a leading communications platform as a service (CPaaS) provider, offering cloud communication solutions for various industries and business sizes [14] - The company has been trading sideways for the past few years due to profitability challenges since its IPO in June 2016 [1] - Twilio's shares recently experienced a significant boost following its strong third-quarter earnings results [14] Financial Performance - Twilio's total revenue for Q3 2024 was $1.13 billion, a 10% year-over-year increase [8] - The company's net loss for Q3 2024 was drastically reduced to $10 million, signaling a move towards profitability [8] - Twilio updated its full-year 2024 organic revenue growth guidance to 7.5%-8%, up from previous estimates of 6%-7% [9] - For Q4 2024, Twilio expects total revenue to increase 7%-8% year-over-year [10] Business Developments - Twilio has undergone a major restructuring, including workforce reductions, cost-cutting measures, and the appointment of a new CEO [1] - The company has released new products, including integrations with OpenAI's Realtime API platform for voice translation and cloud-based solutions to enhance its Flex platform [5] - Twilio's active consumer accounts increased by over 4% year-over-year as of September 30, 2024 [6] - The company's dollar-based expansion rate was 105% in Q3 2024, compared to 101% in Q3 2023 [6] Share Repurchases - Twilio initiated a $1.0 billion share buyback program in early 2023 and approved an additional $2.0 billion in March 2024 [7] - As of September 30, 2024, the company had repurchased over $2.7 billion worth of shares [7] Market Position and Growth Potential - Twilio is one of the largest CPaaS providers, with operating revenue expected to grow over sevenfold from 2023 to 2031 [2] - The company is leveraging generative AI technology to enhance its existing products and improve its customer engagement platform [2] - Twilio's shares have nearly doubled over the past six months, driven by strong Q3 2024 earnings results [11] - The company is positioning itself as a major player in the competitive AI and online automation space [11] Investor Sentiment - Twilio's recent restructuring and focus on cost-saving measures have been viewed positively by investors [12] - The company's strong Q3 2024 earnings results have signaled a promising future outlook, with potential for net income growth [13] - Twilio is considered a solid investment option in the cloud communications industry, with its stock climbing towards previous highs [13]

Bandwidth Stock Analysis - Bandwidth carries a 12-month median price target of $22, representing a 34% jump from current levels [1] - The stock could deliver stronger gains beyond 2025 [1] - Analysts expect Bandwidth's earnings to grow 14% in 2025 to $1.55 per share [2] - Estimates for 2024 and 2025 have moved higher recently [2] - Bandwidth is trading at an attractive valuation with potential upside [3] Twilio Stock Comparison - Twilio has gained 94% in the past six months due to its improving growth profile and addressable market [4] - Twilio trades at 26 times forward earnings, a discount to the Nasdaq-100's multiple of 32 [5] - Bandwidth is cheaper than Twilio and has been growing at a healthy pace [6] Bandwidth Financial Performance - Q3 revenue increased 28% YoY to a record $194 million [7] - EPS nearly doubled to $0.43 from $0.23 in the year-ago quarter [7] - Midpoint of revenue projection for 2024 is $742 million, a 23% increase from 2023 [8] - Analysts expect EPS to increase by almost 64% in 2024 [8] - Average annual customer revenue in Q3 2024 was $212,000, up 20% YoY [9] - Net retention rate increased to 117% from 104% in the same quarter last year [9] Growth Potential - Bandwidth's addressable market opportunity is estimated at $17 billion in 2023 [10] - Analysts expect earnings growth to accelerate in 2026 [11] - If EPS jumps to $2.21 in 2026, the stock price could more than triple to $58 [11] - Bandwidth is currently trading at about 23 times forward earnings, a discount to Twilio [11]

Core Viewpoint - Twilio Inc. has demonstrated exceptional stock performance in 2024, with a 98.9% increase over the past six months, significantly outperforming the Zacks Internet - Software industry and the S&P 500 [1] Financial Performance - Twilio reported a 10% year-over-year revenue increase in Q3 2024, with a 76% rise in non-GAAP earnings per share (EPS) [17] - The company had $2.70 billion in cash, cash equivalents, and short-term marketable securities at the end of Q3 2024, and generated $608 million in operating cash flow over the first three quarters of the year [7] - Management anticipates Q4 revenues to grow by 9.5%–10.5%, with non-GAAP EPS projected to increase by 10.5%–16.5% [17] - Since initiating a $3 billion share repurchase program in February 2023, Twilio has repurchased $2.7 billion worth of its shares, indicating strong confidence in its long-term prospects [18] Market Position and Competitive Edge - Twilio's API-first approach has attracted a diverse client base, enhancing its market position despite competition from larger cloud service providers [9] - The company's focus on customer engagement and AI integration, particularly through products like Twilio Verify and Voice Intelligence, positions it well to meet the growing demand for AI-driven solutions [6] - Twilio's developer-friendly platform and extensive API ecosystem provide a competitive advantage, allowing for highly customizable communication solutions across more than 180 countries [19] Valuation and Investment Potential - Twilio's forward 12-month price-to-sales (P/S) ratio is 3.6, significantly lower than the Zacks Computer and Technology sector average of 6.57, suggesting it remains undervalued [12] - Technical indicators show that TWLO stock is trading above its 50-day moving average, indicating a strong near-term bullish trend [13] - The combination of a Zacks Rank 1 (Strong Buy) and a Growth Score of A positions Twilio as a solid investment opportunity [23]

Company Performance - Twilio's shares have more than doubled in the last six months, making it one of the top performers in the market [1] Market Context - Twilio operates as a customer engagement platform, which has been a key driver of its recent stock performance [1] Analyst Background - The author has a background in finance and accounting, with a focus on investments and financial analysis [3] - The author has experience managing portfolios, including long/short and long-only strategies [3] - The author has interned at a large bank and managed a university endowment, providing practical experience in investment management [3]

I am a full-time analyst interested in a wide range of stocks. With my unique insights and knowledge, I hope to provide other investors with a contrasting view of my portfolio, given my particular background.If you have any questions, feel free to reach out to me via a direct message on Seeking Alpha or leave a comment on one of my articles.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the ...