Wednesday, May 6th 2020

Twilio Q1 2020 Earnings: Digital transformations accelerating ahead


Twilio surged +25% after hours on Wednesday after exceeding Q1 revenue estimates by 10% and guiding to a Q2 revenue target 9% above analyst expectations.

The company is currently the leading platform provider in cloud communications software.

Its technology forms the critical "pipes" that let businesses communicate with customers across multiple channels (for example, automatically texting order confirmations, enabling consumers to call their food delivery people seamlessly and anonymously, etc.).

Although economic activity has obviously contracted over the past quarter, the importance of effective customer outreach has only risen, driving Twilio to see rapid acceleration in the efforts made by business clients towards their digital transformations.

This dynamic helped drive Twilio's +57% year-over-year revenue growth in Q1.

While this represents a deceleration from the +65% growth the company witnessed in the prior quarter, it's notable that dollar-based net expansion rates actually accelerated from 124% in the prior quarter to 143% in Q1.

This is a key metric for Twilio that tracks the rate of usage of Twilio services across Twilio's existing customers.

We believe the acceleration witnessed here points to a broad-based pickup in the key digital transformation efforts that form the backbone of Twilio's long-term growth thesis.

As of this writing, TWLO was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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