Cloud Stocks: Analysis Of Twilio’s Zipwhip Acquisition

 

According to a Grand View Research market report, the global unified communication as a service market is expected to be worth $38.74 billion this year and is expected to grow at 24% CAGR from 2021 to 2028. Communications PaaS player Twilio (NYSE: TWLO) recently announced its first quarter results that surpassed market expectations. Twilio is expanding its presence through acquisitions and partnerships.

Twilio’s Financials

For the first quarter, Twilio’s revenues grew an impressive 62% to $590 million, surging ahead of the market’s forecast of $533.61 million. EPS was $0.05 per share, shattering the market’s expectations of a loss of $0.10 per share.

Among key metrics, its active customer accounts grew by 190,000 to 235,000. The company ended the quarter with 5,482 employees. Dollar-Based Net Expansion Rate, which is calculated using total revenue, was 133% compared to 143% a year ago.

Twilio expects to end the second quarter with revenues of $591-$601 million and a loss of $0.16-$0.13 per share, which was significantly ahead of the Street’s forecast of revenues of $599.68 million and a loss of $0.13 per share.

Twilio’s Zipwhip Acquisition

Recently, Twilio announced the acquisition of Seattle-based Zipwhip for an estimated $850 million. Founded in 2007 by Anthony Riemma, John Larson, John Lauer, and Michael Smyers, Zipwhip’s software enables businesses to have more effective conversations with people by text-enabling existing phone numbers. It uses direct network connectivity and out-of-the-box software to allow customers of any business the option to text or call and gives businesses the opportunity to handle two-way text conversations at scale. The acquisition will allow Twilio to deliver more secure, high-quality toll-free traffic at scale. It will provide Twilio with the ability to elevate the customer experience, assisting brands with better communicating through a growing channel. Prior to the acquisition, Zipwhip raised $91.1 million from investors such as OpenView, Goldman Sachs, M12, Voyager Capital, GCI Com, and Inteliquent.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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