Photo Credit: Gerd Altmann from Pixabay

According to a recent report, the Unified Communications as a Service (UCaaS) market is expected to grow at 13% CAGR to reach $69.93 billion by 2028. Leading player Twilio (NYSE: TWLO) recently announced its first quarter results that outpaced market expectations. But the continuing macro-economic uncertainty has made it cautious as was evident in its outlook.

Twilio’s Financials

For the first quarter, Twilio’s revenues grew 15% to $1.01 billion, ahead of the market’s forecast of $1 billion. EPS of $0.47 per share was significantly better than the market’s expected earnings of $0.21 per share.

Among key metrics, Twilio gained about 10,000 active customer accounts, reaching a total of over 300,000. The market was looking for 295,400 customers at the end of the quarter. Dollar-Based Net Expansion Rate was 106% for the quarter compared with 127% a year ago.

Like others in the industry, Twilio has been managing its costs and announced a layoff of about 1,500 employees, or around 17% of its workforce in February. The company also announced plans to buy back up to $1 billion of its shares.

Twilio expects to end the second quarter with revenues of $980-$990 million and an EPS of $0.27-$0.31 per share. The market forecast revenues of $1.05 billion and an EPS of $0.29 per share.

Twilio’s Growth Focus

Twilio continues with its product upgrades during the quarter and announced the introduction of Segment Unify, a real-time identity resolution solution that includes Profiles Sync and Reverse ETL. With Segment Unify, businesses can merge the history of each customer into a single unified profile, sync Segment’s identity-resolved customer profiles to their data platform, and activate complete profiles in their customer experience tools of choice, including Twilio Engage and Flex. The solution will empower businesses to reduce customer acquisition costs and increase customer lifetime value by providing hyper-personalized engagement, campaigns and communications.

According to Twilio’s reports, customers are expected to spend an average of 21% more time with companies that personalize customer engagement. Twilio’s solutions will help organizations deliver the high impact personalization through the Profiles Sync capability. Data scientists can build for complex use cases that require trusted, high-quality data such as marketing attribution, churn prediction, and the training of machine learning and AI models using the accurate customer profiles available on Profiles Sync.

Reverse ETL will make it easier to pull these enriched ‘golden profiles’ back out of the data warehouse and send them to any downstream tool in the tech stack. The new capability will allow for profiles that have historically been static and inside a data warehouse to now become portable and accessible for analysis or marketing activation.

As part of its efforts to remain focused on the customer engagement segment, Twilio recently announced plans to divest from its IoT business. KORE Group Holdings, a leader in IoT solutions and IoT Connectivity-as-a-Service, recently announced plans to acquire Twilio’s IoT business unit for 11.5% of its shares.

Twilio’s stock is trading at $48.91 with a market cap of $8.99 billion. It hit a 52-week high of $110.98 a year ago in May and a 52-week low of $41 in October.

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