Photo Credit: Gerd Altmann from Pixabay

According to a recent report, the global CDP market is expected to grow at a CAGR of 25% over the next few years to reach $6.94 billion by 2029 from $1.42 billion in 2022. Communications PaaS leader Twilio (NYSE: TWLO) is focusing on building the world’s leading customer engagement platform following its Segment acquisition in 2020.
 

Twilio’s Financials

Twilio’s second-quarter revenues grew 41% to $943.4 million, including $34 million from Zipwhip, an acquisition it made in 2021 for $850 million. GAAP loss from operations was $311.9 million. Non-GAAP net loss per share was $0.11. Analysts expected a loss of $0.19 per share on revenue of $921.6 million.

Among key metrics, its active customer accounts grew 15% to 275,000. Its workforce increased 34% to 8,510 employees. Dollar-Based Net Expansion Rate, which is calculated using total revenue, was 123% compared to 135% a year ago.

Revenue from its top 10 active customer accounts represented 12% of revenue in Q2, compared to 11% last quarter, and 12% in the second quarter of 2021. International revenue was 35% of total revenue in Q2, compared to 35% last quarter and 32% in Q2 2021. 

Twilio expects to end the third quarter with revenues of $965-$975 million or 30% to 32% growth and non-GAAP loss per share of $0.43-$0.37. The Street forecast loss of $0.10 per share on revenue of $978.8 million.
 

Twilio’s Strategy Post Segment Acquisition

Since the acquisition of customer data platform Segment last year in November 2020 for an estimated $3.2 billion, Twilio has been focusing on building the world’s leading customer engagement platform trusted by developers, companies, and marketers globally. The Twilio Customer Engagement Platform comprises three application pillars atop its leading data and communications platforms. These three pillars strengthen engagement at each stage of the customer journey – Twilio Engage for marketing, Twilio Frontline for sales, and Twilio Flex for the contact center. 

Twilio is the communications backbone for over 250,000 customers and is used by over one-third of the world’s developers. It plans to democratize customer engagement the way it has democratized communications over the last 13 years.

Twilio is well positioned to make more such strategic acquisitions. At the end of the second quarter, total current assets were $5.1 billion including $798 million in cash and $3.6 billion in short-term marketable securities.
 

Twilio’s Recent Key Wins and Partnerships

In the second quarter, Twilio finalized a multi-year deal with a Fortune 500 financial services company, which is using the Twilio Segment to drive higher levels of personalization for customer retention and cross-sell. Leveraging Twilio Segment, the company is able to collect all of the unique signals generated in their financial products, develop a more trusted view of their customers, and then personalize the marketing experience to drive the adoption of other financial products. It also expanded its relationship with PlayOn! Sports is the leading high school sports media company in the United States and streams more live sports events than any other company in the world. 

Twilio Flex continues to demonstrate strong momentum, as businesses look for cost-effective solutions to improve their customer service. Twilio signed its largest Flex deal ever during the quarter, with a Fortune 100 retailer. 

Twilio recently expanded its partnership with IBM, which announced a new native integration with Twilio Segment. This integration combines the breadth of Segment with the powerful AI of IBM Watson Assistant — gathering data generated by millions of daily conversations between customers and virtual agents and vastly simplifying analysis of Watson Assistant data. Through Segment, enterprises can now unlock insights and deliver an end-to-end and personalized solution with virtual assistants powered by Watson — while remaining easy to implement and scale. 

Its stock is currently trading at $86.48 with a market cap of $15.7 billion. The stock had climbed to a 52-week high of $382.75 in August last year. It fell to a 52-week low of $77.14 in June. Analyst price targets for Twilio’s stock range from a low of $91.00 per share to a high of $320.00 per share. The average price target for Twilio is $179.48.

More By This Author:

Zeta Global Charges To $1 Billion Revenue Target
Cloud Stocks: Analysis Of ServiceNow’s Hitch Works Acquisition
Reddit Decides To List, Finally