Twilio Closes The SendGrid Acquisition

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Cloud computing software vendor Twilio (NYSE: TWLO) has had a phenomenal stock rally this year. In the last twelve months, the communications platform provider has seen its stock climb an impressive 250%. But analysts are beginning to wonder if the stock has reached its peak.

Twilio’s Financials

For its fourth quarter, Twilio’s revenues grew 77% to $204.3 million, significantly ahead of the market’s forecast of $182 million. Adjusted EPS of $0.04 was in line with market expectations.

Among key metrics, its base revenues jumped 77% to $186.2 million. Its top 10 active customer accounts contributed to 20% of total revenues, compared with 17% a year ago. It registered a 31% growth in active customer accounts and ended the quarter with 64,286 active customers. During the fourth quarter, it added more than 3,100 active customers to its portfolio.

Twilio ended the year with revenues growing 63% over the year to $650.1 million.

For the current quarter, Twilio forecast revenues of $222-$225 million with an EPS of $0.00-$0.01. The market was looking for revenues of $192 million for the quarter with an EPS of $0.02. For the year, Twilio forecast revenues of $1.065-$1.077 billion and an EPS of $0.08-$0.11. The Street had forecast revenues of $984 million with an EPS of $0.16.

Twilio’s SendGrid Acquisition

Last quarter, Twilio announced the acquisition of email specialist SendGrid for $3 billion. This is Twilio’s largest acquisition so far. Founded in 2009, Denver, Colorado-based SendGrid is known for its cloud-based email service that helps solve the challenges of delivering emails for growing companies. SendGrid operates a similar business as Twilio, but for emails. Twilio has built communication-as-a-service APIs and other tools that help businesses integrate phone, messaging services, videos, and SMS with customer services into one system. With the acquisition of SendGrid, Twilio’s platform will now also include an email delivery service. Through the acquisition, the combined entity will manage more than 140,000 active customers and cover over 600 billion interactions annually. The acquisition will bring Twilio closer to its vision of becoming the go-to platform for all external communications for business.

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