Twilio Jumps After Quarterly Results As Revenue Growth Accelerates

Shares of Twilio (TWLO) are on the rise on Thursday after the cloud communications company reported stronger than expected quarterly results, with a surprise adjusted profit. Following the news, several Wall Street analysts raised their price targets on the stock, with Piper Sandler analyst Brent Bracelin saying that the accelerating growth reinforces his bullish view on the 3- to 5-year growth prospects and confidence in the Segment combination as having "game-changing" potential.

RESULTS: Twilio reported fourth-quarter adjusted earnings per share 4c, which was better than the expected (8c) in losses per share. The company also reported fourth-quarter revenue $548.1M, above consensus at $454.75M. "Twilio's 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue," said Jeff Lawson, Twilio's Co-Founder and CEO. For the first quarter, Twilio sees adjusted losses per share of (12c)-(9c) and revenue of $526M-$536M, with consensus at (2c) and $492.08M, respectively.

Twilio also announced that Karyn Smith, who has served as its Chief Legal Officer since September 2014, has informed the company of her decision to leave. To ensure an orderly transition and continuity of operations, Smith will continue to serve as Chief Legal Officer until her successor is found and has moved into the role.

ACCELERATING GROWTH: Piper Sandler analyst Brent Bracelin raised the firm's price target on Twilio to $550 from $475, while reiterating an Overweight rating on the shares following the company's "strong" fourth-quarter results. Digital, political, and Segment tailwinds contributed to a $93M revenue beat on 65% year-over-year growth, Bracelin told investors in a research note. The analyst believes the accelerating growth reinforces his bullish view on the 3- to 5- year growth prospects and confidence in the Segment combination as having "game-changing" potential. Twilio remains a top cloud software franchise to own for 2021, Bracelin added.

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