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Communication Platform as a Service (CPaaS) player Twilio (NYSE: TWLO) recently announced its first quarter results that outpaced market expectations. Twilio continues to focus its efforts on integrating its Segment acquisition into the core business.
Twilio’s Financials
Twilio’s first quarter revenues grew 4% to $1.05 billion, ahead of the market’s forecast of $1.03 billion. GAAP loss was $362 million. Non GAAP earnings were $0.80 per share, significantly better than the analyst estimate of $0.60 per share.Communications revenue grew 4% to $972 million. Segment revenue, formerly Data & Applications, grew 2% to $75 million. The market was looking for revenues of $956.3 million from communications and revenues of $73.5 million from Segment.Among key metrics, it ended the year with more than 313,000 active customer accounts compared to 300,000 a year ago. Dollar-Based Net Expansion Rate of 102% was lower than 106% a year ago.Twilio expects to end the second quarter with revenues of $1.05-$1.06 billion and earnings of $0.64-$0.68 per share. The market was looking for revenues of $1.07 billion and an EPS of $0.65.
Twilio’s AI Focus
During the quarter, Twilio remained focused on building its AI capabilities. It announced the launch of Agent Copilot which is the first of three launches planned for 2024 where Twilio will natively embed Segment into Twilio’s communications products. Agent Copilot embeds unified profiles powered by Segment within Flex, giving agents deeper insights into their customers’ behaviors and preferences. Agent Copilot will help with intelligent routing to agents and provide them with actionable insights for each customer interaction, thus automating and improving agent productivity while reducing resolution times. The solution is currently in public beta and customers are already leveraging these capabilities within their contact centers.It continued to enhance its AI-based voice integration capabilities and recently introduced language operators that use generative AI and large language models to determine identify the suitable sentiment for overall conversation with the customer. It is also embedding AI capabilities into its verification products. It currently has over 11,000 customers leveraging Verify Fraud Guard and in the first quarter, Fraud Guard blocked more than 62 million fraudulent messages.Twilio’s earlier acquisition of Segment continues to deliver slow growth. Twilio is focusing on the acquisition by reviewing Segment’s cost base, accelerating time to value for customers by using AI to automate onboarding, and improving data warehouse interoperability. It believes that by delivering three products in 2024 that natively embed Segment into communications and capitalizing on customer AI momentum, it will be able to address churn and contraction, and improve financial performance. It is targeting a breakeven performance for Segment by Q2 2025.Meanwhile, Twilio worked on expanding partnerships with Databricks and Snowflake as part of its objective of improving its data warehouse interoperability. With Databricks, it announced a new bidirectional integration that will let customers seamlessly ingest and activate data.Twilio’s stock is trading at $60.9 with a market cap of $10.4 billion. The stock had climbed to a 52-week high of $78.16 in December last year, and has grown from the year low of $49.86 that it had fallen to in November last year.More By This Author:Would AI Agents Disrupt Apple’s App Business?
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