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Twilio (TWLO) to Report Q1 Earnings: What's in the Offing?

Zacks Equity Research

Twilio TWLO is slated to release first-quarter 2020 results on May 6.

For the first quarter of 2020, Twilio anticipates revenues between $335 million and $338 million. The Zacks Consensus Estimate is pegged at $328.3 million, indicating a 40.8% surge from the year-ago reported figure.

The company anticipates reporting non-GAAP loss per share between 9 cents and 11 cents. The Zacks Consensus Estimate is pegged at a loss per share of 11 cents, which compares unfavorably with the year-ago quarter reported figure. Notably, Twilio had posted earnings of 5 cents per share in the first quarter of 2019.

Let’s see how things have shaped up for the upcoming announcement.

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Factors at Play

Twilio’s first-quarter 2020 results are likely to have benefited from an increasing clientele and the Sendgrid buyout. Growing adoption of Twilio Flex is also expected to have been a tailwind.

Twilio Inc. Price and Consensus

Twilio Inc. Price and Consensus
Twilio Inc. Price and Consensus

Twilio Inc. price-consensus-chart | Twilio Inc. Quote

The company’s expanding foothold among leading enterprises is also likely to have been a key catalyst. Notably, in the last reported quarter, the company had added 6,908 new clients taking the total active customer count to 179,000.

Moreover, Twilio’s commendable efforts to fortify its global footprint are expected to reflect on first-quarter results.

Further, the introduction of Twilio Conversations, SendGrid Ads and SendGrid’s Email Validation API is anticipated to have been conducive to the company’s performance.

Nonetheless, Twilio’s rising investment in lower-margin international regions might be a lingering overhang on its profitability. Also, it is stepping up investments in its systems and infrastructure, go-to-market team and Flex, as well as in R&D, which is likely to have negatively impacted the company’s profitability in the first quarter.

What Our Model Says

Our proven model does not predict an earnings beat for Twilio this season.The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Twilio currently carries a Zacks Rank of 2 and has an Earnings ESP of -2.55%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Inphi Corporation IPHI has an Earnings ESP of +20.04% and holds a Zacks Rank of 2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify Inc. SHOP has an Earnings ESP of +5.85% and currently carries a Zacks Rank of 2.

Okta, Inc. OKTA has an Earnings ESP of +5.17% and carries a Zacks Rank of 3, at present.

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