Twilio’s stock reacts wildly after company issues cautious revenue guidance

Twilio Inc.’s stock wildly fluctuated in frenzied trading Wednesday after the company issued cautious revenue guidance on better-than-expected results.

Shares of Twilio
TWLO,
+5.50%

initially plunged 18% before swinging to a 9% gain and then settling up about 4% in whip-saw extended trading Wednesday after the customer-engagement technology company reported fiscal first-quarter revenue and earnings that surpassed Wall Street analysts’ forecasts.

“We carried our momentum into 2022 and delivered another strong quarter to start the year, with first-quarter revenue coming in at $875 million, representing 48% year-over-year growth,” Twilio Chief Executive Jeff Lawson said in a statement.

Twilio announced a net loss of $221.6 million, or $1.23 a share, compared with a net loss of $206.5 million, or $1.24 a share, in the year-ago quarter. Adjusted earnings were break-even, at 0 cents a share.

Revenue jumped 48% to $875.4 million from $589.9 million a year ago.

Analysts surveyed by FactSet had expected a net loss of 21 cents a share on revenue of $864 million.

Investors were initially spooked, however, when Twilio offered second-quarter revenue guidance of between $912 million and $922 million, at the low end of FactSet estimates of $921 million. What might have also concerned investors: The company reported 268,000 active customer accounts as of March 31, compared to 235,000 a year ago.

Daniel Newman, principal analyst at Futurum Research, highlighted Twilio’s narrowing loss and strong product mix as notable strengths during a tightening economy.

“It was a strong tech result despite broader negative sentiment,” Newman told MarketWatch, though he added that Q2 guidance “will certainly weigh on investors minds.”

Twilio’s stock has plummeted 55% this year, while the broader S&P 500 index
SPX,
+2.99%

has declined 12%. The San Francisco-based company is among a group of tech companies whose stock skyrocketed during the pandemic only to come plunging back to earth this year.

Harry Byrne

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