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Twilio stock falls on weaker-than-expected revenue forecast

Jeff Lawson, CEO of Twilio.

Scott Mlyn | CNBC

Twilio shares fell as much as 14% in extended trading Tuesday after the developer of communications software issued a forecast for the second quarter that trailed analysts’ estimates.

Here’s how the company did:

  • Earnings: 47 cents per share, adjusted, versus 21 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $1.01 billion, versus $1.00 billion as expected by analysts, according to Refinitiv.

Twilio said adjusted earnings in the second quarter will be 27 cents to 31 cents per share on $980 million to $990 million in revenue, implying 4% to 5% growth. Analysts polled by Refinitiv had been looking for 29 cents in adjusted earnings per share on $1.05 billion in revenue.

Consumer-facing usage has been moderating, although Twilio is not losing market share, said Jeff Lawson, Twilio’s co-founder and CEO, on a conference call with analysts. Twilio is still seeing weakness in social media, e-commerce and cryptocurrency, said Aidan Viggiano, Twilio’s chief financial officer.

Customers are being conscious of their budget and carefully examining their spending because of the larger economy, Viggiano said.

At the same time, Twilio has been busy increasing the effectiveness of its salespeople, said Elena Donio, Twilio’s president of data and applications.

But it’s not that business is stalled. Twilio sold its Verify authentication service to “a very large AI company,” Lawson said.

Revenue in the first quarter increased almost 15% year over year, according to a statement. The company’s net loss widened to $342 million, or $1.84 per share, from $222 million, or $1.23 per share, in the year-ago quarter.

Twilio said in February it would cut about 1,500 employees, or around 17% of its workforce. The company also said it would buy back up to $1 billion of its shares.

Its operating loss included $121.9 million in severance and other expenses related to the layoffs, plus $21.8 million in lease impairment charges tied to office closures. Research and development, sales and marketing and general and administrative costs were all lower year over year.

During the quarter, Twilio gained about 10,000 active customer accounts, reaching a total of over 300,000, above the 295,400 consensus among analysts polled by StreetAccount.

Prior to the after-hours move, Twilio shares were up 14% in 2023, while the S&P 500 index is up 7% this year.

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