Twilio (TWLO, Financial) received an increased price target from Jefferies, rising from $108 to $122, while the investment firm maintained a Hold rating on the stock. The decision follows Twilio's strong first-quarter results, which Jefferies considers a standout in an otherwise unpredictable economic environment. Company executives have indicated that they have not experienced any macroeconomic disruptions. Despite this, they have cautiously integrated just two-thirds of the first-quarter revenue gain into the fiscal year 2025 forecast. According to the analyst, Twilio's resilience and stable performance indicate that its core business applications might possess more defensive qualities than previously acknowledged.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 26 analysts, the average target price for Twilio Inc (TWLO, Financial) is $123.71 with a high estimate of $180.00 and a low estimate of $75.00. The average target implies an upside of 26.39% from the current price of $97.88. More detailed estimate data can be found on the Twilio Inc (TWLO) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, Twilio Inc's (TWLO, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Twilio Inc (TWLO, Financial) in one year is $96.54, suggesting a downside of 1.37% from the current price of $97.88. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Twilio Inc (TWLO) Summary page.
TWLO Key Business Developments
Release Date: May 01, 2025
- Revenue: $1.172 billion, up 12% year-over-year.
- Communications Revenue: $1.097 billion, up 13% year-over-year.
- Segment Revenue: $76 million, up 1% year-over-year.
- Non-GAAP Gross Profit: $602 million, up 6% year-over-year.
- Non-GAAP Gross Margin: 51.3%, down 270 basis points year-over-year.
- Non-GAAP Income from Operations: $213 million, up 34% year-over-year.
- Non-GAAP Operating Margin: 18.2%, up 300 basis points year-over-year.
- Free Cash Flow: $178 million.
- Dollar-Based Net Expansion Rate: 107% overall; 180% for Communications; 94% for Segment.
- Stock-Based Compensation: 11.9% of revenue, down 330 basis points year-over-year.
- Share Repurchase: $130 million repurchased in Q1; $90 million additional repurchases in April.
- Q2 Revenue Guidance: $1.18 billion to $1.19 billion, representing 9% to 10% year-over-year growth.
- Full Year 2025 Organic Revenue Growth Guidance: 7.5% to 8.5%.
- Q2 Non-GAAP Income from Operations Guidance: $195 million to $205 million.
- Full Year Non-GAAP Income from Operations Guidance: $850 million to $875 million.
- Full Year Free Cash Flow Guidance: $850 million to $875 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Twilio Inc (TWLO, Financial) reported a strong Q1 2025 with $1.172 billion in revenue, marking a 12% increase year-over-year.
- The company achieved its third consecutive quarter of double-digit revenue growth and year-over-year growth acceleration.
- Twilio Inc (TWLO) delivered a record non-GAAP income from operations of $213 million, up 34% year-over-year.
- The company generated $178 million in free cash flow despite a significant payout related to its annual cash bonus program.
- Twilio Inc (TWLO) saw strong growth in messaging both in the US and internationally, contributing to the overall revenue increase.
Negative Points
- The non-GAAP gross margin declined to 51.3%, down 270 basis points year-over-year, primarily due to nonrecurring hosting credits and a higher mix of international messaging revenue.
- The dollar-based net expansion rate for the Segment was 94%, indicating slower growth compared to other areas.
- Stock-based compensation as a percentage of revenue was 11.9%, which, although reduced, still represents a significant portion of expenses.
- The company is taking a cautious approach to its outlook due to rising macroeconomic uncertainties, which could impact future performance.
- Twilio Inc (TWLO) experienced a sequential decline in gross margin driven by the acceleration in international messaging, affecting overall profitability.
