Twilio Has 'Impressive' Start To 2018, KeyBanc Says After Q1 Beat

Twilio Inc TWLO reported Tuesday after the close with first-quarter results that show 48-percent year-over-year revenue growth to $129.1 million and a non-GAAP net loss per share of 4 cents, flat with last year.

The result exceeded consensus estimates, which called for a loss of 7 cents per share on revenue of $116.55 million.

Twilio's second-quarter and full-year guidance also exceeded estimates.

The Analyst

KeyBanc Capital Markets analyst Brent Bracelin maintained a Sector Weight rating on Twilio.

The Thesis

Twilio is off to a solid start to 2018, with robust new customer additions and 132-percent net expansion in Q1, Bracelin said in a Tuesday note. (See the analyst's track record here.)

This has reaccelerated base growth from 40 percent to 46 percent.

Excluding Uber, base growth exceeded 60 percent for the fifth straight quarter, the analyst said.

KeyBanc attributed the top- and bottom-line beats to improving visibility, sales productivity, new products, customer diversification and the usage of pricing model.

Twilio notched some high-profile wins in the quarter, including a new enterprise agreement at a top-five cable company, a Forbes Global 2,000 retailer, a division of a F100 logistics company and nationwide Veterans Affairs use case, Bracelin said.

"We were impressed by the consistency of Twilio's usage-based pricing model, which appears capable of producing repeatable growth at a stable gross margin, particularly as the base revenue ex-Uber climbs to 90 percent of sales from 74 percent two years ago," the analyst said.

KeyBanc raised its revenue and profitability estimates for 2018 on healthy demand and evolving go-to-market strategy.