Twilio's Q4 Delivers On Expectations, But Guidance And AI Strategy Divide Analysts

Twilio Inc TWLO reported fourth-quarter financial results after the market close on Thursday. The following are the comments from different analysts on the company’s performance.

Stifel analyst J. Parker Lane reiterated a Hold rating on the shares and raised the price forecast from $130.00 to $135.00.

A few weeks after releasing preliminary results and a 2025 forecast during its analyst day, Twilio reported its fourth-quarter earnings. The only missing detail was the first-quarter guidance, with mid-points slightly below expectations for both top and bottom lines, noted the analyst.

Following the report, Twilio’s shares fell in after-hours trading, which the analyst attributes to elevated expectations after the stock’s recent 30% surge post-investor day.

Looking forward, 2025 will focus on executing the significant CXaaS opportunity and continuing cost reduction efforts, such as getting Segment to breakeven.

While AI remains in its early stages, the analyst sees potential for revenue growth if AI-driven customer engagement solutions gain traction, noted the analyst.

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Needham analyst Ryan Koontz reiterated a Buy rating on the shares with a price forecast of $165.00.

TWLO reported fourth-quarter results that aligned with their positive pre-announcement in January and provided guidance for FY25 that is consistent with earlier expectations for high-single-digit growth and expanding operating margins.

Strong performance in fourth-quarter boosted SMS and voice communications revenue (+11% year-over-year), particularly in sectors like retail.

Management expressed confidence that the record fourth-quarter operating margin of 16.5% will continue to grow in F25, aiming for low 20s by 2027.

The analyst notes the company’s distinctive approach of integrating Communications, Contextual Data (Segment), and AI positions it uniquely to capture a significant share of the AI value chain for customer experience (CX).

JMP Securities analyst Patrick Walravens reiterated a Market Outperform rating on the shares with a price forecast of $165.00.

The company reported solid fourth results that were generally in line with its prior guidance. The non-GAAP EPS came in at $1.00 (slightly below the $1.04 consensus), with revenue reaching $1.195 billion (beating the $1.183 billion consensus), reflecting an 11% year-over-year increase, up from 10% last quarter, noted the analyst.

The analyst continues to consider Twilio an appealing investment for capital growth, as the company provides a reliable, intuitive, and effective platform for customer interactions, combining its core CPaaS, SendGrid for email, and Segment for customer data management (CDP).

Twilio targets a substantial market, with an expected addressable market of $118 billion by 2028 for its core communications and data solutions, plus additional opportunities in emerging sectors.

The company boasts a vast customer and distribution network, including over 10 million developers, nearly 5,000 global carrier connections, more than 300,000 active customer accounts, and 9,000 AI clients, 3,000 of whom are paying, the analyst highlighted.

Price Action: TWLO shares are trading lower by 13.8% at $127.04 at the last check Friday.

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