Twilio (TWLO) Q4 earnings preview: Active customers, base revenues in focus

Twilio Inc. (NYSE: TWLO) is scheduled to report fourth quarter 2019 earnings results on Wednesday, February 5, after the market closes. Analysts have forecast earnings of $0.01 per share which compares to EPS of $0.04 reported a year earlier. Revenue is anticipated to grow 53% year-over-year to $312 million.

The numbers in focus will be the active customer base and the dollar-based expansion rate. Last quarter, active customer accounts increased 181% to 172,092, including the contribution from SendGrid customer accounts.

The dollar-based net expansion rate fell to 132% from 145% in the year-ago quarter. The company has seen a sequential decrease in the expansion rate over the past two quarters and this remains a concern.

Another number to focus on is base revenues, which gives an idea of the number of large accounts with long-term contracts that would generate sustainable revenues. Last quarter, base revenue surged by 79% to $275.5 million. 

In the fourth quarter, the company will continue to benefit from the SendGrid acquisition as well as from the investments being made to drive growth in the business. However, higher costs are likely to weigh on profitability.

Also read: Twilio Q3 2019 Earnings Conference Call Transcript

In the third quarter of 2019, Twilio reported a 75% increase in revenues to $295.1 million while adjusted EPS fell by 57% to $0.03 per share.

For the fourth quarter, Twilio expects revenue in the range of $311 million to $314 million and adjusted EPS in the range of $0.01 to $0.02. For fiscal 2019, the company expects revenue to be $1.114 billion to $1.117 billion and adjusted EPS to be $0.16 to $0.17. Base revenue is predicted to be in the range of $300 million to $302 million for the fourth quarter and $1.053 billion to $1.055 billion for the full year.

Shares of Twilio have gained 12% over the past one year and 23% in the past one month.  

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