Twilio (TWLO) reported its first quarter results after the closing bell. The cloud platform’s revenues beat analyst estimates jumping 48% to $129.1 million year-over-year. The company reported narrower-than-expected loss of $0.04 per share, which is flat over prior year period. Share price rose 4% in the after-market trading and is up 77% this year. Twilio’s first quarter results were boosted by strong growth from all the products and increased spending from its existing customers.
Looking at the key performance metrics, the company’s active customers rose 33% to 53,985. Twilio’s efforts to diversify customer base and reduce its dependence on few big clients seem to be bearing fruit. Base revenue, another important metric to track, surged 46%, which shows more customers enter into long-term contracts which are more than 12 months. Expansion rate of 132% improved sequentially, meaning the company is able to upsell more products to its customers. Still, it lags behind the prior year rate of 141%.
As expected, expenses continue to increase for Twilio as it is focusing on investing on product development, expand its presence, and beef up its marketing and sales efforts. R&D expenses increased nearly 42% and sales and marketing costs jumped 55.4%. Increasing expenses might hurt profits, but it’s going to augur well for the company in the long-term to expand its customer base. New product roll outs would increase revenues from new and existing customers.
Based on the strong first quarter results, Twilio is raising its outlook for second quarter and full year. The company expects second quarter revenues to be in the range of $129 million of $131 million, and adjusted loss per share between $0.06 and $0.05. For the full year, revenue is expected to come in at the range of $538 million to $544 million, and loss per share, on adjusted basis, is expected in the $0.10 to $0.07 range.