Twilio Uses its PaaS to Expand Partnerships

Communications PaaS player Twilio (NYSE: TWLO) recently announced its fourth-quarter results that surpassed market expectations. The company continues to bank on expanding its partnerships with other customer engagement companies as it progresses towards its mission of becoming the leader in customer engagement solutions.

Twilio’s Financials

For the fourth quarter, Twilio’s revenues grew an impressive 54% over the year to $842.7 million, surging ahead of the market’s forecast of $767.8 million. Non GAAP loss per share was $0.20 per share, shattering the market’s expectations of a loss of $0.22 per share.

Among key metrics, its active customer accounts grew by 25,000 to 256,000. The company ended the quarter with 7,867 employees. Dollar-Based Net Expansion Rate which is calculated using total revenue came in at 126% for the quarter compared to 139% reported a year ago.

It ended the year with revenues of $2.84 billion, up 61% and an adjusted net loss of $0.25 per share.

Twilio expects to end the first quarter with revenues of $855-$865 million with a loss of $0.26-$0.22 per share, which was significantly ahead of the Street’s forecast of revenues of $808.01 million with a loss of $0.10 per share.

Twilio’s Partnership Expansion

Recently, Twilio announced its partnership with Teleperformance that will allow them to work together and provide companies with access to Twilio’s technology with Teleperformance’s Customer Experience expertise. This partnership is a prime example of how Twilio has benefited from its successful PaaS strategy. Teleperformance has built their solutions using Twilio’s APIs as building blocks to create customer engagement experiences.

Through this partnership, Twilio enhances Teleperformance’s existing technology-building capabilities to benefit consumers for the world’s biggest brands and entities. As part of the partnership, Teleperformance will be able to use Flex, Twilio’s programmable cloud-based contact center platform, giving customers access to a leading cloud contact center solution. Twilio’s contact center technology will be integrated with Teleperformance’s leading human talent to lay the foundation for the next generation of customer engagement experiences. In the long term, the partnership will help transform the way customer engagement is delivered in organizations of all sizes and structures. Together the two will develop new solutions, focusing on areas such as the emergence of video as a channel, and create digitally integrated customer experience management and cloud communication offerings.

It also announced the launch of Twilio Ventures. The investing arm will invest in early-stage companies and make opportunistic investments in late-stage companies in the customer engagement market. The investments will help support Twilio’s PaaS capabilities by promoting developers and partners within its ecosystem to create paths for innovative solutions built on Twilio’s platform. The venture program will also provide portfolio companies with mentorship, product, and go-to-market support, and access to Twilio’s leadership, partners, and customers. It has completed several investments in companies like Algolia – an API platform for search and dynamic experiences; Mux – a platform for live and on-demand video experiences; Gyro – a conversational AI platform; Calixa – platform for go-to-market teams.

Its stock is currently trading at $205.91 with a market cap of $36.7 billion. The stock had climbed to a 52-week high of $457.30 in February last year. It has recovered from the 52-week low of $172.61 that it had fallen to in January.

This is a great opportunity to buy Twilio’s stock.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.

Photo Credit: Gerd Altmann from Pixabay