Twilio CEO Khozema Shipchandler speaks at the Twilio Signal event on August 14, 2024 in Sao Paulo.
Courtesy: Twilio
twillio Shares of the cloud-based messaging software provider soared more than 20% on Friday and were on track for their biggest gain since the early days of the coronavirus pandemic after the cloud-based messaging software provider issued an encouraging profit forecast for the next few years.
By midday trading, the stock jumped to $140.12, which would be its highest closing price since 2022.
Twilio revealed its new guidance Thursday’s investor event comes more than a year after the company named Khozema Shipchandler as CEO. Shipchandler, who previously served as president of Twilio and previously spent 22 years at GE, succeeds co-founder Jeff Lawson. The fight against activist investors.
As part of its three-year guidance framework, Twilio now expects its adjusted operating margin to expand to 21% to 22% in 2027. This was higher than the Visible Alpha consensus of 19.68%. Twilio Adjusted Operating Margin most recent quarter is 16.1%.
At Thursday’s event, company executives committed to generating $3 billion in free cash flow over the next three years, with free cash flow expected to be about $692 million in 2022, 2023 and 2024. The Visible Alpha consensus is $2.76 billion.
“If we execute well in 2025, I think we’ll start writing our story in 2026,” Shipchandler told CNBC ahead of an investor gathering.
Twilio, which sends text messages and emails to customers, did not release a 2027 revenue growth target at Thursday’s event. The company said it expects free cash flow to reach US$825 million to US$850 million in 2025, adjusted operating income to reach US$825 million to US$850 million, and revenue to increase by 7% to 8% annually. Visible Alpha’s consensus is for adjusted operating income of $814 million and free cash flow of about $808 million. 2025 revenue forecasts are in line with the LSEG consensus.
twillio Listed In 2016, as a high-growth software company capitalizing on the transition to the cloud. It was one of the biggest early beneficiaries of the coronavirus remote work boom, as more companies rely on mobile communications to stay in touch with employees and customers. The stock soared more than 240% in 2020.
But by 2022, the stock had lost more than 80% of its value as investors focused on profits rather than growth in light of rising interest rates and soaring inflation. twilight cut 17% of the workforce In early 2023, activist investors Anson Funds and Legion Partners Asset Management strongly advocated the sale of Twilio or one of its business units. CNBC reports.
Since activist firm Sachem Head Capital Management won a seat on Twilio’s board of directors in April, the company’s shares have risen about 81% as revenue growth accelerates and losses narrow.
Twilio said that by expanding into new areas such as conversational artificial intelligence, its total addressable market could reach $158 billion by 2028, compared with $119 billion when focusing solely on the communications and customer data platform categories. .
Twilio’s preliminary fourth-quarter results showed revenue growth of 11%, with adjusted operating income exceeding the high end of the company’s forecast range of $185 million to $195 million. release October. Analysts surveyed by LSEG had expected revenue to grow 7.9%, with the consensus on adjusted operating income being about $190 million, according to Visible Alpha.
Baird analysts William Power and Yanni Samoilis upgraded the stock to “buy” from “hold” in a note to clients on Friday. Analysts said they “expect the underlying upside tempo to continue to drive the stock price higher, particularly as profitability, cash flow and capital returns continue to strengthen.”
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