Customer engagement platform provider Twilio (NYSE:TWLO) stock has bestowed a buying opportunity on its recent earnings report triggered collapse. The Q4 2021 guidance was mixed with raised revenues but lowered earnings per shares estimates.
The Company is growing organically as it launches its next-generation platform Twilio Engage, which enables hyper-personalized marketing campaigns. It is also adaptable to new privacy initiatives that have been hurting social media companies like Snap (NYSE:SNAP).
As more companies like Apple (NASDAQ:AAPL) adapt more rules to their privacy agreements, Twilio Engage shines brighter with its adaptability. The Company is setting forth a new direction beyond communication as a platform (CaaS) with Twilio Engage as it undertakes hyper-personalized marketing and customer acquisition in an non-intrusive manner. This is the future growth driver that investors can get behind. Prudent investors seeking to gain exposure can watch for opportunistic pullbacks in shares.
Fiscal Q3 2021 Earnings Release
On Oct. 27, 2021, Twilio released its fiscal third-quarter 2021 results for the quarter ended September 2021. The Company reported an earnings-per-share (EPS) profit of $0.01 versus a loss of (-$0.14) consensus analyst estimates, a $0.15 beat. Revenues grew 65.2% year-over-year (YoY) to $740.2 million, beating analyst estimates for $684.1 million. The Company has grown Active Customer Accounts to 250,000, up from $208,000 in the year ago same quarter.
Twilio CEO Jeff Lawson commented,
“We delivered another quarter of strong growth at scale in the third quarter as companies continue to turn to Twilio in this digital-first world. We are extremely excited about the next generation of our customer engagement platform, and our newest pillar, Twilio Engage, which will allow companies of all sizes and in any industry to build and optimize hyper-personalized marketing campaigns on every channel for customer acquisition, conversion and retention.”
Mixed Fiscal Q4 2021 Guidance
Twilio provided Q4 fiscal 2021 EPS estimates for a loss of (-$0.26) to (-$0.23) versus (-$0.08) consensus analyst estimates. Revenues are expected between $760 million to $770 million versus $750.69 estimates.
Conference Call Takeaways
The Twilio conference call had very little in the form of statements and incredibly short mention by its CEO before going straight into the question and answering session. This was a bit disappointing as they offered little extra content.
Twilio Vice-President of Investor Relation Andrew Zilli commented,
“Additionally, some of our discussion and responses may contain forward-looking statements, which are subject to risks, uncertainties, and assumptions. In particular, our expected business benefits and financial impacts from our acquisitions, particularly Segment and Zipwhip, and our partnerships and investments, including the associated transactions, the impact of recent and future pricing changes on certain third-party platforms on us and our customers, our outlook for the quarter ending December 31, 2021, our ability to achieve our targets for non-GAAP gross margin over time, an annual growth rate over the next 3 years, and our ability to manage changes in network service provider fees that we pay in connection with the delivery of our communication on our platform, and the impact of those fees on our gross margin, are subject to change.
"Should any of these risks materialize or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements.”
CEO Lawson made a quick statement,
“I want to take a moment to thank our COO George Hu for the amazing contributions he's made to Twilio over the past 5 years. With George's leadership, we really figured out a developer-first go-to-market, which is an incredibly challenging feat given nearly no other companies has a go-to market that's as unique or as efficient as ours. George has set us up on a new trajectory in building a tremendous team. Starting with his direct reports all the way down the go-to-market recommendation, and I can't wait to see what you build next, George.
"I am also incredibly excited for Marc Boroditsky to be taking the charge and continue driving our forward progress. Marc has built the Twilio sales teams from literally zero, to the powerhouse of challenge it is today, kept up the admiration and respect to the teams, and a vision for how to continually evolve and grow our go-to-market with developers, enterprises, partners, and digital leaders. I'm excited for the next chapter, Marc.”
Digital Transformation
CEO Lawson commented in the Q&A session,
“This is a strong environment for companies who are undergoing digital transformation and those transformations have been accelerated by the pandemic. And something that I think it's really important to understand here is that this is not like a restaurant or the digital interactions that got put in say over the course of the past year or two was not a deviation from the future [Indiscernible]. It was just an acceleration. We're bringing forward a lot of the innovation that were happening.
"Think about telemedicine. You thought telemedicine might take a decade [Indiscernible] adaption. And that is going to continue, I believe, to be the trend when I look at do you want to drive across town for every doctor's visit? No. Like you can see a doctor in 15 minutes on a video call may go back to work, that's a better experience. Same thing with like, for instance like curbside pickup around my ordering, and all these sort of things. This has been an acceleration of the natural digital transformation of the world. It's just going faster.
"When you see that environment exists, businesses are going to continue to drive those roadmaps because the competitive environment today, that customers get accustomed to these efficiencies and these experiences, and that creates even more demand for digital. So I think it's a flywheel for how customers are now differentiating themselves digitally in those markets, and our customer engagement platform now enables this.”
TWLO Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for TWLO stock. The weekly rifle chart downtrend accelerated on the earnings collapse but bottomed out at the $278.14 Fibonacci (fib) level. The weekly 5-period moving average (MA) is falling at the $326.98 fib followed by the 15-period MA at $345.11. The weekly market structure high (MSH) triggered the breakdown on the $370.36 break. The weekly stochastic is chopping flat near the 30-band with weekly lower Bollinger® Bands at $281.57.
The weekly market structure low (MSL) triggered on a breakout through $306.60. The daily rifle chart is attempting a channel tightening rebound with the 5-period MA rising at $307.42 as the stochastic crossed back up off the 20-band. The daily 15-period MA channel tightening target would be $332.76.
Prudent investors can monitor for opportunistic pullback levels at the $306.60 weekly MSL trigger, $303.54 fib, $297.27 fib, $288.81 fib, and the $278.14 fib. Upside trajectories range from the $343.62 fib up to the $390.35 fib level.