IB Net Payout Yields Model

Twilio Q4'18 Earnings

Twilio (TWLO) just reported a quarter where revenues grew 77%, yet the guidance suggests 2019 revenue growth of only 35%. Part of the issue is the inclusion of slower growing SendGrid (SEND) in the 2019 results.

2018 Revenues 
  • Twilio - $650M
  • SendGrid - $145M
2019 Revenue Guidance
  • Total - $1,071M
The slower revenue growth rate will make the stock less attractive in 2019. The guidance has revenue growth decelerating to only 35% this year due to the inclusion of the 25% growth rate from SendGrid. Whether or not Twilio truly needed the email API business from SendGrid or not, the impact is slower revenue growth.

Twilio has a market cap of $16 billion based on the forecast for 141 million shares outstanding in 2019. Don't chase this over hyped story.

Update 2/13 10:50 est
Originally missed this nugget from the earnings call that further explains why revenue growth will decelerate in 2019:
And while the majority of our base revenue growth came from the normal drivers of our business, we did have two items that amplified our Q4 results: First, we saw significant seasonal spending ramp from a large international customer that we added earlier in 2018; Second, we saw positive impact related to the midterm elections in the U.S. Combined, the two items added roughly 10 points to our year-over-year growth in Q4.

More research on WhoTrades - Twilio - Stalled Growth

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