Bhavan Suri of William Blair previewed Twilio's earnings in a research report. Here is a summary of some of his key findings:
Total revenue is expected to come in $3 million to $5 million better than consensus estimates, which call for $83.6 million.
Base revenue is expected to be $78 million–$79 million, which represents 57–59 percent growth.
Non-GAAP operating loss of $5.5 million–$6.5 million, which is in line with the Street's mean estimate of $5.8 million but at or above the high-end of the company's own guidance.
Non-GAAP loss per share of 6–7 cents, which is above the Street's estimate by at least 1 cent per share.
Twilio is expected to beat the Street's free cash flow estimate of negative $6.3 million by a few million dollars due to a better-than-expected profitability.
The analyst believes Twilio continued to win new logos and expand its existing customer base through increased usage.
The analyst also believes Twilio's customers are aware of cheaper alternatives but aren't willing to part ways with Twilio's platform.
Suri noted that Twilio's stock is trading at six times his 2018 revenue estimate, which is slightly shy of the fast-growing SaaS group average of 6.1. The analyst is modeling the company to increase its base revenue by 44 percent in 2017 and 33 percent the year after, which is above the SaaS group average of 29 percent in 2017 and 25 percent in 2018.
Bottom line, given the company's superior growth profile, Twilio's valuation remains "attractive."
Shares remain Outperform rated with no assigned price target.
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