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IPO Stocks Twilio (TWLO) and Acacia (ACIA) Soar After Earnings

Ryan McQueeney

The IPO market this year has been rather… well, boring. Due to several factors contributing to global economic uncertainty, we simply haven’t seen many companies going public in 2016. With that said, however, investors will still recognize names like Twilio TWLO and Acacia Communications ACIA that have debuted recently.

Investors may also recognize these companies because they have both been among the biggest movers throughout the stock market over the past several days. In just the past week, shares of TWLO have gained over 11%, and shares of ACIA are up over 45%.

Both of these stocks have gained a significant amount of momentum since their most recent earnings announcements. When it comes to newly-public companies, earnings reports are incredibly important because they help investors gain confidence in the relatively unproven stocks.

Twilio in the Clouds

Twilio reported its second-quarter earnings on August 8. The company posted a loss of 29 cents per share on $64.5 million in revenue. Our revenue estimate called for $58 million in the quarter. On top of a strong revenue beat, Twilio also showed impressive customer growth. The company had 30,780 Active Customer Accounts as of June 30, 2016, compared to 21,226 Active Customer Accounts as of June 30, 2015.

(Also Read: Twilio Inc. Q2 Earnings, Strong Overall Performance)

Twilio is a provider of cloud-based communications services that help developers build real-time communications platforms within software applications. The company has an impressive client list that includes Facebook FB, Nike NKE, Uber, and The New York Times.

Acacia Impresses

Acacia Communications also impressed investors with its most recent report. The company posted earnings of 43 cents per share, which smashed the Zacks Consensus Estimate of $0.13. Acacia also reported revenue of $116 million, which came in well ahead of our estimate of $86 million. ACIA also said it now projects revenues for the current quarter to be between $120 million and $128 million, and EPS to come in between $0.64 and $0.76.

(Also Read: Why Shares of Acacia Communications Are Surging)

Acacia is a developer of silicon-based processers that make it easier for network providers to build systems. The company tends to do business with cloud infrastructure operators and communication service providers.

Bottom Line

Companies are often reluctant to IPO because publicly-traded companies are forced to be much more transparent with their financial information and therefore receive much more scrutiny from shareholders. Plus the global economy was uncertain to start the year, and that will always make things more sluggish for the IPO market.

However, Twilio and Acacia are proving that success is definitely possible right now, which could inspire other companies to look towards an IPO soon. If you’d like to read more about the state of the IPO market right now, check out our IPO Market Outlook for Second Half of 2016. 


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