Twilio’s Preliminary Q3 Results Not Enough To Make Investors Forget About Monday’s Plunge

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Twilio’s Preliminary Q3 Results Not Enough To Make Investors Forget About Monday’s Plunge

Twilio (NYSE: TWLO), a provider of cloud communications platforms that lets clients build, scale and operate real-time communications within software applications, reported on Tuesday preliminary third quarter results.

Twilio said that it expects to lose four to five cents per share in the third quarter which is better than the nine cent per share loss Wall Street analysts were expecting.  The company also guided its revenue to be in a range of $70.25 million to $71.25 million which is ahead of the $64.37 million analysts were expecting.

Twilio also guided its non-GAAP gross profit to a range of $39.75 million to $40.25 million which marks an improvement from the $24.7 million profit it recorded in the same quarter a year ago.  The company’s guided non-GAAP gross margin of approximately 56 percent is flat from the 56 percent it reported last year.

As of September 30, 2016 the company has over 34,000 active customer accounts which also marks an improvement from the 23,822 active customer accounts it reported a year ago.

Twilio’s stock opened for trading at $54.43 on Tuesday but gave up most of its gains.  With more than one hour of trading remaining the stock was trading at $52.68, up just shy of 1.50 percent on the day.

It is important to note that the Nasdaq index was trading lower by 1.80 percent at the same time.  In fact, the other major indices were solidly in the red with the S&P 500 index down around 1.50 percent and the Dow Jones Industrial Average was lower by nearly 250 points.

Twilio’s investors were dealt a blow on Monday when the company said it plans on raising $400 million in a secondary offering.  The announcement sent the stock plummeting by around 15 percent.

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Twilio’s pre-announcement on Tuesday appeared to satisfy investors but not enough to erase a notable portion of Monday’s losses.

Twilio said on Monday it will use the proceeds from its cash raise to fund growth initiatives, including growing key departments such as engineering and marketing and also plans on growing its technology platform.

Despite Monday’s decline, the stock is still higher by more than 80 percent since its initial public offering in late June.