Twilio shares drop 9% despite sales, earnings beat

Analysts connected mean were expecting an adjusted nonaccomplishment of 14 cents a stock connected income of $681 million, according to FactSet. Shares were down 9% successful after-hours trading pursuing the announcement, aft closing with a 2.3% nonaccomplishment astatine $345.77.

Twilio’s software, which allows companies to converse with customers done substance messages, experienced a surge successful the 2nd fractional past twelvemonth acknowledgment to governmental campaigns seeking to pass with voters. Lapping that play was expected to depress Twilio’s bottommost enactment and sales-growth numbers, but analysts person anticipation that those numbers volition retrieve successful the coming months.

“We admit pugnacious comps successful Q3/Q4 owed to dense governmental messaging postulation past year, and bash not spot betterment successful gross margins yet owed to traction of lower-margin halfway messaging products, but spot precise steadfast request signals from partners positive the emergence of 2-way messaging causing investors to re-rate maturation prospects and the banal into” the archetypal fractional of adjacent year, J.P. Morgan analysts wrote earlier this period aft speaking with Twilio partners.

For the fiscal 4th quarter, Twilio projected an adjusted nonaccomplishment of betwixt 23 cents and 26 cents a stock connected income of $760 cardinal to $770 million. Analysts connected mean were projecting an adjusted nonaccomplishment of 10 cents a stock connected income of $745 million, according to FactSet.

Twilio shares person struggled amid concerns astir second-half maturation rates, falling 12.7% successful the past six months portion the S&P 500 scale SPX, -0.51% grew 9.3%. Still, shares person grown much than 850% since the institution went nationalist successful 2016.