Twilio’s Base Revenue Continues on Its Growth Trajectory



Twilio’s base revenue rose 77% in the fourth quarter

Another dependable indicator of Twilio’s (TWLO) future growth is its base revenue, which excludes revenue from what it describes as its “variable customer accounts.” Twilio defines its variable customer accounts as “large Active Customer Accounts that have never entered into 12-month minimum revenue commitment contracts with Twilio.”

Twilio’s base revenue saw robust growth in the fourth quarter, which drove the company’s growth. Twilio made $186.16 million in base revenue in the fourth quarter, a rise of 77% YoY. Its base revenue made up 91% of its total revenue in the quarter.

For the whole of 2018, Twilio made $593 million in base revenue, a robust 62% rise over 2017. Last year, Twilio’s base revenue made up 91% of its total revenue.

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Twilio’s robust growth could continue, but the stock is trading at a premium

Twilio’s strong active customer account and base revenue growth, among other metrics, suggest that the company could continue to see robust growth in 2019 as well, which is reflected in the company’s better-than-expected guidance.

Twilio’s acquisition of SendGrid, an application programming interface–centric email platform, for $2 billion in October 2018 could be a big one for it. The acquisition makes sense, as Twilio aims to make creating communications platforms easier for developers, and the acquisition of SendGrid will expand its reach.

Twilio’s tremendous rally in the past year means that the stock is trading at very rich valuations. A good pullback could create buying opportunities, though. The stock fell nearly 6% in after-hours trading on February 12.


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