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Twilio (TWLO) to Report Q1 Earnings: What's in the Offing?

Twilio Inc. TWLO is scheduled to report its first-quarter 2023 results on May 9.

Twilio anticipates revenues in the range of $995 million to $1.005 billion for the first quarter. The Zacks Consensus Estimate for the same is pegged at $999.8 million, indicating an improvement of 14.2% from the year-ago quarter. Our estimate projects Twilio’s revenues to be $998.4 million.

The cloud-based communications platform-as-a-service provider expects non-GAAP earnings between 18 cents and 22 cents per share. The consensus mark for the non-GAAP earnings is pegged at 20 cents per share from the year-ago quarter breakeven. We expect Twilio to report earnings of 18 cents per share in the first quarter of 2023.

Twilio’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 130.1%.

Twilio Inc. Price and EPS Surprise

Twilio Inc. price-eps-surprise | Twilio Inc. Quote

Factors to Note

Twilio’s first-quarter results are likely to reflect gains from accelerated digital transformation projects across several industries while the world economy is rebounding. Organizations are continuing to reconfigure their setup for a hybrid operational environment.

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The company’s revenues are likely to have witnessed contributions from its Zipwhip and Segment buyouts. Since the buyout in 2020, Segment has been aiding TWLO in enhancing its capabilities in the cloud-based communications platform space and gaining significant customers. The strong uptake of Segment, the growing adoption of Twilio Flex and an increasing clientele base are likely to have favored first-quarter performance.

Solutions like Journeys, Twilio Conversations, SendGrid Ads and SendGrid’s Email Validation application programming interface are likely to have contributed to first-quarter performance. The company’s efforts to fortify its global footprint are likely to get reflected in the to-be-reported quarter's results.
In the last reported quarter, Twilio added around 10,000 new clients, taking the total active customer count to 290,000. In the first quarter, the company’s increasing scope among leading enterprises is likely to have acted as a key tailwind.

However, increased spending, investments in enhancing the product portfolio and expansion across newer markets are likely to have negatively impacted Twilio’s profitability.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Twilio this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Although TWLO carries a Zacks Rank #3, it has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, Agilent Technologies A, HP HPQ and Cisco Systems CSCO have the right combination of elements to post an earnings beat in upcoming releases.

Agilent Technologies has an Earnings ESP of +0.40% and carries a Zacks Rank #2 at present. The company is set to report its second-quarter fiscal 2023 results on May 23. A’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for A’s fiscal second-quarter earnings is pegged at 1.27 per share, indicating a 12.4% surge from the year-ago quarter’s $1.13 earnings per share. The consensus mark for revenues is pegged at $1.67 billion, suggesting a year-over-year increase of 3.8%.

Currently, HP has an Earnings ESP of +2.24% and carries a Zacks Rank #3 at present. The company is expected to report its second-quarter fiscal 2023 results on May 30. HPQ’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 1.1%.

The Zacks Consensus Estimate for HP’s fiscal second-quarter earnings is 76 cents per share, indicating a year-over-year decline of 29.6%. The company is estimated to report revenues of $13.21 billion, which suggests a drop of 19.9% from the year-ago quarter.

Cisco has an Earnings ESP of +1.59% and carries a Zacks Rank #3 at present. The company is set to report first-quarter fiscal 2024 results on May 17. CSCO’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 1.8%.

The Zacks Consensus Estimate for CSCO’s quarterly earnings is pegged at 97 cents per share, suggesting a year-over-year increase of 11.5%. Its quarterly revenues are estimated to increase 12.1% year over year to $14.39 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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HP Inc. (HPQ) : Free Stock Analysis Report

Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report

Agilent Technologies, Inc. (A) : Free Stock Analysis Report

Twilio Inc. (TWLO) : Free Stock Analysis Report

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