(Bloomberg) -- Twilio Inc. projected sales in the current quarter that topped analysts’ estimates, but represented slowing growth, a sign that corporate demand for communications tools may ease as the economic toll from the pandemic continues.
The software company has been among the sector’s biggest gainers during the coronavirus pandemic, with customers such as retailers using Twilio’s tools to facilitate curbside pickups and health care providers relying on the platform for telehealth services. Investors flocked to the stock, which has almost tripled this year.
Sales will be as much as $406 million in the period that ends in September, the San Francisco-based company said Tuesday in a statement. Analysts, on average, expected $378 million, according to data compiled by Bloomberg. The forecast estimated revenue growth of as much as 38% compared with a year earlier, while Twilio reported that sales jumped 46% in the second quarter.
Twilio Chief Executive Officer Jeff Lawson said Twilio’s sales projection reflects the inherent uncertainty about the evolving Covid-19 pandemic and recession.
“These are unprecedented times,” Lawson said in an interview. “We’re cautiously optimistic about our results going forward, but we can’t predict the future. And so our third-quarter guidance projects strong growth. ”
Twilio has assembled a comprehensive collection of tools that lets clients embed communications systems in apps and on web pages. The pandemic has forced people to stay at home, prompting companies to bolster ways they can speak with customers remotely, which has sparked robust demand for Twilio’s software. The company has prioritized growth over profit, looking to improve its software and tap into new markets abroad. Twilio is striving to stay ahead of MessageBird, which has taken advantage of its proximity to dozens of European markets and expects revenue to grow 50% this year. The Dutch rival is planning an initial public offering.
Shares fell about 5% in extended trading after closing at $283.76 in New York.
Twilio reported revenue of $400.8 million in the period that ended June 30, beating analysts’ estimates of $368 million. Excluding some items, profit was 9 cents per share, compared with analysts’ projected loss of 9 cents a share.
Lawson said Twilio’s international expansion is paying off and it has gained customers with headquarters overseas. Twilio said it expects to lose from 5 cents to 9 cents a share, excluding some items, in the third quarter. Wall Street projected a loss of 6 cents a share.
“We feel like our business is resilient and diversified and so far we are very proud of the strong growth at our scale that we’ve been putting up,” Lawson said.
(Updates with comments from CEO in the fifth paragraph.)
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