Twilio

Twilio

We are long-term investors here at MyWallSt and recommend companies that we believe will have consistent growth for years to come. Updates are an opportunity for us to reaffirm our stance on a company while keeping you up to date on its developments. By renewing our comments with the latest information, we ensure that investors have confidence in our selections, regardless of their start date.

Twilio has been a firm staff favorite at MyWallSt since we added it to our shortlist back in 2018. With the stock already increasing 6-fold, many investors may be concerned about the rich valuation and fear that they’ve missed the boat. However, the business continues to fire on all cylinders, with robust revenue growth being achieved and added functionality that has helped boost margins. 

Post-IPO, the company came under scrutiny after major customers announced plans to reduce spend and deploy their own in-house solutions. Since then, Twilio has added a number of new solutions to their offering, including customer service platform Flex, and Marketing Campaigns, powered by its 2019 acquisition of SendGrid. As we’ve discussed previously, when customers deploy multiple products from the same vendor, switching costs increase, leading to better retention figures. To that end, Twilio recently reported 138% dollar-based net retention, showing that this strategy is paying dividends. 

We’re particularly excited about the recent acquisition of Segment, which expands Twilio into the customer data management space. Segment allows companies to pull data from hundreds of varied applications, giving them a much more comprehensive view of their customers. This acquisition could give Twilio a real edge in the communication-platform-as-a-service world — a category in which they are already firm leaders. While Twilio’s legacy products give clients the tools to contact their customers, Segment provides critical insights into how and when to do so. 

Many of Twilio’s biggest customers — ride-hailing, travel, and hospitality — struggled through 2020 due to the COVID-19 pandemic, new use cases in telehealth, food-delivery, remote learning, and public health emerged, boosting revenue by 55% for the year. As the vaccine rollout intensifies across the United States, we anticipate Twilio will be able to build on 2020’s impressive results and continue to reward long-term investors.

We’ve updated our comments on Twilio, which users can view by clicking on the stock icon below.

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