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Earnings Results: Twilio is still trouncing its own earnings expectations, but this time the stock isn’t playing along

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Twilio Inc. easily outpaced its own expectations for financial performance during the COVID-19 pandemic yet again in the first quarter, but didn’t receive an immediate stock boost Wednesday afternoon after its forecast aimed low again.

Twilio
TWLO,
-1.84%

reported first-quarter losses of $206.5 million, or $1.24 a share, on sales of $590 million, up from $365 million a year ago. After adjusting for stock compensation and other effects, the software company reported earnings of 5 cents a share, after posting adjusted earnings of 6 cents a share a year ago.

Analysts on average expected an adjusted loss of 10 cents a share on sales of $533 million, according to FactSet, after Twilio guided to adjusted losses of 9 cents to 12 cents a share on sales of $526 million to $536 million. Shares declined more than 3% in after-hours trading immediately following the release of the results, after closing with a daily decline of 1.8% at $335.72.

Twilio makes software that allows mobile app developers to connect to customers through their mobile phones, and has seen tremendous growth as the COVID-19 pandemic drove more commerce online. The stock has more than tripled at times in the past year, but has struggled since hitting record highs after its last earnings report, falling 16.2% in the past three months. Shares have still increased 185.7% in the past 12 months as of Wednesday, as the S&P 500 index
SPX,
+0.07%

has increased 45.2%.

The pandemic-fueled growth has apparently made it difficult for Twilio to forecast its own performance. In the four quarters of the 2020 year, Twilio outperformed the top end of its sales guidance by 8%, 8.4%, 9.4% and 20.4%, respectively. In all four quarters, it guided for adjusted losses and posted adjusted earnings, and the stock largely experienced big positive swings as a result, including reaching record highs after last quarter’s earnings.

The trend of outperforming expectations continued Wednesday, but not the stock gains. Twilio easily outperformed its forecast for adjusted losses of 9 cents to 12 cents a share on sales of $526 million to $536 million, but shares still declined in the extended session as Twilio’s second-quarter forecast predicted adjusted losses beyond analysts’ expectations.

For the second quarter, Twilio forecast adjusted losses of 13 cents to 16 cents a share on sales of $591 million to $601 million. Analysts on average were expecting adjusted losses of 4 cents a share on sales of $579 million in the second quarter, according to FactSet.

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