Twilio reported $943M in 2Q22 revenue versus Street of $922M (and us at $948M). There was a time when TWLO had to clear the Street bar by at least 5-10% for the stock to not crater. Not so today. 2.5% beat is just fine. And an improvement on the NG OP line as better than Street is also a good look.
Topline guidance is slightly below Street for 3Q22 at $970M versus Street at $976M. We'll take it as a minor victory that even here, against difficult comps, Twilio is reporting organic growth rates at or above 30% y/y. This is well above our worst fears, and easily above the casual pain point that seemed to have been expected.
Gross margins declined sequentially from 53% to 51%, but even that is fine in our view, as it is the final quarter of inorganic contribution, and 2H will be nearly entirely organic increments of revenue which should, in theory, waterfall better.
All companies are secular until a cycle hits. At that point you are just begging the earnings gods for something less than terrible. Less than terrible works in equities, especially something like TWLO which has been sold down to 3.8x run-rate revenue. The market may be less constructive on these results, and it's quite possible that the tone deaf CEO/CFO will say something yucky on the call. But for us, our first look at 2Q22 results comes with relief.
