Max Grigoryev
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Max Grigoryev in Fundamentality,

Twilio: No Estimates, No Volatility

I posted this article on Friday describing why traders should sell strangles. There was a lack of information regarding analysts estimates - and I assume that it was too difficult to give any forecasts. The stock jumped more than 40% after the IPO. Right after the IPO, I checked the unit-economic and financial metrics here and came to a conclusion that it's too early to invest into Twilio. 

Twilio just released their Q2 earnings and there are some interesting points that I want to tell you about. First of all, operating income dropped. This is the most important outcome, because I always think that the business efficiency should be the most important factor for all the projects and businesses:

Number of customers growth is slowing down - I expected it to be around 32.2k, however, Twilio reported just 30.8k. Average revenue per customer is growing though:

Here is what they reported:

  • Total revenue of $64.5 million for the second quarter of 2016, up 70% from the second quarter of 2015 and 9% sequentially from the first quarter of 2016.
  • Base revenue of $56.4 million for the second quarter of 2016, up 84% from the second quarter of 2015 and 13% sequentially from the first quarter of 2016.
  • GAAP loss from operations of $10.9 million for the second quarter of 2016, compared with GAAP loss from operations of $9.5 million for the second quarter of 2015. Non-GAAP loss from operations of $5.7 million for the second quarter of 2016, compared with non-GAAP net loss from operations of $7.4 million for the second quarter of 2015.

The stock has stopped at $42.50 it will unlikely move significantly this week, hence we will get the maximum return from this strategy. Just in order to remind, here is a few more options strategies for:

 Both companies are going to report their earnings tomorrow and I expect some volatility in both cases.