Market Overview

Twilio's Guidance Cut An Uber Thing, Not Indicative Of Core Business

Twilio's Guidance Cut An Uber Thing, Not Indicative Of Core Business

Twilio Inc (NYSE: TWLO) shares are sinking like a stone after the company lowered its 2017 guidance on Tuesday. The biggest blow to Twilio investors was the revelation that one of the company’s biggest clients, Uber, is branching out and shifting some of its business to competitors.

The news sent Twilio shares down more than 27 percent, but Oppenheimer analyst Ittai Kidron urges investors not to read too much into declining Uber business.

“While the change in the Uber relationship is disappointing and a major growth challenge in 2017, we believe Uber is the exception rather than the rule,” Kidron explains.

“Ex-Uber, Twilio continues to experience impressive growth in new customer additions, size of new customers and usage within existing customers (net dollar expansions).”

Related Link: Twilio's New 'Unexpected' Relationship With Uber

Uber and Facebook Inc (NASDAQ: FB)’s WhatsApp are Twilio’s two largest customers. However, Kidron reports that the remainder of Twilio’s customers each account for no more than 2 percent of the company’s total revenue, limiting the risk of another Uber-like event in the future.

Twilio bulls can take comfort in the fact that the company still managed to exceed consensus analyst revenue estimates in Q1. In addition, Twilio reported a 42.1 percent year-over-year increase in active customer accounts, a 3.6 percent gain in average revenue per customer (excluding Uber and WhatsApp), a 3.7 percent increase in gross margin and a 61.8 percent increase in base revenue.

Kidron admits the Uber news stings and lowered Oppenheimer’s price target for the stock from $50 to $38. However, the firm maintains a bullish outlook and an Outperform rating on Twilio.

Latest Ratings for TWLO

Oct 2019DowngradesBuyNeutral
Oct 2019MaintainsOutperform
Oct 2019Initiates Coverage OnOutperform

View More Analyst Ratings for TWLO
View the Latest Analyst Ratings

Posted-In: Ittai Kidron Oppenheimer UberAnalyst Color Price Target Top Stories Analyst Ratings Tech Best of Benzinga


Related Articles (FB + TWLO)

View Comments and Join the Discussion!

Latest Ratings

MJP MorganMaintains13.0
IPARDA DavidsonMaintains76.0
TGTMorgan StanleyMaintains130.0
VCMorgan StanleyMaintains52.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

We Are Approaching Another Bottoming In Metals And Miners

Apple Investors Shouldn't Get Carried Away With Hopes For iPhone 8