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Shares of Twilio (NYSE: TWLO), a provider of cloud communication services, jumped 32% in August, according to data provided byS&P Global Market Intelligence. The company posted strong growth and beat analyst estimates when it reported its second-quarter results, its first report as a public company, leading investors to bid up the stock. At the end of August, Twilio stock was up 257% from its IPO price.
Twilio reported second-quarter revenue of $64.5 million, up 70% year over year and above the average analyst estimate of $58.2 million. Twilio claimed nearly 31,000 active customer accounts at the end of the quarter, up 45% year over year. The company's dollar-based net expansion rate, which measures a combination of growth in the number of active customers and growth in the amount each customer spends, was 164%, up from 149% during the same period last year.
Non-GAAP EPS came in at a loss of $0.08, an improvement from a loss of $0.11 during the prior-year period. On a GAAP basis, the company lost $0.45 per share, down from a loss of $0.52. GAAP operating expenses grew by 54% year over year, substantially slower than revenue.
Twilio CEO Jeff Lawson summed up the quarter:
Twilio expects its rapid growth to continue, guiding for $253 million to $257 million of revenue for the full year, representing 53% growth at the midpoint. Non-GAAP EPS is expected to be a loss of $0.28 to $0.30 for the full year.
Twilio is one of the few high-profile technology companies to go public this year, and with strong second-quarter results, investors can't get enough of the stock. With a market capitalization of around $4.6 billion, based on the company's expected diluted share count at the end of the third quarter, investors are paying a steep 18 times expected 2016 sales for the stock. Twilio will need to continue to report blockbuster results for the foreseeable future in order for investors to avoid getting burned.
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