Twilio Q2 earnings ahead: Street sees 20% growth in earnings per share

California-based cloud communications company Twilio (NYSE:TWLO) is scheduled to announce its second quarter earnings results on Thursday, August 7th, after the closing bell.

Analysts expect a 20% growth in earnings per share to $1.05, on a revenue of $1.19B, a more than 10% growth compared to last year.

Twilio’s growth slowed after the pandemic due to market saturation, a lower net expansion rate, and increasing competition. However, analysts are optimistic with improvements in margin and FCF.

Seeking Alpha analyst Lighting Rock Research pointed out in a recent analysis that the new CEO’s cost discipline has improved FCF margin and enabled significant share repurchases, supporting higher valuation.

In the past 2 years, Twilio has beaten EPS estimates 88% of the time and revenue estimates 100% of the time.

Over the last 3 months, EPS estimates have seen 1 upward revision and 1 downward, while revenue estimates have seen 19 upward revisions and 1 downward.

Analysts have also pointed to certain downside risks for Twilio, such as the overall enterprise IT spending trend.

“Considering the weak economy and tariff uncertainties, customers, especially small and mid-sized companies, might choose to tighten their IT spending, which could impact Twilio’s near-term growth,” SA analyst Lighting Rock Research said.

Twilio (TWLO) shares were last up 2.29%. The company has gained more than 17% so far in market value.