Twilio Stock Sinks. Guidance Is ‘Tough Pill to Swallow.’

Twilio shares dropped 13% Wednesday to $47.69 and were on pace for their lowest close since December 2022, according to Dow Jones Market Data. The stock has fallen 2.6% this year.

Management noted on its call with investors that the company’s communications business, which represented about 85% of revenue in the quarter, was facing headwinds. The company expects second-quarter revenue of between $980 million and $990 million. That’s below Wall Street’s consensus of $1.05 billion.

“I see moderation in our consumer-facing usage patterns, as well as us lapping our peak crypto usage from last year,” Chief Executive Jeff Lawson said on the earnings call.

“Twilio’s results were lackluster,” RBC Capital Markets analyst Rishi Jaluria wrote in a research note. “Q1’s revenue beat was thin and Q2 guidance of only 4% to 5% growth is a tough pill to swallow, as the company remains one of the more macro-sensitive names in our coverage.”

Jaluria cut his price target to $55 from $75 and maintained his Sector Perform rating on the stock.

William Blair analyst Matt Stotler was more optimistic about the company’s future, and rates the stock as Outperform without a price target.

“We continue to believe that Twilio offers differentiated solutions and holds a leadership position in a large and under penetrated market,” Stotler said in a research note. “While Twilio is navigating numerous internal changes in a tough environment, we believe that the recent restructuring will better position the company for long-term sustainable and profitable growth when the macroeconomic environment normalizes.”

Twilio said in February that it would lay off about 17% of its workforce and pursue further cost cuts.

Write to Angela Palumbo at [email protected]