Twilio Earnings: Good Results Coupled With Mixed Guidance

We are lowering our fair value estimate for narrow-moat Twilio after the company reported better-than-expected first-quarter results and mixed guidance. We have lowered our growth estimates slightly over the next several years, as we would like to see the company deliver top-line results more consistently in both business units while slightly raising our margin profile. We cut our fair value estimate to $68 per share from $73. We continue to adjust our long-term financial model given the information from Twilio’s strategic review from March 2024 and its progress milestones. We expect the next year or so to be a series of fits and starts as the company balances margin improvements with strategic growth investments and plows capital into buybacks. We see shares as fairly valued.