(Bloomberg) — Twilio Inc. projected rising sales for the second quarter, signaling stronger demand for communications software amid the coronavirus pandemic. Shares climbed about 25%.
Revenue will increase as much as 35% to $370 million in the period, the San Francisco-based company said Wednesday in a statement. Analysts, on average, projected sales of $334 million, according to data compiled by Bloomberg. The company expects a loss, excluding some items, of 8 cents to 11 cents per share, which also is better than analysts had estimated.
Twilio Chief Executive Officer Jeff Lawson has assembled a broad set of cloud-based capabilities that help companies embed communications systems in their apps and on their web pages. The company last year completed the largest acquisition in its history, buying SendGrid, which competes with Salesforce.com Inc. and others in helping clients send marketing emails.
With people forced to stay at home during the Covid-19 pandemic, companies have reached out to customers through digital channels, boosting demand for Twilio’s tools. The software maker said in April that Epic Systems Corp., one of the largest U.S. medical records companies, would build a new telehealth service to connect health care providers and patients using Twilio’s videoconferencing product.
“Our platform provides three things the world needs right now: digital engagement, software agility and cloud scale,” Lawson said in the statement.
Shares jumped to a high of $154.28 in extended trading after closing at $122.40 in New York. The stock has climbed about 25% this year.
The company has seen waning demand from the travel, hospitality and ride-sharing industries, which have been hit hard during the pandemic, but health care, education and crisis response organizations have picked up the slack, Chief Financial Officer Khozema Shipchandler said in an interview.
Twilio withdrew its full-year guidance because of uncertainty surrounding the outbreak, but said first-quarter sales surged 57% from a year earlier to $364.9 million.
Twilio has spent rapidly to expand its business, including overseas. Shipchandler said the company has continued to hire people at the same pace during the pandemic, including to fill out a new research-and-development team based in India.
“If we can successfully invest in this cycle, we can emerge from this pandemic stronger than ever,” Shipchandler said.
