Shares of Twilio ( NYSE:TWLO ) recently plunged over 25% after the cloud service provider reported its first quarter earnings, which beat analyst expectations but spooked investors with troubling news about its biggest customer. Twilio disclosed that Uber — which contributed 12% of its revenues during the quarter — would pivot away from its platform in favor of other internally developed or third-party alternatives.
In response, Twilio reduced its full-year sales growth forecast to 28%-31% growth, missing analyst expectations for 33% growth. It also guided for a non-GAAP loss between $0.27-$0.30 per share — which was well below the consensus forecast for a $0.16 per share loss.
Those numbers sound bad, but I believe the subsequent sell-off was far too steep. Let’s discuss three reasons why you shouldn’t follow those panicking sellers out the door just yet. Image source: Getty Images. 1. Uber isn’t abandoning Twilio
Much of the hysteria about Twilio stems from the misconception that Uber is dropping all of the company’s services. That simply isn’t true — CEO Jeff Lawson stated during the conference call that Uber was "optimizing" its platform by usage and geography with a "more active multi-sourcing program" which would also utilize some internally developed […]