Twilio Inc. projected a profit on an adjusted basis in the current quarter, topping analyst’s estimates for a loss, and authorized a stock buyback program days after announcing a major headcount reduction. The shares gained in extended trading.
(Bloomberg) — Twilio Inc. projected a profit on an adjusted basis in the current quarter, topping analyst’s estimates for a loss, and authorized a stock buyback program days after announcing a major headcount reduction. The shares gained in extended trading.
Earnings, excluding some items, will be 18 cents to 22 cents a share in the period ending in March, the company said Wednesday in a statement. Analysts, on average, had expected a loss of two cents, according to data compiled by Bloomberg.
The software firm has been focused on improving profitability, and on Monday announced a second round of job cuts, bringing Twilio’s total planned reduction to about 26% of its workforce, among the steepest in the industry. It also announced it would close offices and pare back benefits as part of a cost-cutting push. “We have to spend less, streamline, and become more efficient,” Chief Executive Officer Jeff Lawson wrote in a message to employees.
Lawson, in eliminating the positions, acknowledged that Twilio had grown too fast over the past few years. The San Francisco-based company, best known for its direct-to-consumer text messaging services, has been betting on an expansion into the wider market for customer service tools in a bid to compete more forcefully with Salesforce Inc. and Adobe Inc. Recent acquisitions have included identity verifier Boku Identity Inc., toll-free messaging service Zipwhip and customer data provider Segment.
In the statement, Lawson said the company had “announced meaningful changes to Twilio’s leadership group, organizational structure, team size and capital allocation strategy that will both accelerate our path to profitability and most importantly, improve our execution.”
Before the first round of reductions announced in September, Twilio’s workforce had jumped to 8,510 employees at the end of June 2022 from 6,334 employees a year earlier. The company said it had 8,156 workers as of Dec. 31.
Twilio said revenue will be about $1 billion in the current period, falling short of analysts’ average estimate of $1.02 billion. The company also authorized a stock buyback program of as much as $1 billion through the end of 2024.
The shares jumped as much as 15% in extended trading after closing at $66.05 in New York. The stock had fallen 67% over the last year through Wednesday’s close amid a broad market slump.
For the quarter ending in December, sales were $1.02 billion, slightly exceeding estimates. Adjusted profit was 22 cents, while analysts had expected a loss of 9 cents.
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