Twilio Forecasts Q4 Organic Revenue Growth of 11% to 12%

Twilio expects organic revenue growth to slow to 11% to 12% in the fourth quarter from 16% in the third, even as the company raised its full-year organic revenue growth outlook to 15% after reporting 20% year-over-year revenue growth for the latest quarter.

Revenue reached $1.56 billion in the quarter ended Sept. 30. Twilio posted diluted earnings per share of $1.65 on a non-GAAP basis and $1.00 under generally accepted accounting principles.

For the quarter ending Dec. 31, the company forecast revenue of $1.595 billion to $1.605 billion. Its guidance also calls for non-GAAP operating income of $300 million to $310 million and non-GAAP diluted earnings per share of $1.48 to $1.53.

Chief Financial Officer Aidan Viggiano said on the Oct. 29 earnings call that third-quarter organic revenue growth exceeded the high end of guidance by about four percentage points. He said Twilio did not expect the greater-than-five-point beats in the first two quarters to become typical.

Viggiano cited messaging growth as the main driver of the smaller beat. Messaging growth eased to 17% in the third quarter from 18% in the second, and accounts for about 60% of revenue, he said.

Twilio also raised its full-year non-GAAP operating income and free cash flow guidance to $1.19 billion to $1.20 billion each.