Checking in on Twilio

Twilio (NYSE: TWLO) wants to become the world’s leading customer engagement platform. Its cloud-based communications software was initially created to help businesses to embed SMS/text messaging within their Smartphone apps to communicate with customers. Businesses like Lyft (Nasdaq: LYFT), Airbnb (Nasdaq: ABNB), and eBay(Nasdaq: EBAY) -- who were constantly interacting with customers via texts -- were eager to embrace them. Today, Twilio serves more than 280,000 paying customers.
Yet the beloved communications platform-as-a-service provider has been having a terrible year. Revenues are slowing due to a challenging macro environment, losses are mounting due to heavy operating expenses from previous acquisitions, and its go-to-market strategy is struggling as it attempts to win deals with larger enterprises. Thus far in 2022, Twilio's stock has now fallen by 85%. Its co-founder and CEO Jeff Lawson has recognized many of the problems and announced a corporate restructuring, which recently included laying off 11% of its workforce.
Is this the beginning of the end for Twilio, where there will be even more pain ahead for investors? Or will Twilio succeed in its turnaround plans, meaning its inexpensive stock is actually a huge opportunity?
In this episode of the 7investing podcast, lead advisors Anirban Mahanti, Luke Hallard, and Simon Erickson check in on Twilio. The three provide an overview of Twilio's business model, discuss where it derives its profit margins, and objectively look at the challenges it faces. They also describe Twilio's four strategic priorities and its likelihood of succeeding at them.
And in the final segment, each advisor provides a "Twilio score", to quantify how bullish or bearish they are about investing in the company during the next year.
This conversation was originally recorded live on November 8, 2022. Publicly-traded companies mentioned in this podcast include Salesforce and Twilio. 7investing’s advisors and/or its guests may have positions in the companies that are mentioned.

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