Increased digital engagement drives solid Q1 results for Twilio, GoDaddy

Companies like Twilio and GoDaddy reported strong first quarter results thanks to increased digital engagement, while Equinix and Fortinet also posted solid results.

As businesses and workers step up their digital engagement efforts in response to the COVID-19 pandemic, the companies powering those initiatives are faring relatively well. Twilio, Equinix, GoDaddy and Fortinet all reported solid first quarter results on Wednesday. 

Twilio, the cloud communications platform, saw shares up in after-hours trading after beating market estimates. Its non-GAAP diluted net income per share came to 6 cents. Revenue was $364.9 million, up 57 percent year-over-year.

Wall Street was expecting a net loss of 11 cents on revenue of $331.88 million 

The company also reported more than 190,000 active customer accounts as of March 31, up 23 percent year-over-year.

"We delivered strong first quarter revenue growth of 57% year-over-year, as customers across industries turned to Twilio's customer engagement platform to accelerate their digital transformation efforts," CEO Jeff Lawson said in a statement. "Our platform provides three things the world needs right now: digital engagement, software agility and cloud scale."

For the second quarter, Twilio expects revenue between  $365 million and $370 million. The company is withdrawing its full year 2020 guidance due to the uncertainty caused by the pandemic. 

GoDaddy, the domain registry company, saw shares up after beating Q1 revenue expectations. Total revenue was $792.0 million, up 11.5 percent year-over-year.

Wall Street was looking for earnings of 17 cents on revenue of $789.86 million. 

"GoDaddy delivered strong results in the first quarter," CEO Aman Bhutani said in a statement. "In this time of uncertainty for small businesses, we are laser-focused on innovating for our customers, as their digital presence is now more important than ever. We believe our focus on customer value remains the best way to create value for our shareholders as well."

Total bookings came to $951.1 million, up 9.3 percent year-over-year. Domains revenue was $355.9 million, up 11.4 percent year-over-year. Hosting and presence revenue was $297.2 million, up 10.5 percent year-over-year. Business applications revenue came to $138.9 million, up 14.3 percent.

For the second quarter, GoDaddy expects total revenue of approximately $790 million.

Equinix, the global interconnection and data center company, saw its shares fall slightly in after-hours trading after reporting Q1 revenues in line with market expectations. 

Net Income for the quarter was $119 million, or $1.38 per share, a 5 percent decrease from the previous quarter. Quarterly revenues increased 6 percent over the same quarter last year to $1.445 billion. 

"The Equinix business continues to perform well and show resiliency through these times of uncertainty, enabling us to remain focused on the clear set of priorities we laid out at the beginning of the year," CEO Charles Meyers said in a statement, "investing in our people, evolving our platform and service portfolio to meet the changing needs of customers, expanding our go-to-market engine to fuel long-term growth, and simplifying our business to drive operating leverage and enhance our customer experience."

In Q1, Equinix expanded its business with key customers, including Hurricane Electric, TikTok and Zoom.

Peak Equinix Internet Exchange traffic increased 44 percent over the same quarter last year, or over 20 percent compared to the prior quarter, reflecting the impact of the sudden global shift to remote and work-from-home practices.

Interconnection revenues in the quarter increased 14 percent over the same quarter last year. 

For the second quarter of 2020, the company expects revenues to range between $1.446 billion and $1.466 billion. Its full 2020 revenue guidance is $5.877 billion to $5.985 billion.

The cybersecurity company Fortinet beat market expectations and saw shares up in after-hours trading. The company said the COVID-19 pandemic did not have a material impact on its first quarter. 

Non-GAAP diluted net income for the quarter was 60 cents per share. Total revenue was $576.9 million, up 22 percent year-over-year.

Wall Street was looking for earnings of 51 cents on revenue of $556.69 million.

Product revenue was $192.3 million, up 18 percent year-over-year. Billings came to $667.8 million, up 21 percent. Service revenue was $384.6 million for the first quarter, an increase of 24.1 percent compared to the same quarter of 2019.

"Our strong first quarter performance is the result of strategic internal investments we made to deliver industry-leading products and services, expand into adjacent addressable markets, grow our global sales force and invest in the channel," CEO Ken Xie said in a statement. "Fortinet is an important strategic partner to our customers. Our proprietary FortiASIC security processing unit (SPU) can deliver 10 times the VPN throughput capacity of comparable competitor solutions to support teleworkers. This significant competitive advantage is one reason we believe we will continue to gain market share during a period of tougher economic conditions. We believe our industry-validated teleworker and secure SD-WAN offerings, along with our SPU-driven FortiGates, Security Fabric platform and hybrid- and multi-cloud offerings, provide companies with more cost-effective solutions across their entire digital infrastructure."

For the second quarter of 2020, Fortinet currently expects revenue in the range of $590 million to $605 million.