Twilio CFO says muted forecast nothing more than cautious optimism

Twilio shares declined after its Q2 outlook offered less upside than usual. The company’s CFO, Khozema Shipchandler, says it reflects nothing more than “cautious optimism” in an uncertain world.
Written by Tiernan Ray, Senior Contributing Writer

Twilio chief financial officer Khozema Shipchandler. "The macroeconomic environment is really uncertain," says Khozema. "it's a confusing picture."

Shares of cloud computing darling Twilio trended down Wednesday morning after the company offered a quarterly forecast with not as much upside as analysts would have expected. 

In an interview with ZDNet following the report, chief financial officer Khozema Shipchandler said the muted outlook reflects a realistic sense of the uncertainty in the world. 

"I wouldn't call it anything more than cautious optimism," Shipchandler told ZDNet.

Twilio's outlook for revenue of $401 million to $406 million this quarter promises only perhaps $5 million more than last quarter, whereas the company tends to deliver increases of $20 million to $40 million from quarter to quarter. More details of the quarter can be found in the company's press release.

Despite that muted upside, the forecast was still comfortably ahead of expectations for $378 million from Wall Street analysts. Last quarter's results, too, were ahead, at $401 million versus an expected $369 million.

The stock is down by about 10 points in morning trading, at $273.45. 

Twilio makes software that lets companies such as Uber plug in services to their business via an application programming interface. To some extent, then, its software sales reflect the level of economic activity of its customers. 

"The way that we think about it is that we wanted to put a guide out there that our investors can believe in," he added. Shipchandler was generally addressing the uncertainty that exists in the world amidst COVID-19 lockdown. 

"The macroeconomic environment is really uncertain," Khozema went on. "You know, you read all the same outlets that I do, and look at all the same indicators that I do, and it's a confusing picture."

"In the long term, we feel actually more enthusiastic than ever," he added.

In fact, the pandemic may have prompted some clients to buy more software, Shipchandler implied, "I think what COVID has done is, it has accelerated adoption in some key areas," he said.

"We saw a continuation of certain trends that we saw in Q1," Shipchandler told ZDNet, referring to thecompany's first fiscal quarter. That includes industries that were "down" in Q1, such as ride-sharing leisure and hospitality, which are starting to show a modest increase, what he referred to as  "green shoots."

Other fields such as education, health care, and e-commerce, and "even philanthropy," are proving "resilient," said Shipchandler. He predicted the strength of those fields will prove "part of a long-term secular trend."

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