Twilio Inc. TWLO is scheduled to report third-quarter 2021 results on Oct 27.

For third-quarter 2021, Twilio anticipates revenues in the range of $670 million to $680 million. The Zacks Consensus Estimate for the same is pegged at $680.2 million, indicating an improvement of 51.8% from the year-ago quarter.

The cloud-based communications platform-as-a-service provider expects non-GAAP loss per share between 14 cents and 17 cents. The consensus mark for non-GAAP loss stands at 15 cents per share, suggesting a drastic decline from the year-ago quarter’s earnings of 4 cents.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 125.4%.

Twilio Inc. Price and EPS Surprise

Twilio Inc. price-eps-surprise | Twilio Inc. Quote

Factors to Note

Twilio’s third-quarter revenues are likely to reflect contributions from the acquisition of the customer-data startup, Segment, and an increasing clientele base. Since last year, Segment has been aiding Twilio in enhancing its capabilities in the cloud-based communications platform space and gaining significant customers. Thus, strong uptake of Segment and growing adoption of Twilio Flex might have favored the third-quarter performance.

The to-be-reported quarter’s results are likely to reflect gains from the accelerated digital transformation projects across a number of industries amid the COVID-19 pandemic. Organizations have been reconfiguring their set-up for a work-from-home operational environment in a bid to make nearly 100% e-commerce a reality.

Twilio’s expanding presence among leading enterprises is likely to have acted as a key tailwind. Remarkably, in the last reported quarter, the company had added more than 5,000 new clients, taking the total active customer count to more than 240,000.

The company’s efforts to fortify its global footprint may get reflected in the to-be-reported quarter’s results. The introductions of Journeys, Twilio Conversations, SendGrid Ads and SendGrid’s Email Validation API might have contributed to the company’s performance.

However, its aggressive investments in systems and infrastructure, go-to-market team and Flex, and R&D are likely to have weighed on its profitability in the quarter under review.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Twilio this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Twilio currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which per our model have the right combination of elements to post an earnings beat in their upcoming releases:

Salesforce CRM has an Earnings ESP of +6.69% and a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Science Applications International Corporation SAIC has an Earnings ESP of +4.59% and a Zacks Rank #2 currently.

Accel Entertainment ACEL has an Earnings ESP of +20.00% and a Zacks Rank #2 currently.

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