When Can We Expect A Profit From Twilio Inc. (NYSE:TWLO)?

Twilio Inc. (NYSE:TWLO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Twilio Inc., together with its subsidiaries, provides customer engagement platform solutions in the United States and internationally. The US$17b market-cap company’s loss lessened since it announced a US$1.0b loss in the full financial year, compared to the latest trailing-twelve-month loss of US$462m, as it approaches breakeven. As path to profitability is the topic on Twilio's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Twilio

According to the 27 industry analysts covering Twilio, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$27m in 2026. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 69% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Twilio's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 12% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Twilio, so if you are interested in understanding the company at a deeper level, take a look at Twilio's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Twilio worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Twilio is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Twilio’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.