Roku and Twilio Shine Bright as Investors Analyze Q4 Results
As February unfolds, stocks like Roku ROKU and Twilio TWLO have stood out in the market.
To date, ROKU has surged over +30%, while TWLO has increased by +14%. With the recent release of their Q4 results last Thursday, let’s examine whether now is the right time to invest in either company.
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Roku’s Q4 Performance
As the top streaming platform in North America, Roku saw Q4 sales rise 22% year over year to $1.2 billion, up from $984.43 million during the same quarter last year. This performance exceeded the sales estimates of $1.14 billion and marks Roku’s tenth consecutive quarter of surpassing revenue expectations.
Furthermore, Roku reported a narrower-than-expected loss of -$0.24 per share, outperforming the Zacks EPS Consensus estimate of -$0.44. This figure also improved significantly from an adjusted loss of -$0.55 in Q4 2023. Roku has consistently beaten earnings forecasts for five quarters, getting closer to profitability since its IPO in 2017.
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Twilio’s Q4 Analysis
Twilio, which enables developers to include real-time communications in applications, recorded Q4 sales growth of 11% year over year, reaching $1.19 billion, compared to $1.07 billion in the previous year. Twilio has beaten sales estimates consistently since its 2016 IPO.
However, an EPS of $1.00 fell short of expectations of $1.02, although it represented a 16% increase from $0.86 in the prior quarter. Despite this, Twilio has met or exceeded earnings estimates in three of its last four quarterly reports, resulting in an average EPS surprise of 17.79%.
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Full-Year Results for Roku and Twilio
For the fiscal year 2024, Roku experienced a sales rise of 18% to $4.11 billion, up from $3.48 billion in 2023. The annual loss per share narrowed to -$0.89 from -$5.02 last year.
In comparison, Twilio’s total sales climbed 7% to $4.45 billion, while its annual EPS surged 50% to $3.67 from $2.45 in 2023.
Future Outlook for Roku and Twilio
Looking ahead to FY25, Roku projects a 12% sales increase to $4.61 billion, with Zacks anticipating another 13% growth to $5.22 billion in FY26. Moreover, Roku aims for a gross profit of $2 billion this year and an adjusted EBITDA of $350 million.
There are ambitious goals for Roku to achieve positive operating margins by 2026. Zacks projects an EPS of $0.10 for that year, although FY25 is currently expected to show an adjusted loss of -$0.80. Encouragingly, EPS estimates for FY25 and FY26 have seen upward adjustments in the past month.
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Twilio’s guidance for the first quarter estimates sales between $1.13-$1.14 billion, indicating 8-9% growth. Expected Q1 EPS is in the range of $0.88-$0.93, rising from $0.80 last year. Twilio anticipates a 7-8% total sales increase for FY25, with Zacks predicting $4.78 billion in revenue. Growth is also expected to continue with another 7% rise in FY26, reaching $5.13 billion.
For Q1, Twilio is projecting non-GAAP net income of $180-$190 million, with annual expectations of $825-$850 million. This translates to Zacks estimating an 18% EPS growth to $4.33 for the year, and a projected 14% rise to $4.94 for FY26, while FY25 EPS estimates have slightly declined.
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Conclusion
Both Roku and Twilio continue to show strong expansion prospects, currently holding a Zacks Rank #1 (Strong Buy). Investors should watch their operating efficiency closely, but the positive revisions in earnings estimates for FY26 could fuel momentum for ROKU and TWLO.
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Twilio Inc. (TWLO): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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