Twilio recorded net losses of $186 million last quarter, taking its trailing-12-month net loss to an eye-watering $1.38BN.
Equally worryingly, its revenue growth has dried up, increasing by 15 percent year-over-year. This time last year, the figure sat at 48 percent.
Noting these results, one analyst claimed in a piece for The Motley Fool: "Twilio's business model simply isn't efficient."
In doing so, they suggested that the business spent $2.1BN on the cost of goods and $2.8BN on various other expenses across the previous twelve months.
During that very same period, Twilio’s revenues fell short of the $4BN mark.
Twilio has taken action to address this disparity in recent months, cutting its workforce by 17 percent and readdressing its compensation structure.
Now, it is pledging to do more and bring the focus back to profitability. As Khozema Shipchandler, COO at Twilio, stated during a recent earnings call:
We're trying to optimize for profit on the communications side while continuing to optimize for growth on the data application side.
Nevertheless, some will question whether these moves are enough, as increased investment in data applications may prevent the vendor from closing its profitability gap.
Twilio Urged to Pick a Lane
Twilio has a market cap of over $8.7BN, much more significant than many of its enterprise communications rivals.
To live up to this lofty figure, the vendor will likely have to start turning that revenue into profit or drive revenue growth significantly.
As Shipchandler’s comment suggests, the vendor is still somewhat trying to do both.
That perhaps reflects many of the issues industry experts have recognized with Twilio: it tries to do too much at once.
After its recent layoffs, Dan Miller, Founder & Lead Analyst at Opus Research, somewhat noted this.
"Twilio’s fundamental problem is its origin story," wrote Miller on LinkedIn. "[It was] one of the very first CPaaS companies, a developer’s paradise and broker of text messages and DIDs.
"Success in those core activities funded expansion into promising, "growth" opportunities through acquisition and hiring. But the roots remain in the opportunistic developer communities, which led to agglomerating email marketing, customer data aggregation, analytics, and contact centers.
Problem is: there is no "there" there.
Indeed, spinning so many plates at once may be inhibiting Twilio’s growth in particular fields.
