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Yahoo
25-06-2025
- Business
- Yahoo
Twilio vs. Bandwidth: Which CPaaS Stock Is the Better Buy Right Now?
Twilio Inc. TWLO and Bandwidth Inc. BAND are two major names in the U.S. Communications Platform as a Service (CPaaS) market. Both help businesses and developers build apps for messaging, voice and emergency services using application programming interfaces (APIs). With the growing shift to cloud-based communications and artificial intelligence (AI)-driven solutions, the big question for investors is: Which of these CPaaS players offers a more compelling investment opportunity today? Let's break down their fundamentals, growth prospects and valuations to find out. Twilio remains the leader in customer communications, offering tools that help businesses connect with customers in real time and at scale. The company's focus on AI-powered products like Conversation Relay and Generative Custom Operators allows businesses to automate customer interactions, improve security and get smarter insights. This focus on AI is helping Twilio's clients work more efficiently and save costs. Twilio Segment, TWLO's customer data platform, is another growth driver. It allows businesses to bring together data from different sources to run targeted marketing campaigns that boost loyalty and sales. As AI adoption rises, Twilio's ability to combine communication with data gives it a real advantage. On the financial front, Twilio has made solid progress. In the first quarter of 2025, non-GAAP earnings per share jumped 42.5% on 12% revenue growth due to better cost control and efficiency. Twilio Inc. price-consensus-eps-surprise-chart | Twilio Inc. Quote Twilio's financial health looks strong, with $2.45 billion in cash and $991 million in long-term debt. It has been returning capital to shareholders aggressively by repurchasing stocks worth $2.3 billion in 2024 alone. In January 2025, Twilio authorized a $2 billion share buyback program, signaling confidence in its long-term prospects. During the first quarter of 2025, it repurchased shares worth $126.3 million. Bandwidth has built a respectable position in cloud communications but at a smaller scale than Twilio. In the first quarter of 2025, Bandwidth saw its non-GAAP earnings per share rise 33.3% on 7% revenue growth. Its Enterprise Voice business is the star performer, with the growing adoption of its Maestro and AI Bridge platforms. These help businesses modernize communications and integrate AI voice tools for better efficiency. Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote From a portfolio strength and market positioning view, Bandwidth's mix of Enterprise Voice, Global Voice Plans and Programmable Messaging provides a broad service offering. Its global network helps ensure reliable, low-latency service for demanding use cases like AI-powered voice applications. However, challenges remain. Messaging growth has been slow and could face more pressure if retail or marketing spending slows. The heavy reliance on Enterprise Voice for growth creates a concentration risk, and while Bandwidth's AI offerings show promise, it may take time before they drive significant revenues. Bandwidth's debt is another concern. As of March 31, 2025, the company had just $42 million in cash compared to $468 million in long-term liabilities. This debt load could limit its ability to invest or manage through tough periods. Twilio seems better positioned for growth. The Zacks Consensus Estimate for TWLO's 2025 revenues and EPS implies year-over-year growth of 7.9% and 22.3%, respectively. The consensus mark for BAND's 2025 revenues and EPS indicates a year-over-year increase of 0.3% and 14.2%, respectively. On the valuation front, Twilio trades at 3.61 times forward sales compared to 0.53 times for Bandwidth. While TWLO looks more expensive, its higher growth momentum justifies the premium. BAND's lower valuation reflects its risks, including slowing messaging growth, macroeconomic headwinds and a high debt level. Image Source: Zacks Investment Research Year to date, Twilio stock has risen 9%, while Bandwidth shares have fallen 17.3%. This difference shows how investors are weighing the risks and rewards of each company. Image Source: Zacks Investment Research Both companies offer ways to benefit from the shift to cloud communications and AI. However, Twilio's scale, product diversity, stronger growth outlook and solid balance sheet give it a clear edge. For investors looking for a more reliable and faster-growing player in CPaaS, Twilio stands out as the smarter choice right now. Currently, TWLO sports a Zacks Rank #1 (Strong Buy), making the stock a must-pick compared to Bandwidth, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Twilio Inc. (TWLO) : Free Stock Analysis Report Bandwidth Inc. (BAND) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
23-06-2025
- Business
- Yahoo
Twilio's AI Push: Enough to Boost Communications Revenues Further?
Twilio TWLO is augmenting its product portfolio with the integration of artificial intelligence (AI) and collaborations with AI leaders to enhance its customer engagement capabilities. Last year, Twilio launched Conversational AI through a partnership with OpenAI by integrating OpenAI's Realtime API into this platform. The platform was developed for enterprises so they can automate their customer engagement with natural-sounding interaction. Conversational AI serves across various channels, including voice, SMS, WhatsApp, and web chat. Integrated with features like ConversationRelay, Conversational Intelligence and large language models, the platform simplifies the development and deployment of voice AI agents. The platform can analyze voice and messaging conversations for structured data extraction. The platform also supports real-time streaming, speech recognition, interruption handling, and expressive voices, making customer interactions seamless. Recently, the company launched a unified platform for customer engagement by integrating its messaging tools, customer data platform, and AI tools to enable enterprises to deliver greater personalization for automated customer interaction. Twilio also enhanced the capabilities of its Customer Data Platform and Communications Platform as a Service (CPaaS) through new updates like conversational AI tools, secure communications channels, and intelligent compliance solutions. In one of its research reports, Twilio stated that 58% of non-profits and 47% of B2C businesses in the private sector are using AI with their CPaaS solution. Moreover, 68% of non-profits and 64% of B2C brands are using AI to analyze end-user data to understand their needs and pain points, implying a large-scale adoption of AI. These factors are driving the growth of Twilio's communications division, which grew 13% to reach $1.1 billion in the first quarter of 2025. Twilio expects its 2025 revenues to grow in the range of 7.5-8.5% organically. The Zacks Consensus Estimate for the same has been pegged at $4.81 billion, indicating year-over-year growth of 7.9%. However, Twilio also faces competition from other players in the customer engagement space. RingCentral, Inc. RNG started as a leader in cloud phone systems but now offers messaging, video and AI-powered contact center tools. RNG launched RingSense in 2023 as a proprietary AI engine across its communications tools. Unlike Twilio, which uses OpenAI's AI models, RingCentral uses its proprietary models for auto-generated call summaries and follow-ups and topic extraction from phone and video calls. Bandwidth BAND focuses mostly on voice and messaging services through application programming interfaces. Bandwidth is expanding into emergency services and call protection features, making its platform essential with strong customer retention. Both RingCentral and Bandwidth are growing in the communications space on the back of their uniqueness, but Twilio's edge lies in its broader platform and AI integration. Shares of Twilio have returned 7.8% year to date compared with the Zacks Internet – Software industry's growth of 11.2%. Image Source: Zacks Investment Research From a valuation standpoint, TWLO trades at a forward price-to-sales ratio of 3.58, significantly below the industry's average of 5.62. The company carries a Value Score of F. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Twilio's 2025 earnings is pegged at $4.49 per share, revised downward by a cent over the past 30 days. The estimated earnings figure suggests year-over-year growth of 22.34%. Image Source: Zacks Investment Research Twilio currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ringcentral, Inc. (RNG) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report Bandwidth Inc. (BAND) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-06-2025
- Business
- Yahoo
KeyBanc Initiates Coverage Of Twilio (TWLO) with Overweight Rating
Twilio Inc. (NYSE:TWLO) is one of the 10 tech stocks on Wall Street's radar right now. On June 6, KeyBanc initiated coverage of Twilio Inc. (NYSE:TWLO) with a $146 price target and an Overweight rating as part of the firm's broader look at enterprise software stocks. The firm noted that the company's recent momentum could continue, which could be driven by a sharper focus on its main products and improvements in its go-to-market execution. Over the last month, Twilio's (NYSE:TWLO) stock has gained nearly 15.7%. A software developer in front of a monitor, coding to build the latest internet content & information. Earlier on May 14, Baird analyst William Power reaffirmed a Buy rating on Twilio (NYSE:TWLO) with a $130 price target. The firm had previously cut the price target for the company in April from $160 to $130. Power's view shows confidence in the company's progress in conversational AI and its collaboration with Microsoft. Moreover, tools like ConversationRelay and its integration with Segment are seen as Twilio's (NYSE:TWLO) main strengths. The company's platform upgrades, including new AI and customer data features, signal strong innovation. Twilio (NYSE:TWLO) provides a platform that helps businesses manage customer interactions through messaging, voice, email, and user verification. Furthermore, the company offers tools to personalize experiences using real-time data and AI features. While we acknowledge the potential of TWLO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Techday NZ
15-05-2025
- Business
- Techday NZ
Twilio teams with Microsoft to drive enterprise conversational AI
Twilio has announced a multi-year strategic partnership with Microsoft aimed at accelerating the adoption of conversational artificial intelligence (AI) technologies for customer engagement. The collaboration will leverage Twilio's customer engagement platform in conjunction with Microsoft Azure AI Foundry, providing enhanced enterprise-grade infrastructure for conversational AI deployment. This partnership is intended to benefit Twilio's developer community, numbering over 10 million, alongside thousands of Microsoft's managed customers seeking to adopt advanced conversational interfaces. Conversational AI, powered by natural language processing and machine learning, enables machines to interpret and respond to human conversations with increasing sophistication. The technology addresses common business challenges such as limited data precision and integration barriers caused by outdated legacy systems. Twilio's expertise in communications, data, and AI will be paired with Azure's secure and scalable platform to assist enterprises in integrating conversational AI across various business functions. Specific areas of product development will include multi-channel AI agents for customer service automation, AI tools to assist live agents in contact centres, and solutions that enhance digital engagement between businesses and their clients. "Every interaction between a business and their customers is an opportunity to build loyalty and trust, and those interactions have been drastically improved by AI," said Inbal Shani, Chief Product Officer at Twilio. "Conversational AI enhances customer engagement by delivering precision for our customers, and rich and dynamic experiences for their consumers." The partnership will focus on building solutions using both Microsoft Azure AI Foundry and Twilio's engagement platform, which merges communications, contextual data, and AI. These solutions aim to enhance how enterprises automate customer interactions and drive more personalised engagement at scale. Asha Sharma, Corporate Vice President, Azure AI Platform at Microsoft, commented: "Azure AI Foundry enables customers to confidently scale AI including AI agents across their organisation with our enterprise-grade technologies and best practices that help manage risk, improve accuracy, protect privacy, reinforce transparency, and simplify compliance. Customers will see strong business value with the combination of Azure AI Foundry and Twilio's communications and data capabilities – the critical last mile connection between businesses and customers." Twilio is also introducing new conversational AI features, including ConversationRelay, which is now generally available. This tool allows developers to build sophisticated voice AI agents, integrating the latest in speech recognition, real-time streaming, and human-like responses. Additional updates include Conversational Intelligence, offering insights drawn from voice calls and message transcripts, which are available for voice communications and in private beta for messaging. Khozema Shipchandler, Chief Executive Officer at Twilio, spoke on the future of customer engagement: "We are facing the end of customer experience as we know it, and Twilio's heritage in CPaaS, CDP, and AI-powered capabilities has positioned us well for a new era of customer engagement. To be successful, every business needs the right infrastructure: communications channels to connect with customers, contextual data to understand them, and the ability to accelerate it all with AI in a way that's powerful, flexible, and trustworthy." Twilio has also previewed the next generation of its Customer Engagement Platform, designed to serve as the infrastructure underpinning all customer interactions. The platform will offer modular, interoperable systems that integrate with a range of AI ecosystems and support native large language model (LLM) integrations for greater efficiency. Additional product enhancements announced include the expansion of communications channels, with upcoming general availability of Rich Communication Services (RCS) and WhatsApp Business Calling, as well as the introduction of a Compliance Toolkit to help businesses adhere to global regulations such as the Telephone Consumer Protection Act (TCPA). Data residency enhancements were shared, with general availability of EU-based email data storage scheduled for July and SMS data residency in private beta later in 2025. Twilio's Segment Customer Data Platform (CDP) will receive a rearchitected journeys system for real-time, personalised customer engagement, alongside features such as event-triggered journeys, contextual payloads, strengthened observability, and native integrations with Twilio's messaging solutions. Segment announced two new preferred partnerships with Amplitude and Attribution App, expanding the analytics and marketing attribution options available to users of its CDP. Customer feedback was also highlighted. Dugan Winkie, Vice President and Head of Commercial Strategy at Cedar, stated: "ConversationRelay has been instrumental in helping us bring Kora, our AI voice assistant, to life. Twilio's real-time voice infrastructure, combined with our own data and AI, allows us to simplify the financial experience and meet patients with the same level of care, personalisation, and empathy they'd expect from a live agent—at scale." Bob Summers, founder and Chief Executive Officer of Goodcall AI, said: "Being named a Twilio AI Startup Searchlight honoree has super-charged Goodcall's credibility, turning recognition into real revenue growth and an even faster innovation cadence. Twilio's feature-rich, rock-solid platform is the backbone that lets our Voice AI delight customers at scale while we push the boundaries of what conversational automation can do. I'm excited to join the SIGNAL stage to share our journey and inspire developers to build the next wave of voice-first experiences." Twilio's recent developments reflect ongoing efforts to provide flexible, secure, and intelligent tools to support evolving business needs in customer engagement, personalisation, and compliance.
Yahoo
05-05-2025
- Business
- Yahoo
Twilio raised as HSBC sees signs of growth
-- HSBC upgraded Twilio (NYSE:TWLO) to Hold from Reduce on Monday, citing early signs of revenue momentum and a more reasonable valuation. The firm also raised its target price for the company's shares to $99 from $77 following strong first-quarter results and improved guidance. 'Twilio reported solid 1Q25 results and raised its 2025 guidance,' HSBC analysts wrote, noting that revenue of $1.17 billion beat estimates by 2-3% and marked the highest year-over-year growth in eight quarters at 12%. Non-GAAP EPS of $1.14 was approximately 20% above consensus, and operating margin expanded by nearly 300 basis points to 18.2%. HSBC highlighted encouraging customer adoption trends and product traction, including 'broadening partnerships with AI startups with voice needs' and growing demand for offerings like ConversationRelay. The firm also noted that Twilio's dollar-based net expansion rate improved to 107%, up from 102% a year ago. Despite raising 2025–28 EPS estimates by 3% to 6%, HSBC expressed skepticism over Twilio's long-term margin targets. 'We are modelling FY27 non-GAAP operating margin of 19.1% vs company guidance of 21.5%,' analysts said, pointing to concerns over planned reductions in share-based compensation and structurally lower gross margins compared to peers. While Twilio trades at a sector-discounted 20.0x CY26e non-GAAP P/E, HSBC flagged that on a GAAP basis, the multiple jumps to 72.5x, far above the sector median of 28.6x. 'Lower-quality growth is heavily influenced by cost-cutting rather than operations,' they added. Still, HSBC acknowledged the company's improving outlook, saying, 'We expect the company to report an EPS CAGR of 14.3% over CY24-27e, which is towards the higher end of 10-15% typical for the sector.' Related articles Twilio raised as HSBC sees signs of growth OpenAI scraps plans to convert to for-profit structure Bloom Energy upgraded, Mizuho sees upside ahead Sign in to access your portfolio
