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Is the shine coming off the one-time unicorn?

Twilio — the cloud-communications platform whose stellar IPO last year lent hope to other highly valued start-ups considering a public listing — saw its shares fall nearly 29 per cent in after-hours trading on Tuesday after dimming its earnings outlook for 2017

The US-based company said that it expects an adjusted net loss from operations between $9.5m and $10.5m for the quarter ending June 30, and $26m-$29m for the full year. Per share, adjusted for special items, that translates to a predicted quarterly loss of 10-11 cents for the quarter ending June 30, and 27-30 cents for the full year.

Revenue, meanwhile, is expected to come in at about $85.5m-$87.5m for the quarter ending June 30, and $356m-$362m for the full year.

Twilio had previously projected full-year revenue in the range of $364m-$372m and an adjusted per-share loss of 15-19 cents.

If the numbers come in as forecast, that would represent a stall-out for Twilio, which was among the vaunted ranks of so-called unicorns (private startups whose valuations are at least $1bn) as it went public in 2016.

For the quarter ending March 31, total revenue was $87.4m, a 47 per cent rise year-on-year and a 7 per cent rise sequentially. It also beat analysts’ expectations of $83.5m in quarterly sales. Its net loss from operations was $14.8m, steeper than the $6.4m loss it incurred during the prior-year quarter. Net loss per share was narrower, however, coming in at 16 cents, versus the 37 cent loss per share recorded a year ago.

Jeff Lawson, Twilio’s co-founder and chief executive, said that the company made “continued progress across a number of our key initiatives” during the quarter, despite “some changes in the relationship with our largest customer”, which it did not name.

When it went public in June of last year, Twilio soared nearly 92 per cent, bucking some of the concerns that had plagued fellow unicorns like Square and Pure Storage immediately after their IPO debuts. While it has struggled to hang onto that momentum, its shares were still up 38.4 per cent since its debut.

Copyright The Financial Times Limited 2017. All rights reserved.
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