IPO of the Week: Twilio

Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

Company Description

Twilio

Founded in 2008 and headquartered in San Francisco, Twilio develops and provides a cloud-based communication platform that enables developers to integrate voice, messaging and video capabilities into their software applications via Application Programming Interfaces (APIs).

Business Model

Twilio generates revenue from usage-based fees from customers using the software products that they have incorporated into their software applications. The company also earns monthly flat fees from certain fee-based products including telephone numbers and customer support.

IPO History

On 6/23/2016, Twilio began trading on NYSE led by Goldman Sachs and J.P. Morgan. The cloud communication company was priced at $15.00 per share, above the proposed range of $12.00 to $14.00/share. Twilio sold 10.0 million shares and with a 15% over-allotment option fully exercised, the company was valued at $1.23 billion at offer. The stock opened at $23.99/share, a 59.93% pop, and continued to climb to close the first day with a 91.93% initial return. Twilio was included in the IPOX® 100 U.S. Portfolio on 6/16/2017 and currently weighs approximately 1.23% of the portfolio. On 2/1/2019, Twilio acquired email API platform SendGrid (SEND US), another IPOX® 100 U.S. Portfolio holding in 2019

Historical Performance

Growth Outlook

Industry Comparison

Company

Stock

Symbol

IPO/Spin-off

Date

Initial
Return

Offer to Date

2019

YTD

Beta to S&P

EPS

2018

Revenue

(in millions)

2018 Net Income

(in millions)

P/S
ratio

Twilio

TWLO US

6/23/2016

91.93%

850.6%

59.68%

1.97

-($1.26)

650.07

-($121.95)

19.8x

Bandwidth

BAND US

11/10/2017

5.95%

284.3%

88.61%

1.05

0.85

204.11

17.92

7.25x