Top 5 Stock Picks of Christopher Lyle’s SCGE Management

3. Twilio Inc. (NYSE:TWLO)

SCGE Management: $887,948,000
Percentage of SCGE Management’s 13F Portfolio: 8.23%
Number of Hedge Fund Holders: 96

Twilio Inc. (NYSE:TWLO) is a communications software company that offers a cloud-based platform and services. Twilio Flex, messaging, programmable voice, programmable video, elastic SIP trunking, and IoT are some of the company’s offerings. As of September 30, 2021, there were 250,000 active client accounts, an increase as compared to 208,000 active client accounts as of September 30, 2020.

In December, Goldman Sachs analyst Kash Rangan initiated coverage of Twilio Inc. (NYSE:TWLO) with a “Buy” rating and a price target of $350. Out of the hedge funds tracked by Insider Monkey, Catherine D. Wood’s ARK Investment Management is the biggest shareholder of Twilio Inc. (NYSE:TWLO), with 3.25 million shares worth $1.04 million.

In the third quarter, hedge fund sentiment decreased for Twilio Inc. (NYSE:TWLO). Insider Monkey’s data shows that 96 hedge funds held stakes in the company at the end of the third quarter, down from 98 funds a quarter earlier.

RiverPark Funds, in its third-quarter 2021 investor letter, mentioned Twilio Inc. (NYSE:TWLO). Here is what the fund said:

“TWLO shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.

The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”