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- Twilio has begun an operational review of its segment business unit, which is expected to be completed in March, following months of activist scrutiny of the struggling business unit.
- Twilio acquired Segment in 2020 for $3.2 billion, but activists are pushing management to break up the business or sell the entire company.
- Founder and CEO Jeff Lawson was replaced by Josema Shipkandler in January, and the company said it would take a “new look” at the business.
Twilio announced on Wednesday, coinciding with its fourth-quarter results, that it would begin a review of its unprofitable business unit, which has been under scrutiny by shareholder activists, to “identify the appropriate path forward.”
The company also announced that it had recorded a $286 million impairment charge related to the business unit, and plans to rename the business unit back to a segment. Formerly known as Twilio Data & Applications, it was created in 2020 when Twilio acquired the namesake segment for his $3.2 billion.
Twilio has been under intense shareholder scrutiny over the performance of segment businesses it acquired at significantly higher prices than private market valuations, which has dragged down Twilio’s long-term communications business performance. Activist investors Anson Funds and Region Capital both said they want the company to sell either a division or the entire company.
Twilio did not immediately respond to a request for comment.
The initial activist campaign began shortly after founder Jeff Lawson’s super-voting stock block expired. Lawson was ultimately fired as chairman and CEO, and Josema Shipkandler took over as CEO in January.
At the time, Shipcandler said the company would “take a new look at underperforming business areas” to maximize Twilio’s potential.
Twilio, which develops tools to help businesses stay in touch with customers, also plans to release its full-year outlook in March along with the results of an operational review.
The company reported earnings per share excluding items of 86 cents, beating the LSEG (formerly Refinitiv) consensus estimate of 58 cents. Revenue also exceeded consensus estimates, coming in at $1.08 billion versus $1.04 billion. The company reported a loss of $365.4 million in the fourth quarter.
Twilio’s stock price fell more than 9% in after-hours trading after the company reported lower than expected active customer numbers. Analysts surveyed by StreetAccount had expected 311,000 active customers, but the company reported only 305,000 active customers.
Similarly, the company expects revenue in the range of $1.025 billion to $1.035 billion for the first quarter of its next fiscal year, below the LSEG consensus estimate of $1.049 billion. There is.
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