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Twilio (TWLO) Enhances Segment Capabilities With New Features
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Twilio’s (TWLO - Free Report) Segment has remained a category leader in data collection since its acquisition in 2020 by TWLO. The cloud communications company has added a couple of new features — Linked Audiences and Segment Data Graph — to Segment, which will further enhance the platform’s capabilities.
How Will New Features Enrich Segment?
The Linked Audiences feature will enable marketers to combine real-time data from Segment’s CDP with data from warehouses through a no-code interface. The feature bridges the gap between real-time operational data and historical data while leaving enough room for marketers to focus on querying, segmenting and targeting audiences.
The second feature, Segment Data Graph, is a framework that unifies customer profiles and transforms static data repositories into dynamic and actionable engines. It allows data teams to manage relationships between datasets within data platforms and warehouses, creating detailed audience segments for advanced analytics and marketing automation.
These innovations enhance Twilio Segment’s interoperability with data platforms and warehouses, providing businesses with a unified and real-time view of their customers and driving marketing efficiencies.
Twilio's year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, TWLO stock has plunged 24.9% against the Zacks Internet – Software industry’s growth of 11.3%.
The latest move can be seen as Twilio’s sustained efforts in boosting Segment’s financial performance, which has been underperforming for the past few quarters. In 2023, Segment contributed 7% of Twilio’s revenues and more than 8,000 customers are currently using it for their data and insights needs.
The underperformance was mainly due to the changing nature of the Customer Data Platform (CDP) market in which Segment operates. The platform has been unable to evolve with the new approach used by its competitors.
The platform's underperformance led the company's management to consider selling the business. However, the company initiated an operational review of Segment in March 2024 and ultimately decided to retain it and focus on achieving break-even non-GAAP income from operations for the Segment business by the second quarter of 2025.
Segment’s competitors have been focusing on centralizing data, aligning with the data warehouse-centric approach of the modern data stack. In response, Twilio is enhancing its offerings by introducing new features like Linked Audiences and Segment Data Graph, as announced at Snowflake Summit 2024.
Segment’s Prospects in Growing CDP Market
The CDP market is crowded with multiple players, including Hightouch, Treasure Data CDP and Bloomreach Engagement, that compete directly with Twilio Segment. The market also comprises big players like SAP (SAP - Free Report) , Oracle (ORCL - Free Report) and Salesforce (CRM - Free Report) .
SAP’s Customer Data Platform focuses on collecting and merging data from various sources and processing these large datasets. Moreover, it provides a comprehensive visibility of this unified data and enables data governance for customers’ purposes. It also features hyper-personalization, real-time insights and back-office connectivity for the data.
Oracle Unity CDP serves the B2B and B2C needs of the customers. It collects and merges marketing data from multiple sources whether online or offline. Moreover, it lets marketers reach and connect target audiences through devices, networks, channels and domains.
Salesforce Data Cloud can serve multiple purposes like data unification, audience segmentation, integration in the Salesforce ecosystem to leverage other products, analytics and reporting, all while maintaining data privacy and compliance.
Despite the large number of players in the CDP market, companies have ample opportunities to benefit from its significant future expansion. According to a report by Markets and Markets, the CDP market is projected to reach $28.2 billion in 2028 from $5.1 billion in 2023, witnessing a CAGR of 39.9% and providing companies with substantial scope to expand their market presence.
This impressive opportunity in the CDP market will also support Segment’s expansion, particularly if it continues to introduce innovative features like Linked Audience and Segment Data Graph that keep it relevant in the evolving market and contribute to the company’s top line.
Twilio expects its top line to increase 5-10% in fiscal 2024. The Zacks Consensus Estimates for TWLO’s fiscal 2024 revenues is pegged at $4.35 billion, suggesting growth of 4.73% year over year.
Image: Bigstock
Twilio (TWLO) Enhances Segment Capabilities With New Features
Twilio’s (TWLO - Free Report) Segment has remained a category leader in data collection since its acquisition in 2020 by TWLO. The cloud communications company has added a couple of new features — Linked Audiences and Segment Data Graph — to Segment, which will further enhance the platform’s capabilities.
How Will New Features Enrich Segment?
The Linked Audiences feature will enable marketers to combine real-time data from Segment’s CDP with data from warehouses through a no-code interface. The feature bridges the gap between real-time operational data and historical data while leaving enough room for marketers to focus on querying, segmenting and targeting audiences.
The second feature, Segment Data Graph, is a framework that unifies customer profiles and transforms static data repositories into dynamic and actionable engines. It allows data teams to manage relationships between datasets within data platforms and warehouses, creating detailed audience segments for advanced analytics and marketing automation.
These innovations enhance Twilio Segment’s interoperability with data platforms and warehouses, providing businesses with a unified and real-time view of their customers and driving marketing efficiencies.
Twilio's year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, TWLO stock has plunged 24.9% against the Zacks Internet – Software industry’s growth of 11.3%.
Twilio Inc. Price and Consensus
Twilio Inc. price-consensus-chart | Twilio Inc. Quote
Twilio Focuses on Reviving Segment
The latest move can be seen as Twilio’s sustained efforts in boosting Segment’s financial performance, which has been underperforming for the past few quarters. In 2023, Segment contributed 7% of Twilio’s revenues and more than 8,000 customers are currently using it for their data and insights needs.
The underperformance was mainly due to the changing nature of the Customer Data Platform (CDP) market in which Segment operates. The platform has been unable to evolve with the new approach used by its competitors.
The platform's underperformance led the company's management to consider selling the business. However, the company initiated an operational review of Segment in March 2024 and ultimately decided to retain it and focus on achieving break-even non-GAAP income from operations for the Segment business by the second quarter of 2025.
Segment’s competitors have been focusing on centralizing data, aligning with the data warehouse-centric approach of the modern data stack. In response, Twilio is enhancing its offerings by introducing new features like Linked Audiences and Segment Data Graph, as announced at Snowflake Summit 2024.
Segment’s Prospects in Growing CDP Market
The CDP market is crowded with multiple players, including Hightouch, Treasure Data CDP and Bloomreach Engagement, that compete directly with Twilio Segment. The market also comprises big players like SAP (SAP - Free Report) , Oracle (ORCL - Free Report) and Salesforce (CRM - Free Report) .
SAP’s Customer Data Platform focuses on collecting and merging data from various sources and processing these large datasets. Moreover, it provides a comprehensive visibility of this unified data and enables data governance for customers’ purposes. It also features hyper-personalization, real-time insights and back-office connectivity for the data.
Oracle Unity CDP serves the B2B and B2C needs of the customers. It collects and merges marketing data from multiple sources whether online or offline. Moreover, it lets marketers reach and connect target audiences through devices, networks, channels and domains.
Salesforce Data Cloud can serve multiple purposes like data unification, audience segmentation, integration in the Salesforce ecosystem to leverage other products, analytics and reporting, all while maintaining data privacy and compliance.
Despite the large number of players in the CDP market, companies have ample opportunities to benefit from its significant future expansion. According to a report by Markets and Markets, the CDP market is projected to reach $28.2 billion in 2028 from $5.1 billion in 2023, witnessing a CAGR of 39.9% and providing companies with substantial scope to expand their market presence.
This impressive opportunity in the CDP market will also support Segment’s expansion, particularly if it continues to introduce innovative features like Linked Audience and Segment Data Graph that keep it relevant in the evolving market and contribute to the company’s top line.
Twilio expects its top line to increase 5-10% in fiscal 2024. The Zacks Consensus Estimates for TWLO’s fiscal 2024 revenues is pegged at $4.35 billion, suggesting growth of 4.73% year over year.
Twilio currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here