Twilio shares drop more than 17% despite beating earnings estimates as COO announces departure

Twilio shares closed down 17.57% Thursday despite beating third-quarter earnings expectations, after the company shared a weak forecast for the fourth quarter and its COO announced his departure.

The cloud communications platform reported $0.01 adjusted earnings per share and revenue of $740 million, beating analyst estimates which included an adjusted loss of $0.15 and revenue of $681 million.

Those gains were eclipsed by a weak fourth-quarter earnings forecast and news that George Hu will depart as COO. Khozema Shipchandler will take over the role while maintaining chief financial officer duties.

“I’ve been building this company for 14 years, and leaders come and leaders go, and that’s how it works,” Twilio CEO Jeff Lawson told CNBC’s “Closing Bell.” “We did announce changes, but when you’re growing as quickly as Twilio is there’s always changes that happen.”

The San Francisco-based company, which allows app developers to add features like voice and text messaging to their products, forecasted a fourth-quarter loss of 23 cents per share to 26 cents per share compared to an expected loss of 8 cents.

Analysts at JMP maintained their $510 price target on the company’s stock, noting that despite Hu’s departure they “continue to like this business.” JMP cited CEO Jeff Lawson’s leadership, the company’s mission, and the estimated $79 billion addressable market as some of those reasons.