Twilio Inc. TWLO recently announced that it is set to acquire SendGrid Inc., a company that provides mass email services. The all-stock $2 billion acquisition is expected to be completed in the first half of 2019.

With this acquisition, Twilio aims to strengthen its onmichannel communications capabilities by enhancing its Programmable Communications Cloud software, which allows developers to embed voice, messaging, video and authentication capabilities.

Through the integration of SendGrid’s services, Twilio expects to add more than half a trillion customer interactions annually on its communications platform. SendGrid, which reported more than 74,000 customers at the end of its last reported quarter, will add value to Twilio by expanding Twilio’s customer base and bringing it into the email market faster.

This is the second acquisition announced by Twilio this year, and its largest to date. Last month, it bought its long-term business partner Ytica, as part of efforts to enhance its customer service application platform, Twilio Flex.

Strategic Acquisitions Boost Growth

Apart from SendGrid and Ytica, Twilio has made a couple of acquisitions in the past as well. Last year, it acquired Beepsend, enhancing its Twilio Super Network’s capabilities.

Furthermore, Twilio acquired proprietary WebRTC media processing technologies in 2016, boosting its Programmable Video capabilities.

The company’s acquisition of Authy helped it in offering cloud-based API to seamlessly embed two-factor authentication and phone verification into any application.

Focus on Customer Engagement

Twilio has been focusing on enhancing its communications platform continuously, thereby boosting the top-line, which surged 54% year-over-year in its last reported quarter.

Twilio Inc. Revenue (TTM)

Twilio Inc. Revenue (TTM) | Twilio Inc. Quote

Twilio Flex has given further impetus to the company’s Engagement Cloud strategy. Ever since its launch this March, the company has focused on the development and enhancement of the platform.

In this regard, Twilio recently collaborated with Alphabets’ GOOGL Google Cloud to integrate Contact Center AI into Twilio Flex, thus deepening its artificial intelligence capabilities.

Being a provider of cloud communications platforms to corporations, Twilio is the missing link between businesses and the cloud. Additionally, as more and more companies are making a switch to the cloud, Twilio looks poised to ride the growth trend over the long run.

Zacks Rank &Other Stocks to Consider

Twilio currently carries a Zacks Rank #1 (Strong Buy).

A couple of other top-ranked stocks in the broader Computer and Technology are Salesforce.com Inc. CRM and PayPal Holdings, Inc. PYPL, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth of Salesforce and PayPal is pegged at 25% and 17.8% respectively.

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