Twilio (NYSE:TWLO) reported a record fourth quarter to close out what executives described as one of the company’s most balanced years of execution, highlighted by accelerating growth in Voice, strong performance in self-serve and independent software vendor (ISV) channels, and substantial free cash flow generation.
Quarterly and full-year results
Chief Executive Officer Khozema Shipchandler said Twilio reached “record heights” in Q4, delivering $1.4 billion in revenue, $256 million of non-GAAP income from operations, and $256 million in free cash flow. For the full year, Twilio generated $5.1 billion in revenue, $924 million of non-GAAP income from operations, and $945 million in free cash flow.
Voice acceleration, AI-related demand, and product trends
Management repeatedly pointed to Voice as a standout area in 2025. Viggiano said Voice revenue growth accelerated to the high teens in Q4, its best growth rate since 2022, and that voice AI revenue growth accelerated above 60% year-over-year. Shipchandler said Voice strength was aided in part by voice AI use cases and described those applications as early innings that should become more conversational and cross-channel over time.
On the Q&A, Chief Revenue Officer Thomas Wyatt said Voice demand was “broad” across customer cohorts, including self-serve, ISVs, and direct enterprise. He cited use cases spanning customer care and sales automation, as well as ISVs embedding voice AI agents into their platforms. Shipchandler added that while Twilio is seeing “incredible velocity” among voice AI companies, he expects enterprise customers to ultimately be the largest drivers of spend as experimentation turns into more durable volume.
Twilio also highlighted early momentum in additional products tied to branding and rich messaging. Shipchandler said Branded Calling revenue grew roughly 6x year-over-year in Q4. He also said RCS volume grew roughly 5x quarter-over-quarter, while emphasizing it is growing from a relatively small base. The company pointed to a deal with Ramp to use RCS for account notifications and two-way interactions.
Across the broader portfolio, Viggiano said Messaging growth was solid in Q4, helped by Cyber Week and holiday volumes, while software add-on revenue growth exceeded 20% year-over-year, led by Verify, which grew more than 25% for the second consecutive quarter.
Go-to-market execution, customer wins, and multi-product adoption
Shipchandler said Twilio’s go-to-market motion is “firing on all cylinders,” with Q4 strength in self-serve and ISVs. The company reported self-serve revenue grew 28% year-over-year in Q4, and ISV revenue grew 26%. Viggiano added that from a sales channel perspective, both self-service and ISV revenue grew 25%+ in Q4, while for the full year self-serve revenue grew 21% and ISV revenue grew 24%.
Twilio said the number of large deals of $500,000 or more increased 36% year-over-year in Q4. Shipchandler called out a nine-figure renewal with a “leading marketing automation platform,” describing it as the largest deal in Twilio’s history. The company also listed several other wins, and said it signed a strategic partnership with AEG to use Twilio to understand fan behavior and deliver personalized communications around live events.
Management also emphasized progress shifting from product selling to solution selling. Shipchandler said Twilio’s multi-product customer count grew 26% year-over-year in Q4, while software add-on revenue grew more than 20%. Wyatt later said Twilio made changes to its 2026 compensation plans to drive more cross-sell and upsell, adding that the company created specialist support for its global sales team.
Margins, cash flow, and carrier fee pass-through impacts
Twilio reported Q4 non-GAAP gross profit of $682 million, with a non-GAAP gross margin of 49.9%, down 200 basis points year-over-year. Viggiano said margin was pressured by $23 million of carrier pass-through fees tied to increased Verizon A2P fees, which also contributed to a slight sequential decline. For the full year, non-GAAP gross margin was 50.5% on non-GAAP gross profit of $2.6 billion.
Non-GAAP operating margin in Q4 was 18.7%, up 220 basis points year-over-year, and full-year non-GAAP operating margin was 18.2%. Viggiano attributed the expansion to cost discipline, citing a 1% year-over-year decline in non-GAAP operating expenses.
Twilio also highlighted its stock-based compensation and capital return efforts. In Q4, stock-based compensation was 11.3% of revenue, and 11.8% for the full year. Twilio completed $198 million in share repurchases in Q4 and $855 million for the full year, which management said represented 90% of 2025 free cash flow and exceeded its prior target.
Guidance and outlook for 2026 and 2027
For Q1, Twilio guided to revenue of $1.335 billion to $1.345 billion, representing 14% to 15% reported growth and 10% to 11% organic growth. Viggiano said the guidance includes an assumed $44 million of incremental pass-through revenue from U.S. carrier fees, including increased T-Mobile fees that took effect in January.
For 2026, Twilio guided to 11.5% to 12.5% reported revenue growth and 8% to 9% organic growth, and said it continues to orient the business toward double-digit organic growth. The company expects approximately $190 million in incremental pass-through revenue from U.S. carrier A2P fees, including AT&T increases expected to take effect April 1. Viggiano said these fees have no impact on gross profit, operating income, or free cash flow dollars, but do affect margin rates; he estimated the incremental fees could reduce 2026 non-GAAP gross margin by roughly 170 basis points, and operating margin by 60 to 70 basis points, all else equal.
Twilio guided to Q1 non-GAAP income from operations of $240 million to $250 million, and full-year 2026 non-GAAP income from operations of $1.04 billion to $1.06 billion. It also guided to 2026 free cash flow of $1.04 billion to $1.06 billion, while noting Q1 free cash flow will be limited to roughly $100 million due to a planned $140 million payment tied to its company-wide cash bonus program introduced as part of efforts to reduce stock-based compensation.
Looking beyond 2026, Twilio provided a 2027 non-GAAP operating income target of at least $1.23 billion, which management said is unaffected by carrier fees and aligns with the high end of its prior framework. Shipchandler said Twilio’s roadmap is aimed at becoming a “foundational infrastructure layer” for AI-era customer engagement, including capabilities around memory, context, and orchestration across channels, with additional updates expected at the company’s Signal event in May.
About Twilio (NYSE:TWLO)
Twilio Inc (NYSE: TWLO) is a cloud communications platform-as-a-service (CPaaS) company that enables developers and enterprises to embed communications into web and mobile applications. Its core offering is a suite of programmable APIs that handle messaging (SMS, MMS, and chat), voice calling, video, and user authentication. Twilio’s platform is designed to help businesses build customer engagement and communication workflows without managing telecommunications infrastructure directly.
The company’s product portfolio includes programmable voice and messaging APIs, Twilio Video for real‑time video applications, and Twilio Authy for multi‑factor authentication.
