Twilio (NYSE:TWLO) Announces Earnings Results

Twilio (NYSE:TWLO) posted its earnings results on Thursday. The technology company reported $1.65 earnings per share for the quarter, beating the consensus estimate of $1.47 by $0.18, FiscalAI reports. Twilio had a return on equity of 5.09% and a net margin of 20.61%. The company had revenue of $1.56 billion for the quarter, compared to analyst estimates of $1.52 billion. During the same quarter in the prior year, the company earned $1.25 earnings per share. Twilio’s revenue was up 19.9% compared to the same quarter last year.

Here are the key takeaways from Twilio’s conference call:

• Strong Q3 execution: Revenue reached a record $1.56 billion, up 20% year over year reported and 16% organically, while non-GAAP operating income rose 39% to $326 million and free cash flow reached a record $370 million.
• Twilio raised its full-year 2026 outlook to 15% organic revenue growth, $1.19–$1.20 billion in non-GAAP operating income and $1.19–$1.20 billion in free cash flow. Management also expects at least 10% organic revenue growth and $1.35 billion in operating income and free cash flow in 2027.
• AI and higher-value products are gaining traction: Voice revenue grew more than 20%, software add-ons grew more than 25%, and self-serve voice revenue increased roughly 50% or more. Management highlighted growing adoption of ConversationRelay, Conversation Intelligence, Branded Calling, RCS and other products by AI-native and enterprise customers.
• Twilio is developing an identity product for validating AI agents, currently in private beta with general availability planned for 2027; management expects usage-based monetization and software-like gross margins but has not finalized pricing.
• Messaging growth decelerated modestly to 17% organically from 18% in Q2, primarily because ISV customers faced tougher comparisons. Incremental U.S. carrier passthrough fees are also expected to reduce full-year 2026 non-GAAP gross margin by roughly 200 basis points, while Q4 gross profit growth is expected to track organic revenue growth because of seasonal hosting costs.

Twilio Trading Down 17.3%

Shares of Twilio stock traded down $41.76 during trading hours on Friday, hitting $200.14. The company’s stock had a trading volume of 3,943,630 shares, compared to its average volume of 2,643,313. Twilio has a 1-year low of $105.00 and a 1-year high of $308.40. The business has a fifty day moving average of $256.85 and a 200 day moving average of $187.78. The company has a market capitalization of $30.74 billion, a PE ratio of 27.78, a P/E/G ratio of 5.20 and a beta of 1.35. The company has a quick ratio of 4.62, a current ratio of 4.62 and a debt-to-equity ratio of 0.11.

Insiders Place Their Bets

In other news, Director Andrew Stafman sold 500,000 shares of the business’s stock in a transaction on Wednesday, August 12th. The shares were sold at an average price of $247.08, for a total transaction of $123,540,000.00. Following the transaction, the director directly owned 120,000 shares of the company’s stock, valued at approximately $29,649,600. The trade was a 80.65% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CFO Aidan Viggiano sold 9,084 shares of the company’s stock in a transaction dated Wednesday, September 30th. The shares were sold at an average price of $294.65, for a total transaction of $2,676,600.60. Following the completion of the transaction, the chief financial officer directly owned 99,246 shares of the company’s stock, valued at approximately $29,242,833.90. The trade was a 8.39% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 538,818 shares of company stock worth $134,833,645 over the last quarter. 0.21% of the stock is owned by corporate insiders.

Analysts Set New Price Targets

Several brokerages have weighed in on TWLO. Rosenblatt Securities boosted their price target on Twilio from $275.00 to $290.00 and gave the company a “buy” rating in a report on Tuesday, September 22nd. HSBC cut Twilio from a “hold” rating to a “reduce” rating and set a $211.00 price target for the company. in a report on Thursday, September 24th. The Goldman Sachs Group reiterated a “buy” rating and set a $330.00 price objective on shares of Twilio in a report on Friday, August 7th. Jefferies Financial Group restated a “buy” rating and issued a $240.00 target price on shares of Twilio in a report on Friday, August 7th. Finally, JPMorgan Chase & Co. increased their price target on shares of Twilio from $260.00 to $335.00 and gave the stock an “overweight” rating in a research note on Thursday, October 8th. Three research analysts have rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, one has issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $268.00.

Trending Headlines about Twilio

Here are the key news stories impacting Twilio this week:

• Positive Sentiment: Twilio reported third-quarter earnings of $1.65 per share, above the $1.46-$1.47 analyst consensus, while revenue of $1.56 billion exceeded estimates of approximately $1.52 billion. Revenue increased nearly 20% year over year, supported by demand for messaging, voice and artificial-intelligence services. Twilio Q3 Earnings Beat Estimates on Strong Revenue Growth
• Positive Sentiment: The quarter showed improved profitability, with earnings rising from $1.25 per share a year earlier, and Twilio raised its full-year revenue outlook. These results support the view that the company is converting growth into stronger earnings. Twilio Earnings Report and Conference Call
• Positive Sentiment: Needham maintained a “buy” rating, although it reduced its price target from $280 to $240. The revised target still implies meaningful potential upside based on the reported share price. Needham Analyst Ratings
• Neutral Sentiment: Management highlighted continued AI demand, but investors are assessing whether AI-related products can materially accelerate Twilio’s growth rather than simply support existing trends. Twilio Stock Sinks as Slowing Growth Throws Cold Water on Benefits From AI
• Negative Sentiment: Organic revenue growth was 16% in the third quarter, but management expects it to slow to approximately 11%-12% in the fourth quarter. The weaker forward growth forecast overshadowed the earnings and revenue beats, prompting a sharp decline in the stock. Twilio Sees Slower Q4 Growth and Lower Profit
• Negative Sentiment: The fourth-quarter outlook also calls for lower profit, reinforcing concerns that Twilio’s growth is decelerating and that the benefits from AI may take longer to appear. Twilio Beat Expectations, Shares Plunged on Weaker Growth Forecast

About Twilio

Twilio Inc (NYSE:TWLO) provides a cloud-based customer engagement platform that enables businesses to communicate with customers through software and application programming interfaces (APIs). Its services support messaging, voice, video, email, authentication, contact centers and other digital interactions across mobile and web applications.

The company’s products include programmable communications tools, Twilio SendGrid for email delivery, Twilio Verify for user authentication, Twilio Flex for cloud contact centers, and Twilio Segment for collecting and using customer data.