Twilio (NYSE:TWLO) Announces Quarterly Earnings Results, Beats Expectations By $0.18 EPS

Twilio (NYSE:TWLO) released its quarterly earnings data on Thursday. The technology company reported $1.65 earnings per share for the quarter, beating analysts’ consensus estimates of $1.47 by $0.18, FiscalAI reports. The business had revenue of $1.56 billion during the quarter, compared to analyst estimates of $1.52 billion. Twilio had a net margin of 21.82% and a return on equity of 5.74%. Twilio’s revenue was up 19.9% compared to the same quarter last year. During the same period last year, the business earned $1.25 EPS.

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 Stock Performance

TWLO traded down $35.95 during trading on Friday, hitting $205.95. The company’s stock had a trading volume of 7,342,535 shares, compared to its average volume of 4,228,142. The business’s 50 day simple moving average is $256.56 and its 200-day simple moving average is $188.15. The firm has a market cap of $31.63 billion, a PE ratio of 25.91, a P/E/G ratio of 4.96 and a beta of 1.35. Twilio has a one year low of $105.00 and a one year high of $308.40. The company has a quick ratio of 4.62, a current ratio of 4.62 and a debt-to-equity ratio of 0.11.

Analysts Set New Price Targets

TWLO has been the topic of several research analyst reports. KeyCorp upped their target price on shares of Twilio from $200.00 to $250.00 and gave the company an “overweight” rating in a research note on Friday, August 7th. Citizens Jmp reiterated a “market outperform” rating and issued a $275.00 price target on shares of Twilio in a research note on Thursday, August 27th. TD Cowen reaffirmed a “buy” rating on shares of Twilio in a research report on Friday. Piper Sandler upped their price objective on Twilio from $192.00 to $247.00 and gave the company a “neutral” rating in a research report on Friday, August 7th. Finally, HSBC downgraded Twilio from a “hold” rating to a “reduce” rating and set a $211.00 target price on the stock. in a report on Thursday, September 24th. Three analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus price target of $268.00.

Insider Activity

In other Twilio news, Director Andrew Stafman sold 500,000 shares of the 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 completion of the transaction, the director owned 120,000 shares in the company, valued at $29,649,600. This trade represents a 80.65% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CEO Khozema Shipchandler sold 14,442 shares of the stock in a transaction on Monday, October 5th. The shares were sold at an average price of $291.03, for a total transaction of $4,203,055.26. Following the transaction, the chief executive officer owned 178,863 shares of the company’s stock, valued at $52,054,498.89. This trade represents a 7.47% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 538,818 shares of company stock valued at $134,833,645 in the last 90 days. Company insiders own 0.21% of the company’s stock.

Twilio News Roundup

Here are the key news stories impacting Twilio this week:

• Positive Sentiment: Twilio reported third-quarter revenue of $1.56 billion, up nearly 20% year over year and above the $1.52 billion analyst consensus. Adjusted earnings of $1.65 per share also exceeded estimates of approximately $1.46-$1.47. Twilio Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: Demand for messaging, voice, email and artificial-intelligence-related communications supported growth, while profitability improved. Management also raised its full-year 2026 revenue outlook. Twilio Q3 Earnings Beat Estimates on Strong Revenue Growth
• Positive Sentiment: Record free cash flow and management’s view that long-term AI demand remains intact provide support for the company’s longer-term growth thesis. TWLO Stock and AI Demand
• Neutral Sentiment: Needham maintained a “buy” rating but lowered its price target from $280 to $240, reflecting continued confidence in Twilio while acknowledging increased near-term uncertainty. Needham Twilio Rating
• Negative Sentiment: Organic revenue growth was 16% in the third quarter, but management expects it to slow to roughly 11%-12% in the fourth quarter. The lower growth forecast overshadowed the earnings beat and raised concerns that AI benefits may take longer to accelerate. Twilio Sees Slower Q4 Growth and Lower Profit
• Negative Sentiment: The fourth-quarter outlook also points to lower profit, prompting investors to reassess Twilio’s elevated valuation despite strong cash generation and a raised full-year revenue forecast. Twilio Stock Sinks as Slowing Growth Raises Concerns

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.