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

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

Shares of Twilio stock traded down $11.06 during trading on Thursday, reaching $242.71. The company’s stock had a trading volume of 4,980,428 shares, compared to its average volume of 4,105,068. The business has a 50 day moving average price of $256.85 and a 200-day moving average price of $187.78. Twilio has a 12-month low of $105.00 and a 12-month high of $308.40. The company has a market capitalization of $37.27 billion, a P/E ratio of 98.36, a price-to-earnings-growth 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.

Insider Buying and Selling

In other news, CEO Khozema Shipchandler sold 14,442 shares of Twilio stock in a transaction that occurred 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 completion of the sale, the chief executive officer directly owned 178,863 shares in the company, valued at approximately $52,054,498.89. This trade represents a 7.47% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Andrew Stafman sold 500,000 shares of the business’s stock in a transaction on Wednesday, August 12th. The stock was sold at an average price of $247.08, for a total value of $123,540,000.00. Following the sale, the director owned 120,000 shares in the company, valued at approximately $29,649,600. The trade was a 80.65% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 538,818 shares of company stock valued at $134,833,645. Corporate insiders own 0.21% of the company’s stock.

More Twilio News

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 consensus estimate and up from $1.25 a year earlier. Revenue reached $1.56 billion, also exceeding analysts’ $1.52 billion forecast. Twilio Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: Organic revenue growth was 16% in the third quarter, while the company demonstrated improving earnings power, with a reported net margin of 20.61%. Twilio Earnings Report
• Positive Sentiment: Recent analyst commentary was supportive, including a new Buy rating and a Wells Fargo analyst view that Twilio’s stock could rise. New Buy Rating for Twilio
• Neutral Sentiment: Broader economic data released Thursday showed headline PCE inflation rising 3.6% year over year, while initial jobless claims were little changed. These developments provide market context but were not specific to Twilio. GDP, PCE, Jobless Claims and Q3 Earnings
• Negative Sentiment: Twilio expects organic revenue growth to slow to 11%–12% in the fourth quarter, a notable step down from Q3’s 16% pace. The outlook also calls for lower profit, raising concerns about decelerating growth despite the earnings beat. Twilio Sees Slower Q4 Growth and Lower Profit

Wall Street Analyst Weigh In

A number of research firms have weighed in on TWLO. The Goldman Sachs Group reissued a “buy” rating and set a $330.00 price objective on shares of Twilio in a report on Friday, August 7th. KGI Securities assumed coverage on shares of Twilio in a report on Thursday, July 2nd. They issued an “outperform” rating and a $250.00 target price for the company. Citigroup reaffirmed a “market outperform” rating on shares of Twilio in a research report on Thursday, August 27th. Needham & Company LLC lifted their price target on shares of Twilio from $250.00 to $280.00 and gave the stock a “buy” rating in a research note on Friday, August 7th. Finally, Monness Crespi & Hardt lifted their price target on shares of Twilio from $246.00 to $270.00 and gave the stock a “buy” rating in a research note on Friday, August 7th. Three equities research analysts have rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating, one has assigned a Hold rating and two have given a Sell rating to the stock. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $271.04.

Twilio Company Profile

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.