Twilio (TWLO) AI Stock Analysis

Compare

11,502 Followers

TWLO Dividends

Top Page

Twilio

(NYSE:TWLO)

68Neutral

Twilio's overall score reflects strong revenue growth and improving operational efficiency, but is tempered by ongoing net losses and valuation concerns. The positive earnings call outlook, with strategic initiatives in AI and share repurchase programs, offers confidence but is offset by a conservative outlook for the second half of the year.

Positive Factors

Financial Performance

Twilio reported solid Q1 results, including upside to revenue and profitability, and raised full-year revenue and profitability guidance modestly.

Product Innovation

AI-driven accelerating customer engagement as increasing product innovation using AI to enhance personalization and user experience continues to drive revenue and cash flow growth and increasing shareholder value creation.

Revenue Growth

Twilio's revenue growth accelerated to 12%, with a significant increase in active customer accounts.

Negative Factors

Gross Margin

The adjusted gross margin of 52.3% missed the estimate of 53.2% due to a higher international mix.

Growth Quality

Twilio has a high share-based compensation, which is ignored when computing non-GAAP results, leading to lower-quality growth influenced by cost-cutting.

Margin Concerns

There are concerns about long-term margin guidance due to potential pressure from reducing share-based compensation.

Twilio (TWLO) vs. S&P 500 (SPY)

Market Cap

$15.40B

Dividend YieldN/A

Average Volume (3M)2.64M

Price to Earnings (P/E)―

Beta (1Y)1.59

Revenue Growth9.27%

EPS Growth95.03%

CountryUS

Employees5,502

SectorCommunication Services

Sector Strength85

IndustryInternet Content & Information

Share Statistics

EPS (TTM)1.14

Shares Outstanding152,674,210

10 Day Avg. Volume3,562,542

30 Day Avg. Volume2,637,145

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.94

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit6.36

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$127.60

Price Target Upside21.26% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering27

Twilio Business Overview & Revenue Model

Company DescriptionTwilio Inc. is a leading cloud communications platform that enables businesses to integrate communication capabilities such as voice, messaging, and video into their applications. Operating primarily in the technology and telecommunications sectors, Twilio provides developers with APIs (Application Programming Interfaces) that facilitate the incorporation of communication functionalities, enhancing customer engagement and interaction. The company's core products include programmable messaging, voice, and video, as well as various customer engagement solutions.

How the Company Makes MoneyTwilio makes money primarily through a usage-based revenue model where customers pay for the communication services they use via its APIs. The company charges fees based on the volume of messages sent, minutes of voice calls made, or other communication activities conducted through its platform. Twilio's key revenue streams include programmable messaging, voice, email, and video services. Additionally, Twilio offers solutions such as Twilio Flex, a cloud-based contact center platform, and Twilio Segment, a customer data platform, which contribute to its revenue. Significant partnerships with major technology companies and telecommunications carriers also play a crucial role in expanding its global reach and accessibility, further driving revenue growth.

Twilio Key Performance Indicators (KPIs)

Any

Active Customers

Active Customers
Tracks the number of customers actively using Twilio’s services, reflecting market penetration, customer retention, and potential for future revenue growth.

Chart InsightsTwilio's active customer base has shown consistent growth, reaching 335,000 by Q1 2025. This upward trend aligns with Twilio's strategic focus on cross-selling and AI integration, as highlighted in their earnings call. The company reported record revenue and profitability, driven by strong large deal activity and significant AI adoption. Despite challenges like a decline in Segment revenue and increased bad debt expenses, Twilio's commitment to innovation and a $2 billion share repurchase program suggest confidence in sustained growth and shareholder value.

Data provided by:

Main Street Data

Twilio Financial Statement Overview

Summary

Twilio exhibits strong revenue growth and operational improvements, with a positive cash flow trend. However, persistent net losses and negative ROE due to ongoing losses are concerns. The balance sheet remains robust, reflecting financial stability.

Income Statement

Positive

Twilio has shown a positive revenue growth rate, improving from $4.15 billion in 2023 to $4.58 billion TTM 2025, indicating a healthy growth trajectory. Gross profit margin is solid at around 50% TTM, but the company is still grappling with net losses, as reflected in the negative net profit margins. EBIT margin has turned positive TTM, highlighting operational improvements. However, the consistent net losses over the years pose a risk to profitability.

Balance Sheet

Positive

The company's balance sheet is robust, with a strong equity ratio of over 80% TTM, indicating low leverage and high financial stability. The debt-to-equity ratio is low, reflecting prudent financial management. Return on equity remains negative due to ongoing net losses, which is a concern. However, the substantial stockholder equity suggests resilience.

Cash Flow

Positive

Twilio's cash flow situation is improving, with a positive free cash flow growth rate TTM. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net losses. Free cash flow to net income ratio is also positive, suggesting effective capital management. The trend towards positive cash flows is promising, but historical negative cash flows highlight past challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.46B	4.15B	3.83B	2.84B	1.76B
	Gross Profit
2.28B	2.04B	1.81B	1.39B	915.66M
	EBIT
-53.71M	-876.54M	-1.03B	-915.58M	-492.90M
	EBITDA
165.55M	-100.34M	-751.82M	-653.76M	-343.24M
	Net Income Common Stockholders
-109.40M	-1.02B	-1.26B	-949.90M	-490.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.38B	4.01B	4.16B	5.36B	3.04B
	Total Assets
9.87B	11.61B	12.56B	13.00B	9.49B
	Total Debt
1.11B	1.18B	1.23B	1.27B	607.23M
	Net Debt
688.85M	521.34M	575.69M	-204.84M	-326.66M
	Total Liabilities
1.91B	1.88B	2.01B	1.97B	1.03B
	Stockholders Equity
7.95B	9.73B	10.56B	11.03B	8.45B
Cash Flow		Free Cash Flow
657.46M	363.52M	-334.55M	-148.21M	-26.48M
	Operating Cash Flow
716.24M	414.75M	-254.37M	-58.19M	32.65M
	Investing Cash Flow
1.37B	228.60M	-616.45M	-2.49B	-845.86M
	Financing Cash Flow
-2.31B	-643.61M	45.01M	3.10B	1.49B

Twilio Technical Analysis

Technical Analysis Sentiment

Positive

Last Price105.23

Price Trends

50DMA

98.12

Positive

100DMA

110.25

Negative

200DMA

92.06

Positive

Market Momentum

MACD

1.85

Negative

RSI

63.24

Neutral

STOCH

80.86

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWLO, the sentiment is Positive. The current price of 105.23 is above the 20-day moving average (MA) of 92.94, above the 50-day MA of 98.12, and above the 200-day MA of 92.06, indicating a bullish trend. The MACD of 1.85 indicates Negative momentum. The RSI at 63.24 is Neutral, neither overbought nor oversold. The STOCH value of 80.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TWLO.

Twilio Risk Analysis

Twilio disclosed 51 risk factors in its most recent earnings report. Twilio reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Twilio Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPRA	80 Outperform	$1.54B	23.61	9.18%	4.50%	26.71%	-23.67%
PINS	78 Outperform	$18.27B	9.98	47.49%	―	19.35%	―
YELP	74 Outperform	$2.23B	18.10	17.79%	―	5.61%	37.61%
TWLO	68 Neutral	$15.40B	―	-0.39%	―	9.27%	95.03%
MTCH	65 Neutral	$7.39B	14.99	-865.98%	1.25%	3.41%	-10.41%
SNAP	61 Neutral	$13.97B	―	-23.97%	―	14.91%	59.90%
Sector *	60 Neutral	$13.41B	7.23	-2.74%	3.81%	2.12%	-37.24%

* Communication Services Sector Average

Performance Comparison

TWLO

Twilio

105.23

45.13

75.09%

YELP

Yelp

35.74

-1.05

-2.85%

SNAP

Snap

8.22

-7.79

-48.66%

OPRA

Opera

17.16

4.05

30.89%

PINS

27.86

-14.14

-33.67%

MTCH

Match Group

27.47

-2.86

-9.43%

Twilio Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 7.51%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong start to 2025 with significant revenue growth driven by innovation in AI products and successful ISV and self-serve growth strategies. Despite the decline in gross margin and cautious outlook for the second half due to macroeconomic uncertainties, the overall performance and strategic initiatives suggest a positive trajectory.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Twilio reached $1.172 billion in revenue for Q1 2025, a 12% increase year-over-year, marking the third consecutive quarter of double-digit revenue growth and year-over-year growth acceleration. Communications revenue grew by 13% year-over-year.

Non-GAAP Income and Cash Flow

Record non-GAAP income from operations of $213 million, up 34% year-over-year, and $178 million of free cash flow were reported. Non-GAAP operating margin improved by 300 basis points year-over-year.

AI Product Innovation

Introduction of new AI-enabled products such as Conversation Relay and Generative Custom Operators, leading to increased customer engagement and potential for automation of complex tasks.

ISV and Self-Serve Growth

Strong traction in ISV customers with notable wins, and 85% of inbound leads were handled with AI, resulting in a 3x higher likelihood of upgrading from free to paid accounts.

Share Repurchase Program

A $2 billion share repurchase program was authorized, with $130 million repurchased in Q1 and more than $90 million in April.

Positive Customer Use Cases

Partnerships and customer wins, including Cedar's AI voice agent Kora and Chelsea Football Club's use of Twilio Segment for personalized experiences.

Negative Updates

Decline in Gross Margin

Non-GAAP gross margin declined to 51.3%, down 270 basis points year-over-year, primarily due to non-recurring hosting credits and a higher mix of international messaging revenue.

Segment Revenue Growth Lag

Segment revenue was $76 million, up only 1% year-over-year, with a dollar-based net expansion rate of 94%, indicating slower growth compared to other business areas.

Conservative Second Half Outlook

Prudent approach to H2 outlook due to macroeconomic uncertainties, with only a portion of Q1 revenue beat flowing through to full-year guidance.

Company Guidance

During the Twilio First Quarter 2025 Earnings Call, the company provided several key metrics indicating a strong performance. Twilio reported a revenue of $1.172 billion, representing a 12% year-over-year increase, and a non-GAAP income from operations of $213 million, up 34% compared to the previous year. Furthermore, the company generated $178 million in free cash flow despite a $122 million payout for their annual cash bonus program. Revenue from Twilio's communications business reached $1.097 billion, marking a 13% growth year-over-year, driven by progress in key growth levers such as ISVs and self-serve. The dollar-based net expansion rate for communications was 108%, while for the segment it was 94%, with an overall company rate of 107%. Non-GAAP gross profit was $602 million, with a gross margin of 51.3%. Additionally, Twilio raised its full-year 2025 organic revenue growth guidance to a range of 7.5% to 8.5% and increased its full-year non-GAAP income from operations guidance to between $850 million and $875 million. The company also highlighted their commitment to returning shareholder value through a $2 billion share repurchase program, having repurchased $130 million in shares during Q1.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.