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Twilio
(NYSE:TWLO)
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Rating:75Outperform
Price Target:
$271.00
▲(21.00% Upside)
Action:Reiterated
Date:08/09/26
TWLO scores well primarily on improved financial performance (profitability and robust free cash flow alongside very low leverage) and a supportive earnings update with raised guidance. The score is tempered by expensive valuation (very high P/E) and stretched technical momentum (high RSI), which increase downside risk if growth or margin expectations slip.
Positive Factors
Raised Growth and Profit Guidance
Higher full-year revenue, operating income and free cash flow targets indicate stronger execution across the platform. The upgrades provide evidence that product adoption and customer demand can support improved fundamentals beyond a single quarter.
Negative Factors
Carrier Fees Pressure Margins
Although the fees are largely passed through, they reduce reported gross margin and raise customer costs, particularly for small businesses. Persistent fee increases could pressure adoption, usage economics and the quality of reported growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Raised Growth and Profit Guidance
Higher full-year revenue, operating income and free cash flow targets indicate stronger execution across the platform. The upgrades provide evidence that product adoption and customer demand can support improved fundamentals beyond a single quarter.
Read all positive factors
Twilio Key Performance Indicators (KPIs)
Any
Active Customers
Tracks the number of customers actively using Twilio’s services, reflecting market penetration, customer retention, and potential for future revenue growth.
Tracks the number of customers actively using Twilio’s services, reflecting market penetration, customer retention, and potential for future revenue growth.
Data provided by:
The Fly
The FlyTwilio (TWLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$36.52B
Dividend YieldN/A
Average Volume (3M)2.29M
Price to Earnings (P/E)31.3
Beta (1Y)1.42
Revenue Growth17.82%
EPS Growth5490.04%
CountryUS
Employees5,587
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)7.52
Shares Outstanding153,575,230
10 Day Avg. Volume1,930,626
30 Day Avg. Volume2,290,228
Financial Highlights & Ratios
PEG Ratio-4.85
Price to Book (P/B)2.78
Price to Sales (P/S)4.29
P/FCF Ratio21.07
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$259.39Price Target Upside15.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)5.91
Revenue Forecast (FY)$5.99B
Twilio Business Overview & Revenue Model
Company Description
Twilio Inc. offers a comprehensive cloud-based communications platform, empowering developers to build, scale, and manage customer engagement features directly within their software applications across both U.S. and international markets. Central ...
How the Company Makes Money
Twilio primarily makes money by charging customers for usage of its communications services and, to a lesser extent, through recurring software subscriptions and related fees. (1) Usage-based communications revenue: The largest revenue stream come...
Twilio Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed strong positive operational and financial momentum: record revenue, gross profit, non-GAAP operating income and free cash flow, broad-based product and channel growth (notably messaging, voice, software add-ons, self-serve and ISVs), high dollar-based net expansion (116%), major customer wins and meaningful early production adoption of the new Conversations platform. Management raised both near-term and full-year organic and reported revenue guidance and upgraded profitability and free cash flow targets. The primary headwind is incremental U.S. carrier pass-through fees (~$71M in Q2, ~ $250M expected full year) that mechanically reduce reported margins and are being passed through to customers, creating pressure for some SMBs; there are also one-time GAAP adjustments and early-stage AI/RCS adoption that temper the near-term outlook. Overall, highlights significantly outweigh the lowlights, with management framing fee-driven margin impacts as largely transitory and the underlying business showing durable secular tailwinds from AI and multiproduct adoption.Positive Updates
Record Revenue and Accelerating Organic Growth
Q2 revenue of $1.5 billion, up 22% year-over-year reported and 17% year-over-year on an organic basis (organic excludes incremental U.S. carrier pass-through fees).
Negative Updates
Margin Headwinds from Incremental Carrier Pass-Through Fees
Non-GAAP gross margin declined to 49.1%, down 160 basis points year-over-year and 50 basis points quarter-over-quarter, driven by $71 million of incremental U.S. carrier pass-through fees in Q2. Management expects ~ $250 million of incremental carrier pass-through revenue for the full year, reducing full-year non-GAAP gross margin by roughly 210 basis points versus 2025, all else equal.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Accelerating Organic Growth
Q2 revenue of $1.5 billion, up 22% year-over-year reported and 17% year-over-year on an organic basis (organic excludes incremental U.S. carrier pass-through fees).
Read all positive updates
Company Guidance
Twilio initiated Q3 revenue guidance of $1.505–$1.515 billion (16.0%–16.5% reported growth; 11%–12% organic growth), noting the Q3 guide assumes $56 million of incremental U.S. carrier pass‑through fees (organic growth excludes those fees), and expects Q3 non‑GAAP income from operations of $285–$295 million. For the full year Twilio raised guidance to 13%–13.5% organic revenue growth (up from 9.5%–10.5%) and 18%–18.5% reported revenue growth (up from 14%–15%), with roughly $250 million of incremental U.S. carrier fees assumed; management said those fees would reduce 2026 full‑year non‑GAAP gross margin by about 210 basis points versus 2025. The company also raised full‑year non‑GAAP income from operations to $1.135–$1.155 billion (from $1.08–$1.10 billion) and raised full‑year free cash flow guidance to $1.135–$1.155 billion.Twilio Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
90
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.57B | 5.07B | 4.46B | 4.15B | 3.83B | 2.84B |
| Gross Profit | 2.70B | 2.48B | 2.28B | 2.04B | 1.81B | 1.39B |
| EBITDA | 366.57M | 250.54M | 117.37M | -712.32M | -964.50M | -702.55M |
| Net Income | 1.15B | 33.83M | -109.40M | -1.02B | -1.26B | -949.90M |
Balance Sheet | ||||||
| Total Assets | 10.84B | 9.77B | 9.87B | 11.61B | 12.56B | 13.00B |
| Cash, Cash Equivalents and Short-Term Investments | 2.66B | 2.47B | 2.38B | 4.01B | 4.16B | 5.36B |
| Total Debt | 1.07B | 1.08B | 1.11B | 1.16B | 1.24B | 1.29B |
| Total Liabilities | 1.86B | 1.95B | 1.91B | 1.88B | 2.01B | 1.97B |
| Stockholders Equity | 8.98B | 7.82B | 7.95B | 9.73B | 10.56B | 11.03B |
Cash Flow | ||||||
| Free Cash Flow | 1.11B | 1.03B | 657.46M | 363.52M | -334.55M | -148.21M |
| Operating Cash Flow | 1.10B | 1.04B | 716.24M | 414.75M | -254.37M | -58.19M |
| Investing Cash Flow | -396.37M | 80.95M | 1.37B | 228.60M | -616.45M | -2.49B |
| Financing Cash Flow | -857.41M | -868.69M | -2.31B | -643.61M | 45.01M | 3.10B |
Twilio Technical Analysis
Positive
223.97
Price Trends
211.92
Positive
195.89
Positive
161.09
Positive
Market Momentum
6.80
Positive
58.00
Neutral
82.19
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 223.97 is below the 20-day moving average (MA) of 228.98, above the 50-day MA of 211.92, and above the 200-day MA of 161.09, indicating a bullish trend. The MACD of 6.80 indicates Positive momentum. The RSI at 58.00 is Neutral, neither overbought nor oversold. The STOCH value of 82.19 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 49 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $28.72B | 8.79 | 32.25% | ― | 5.04% | 183.28% | |
75 Outperform | $36.52B | 31.33 | 14.15% | ― | 17.82% | 5490.04% | |
73 Outperform | $1.58B | -617.73 | <0.01% | ― | 9.25% | ― | |
69 Neutral | $2.54B | 45.47 | 7.49% | ― | 8.87% | 562.42% | |
65 Neutral | $5.79B | 53.97 | -20.59% | 0.31% | 5.22% | ― | |
64 Neutral | $287.43M | 56.97 | 3.34% | ― | 3.66% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TWLO
Twilio
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Twilio Corporate Events
Executive/Board ChangesShareholder Meetings
Twilio Shareholders Approve Governance, Compensation and Equity Plans
Positive
Jun 17, 2026
On June 16, 2026, Twilio Inc. held its 2026 Annual Meeting of Stockholders, where a quorum representing 86.40% of the Class A voting power participated in voting on five corporate governance and compensation proposals. Stockholders elected four Cl...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.