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Twilio
(NYSE:TWLO)
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Rating:67Neutral
Price Target:
$224.00
▲(59.87% Upside)
Action:Downgraded
Date:06/18/26
TWLO scores as moderately attractive: improved profitability, strong free cash flow, and a low-leverage balance sheet support the score, reinforced by raised guidance and strong operational momentum from the latest earnings call. Offsetting these positives are a very high P/E (limited valuation support) and only mixed near-term technicals following a pullback below the 20-day average.
Positive Factors
Profitability & Cash Generation
Twilio's shift to sustained positive operating cash flow and matching free cash flow (~$1.0B TTM) is a durable improvement in cash generation quality. This underpins reinvestment, share repurchases and margin resilience, reducing reliance on financing and improving strategic optionality over the next 2–6 months.
Negative Factors
Carrier Pass‑Through Fee Headwinds
Significant incremental carrier fees materially compress gross margins and are largely outside Twilio's pricing power. This reduces durable gross margin sustainability and forces either higher customer prices or lower profitability, creating structural margin pressure over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Cash Generation
Twilio's shift to sustained positive operating cash flow and matching free cash flow (~$1.0B TTM) is a durable improvement in cash generation quality. This underpins reinvestment, share repurchases and margin resilience, reducing reliance on financing and improving strategic optionality over the next 2–6 months.
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
$31.37B
Dividend YieldN/A
Average Volume (3M)2.14M
Price to Earnings (P/E)304.1
Beta (1Y)1.18
Revenue Growth15.67%
EPS GrowthN/A
CountryUS
Employees5,587
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.68
Shares Outstanding151,773,860
10 Day Avg. Volume1,600,327
30 Day Avg. Volume2,139,336
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
$219.59Price Target Upside56.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering25
EPS Forecast (FY)5.71
Revenue Forecast (FY)$5.83B
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:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call highlighted broad-based and accelerating revenue and gross profit growth, record non-GAAP profitability and operating margins, strong product momentum across voice, messaging, software add-ons and channels (self-serve, ISV), and upgraded full-year guidance. Primary headwinds are incremental carrier pass-through fees that depress margin rates (with roughly $235M of incremental fees expected for the year), some near-term deceleration in Q2 guidance versus Q1, and the early-stage nature of RCS and enterprise Voice AI deployments. Overall, operational momentum and improved cost discipline substantially outweigh the transitory fee headwinds and timing-related adoption risks.Positive Updates
Strong Top-Line Growth
Reported revenue of $1.4 billion in Q1 FY2026, up 20% year-over-year; organic revenue up 16% year-over-year — the fastest organic growth rate since 2022.
Negative Updates
Carrier Fee Headwinds Depress Margins
Incremental U.S. carrier pass-through fees were $46 million in Q1 (associated with increased A2P fees), driving a 180 basis point YoY decline in non-GAAP gross margin to 49.6% and a 40 basis point QoQ decline. Management expects ~ $235 million incremental pass-through revenue for the full year, reducing 2026 non-GAAP gross margin by roughly 200 basis points vs. 2025.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth
Reported revenue of $1.4 billion in Q1 FY2026, up 20% year-over-year; organic revenue up 16% year-over-year — the fastest organic growth rate since 2022.
Read all positive updates
Company Guidance
Twilio guided Q2 revenue of $1.42B–$1.43B (15.5%–16.5% reported growth; 10%–11% organic growth), which assumes $71M of incremental U.S. carrier fees taking effect May 1, and expects Q2 non‑GAAP income from operations of $250M–$260M (including annual merit and SIGNAL costs). For the full year the company raised targets to 9.5%–10.5% organic revenue growth and 14%–15% reported revenue growth (up from 8%–9% and 11.5%–12.5%, respectively), expects full‑year incremental pass‑through carrier revenue of ~ $235M (up from $190M), expects full‑year non‑GAAP gross profit dollar growth to be similar to organic revenue growth, and said the carrier fees should reduce FY26 non‑GAAP gross margin by roughly 200 bps versus FY25. Twilio also raised full‑year non‑GAAP income from operations to $1.08B–$1.10B (from $1.04B–$1.06B) and raised full‑year free cash flow to $1.08B–$1.10B.Twilio Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.30B | 5.07B | 4.46B | 4.15B | 3.83B | 2.84B |
| Gross Profit | 2.58B | 2.48B | 2.28B | 2.04B | 1.81B | 1.39B |
| EBITDA | 310.79M | 250.54M | 117.37M | -712.32M | -964.50M | -702.55M |
| Net Income | 103.96M | 33.83M | -109.40M | -1.02B | -1.26B | -949.90M |
Balance Sheet | ||||||
| Total Assets | 9.58B | 9.77B | 9.87B | 11.61B | 12.56B | 13.00B |
| Cash, Cash Equivalents and Short-Term Investments | 2.35B | 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 | 1.79B | 1.95B | 1.91B | 1.88B | 2.01B | 1.97B |
| Stockholders Equity | 7.78B | 7.82B | 7.95B | 9.73B | 10.56B | 11.03B |
Cash Flow | ||||||
| Free Cash Flow | 987.02M | 1.03B | 657.46M | 363.52M | -334.55M | -148.21M |
| Operating Cash Flow | 1.00B | 1.04B | 716.24M | 414.75M | -254.37M | -58.19M |
| Investing Cash Flow | 58.90M | 80.95M | 1.37B | 228.60M | -616.45M | -2.49B |
| Financing Cash Flow | -995.47M | -868.69M | -2.31B | -643.61M | 45.01M | 3.10B |
Twilio Technical Analysis
Positive
140.11
Price Trends
202.30
Positive
167.65
Positive
145.36
Positive
Market Momentum
4.23
Positive
51.60
Neutral
17.28
Positive
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 140.11 is below the 20-day moving average (MA) of 203.96, below the 50-day MA of 202.30, and below the 200-day MA of 145.36, indicating a bullish trend. The MACD of 4.23 indicates Positive momentum. The RSI at 51.60 is Neutral, neither overbought nor oversold. The STOCH value of 17.28 is Positive, 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.93B | 34.79 | 7.37% | ― | 9.31% | ― | |
76 Outperform | $27.25B | 13.13 | 21.79% | ― | 4.98% | 103.70% | |
71 Outperform | $3.50B | 42.60 | -16.71% | ― | 4.90% | ― | |
67 Neutral | $31.37B | 304.09 | 1.32% | ― | 15.67% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $2.21B | -426.43 | -1.28% | ― | 4.88% | -534.80% | |
60 Neutral | $287.82M | 170.91 | 1.20% | ― | 2.89% | ― |
* Technology Sector Average
TWLO
Twilio
206.78
75.78
57.85%
EGHT
8X8
1.88
-0.05
-2.59%
RNG
RingCentral
41.32
14.74
55.45%
FIVN
Five9
25.58
-1.36
-5.05%
BAND
Bandwidth
71.81
56.27
362.10%
ZM
Zoom Video Communications
91.13
16.28
21.75%
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.