Twilio Inc. (TWLO) Earnings
Twilio Inc. is expected to report next earnings on October 29, 2026 (in NaN days), with a consensus EPS estimate of $1.45. TWLO has beaten EPS estimates in 12 of its last 12 reported quarters (average surprise +13.3% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 6, 2026 | $1.32 | $1.47 | +10.9% | $1.5B | +4.8% |
| Apr 30, 2026 | $1.27 | $1.50 | +18.1% | $1.4B | +4.7% |
| Feb 12, 2026 | $1.24 | $1.33 | +7.3% | $1.4B | +6.2% |
| Oct 30, 2025 | $1.07 | $1.25 | +16.8% | $1.3B | +3.8% |
| Aug 7, 2025 | $1.05 | $1.19 | +13.3% | $1.2B | +3.4% |
| May 1, 2025 | $0.96 | $1.14 | +19.0% | $1.2B | +2.9% |
| Feb 13, 2025 | $0.99 | $1.00 | +1.0% | $1.2B | +1.0% |
| Oct 30, 2024 | $0.86 | $1.02 | +18.9% | $1.1B | +3.6% |
| Aug 1, 2024 | $0.73 | $0.87 | +18.9% | $1.1B | +1.9% |
| Feb 14, 2024 | $0.57 | $0.86 | +50.9% | $1.1B | +3.2% |
| Feb 15, 2023 | $-0.09 | $0.22 | +344.4% | $1.0B | +2.4% |
| Nov 3, 2022 | $-0.39 | $-0.27 | +30.8% | $983M | +1.0% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · August 6, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Core Business Growth Trends - Organic revenue growth accelerated for the quarter, driven by strong volume gains and strong go-to-market execution, with robust customer additions supported by the new conversations layer and updated Twilio console. - Multi-product customer revenue growth is accelerating, driving higher expansion within the installed customer base, and the $1 million+ annual customer cohort is growing over 20% year-over-year. - Cross-sell and upsell momentum is strong: customers that start with one channel frequently add additional channels and software add-ons, supporting 25%+ year-over-year software add-on growth. ### AI-Related Operational Progress - AI tailwinds are most pronounced in the voice segment, with both AI-native startups and established enterprises choosing Twilio as their voice infrastructure for AI-powered customer engagement workflows. AI-native customers show extremely high expansion rates, with many starting small and growing rapidly into large, multi-product customers. - Twilio's Conversation Suite, which includes AI-powered Conversation Memory and Conversation Intelligence, is gaining strong customer traction, with early adoption from both existing customers improving existing workflows and new customers building net-new AI workflows. - AI-native voice AI startup customers are consolidating spend on Twilio's platform to take full advantage of the Conversation Suite's context and orchestration capabilities, rather than diversifying across multiple providers. ### Product and Infrastructure Efficiency - The new unified Twilio console has migrated most existing customers, with top-of-funnel conversion 90% higher than the prior console due to reduced friction for new customer sign-ups and onboarding. Free credits in the new console encourage customer trial of multiple products, with positive leading indicators for future cross-sell. - Twilio has completed cloud migration for its email business, driving ongoing margin improvements, and has secured direct 10 DLC and toll-free messaging connections with all major US carriers, driving cost efficiencies for the messaging business. ### Strategic Positioning - Twilio positions itself as a neutral, infrastructure-agnostic provider, supporting integrations with all major LLM providers, cloud platforms, and system of record platforms. This neutrality is a key competitive advantage as customers prefer to work with an independent party that can integrate with their existing stack choices.
Guidance
- For Q3 2026, management is guiding revenue of $1.505 to $1.515 billion, representing 16% to 16.5% reported year-over-year growth and 11% to 12% organic growth (excluding incremental US carrier pass-through fees). This is the highest organic growth guidance the company has issued in three years. - Q3 2026 non-GAAP operating income guidance is $285 to $295 million. Q3 guidance assumes $56 million in incremental US carrier pass-through fees. - For full-year 2026, management raised organic revenue growth guidance to 13% to 13.5%, up from the prior 9.5% to 10.5% range. Reported revenue growth guidance was raised to 18% to 18.5%, up from the prior 14% to 15% range. Full-year guidance assumes ~$250 million in total incremental US carrier pass-through fees. - Full-year 2026 non-GAAP operating income guidance was raised to $1.135 to $1.155 billion, up from the prior $1.08 to $1.1 billion range. Full-year free cash flow guidance was also raised to $1.135 to $1.155 billion. - Management reaffirmed that full-year non-GAAP gross profit growth is expected to match the organic revenue growth rate. Incremental pass-through carrier fees are expected to reduce full-year 2026 non-GAAP gross margin by ~210 bps compared to 2025, but have no impact on gross profit dollars, operating income, or free cash flow.
Segment performance
By product segment: 1. Messaging: 28% year-over-year revenue growth, with 10 percentage points of growth coming from incremental US carrier pass-through fees. Growth was driven by strong overall volumes and expansion of newer channels including WhatsApp and RCS. 2. Voice: Year-over-year revenue growth accelerated above 20%, driven by a balance of core volume growth and high-growth software add-ons. Branded calling and conversational intelligence both grew triple-digit year-over-year. 3. Software add-ons: Total segment revenue grew 25%+ year-over-year, led by Verify which accelerated to 30%+ growth. By go-to-market channel: 1. Self-serve: 30%+ year-over-year revenue growth. 2. ISV: 25%+ year-over-year revenue growth. Overall financial performance: Q2 2026 dollar-based net expansion rate (DB&E) was 116%, with 5 percentage points of contribution from incremental carrier fees. Non-GAAP gross profit hit a record $736 million, with 18% year-over-year growth (the fifth consecutive quarter of accelerating gross profit growth). Non-GAAP gross margin was 49.1%, down 160 bps year-over-year and 50 bps quarter-over-quarter, entirely due to $71 million in incremental US carrier pass-through fees; excluding these fees, non-GAAP gross margin would have risen 60 bps year-over-year. Non-GAAP operating income was $285 million (ahead of expectations), up 29% year-over-year, with a 19% non-GAAP operating margin. GAAP operating income was $85 million, impacted by a $33 million non-recurring prepaid asset impairment that did not affect non-GAAP results or free cash flow. GAAP net income included a one-time $944 million non-cash benefit from a deferred tax asset valuation allowance release, which also did not impact non-GAAP results. Free cash flow hit a record $353 million in the quarter.
Risks & headwinds
No explicit material risks or operational failures were discussed during the earning call. Management noted that while there may be ups and downs as the AI ecosystem develops, the secular AI tailwind for Twilio's business remains clear and durable.
Analyst Q&A
Q: What is driving the recent upside surprise in messaging growth, and how is AI driving performance across messaging vs. voice? /
A: Management stated broad-based strength across both messaging and voice, with AI tailwinds still at an early stage overall and more visible in voice currently. They shared concrete examples of fast-growing AI-native customers that started with voice, then tripled connectivity spend and expanded into high-margin software add-ons to reach $6-$9 million annual run rates in 1-2 years. They added that strength comes from both existing channel momentum and traction for the new AI-powered Conversation Suite, particularly Conversation Memory and Intelligence.
Q: What is driving accelerating dollar-based net expansion and gross profit growth, and can this strength continue into the second half? /
A: Incremental carrier fees contributed 5 percentage points to the 116% Q2 DB&E, but DB&E still accelerated 1 percentage point quarter-over-quarter after adjusting for fees. Strength comes from healthy existing customer expansion, especially among ISVs and multi-product customers. Gross profit acceleration comes from a mix of faster growth in higher-margin products (software add-ons, voice features, support services) and ongoing cost efficiencies from completed cloud migration and new direct carrier connections. Management reaffirmed guidance that gross profit will grow in line with organic revenue through the second half.
Q: How early are we in the AI voice tailwind, what drives its durability, and how does Twilio benefit regardless of where value accrues in the AI stack? /
A: Management emphasized we are still very early innings, as consumer adoption of voice AI interactions remains very low today, with most volume still coming in the future. The tailwind is durable because Twilio's AI-powered tools deliver clear high ROI for customers, both driving revenue uplift and reducing token costs by using only relevant context for interactions. Regardless of where model or application layer value accrues, Twilio owns the critical connectivity channel to end users, so it benefits from any growth in AI-driven interactions.
Q: How does Twilio view OpenAI and other large AI/platform players, as customers, partners, or competitors? /
A: Management stated Twilio's core positioning is as a neutral infrastructure provider (the "Switzerland" of the communications ecosystem), and most large AI players are primarily partners. Many ecosystem players simultaneously fill multiple roles depending on the use case, but customers prefer working with a neutral party that can integrate with any LLM, cloud, or system of record. Twilio focuses on providing the connectivity infrastructure that all AI agents need to reach end users, and has existing integrations with all major frontier AI model providers and development platforms.