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Twilio Inc (TWLO)
NYSE:TWLO
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Twilio
(NYSE:TWLO)
Rating:68Neutral
Price Target:―
Positive Factors
Partnerships
The partnership with Microsoft to integrate AI tools with Twilio's platform capabilities is a significant development.
Product Innovation
Twilio's growing conversational AI portfolio, highlighted by its ConversationRelay product, positions the company well to provide software tools and infrastructure for voice and chat-based AI agents.
Revenue Growth
Signs of revenue growth revival with 1Q25 revenue growth of 12.0% y-o-y, the highest in eight quarters.
Negative Factors
Competition
Risks include competition, macro/usage trends, telco fees, and international expansion.
Cost Management
Remain sceptical about long-term margin guidance due to potential pressure to increase cash compensation and limited scope for further improvement in costs.
Twilio (TWLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.33B
Dividend YieldN/A
Average Volume (3M)2.79M
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth9.27%
EPS Growth95.03%
CountryUS
Employees5,502
SectorCommunication Services
Sector Strength89
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.14
Shares Outstanding152,674,210
10 Day Avg. Volume2,711,374
30 Day Avg. Volume2,793,457
Financial Highlights & Ratios
PEG Ratio-6.93
Price to Book (P/B)2.02
Price to Sales (P/S)0.00
P/FCF Ratio24.04
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit6.85
Enterprise Value/Ebitda28.64
Forecast
1Y Price Target
$128.09Price Target Upside12.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
Twilio Business Overview & Revenue Model
Company DescriptionTwilio Inc., together with its subsidiaries, provides a cloud communications platform that enables developers to build, scale, and operate customer engagement within software applications in the United States and internationally. Its customer engagement platform provides a set of application programming interfaces that handle the higher-level communication logic needed for nearly every type of customer engagement, as well as enable developers to embed voice, messaging, video, and email capabilities into their applications. The company was incorporated in 2008 and is headquartered in San Francisco, California.
How the Company Makes MoneyTwilio generates revenue primarily through a usage-based model where customers are charged based on their consumption of communication services such as voice, SMS, email, and video APIs. The company earns money by charging fees for each interaction, like a text message sent or a voice call made using its platform. Additionally, Twilio offers premium service tiers and support plans that provide enhanced functionalities and dedicated customer support for higher fees. Significant partnerships with major cloud providers and telecommunications companies further bolster its revenue streams by expanding its network capabilities and market reach. Twilio's acquisition of companies like SendGrid has also diversified its offerings, allowing it to capture additional market segments and drive revenue growth.
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:
Main Street Data
Main Street DataTwilio 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
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.65
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.72
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.58B | 4.46B | 4.15B | 3.83B | 2.84B | 1.76B | Gross Profit |
| 2.30B | 2.28B | 2.04B | 1.81B | 1.39B | 915.66M | EBIT |
| 12.57M | -53.71M | -876.54M | -1.03B | -915.58M | -492.90M | EBITDA |
| 218.44M | 165.55M | -100.34M | -751.82M | -653.76M | -343.24M | Net Income Common Stockholders |
| -34.04M | -109.40M | -1.02B | -1.26B | -949.90M | -490.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.83B | 2.38B | 4.01B | 4.16B | 5.36B | 3.04B | Total Assets |
| 11.29B | 9.87B | 11.61B | 12.56B | 13.00B | 9.49B | Total Debt |
| 1.19B | 1.11B | 1.18B | 1.23B | 1.27B | 607.23M | Net Debt |
| 519.05M | 688.85M | 521.34M | 575.69M | -204.84M | -326.66M | Total Liabilities |
| 1.84B | 1.91B | 1.88B | 2.01B | 1.97B | 1.03B | Stockholders Equity |
| 9.45B | 7.95B | 9.73B | 10.56B | 11.03B | 8.45B |
| Cash Flow | Free Cash Flow | ||||
| 671.20M | 657.46M | 363.52M | -334.55M | -148.21M | -26.48M | Operating Cash Flow |
| 717.16M | 716.24M | 414.75M | -254.37M | -58.19M | 32.65M | Investing Cash Flow |
| 1.16B | 1.37B | 228.60M | -616.45M | -2.49B | -845.86M | Financing Cash Flow |
| -2.07B | -2.31B | -643.61M | 45.01M | 3.10B | 1.49B |
Twilio Technical Analysis
Positive
113.49
Price Trends
99.27
Positive
110.68
Positive
95.09
Positive
Market Momentum
5.33
Negative
62.70
Neutral
61.47
Neutral
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 113.49 is above the 20-day moving average (MA) of 107.67, above the 50-day MA of 99.27, and above the 200-day MA of 95.09, indicating a bullish trend. The MACD of 5.33 indicates Negative momentum. The RSI at 62.70 is Neutral, neither overbought nor oversold. The STOCH value of 61.47 is Neutral, 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 2 New Risks
1.
The success of our products depends, in part, on our ability to integrate them with third-party products used by us or our customers and to ensure that they operate effectively with evolving platforms and technologies. Q4, 2024
2.
If our customers terminate or reduce their usage of our products, our business, results of operations and financial condition would be adversely affected. Q4, 2024
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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.55B | 23.57 | 9.18% | 4.49% | 26.71% | -23.67% | |
77 Outperform | $20.91B | 11.22 | 48.41% | ― | 17.81% | 1175.52% | |
77 Outperform | $2.39B | 17.99 | 19.74% | ― | 5.93% | 29.17% | |
68 Neutral | $17.33B | ― | -0.39% | ― | 9.27% | 95.03% | |
66 Neutral | $13.75B | ― | -23.97% | ― | 14.91% | 59.90% | |
60 Neutral | $14.12B | 6.43 | -3.56% | 3.69% | 2.49% | -35.43% | |
57 Neutral | $7.16B | 14.41 | -865.98% | 1.30% | 0.40% | -11.05% |
* Communication Services Sector Average
Performance Comparison
TWLO
Twilio
113.49
54.52
92.45%
YELP
Yelp
37.40
1.09
3.00%
SNAP
Snap
8.23
-7.09
-46.28%
OPRA
Opera
17.37
3.38
24.16%
PINS
Pinterest
30.90
-10.60
-25.54%
MTCH
Match Group
29.21
0.21
0.72%
Twilio Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 15.95%|
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.