Twilio Inc (TWLO)
NYSE:TWLO
Top Page
Twilio
(NYSE:TWLO)
Select Model
Select Model
Rating:71Outperform
Price Target:
$136.00
▲(15.60% Upside)
Action:UpgradedDate:03/25/26
TWLO scores well on improving fundamentals—particularly strong free cash flow and a profitability inflection—reinforced by constructive forward guidance on operating income and free cash flow. The main constraints on the score are very expensive valuation (high P/E) and a mixed technical backdrop, with margin headwinds from carrier fees also a notable risk.
Positive Factors
Strong Free Cash Flow
Consistent, scaled free cash flow near $1B in 2025 materially improves Twilio's financial optionality. Durable cash generation supports sustained investment in product development, disciplined buybacks, and working capital needs, reducing funding risk even if revenue growth softens.
Negative Factors
Carrier A2P Fee Headwind
Industry-wide A2P carrier fee hikes create a structural cost pass-through that compresses gross and operating margins. Because these are external fee increases, Twilio has limited pricing power to fully offset them without hurting usage, reducing long-term operating leverage and resilience.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Free Cash Flow
Consistent, scaled free cash flow near $1B in 2025 materially improves Twilio's financial optionality. Durable cash generation supports sustained investment in product development, disciplined buybacks, and working capital needs, reducing funding risk even if revenue growth softens.
Read all positive factors
Twilio (TWLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.83B
Dividend YieldN/A
Average Volume (3M)1.77M
Price to Earnings (P/E)643.2
Beta (1Y)1.12
Revenue Growth12.84%
EPS GrowthN/A
CountryUS
Employees5,502
SectorTechnology
Sector Strength88
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.33
Shares Outstanding151,513,990
10 Day Avg. Volume1,781,172
30 Day Avg. Volume1,769,243
Financial Highlights & Ratios
PEG Ratio-4.82
Price to Book (P/B)2.78
Price to Sales (P/S)4.29
P/FCF Ratio21.07
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue3.61
Enterprise Value/Gross Profit7.37
Enterprise Value/Ebitda67.99
Forecast
1Y Price Target
$145.63Price Target Upside23.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
EPS Forecast (FY)5.42
Revenue Forecast (FY)$5.69B
Twilio Business Overview & Revenue Model
Company Description
Twilio 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 enga...
How the Company Makes Money
Twilio primarily makes money by charging businesses to use its cloud platform services, which are generally consumed on a usage-based model. The company’s core revenue stream is its Communications offerings, where customers pay per unit of activit...
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 Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented strong, broad-based operational and financial progress: record Q4 and full-year revenue, accelerating voice and Voice AI adoption, margin expansion on a non-GAAP basis, robust free cash flow, GAAP profitability for the first full year, large deal momentum, and disciplined capital returns. The primary headwinds are margin pressure from industry-wide A2P carrier fee increases and messaging mix (lower-margin product), plus a planned Q1 cash bonus that will temporarily reduce free cash flow. Management provided constructive guidance for 2026 and a clear path to a 2027 operating income target, indicating confidence in sustaining momentum despite margin-rate headwinds that are largely pass-through in nature.Positive Updates
Record Q4 and Full-Year Revenue
Q4 revenue of $1,400,000,000 (record), up 14% year over year reported and 12% organic. Full-year 2025 revenue of $5,100,000,000, up 14% reported and 13% organic.
Negative Updates
Carrier A2P Fee Increases Pressure Margins
All major U.S. carriers announced A2P fee increases. Incremental pass-through revenue of approximately $190,000,000 is expected in 2026, which the company estimates will reduce full-year 2026 non-GAAP gross margin by ~170 basis points and operating margin by ~60–70 basis points. Q4 included $23,000,000 in carrier pass-through fees that primarily drove a sequential gross margin decline.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Q4 and Full-Year Revenue
Q4 revenue of $1,400,000,000 (record), up 14% year over year reported and 12% organic. Full-year 2025 revenue of $5,100,000,000, up 14% reported and 13% organic.
Read all positive updates
Company Guidance
Twilio guided Q1 revenue of $1,335 million to $1,345 million (14–15% reported, 10–11% organic), which includes an assumed $44 million of incremental U.S. carrier pass‑through fees (up $21M vs. Q4); Q1 non‑GAAP income from operations of $240 million to $250 million and Q1 free cash flow of roughly $100 million (impacted by a planned $140 million cash bonus). For full‑year 2026 the company expects reported revenue growth of 11.5–12.5% and organic growth of 8–9%, about $190 million of incremental pass‑through carrier revenue (which Twilio estimates will reduce 2026 non‑GAAP gross margin by ~170 bps and operating margin by ~60–70 bps), full‑year non‑GAAP income from operations of $1,040 million to $1,060 million, full‑year free cash flow of $1,000 million to $1,040 million, and non‑GAAP gross profit dollar growth roughly in line with organic revenue growth; management also reiterated a 2027 non‑GAAP operating income target of at least $1,230 million (stated as unaffected by carrier fees).Twilio Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
74
Positive
Cash Flow
86
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.07B | 4.46B | 4.15B | 3.83B | 2.84B |
| Gross Profit | 2.43B | 2.23B | 1.96B | 1.76B | 1.31B |
| EBITDA | 272.54M | 136.47M | -685.35M | -917.35M | -653.76M |
| Net Income | 33.83M | -109.40M | -1.02B | -1.26B | -949.90M |
Balance Sheet | |||||
| Total Assets | 9.77B | 9.87B | 11.61B | 12.56B | 13.00B |
| Cash, Cash Equivalents and Short-Term Investments | 2.47B | 2.38B | 4.01B | 4.16B | 5.36B |
| Total Debt | 1.14B | 1.11B | 1.16B | 1.24B | 1.29B |
| Total Liabilities | 1.95B | 1.91B | 1.88B | 2.01B | 1.97B |
| Stockholders Equity | 7.82B | 7.95B | 9.73B | 10.56B | 11.03B |
Cash Flow | |||||
| Free Cash Flow | 1.03B | 657.46M | 363.52M | -334.55M | -148.21M |
| Operating Cash Flow | 1.04B | 716.24M | 414.75M | -254.37M | -58.19M |
| Investing Cash Flow | 80.95M | 1.37B | 228.60M | -616.45M | -2.49B |
| Financing Cash Flow | -868.69M | -2.31B | -643.61M | 45.01M | 3.10B |
Twilio Technical Analysis
Negative
117.65
Price Trends
121.06
Negative
126.19
Negative
120.11
Negative
Market Momentum
0.80
Positive
39.80
Neutral
33.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWLO, the sentiment is Negative. The current price of 117.65 is below the 20-day moving average (MA) of 126.07, below the 50-day MA of 121.06, and below the 200-day MA of 120.11, indicating a bearish trend. The MACD of 0.80 indicates Positive momentum. The RSI at 39.80 is Neutral, neither overbought nor oversold. The STOCH value of 33.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $17.83B | 643.16 | 0.43% | ― | 12.84% | ― | |
70 Outperform | $23.35B | 14.57 | 20.57% | ― | 3.85% | 72.42% | |
66 Neutral | $3.10B | 57.31 | -8.90% | ― | 5.45% | ― | |
63 Neutral | $1.04B | 39.43 | 5.36% | ― | 12.48% | ― | |
62 Neutral | $506.58M | -35.89 | -3.39% | ― | 7.42% | 34.42% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $242.41M | 13.24 | -2.93% | ― | 0.25% | 92.10% |
* Technology Sector Average
TWLO
Twilio
117.65
31.23
36.14%
EGHT
8X8
1.73
0.02
1.17%
RNG
RingCentral
33.49
10.90
48.26%
FIVN
Five9
13.61
-9.57
-41.29%
BAND
Bandwidth
16.14
4.08
33.83%
ZM
Zoom Video Communications
79.24
7.26
10.09%
Twilio Corporate Events
Business Operations and StrategyExecutive/Board Changes
Twilio Appoints Doug Robinson to Board of Directors
Positive
Mar 24, 2026
On March 24, 2026, Twilio Inc. announced that its board of directors appointed Doug Robinson, former Co-President of Workday, as a Class I director effective immediately, expanding the board from nine to ten members. Robinson will serve until the ...
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.