Twilio (TWLO) AI Stock Analysis

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Twilio

(NYSE:TWLO)

Rating:64Neutral

Price Target:

$111.00

▲(8.23% Upside)

Twilio's overall stock score is driven by strong financial performance and positive earnings call highlights, including strategic partnerships and revenue growth. However, the high P/E ratio and bearish technical indicators weigh down the score. Continued focus on improving profitability and maintaining financial stability will be key to sustaining positive momentum.

Positive Factors

Revenue Growth

Consistent revenue growth highlights Twilio's expanding market reach and product adoption, reinforcing its competitive position in cloud communications.

Strategic Partnerships

The partnership with Microsoft enhances Twilio's technological capabilities and market presence, fostering innovation in AI-driven communication solutions.

Governance Improvements

Governance improvements streamline decision-making and enhance shareholder influence, potentially boosting operational efficiency and market confidence.

Negative Factors

Gross Margin Decline

Declining gross margins could pressure profitability, challenging Twilio's ability to maintain cost efficiency amidst rising operational expenses.

Flat Segment Revenue

Stagnant segment revenue indicates potential challenges in diversifying income streams, which may hinder long-term growth prospects.

Carrier Fee Challenges

Rising carrier fees can erode margins, affecting Twilio's cost structure and potentially limiting pricing flexibility in a competitive market.

Twilio (TWLO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$16.00B

Dividend YieldN/A

Average Volume (3M)4.69M

Price to Earnings (P/E)855.9

Beta (1Y)1.41

Revenue Growth11.56%

EPS GrowthN/A

CountryUS

Employees5,502

SectorTechnology

Sector Strength86

IndustryInternet Content & Information

Share Statistics

EPS (TTM)1.19

Shares Outstanding153,433,610

10 Day Avg. Volume2,111,845

30 Day Avg. Volume4,694,749

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.15

Enterprise Value/Revenue3.89

Enterprise Value/Gross Profit7.95

Enterprise Value/Ebitda70.16

Forecast

1Y Price Target

$131.40

Price Target Upside28.12% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering22

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 pay for the communication services they use via its APIs. Key revenue streams include fees for SMS and voice calls, as well as charges for video and authentication services. Twilio also offers monthly subscription services for its Flex platform and other products, which provide businesses with advanced capabilities for managing customer interactions. Significant partnerships with companies like Salesforce and AWS enhance Twilio's offerings and expand its market reach, contributing to its earnings. Additionally, the company benefits from a growing demand for cloud-based communication solutions, driven by digital transformation trends across various industries.

Twilio Key Performance Indicators (KPIs)

Any

Active Customers

Active Customers
Tracks the number of customers actively using Twilio’s services, reflecting market penetration, customer retention, and potential for future revenue growth.

Chart InsightsTwilio's active customer base has shown consistent growth, with a notable acceleration in 2025, reaching 349,000 by June. This upward trend suggests successful customer acquisition strategies and possibly increased demand for Twilio's communication solutions. The absence of earnings call commentary leaves open questions about potential challenges or strategic shifts, but the data indicates strong momentum in expanding their customer footprint.

Data provided by:

Main Street Data

Twilio Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 30, 2025

Earnings Call Sentiment Positive

Twilio's earnings call highlights a strong quarter with record revenue, significant growth in messaging and voice, and successful strategic initiatives, including a partnership with Microsoft. However, the company faced challenges with gross margin decline and flat segment revenue. Overall, the positive aspects of growth and strategic progress outweigh the lowlights.

Q2-2025 Updates

Positive Updates

Strong Revenue Growth

Twilio reported record revenue of $1.228 billion for Q2 2025, up 13% year-over-year on both reported and organic bases.

Record Non-GAAP Income and Free Cash Flow

The company achieved record non-GAAP income from operations of $221 million and free cash flow of $263 million.

Accelerating Messaging and Voice Growth

Twilio delivered its fourth consecutive quarter of accelerating messaging growth and double-digit voice growth, with messaging revenue mix up by 260 basis points year-over-year.

Increase in Large Deals

The number of large deals closed over $500,000 increased 57% year-over-year.

Successful SIGNAL Conference

Nearly 1,000 attendees gathered for the SIGNAL conference, showcasing new products and innovations, including ConversationRelay and conversational intelligence.

Partnership with Microsoft

Announced a multiyear strategic partnership with Microsoft, aimed at building the future of conversational AI.

Positive Customer Feedback

Twilio received high praise for its ability to bring more ROI to businesses, with customers increasingly adopting its infrastructure for customer interactions.

Negative Updates

Gross Margin Decline

Non-GAAP gross margin declined to 50.7%, down 260 basis points year-over-year, primarily due to the increased messaging mix and FX impacts.

Flat Segment Revenue

Segment revenue was reported at $75 million, showing no growth year-over-year.

Challenges with Carrier Fees

The increase in Verizon's A2P messaging fees contributed $6 million in incremental pass-through, impacting margins.

Company Guidance

During the Twilio Second Quarter 2025 Earnings Conference Call, the company reported a strong performance with revenue exceeding $1.2 billion, marking a 13% year-over-year increase. Twilio achieved a record non-GAAP income from operations of $221 million and a free cash flow of $263 million. The communications segment saw a 14% growth with notable increases in messaging and voice services, alongside a dollar-based net expansion rate of 108%. The company highlighted successful initiatives, including a strategic partnership with Microsoft to enhance conversational AI capabilities. New product offerings such as ConversationRelay and advancements in RCS messaging were emphasized, contributing to increased customer adoption and engagement. Twilio raised its full-year organic revenue growth guidance to 9-10% and reported revenue growth to 10-11%, with expectations to stabilize gross margins through pricing strategies and cost optimizations.

Twilio Financial Statement Overview

Summary

Twilio shows a positive trajectory with improving profitability and cash flow metrics. The company has transitioned to positive net income and maintains a strong balance sheet with low leverage. While margins are thin, consistent revenue growth and strong cash flow generation provide a solid foundation for future growth.

Income Statement

Positive

Twilio's revenue growth has been consistent, with a TTM growth rate of 3.18%. The company has improved its profitability, moving from negative net profit margins in previous years to a positive 0.43% in the TTM. However, margins remain thin, and the EBIT and EBITDA margins, though improved, are still relatively low. The gross profit margin is stable at around 50%, indicating efficient cost management.

Balance Sheet

Positive

Twilio maintains a strong balance sheet with a low debt-to-equity ratio of 0.14, indicating low leverage and financial stability. The return on equity has turned positive in the TTM, reflecting improved profitability. The equity ratio remains robust, suggesting a solid capital structure. However, the company needs to continue improving its return metrics to enhance shareholder value.

Cash Flow

Positive

Twilio's cash flow position has strengthened, with a 10.01% growth in free cash flow in the TTM. The operating cash flow to net income ratio is healthy at 1.08, indicating strong cash generation relative to reported earnings. The free cash flow to net income ratio is also strong at 0.93, reflecting efficient cash management. Continued focus on cash flow generation will be crucial for sustaining growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.73B	4.46B	4.15B	3.83B	2.84B	1.76B
Gross Profit	2.32B	2.23B	1.96B	1.76B	1.31B	876.67M
EBITDA	262.52M	136.47M	-685.35M	-917.35M	-653.76M	-291.39M
Net Income	20.24M	-109.40M	-1.02B	-1.26B	-949.90M	-490.98M
Balance Sheet
Total Assets	9.85B	9.87B	11.61B	12.56B	13.00B	9.49B
Cash, Cash Equivalents and Short-Term Investments	2.54B	2.38B	4.01B	4.16B	5.36B	3.04B
Total Debt	1.10B	1.11B	1.16B	1.24B	1.29B	607.23M
Total Liabilities	1.80B	1.91B	1.88B	2.01B	1.97B	1.03B
Stockholders Equity	8.04B	7.95B	9.73B	10.56B	11.03B	8.45B
Cash Flow
Free Cash Flow	724.39M	657.46M	363.52M	-334.55M	-148.21M	-26.48M
Operating Cash Flow	780.90M	716.24M	414.75M	-254.37M	-58.19M	32.65M
Investing Cash Flow	779.33M	1.37B	228.60M	-616.45M	-2.49B	-845.86M
Financing Cash Flow	-1.35B	-2.31B	-643.61M	45.01M	3.10B	1.49B

Twilio Technical Analysis

Technical Analysis Sentiment

Negative

Last Price102.56

Price Trends

50DMA

114.81

Negative

100DMA

113.03

Negative

200DMA

112.45

Negative

Market Momentum

MACD

-2.26

Negative

RSI

41.50

Neutral

STOCH

29.59

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 102.56 is below the 20-day moving average (MA) of 104.67, below the 50-day MA of 114.81, and below the 200-day MA of 112.45, indicating a bearish trend. The MACD of -2.26 indicates Negative momentum. The RSI at 41.50 is Neutral, neither overbought nor oversold. The STOCH value of 29.59 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 50 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PINS	78 Outperform	$23.99B	12.62	48.08%	―	17.00%	901.05%
Z	73 Outperform	$21.45B	―	-1.34%	―	15.31%	56.19%
MTCH	68 Neutral	$9.12B	18.66	-865.98%	1.00%	-0.60%	-11.05%
TWLO	64 Neutral	$16.00B	855.91	0.24%	―	11.56%	―
Sector *	61 Neutral	$36.70B	12.21	-10.39%	1.84%	8.50%	-7.32%
NBIS	60 Neutral	$21.29B	97.04	4.95%	―	-95.06%	1.92%
SNAP	59 Neutral	$12.32B	―	-26.42%	―	13.18%	54.39%

* Technology Sector Average

Performance Comparison

TWLO

Twilio

102.56

43.10

72.49%

NBIS

Nebius Group

89.19

70.25

370.91%

Zillow Group Class C

89.27

29.53

49.43%

SNAP

Snap

7.29

-2.23

-23.42%

PINS

34.96

6.10

21.14%

MTCH

Match Group

38.02

3.62

10.52%

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.Date of analysis: Sep 11, 2025