TWILIO INC (TWLO): Results of Operations and Financial Condition
TWILIO INC (TWLO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Twilio Announces Second Quarter 2026 Results • Revenue of $1.50 billion, up 22% reported and 17% organic year-over-year • GAAP gross profit of $726 million, up 20% year-over-year • Non-GAAP gross profit of $736 million, up 18% year-over-year • GAAP Income from Operat
How this was made
The 30-second read
Why it matters
The newest decision-relevant information is the raised FY2026 revenue growth range and non-GAAP operating income and free cash flow targets, plus Q3 revenue and non-GAAP operating income guidance.
Market read
Traders can update models immediately using the disclosed Q3 and FY2026 guidance ranges and the reported profitability and free cash flow metrics.
What to watch
Guidance assumes no FX impact for non-GAAP diluted EPS; traders may scrutinize FX sensitivity and whether organic growth re-acceleration is sustainable into Q4.
Twilio Announces Second Quarter 2026 Results
Revenue grew 22% year-over-year, organic revenue grew 17% year-over-year, profitability increased, free cash flow rose to $352.6 million, and Twilio raised its full-year 2026 revenue-growth, non-GAAP income-from-operations, and free-cash-flow outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenueother | $1,499 | – | 22% |
| Organic revenue growthother | 17% | – | 17% |
| GAAP gross profitGAAP | $726 | – | 20% |
| GAAP gross marginGAAP | 48% | – | – |
| Non-GAAP gross profitnon-GAAP | $736 | – | 18% |
| Non-GAAP gross marginnon-GAAP | 49% | – | – |
| GAAP income from operationsGAAP | $85 | – | 129% |
| GAAP operating marginGAAP | 6% | – | – |
| Non-GAAP income from operationsnon-GAAP | $285 | – | 29% |
| Non-GAAP operating marginnon-GAAP | 19% | – | – |
| GAAP net income attributable to common stockholdersGAAP | $1,067 | – | – |
| Non-GAAP net income attributable to common stockholdersnon-GAAP | $234 | – | – |
| GAAP net income per share attributable to common stockholders, dilutedGAAP | $6.68 | – | – |
| Non-GAAP net income per share attributable to common stockholders, dilutednon-GAAP | $1.47 | – | – |
| GAAP weighted average shares outstanding, dilutedGAAP | 159.7 million | – | – |
| Non-GAAP weighted average shares outstanding, dilutednon-GAAP | 159.7 million | – | – |
| Net cash provided by operating activitiesGAAP | $372.4 million | – | – |
| Free cash flownon-GAAP | $352.6 million | – | – |
| Dollar-Based Net Expansion Rateother | 116% | – | – |
| Employeesother | 5,492 employees | – | – |
third quarter ending September 30, 2026 and fiscal year 2026 outlook
- Revenue$1,505 - $1,515
- NoteQ3 2026 reported revenue growth: 16% - 16.5%
- NoteQ3 2026 organic revenue growth: 11% - 12%
- NoteQ3 2026 non-GAAP income from operations: $285 - $295
- NoteQ3 2026 non-GAAP diluted earnings per share: $1.42 - $1.47
- NoteQ3 2026 non-GAAP weighted average diluted shares outstanding: 160
- NoteFY26 reported revenue growth: 18% - 18.5%
- NoteFY26 organic revenue growth: 13% - 13.5%
- NoteFY26 non-GAAP gross profit growth: similar to its organic revenue growth range
- NoteFY26 non-GAAP income from operations: $1,135 - $1,155
- NoteFY26 free cash flow: $1,135 - $1,155
Capital returns
- During the second quarter of 2026, Twilio repurchased $66.0 million in aggregate value of shares of common stock.
- To date, Twilio has completed approximately $1.2 billion of aggregate repurchases.
- Twilio has $826.0 million of the originally authorized amount available for future repurchases as of June 30, 2026.
- The share repurchase program authorizes repurchases of up to $2.0 billion in aggregate value of outstanding Class A common stock and is set to expire on December 31, 2027.
What drove it
- Organic revenue growth was 17% year-over-year.
- Dollar-Based Net Expansion Rate was 116% for the second quarter of 2026 compared to 108% for the second quarter of 2025.
- Twilio unveiled a revamped Twilio platform at SIGNAL.
- The company cited global communications, memory, AI orchestration, identity, governance, and observability as components of its customer-engagement infrastructure.
Concerns
- Third-quarter reported revenue growth guidance of 16% to 16.5% and organic revenue growth guidance of 11% to 12% are below second-quarter reported revenue growth of 22% and organic revenue growth of 17%.
- GAAP diluted net income per share included a non-cash benefit of $5.91 per share associated with the release of a significant portion of the valuation allowance against Twilio’s U.S. deferred tax assets.
- Twilio identified potential fluctuations in customer platform usage, network service provider fees, competitive conditions, and macroeconomic conditions as risks to future performance.
What to watch
- Execution against third-quarter revenue guidance of $1,505 - $1,515 and organic revenue growth guidance of 11% - 12%.
- Execution against fiscal-year 2026 reported revenue growth guidance of 18% - 18.5% and organic revenue growth guidance of 13% - 13.5%.
- Delivery against fiscal-year 2026 non-GAAP income from operations and free cash flow guidance of $1,135 - $1,155.
- Dollar-Based Net Expansion Rate following the reported 116% result.
- Further use of the $826.0 million remaining under the share repurchase authorization.
Balance sheet and cash flow
- Net cash provided by operating activities was $372.4 million, compared with $277.1 million for the second quarter of 2025.
- Free cash flow was $352.6 million, compared with $263.5 million for the second quarter of 2025.
Analysis
Twilio reported second-quarter revenue of $1,499, up 22% year-over-year, with organic revenue growth of 17%. The company also reported a Dollar-Based Net Expansion Rate of 116%, compared with 108% in the second quarter of 2025. These reported customer-expansion metrics accompanied the company’s description of accelerating organic growth and a revamped platform introduced at SIGNAL.
Profitability expanded materially. GAAP gross profit was $726 with a 48% margin, while non-GAAP gross profit was $736 with a 49% margin. GAAP income from operations was $85, up 129% year-over-year, and non-GAAP income from operations was $285, up 29% year-over-year. The reported operating margins were 6% on a GAAP basis and 19% on a non-GAAP basis.
Cash generation increased from the prior-year period. Net cash provided by operating activities was $372.4 million versus $277.1 million, and free cash flow was $352.6 million versus $263.5 million. Twilio repurchased $66.0 million of common stock during the quarter. The company had completed approximately $1.2 billion of aggregate repurchases to date and reported $826.0 million remaining under the authorization as of June 30, 2026.
GAAP net income attributable to common stockholders was $1,067 and GAAP diluted net income per share was $6.68. The company stated that GAAP diluted EPS included a non-cash benefit of $5.91 per share related to the release of a significant portion of the valuation allowance against U.S. deferred tax assets. Non-GAAP net income attributable to common stockholders was $234 and non-GAAP diluted EPS was $1.47, compared with $1.19 in the second quarter of 2025.
For the third quarter, Twilio initiated revenue guidance of $1,505 - $1,515, implying reported growth of 16% - 16.5% and organic growth of 11% - 12%, alongside non-GAAP income from operations of $285 - $295 and non-GAAP diluted EPS of $1.42 - $1.47. For fiscal 2026, the company raised reported revenue growth guidance to 18% - 18.5%, organic revenue growth guidance to 13% - 13.5%, non-GAAP income from operations guidance to $1,135 - $1,155, and free-cash-flow guidance to $1,135 - $1,155.
Management, verbatim
We are in a powerful new chapter at Twilio, marked by another quarter of organic growth acceleration as well as record profitability and free cash flow.
Khozema Shipchandler, CEO of Twilio
At SIGNAL, we unveiled a revamped Twilio platform giving customers the building blocks they need to power rich, lifelong conversations.
Khozema Shipchandler, CEO of Twilio
Not in the filing
stated, not guessed- Revenue for the second quarter of 2025
- Revenue for the prior quarter
- Segment revenue and segment growth metrics
- GAAP gross profit for the second quarter of 2025
- Non-GAAP gross profit for the second quarter of 2025
- GAAP income from operations for the second quarter of 2025
- Non-GAAP income from operations for the second quarter of 2025
- GAAP net income attributable to common stockholders for the second quarter of 2025
- Non-GAAP net income attributable to common stockholders for the second quarter of 2025
- Operating expenses
- Tax rate
- Cash balance
- Debt balance
- Dividend information
- GAAP gross-margin guidance
- Operating-expense guidance
- Tax-rate guidance
- Previous-release outlook for comparison with actual second-quarter results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Twilio’s SEC 8-K (Item 2.02) with Q2 2026 results and updated outlook, including Q3 and full-year 2026 guidance ranges.
Ticker impact
Twilio reported Q2 revenue of $1.50B (+22% Y/Y) and raised Q3 revenue to $1.505-$1.515B, plus FY2026 guidance.
Near-term bias to the upside as traders price in higher 2026 growth and cash flow; follow-through depends on whether the market expected the guidance raise.
The filing includes concrete, time-bound guidance ranges for Q3 and updated full-year targets, alongside strong profitability and free cash flow metrics.
Market effects
Supports the broader narrative that customer engagement and communications infrastructure vendors can scale profitability alongside AI-era demand.
Primarily US-listed sentiment; limited direct regional spillover beyond software/communications peers.
Global revenue exposure (180+ countries) makes the raised organic growth and cash flow targets relevant for international SaaS/CPaaS positioning.
Counterpoint
The GAAP EPS jump is partly driven by a non-cash deferred tax valuation allowance release, so cash earnings quality should be judged on non-GAAP and operating cash flow trends.
Key entities
- companyTwilio Inc.
CPaaS/customer engagement infrastructure provider reporting Q2 2026 results and raising guidance.
- executiveKhozema Shipchandler
Twilio CEO quoted on organic growth acceleration and record profitability/free cash flow.
