Twilio Announces Third Quarter 2026 Results
TWILIO INC (TWLO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Twilio Announces Third Quarter 2026 Results • Revenue of $1.56 billion, up 20% reported and 16% organic year-over-year • GAAP gross profit of $761 million, up 20% year-over-year • Non-GAAP gross profit of $768 million, up 18% year-over-year • GAAP Income from Operati
Facts are quoted from the filing text and checked against it.
How this was made
The 30-second read
Why it matters
The raised guidance signals accelerated adoption of AI‑driven communication services, likely boosting investor confidence.
Market read
Twilio's strong quarter and raised outlook may drive a rally in the broader AI‑enabled communications space.
What to watch
Potential headwinds from competitive pricing pressure and macro‑economic slowdown could temper growth.
Twilio Announces Third Quarter 2026 Results
Revenue grew 20% year-over-year, GAAP income from operations rose 263% year-over-year, non-GAAP income from operations rose 39% year-over-year, and Twilio raised its fiscal-year reported revenue growth, organic revenue growth, non-GAAP income from operations, and free cash flow outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.56B | – | 20% |
| Organic revenue growthnon-GAAP | 16% | – | 16% |
| Cost of revenueGAAP | 799,006 | – | – |
| Gross profitGAAP | $760.5M | – | 20 % |
| Gross marginGAAP | 49 % | – | – |
| Gross profitnon-GAAP | $767.8M | – | 18 % |
| Gross marginnon-GAAP | 49 % | – | – |
| Research and development expenseGAAP | 280,367 | – | – |
| Sales and marketing expenseGAAP | 216,646 | – | – |
| General and administrative expenseGAAP | 114,887 | – | – |
| Total operating expensesGAAP | 611,900 | – | – |
| Income from operationsGAAP | $148.6M | – | 263 % |
| Operating marginGAAP | 10 % | – | – |
| Income from operationsnon-GAAP | $325.7M | – | 39 % |
| Operating marginnon-GAAP | 21 % | – | – |
| Income before benefit from income taxesGAAP | 139,129 | – | – |
| Benefit from income taxesGAAP | 22,028 | – | – |
| Net income attributable to common stockholdersGAAP | $161.2M | – | – |
| Net income attributable to common stockholdersnon-GAAP | $266.9M | – | – |
| Net income per share attributable to common stockholders, basicGAAP | $ 1.04 | – | – |
| Net income per share attributable to common stockholders, dilutedGAAP | $ 1.00 | – | – |
| Net income per share attributable to common stockholders, dilutednon-GAAP | $ 1.65 | – | – |
| Weighted-average shares used to compute net income per share attributable to common stockholders, dilutedGAAP | 161,746,027 | – | – |
| Weighted-average shares used to compute non-GAAP net income per share attributable to common stockholders, dilutednon-GAAP | 161,746,027 | – | – |
| Net cash provided by operating activitiesGAAP | $389.2M | – | – |
| Operating cash flow marginGAAP | 25 % | – | – |
| Free cash flownon-GAAP | $369.6M | – | – |
| Free cash flow marginnon-GAAP | 24 % | – | – |
| Dollar-Based Net Expansion Rateother | 114% | – | – |
| Employeesother | 5,625 employees | – | – |
| Stock-Based Compensation Expenseother | $153.9M | – | – |
| Stock-Based Compensation Expense as a % of Revenueother | 9.9 % | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | 914,755 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fourth quarter ending December 31, 2026 and fiscal year 2026 outlook
- Revenue$1.595 to $1.605 billion
- NoteQ4 2026 reported revenue growth: 17% to 17.5%
- NoteQ4 2026 organic revenue growth: 11% to 12%
- NoteQ4 2026 non-GAAP gross profit: similar to its organic revenue growth range
- NoteQ4 2026 non-GAAP income from operations: $300 to $310 million
- NoteQ4 2026 non-GAAP diluted earnings per share: $1.48 to $1.53
- NoteQ4 2026 non-GAAP weighted average diluted shares outstanding: 163 million
- NoteFY26 reported revenue growth: 20%
- NoteFY26 organic revenue growth: 15%
- NoteFY26 non-GAAP gross profit growth: similar to its organic revenue growth range
- NoteFY26 non-GAAP income from operations: $1.19 billion to $1.20 billion
- NoteFY26 free cash flow: $1.19 billion to $1.20 billion
Capital returns
- During the third quarter of 2026, Twilio repurchased $127.2 million in aggregate value of shares of common stock.
- As of September 30, 2026, Twilio has completed approximately $1.3 billion of aggregate repurchases and has approximately $700 million of the originally authorized amount available for future repurchases.
- 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.
- Repurchases of shares of Class A common stock and related costs were (448,296) for the nine months ended September 30, 2026, compared with (670,472) for the nine months ended September 30, 2025.
What drove it
- Management cited disciplined execution and broad-based strength across its product portfolio.
- Dollar-Based Net Expansion Rate was 114% for the third quarter of 2026 compared to 109% for the third quarter of 2025.
- Organic revenue growth was 16% year-over-year, compared with reported revenue growth of 20% year-over-year.
- Twilio stated that consumer AI has accelerated AI development and that adoption demands fast, reliable infrastructure built for AI speed.
Concerns
- Fourth-quarter reported revenue growth guidance of 17% to 17.5% and organic revenue growth guidance of 11% to 12% are below the third-quarter reported growth of 20% and organic growth of 16%.
- Non-GAAP gross margin was 49 % in the third quarter of 2026, compared with 50 % in the third quarter of 2025.
- The company identified risks including fluctuations in customer usage, network service provider fees, cybersecurity incidents, competition, macroeconomic conditions, and the rapidly evolving AI landscape.
What to watch
- Fourth-quarter execution against the $1.595 to $1.605 billion revenue range and the 11% to 12% organic revenue growth range.
- Whether fourth-quarter non-GAAP gross profit is similar to the organic revenue growth range, as guided.
- Fourth-quarter non-GAAP income from operations in the $300 to $310 million range and non-GAAP diluted earnings per share in the $1.48 to $1.53 range.
- Dollar-Based Net Expansion Rate following the increase to 114%.
- Progress toward fiscal-year non-GAAP income from operations and free cash flow of $1.19 billion to $1.20 billion.
Balance sheet and cash flow
- Cash and cash equivalents were $ 1,061,531 as of September 30, 2026, compared with $ 682,335 as of December 31, 2025.
- Short-term marketable securities were 1,829,940 as of September 30, 2026, compared with 1,788,007 as of December 31, 2025.
- Long-term debt, net was 993,606 as of September 30, 2026, compared with 992,287 as of December 31, 2025.
- Net cash provided by operating activities was 914,755 for the nine months ended September 30, 2026, compared with 731,689 for the nine months ended September 30, 2025.
- Net cash used in investing activities was (124,500) for the nine months ended September 30, 2026, compared with net cash provided by investing activities of 221,377 for the nine months ended September 30, 2025.
- Net cash used in financing activities was (411,258) for the nine months ended September 30, 2026, compared with (649,660) for the nine months ended September 30, 2025.
- Net increase in cash, cash equivalents and restricted cash was 378,997 for the nine months ended September 30, 2026, compared with 303,406 for the nine months ended September 30, 2025.
Analysis
Twilio reported third-quarter revenue of $1.56 billion, up 20% year-over-year, with organic revenue growth of 16% year-over-year. Dollar-Based Net Expansion Rate increased to 114% from 109% in the third quarter of 2025, indicating stronger revenue from the defined existing-customer cohort. Management attributed the quarter to disciplined execution and broad-based product portfolio strength.
Profitability improved materially. GAAP gross profit was $760.5 million, up 20% year-over-year, while GAAP gross margin was 49%, unchanged from the prior-year quarter. GAAP income from operations was $148.6 million, up 263% year-over-year, and GAAP operating margin expanded to 10% from 3%. Non-GAAP income from operations rose 39% year-over-year to $325.7 million, with non-GAAP operating margin of 21% versus 18%.
Cash generation was strong in the quarter. Net cash provided by operating activities was $389.2 million, compared with $263.6 million in the third quarter of 2025, and free cash flow was $369.6 million, compared with $247.5 million. Cash and cash equivalents were $1,061,531 as of September 30, 2026, while long-term debt, net was 993,606. Twilio repurchased $127.2 million of common stock during the quarter and had approximately $700 million remaining under its authorization.
The company initiated fourth-quarter revenue guidance of $1.595 to $1.605 billion, implying 17% to 17.5% reported growth and 11% to 12% organic growth. It also initiated fourth-quarter non-GAAP income from operations guidance of $300 to $310 million and non-GAAP diluted earnings per share guidance of $1.48 to $1.53. The guided growth ranges are below the third-quarter reported growth rates, making the trajectory of organic growth and gross profit important to monitor.
For fiscal year 2026, Twilio raised its reported revenue growth outlook to 20% from 18% to 18.5% previously and raised its organic revenue growth outlook to 15% from 13% to 13.5% previously. It also raised both non-GAAP income from operations and free cash flow guidance to $1.19 billion to $1.20 billion from $1.135 billion to $1.155 billion previously. The updated outlook pairs higher growth expectations with continued operating-income and free-cash-flow targets.
Management, verbatim
Q3 was a great quarter for Twilio, driven by disciplined execution and broad-based strength across our product portfolio.
Khozema Shipchandler, CEO of Twilio
Consumer AI has accelerated AI development, and its adoption demands fast, reliable infrastructure built for AI speed. Twilio is well positioned to capitalize on this moment and meet this demand.
Khozema Shipchandler, CEO of Twilio
Not in the filing
stated, not guessed- Segment revenue and segment-level comparisons were not reported.
- Prior-quarter comparisons were not reported for the presented third-quarter metrics.
- GAAP fourth-quarter and fiscal-year guidance was not provided.
- Guidance for operating expenses and tax rate was not provided.
- Dividend information was not reported.
- A previous earnings release outlook was not provided for direct comparison with reported third-quarter results.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Twilio's Q3 2026 earnings were filed via an SEC Form 8‑K, providing the first public disclosure of the results and guidance.
Ticker impact
Twilio reported Q3 2026 results with revenue up 20% YoY and raised FY 2026 revenue growth outlook to 20% from 18-18.5%.
likely upside as investors price in the raised revenue growth outlook
Guidance was raised, indicating better than expected performance and supporting a bullish reaction.
Market effects
Strengthens the cloud communications and AI‑infrastructure sector, potentially lifting peers.
Positive for U.S. tech stocks, especially those with AI exposure.
Reinforces global demand for AI‑driven engagement platforms.
Counterpoint
If the raised outlook is already priced in, the stock may face limited upside.
Key entities
- ExecutiveKhozema Shipchandler
CEO of Twilio who commented on the results.
