Twilio Announces Third Quarter 2026 Results
SAN FRANCISCO--(BUSINESS WIRE)--October 29, 2026--Twilio (NYSE: TWLO), the infrastructure for customer engagement in the AI era, reported financial results for its third quarter ended September 30, 2026.
“Q3 was a great quarter for Twilio, driven by disciplined execution and broad- based strength across our product portfolio,” said 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.”
• Revenue of $1.56 billion, up 20% year-over-year. Organic revenue growth was 16% year-over-year.
• GAAP net income per share attributable to common stockholders, diluted, of $1.00 based on 161.7 million weighted average shares outstanding, compared with GAAP net income per share attributable to common stockholders, diluted, of $0.23 based on 159.2 million weighted average shares outstanding in the third quarter of 2025.
• Non-GAAP net income per share attributable to common stockholders, diluted, of $1.65 based on 161.7 million non-GAAP weighted average shares outstanding, compared with non-GAAP net income per share attributable to common stockholders, diluted, of $1.25 based on 159.2 million non-GAAP weighted average shares outstanding in the third quarter of 2025.
• Net cash provided by operating activities of $389.2 million and free cash flow of $369.6 million, compared with net cash provided by operating activities of $263.6 million and free cash flow of $247.5 million for the third quarter of 2025.
• Dollar-Based Net Expansion Rate of 114% for the third quarter of 2026 compared to Dollar-Based Net Expansion Rate of 109% for the third quarter of 2025.
Dollars in millions, except per share Q3 2026 amounts Results Revenue $1,560 Y/Y Revenue Growth 20% Y/Y Organic Revenue Growth 16% Amount Margin Y/Y Growth GAAP gross profit $761 49% 20% Non-GAAP gross profit $768 49% 18% GAAP income from operations $149 10% 263% Non-GAAP income from operations $326 21% 39% Net cash provided by operating $389 25% activities Free cash flow $370 24% GAAP net income attributable to common $161 stockholders Non-GAAP net income attributable to $267 common stockholders GAAP net income per share attributable $1.00 to common stockholders, diluted Non-GAAP net income per share attributable to common stockholders, $1.65 diluted
In January 2025, Twilio’s Board of Directors authorized a share repurchase program pursuant to which Twilio may repurchase up to $2.0 billion in aggregate value of its outstanding Class A common stock (“common stock”). The program is set to expire on December 31, 2027. 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.
For the fourth quarter ending December 31, 2026, Twilio is initiating a revenue range of $1.595 to $1.605 billion, which implies a reported revenue growth range of 17% to 17.5% and an organic revenue growth range of 11% to 12% year-over- year. Twilio expects fourth quarter non-GAAP gross profit to be similar to its organic revenue growth range. In addition, Twilio is initiating a fourth quarter non-GAAP income from operations range of $300 to $310 million. Lastly, Twilio expects fourth quarter non-GAAP diluted earnings per share in a range of $1.48 to $1.53, based on non-GAAP weighted average diluted shares outstanding of 163 million.
Dollars and shares in millions, except per share Q4 2026 amounts Guidance Revenue $1,595 - $1,605 Y/Y Revenue Growth 17% - 17.5% Y/Y Organic Revenue Growth 11% - 12% Non-GAAP income from operations $300 - $310 Non-GAAP diluted earnings per share(1) $1.48 - $1.53 Non-GAAP weighted average diluted shares 163 outstanding
(1) Non-GAAP diluted earnings per share guidance assumes no impact from volatility of foreign exchange rates.
For fiscal year 2026, Twilio is raising its reported revenue growth outlook to 20% compared with 18% to 18.5% previously, and its organic revenue growth range outlook to 15% year-over-year compared with 13% to 13.5% previously. In addition, Twilio expects full-year non-GAAP gross profit growth to be similar to its organic revenue growth range. Lastly, Twilio is raising its 2026 non-GAAP income from operations range to $1.19 billion to $1.20 billion compared to $1.135 billion to $1.155 billion previously, and raising its 2026 free cash flow range to $1.19 billion to $1.20 billion compared to $1.135 billion to $1.155 billion previously.
Dollars in millions FY26 Guidance Y/Y Revenue Growth 20% Y/Y Organic Revenue Growth 15% Non-GAAP income from operations $1,190 - $1,200 Free cash flow $1,190 - $1,200
Twilio is hosting a Q&A conference call today, October 29, 2026, to discuss its third quarter 2026 financial results. The conference call will begin at 2:00 p.m. (PT) / 5:00 p.m. (ET), and investors and analysts should register for the webcast in advance by visiting https://edge.media-server.com/mmc/p/322yprpw. The live webcast of the conference call, as well as a replay, and Twilio’s supplemental earnings presentation, will be available on the investor relations website.
Twilio uses its investor relations website, its X feed (@twilio) and its LinkedIn page as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Twilio (NYSE: TWLO) provides the infrastructure for customer engagement in the AI era. By combining global communications, memory, and AI orchestration with identity, governance, and observability, Twilio enables businesses to deliver continuous, contextual, personal, and secure conversations across every channel and participant—human or AI.
Across 180+ countries, hundreds of thousands of the most innovative companies—from the Fortune 500 to startups—and millions of developers, rely on Twilio’s global platform across messaging, voice, email, and beyond, to power trusted customer experiences that drive real results. For more information about Twilio visit www.twilio.com.
This press release and the accompanying conference call contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this press release and the accompanying conference call include, but are not limited to, statements about: our future financial and operating performance and outlook, including our expected financial and operating results, guidance and targets, including the assumptions underlying such guidance and targets; our anticipated strategies and business plans and our ability to successfully execute them; our ability to drive growth, profitability and free cash flow; our ability to maintain cost discipline and drive operating leverage; future investments and expenses; our expectations regarding carrier fees, and our related actions, and the impact of such fees on our financial and operating performance, including guidance; our expectations regarding our margins, including regarding price actions, product mix and growth in higher-margin products; our expectations regarding capital returns to shareholders and our capital allocation strategy, including share repurchases and potential mergers and acquisitions; our expectations regarding revenue from ISVs and self-serve customers; our expectations regarding our cross-sell, upsell and solution selling efforts; our pipeline of new business; the benefits our customers derive from our products; our ability to expand into new and existing markets; our innovation roadmap and the development, release and adoption of our products (and the timing thereof); the effects of our go-to-market efforts to drive profitable growth and capture market share; our expectations related to being a foundational infrastructure layer in the AI era and our vision, strategy and expected benefits related to AI opportunities; and our expectations regarding the macroeconomic environment. You should not rely upon forward- looking statements as predictions of future events.
The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to differ materially from those described in the forward-looking statements, including, among other things: the impact of global economic and political conditions and uncertainties; the accuracy of our forecasts and metrics; fluctuations in our results of operations and the levels of our customers’ usage of our platform; our ability to attract and retain customers and expand their usage of our platform; our ability to develop new products and integrate our products with third-party products effectively; our ability to manage our growth and strategic changes to our business; our ability to compete effectively in intensely competitive markets; the occurrence of and our ability to manage cybersecurity breaches and other incidents impacting our networks and systems or those of our third-party service providers; our ability to manage changes in network service provider fees and optimize our network service provider coverage and connectivity; the rapidly evolving AI landscape; and our compliance with industry standards, laws and regulations.
The forward-looking statements contained in this press release and the accompanying conference call are also subject to additional risks, uncertainties, and factors, including those more fully described in our most recent filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment, and new risks and uncertainties may emerge that could have an impact on the forward-looking statements contained in this press release and the accompanying conference call.
All forward-looking statements contained in this press release and the accompanying conference call represent our management’s beliefs and assumptions only as of the date such statements are made and we do not assume any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date on which the statements were made, or to reflect new information or the occurrence of unanticipated events, except as required by law.
In addition to financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release and the accompanying conference call include certain non-GAAP financial measures, including those listed below. We use these non-GAAP 3 financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures may be helpful to investors because they provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of results of operations and assist in comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. We believe organic revenue and organic revenue growth are useful in understanding the ongoing results of our operations. We believe free cash flow and free cash flow margin provide useful supplemental information to help investors understand underlying trends in our business and our liquidity.
These non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered substitutes for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation of these measures to the most directly comparable GAAP measures is included at the end of this press release. We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP measures presented in this press release and the accompanying conference call, or a GAAP reconciliation, as a result of the uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense. Accordingly, a reconciliation of these non- GAAP guidance metrics to their corresponding forward-looking GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results.
For the periods presented, we define non‑GAAP gross profit and non‑GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, adjusted to exclude stock-based compensation, amortization of acquired intangibles and payroll taxes related to stock-based compensation.
For the periods presented, we define non‑GAAP income from operations and non‑GAAP operating margin as GAAP income from operations and GAAP operating margin, respectively, adjusted to exclude, as applicable, stock-based compensation, amortization of acquired intangibles, loss on net assets divested, acquisition and divestiture related expenses, payroll taxes related to stock- based compensation, charitable contributions, restructuring costs, impairment of long-lived assets, gains or losses on lease termination, and impairment loss on prepaid assets.
Non‑GAAP Net Income Attributable to Common Stockholders and Non‑GAAP Net Income Per Share Attributable to Common Stockholders. For the periods presented, we define non-GAAP net income attributable to common stockholders and non‑GAAP net income per share attributable to common stockholders, diluted (which we refer to as “non-GAAP diluted earnings per share”) as GAAP net income (loss) attributable to common stockholders and GAAP net income (loss) per share attributable to common stockholders, diluted, respectively, adjusted to exclude, as applicable, stock-based compensation, amortization of acquired intangibles, loss on net assets divested, acquisition and divestiture related expenses, losses (gains) on strategic investments, payroll taxes related to stock-based compensation, accretion of debt discount and issuance costs, provision of income tax effects related to non-GAAP adjustments, income tax benefit related to acquisitions, charitable contributions, share of losses from equity method investment, impairment of equity method investment, restructuring costs, impairment of long- lived assets, gains or losses on or impairment of strategic investments, gains or losses on lease termination, and impairment loss on prepaid assets.
For the periods presented, we define organic revenue as GAAP revenue, excluding (i) revenue from each acquired business and revenue from incremental increases to application-to-person (“A2P”) fees imposed by major U.S. carriers on our core messaging business, in each case until the beginning of the first full quarter following the one-year anniversary of the closing date of such acquisition or the initial date such fees were charged and (ii) revenue from each divested business beginning in the quarter of the closing date of such divestiture; provided that (a) if an acquisition closes or such fees are initially charged on the first day of a quarter, such revenue will be included in organic revenue beginning on the one-year anniversary of the closing date of such acquisition or the initial date such fees were charged and (b) if a divestiture closes on the last day of a quarter, such revenue will be included in organic revenue for that quarter. As used in this definition, A2P fees refers to fees imposed by U.S. mobile carriers for A2P messages delivered to their subscribers, and we pass these fees to our messaging customers at cost.
For the periods presented, we calculate organic revenue growth by dividing (i) organic revenue for the period presented less organic revenue in the comparative period by (ii) organic revenue in the comparative period. If revenue from certain acquisitions, divestitures or A2P fees is included or excluded in organic revenue in the period presented, then revenue from the same acquisitions, divestitures and A2P fees is included or excluded in organic revenue in the comparative period for purposes of the organic revenue growth calculation. As a result, organic revenue used in this calculation for the comparative period will not always equal organic revenue reported for the comparative period.
For the periods presented, we define free cash flow as net cash provided by operating activities, excluding capitalized software development costs and purchases of long-lived assets, and we define free cash flow margin as free cash flow divided by revenue.
We review a number of operational and financial metrics, including Dollar-Based Net Expansion Rate (“DBNE”), to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Our DBNE is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our DBNE may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. The numbers that we use to calculate DBNE are based on internal data. While these numbers are based on what we believe to be reasonable judgments and estimates for the applicable period of measurement, there are 4 inherent challenges in measuring usage. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations, and financial condition would be harmed.
Our DBNE compares the total revenue in a quarter from all individual customer accounts, as identified by a unique account identifier, for which we have recognized at least $5 of revenue in the last month of the quarter, to revenue from those same accounts in the same quarter in the prior year. A single customer organization may constitute multiple unique customer accounts if it has multiple account identifiers. To calculate DBNE, we first identify the cohort of such customer accounts in the same quarter of the prior year. DBNE is the quotient obtained by dividing the revenue generated from that cohort in a quarter, by the revenue generated from that same cohort in the corresponding quarter in the prior year. When we calculate DBNE for periods longer than one quarter, we use the average of the applicable quarterly DBNEs for each of the quarters in such period. Revenue from acquisitions does not impact the DBNE calculation until the quarter following the one-year anniversary of the applicable acquisition, unless the acquisition closing date is the first day of a quarter. Revenue from divestitures does not impact the DBNE calculation beginning in the quarter the divestiture closed, unless the divestiture closing date is the last day of a quarter.
We believe that measuring DBNE provides an important indication of the performance of our efforts to increase revenue from existing customers. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing customers and to increase their use of the platform. An important way in which we have historically tracked performance in this area is by measuring the DBNE for such customer accounts. Our DBNE increases when these customers increase their usage of a product, extend their usage of a product to new applications or adopt a new product. Our DBNE decreases when these customers cease or reduce their usage of a product or when we lower usage prices on a product. As our customers grow their businesses and extend the use of our platform, they sometimes create multiple customer accounts with us for operational or other reasons. As such, when we identify a significant customer organization (defined as a single customer organization generating more than 1% of revenue in a quarterly reporting period) that has created a new customer account, this new account is tied to, and revenue from this new account is included with, the original customer account for the purposes of calculating this metric.
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Revenue $ 1,559,536 $ 1,300,402 Cost of revenue 799,006 668,325 Gross profit 760,530 632,077 Operating expenses: Research and 280,367 262,311 development Sales and marketing 216,646 220,627 General and 114,887 108,191 administrative Total operating 611,900 591,129 expenses Income from 148,630 40,948 operations Other expenses, net: Share of losses from equity method -25,489 -27,506 investment Other income, net 15,988 19,242 Total other -9,501 -8,264 expenses, net Income before benefit from income 139,129 32,684 taxes Benefit from income 22,028 4,564 taxes Net income attributable to $ 161,157 $ 37,248 common stockholders Net income per share attributable to common stockholders: Basic $ 1.04 $ 0.24 Diluted $ 1.00 $ 0.23 Weighted-average shares used to compute net income per share attributable to common stockholders: Basic 154,378,183 153,119,639 Diluted 161,746,027 159,209,951
ASSETS As of September As of December Current 30, 31, assets: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Cash and cash $ 1,061,531 $ 682,335 equivalents Short-term marketable 1,829,940 1,788,007 securities Accounts receivable, 755,015 636,736 net Prepaid expenses and 338,971 469,650 other current assets Total current 3,985,457 3,576,728 assets Property and 183,870 176,963 equipment, net Operating right-of-use 25,740 39,031 assets Equity method 225,180 301,642 investment Intangible 105,301 142,065 assets, net Goodwill 5,291,893 5,291,787 Other long-term 230,008 222,648 assets Deferred tax 1,059,490 20,026 asset Total assets $ 11,106,939 $ 9,770,890 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts $ 61,624 $ 85,089 payable Accrued expenses and 646,245 608,119 other current liabilities Deferred revenue and 157,046 158,677 customer deposits Operating lease 26,583 35,123 liability, current Total current 891,498 887,008 liabilities Operating lease 36,811 54,162 liability, noncurrent Long-term 993,606 992,287 debt, net Other long-term 14,431 15,887 liabilities Total 1,936,346 1,949,344 liabilities Commitments and contingencies Stockholders’ equity: Preferred — — stock Common stock 155 152 Additional paid-in 16,657,626 16,148,190 capital Accumulated other comprehensive -16,520 15,668 (loss) income Accumulated -7,470,668 -8,342,464 deficit Total stockholders’ 9,170,593 7,821,546 equity Total liabilities and $ 11,106,939 $ 9,770,890 stockholders’ equity
Nine Months Ended CASH FLOWS FROM OPERATING September 30, ACTIVITIES: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 1,318,505 $ 79,688 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and 91,414 147,901 amortization Non-cash reduction to the right-of-use 14,206 16,634 asset Net amortization of investment premium -5,908 -11,473 and discount Stock-based compensation 432,339 446,693 Amortization of deferred 48,910 56,895 commissions Provision for doubtful 15,101 6,361 accounts Value of shares of Class A common stock 12,328 7,118 issued and donated to charity Share of losses from equity method 77,058 72,199 investment Impairment of capitalized internal‑use 13,957 6,642 software development costs Tax benefit related to release of -937,077 — valuation allowance Impairment loss on 32,771 — prepaid assets Other adjustments 1,924 204 Changes in operating assets and liabilities: Accounts receivable -133,381 -30,942 Prepaid expenses and other current 93,142 77,596 assets Deferred tax asset -82,243 -1,667 Other long-term assets -57,462 -62,592 Accounts payable -24,720 -59,798 Accrued expenses and other current 33,929 3,939 liabilities Deferred revenue and -1,631 3,484 customer deposits Operating lease -26,730 -26,868 liabilities Other long-term -1,677 -325 liabilities Net cash provided by operating 914,755 731,689 activities CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired and payments related to prior -685 — period acquisitions Purchases of marketable securities and -751,923 -780,234 other investments Proceeds from sales and maturities of marketable securities and 688,244 1,043,977 other investments Capitalized software -47,968 -37,964 development costs Purchases of long-lived -12,168 -4,402 assets Net cash (used in) provided by investing -124,500 221,377 activities CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on -193 -5,255 finance leases Value of equity awards withheld for tax -62 -213 liabilities Repurchases of shares of Class A common -448,296 -670,472 stock and related costs Proceeds from exercises of stock options and shares of Class A 37,293 26,280 common stock issued under ESPP Net cash used in -411,258 -649,660 financing activities NET INCREASE IN CASH, CASH EQUIVALENTS 378,997 303,406 AND RESTRICTED CASH CASH, CASH EQUIVALENTS AND RESTRICTED 682,534 431,437 CASH—Beginning of period CASH, CASH EQUIVALENTS AND RESTRICTED $ 1,061,531 $ 734,843 CASH —End of period
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── GAAP gross profit $ 760,530 $ 632,077 GAAP gross profit growth 20 % (Y/Y) GAAP gross margin 49 % 49 % Non-GAAP adjustments: Stock-based compensation 3,248 4,305 Amortization of acquired 3,484 15,446 intangibles Payroll taxes related to stock-based 538 269 compensation Non-GAAP gross profit $ 767,800 $ 652,097 Non-GAAP gross profit 18 % growth (Y/Y) Non-GAAP gross margin 49 % 50 %
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── GAAP income from $ 148,630 $ 40,948 operations GAAP income from 263 % operations growth (Y/Y) GAAP operating margin 10 % 3 % Non-GAAP adjustments: Stock-based compensation 153,916 158,169 Amortization of acquired 8,713 26,858 intangibles Acquisition related 22 — expenses Payroll taxes related to stock-based 8,877 3,429 compensation Charitable contributions 5,527 5,104 Restructuring costs 46 — Non-GAAP income from $ 325,731 $ 234,508 operations Non-GAAP income from operations growth 39 % (Y/Y) Non-GAAP operating margin 21 % 18 %
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── GAAP net income attributable to common $ 161,157 $ 37,248 stockholders Non-GAAP adjustments: Stock-based compensation 153,916 158,169 Amortization of acquired 8,713 26,858 intangibles Acquisition related expenses 22 — Payroll taxes related to stock-based 8,877 3,429 compensation Accretion of debt discount and issuance 444 427 costs Provision of income tax effects related -97,304 -60,483 to non-GAAP adjustments Charitable contributions 5,527 5,104 Share of losses from equity method 25,489 27,506 investment Restructuring costs 46 — Non-GAAP net income attributable to $ 266,887 $ 198,258 common stockholders
Three Months Ended September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── GAAP net income per share attributable $ 1.00 $ 0.23 to common stockholders, diluted* Non-GAAP adjustments: Stock-based 0.95 0.99 compensation Amortization of acquired 0.05 0.17 intangibles Acquisition related — — expenses Payroll taxes related to 0.05 0.02 stock-based compensation Accretion of debt discount — — and issuance costs Provision of income tax effects -0.60 -0.38 related to non-GAAP adjustments Charitable 0.03 0.03 contributions Share of losses from 0.16 0.17 equity method investment Restructuring — — costs Non-GAAP net income per share attributable $ 1.65 $ 1.25 to common stockholders, diluted Weighted-ave… shares used to compute non-GAAP net income per 161,746,027 159,209,951 share attributable to common stockholders, diluted
¹ Organic revenue for the three months ended September 30, 2025, when used as the denominator for Organic Revenue Growth for the three months ended September 30, 2026 is equal to reported revenue. Revenue for the three months ended September 30, 2025 was $1.30 billion.
Free cash flow and Three Months Ended free cash flow September 30, margin 2026 2025 ────────────────────────────────────────────────────────────────────────────── GAAP net cash provided by $ 389,164 $ 263,563 operating activities Operating cash flow 25 % 20 % margin Non-GAAP adjustments: Capitalized software -14,585 -13,812 development costs Purchase of -4,950 -2,235 long-lived assets Free cash flow $ 369,629 $ 247,516 Free cash flow 24 % 19 % margin GAAP net cash used in investing $ -30,064 $ -161,502 activities GAAP net cash used in financing $ -120,830 $ -347,952 activities
Full text with the tables
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 Operations of $149 million
•
Non-GAAP Income from Operations of $326 million
SAN FRANCISCO--(BUSINESS WIRE)--October 29, 2026--Twilio (NYSE: TWLO), the
infrastructure for customer engagement in the AI era, reported financial results
for its third quarter ended September 30, 2026.
“Q3 was a great quarter for Twilio, driven by disciplined execution and broad-
based strength across our product portfolio,” said 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.”
Third Quarter 2026 Financial Highlights
• Revenue of $1.56 billion, up 20% year-over-year. Organic revenue growth was
16% year-over-year.
• GAAP gross profit of $760.5 million, up 20% year-over-year.
• Non-GAAP gross profit of $767.8 million, up 18% year-over-year.
• GAAP income from operations of $148.6 million, up 263% year-over-year.
• Non-GAAP income from operations of $325.7 million, up 39% year-over-year.
• GAAP net income per share attributable to common stockholders, diluted, of
$1.00 based on 161.7 million weighted average shares outstanding, compared with
GAAP net income per share attributable to common stockholders, diluted, of $0.23
based on 159.2 million weighted average shares outstanding in the third quarter
of 2025.
• Non-GAAP net income per share attributable to common stockholders, diluted, of
$1.65 based on 161.7 million non-GAAP weighted average shares outstanding,
compared with non-GAAP net income per share attributable to common stockholders,
diluted, of $1.25 based on 159.2 million non-GAAP weighted average shares
outstanding in the third quarter of 2025.
• Net cash provided by operating activities of $389.2 million and free cash flow
of $369.6 million, compared with net cash provided by operating activities of
$263.6 million and free cash flow of $247.5 million for the third quarter of
2025.
Key Metrics
• Dollar-Based Net Expansion Rate of 114% for the third quarter of 2026 compared
to Dollar-Based Net Expansion Rate of 109% for the third quarter of 2025.
• 5,625 employees as of September 30, 2026.
1
Dollars in millions, except per share Q3 2026
amounts Results
Revenue $1,560
Y/Y Revenue Growth 20%
Y/Y Organic Revenue Growth 16%
Amount Margin Y/Y Growth
GAAP gross profit $761 49% 20%
Non-GAAP gross profit $768 49% 18%
GAAP income from operations $149 10% 263%
Non-GAAP income from operations $326 21% 39%
Net cash provided by operating $389 25%
activities
Free cash flow $370 24%
GAAP net income attributable to common $161
stockholders
Non-GAAP net income attributable to $267
common stockholders
GAAP net income per share attributable $1.00
to common stockholders, diluted
Non-GAAP net income per share
attributable to common stockholders, $1.65
diluted
Share Repurchase Program
In January 2025, Twilio’s Board of Directors authorized a share repurchase
program pursuant to which Twilio may repurchase up to $2.0 billion in aggregate
value of its outstanding Class A common stock (“common stock”). The program is
set to expire on December 31, 2027. 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.
Outlook
For the fourth quarter ending December 31, 2026, Twilio is initiating a revenue
range of $1.595 to $1.605 billion, which implies a reported revenue growth range
of 17% to 17.5% and an organic revenue growth range of 11% to 12% year-over-
year. Twilio expects fourth quarter non-GAAP gross profit to be similar to its
organic revenue growth range. In addition, Twilio is initiating a fourth quarter
non-GAAP income from operations range of $300 to $310 million. Lastly, Twilio
expects fourth quarter non-GAAP diluted earnings per share in a range of $1.48
to $1.53, based on non-GAAP weighted average diluted shares outstanding of 163
million.
Dollars and shares in millions, except per share Q4 2026
amounts Guidance
Revenue $1,595 - $1,605
Y/Y Revenue Growth 17% - 17.5%
Y/Y Organic Revenue Growth 11% - 12%
Non-GAAP income from operations $300 - $310
Non-GAAP diluted earnings per share(1) $1.48 - $1.53
Non-GAAP weighted average diluted shares 163
outstanding
(1) Non-GAAP diluted earnings per share guidance assumes no impact from
volatility of foreign exchange rates.
For fiscal year 2026, Twilio is raising its reported revenue growth outlook to
20% compared with 18% to 18.5% previously, and its organic revenue growth range
outlook to 15% year-over-year compared with 13% to 13.5% previously. In
addition, Twilio expects full-year non-GAAP gross profit growth to be similar to
its organic revenue growth range. Lastly, Twilio is raising its 2026 non-GAAP
income from operations range to $1.19 billion to $1.20 billion compared to
$1.135 billion to $1.155 billion previously, and raising its 2026 free cash flow
range to $1.19 billion to $1.20 billion compared to $1.135 billion to $1.155
billion previously.
Dollars in millions FY26
Guidance
Y/Y Revenue Growth 20%
Y/Y Organic Revenue Growth 15%
Non-GAAP income from operations $1,190 - $1,200
Free cash flow $1,190 - $1,200
2
Conference Call Information
Twilio is hosting a Q&A conference call today, October 29, 2026, to discuss its
third quarter 2026 financial results. The conference call will begin at 2:00
p.m. (PT) / 5:00 p.m. (ET), and investors and analysts should register for the
webcast in advance by visiting https://edge.media-server.com/mmc/p/322yprpw. The
live webcast of the conference call, as well as a replay, and Twilio’s
supplemental earnings presentation, will be available on the investor relations
website.
Twilio uses its investor relations website, its X feed (@twilio) and its
LinkedIn page as a means of disclosing material non-public information and for
complying with its disclosure obligations under Regulation FD.
About Twilio Inc.
Twilio (NYSE: TWLO) provides the infrastructure for customer engagement in the
AI era. By combining global communications, memory, and AI orchestration with
identity, governance, and observability, Twilio enables businesses to deliver
continuous, contextual, personal, and secure conversations across every channel
and participant—human or AI.
Across 180+ countries, hundreds of thousands of the most innovative
companies—from the Fortune 500 to startups—and millions of developers, rely on
Twilio’s global platform across messaging, voice, email, and beyond, to power
trusted customer experiences that drive real results. For more information about
Twilio visit www.twilio.com.
Forward-Looking Statements
This press release and the accompanying conference call contain forward-looking
statements within the meaning of the federal securities laws. Forward-looking
statements generally relate to future events or our future financial or
operating performance. In some cases, you can identify forward-looking
statements because they contain words such as “may,” “can,” “will,” “would,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,”
“potential” or “continue” or the negative of these words or other similar terms
or expressions that concern our expectations, strategy, plans or intentions.
Forward-looking statements contained in this press release and the accompanying
conference call include, but are not limited to, statements about: our future
financial and operating performance and outlook, including our expected
financial and operating results, guidance and targets, including the assumptions
underlying such guidance and targets; our anticipated strategies and business
plans and our ability to successfully execute them; our ability to drive growth,
profitability and free cash flow; our ability to maintain cost discipline and
drive operating leverage; future investments and expenses; our expectations
regarding carrier fees, and our related actions, and the impact of such fees on
our financial and operating performance, including guidance; our expectations
regarding our margins, including regarding price actions, product mix and growth
in higher-margin products; our expectations regarding capital returns to
shareholders and our capital allocation strategy, including share repurchases
and potential mergers and acquisitions; our expectations regarding revenue from
ISVs and self-serve customers; our expectations regarding our cross-sell, upsell
and solution selling efforts; our pipeline of new business; the benefits our
customers derive from our products; our ability to expand into new and existing
markets; our innovation roadmap and the development, release and adoption of our
products (and the timing thereof); the effects of our go-to-market efforts to
drive profitable growth and capture market share; our expectations related to
being a foundational infrastructure layer in the AI era and our vision, strategy
and expected benefits related to AI opportunities; and our expectations
regarding the macroeconomic environment. You should not rely upon forward-
looking statements as predictions of future events.
The outcome of the events described in these forward-looking statements is
subject to known and unknown risks, uncertainties, and other factors that may
cause our actual results, performance, or achievements to differ materially from
those described in the forward-looking statements, including, among other
things: the impact of global economic and political conditions and
uncertainties; the accuracy of our forecasts and metrics; fluctuations in our
results of operations and the levels of our customers’ usage of our platform;
our ability to attract and retain customers and expand their usage of our
platform; our ability to develop new products and integrate our products with
third-party products effectively; our ability to manage our growth and strategic
changes to our business; our ability to compete effectively in intensely
competitive markets; the occurrence of and our ability to manage cybersecurity
breaches and other incidents impacting our networks and systems or those of our
third-party service providers; our ability to manage changes in network service
provider fees and optimize our network service provider coverage and
connectivity; the rapidly evolving AI landscape; and our compliance with
industry standards, laws and regulations.
The forward-looking statements contained in this press release and the
accompanying conference call are also subject to additional risks,
uncertainties, and factors, including those more fully described in our most
recent filings with the Securities and Exchange Commission, including our Annual
Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Should any of
these risks materialize, or should our assumptions prove to be incorrect, actual
financial results could differ materially from our projections or those implied
by these forward-looking statements. Moreover, we operate in a very competitive
and rapidly changing environment, and new risks and uncertainties may emerge
that could have an impact on the forward-looking statements contained in this
press release and the accompanying conference call.
All forward-looking statements contained in this press release and the
accompanying conference call represent our management’s beliefs and assumptions
only as of the date such statements are made and we do not assume any obligation
to update any forward-looking statements to reflect events or circumstances
occurring after the date on which the statements were made, or to reflect new
information or the occurrence of unanticipated events, except as required by
law.
Non-GAAP Financial Measures
In addition to financial information presented in accordance with U.S. generally
accepted accounting principles (“GAAP”), this press release and the accompanying
conference call include certain non-GAAP financial measures, including those
listed below. We use these non-GAAP
3
financial measures to evaluate our ongoing operations and for internal planning
and forecasting purposes. We believe that these non-GAAP financial measures may
be helpful to investors because they provide consistency and comparability with
past financial performance, facilitate period-to-period comparisons of results
of operations and assist in comparisons with other companies, many of which use
similar non-GAAP financial measures to supplement their GAAP results. We believe
organic revenue and organic revenue growth are useful in understanding the
ongoing results of our operations. We believe free cash flow and free cash flow
margin provide useful supplemental information to help investors understand
underlying trends in our business and our liquidity.
These non-GAAP financial measures are presented for supplemental informational
purposes only, should not be considered substitutes for financial information
presented in accordance with GAAP, and may be different from similarly-titled
non-GAAP measures used by other companies. A reconciliation of these measures to
the most directly comparable GAAP measures is included at the end of this press
release. We have not provided the forward-looking GAAP equivalents for certain
forward-looking non-GAAP measures presented in this press release and the
accompanying conference call, or a GAAP reconciliation, as a result of the
uncertainty regarding, and the potential variability of, reconciling items such
as stock-based compensation expense. Accordingly, a reconciliation of these non-
GAAP guidance metrics to their corresponding forward-looking GAAP equivalents is
not available without unreasonable effort. However, it is important to note that
material changes to reconciling items could have a significant effect on future
GAAP results.
Non‑GAAP Gross Profit
and
Non‑GAAP Gross Margin.
For the periods presented, we define non‑GAAP gross profit and non‑GAAP gross
margin as GAAP gross profit and GAAP gross margin, respectively, adjusted to
exclude stock-based compensation, amortization of acquired intangibles and
payroll taxes related to stock-based compensation.
Non‑GAAP Income from Operations
and
Non‑GAAP Operating Margin.
For the periods presented, we define non‑GAAP income from operations and
non‑GAAP operating margin as GAAP income from operations and GAAP operating
margin, respectively, adjusted to exclude, as applicable, stock-based
compensation, amortization of acquired intangibles, loss on net assets divested,
acquisition and divestiture related expenses, payroll taxes related to stock-
based compensation, charitable contributions, restructuring costs, impairment of
long-lived assets, gains or losses on lease termination, and impairment loss on
prepaid assets.
Non‑GAAP Net Income Attributable to Common Stockholders and Non‑GAAP Net Income
Per Share Attributable to Common Stockholders. For the periods presented, we
define non-GAAP net income attributable to common stockholders and non‑GAAP net
income per share attributable to common stockholders, diluted (which we refer to
as “non-GAAP diluted earnings per share”) as GAAP net income (loss) attributable
to common stockholders and GAAP net income (loss) per share attributable to
common stockholders, diluted, respectively, adjusted to exclude, as applicable,
stock-based compensation, amortization of acquired intangibles, loss on net
assets divested, acquisition and divestiture related expenses, losses (gains) on
strategic investments, payroll taxes related to stock-based compensation,
accretion of debt discount and issuance costs, provision of income tax effects
related to non-GAAP adjustments, income tax benefit related to acquisitions,
charitable contributions, share of losses from equity method investment,
impairment of equity method investment, restructuring costs, impairment of long-
lived assets, gains or losses on or impairment of strategic investments, gains
or losses on lease termination, and impairment loss on prepaid assets.
Organic Revenue.
For the periods presented, we define organic revenue as GAAP revenue, excluding
(i) revenue from each acquired business and revenue from incremental increases
to application-to-person (“A2P”) fees imposed by major U.S. carriers on our core
messaging business, in each case until the beginning of the first full quarter
following the one-year anniversary of the closing date of such acquisition or
the initial date such fees were charged and (ii) revenue from each divested
business beginning in the quarter of the closing date of such divestiture;
provided that (a) if an acquisition closes or such fees are initially charged on
the first day of a quarter, such revenue will be included in organic revenue
beginning on the one-year anniversary of the closing date of such acquisition or
the initial date such fees were charged and (b) if a divestiture closes on the
last day of a quarter, such revenue will be included in organic revenue for that
quarter. As used in this definition, A2P fees refers to fees imposed by U.S.
mobile carriers for A2P messages delivered to their subscribers, and we pass
these fees to our messaging customers at cost.
Organic Revenue Growth.
For the periods presented, we calculate organic revenue growth by dividing (i)
organic revenue for the period presented less organic revenue in the comparative
period by (ii) organic revenue in the comparative period. If revenue from
certain acquisitions, divestitures or A2P fees is included or excluded in
organic revenue in the period presented, then revenue from the same
acquisitions, divestitures and A2P fees is included or excluded in organic
revenue in the comparative period for purposes of the organic revenue growth
calculation. As a result, organic revenue used in this calculation for the
comparative period will not always equal organic revenue reported for the
comparative period.
Free Cash Flow
and
Free Cash Flow Margin.
For the periods presented, we define free cash flow as net cash provided by
operating activities, excluding capitalized software development costs and
purchases of long-lived assets, and we define free cash flow margin as free cash
flow divided by revenue.
Operating Metrics
We review a number of operational and financial metrics, including Dollar-Based
Net Expansion Rate (“DBNE”), to evaluate our business, measure our performance,
identify trends affecting our business, formulate business plans and make
strategic decisions. Our DBNE is not based on any standardized industry
methodology and is not necessarily calculated in the same manner or comparable
to similarly titled measures presented by other companies. Similarly, our DBNE
may differ from estimates published by third parties or from similarly titled
metrics of our competitors due to differences in methodology. The numbers that
we use to calculate DBNE are based on internal data. While these numbers are
based on what we believe to be reasonable judgments and estimates for the
applicable period of measurement, there are
4
inherent challenges in measuring usage. We regularly review and may adjust our
processes for calculating our internal metrics to improve their accuracy. If
investors or analysts do not perceive our metrics to be accurate representations
of our business, or if we discover material inaccuracies in our metrics, our
reputation, business, results of operations, and financial condition would be
harmed.
Dollar-Based Net Expansion Rate.
Our DBNE compares the total revenue in a quarter from all individual customer
accounts, as identified by a unique account identifier, for which we have
recognized at least $5 of revenue in the last month of the quarter, to revenue
from those same accounts in the same quarter in the prior year. A single
customer organization may constitute multiple unique customer accounts if it has
multiple account identifiers. To calculate DBNE, we first identify the cohort of
such customer accounts in the same quarter of the prior year. DBNE is the
quotient obtained by dividing the revenue generated from that cohort in a
quarter, by the revenue generated from that same cohort in the corresponding
quarter in the prior year. When we calculate DBNE for periods longer than one
quarter, we use the average of the applicable quarterly DBNEs for each of the
quarters in such period. Revenue from acquisitions does not impact the DBNE
calculation until the quarter following the one-year anniversary of the
applicable acquisition, unless the acquisition closing date is the first day of
a quarter. Revenue from divestitures does not impact the DBNE calculation
beginning in the quarter the divestiture closed, unless the divestiture closing
date is the last day of a quarter.
We believe that measuring DBNE provides an important indication of the
performance of our efforts to increase revenue from existing customers. Our
ability to drive growth and generate incremental revenue depends, in part, on
our ability to maintain and grow our relationships with existing customers and
to increase their use of the platform. An important way in which we have
historically tracked performance in this area is by measuring the DBNE for such
customer accounts. Our DBNE increases when these customers increase their usage
of a product, extend their usage of a product to new applications or adopt a new
product. Our DBNE decreases when these customers cease or reduce their usage of
a product or when we lower usage prices on a product. As our customers grow
their businesses and extend the use of our platform, they sometimes create
multiple customer accounts with us for operational or other reasons. As such,
when we identify a significant customer organization (defined as a single
customer organization generating more than 1% of revenue in a quarterly
reporting period) that has created a new customer account, this new account is
tied to, and revenue from this new account is included with, the original
customer account for the purposes of calculating this metric.
Source: Twilio Inc.
5
TWILIO INC.
Condensed Consolidated Statements of Operations
(In thousands, except shares and per share amounts)
(Unaudited)
Three Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Revenue $ 1,559,536 $ 1,300,402
Cost of revenue 799,006 668,325
Gross profit 760,530 632,077
Operating expenses:
Research and 280,367 262,311
development
Sales and marketing 216,646 220,627
General and 114,887 108,191
administrative
Total operating 611,900 591,129
expenses
Income from 148,630 40,948
operations
Other expenses, net:
Share of losses from
equity method -25,489 -27,506
investment
Other income, net 15,988 19,242
Total other -9,501 -8,264
expenses, net
Income before
benefit from income 139,129 32,684
taxes
Benefit from income 22,028 4,564
taxes
Net income
attributable to $ 161,157 $ 37,248
common
stockholders
Net income per share
attributable to
common stockholders:
Basic $ 1.04 $ 0.24
Diluted $ 1.00 $ 0.23
Weighted-average
shares used to
compute
net income per share
attributable to
common stockholders:
Basic 154,378,183 153,119,639
Diluted 161,746,027 159,209,951
6
TWILIO INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
ASSETS As of September As of December
Current 30, 31,
assets: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cash and cash $ 1,061,531 $ 682,335
equivalents
Short-term
marketable 1,829,940 1,788,007
securities
Accounts
receivable, 755,015 636,736
net
Prepaid
expenses and 338,971 469,650
other current
assets
Total current 3,985,457 3,576,728
assets
Property and 183,870 176,963
equipment, net
Operating
right-of-use 25,740 39,031
assets
Equity method 225,180 301,642
investment
Intangible 105,301 142,065
assets, net
Goodwill 5,291,893 5,291,787
Other
long-term 230,008 222,648
assets
Deferred tax 1,059,490 20,026
asset
Total assets $ 11,106,939 $ 9,770,890
LIABILITIES
AND
STOCKHOLDERS’
EQUITY
Current
liabilities:
Accounts $ 61,624 $ 85,089
payable
Accrued
expenses and 646,245 608,119
other current
liabilities
Deferred
revenue and 157,046 158,677
customer
deposits
Operating
lease 26,583 35,123
liability,
current
Total current 891,498 887,008
liabilities
Operating
lease 36,811 54,162
liability,
noncurrent
Long-term 993,606 992,287
debt, net
Other
long-term 14,431 15,887
liabilities
Total 1,936,346 1,949,344
liabilities
Commitments
and
contingencies
Stockholders’
equity:
Preferred — —
stock
Common stock 155 152
Additional
paid-in 16,657,626 16,148,190
capital
Accumulated
other
comprehensive -16,520 15,668
(loss)
income
Accumulated -7,470,668 -8,342,464
deficit
Total
stockholders’ 9,170,593 7,821,546
equity
Total
liabilities
and $ 11,106,939 $ 9,770,890
stockholders’
equity
7
TWILIO INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
CASH FLOWS FROM OPERATING September 30,
ACTIVITIES: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 1,318,505 $ 79,688
Adjustments to reconcile
net income to
net cash provided by
operating
activities:
Depreciation and 91,414 147,901
amortization
Non-cash reduction to the
right-of-use 14,206 16,634
asset
Net amortization of
investment premium -5,908 -11,473
and discount
Stock-based compensation 432,339 446,693
Amortization of deferred 48,910 56,895
commissions
Provision for doubtful 15,101 6,361
accounts
Value of shares of Class
A common stock 12,328 7,118
issued and donated to
charity
Share of losses from
equity method 77,058 72,199
investment
Impairment of capitalized
internal‑use 13,957 6,642
software development
costs
Tax benefit related to
release of -937,077 —
valuation allowance
Impairment loss on 32,771 —
prepaid assets
Other adjustments 1,924 204
Changes in operating
assets and
liabilities:
Accounts receivable -133,381 -30,942
Prepaid expenses and
other current 93,142 77,596
assets
Deferred tax asset -82,243 -1,667
Other long-term assets -57,462 -62,592
Accounts payable -24,720 -59,798
Accrued expenses and
other current 33,929 3,939
liabilities
Deferred revenue and -1,631 3,484
customer deposits
Operating lease -26,730 -26,868
liabilities
Other long-term -1,677 -325
liabilities
Net cash provided by
operating 914,755 731,689
activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisitions, net of cash
acquired and
payments related to prior -685 —
period
acquisitions
Purchases of marketable
securities and -751,923 -780,234
other investments
Proceeds from sales and
maturities of
marketable securities and 688,244 1,043,977
other
investments
Capitalized software -47,968 -37,964
development costs
Purchases of long-lived -12,168 -4,402
assets
Net cash (used in)
provided by investing -124,500 221,377
activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on -193 -5,255
finance leases
Value of equity awards
withheld for tax -62 -213
liabilities
Repurchases of shares of
Class A common -448,296 -670,472
stock and related costs
Proceeds from exercises
of stock options
and shares of Class A 37,293 26,280
common stock
issued under ESPP
Net cash used in -411,258 -649,660
financing activities
NET INCREASE IN CASH,
CASH EQUIVALENTS 378,997 303,406
AND RESTRICTED CASH
CASH, CASH EQUIVALENTS
AND RESTRICTED 682,534 431,437
CASH—Beginning of period
CASH, CASH EQUIVALENTS
AND RESTRICTED $ 1,061,531 $ 734,843
CASH —End of period
8
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP gross profit $ 760,530 $ 632,077
GAAP gross profit growth 20 %
(Y/Y)
GAAP gross margin 49 % 49 %
Non-GAAP adjustments:
Stock-based compensation 3,248 4,305
Amortization of acquired 3,484 15,446
intangibles
Payroll taxes related to
stock-based 538 269
compensation
Non-GAAP gross profit $ 767,800 $ 652,097
Non-GAAP gross profit 18 %
growth (Y/Y)
Non-GAAP gross margin 49 % 50 %
Three Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP income from $ 148,630 $ 40,948
operations
GAAP income from 263 %
operations growth (Y/Y)
GAAP operating margin 10 % 3 %
Non-GAAP adjustments:
Stock-based compensation 153,916 158,169
Amortization of acquired 8,713 26,858
intangibles
Acquisition related 22 —
expenses
Payroll taxes related to
stock-based 8,877 3,429
compensation
Charitable contributions 5,527 5,104
Restructuring costs 46 —
Non-GAAP income from $ 325,731 $ 234,508
operations
Non-GAAP income from
operations growth 39 %
(Y/Y)
Non-GAAP operating margin 21 % 18 %
Three Months Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP net income attributable to
common $ 161,157 $ 37,248
stockholders
Non-GAAP adjustments:
Stock-based compensation 153,916 158,169
Amortization of acquired 8,713 26,858
intangibles
Acquisition related expenses 22 —
Payroll taxes related to
stock-based 8,877 3,429
compensation
Accretion of debt discount and
issuance 444 427
costs
Provision of income tax effects
related -97,304 -60,483
to non-GAAP adjustments
Charitable contributions 5,527 5,104
Share of losses from equity
method 25,489 27,506
investment
Restructuring costs 46 —
Non-GAAP net income
attributable to $ 266,887 $ 198,258
common stockholders
9
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except shares and per share amounts)
(Unaudited)
Three Months
Ended
September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP net
income per
share
attributable $ 1.00 $ 0.23
to common
stockholders,
diluted*
Non-GAAP
adjustments:
Stock-based 0.95 0.99
compensation
Amortization
of acquired 0.05 0.17
intangibles
Acquisition
related — —
expenses
Payroll taxes
related to 0.05 0.02
stock-based
compensation
Accretion of
debt discount — —
and issuance
costs
Provision of
income tax
effects -0.60 -0.38
related
to non-GAAP
adjustments
Charitable 0.03 0.03
contributions
Share of
losses from 0.16 0.17
equity method
investment
Restructuring — —
costs
Non-GAAP net
income per
share
attributable $ 1.65 $ 1.25
to common
stockholders,
diluted
Weighted-ave…
shares used
to compute
non-GAAP net
income per 161,746,027 159,209,951
share
attributable
to common
stockholders,
diluted
* Some columns may not add due to rounding
10
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except percentages)
(Unaudited)
Three Months Ended
September 30,
Organic Revenue 2026
──────────────────────────────────────────────────────────────────
GAAP Revenue $ 1,559,536
A2P Revenue -53,128
Acquisition Revenue -1,760
Organic Revenue $ 1,504,648
GAAP Revenue Growth (Y/Y) 20 %
Organic Revenue Growth (Y/Y) 16%1
¹ Organic revenue for the three months ended September 30, 2025, when used as
the denominator for Organic Revenue Growth for the three months ended September
30, 2026 is equal to reported revenue. Revenue for the three months ended
September 30, 2025 was $1.30 billion.
Free cash flow and Three Months Ended
free cash flow September 30,
margin 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP net cash
provided by $ 389,164 $ 263,563
operating
activities
Operating cash flow 25 % 20 %
margin
Non-GAAP
adjustments:
Capitalized software -14,585 -13,812
development costs
Purchase of -4,950 -2,235
long-lived assets
Free cash flow $ 369,629 $ 247,516
Free cash flow 24 % 19 %
margin
GAAP net cash used
in investing $ -30,064 $ -161,502
activities
GAAP net cash used
in financing $ -120,830 $ -347,952
activities
11
TWILIO INC.
Supplemental Stock-Based Compensation Expense Information
(In thousands, except percentages)
(Unaudited)
Three Months Ended
Stock-Based September 30,
Compensation Expense 2026 2025
──────────────────────────────────────────────────────────────────────────────
Cost of revenue $ 3,248 $ 4,305
Research and 79,204 86,020
development
Sales and marketing 35,313 36,304
General and 36,151 31,540
administrative
Total $ 153,916 $ 158,169
Stock-Based
Compensation Expense 9.9 % 12.2 %
as a %
of Revenue
12
CONTACT:
Investor Contact:
Rodney Nelson
ir@Twilio.com
or
Media Contact:
Caitlin Epstein
press@Twilio.com
13