Results
Twilio Announces Third Quarter 2026 Results
3Revenue of $1.56 billion, up 20% reported and 16% organic year-over-year
4GAAP gross profit of $761 million, up 20% year-over-year
5Non-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
6Revenue of $1.56 billion, up 20% year-over-year.
7Organic revenue growth was 16% year-over-year.
8GAAP 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
1Dollar-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.
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
Dollars and shares in millions, except per share amountsQ4 2026 Guidance
Revenue$1,595 - $1,605
Y/Y Revenue Growth17% - 17.5%
Y/Y Organic Revenue Growth11% - 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 outstanding163
2For 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 millionsFY26 Guidance
Y/Y Revenue Growth20%
Y/Y Organic Revenue Growth15%
Non-GAAP income from operations$1,190 - $1,200
Free cash flow$1,190 - $1,200
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.
We use these non-GAAP
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.
A reconciliation of these measures to the most directly comparable GAAP measures is included at the end of this press release.
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.
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.
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.
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
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.
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