Twilio (TWLO)
Market Price (5/20/2026): $195.85 | Market Cap: $29.9 BilSector: Information Technology | Industry: Systems Software
Twilio (TWLO)
Market Price (5/20/2026): $195.85Market Cap: $29.9 BilSector: Information TechnologyIndustry: Systems Software
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 18%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 17% Stock buyback supportStock Buyback 3Y Total is 4.0 Bil Megatrend and thematic driversMegatrends include Cloud Computing, E-commerce & DTC Adoption, and Fintech & Digital Payments. Themes include Platform as a Service (PaaS), Show more. | Trading close to highsDist 52W High is -2.9%, Dist 3Y High is -2.9% | Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 115x, P/EPrice/Earnings or Price/(Net Income) is 287x Significant share based compensationSBC/Rev LTMShare Based Compensation / Revenue (Sales), Last Twelve Months (LTM) is 11% Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -3.8% Key risksTWLO key risks include [1] significant profitability and margin pressures in its core messaging business, Show more. |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 18%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 17% |
| Stock buyback supportStock Buyback 3Y Total is 4.0 Bil |
| Megatrend and thematic driversMegatrends include Cloud Computing, E-commerce & DTC Adoption, and Fintech & Digital Payments. Themes include Platform as a Service (PaaS), Show more. |
| Trading close to highsDist 52W High is -2.9%, Dist 3Y High is -2.9% |
| Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 115x, P/EPrice/Earnings or Price/(Net Income) is 287x |
| Significant share based compensationSBC/Rev LTMShare Based Compensation / Revenue (Sales), Last Twelve Months (LTM) is 11% |
| Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -3.8% |
| Key risksTWLO key risks include [1] significant profitability and margin pressures in its core messaging business, Show more. |
Qualitative Assessment
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1. Stronger-than-Expected Financial Performance and Upbeat Future Guidance.
Twilio significantly outperformed analyst expectations in both its Q4 2025 and Q1 2026 earnings reports. For Q4 2025, reported on February 12, 2026, the company announced revenue of $1.37 billion, a 14% year-over-year increase, beating estimates, and projected strong free cash flow and revenue growth for fiscal year 2026. Building on this momentum, Q1 2026 results, released on April 30, 2026, showcased revenue of $1.41 billion, a 20% year-over-year increase, surpassing consensus estimates of $1.3 billion to $1.34 billion, and non-GAAP diluted earnings per share (EPS) of $1.50, considerably higher than analyst forecasts (e.g., $1.27 or $1.30). This strong performance, described as the highest revenue and gross profit growth rates in over three years, led the company to raise its full-year 2026 reported revenue growth outlook to 14%-15% and its organic revenue growth outlook to 9.5%-10.5%.
2. Accelerating AI-Driven Growth and Strategic Positioning.
Twilio has successfully positioned itself as a critical infrastructure provider in the artificial intelligence (AI) era, which has been a significant driver of its stock appreciation. Management highlighted that Twilio is "quickly becoming a foundational infrastructure layer in the age of AI" with accelerating voice and messaging usage tied to AI use cases. The company is actively winning AI-driven customer engagement deals, leading to expanded consumption-based spending from its customer base. Analysts also emphasized Twilio's strengthening AI positioning and its deep integration with telecom networks and partnerships with emerging AI firms as key competitive advantages.
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Stock Movement Drivers
Fundamental Drivers
The 62.7% change in TWLO stock from 1/31/2026 to 5/19/2026 was primarily driven by a 42.8% change in the company's Net Income Margin (%).| (LTM values as of) | 1312026 | 5192026 | Change |
|---|---|---|---|
| Stock Price ($) | 120.46 | 195.95 | 62.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,896 | 5,302 | 8.3% |
| Net Income Margin (%) | 1.4% | 2.0% | 42.8% |
| P/E Multiple | 274.4 | 287.3 | 4.7% |
| Shares Outstanding (Mil) | 153 | 152 | 0.5% |
| Cumulative Contribution | 62.7% |
Market Drivers
1/31/2026 to 5/19/2026| Return | Correlation | |
|---|---|---|
| TWLO | 62.7% | |
| Market (SPY) | 6.3% | 31.0% |
| Sector (XLK) | 20.6% | 37.6% |
Fundamental Drivers
The 45.3% change in TWLO stock from 10/31/2025 to 5/19/2026 was primarily driven by a 42.8% change in the company's Net Income Margin (%).| (LTM values as of) | 10312025 | 5192026 | Change |
|---|---|---|---|
| Stock Price ($) | 134.88 | 195.95 | 45.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,896 | 5,302 | 8.3% |
| Net Income Margin (%) | 1.4% | 2.0% | 42.8% |
| P/E Multiple | 307.3 | 287.3 | -6.5% |
| Shares Outstanding (Mil) | 153 | 152 | 0.5% |
| Cumulative Contribution | 45.3% |
Market Drivers
10/31/2025 to 5/19/2026| Return | Correlation | |
|---|---|---|
| TWLO | 45.3% | |
| Market (SPY) | 8.2% | 32.8% |
| Sector (XLK) | 15.5% | 40.9% |
Fundamental Drivers
The 102.6% change in TWLO stock from 4/30/2025 to 5/19/2026 was primarily driven by a 69.2% change in the company's P/S Multiple.| (LTM values as of) | 4302025 | 5192026 | Change |
|---|---|---|---|
| Stock Price ($) | 96.71 | 195.95 | 102.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,458 | 5,302 | 18.9% |
| P/S Multiple | 3.3 | 5.6 | 69.2% |
| Shares Outstanding (Mil) | 154 | 152 | 0.7% |
| Cumulative Contribution | 102.6% |
Market Drivers
4/30/2025 to 5/19/2026| Return | Correlation | |
|---|---|---|
| TWLO | 102.6% | |
| Market (SPY) | 33.8% | 32.4% |
| Sector (XLK) | 66.0% | 37.7% |
Fundamental Drivers
The 272.5% change in TWLO stock from 4/30/2023 to 5/19/2026 was primarily driven by a 121.5% change in the company's P/S Multiple.| (LTM values as of) | 4302023 | 5192026 | Change |
|---|---|---|---|
| Stock Price ($) | 52.61 | 195.95 | 272.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 3,826 | 5,302 | 38.6% |
| P/S Multiple | 2.5 | 5.6 | 121.5% |
| Shares Outstanding (Mil) | 185 | 152 | 21.4% |
| Cumulative Contribution | 272.5% |
Market Drivers
4/30/2023 to 5/19/2026| Return | Correlation | |
|---|---|---|
| TWLO | 272.5% | |
| Market (SPY) | 83.3% | 40.5% |
| Sector (XLK) | 134.5% | 39.3% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| TWLO Return | -22% | -81% | 55% | 42% | 32% | 39% | -42% |
| Peers Return | 16% | -45% | 45% | -19% | 1% | 10% | -16% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 8% | 97% |
Monthly Win Rates [3] | |||||||
| TWLO Win Rate | 33% | 17% | 50% | 58% | 50% | 80% | |
| Peers Win Rate | 67% | 33% | 58% | 48% | 50% | 52% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 60% | |
Max Drawdowns [4] | |||||||
| TWLO Max Drawdown | -44% | -84% | -39% | -30% | -45% | -24% | |
| Peers Max Drawdown | -27% | -57% | -23% | -36% | -37% | -36% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: VRSN, MDB, AKAM, OKTA, CHOW. See TWLO Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 5/19/2026 (YTD)
How Low Can It Go
| Event | TWLO | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -32.9% | -18.8% |
| % Gain to Breakeven | 49.0% | 23.1% |
| Time to Breakeven | 59 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -16.9% | -9.5% |
| % Gain to Breakeven | 20.4% | 10.5% |
| Time to Breakeven | 18 days | 24 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -25.3% | -6.7% |
| % Gain to Breakeven | 33.8% | 7.1% |
| Time to Breakeven | 12 days | 31 days |
| 2020 COVID-19 Crash | ||
| % Loss | -44.0% | -33.7% |
| % Gain to Breakeven | 78.6% | 50.9% |
| Time to Breakeven | 52 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -20.9% | -19.2% |
| % Gain to Breakeven | 26.4% | 23.8% |
| Time to Breakeven | 14 days | 105 days |
| 2016-2017 Trump Reflation Bond Selloff | ||
| % Loss | -66.4% | -3.7% |
| % Gain to Breakeven | 197.7% | 3.9% |
| Time to Breakeven | 455 days | 6 days |
In The Past
Twilio's stock fell -32.9% during the 2025 US Tariff Shock. Such a loss loss requires a 49.0% gain to breakeven.
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| Event | TWLO | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -32.9% | -18.8% |
| % Gain to Breakeven | 49.0% | 23.1% |
| Time to Breakeven | 59 days | 79 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -25.3% | -6.7% |
| % Gain to Breakeven | 33.8% | 7.1% |
| Time to Breakeven | 12 days | 31 days |
| 2020 COVID-19 Crash | ||
| % Loss | -44.0% | -33.7% |
| % Gain to Breakeven | 78.6% | 50.9% |
| Time to Breakeven | 52 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -20.9% | -19.2% |
| % Gain to Breakeven | 26.4% | 23.8% |
| Time to Breakeven | 14 days | 105 days |
| 2016-2017 Trump Reflation Bond Selloff | ||
| % Loss | -66.4% | -3.7% |
| % Gain to Breakeven | 197.7% | 3.9% |
| Time to Breakeven | 455 days | 6 days |
In The Past
Twilio's stock fell -32.9% during the 2025 US Tariff Shock. Such a loss loss requires a 49.0% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Twilio (TWLO)
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Here are 1-2 brief analogies for Twilio:
Stripe for communications
AWS for customer engagement APIs
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- Voice APIs: Services enabling developers to embed voice calls, conferencing, and interactive voice response (IVR) into applications.
- Messaging APIs: Services allowing developers to integrate SMS, MMS, and other chat messaging functionalities into their software.
- Video APIs: Services for developers to embed real-time video, such as video calls and conferencing, into their applications.
- Email APIs: Services providing developers with tools to programmatically send, receive, and track emails from within their applications.
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Major Customers of Twilio (TWLO)
Twilio primarily sells its cloud communications platform and APIs to other companies, enabling them to embed voice, messaging, video, and email capabilities into their own software applications.
Major customers include:
- Uber (NYSE: UBER)
- Lyft (NASDAQ: LYFT)
- Zendesk (NYSE: ZEN)
- Netflix (NASDAQ: NFLX)
- Salesforce (NYSE: CRM)
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- Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (AMZN)
- Google Cloud Platform (GCP), a subsidiary of Alphabet Inc. (GOOGL)
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Khozema Shipchandler, Chief Executive OfficerKhozema Shipchandler has over 25 years of experience, currently serving as the Chief Executive Officer of Twilio since January 2024. Before becoming CEO, he held several key positions at Twilio, including President of Twilio Communications, Chief Operating Officer, and Chief Financial Officer. Prior to joining Twilio in 2018, Shipchandler had an extensive career at GE, where he held various operating and financial leadership roles across Industrial Internet, Corporate Audit, and Aviation sectors in the U.S., Middle East, and Singapore. His roles at GE also included Chief Commercial Officer and CFO & EVP of Corporate Development at GE Digital, as well as Vice President of Corporate Audit Staff at GE. He has also served on the board of directors for SendGrid, Inc. and Quiet Plus I Acquisition Corp., and previously for Pivotal Software, Inc.
Aidan Viggiano, Chief Financial OfficerAidan Viggiano is Twilio's Chief Financial Officer, a position she assumed in March 2023. She joined Twilio in 2019 and previously served as Senior Vice President of Finance and Vice President of Corporate Finance within the company. Viggiano brings over 20 years of experience, having held a variety of finance leadership roles at General Electric prior to her time at Twilio, including Chief of Staff to the GE CFO.
Christy Lake, Chief Administrative OfficerChristy Lake serves as the Chief Administrative Officer at Twilio. She is responsible for ensuring the company's operational excellence and fostering a diverse and inclusive environment.
Thomas Wyatt, Chief Revenue OfficerThomas Wyatt is the Chief Revenue Officer at Twilio. In this role, he is part of the leadership team responsible for setting the strategic direction and vision of the company.
Chris Koehler, Chief Marketing OfficerChris Koehler is the Chief Marketing Officer at Twilio, having joined in May 2024. He has over 25 years of experience in customer engagement and marketing technology, with a background in driving growth and innovation at leading companies. Before joining Twilio, Koehler served as the CMO at Box, where he played a key role in the company exceeding $1 billion in annual revenue. His career also includes leadership positions in marketing, customer success, solution consulting, demand generation, and enablement teams at Adobe Systems, E*TRADE Financial, SunTrust Bank, and Claritas. Notably, a small software startup he worked for was acquired by Adobe.
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Key Risks to Twilio (TWLO)
Twilio Inc. (TWLO) faces several key business risks, primarily stemming from its profitability challenges, intense competitive landscape, and the complexities of navigating a dynamic regulatory environment.
The most significant risk to Twilio is its **thin profit margins and ongoing profitability challenges**. Despite its revenue growth, the company's profits remain slim, and its gross margins are notably lower compared to many of its software peers. This low profitability makes Twilio vulnerable to any slowdown in growth or increases in operating costs. Additionally, substantial stock-based compensation continues to exert financial pressure and dilute investors. The company's core Communications segment is a high-volume, lower-margin business, and while the Segment platform is aimed at higher profitability, its growth has stagnated, indicating challenges in that market.
Secondly, Twilio operates in an **intensely competitive market, leading to pricing pressure and challenges in customer acquisition and retention**. The Communications Platform as a Service (CPaaS) sector sees competition from a diverse array of players, including established telecommunications companies, other CPaaS providers like Sinch, Infobip, and Vonage, and even broader Customer Relationship Management (CRM) platforms. This competitive environment can erode Twilio's pricing power, potentially forcing it to lower prices and impacting its ability to improve margins. Furthermore, large customers may choose to diversify their CPaaS spending or develop internal communication solutions, as seen with past instances involving major clients.
Lastly, **evolving regulatory changes and compliance requirements across various global jurisdictions pose a considerable risk**. As a global cloud communications platform, Twilio must adhere to complex and frequently changing laws regarding data privacy, telecommunications, and "Know Your Customer" (KYC) mandates in numerous countries. Non-compliance with these regulations can lead to increased operational costs, potential penalties, service disruptions, or even the disconnection of phone numbers. Changes in U.S. and global tax laws could also adversely affect the company's financial position.
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The clear emerging threat to Twilio is the increasing competition from hyperscale cloud providers, particularly Microsoft Azure Communication Services (ACS).
Azure Communication Services directly competes with Twilio by offering a similar suite of application programming interfaces (APIs) for embedding voice, video, chat, SMS, and email capabilities into applications. For organizations already using Microsoft Azure for their cloud infrastructure, ACS can offer a more integrated solution with consolidated billing, simplified management, and potentially competitive pricing, making it a compelling alternative to Twilio for their communication needs.
This situation is analogous to the historical examples provided, where a major incumbent or a new entrant with a strong ecosystem (like Apple with the iPhone or Netflix with streaming) disrupts an existing market leader (BlackBerry, Blockbuster) by offering a competitive or superior alternative.
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Twilio operates in substantial and growing addressable markets for its communication and customer engagement platforms. The addressable market for Twilio's services is projected to reach $118 billion by 2028 globally. Specifically, within the Communications Platform as a Service (CPaaS) market, where Twilio holds a leadership position, the market is projected to grow from $12.3 billion to $121 billion by 2034 globally. Additionally, Twilio's acquisition of Segment contributes to the Customer Data Platform (CDP) market, which was estimated at approximately $17 billion as of Q1 2021. The broader Software - Infrastructure segment of the Technology sector, in which Twilio operates, is a $5.0 trillion market by 2027 globally.AI Analysis | Feedback
Here are the expected drivers of future revenue growth for Twilio (TWLO) over the next 2-3 years:- AI-driven Product Innovation and Adoption: Twilio is positioned as a standard for Voice AI agent infrastructure among AI startups. The company is expected to drive future revenue growth through the acceleration of Voice AI adoption, the movement of Voice AI proofs of concept into production, and the launch of new AI-focused products such as Conversational Memory and multi-channel orchestration. These new offerings are designed to be more ISV-friendly and extend AI benefits across various communication channels, particularly within key verticals like Fintech, Healthcare, Real Estate, and Insurance.
- Growth in Core Communications (Messaging and Voice) and High-Margin Add-on Products: Analysts anticipate an increase in messaging and voice volumes in the medium term, which is expected to be a significant driver. This growth in core communication services is also projected to stimulate the sale of high-margin software add-on products. Twilio has already demonstrated strong growth in messaging, both domestically and internationally.
- Customer Base Expansion and Increased Spending from Existing Customers: Twilio continues to expand its active customer accounts, adding tens of thousands of new customers annually. Furthermore, the company's dollar-based net expansion rate indicates that existing customers are increasing their usage and spending on Twilio's platform, contributing to organic revenue growth.
- Incremental Revenue from Carrier Fee Pass-Throughs: While primarily pass-throughs, carrier fee increases are expected to contribute incremental reported revenue. Twilio anticipates approximately $190 million in additional revenue in 2026 from these fees.
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Share Repurchases
- Twilio initiated a $1 billion share repurchase program in early 2023.
- In March 2024, an additional $2 billion share repurchase program was authorized, with the company targeting to complete approximately $2.2 billion in repurchases from both programs by the end of 2024.
- A new $2 billion share repurchase program was announced in January 2025, which is valid until December 31, 2027.
Share Issuance
- In February 2021, Twilio commenced an underwritten public offering of $1 billion of its Class A common stock, with an option for underwriters to purchase an additional $150 million.
Outbound Investments
- Twilio acquired Segment for an estimated $3.2 billion in Twilio Class A stock in October 2020, aiming to bolster its customer engagement software suite.
- Twilio's most recent acquisition was Ionic Security in May 2021.
- Other acquisitions in 2021 included Zipwhip and ValueFirst.
Capital Expenditures
- Twilio's capital expenditures were $46.05 million in 2021, $34.42 million in 2022, $11.31 million in 2023, $6.978 million in 2024, and $5.848 million in 2025.
- Expected capital expenditures are $7.277 million for 2026.
- Capital expenditures include purchases of long-lived and intangible assets.
Latest Trefis Analyses
Trade Ideas
Select ideas related to TWLO.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 04302026 | PLTR | Palantir Technologies | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 0.0% | 0.0% | 0.0% |
| 04102026 | ADSK | Autodesk | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 8.5% | 8.5% | 0.0% |
| 04102026 | BSY | Bentley Systems | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 4.2% | 4.2% | 0.0% |
| 04102026 | ENPH | Enphase Energy | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 5.7% | 5.7% | 0.0% |
| 04102026 | BL | BlackLine | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | 3.2% | 3.2% | -3.0% |
| 02282023 | TWLO | Twilio | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | -9.9% | -11.1% | -31.8% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 168.64 |
| Mkt Cap | 27.2 |
| Rev LTM | 2,919 |
| Op Inc LTM | 259 |
| FCF LTM | 863 |
| FCF 3Y Avg | 738 |
| CFO LTM | 965 |
| CFO 3Y Avg | 795 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 11.8% |
| Rev Chg 3Y Avg | 10.3% |
| Rev Chg Q | 11.6% |
| QoQ Delta Rev Chg LTM | 2.8% |
| Op Inc Chg LTM | 36.6% |
| Op Inc Chg 3Y Avg | 25.6% |
| Op Mgn LTM | 5.2% |
| Op Mgn 3Y Avg | -0.7% |
| QoQ Delta Op Mgn LTM | 0.9% |
| CFO/Rev LTM | 30.3% |
| CFO/Rev 3Y Avg | 27.2% |
| FCF/Rev LTM | 20.3% |
| FCF/Rev 3Y Avg | 18.6% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 27.2 |
| P/S | 5.6 |
| P/Op Inc | 35.0 |
| P/EBIT | 35.1 |
| P/E | 47.2 |
| P/CFO | 25.9 |
| Total Yield | 1.5% |
| Dividend Yield | 0.0% |
| FCF Yield 3Y Avg | 4.8% |
| D/E | 0.0 |
| Net D/E | -0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 22.8% |
| 3M Rtn | 17.1% |
| 6M Rtn | 13.9% |
| 12M Rtn | 38.6% |
| 3Y Rtn | 28.4% |
| 1M Excs Rtn | 16.5% |
| 3M Excs Rtn | 9.5% |
| 6M Excs Rtn | 2.3% |
| 12M Excs Rtn | 15.1% |
| 3Y Excs Rtn | -45.9% |
Comparison Analyses
Price Behavior
| Market Price | $195.95 | |
| Market Cap ($ Bil) | 29.8 | |
| First Trading Date | 06/23/2016 | |
| Distance from 52W High | -2.9% | |
| 50 Days | 200 Days | |
| DMA Price | $147.83 | $125.76 |
| DMA Trend | up | up |
| Distance from DMA | 32.6% | 55.8% |
| 3M | 1YR | |
| Volatility | 62.9% | 56.8% |
| Downside Capture | 83.43 | 166.89 |
| Upside Capture | 282.68 | 186.08 |
| Correlation (SPY) | 26.7% | 31.0% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 1.03 | 0.97 | 1.39 | 1.38 | 1.45 | 1.36 |
| Up Beta | 0.30 | 0.30 | 0.82 | 1.01 | 1.40 | 1.23 |
| Down Beta | -2.92 | 0.18 | -0.29 | 0.45 | 1.06 | 1.42 |
| Up Capture | 192% | 189% | 235% | 257% | 212% | 365% |
| Bmk +ve Days | 15 | 22 | 31 | 66 | 141 | 428 |
| Stock +ve Days | 13 | 24 | 36 | 70 | 134 | 404 |
| Down Capture | 615% | 112% | 190% | 146% | 138% | 107% |
| Bmk -ve Days | 4 | 18 | 30 | 56 | 108 | 321 |
| Stock -ve Days | 9 | 19 | 28 | 55 | 117 | 347 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with TWLO | |
|---|---|---|---|---|
| TWLO | 61.8% | 56.5% | 1.06 | - |
| Sector ETF (XLK) | 48.6% | 20.5% | 1.82 | 36.9% |
| Equity (SPY) | 25.0% | 12.1% | 1.55 | 31.6% |
| Gold (GLD) | 40.0% | 26.8% | 1.23 | -0.8% |
| Commodities (DBC) | 49.4% | 18.5% | 2.03 | -3.9% |
| Real Estate (VNQ) | 9.7% | 13.4% | 0.45 | 9.1% |
| Bitcoin (BTCUSD) | -25.6% | 41.9% | -0.59 | 27.2% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with TWLO | |
|---|---|---|---|---|
| TWLO | -8.7% | 58.7% | 0.08 | - |
| Sector ETF (XLK) | 22.4% | 24.8% | 0.79 | 48.6% |
| Equity (SPY) | 14.2% | 17.0% | 0.65 | 48.1% |
| Gold (GLD) | 19.3% | 18.0% | 0.87 | 1.4% |
| Commodities (DBC) | 11.0% | 19.4% | 0.45 | 4.6% |
| Real Estate (VNQ) | 4.0% | 18.8% | 0.11 | 33.0% |
| Bitcoin (BTCUSD) | 9.4% | 55.6% | 0.38 | 23.9% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with TWLO | |
|---|---|---|---|---|
| TWLO | 20.6% | 60.5% | 0.57 | - |
| Sector ETF (XLK) | 24.6% | 24.4% | 0.91 | 46.7% |
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Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 4/30/2026 | 23.8% | 33.1% | |
| 2/12/2026 | 2.3% | 2.5% | 14.4% |
| 10/30/2025 | 19.5% | 13.0% | 15.0% |
| 8/7/2025 | -19.4% | -17.6% | -10.9% |
| 5/1/2025 | 2.3% | 7.5% | 22.2% |
| 1/23/2025 | 20.1% | 30.8% | 4.1% |
| 10/30/2024 | 14.3% | 28.0% | 48.1% |
| 8/1/2024 | 11.7% | 7.7% | 11.5% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 13 | 11 | 11 |
| # Negative | 12 | 14 | 13 |
| Median Positive | 7.7% | 13.0% | 14.5% |
| Median Negative | -11.0% | -12.3% | -14.1% |
| Max Positive | 39.6% | 53.1% | 60.7% |
| Max Negative | -34.6% | -22.4% | -34.4% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/01/2026 | 10-Q |
| 12/31/2025 | 02/24/2026 | 10-K |
| 09/30/2025 | 10/31/2025 | 10-Q |
| 06/30/2025 | 08/08/2025 | 10-Q |
| 03/31/2025 | 05/02/2025 | 10-Q |
| 12/31/2024 | 02/26/2025 | 10-K |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/01/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/27/2024 | 10-K |
| 09/30/2023 | 11/09/2023 | 10-Q |
| 06/30/2023 | 08/09/2023 | 10-Q |
| 03/31/2023 | 05/10/2023 | 10-Q |
| 12/31/2022 | 02/27/2023 | 10-K |
| 09/30/2022 | 11/04/2022 | 10-Q |
| 06/30/2022 | 08/05/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q1 2026 Earnings Reported 4/30/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q2 2026 Revenue | 1.42 Bil | 1.43 Bil | 1.43 Bil | 6.3% | Raised | Guidance: 1.34 Bil for Q1 2026 | |
| Q2 2026 Revenue Growth | 15.5% | 16.0% | 16.5% | 10.3% | 1.5% | Raised | Guidance: 14.5% for Q1 2026 |
| Q2 2026 Organic Revenue Growth | 10.0% | 10.5% | 11.0% | 0 | 0 | Affirmed | Guidance: 10.5% for Q1 2026 |
| Q2 2026 Operating Income | 250.00 Mil | 255.00 Mil | 260.00 Mil | 4.1% | Raised | Guidance: 245.00 Mil for Q1 2026 | |
| Q2 2026 EPS | 1.27 | 1.29 | 1.32 | 4.9% | Raised | Guidance: 1.24 for Q1 2026 | |
| 2026 Revenue Growth | 14.0% | 14.5% | 15.0% | 20.8% | 2.5% | Raised | Guidance: 12.0% for 2026 |
| 2026 Organic Revenue Growth | 9.5% | 10.0% | 10.5% | 17.6% | 1.5% | Raised | Guidance: 8.5% for 2026 |
| 2026 Operating Income | 1.08 Bil | 1.09 Bil | 1.10 Bil | 3.8% | Raised | Guidance: 1.05 Bil for 2026 | |
| 2026 Free Cash Flow | 1.08 Bil | 1.09 Bil | 1.10 Bil | 3.8% | Raised | Guidance: 1.05 Bil for 2026 | |
Prior: Q4 2025 Earnings Reported 2/12/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Revenue | 1.33 Bil | 1.34 Bil | 1.34 Bil | 1.9% | Raised | Guidance: 1.31 Bil for Q4 2025 | |
| Q1 2026 Revenue Growth | 14.0% | 14.5% | 15.0% | 45.0% | 4.5% | Raised | Guidance: 10.0% for Q4 2025 |
| Q1 2026 Organic Revenue Growth | 10.0% | 10.5% | 11.0% | 23.5% | 2.0% | Raised | Guidance: 8.5% for Q4 2025 |
| Q1 2026 Non-GAAP Income from Operations | 240.00 Mil | 245.00 Mil | 250.00 Mil | 4.3% | Raised | Guidance: 235.00 Mil for Q4 2025 | |
| Q1 2026 Non-GAAP Diluted EPS | 1.21 | 1.24 | 1.26 | 3.3% | Raised | Guidance: 1.2 for Q4 2025 | |
| 2026 Revenue Growth | 11.5% | 12.0% | 12.5% | -4.0% | -0.5% | Lowered | Guidance: 12.5% for 2025 |
| 2026 Organic Revenue Growth | 8.0% | 8.5% | 9.0% | -25.4% | -2.9% | Lowered | Guidance: 11.4% for 2025 |
| 2026 Non-GAAP Income from Operations | 1.04 Bil | 1.05 Bil | 1.06 Bil | 16.0% | Raised | Guidance: 905.00 Mil for 2025 | |
| 2026 Free Cash Flow | 1.04 Bil | 1.05 Bil | 1.06 Bil | 13.5% | Raised | Guidance: 925.00 Mil for 2025 | |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Viggiano, Aidan | Chief Financial Officer | Direct | Sell | 5192026 | 197.44 | 1,376 | 271,676 | 25,503,792 | Form |
| 2 | Stafman, Andrew | See footnotes | Sell | 5122026 | 193.54 | 675,000 | 130,639,500 | 313,534,800 | Form | |
| 3 | Rottenberg, Erika | Trust | Sell | 5062026 | 185.32 | 1,500 | 277,974 | 6,114,498 | Form | |
| 4 | Rottenberg, Erika | Trust | Sell | 4232026 | 149.02 | 1,800 | 268,239 | 5,140,497 | Form | |
| 5 | Shipchandler, Khozema | Chief Executive Officer | Direct | Sell | 4082026 | 133.39 | 15,715 | 2,096,193 | 31,418,483 | Form |
TWLO Trade Sentinel
AVOID (Score 1-2)
CONVICTION RATIONALE
The risk-reward is highly unattractive with a probability-adjusted skew of 0.36x. The investment thesis requires believing in a turnaround of the 'Segment' business, but the hard data shows a -1% YoY decline. The moat is eroding in the core business, and the valuation does not adequately compensate for the high probability that the turnaround strategy will fail.
STOCK ARCHETYPE
Turnaround / Deep ValueTwilio is no longer a 'High-Beta Compounder' as growth has materially decelerated. The investment thesis now hinges entirely on the successful execution of a strategic pivot from its commoditizing core 'Communications' business to the higher-margin 'Data & Applications' segment. This places the focus squarely on strategic execution and management's ability to right the ship, fitting the 'Turnaround' archetype.
INVESTMENT THESIS
The primary long thesis is a margin expansion and free cash flow story, driven by a successful strategic shift. As the business mix skews towards the higher-margin 'Data & Applications' (Segment) business, overall profitability should improve significantly, leading to substantial EPS growth and FCF generation even with decelerating top-line growth.
- 'Data & Applications' Gross Margin is ~75% vs. 'Communications' at ~50%.
- Management has shifted capital allocation priorities to FCF generation, with guidance for $920M-$930M in 2025, up from $657M in 2024.
- The company has a significant opportunity for operating margin expansion from 18% towards a mature SaaS peer level of 25-30%.
PRIMARY RISK
The greatest risk to the thesis is the persistent failure of the 'Segment' (Customer Data Platform) business to achieve escape velocity. Recent data shows this unit's revenue declined 1% YoY, directly contradicting the 'Alpha Driver'. If Segment cannot become a reliable growth engine, Twilio is left with a structurally challenged, commoditizing core business with limited pricing power.
- The 'Segment' business unit's revenue declined by 1% year-over-year in Q4 2024.
- The risk of 'Structural Stagnation of Segment' is rated as CRITICAL with a HIGH likelihood in the next 6 months.
- Intense competition in the Customer Data Platform market is preventing Segment from gaining market share.
| KPI | Threshold | Rationale |
|---|---|---|
| Data & Applications (Segment) Revenue Growth YoY | >10% | This is the single most important leading indicator for the Alpha Driver. Any number below high single digits confirms the turnaround is failing. |
| Non-GAAP Gross Margin | Stable or Expanding | Measures the impact of commoditization and carrier fees in the core business. A declining margin would signal pricing power is deteriorating faster than the mix-shift can offset. |
| Dollar-Based Net Expansion Rate | >105% | While this metric has decelerated, a drop below 100% would indicate net customer churn, a significant red flag for the health of the existing customer base. |
The Segment Growth Engine vs. Core Commoditization
BULL VIEW
A strategic mix shift to the 'Segment' data platform will expand margins and re-accelerate growth, proving Twilio is a customer engagement platform, not a utility.
CORE TENSION
Can the high-margin 'Data & Applications' business grow fast enough to offset the commoditization and margin pressure in the core 'Communications' business?
PREVAILING SENTIMENT
The 'Segment' (Customer Data Platform) business unit's revenue declined by 1% year-over-year in the most recently reported quarter (Q4 2024), while the core business grew.
BEAR VIEW
The 'Segment' acquisition is failing to deliver growth, leaving the company exposed to intense pricing pressure from competitors and hyperscalers in its core, low-margin business.
| Timeline | Event & Metric To Watch |
|---|---|
Feb 12, 2026 | Q4 2025 Earnings Report Watch: Growth rate of the 'Segment' (Data & Applications) business. A figure below high single-digits is a major failure signal. |
Feb 12, 2026 | Q1 2026 Gross Margin Guidance Watch: Commentary on 'gross margin' and 'carrier fees'. Any downward revision to margin guidance is a negative trigger. |
Next 6 Months | Hyperscaler Developer Conferences Watch: Announcements of new features, pricing, or bundling for Azure Communication Services or AWS Pinpoint. |
Ongoing | Major Tech Sector Earnings Calls Watch: Announcements of further headcount reductions or hiring freezes from large tech employers, a core Twilio customer base. |
| Date | Event | Stock Impact |
|---|---|---|
8/7/2025 | Q2 2025 Earnings Report Details: Despite meeting revenue expectations, the company reported a year-over-year decline in gross margins, citing rising carrier fees, which led to a sharp stock sell-off. | Plummeted -19.38% $122.39 -> $98.67 |
9/18/2025 | Announces Major Enterprise Win Details: The company announced a new contract with 'Global Bank X' for its fraud detection API, signaling strength in high-value enterprise use cases. | Rose significantly by 4.68% $103.53 -> $108.38 |
10/30/2025 | Q3 2025 Earnings Report Details: Twilio reported accelerating active customer accounts and dollar-based net expansion rate, significantly beating expectations and causing the stock to surge in the following session. | Surged +19.51% $112.86 -> $134.88 |
12/30/2025 | Stock Reaches 6-Month High Details: The stock reached its highest point in the trailing 6-month period, driven by broad market strength and momentum from its strong Q3 earnings report. | Modest 1.85% gain $141.52 -> $144.14 |
1/15/2026 | Mass Arbitration Claims Surface Details: Reports emerged of mass arbitration claims alleging improper data collection via Twilio's SDKs. Stock fell on concerns of unquantified legal and financial liabilities. | Fell notably by -2.64% $123.03 -> $119.78 |
Position Sizing
1% - 3%
CONSERVATIVE
Stock is in an Explosive Volatility regime (4.6x S&P). The Bearish sentiment, eroding moat, and low near-term visibility create a high-risk profile, forcing a Conservative sizing until the fundamental picture improves.
Diversification Alternatives
VEEV
SECTORUnlike TWLO's commoditizing business, VEEV has a strong regulatory moat in Life Sciences SaaS, leading to high switching costs and superior pricing power.
DDOG
SECTORDDOG's integrated, vendor-neutral observability platform has a stronger position against hyperscalers than TWLO, serving as a necessary multi-cloud aggregation layer.
Twilio is pivoting from a growth-at-all-costs CPaaS provider to a disciplined, profitable Customer Engagement Platform, leveraging its massive developer base to embed AI-driven communications and data services, while facing gross margin pressure from carrier fees.
Filter all news through the lens of profitable growth and the AI-enabled platform transition. Focus on organic growth acceleration and gross margin stabilization.
Organic revenue growth guidance increasing above the 8-9% FY2026 forecast. Dollar-Based Net Expansion Rate rising above 110%. Gross margins stabilizing or improving, signaling pricing power over carrier fees. Major customer wins for Twilio Segment or Voice AI products.
Further erosion of non-GAAP gross margins below 49%. Dollar-Based Net Expansion Rate falling below 105%. Deceleration in active customer account growth. Competitors like Sinch or Vonage winning large enterprise deals with better pricing.
Quarterly fluctuations in specific product lines (e.g., messaging vs. voice) as long as overall organic growth is on track. Insider selling, given the large outstanding share buyback program. Regional competitor announcements without evidence of market share shifts in key geographies.
Repricing Catalyst
The market is re-evaluating Twilio as a profitable, cash-generating entity rather than just a revenue growth story. The primary catalyst is achieving full-year GAAP profitability in FY2025 ($158M income from operations vs. a -$54M loss in FY24) and guiding to over $1B in free cash flow for FY2026. This is coupled with the aggressive $2.0B share repurchase program, which is expected to retire 4-5% of the market cap annually.
Communications (API Platform)
$4.8B TTM (94% of Total) · 49.9% MarginWhat It Is
Programmable Messaging API (SMS, MMS, WhatsApp), Programmable Voice API, Twilio SendGrid (Email API), Twilio Flex (Programmable Contact Center), Verify API (Two-Factor Authentication).
Who Pays & How
Developers at companies like Uber and Lyft pay to send ride alerts and mask phone numbers. Marketing platforms pay to integrate multi-channel messaging (SMS, WhatsApp, Email) into their campaigns. The core value is abstracting complex global telecom infrastructure into simple API calls, enabling faster time-to-market and scalability without in-house telco expertise.
Competition
Segment (Customer Data Platform)
$0.3B TTM (6% of Total) · % MarginWhat It Is
A Customer Data Platform (CDP) that collects, cleans, and activates customer data from multiple sources (web, mobile, CRM) to create a single unified view of the customer.
Who Pays & How
Enterprises, like a major financial services company (largest-ever deal signed in Q4 2024), pay to unify disparate customer data sources to enable personalized marketing and customer service across all channels. The 'why' is to break down data silos and power real-time personalization, which is difficult and expensive to build in-house.
Competition
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