Twilio Reports Q2 Revenue of $1.5 Billion, Raises Full-Year Growth Targets

On Thursday, Twilio (NYSE: TWLO ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Twilio Inc. 5 billion in revenue, an organic growth rate of 17% year over year, and a non-GAAP gross profit growth of 18% year over year. The company announced the general availability of its next-generation conversational platform, featuring AI-driven tools like Conversation Memory and Conversation Orchestrator, enhancing customer engagement capabilities. Twilio experienced strong performance in its Messaging and Voice segments and secured significant deals with companies like CarFinance 247 and Eltropy, driving multimillion-dollar revenue uplifts.

The newly launched Twilio Console has led to a 90%+ conversion uplift among existing customers, facilitating easier multi-product adoption. 5%, driven by positive trends in AI and multi-product strategies. Full Transcript OPERATOR Good day, and thank you for standing by. 's second quarter 2026 earnings conference call.

At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the call, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Rodney Nelson, Vice President of Investor Relations. Please go ahead.

Rodney Nelson, Vice President of Investor Relations Good afternoon, everyone, and thank you for joining us for Twilio's second quarter 2026 earnings conference call. Joining me today are Khozema Shipchandler, Chief Executive Officer, Aidan Viggiano, Chief Financial Officer, and Thomas Wyatt, Chief Operating Officer. As a reminder, we will disclose non-GAAP financial measures on this call. com.

We will also make forward-looking statements on this call, including statements about our future outlook and goals. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent Form 10-K and our forthcoming Form 10-Q. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made.

We disclaim any obligation to update any forward-looking statements, except as required by law. With that, I'll hand it over to Khozema and Aidan, who will discuss our Q2 results, and we'll then open the call for Q&A. Khozema Shipchandler, Chief Executive Officer Thank you, Rodney. Good afternoon, everyone, and thank you for joining us today.

Twilio had an exceptional second quarter. 5 billion in revenue, accelerating organic growth to 17% year over year, while non-GAAP gross profit growth also accelerated to 18% year over year. We generated $285 million in non-GAAP income from operations and $353 million in free cash flow. Twilio's momentum is strong.

We're executing with precision and innovating across the board to power customer conversations in the age of AI. During the quarter, we hosted our annual user conference, SIGNAL, which is always the highlight of my year. I love connecting with customers one on one and hearing firsthand why these brands choose Twilio as their foundational infrastructure. We are proud to have had brands like AWS, Centerfield, Coval, Deepgram, IBM, Nestlé, PGA of America, Rivian, Sierra, and Stripe take the stage to share how Twilio is driving ROI for their businesses as they build for the next era of customer engagement.

This year's SIGNAL was especially memorable because we announced the general availability of Twilio's next-generation platform. Our Conversations layer, which includes Conversation Memory, Conversation Orchestrator, Conversation Intelligence, Conversation Relay, and Agent Connect, provides the building blocks customers need to deliver context-rich conversations over a consumer's lifetime. As an example, to drive conversion and scale revenue, leading automotive fintech company CarFinance 247 joined our private beta program, a move that quickly evolved into a seven-figure deal to implement the new Twilio Conversations layer.

Their AI assistant, Carla, has already handled nearly 300,000 customer conversations. 6 times faster, delivering a multimillion-dollar annual revenue uplift across their core commission and ancillary offerings. While our new products have only been in the hands of customers since May, these early stories validate that businesses need Twilio's conversational infrastructure that both serves humans and agents as they navigate a hybrid agentic era. The newly redesigned Twilio Console also launched in May, giving customers a single command center to manage all of their Twilio workloads.

It has an intuitive UX, frictionless trials to encourage experimentation, AI-guided onboarding, and one central billing experience. This is all in service of making it easier to build with Twilio, and the refreshed console bolsters our acceleration in self-serve and will make multi-product adoption more seamless. Since the launch, a majority of existing customers have migrated to the new console, and we are seeing a 90%+ uplift in conversions when compared to the old console. We continue to see strength across the business, highlighted by robust Messaging growth even as carriers have raised their fees on our customers.

While these pass-through costs carry no direct impact on Twilio's profitability, we do recognize the pressure it creates for our customers, specifically small businesses. Our Twilio platform strategy equips our customers with complete access to a variety of channels, empowering our customers to diversify their engagement strategies, maintain cost efficiency, and reliably reach their own customers. Our go-to-market focus on multi-product adoption is working well, and we saw continued strength across our platform, including Messaging, Voice, and software add-ons during the quarter.

The team signed an eight-figure deal with a leading AI company, and other key wins with All Nippon Airways, Atlassian, Eltropy, Kixie, Lerio, MetaBank, Olo, Open Evidence, Orion AI Solutions, Vazi, and Explore Technologies. Revenue growth from multi-product customers is accelerating, illustrating that our customers are continuing to use multiple products within the Twilio platform to power personal, multichannel communications. Let me walk you through a few examples. Olo, a digital commerce platform for restaurants, signed a cross-sell deal to expand their utilization of Messaging and Voice.

Olo is leveraging Twilio's communications infrastructure to power real-time order notifications and seamless delivery updates across its restaurant network. We also landed a seven-figure deal with Eltropy, an agentic AI platform for credit unions and community banks, to leverage Messaging, RCS, Voice, and Branded Calling across its platform. Eltropy also built its AI voice agent using Conversation Relay to help financial institutions deliver better consumer experiences, accelerate resolutions, reduce operating costs, and create a scalable AI-powered contact center from day one.

Another win was with a leading home improvement retailer, who signed a seven-figure deal to utilize Messaging, Voice, and Branded Calling. By consolidating its legacy communication traffic onto Twilio, the company is now able to streamline North American delivery logistics, leveraging trusted voice capabilities and rich RCS two-way interactions to optimize transactional order notifications and appointment scheduling. Another great win from the quarter was with a leading HR and payroll technology platform, which signed a seven-figure deal to leverage Twilio Messaging and Verify to scale their unified employee engagement infrastructure.

They are embedding Messaging directly into their mobile application to power secure two-way employee communications and batch workforce text alerts, while using Verify to deliver seamless two-factor authentication for payroll access. And Atlassian, a leading provider of AI-powered collaboration and team productivity software, utilizes Twilio's communications infrastructure to deliver contextual, AI-powered omnichannel support within its new customer service management app. This partnership helps Atlassian reimagine customer experiences with complete context while scaling global channel coverage via Twilio's Flex SDK and Super Network. So that's the power of Twilio.

Just as we've abstracted the complexities of global telecom for 18 years, we're now helping our customers abstract the complexities that come with creating omnichannel, agentic conversations, and these innovations continue to earn praise from leading industry analysts. During the quarter, Twilio was named a Leader by Gartner in the 2026 Magic Quadrant CPaaS report, scoring the highest in Ability to Execute. Additionally, Twilio was also named a Leader in the 2026 IDC MarketScape for AI-enabled CDP. In summary, there is tremendous momentum building across our business—from landmark enterprise wins to an eight-figure deal with an AI company.

Twilio is empowering the next generation of companies with our world-class infrastructure that's delivering measurable ROI in the AI era. Our next-generation conversational platform is live, our refreshed console is accelerating adoption, and our customer momentum has never been stronger. We remain focused on strong execution while building the future of customer engagement. And with that, I'll turn it over to Aidan.

Aidan Viggiano, Chief Financial Officer Thank you, Khozema, and good afternoon, everyone. S. carrier pass-through fees. Non-GAAP gross profit growth accelerated to 18% year over year.

We also generated record non-GAAP income from operations of $285 million and record free cash flow of $353 million. Top-line performance was driven by strong volumes and solid go-to-market execution, resulting in another quarter of organic revenue growth acceleration. We saw strong customer additions in the quarter, aided by the release of our new Conversations layer and Twilio Console. Our self-serve channel delivered revenue growth of 30% plus, while ISV revenue grew 25% plus.

We are also seeing continued strength across the product portfolio. Messaging revenue growth was 28%, driven primarily by strong volumes and aided by growth in WhatsApp and RCS. Incremental carrier fees contributed roughly 10 points to Messaging's growth. Voice growth accelerated above 20% year over year, driven by a balance of volume growth and software add-ons, including triple-digit growth in branded calling and conversational intelligence.

Finally, total software add-on revenue grew 25% plus, led by Verify, which accelerated to 30% plus growth. Our Q2 dollar-based net expansion rate was 116%, reflecting the improving growth trends we've seen in our business over the last several quarters. Incremental carrier fees contributed roughly 5 points to DBNE. We delivered record non-GAAP gross profit of $736 million, with growth accelerating to 18% year over year—our fifth consecutive quarter of accelerating non-GAAP gross profit growth.

This was driven by continued momentum in our higher-margin products, in addition to our proactive efforts to deliver meaningful cost efficiencies. 1%, down 160 basis points year over year and 50 basis points quarter over quarter. S. carrier pass-through fees of $71 million, which drove the year-over-year and quarter-over-quarter declines.

Without these incremental fees, non-GAAP gross margins would have been up 60 basis points year over year and up 30 basis points quarter over quarter. Q2 non-GAAP income from operations came in ahead of expectations at $285 million, up 29% year over year, driven by strong gross profit dollar growth and continued cost leverage. Non-GAAP operating margin was 19%, up 100 basis points year over year and down 80 basis points quarter over quarter. S.

carrier fees. We generated $85 million in GAAP income from operations. This was impacted by a prepaid asset impairment of $33 million. This write-down did not impact our Q2 non-GAAP results or free cash flow and will not impact future results.

S. S. state deferred tax assets. The release did not have an impact on our non-GAAP results.

5%, down 270 basis points year over year and 20 basis points quarter over quarter. We generated record free cash flow of $353 million in the quarter. Additionally, we completed $66 million in share repurchases in Q2 and have roughly $800 million remaining on our current authorization. 5% reported growth and 11 to 12% organic growth.

S. carrier fees. S. carrier fees.

Moving to the full year, we're encouraged by the broad-based trends we saw in the first half. 5% previously. 5%, up from 14 to 15% previously. In addition, we continue to expect full-year non-GAAP gross profit growth to be similar to our organic revenue growth rate.

S. carrier fees. As a reminder, while the pass-through fees have no impact on our gross profit, income from operations, or free cash flow dollars, they do impact our margin rates. For modeling purposes, we would expect the incremental fees to reduce our full year 2026 non-GAAP gross margin by roughly 210 basis points when compared with our full year 2025 non-GAAP gross margin, all else equal.

Turning to our profit outlook for Q3, we expect non-GAAP income from operations of $285 to $295 million. 1 billion previously. 155. I'm very pleased with the accelerated revenue and gross profit growth we delivered in the second quarter, as well as our ongoing financial discipline that is driving strong profitability and free cash flow.

We remain focused on our key go-to-market initiatives and delivering the essential infrastructure that will help our customers win in the AI era. And with that, we'll now open it up for questions. OPERATOR Thank you. At this time, we will conduct the question-and-answer session.

As a reminder, to ask a question, you will need to press Star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Alex Zukin of Wolfe Research.

Your line is now open. Alex Zukin, Analyst at Wolfe Research Hey, guys. Truly, congrats on the quarter, and thank you for taking the question. I guess if last quarter there was a lot of questions of whether or not AI is creating durable tailwinds for your business, it doesn't feel like that's a question anymore.

But I guess if I think about where you're seeing it most pronounced, whether in the messaging and the voice, really across the business, what is happening in the messaging business? Because it seems like it's coming in ahead of expectations now, kind of a second straight quarter. So, like, what's driving that and longer term kind of what. What did you see differently this quarter from Voice or the Voice AI cohort specifically versus your expectations?

Khozema Shipchandler, Chief Executive Officer Hey, Alex, this is Khozema. Thanks for the question—a lot there. So I would say kind of in general, maybe just let's just start there. Like, obviously we saw very good strength in Messaging, very good strength in Voice, and I would say Messaging—it's still pretty early days in terms of AI tailwinds starting to show up.

They are happening, but I think most of the activity continues to be in Voice. Obviously you're familiar with a lot of the trends that are happening in Voice right now with various kinds of both scaled companies as well as a lot of the voice AI startups. Just a lot of traction, and we're obviously fortunate that most of these companies are choosing Twilio as their voice infrastructure.