Twilio Raises 2026 Outlook as Third-Quarter Revenue Grows 20% to $1.56 Billion

Twilio raised its full-year growth and profit outlook on Thursday after third-quarter revenue climbed 20% to $1.56 billion, with organic growth of 16%, the customer-engagement software company said in its earnings release filed with an 8-K after the close.

The company now expects 2026 reported revenue growth of 20%, up from 18% to 18.5% previously, and organic growth of 15%, up from 13% to 13.5%. It also lifted its full-year non-GAAP operating income and free cash flow ranges to $1.19 billion to $1.20 billion each, from $1.135 billion to $1.155 billion.

"Q3 was a great quarter for Twilio, driven by disciplined execution and broad-based strength across our product portfolio," CEO Khozema Shipchandler said in the release. He added that consumer AI "has accelerated AI development," and that its adoption demands fast, reliable infrastructure.

Profits grow faster than sales

GAAP income from operations jumped 263% from a year earlier to $148.6 million, while non-GAAP income from operations rose 39% to $325.7 million, a 21% margin, according to the 8-K.

GAAP diluted earnings per share were $1.00, compared with $0.23 in the third quarter of 2025. On a non-GAAP basis, diluted EPS rose to $1.65 from $1.25. GAAP net income attributable to common stockholders was $161 million, and non-GAAP net income was $267 million.

Gross profit kept pace with revenue. GAAP gross profit rose 20% to $760.5 million and non-GAAP gross profit grew 18% to $767.8 million, both at a 49% margin.

By the numbers

• Revenue: $1.56 billion, up 20% (16% organic)
• Non-GAAP operating income: $325.7 million, up 39%
• Non-GAAP diluted EPS: $1.65, vs. $1.25
• Free cash flow: $369.6 million, vs. $247.5 million
• Dollar-based net expansion rate: 114%, vs. 109%

Customers spend more

Twilio's dollar-based net expansion rate, which tracks how much more existing customers spend over time, rose to 114% from 109% a year earlier. The company had 5,625 employees as of Sept. 30.

Operating cash flow came in at $389.2 million, up from $263.6 million, and free cash flow reached $369.6 million, the company said.

Fourth-quarter outlook and buybacks

For the fourth quarter, Twilio guided to revenue of $1.595 billion to $1.605 billion, implying reported growth of 17% to 17.5% and organic growth of 11% to 12%. It expects non-GAAP operating income of $300 million to $310 million and non-GAAP diluted EPS of $1.48 to $1.53, based on about 163 million diluted shares. The company said it expects fourth-quarter non-GAAP gross profit growth to be similar to its organic revenue growth range.

Twilio repurchased $127.2 million of its Class A common stock during the quarter. It has now completed about $1.3 billion of buybacks under the $2.0 billion program its board authorized in January 2025, leaving about $700 million available before the program expires at the end of 2027.

Sources

1. Twilio Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001447669-26-000106)

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.