Twilio Inc.

Twilio reported Q2 revenue of $1.5 billion, up 22% year over year on a reported basis and 17% organically. Non-GAAP gross profit was a record $736 million, up 18% year over year, and non-GAAP income from operations was a record $285 million, up 29% year over year. Non-GAAP gross margin was 49.1%, down 160 basis points year over year, and non-GAAP operating margin was 19%, up 100 basis points year over year. Free cash flow was a record $353 million. For Q3, Twilio guided to revenue of $1.505 billion to $1.515 billion, representing 16% to 16.5% reported growth and 11% to 12% organic growth, and non-GAAP income from operations of $285 million to $295 million. For the full year, Twilio raised organic revenue growth guidance to 13% to 13.5% from 9.5% to 10.5%, reported revenue growth guidance to 18% to 18.5% from 14% to 15%, and non-GAAP income from operations and free cash flow guidance to $1.135 billion to $1.155 billion. The company said full-year guidance assumes about $250 million in incremental pass-through revenue from U.S. carrier fees, which it expects to reduce full-year 2026 non-GAAP gross margin by roughly 210 basis points versus 2025.

Khozema Shipchandler framed the quarter as exceptional and said Twilio is seeing strong momentum across the business, especially as customers adopt the new Conversations Layer, Console, and AI-enabled products. He repeatedly emphasized that the opportunity is still early, particularly in Voice AI, but argued the secular tailwind is durable because Twilio provides neutral infrastructure, context, and channels that customers need to build hybrid human-and-agent workflows. His tone was confident and upbeat, with a focus on execution, customer ROI, and Twilio’s role as foundational infrastructure in the AI era.

Aidan Viggiano focused on the quality of the revenue mix, margin dynamics, and capital returns. She said Q2 gross profit grew 18% to a record $736 million, operating income was $285 million, free cash flow was $353 million, and stock-based compensation was 9.5% of revenue, down 270 basis points year over year. She also highlighted that incremental U.S. carrier fees were $71 million in Q2, weighed on gross margin and operating margin, and that the company completed $66 million of share repurchases in the quarter with roughly $800 million remaining on authorization. For the full year, she raised operating income and free cash flow guidance to $1.135 billion to $1.155 billion and reiterated that gross profit growth should track organic revenue growth.

Analysts pressed management on whether AI is creating durable demand, where it is showing up most, and how much is coming from Voice versus Messaging. Management said the AI impact is still early but most visible in Voice, with Messaging early in the cycle, and gave examples of AI-native customers scaling from low six figures to $6 million and $9 million annual run rates as they add Voice and software products. Questions also focused on the new Console and cross-sell; management said the Console has significantly higher conversion, but it contributed very little to Q2 multiproduct revenue so far, with benefits expected to show up over time as customers move from trials into production. Analysts also asked about OpenAI and other platform players, and Twilio positioned itself as a neutral, “Switzerland”-like layer that integrates with multiple model providers and systems of record.