Twilio Inc.

Twilio reported Q1 revenue of $1.4 billion, up 20% year over year on a reported basis and 16% organically. Non-GAAP gross profit was $697 million, up 16% year over year, and non-GAAP income from operations was a record $279 million, up 31%; free cash flow was $132 million. Non-GAAP gross margin was 49.6%, down 180 basis points year over year and 40 basis points quarter over quarter, partly due to $46 million of incremental carrier pass-through fees. Q1 non-GAAP operating margin was 19.8%, up 160 basis points year over year. For Q2, Twilio guided to revenue of $1.42 billion to $1.43 billion, implying 15.5% to 16.5% reported growth and 10% to 11% organic growth, and non-GAAP income from operations of $250 million to $260 million. For the full year, it raised organic growth guidance to 9.5% to 10.5% from 8% to 9%, reported revenue growth to 14% to 15% from 11.5% to 12.5%, non-GAAP operating income to $1.08 billion to $1.1 billion from $1.04 billion to $1.06 billion, and free cash flow to $1.08 billion to $1.1 billion. Full-year guidance now assumes about $235 million in incremental carrier pass-through revenue, and management said that would reduce full-year 2026 non-GAAP gross margin by roughly 200 basis points versus 2025, all else equal.

Khozema Shipchandler framed the quarter as evidence that Twilio’s multi-year transformation is paying off, saying the company is now seen as foundational AI infrastructure rather than just a communications provider. He highlighted accelerating voice growth, expanding software add-ons, stronger self-serve/ISV performance, and a broadening platform strategy around memory, orchestration, and cross-channel engagement. His tone was upbeat and confident, with repeated references to SIGNAL and the next evolution of the platform.

Aidan Viggiano emphasized strong operating leverage and broad-based demand, citing record non-GAAP gross profit of $697 million, record non-GAAP operating income of $279 million, and free cash flow of $132 million. He noted that non-GAAP gross margin was 49.6% but was pressured by $46 million in incremental carrier fees, while non-GAAP operating margin reached 19.8% and SBC fell to 9.7% of revenue, below 10% for the first time since the IPO. On capital allocation, he said Twilio completed $253 million of share repurchases in Q1 and still has roughly $900 million remaining under authorization. He also said headcount has been roughly flat for 2 to 3 years and should stay around that level, with AI tool costs and other SaaS spend embedded in guidance.

Analysts pressed on messaging durability, voice AI scaling, macro impact, multiproduct adoption, and whether AI changes Twilio’s competitive position. Management said messaging strength was broad-based across the U.S. and internationally, with RCS still early and AI natives only a modest contributor, while voice growth was being driven by AI use cases and software add-ons. On Voice AI, management said adoption is moving from experimentation into production faster in nonregulated sectors like e-commerce, retail, and food service, while regulated industries are slower. They also said the business is seeing more multiproduct selling, up 29% in customer count, and that Twilio’s neutral, multi-cloud, multi-model integration posture is a competitive advantage rather than a concern.