Exhibit 99.1
Twilio Announces Third Quarter 2026 Results
•Revenue of $1.56 billion, up 20% reported and 16% organic year-over-year
•GAAP gross profit of $761 million, up 20% year-over-year
•Non-GAAP gross profit of $768 million, up 18% year-over-year
•GAAP Income from Operations of $149 million
•Non-GAAP Income from Operations of $326 million
SAN FRANCISCO--(BUSINESS WIRE)--October 29, 2026--Twilio (NYSE: TWLO), the infrastructure for customer engagement in the AI era, reported financial results for its third quarter ended September 30, 2026.
“Q3 was a great quarter for Twilio, driven by disciplined execution and broad-based strength across our product portfolio,” said Khozema Shipchandler, CEO of Twilio. “Consumer AI has accelerated AI development, and its adoption demands fast, reliable infrastructure built for AI speed. Twilio is well positioned to capitalize on this moment and meet this demand.”
Third Quarter 2026 Financial Highlights
•Revenue of $1.56 billion, up 20% year-over-year. Organic revenue growth was 16% year-over-year.
•GAAP gross profit of $760.5 million, up 20% year-over-year.
•Non-GAAP gross profit of $767.8 million, up 18% year-over-year.
•GAAP income from operations of $148.6 million, up 263% year-over-year.
•Non-GAAP income from operations of $325.7 million, up 39% year-over-year.
•GAAP net income per share attributable to common stockholders, diluted, of $1.00 based on 161.7 million weighted average shares outstanding, compared with GAAP net income per share attributable to common stockholders, diluted, of $0.23 based on 159.2 million weighted average shares outstanding in the third quarter of 2025.
•Non-GAAP net income per share attributable to common stockholders, diluted, of $1.65 based on 161.7 million non-GAAP weighted average shares outstanding, compared with non-GAAP net income per share attributable to common stockholders, diluted, of $1.25 based on 159.2 million non-GAAP weighted average shares outstanding in the third quarter of 2025.
•Net cash provided by operating activities of $389.2 million and free cash flow of $369.6 million, compared with net cash provided by operating activities of $263.6 million and free cash flow of $247.5 million for the third quarter of 2025.
Key Metrics
•Dollar-Based Net Expansion Rate of 114% for the third quarter of 2026 compared to Dollar-Based Net Expansion Rate of 109% for the third quarter of 2025.
•5,625 employees as of September 30, 2026.
| | | | | | | | | | | | | | | | | |
Dollars in millions, except per share amounts | Q3 2026
Results | | |
Revenue | $1,560 | | |
Y/Y Revenue Growth | 20% | | |
Y/Y Organic Revenue Growth | | 16% | | |
| | | | | | | |
| | Amount | Margin | Y/Y Growth | | | |
GAAP gross profit | | $761 | 49% | 20% | | | |
Non-GAAP gross profit | | $768 | 49% | 18% | | | |
GAAP income from operations | $149 | 10% | 263% | | | |
Non-GAAP income from operations | $326 | 21% | 39% | | | |
Net cash provided by operating activities | $389 | 25% | | | | |
| Free cash flow | $370 | 24% | | | | |
GAAP net income attributable to common stockholders | $161 | | | | | |
| Non-GAAP net income attributable to common stockholders | $267 | | | | | |
| | | | | | |
GAAP net income per share attributable to common stockholders, diluted | $1.00 | | | | | |
Non-GAAP net income per share attributable to common stockholders, diluted | $1.65 | | | | | |
Share Repurchase Program
In January 2025, Twilio’s Board of Directors authorized a share repurchase program pursuant to which Twilio may repurchase up to $2.0 billion in aggregate value of its outstanding Class A common stock (“common stock”). The program is set to expire on December 31, 2027. During the third quarter of 2026, Twilio repurchased $127.2 million in aggregate value of shares of common stock. As of September 30, 2026, Twilio has completed approximately $1.3 billion of aggregate repurchases and has approximately $700 million of the originally authorized amount available for future repurchases.
Outlook
For the fourth quarter ending December 31, 2026, Twilio is initiating a revenue range of $1.595 to $1.605 billion, which implies a reported revenue growth range of 17% to 17.5% and an organic revenue growth range of 11% to 12% year-over-year. Twilio expects fourth quarter non-GAAP gross profit to be similar to its organic revenue growth range. In addition, Twilio is initiating a fourth quarter non-GAAP income from operations range of $300 to $310 million. Lastly, Twilio expects fourth quarter non-GAAP diluted earnings per share in a range of $1.48 to $1.53, based on non-GAAP weighted average diluted shares outstanding of 163 million. | | | | | | | | | | | |
Dollars and shares in millions, except per share amounts | | Q4 2026
Guidance |
| Revenue | | $1,595 - $1,605 |
Y/Y Revenue Growth | | 17% - 17.5% |
Y/Y Organic Revenue Growth | | 11% - 12% |
| Non-GAAP income from operations | | $300 - $310 |
Non-GAAP diluted earnings per share (1) | | $1.48 - $1.53 |
Non-GAAP weighted average diluted shares outstanding | | 163 |
(1) Non-GAAP diluted earnings per share guidance assumes no impact from volatility of foreign exchange rates. For fiscal year 2026, Twilio is raising its reported revenue growth outlook to 20% compared with 18% to 18.5% previously, and its organic revenue growth range outlook to 15% year-over-year compared with 13% to 13.5% previously. In addition, Twilio expects full-year non-GAAP gross profit growth to be similar to its organic revenue growth range. Lastly, Twilio is raising its 2026 non-GAAP income from operations range to $1.19 billion to $1.20 billion compared to $1.135 billion to $1.155 billion previously, and raising its 2026 free cash flow range to $1.19 billion to $1.20 billion compared to $1.135 billion to $1.155 billion previously.
| | | | | | | | | | | |
Dollars in millions | | FY26
Guidance |
Y/Y Revenue Growth | | 20% |
Y/Y Organic Revenue Growth | | 15% |
| Non-GAAP income from operations | | $1,190 - $1,200 |
Free cash flow | | $1,190 - $1,200 |
Conference Call Information
Twilio is hosting a Q&A conference call today, October 29, 2026, to discuss its third quarter 2026 financial results. The conference call will begin at 2:00 p.m. (PT) / 5:00 p.m. (ET), and investors and analysts should register for the webcast in advance by visiting https://edge.media-server.com/mmc/p/322yprpw. The live webcast of the conference call, as well as a replay, and Twilio’s supplemental earnings presentation, will be available on the investor relations website.
Twilio uses its investor relations website, its X feed (@twilio) and its LinkedIn page as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Twilio Inc.
Twilio (NYSE: TWLO) provides the infrastructure for customer engagement in the AI era. By combining global communications, memory, and AI orchestration with identity, governance, and observability, Twilio enables businesses to deliver continuous, contextual, personal, and secure conversations across every channel and participant—human or AI.
Across 180+ countries, hundreds of thousands of the most innovative companies—from the Fortune 500 to startups—and millions of developers, rely on Twilio’s global platform across messaging, voice, email, and beyond, to power trusted customer experiences that drive real results. For more information about Twilio visit www.twilio.com.
Forward-Looking Statements
This press release and the accompanying conference call contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this press release and the accompanying conference call include, but are not limited to, statements about: our future financial and operating performance and outlook, including our expected financial and operating results, guidance and targets, including the assumptions underlying such guidance and targets; our anticipated strategies and business plans and our ability to successfully execute them; our ability to drive growth, profitability and free cash flow; our ability to maintain cost discipline and drive operating leverage; future investments and expenses; our expectations regarding carrier fees, and our related actions, and the impact of such fees on our financial and operating performance, including guidance; our expectations regarding our margins, including regarding price actions, product mix and growth in higher-margin products; our expectations regarding capital returns to shareholders and our capital allocation strategy, including share repurchases and potential mergers and acquisitions; our expectations regarding revenue from ISVs and self-serve customers; our expectations regarding our cross-sell, upsell and solution selling efforts; our pipeline of new business; the benefits our customers derive from our products; our ability to expand into new and existing markets; our innovation roadmap and the development, release and adoption of our products (and the timing thereof); the effects of our go-to-market efforts to drive profitable growth and capture market share; our expectations related to being a foundational infrastructure layer in the AI era and our vision, strategy and expected benefits related to AI opportunities; and our expectations regarding the macroeconomic environment. You should not rely upon forward-looking statements as predictions of future events.
The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to differ materially from those described in the forward-looking statements, including, among other things: the impact of global economic and political conditions and uncertainties; the accuracy of our forecasts and metrics; fluctuations in our results of operations and the levels of our customers’ usage of our platform; our ability to attract and retain customers and expand their usage of our platform; our ability to develop new products and integrate our products with third-party products effectively; our ability to manage our growth and strategic changes to our business; our ability to compete effectively in intensely competitive markets; the occurrence of and our ability to manage cybersecurity breaches and other incidents impacting our networks and systems or those of our third-party service providers; our ability to manage changes in network service provider fees and optimize our network service provider coverage and connectivity; the rapidly evolving AI landscape; and our compliance with industry standards, laws and regulations.
The forward-looking statements contained in this press release and the accompanying conference call are also subject to additional risks, uncertainties, and factors, including those more fully described in our most recent filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment, and new risks and uncertainties may emerge that could have an impact on the forward-looking statements contained in this press release and the accompanying conference call.
All forward-looking statements contained in this press release and the accompanying conference call represent our management’s beliefs and assumptions only as of the date such statements are made and we do not assume any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date on which the statements were made, or to reflect new information or the occurrence of unanticipated events, except as required by law.
Non-GAAP Financial Measures
In addition to financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release and the accompanying conference call include certain non-GAAP financial measures, including those listed below. We use these non-GAAP
financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures may be helpful to investors because they provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of results of operations and assist in comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. We believe organic revenue and organic revenue growth are useful in understanding the ongoing results of our operations. We believe free cash flow and free cash flow margin provide useful supplemental information to help investors understand underlying trends in our business and our liquidity.
These non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered substitutes for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation of these measures to the most directly comparable GAAP measures is included at the end of this press release. We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP measures presented in this press release and the accompanying conference call, or a GAAP reconciliation, as a result of the uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding forward-looking GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results.
Non‑GAAP Gross Profit and Non‑GAAP Gross Margin. For the periods presented, we define non‑GAAP gross profit and non‑GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, adjusted to exclude stock-based compensation, amortization of acquired intangibles and payroll taxes related to stock-based compensation.
Non‑GAAP Income from Operations and Non‑GAAP Operating Margin. For the periods presented, we define non‑GAAP income from operations and non‑GAAP operating margin as GAAP income from operations and GAAP operating margin, respectively, adjusted to exclude, as applicable, stock-based compensation, amortization of acquired intangibles, loss on net assets divested, acquisition and divestiture related expenses, payroll taxes related to stock-based compensation, charitable contributions, restructuring costs, impairment of long-lived assets, gains or losses on lease termination, and impairment loss on prepaid assets.
Non‑GAAP Net Income Attributable to Common Stockholders and Non‑GAAP Net Income Per Share Attributable to Common Stockholders. For the periods presented, we define non-GAAP net income attributable to common stockholders and non‑GAAP net income per share attributable to common stockholders, diluted (which we refer to as “non-GAAP diluted earnings per share”) as GAAP net income (loss) attributable to common stockholders and GAAP net income (loss) per share attributable to common stockholders, diluted, respectively, adjusted to exclude, as applicable, stock-based compensation, amortization of acquired intangibles, loss on net assets divested, acquisition and divestiture related expenses, losses (gains) on strategic investments, payroll taxes related to stock-based compensation, accretion of debt discount and issuance costs, provision of income tax effects related to non-GAAP adjustments, income tax benefit related to acquisitions, charitable contributions, share of losses from equity method investment, impairment of equity method investment, restructuring costs, impairment of long-lived assets, gains or losses on or impairment of strategic investments, gains or losses on lease termination, and impairment loss on prepaid assets.
Organic Revenue. For the periods presented, we define organic revenue as GAAP revenue, excluding (i) revenue from each acquired business and revenue from incremental increases to application-to-person (“A2P”) fees imposed by major U.S. carriers on our core messaging business, in each case until the beginning of the first full quarter following the one-year anniversary of the closing date of such acquisition or the initial date such fees were charged and (ii) revenue from each divested business beginning in the quarter of the closing date of such divestiture; provided that (a) if an acquisition closes or such fees are initially charged on the first day of a quarter, such revenue will be included in organic revenue beginning on the one-year anniversary of the closing date of such acquisition or the initial date such fees were charged and (b) if a divestiture closes on the last day of a quarter, such revenue will be included in organic revenue for that quarter. As used in this definition, A2P fees refers to fees imposed by U.S. mobile carriers for A2P messages delivered to their subscribers, and we pass these fees to our messaging customers at cost.
Organic Revenue Growth. For the periods presented, we calculate organic revenue growth by dividing (i) organic revenue for the period presented less organic revenue in the comparative period by (ii) organic revenue in the comparative period. If revenue from certain acquisitions, divestitures or A2P fees is included or excluded in organic revenue in the period presented, then revenue from the same acquisitions, divestitures and A2P fees is included or excluded in organic revenue in the comparative period for purposes of the organic revenue growth calculation. As a result, organic revenue used in this calculation for the comparative period will not always equal organic revenue reported for the comparative period.
Free Cash Flow and Free Cash Flow Margin. For the periods presented, we define free cash flow as net cash provided by operating activities, excluding capitalized software development costs and purchases of long-lived assets, and we define free cash flow margin as free cash flow divided by revenue.
Operating Metrics
We review a number of operational and financial metrics, including Dollar-Based Net Expansion Rate (“DBNE”), to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Our DBNE is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies. Similarly, our DBNE may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. The numbers that we use to calculate DBNE are based on internal data. While these numbers are based on what we believe to be reasonable judgments and estimates for the applicable period of measurement, there are
inherent challenges in measuring usage. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations, and financial condition would be harmed.
Dollar-Based Net Expansion Rate. Our DBNE compares the total revenue in a quarter from all individual customer accounts, as identified by a unique account identifier, for which we have recognized at least $5 of revenue in the last month of the quarter, to revenue from those same accounts in the same quarter in the prior year. A single customer organization may constitute multiple unique customer accounts if it has multiple account identifiers. To calculate DBNE, we first identify the cohort of such customer accounts in the same quarter of the prior year. DBNE is the quotient obtained by dividing the revenue generated from that cohort in a quarter, by the revenue generated from that same cohort in the corresponding quarter in the prior year. When we calculate DBNE for periods longer than one quarter, we use the average of the applicable quarterly DBNEs for each of the quarters in such period. Revenue from acquisitions does not impact the DBNE calculation until the quarter following the one-year anniversary of the applicable acquisition, unless the acquisition closing date is the first day of a quarter. Revenue from divestitures does not impact the DBNE calculation beginning in the quarter the divestiture closed, unless the divestiture closing date is the last day of a quarter.
We believe that measuring DBNE provides an important indication of the performance of our efforts to increase revenue from existing customers. Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing customers and to increase their use of the platform. An important way in which we have historically tracked performance in this area is by measuring the DBNE for such customer accounts. Our DBNE increases when these customers increase their usage of a product, extend their usage of a product to new applications or adopt a new product. Our DBNE decreases when these customers cease or reduce their usage of a product or when we lower usage prices on a product. As our customers grow their businesses and extend the use of our platform, they sometimes create multiple customer accounts with us for operational or other reasons. As such, when we identify a significant customer organization (defined as a single customer organization generating more than 1% of revenue in a quarterly reporting period) that has created a new customer account, this new account is tied to, and revenue from this new account is included with, the original customer account for the purposes of calculating this metric.
Source: Twilio Inc.
TWILIO INC.
Condensed Consolidated Statements of Operations
(In thousands, except shares and per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | |
| | 2026 | | 2025 | | | |
| Revenue | | $ | 1,559,536 | | | $ | 1,300,402 | | | | |
| Cost of revenue | | 799,006 | | | 668,325 | | | | |
| Gross profit | | 760,530 | | | 632,077 | | | | |
| Operating expenses: | | | | | | | |
| Research and development | | 280,367 | | | 262,311 | | | | |
| Sales and marketing | | 216,646 | | | 220,627 | | | | |
| General and administrative | | 114,887 | | | 108,191 | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total operating expenses | | 611,900 | | | 591,129 | | | | |
Income from operations | | 148,630 | | | 40,948 | | | | |
| Other expenses, net: | | | | | | | |
| Share of losses from equity method investment | | (25,489) | | | (27,506) | | | | |
| | | | | | | |
| | | | | | | |
Other income, net | | 15,988 | | | 19,242 | | | | |
| Total other expenses, net | | (9,501) | | | (8,264) | | | | |
| Income before benefit from income taxes | | 139,129 | | | 32,684 | | | | |
| Benefit from income taxes | | 22,028 | | | 4,564 | | | | |
Net income attributable to common stockholders | | $ | 161,157 | | | $ | 37,248 | | | | |
Net income per share attributable to common stockholders: | | | | | | | |
| Basic | | $ | 1.04 | | | $ | 0.24 | | | | |
| Diluted | | $ | 1.00 | | | $ | 0.23 | | | | |
Weighted-average shares used to compute net income per share attributable to common stockholders: | | | | | | | |
| Basic | | 154,378,183 | | | 153,119,639 | | | | |
| Diluted | | 161,746,027 | | | 159,209,951 | | | | |
TWILIO INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | |
| | As of September 30, | | As of December 31, |
| | 2026 | | 2025 |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 1,061,531 | | | $ | 682,335 | |
| Short-term marketable securities | | 1,829,940 | | | 1,788,007 | |
| Accounts receivable, net | | 755,015 | | | 636,736 | |
| Prepaid expenses and other current assets | | 338,971 | | | 469,650 | |
| | | | |
| Total current assets | | 3,985,457 | | | 3,576,728 | |
| Property and equipment, net | | 183,870 | | | 176,963 | |
| Operating right-of-use assets | | 25,740 | | | 39,031 | |
| Equity method investment | | 225,180 | | | 301,642 | |
| Intangible assets, net | | 105,301 | | | 142,065 | |
| Goodwill | | 5,291,893 | | | 5,291,787 | |
| Other long-term assets | | 230,008 | | | 222,648 | |
| Deferred tax asset | | 1,059,490 | | | 20,026 | |
| Total assets | | $ | 11,106,939 | | | $ | 9,770,890 | |
| | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 61,624 | | | $ | 85,089 | |
| Accrued expenses and other current liabilities | | 646,245 | | | 608,119 | |
| Deferred revenue and customer deposits | | 157,046 | | | 158,677 | |
| Operating lease liability, current | | 26,583 | | | 35,123 | |
| | | | |
| Total current liabilities | | 891,498 | | | 887,008 | |
| Operating lease liability, noncurrent | | 36,811 | | | 54,162 | |
| | | | |
| Long-term debt, net | | 993,606 | | | 992,287 | |
| Other long-term liabilities | | 14,431 | | | 15,887 | |
| Total liabilities | | 1,936,346 | | | 1,949,344 | |
| Commitments and contingencies | | | | |
Stockholders’ equity: | | | | |
| Preferred stock | | — | | | — | |
| Common stock | | 155 | | | 152 | |
| Additional paid-in capital | | 16,657,626 | | | 16,148,190 | |
Accumulated other comprehensive (loss) income | | (16,520) | | | 15,668 | |
| Accumulated deficit | | (7,470,668) | | | (8,342,464) | |
| Total stockholders’ equity | | 9,170,593 | | | 7,821,546 | |
| Total liabilities and stockholders’ equity | | $ | 11,106,939 | | | $ | 9,770,890 | |
TWILIO INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Nine Months Ended
September 30, | | |
| | 2026 | | 2025 | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net income | | $ | 1,318,505 | | | $ | 79,688 | | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
| Depreciation and amortization | | 91,414 | | | 147,901 | | | |
| Non-cash reduction to the right-of-use asset | | 14,206 | | | 16,634 | | | |
| Net amortization of investment premium and discount | | (5,908) | | | (11,473) | | | |
| | | | | | |
| | | | | | |
Stock-based compensation | | 432,339 | | | 446,693 | | | |
| Amortization of deferred commissions | | 48,910 | | | 56,895 | | | |
| | | | | | |
| Provision for doubtful accounts | | 15,101 | | | 6,361 | | | |
| Value of shares of Class A common stock issued and donated to charity | | 12,328 | | | 7,118 | | | |
| | | | | | |
| Share of losses from equity method investment | | 77,058 | | | 72,199 | | | |
Impairment of capitalized internal‑use software development costs | | 13,957 | | | 6,642 | | | |
| Tax benefit related to release of valuation allowance | | (937,077) | | | — | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| Impairment loss on prepaid assets | | 32,771 | | | — | | | |
| Other adjustments | | 1,924 | | | 204 | | | |
| Changes in operating assets and liabilities: | | | | | | |
| Accounts receivable | | (133,381) | | | (30,942) | | | |
| Prepaid expenses and other current assets | | 93,142 | | | 77,596 | | | |
| Deferred tax asset | | (82,243) | | | (1,667) | | | |
| Other long-term assets | | (57,462) | | | (62,592) | | | |
| Accounts payable | | (24,720) | | | (59,798) | | | |
| Accrued expenses and other current liabilities | | 33,929 | | | 3,939 | | | |
| Deferred revenue and customer deposits | | (1,631) | | | 3,484 | | | |
| Operating lease liabilities | | (26,730) | | | (26,868) | | | |
| Other long-term liabilities | | (1,677) | | | (325) | | | |
Net cash provided by operating activities | | 914,755 | | | 731,689 | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | |
| Acquisitions, net of cash acquired and payments related to prior period acquisitions | | (685) | | | — | | | |
| | | | | | |
| Purchases of marketable securities and other investments | | (751,923) | | | (780,234) | | | |
Proceeds from sales and maturities of marketable securities and other investments | | 688,244 | | | 1,043,977 | | | |
| Capitalized software development costs | | (47,968) | | | (37,964) | | | |
Purchases of long-lived assets | | (12,168) | | | (4,402) | | | |
| Net cash (used in) provided by investing activities | | (124,500) | | | 221,377 | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| Principal payments on finance leases | | (193) | | | (5,255) | | | |
| Value of equity awards withheld for tax liabilities | | (62) | | | (213) | | | |
| | | | | | |
| Repurchases of shares of Class A common stock and related costs | | (448,296) | | | (670,472) | | | |
| Proceeds from exercises of stock options and shares of Class A common stock issued under ESPP | | 37,293 | | | 26,280 | | | |
Net cash used in financing activities | | (411,258) | | | (649,660) | | | |
| | | | | | |
| NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | | 378,997 | | | 303,406 | | | |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period | | 682,534 | | | 431,437 | | | |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period | | $ | 1,061,531 | | | $ | 734,843 | | | |
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except percentages)
(Unaudited)
| | | | | | | | | | | | | | |
| | Three Months Ended September 30, |
| | 2026 | | 2025 |
| GAAP gross profit | | $ | 760,530 | | | $ | 632,077 | |
GAAP gross profit growth (Y/Y) | | 20 | % | | |
| GAAP gross margin | | 49 | % | | 49 | % |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | | 3,248 | | | 4,305 | |
| Amortization of acquired intangibles | | 3,484 | | | 15,446 | |
| Payroll taxes related to stock-based compensation | | 538 | | | 269 | |
| Non-GAAP gross profit | | $ | 767,800 | | | $ | 652,097 | |
Non-GAAP gross profit growth (Y/Y) | | 18 | % | | |
| Non-GAAP gross margin | | 49 | % | | 50 | % |
| | | | | | | | | | | | | | |
| | Three Months Ended September 30, |
| | 2026 | | 2025 |
| GAAP income from operations | | $ | 148,630 | | | $ | 40,948 | |
GAAP income from operations growth (Y/Y) | | 263 | % | | |
| GAAP operating margin | | 10 | % | | 3 | % |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | | 153,916 | | | 158,169 | |
| Amortization of acquired intangibles | | 8,713 | | | 26,858 | |
Acquisition related expenses | | 22 | | | — | |
| | | | |
| Payroll taxes related to stock-based compensation | | 8,877 | | | 3,429 | |
| Charitable contributions | | 5,527 | | | 5,104 | |
| Restructuring costs | | 46 | | | — | |
| | | | |
| | | | |
| | | | |
| Non-GAAP income from operations | | $ | 325,731 | | | $ | 234,508 | |
Non-GAAP income from operations growth (Y/Y) | | 39 | % | | |
| Non-GAAP operating margin | | 21 | % | | 18 | % |
| | | | |
| | | | | | | | | | | | | | |
| | Three Months Ended September 30, |
| | 2026 | | 2025 |
GAAP net income attributable to common stockholders | | $ | 161,157 | | | $ | 37,248 | |
| | | | |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | | 153,916 | | | 158,169 | |
| Amortization of acquired intangibles | | 8,713 | | | 26,858 | |
Acquisition related expenses | | 22 | | | — | |
| | | | |
| Payroll taxes related to stock-based compensation | | 8,877 | | | 3,429 | |
| Accretion of debt discount and issuance costs | | 444 | | | 427 | |
| | | | |
| Provision of income tax effects related to non-GAAP adjustments | | (97,304) | | | (60,483) | |
| Charitable contributions | | 5,527 | | | 5,104 | |
Share of losses from equity method investment | | 25,489 | | | 27,506 | |
| Restructuring costs | | 46 | | | — | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Non-GAAP net income attributable to common stockholders | | $ | 266,887 | | | $ | 198,258 | |
| | | | |
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except shares and per share amounts)
(Unaudited)
| | | | | | | | | | | | | | |
| | Three Months Ended September 30, |
| | 2026 | | 2025 |
GAAP net income per share attributable to common stockholders, diluted* | | $ | 1.00 | | | $ | 0.23 | |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | | 0.95 | | | 0.99 | |
| Amortization of acquired intangibles | | 0.05 | | | 0.17 | |
Acquisition related expenses | | — | | | — | |
| | | | |
| Payroll taxes related to stock-based compensation | | 0.05 | | | 0.02 | |
| Accretion of debt discount and issuance costs | | — | | | — | |
| | | | |
| Provision of income tax effects related to non-GAAP adjustments | | (0.60) | | | (0.38) | |
| Charitable contributions | | 0.03 | | | 0.03 | |
Share of losses from equity method investment | | 0.16 | | | 0.17 | |
| | | | |
| Restructuring costs | | — | | | — | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Non-GAAP net income per share attributable to common stockholders, diluted | | $ | 1.65 | | | $ | 1.25 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Weighted-average shares used to compute non-GAAP net income per share attributable to common stockholders, diluted | | 161,746,027 | | 159,209,951 |
* Some columns may not add due to rounding
TWILIO INC.
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except percentages)
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended
September 30, | | | | |
| | 2026 | | | | |
Organic Revenue | | | | | | |
| GAAP Revenue | | $ | 1,559,536 | | | | | |
| | | | | | |
| | | | | | |
A2P Revenue | | (53,128) | | | | | |
Acquisition Revenue | | (1,760) | | | | | |
| Organic Revenue | | $ | 1,504,648 | | | | | |
| GAAP Revenue Growth (Y/Y) | | 20 | % | | | | |
| Organic Revenue Growth (Y/Y) | | 16%1 | | | | |
¹ Organic revenue for the three months ended September 30, 2025, when used as the denominator for Organic Revenue Growth for the three months ended September 30, 2026 is equal to reported revenue. Revenue for the three months ended September 30, 2025 was $1.30 billion.
| | | | | | | | | | | | | | |
| | Three Months Ended
September 30, |
| | 2026 | | 2025 |
| Free cash flow and free cash flow margin | | | | |
| GAAP net cash provided by operating activities | | $ | 389,164 | | | $ | 263,563 | |
Operating cash flow margin | | 25 | % | | 20 | % |
Non-GAAP adjustments: | | | | |
| Capitalized software development costs | | (14,585) | | | (13,812) | |
Purchase of long-lived assets | | (4,950) | | | (2,235) | |
| Free cash flow | | $ | 369,629 | | | $ | 247,516 | |
Free cash flow margin | | 24 | % | | 19 | % |
| GAAP net cash used in investing activities | | $ | (30,064) | | | $ | (161,502) | |
| GAAP net cash used in financing activities | | $ | (120,830) | | | $ | (347,952) | |
TWILIO INC.
Supplemental Stock-Based Compensation Expense Information
(In thousands, except percentages)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | | | |
| | 2026 | | 2025 | | | | | | |
Stock-Based Compensation Expense | | | | | | | | | | |
| Cost of revenue | | $ | 3,248 | | | $ | 4,305 | | | | | | | |
| Research and development | | 79,204 | | | 86,020 | | | | | | | |
| Sales and marketing | | 35,313 | | | 36,304 | | | | | | | |
| General and administrative | | 36,151 | | | 31,540 | | | | | | | |
| | | | | | | | | | |
| Total | | $ | 153,916 | | | $ | 158,169 | | | | | | | |
Stock-Based Compensation Expense as a % of Revenue | | 9.9 | % | | 12.2 | % | | | | | | |
CONTACT:
Investor Contact:
Rodney Nelson
ir@Twilio.com
or
Media Contact:
Caitlin Epstein
press@Twilio.com
