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1. Company Snapshot

1.a. Company Description

Twilio Inc., together with its subsidiaries, provides a cloud communications platform that enables developers to build, scale, and operate customer engagement within software applications in the United States and internationally.Its customer engagement platform provides a set of application programming interfaces that handle the higher-level communication logic needed for nearly every type of customer engagement, as well as enable developers to embed voice, messaging, video, and email capabilities into their applications.The company was incorporated in 2008 and is headquartered in San Francisco, California.

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1.b. Last Insights on TWLO

Twilio's recent performance is driven by strong Q3 results, with revenue and earnings surpassing estimates. AI-driven upgrades and digital adoption fueled growth, with double-digit organic revenue growth and expanding customer spending. The company's robust net cash position of $1.55 billion provides flexibility for growth initiatives. Analysts upgraded their forecasts following Q3 results, citing potential for upside surprises. Additionally, Twilio's aggressive share buybacks, which reduce outstanding shares, are a positive factor. Guidance was also lifted for the full year.

1.c. Company Highlights

2. Twilio's Q3 2025 Earnings: A Strong Performance

Twilio reported a record revenue of $1.3 billion for Q3 2025, representing a 15% year-over-year growth. Non-GAAP income from operations also reached a record high of $235 million. The company's EPS came in at $1.25, beating estimates of $1.07. Revenue growth was driven by broad-based strength across customer segments, with ISV and self-serve customers growing revenue more than 20% year-over-year. Messaging revenue grew in the high teens, while voice revenue growth accelerated to the mid-teens.

Publication Date: Nov -10

📋 Highlights
  • Record Revenue and Income: Q3 2025 revenue hit $1.3B (+15% YoY), with non-GAAP income from operations at $235M (both records).
  • High-Growth Segments: ISV/self-serve customers drove >20% YoY revenue growth; Verify software add-on grew >25% YoY.
  • Strategic Acquisition: Acquired Stytch (<$100M) to enhance AI-driven identity solutions and digital interactions.
  • Upgraded Guidance: Raised full-year revenue target to $5.24B-$5.28B, non-GAAP income to $900M-$910M, and free cash flow to $920M-$930M.
  • International Momentum: International messaging grew 18%, with strong cross-sell adoption and expansion into Australia, Japan, and Singapore.

Segment Performance

The company's non-messaging business saw significant growth, with sequential adds nearly double last quarter, driven largely by email. The growth was broad-based, with ISVs, self-serve, and software add-on products like Verify, all growing over 20%. Voice AI start-up customer volume drove growth in voice, which grew mid- to high-teens. International messaging growth was also strong at 18%.

Guidance and Outlook

Twilio raised its revenue, profitability, and free cash flow targets for the full year. The company expects revenue to be in the range of $1.31 billion to $1.32 billion for Q4, representing organic revenue growth guidance of 11.3% to 11.5% for the full year. Non-GAAP income from operations is expected to be $230 million to $240 million for Q4, and full-year non-GAAP income from operations range is raised to $900 million to $910 million. Analysts estimate next year's revenue growth at 8.8%.

Valuation

Twilio's current valuation metrics indicate a premium, with a P/E Ratio of 290.85 and an EV/EBITDA of 67.43. The P/S Ratio stands at 4.0, while the Free Cash Flow Yield is 4.33%. The company's ROIC is 1.08%, and ROE is 0.84%. These metrics suggest that the market has high expectations for Twilio's future growth.

Growth Initiatives

The company is investing in areas such as voice AI, RCS adoption, and inorganic investments like the recent Stytch acquisition. Twilio sees potential in RCS due to its branded nature, leading to higher efficacy and more trust. The company's initiatives to fuel cross-sell growth, including product innovation, enablement, and marketing programs, have shown a positive start to the year.

3. NewsRoom

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Market Today: WBD Sale Bids, Meta Cuts, Apple Shake-Up

Dec -04

Source: gurufocus.com

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First Look: Insurers, Auto Rules, AI and Fed Jitters

Dec -04

Source: gurufocus.com

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Twilio Inc. (TWLO) Presents at UBS Global Technology and AI Conference 2025 Prepared Remarks Transcript

Dec -03

Source: seekingalpha.com

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Market Today: Fed hopes lift stocks; AWS AI rollout; Prada-Versace deal

Dec -03

Source: gurufocus.com

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First Look: Airbus trims targets, AWS AI, AEO hikes outlook

Dec -03

Source: gurufocus.com

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Trade Tracker: Joe Terranova buys Twilio

Dec -02

Source: youtube.com

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Twilio to Participate at the UBS Global Technology and AI Conference

Dec -01

Source: businesswire.com

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Choreo LLC Raises Stock Holdings in Twilio Inc. $TWLO

Nov -28

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.61%)

6. Segments

Messaging

Expected Growth: 27.43%

Twilio's 27.43% growth in Messaging is driven by increasing adoption of cloud-based communication platforms, rising demand for omnichannel customer engagement, and expansion into new markets. Additionally, the growing need for businesses to enhance customer experience, improve operational efficiency, and reduce costs are key factors contributing to this growth.

Other

Expected Growth: 27.18%

Twilio's 'Other' segment growth of 27.18% is driven by increasing adoption of its IoT and messaging services, expansion into new markets, and strategic partnerships. The rise of remote work and digital transformation also fuels demand for Twilio's communication and customer engagement solutions, contributing to its rapid growth.

Voice

Expected Growth: 26.27%

Twilio's Voice segment growth is driven by increasing adoption of cloud-based communication platforms, rising demand for omnichannel customer engagement, and expansion into new industries such as healthcare and finance. Additionally, the growing need for real-time communication and analytics capabilities, as well as the shift towards API-based communication, are contributing to the segment's 26.27% growth.

Email and Marketing Campaigns

Expected Growth: 11.7%

Twilio's 11.7% growth in Email and Marketing Campaigns is driven by increasing demand for omnichannel customer engagement, expansion into new industries, and growing adoption of cloud-based communication platforms. Additionally, the rise of e-commerce and digital transformation initiatives across enterprises are fueling the need for personalized and automated marketing campaigns, further boosting Twilio's growth.

Twilio

Expected Growth: 27.93%

Twilio's 27.93% growth is driven by increasing adoption of cloud-based communication platforms, rising demand for customer engagement solutions, and expansion into new markets. Additionally, the company's strategic acquisitions, such as Segment, have enhanced its offerings and contributed to revenue growth.

7. Detailed Products

Twilio Voice

A cloud communication platform that enables businesses to make and receive voice calls programmatically.

Twilio Messaging

A messaging platform that enables businesses to send and receive SMS, MMS, and WhatsApp messages programmatically.

Twilio Video

A cloud-based video platform that enables businesses to build real-time video experiences into their applications.

Twilio Flex

A cloud-based contact center platform that enables businesses to build custom, omnichannel customer service experiences.

Twilio Autopilot

A conversational AI platform that enables businesses to build custom, omnichannel chatbots and IVRs.

Twilio Verify

A two-factor authentication platform that enables businesses to verify user identities programmatically.

Twilio Lookup

A phone number lookup platform that enables businesses to validate and enrich phone number data programmatically.

8. Twilio Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Twilio's platform is highly specialized and customizable, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative communication platforms, Twilio's strong brand recognition and customer loyalty mitigate this force.

Bargaining Power Of Suppliers

Twilio has a diversified supplier base, and its technology is not heavily reliant on any single supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The cloud communication platform market is highly competitive, and new entrants can easily enter the market, posing a significant threat to Twilio's market share.

Intensity Of Rivalry

The cloud communication platform market is highly competitive, with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.72%
Debt Cost 3.95%
Equity Weight 90.28%
Equity Cost 10.53%
WACC 9.89%
Leverage 10.76%

11. Quality Control: Twilio Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Alphabet

A-Score: 5.9/10

Value: 1.8

Growth: 8.3

Quality: 8.4

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Yelp

A-Score: 5.5/10

Value: 6.2

Growth: 7.8

Quality: 8.2

Yield: 0.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
CarGurus

A-Score: 5.2/10

Value: 3.0

Growth: 6.8

Quality: 8.2

Yield: 0.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Twilio

A-Score: 4.5/10

Value: 1.6

Growth: 8.1

Quality: 5.9

Yield: 0.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Cogent Communications

A-Score: 4.1/10

Value: 5.2

Growth: 2.7

Quality: 2.1

Yield: 10.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
IAC

A-Score: 3.7/10

Value: 6.8

Growth: 2.7

Quality: 4.5

Yield: 0.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

125.22$

Current Price

125.22$

Potential

-0.00%

Expected Cash-Flows