Key Highlights

● Revenue was $1.50 billion, up 22% reported and 17% organic.

● Dollar-based net expansion rate rose to 116% from 108%.

● Free cash flow was $352.6 million against $263.5 million a year earlier.

● The 2026 reported revenue growth outlook rose to 18% to 18.5%.

Twilio Inc. (NYSE:TWLO) reported second-quarter 2026 results on 6 August 2026 and raised its full-year growth and profit guidance. Revenue was $1.50 billion, up 22% as reported and 17% on an organic basis, while the dollar-based net expansion rate rose to 116% from 108%. The figures show how a communications platform provider is benefiting from higher usage by existing customers during 2026.

Business and sector

Twilio provides application programming interfaces and software that let developers and businesses add messaging, voice, email and customer engagement features to their own products. Its customers range from start-ups to large enterprises, and revenue depends heavily on usage, so volumes of messages and calls matter as much as the number of customers. The sector is being shaped by the use of artificial intelligence in customer service, which may increase interactions handled by software, and by competition from other cloud communications suppliers. The company reports organic growth separately from reported growth, a distinction that strips out the effect of acquisitions and currency movements and gives a clearer picture of underlying demand for its core services.

Latest reported results

GAAP gross profit was $725.9 million, a margin of 48%, and non-GAAP gross profit was $735.7 million, a margin of 49%. GAAP income from operations was $84.5 million, up 129%, while non-GAAP income from operations was $284.6 million, a margin of 19%, up 29%. GAAP diluted earnings per share were $6.68, but that figure includes a non-cash benefit of $5.91 per share from releasing most of the valuation allowance on United States deferred tax assets. Non-GAAP diluted earnings per share were $1.47, compared with $1.19 a year earlier. Operating cash flow was $372.4 million.

Financial performance and industry context

Free cash flow was $352.6 million, compared with $263.5 million in the prior-year quarter. Twilio repurchased $66.0 million of its stock in the quarter. About $1.2 billion has been completed under a $2.0 billion programme that expires on 31 December 2027, leaving $826.0 million available at 30 June 2026. The company ended the quarter with 5,492 employees. For the third quarter it guided to revenue of $1.505 billion to $1.515 billion and non-GAAP income from operations of $285 million to $295 million. For 2026 it raised expected reported revenue growth to between 18 and 18.5%, from 14 to 15%, and organic growth to between 13 and 13.5%. Free cash flow is now expected at $1.135 billion to $1.155 billion.

Risks and uncertainties

The headline GAAP profit is distorted by the tax valuation allowance release, which is non-cash and not a measure of operating performance. Organic growth of 17% in the second quarter compares with guided organic growth of 11 to 12% in the third quarter, indicating that management expects the rate to moderate. Usage-based revenue can vary with customer activity, and a rise in the net expansion rate may not persist. Competition, regulation of messaging, and the pricing of AI-related services are further uncertainties.

Net expansion and organic growth ahead

The third-quarter results will show whether revenue falls within the guided range and whether the net expansion rate remains elevated. Readers may follow the split between organic and acquired growth, the conversion of operating profit into free cash flow, and the pace of repurchases against the remaining authorisation. Margin trends will also be relevant to readers, since non-GAAP operating income guidance for the full year was raised to between $1.135 billion and $1.155 billion from between $1.08 billion and $1.10 billion.