Twilio Exceeds Q4 Estimates with Strong Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy TWLO?
Source: Benzinga
- Significant Revenue Growth: Twilio reported Q4 revenue of $1.37 billion, surpassing analyst expectations of $1.32 billion, reflecting a robust 14% year-over-year increase that underscores strong market performance and sustained customer demand.
- Expanding Customer Base: As of December 31, 2025, Twilio had over 402,000 active customer accounts, up from 325,000 year-over-year, indicating success in customer acquisition and retention strategies.
- Strong Cash Flow Performance: The company generated $271.6 million in operating cash flow and $256.1 million in free cash flow during the quarter, demonstrating solid financial health and operational efficiency.
- Optimistic Guidance: Twilio expects Q1 revenue to be between $1.34 billion and $1.35 billion, exceeding market estimates of $1.29 billion, with full-year 2026 revenue projected at $5.65 billion to $5.70 billion, further boosting investor confidence.
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Analyst Views on TWLO
Wall Street analysts forecast TWLO stock price to rise
20 Analyst Rating
14 Buy
4 Hold
2 Sell
Moderate Buy
Current: 110.410
Low
100.00
Averages
146.28
High
185.00
Current: 110.410
Low
100.00
Averages
146.28
High
185.00
About TWLO
Twilio Inc. provides a customer engagement platform to build direct, personalized relationships with their customers everywhere in the world. Its platform provides developers with tools to build, scale, and deploy real-time communications within software applications. Its segments include Twilio Communications (Communications) and Twilio Segment (Segment). The Communications segment consists of a variety of application programming interfaces (APIs) and software solutions to optimize communications between its customers and their end users. Its key offerings in its Communications segment include Messaging, Voice, Email (includes Marketing Campaigns), Flex and User Authentication and Identity. Its Twilio Flex is a digital engagement center for the entire customer journey. Twilio Segment is a customer data platform that provides businesses with the tools to harness the power of contextual data by unifying real-time information collected throughout each customer’s journey into a profile.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Optimistic 2026 Outlook: The company’s guidance for fiscal 2026 exceeded expectations, projecting about 12% revenue growth at the midpoint, with adjusted operating income and free cash flow around $1.05 billion, suggesting a robust growth trajectory.
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- Strong Performance: Twilio reported Q4 revenue of $1.37 billion, a 14% year-over-year increase that exceeded consensus estimates by $50 million, indicating ongoing growth potential in its cloud-based customer engagement platform.
- Profitability Metrics: The non-GAAP EPS of $1.33 surpassed expectations by $0.10, with a non-GAAP operating margin of 18.7%, showcasing effective management in cost control and profitability.
- Mixed Analyst Reactions: RBC Capital maintained an Underperform rating with a $100 price target, citing underwhelming 2026 guidance, while Wells Fargo issued an Overweight rating with a $147 target, highlighting acceleration in voice revenue growth.
- Cautious Market Outlook: Despite a strong Q4 performance, analysts expressed caution regarding future organic growth, suggesting that a sub-10% growth outlook may not be sufficient to excite investors, reflecting the prevailing sentiment in the software market.
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- Stock Performance Excellence: Since May 2022, ANET's stock has outperformed the S&P 500 by 362%, reflecting strong market confidence in its growth potential, with CEO Ullal emphasizing the company's central role in mission-critical network transactions.
- Surge in Deferred Revenue: The company reported deferred revenue of $5.37 billion, indicating a growing backlog, and investors will closely monitor the conversion of multistage projects to ensure cash flow supports higher innovation spending.
- Positive Market Reaction: In pre-market trading, ANET's stock surged over 10%, demonstrating a positive market response to its robust performance and growth outlook, further solidifying its leadership position in the AI networking sector.
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- Extreme Price Volatility: Analysts point out that the extreme price action in software stocks has led to unrealistic expectations regarding AI disruption, which may prompt a rotation back into higher-quality companies, thereby improving portfolio performance.
- AI Profitability Gains: Companies in the S&P 500 that have adopted AI have seen net margins expand by approximately 2 to 3 percentage points more than their peers, indicating that AI technology is already delivering productivity gains and reflecting that corporate adoption is enhancing profitability.
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