Twilio(TWLO) - 2025 Q2 - Quarterly Results

Executive Summary Twilio reported strong Q2 2025 results, achieving accelerated revenue growth and record non-GAAP income from operations and free cash flow Q2 2025 Performance Overview Twilio reported strong financial results for Q2 2025, with significant year-over-year revenue growth and improved profitability, including record non-GAAP income from operations and free cash flow | Metric | Q2 2025 | YoY Change | | :-------------------------------- | :---------- | :--------- | | Revenue | $1.23 billion | +13% | | GAAP Income from Operations | $37 million | +$56 million | | Non-GAAP Income from Operations | $221 million | +26% | CEO Commentary CEO Khozema Shipchandler highlighted the company's successful focus and execution, leading to accelerated revenue growth and record non-GAAP income from operations and free cash flow. He emphasized Twilio's role as an infrastructure layer for customer experience, combining communications, data, and AI - CEO Khozema Shipchandler noted Q2 2025 as another quarter of accelerated year-over-year revenue growth, alongside record non-GAAP income from operations and free cash flow, attributing success to the company's focus and execution[4] - Twilio showcased its latest innovations at the Signal user conference, reinforcing its position as the infrastructure layer for customer experience by integrating communications, data, and AI[4] Second Quarter 2025 Financial Highlights Twilio reported strong Q2 2025 financial and operational growth, including double-digit revenue increases, improved profitability, and an active share repurchase program Key Financial Metrics Twilio demonstrated strong financial and operational growth in Q2 2025, with double-digit revenue increases, a significant shift from GAAP operating loss to income, and improved cash flow. Key operational metrics like active customer accounts and dollar-based net expansion rate also showed positive trends Q2 2025 Key Financial Metrics (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $1.23 billion | $1.08 billion | +13% | | Total Organic Revenue Growth | 13% | - | +13% | | Communications Revenue | $1.15 billion | - | +14% | | Communications Organic Revenue Growth | 14% | - | +14% | | Segment Revenue | $75.5 million | - | Flat | | GAAP Income (Loss) from Operations | $37.0 million | ($19.0 million) | Improvement | | Non-GAAP Income from Operations | $220.5 million | $175.3 million | +26% | | GAAP Net Income (Loss) per Share, Diluted | $0.14 | ($0.19) | Improvement | | Non-GAAP Net Income per Share, Diluted | $1.19 | $0.87 | +36.8% | | Net Cash Provided by Operating Activities | $277.1 million | $213.3 million | +30.1% | | Free Cash Flow | $263.5 million | $197.6 million | +33.3% | | Active Customer Accounts | >349,000 | >316,000 | +10.4% | | Dollar-Based Net Expansion Rate | 108% | 102% | +6 percentage points | | Employees | 5,466 | - | - | Share Repurchase Program Twilio's Board of Directors authorized a $2.0 billion share repurchase program in January 2025, set to expire by December 31, 2027. During Q2 2025, the company repurchased $176.7 million worth of Class A common stock - Twilio's Board authorized a $2.0 billion share repurchase program in January 2025, expiring December 31, 2027[9] Q2 2025 Share Repurchase Activity | Metric | Amount | | :------------------------------------------------ | :------------- | | Value of Class A common stock repurchased in Q2 2025 | $176.7 million | Outlook Twilio provided updated financial guidance for Q3 and full-year 2025, reflecting increased organic revenue and free cash flow targets, alongside consistent non-GAAP operating income projections Q3 2025 Guidance Twilio provided guidance for Q3 2025, projecting revenue between $1.245 billion and $1.255 billion, with organic revenue growth of 8%-9% year-over-year. Non-GAAP income from operations is expected to be $205-$215 million, and non-GAAP diluted EPS between $1.01 and $1.06 Q3 2025 Guidance | Metric | Guidance Range | | :------------------------------------------ | :--------------- | | Revenue | $1,245 - $1,255 million | | Y/Y Revenue Growth | 10% - 11% | | Y/Y Organic Revenue Growth | 8% - 9% | | Non-GAAP Income from Operations | $205 - $215 million | | Non-GAAP Diluted Earnings Per Share | $1.01 - $1.06 | | Non-GAAP Weighted Average Diluted Shares Outstanding | 161 million | FY 2025 Guidance For fiscal year 2025, Twilio raised its organic revenue target to 9%-10% year-over-year (up from 7.5%-8.5%) and initiated a reported revenue target of 10%-11%. The company reiterated its non-GAAP income from operations target of $850-$875 million and raised its free cash flow target to $875-$900 million (up from $850-$875 million) FY 2025 Guidance Updates | Metric | Previous Guidance | Updated Guidance | | :-------------------------- | :---------------- | :--------------- | | Y/Y Organic Revenue Growth | 7.5% - 8.5% | 9% - 10% | | Y/Y Reported Revenue Growth | - | 10% - 11% | | Non-GAAP Income from Operations | $850 - $875 million | $850 - $875 million (reiterated) | | Free Cash Flow | $850 - $875 million | $875 - $900 million | Company Information This section provides details on Twilio's investor relations, media contacts, and a description of its Customer Engagement Platform Conference Call & Investor Relations Twilio hosted a Q&A conference call on August 7, 2025, to discuss its Q2 financial results. Information regarding the webcast, replay, and supplemental earnings presentation is available on the investor relations website. Twilio also uses its investor relations website and X (formerly Twitter) feed (@twilio) for disclosing material non-public information - Twilio held a Q&A conference call on August 7, 2025, to discuss Q2 financial results, with webcast and replay available on its investor relations website[12] - Twilio utilizes its investor relations website and X (formerly Twitter) feed (@twilio) for disclosing material non-public information and complying with Regulation FD[13] About Twilio Inc. Twilio Inc. provides a Customer Engagement Platform (CEP) that enables companies to build direct, personalized relationships with customers globally. The platform integrates communications and data with AI and security to enhance the customer journey across various use cases, serving millions of developers and hundreds of thousands of businesses in 180 countries - Twilio's Customer Engagement Platform (CEP) helps leading companies build direct, personalized customer relationships worldwide[14] - The platform leverages communications, data, and AI to add intelligence and security to the customer journey, supporting sales, marketing, growth, and customer service[14] - Twilio serves millions of developers and hundreds of thousands of businesses across 180 countries and territories[14] Disclosures and Definitions This section outlines the nature of forward-looking statements and provides detailed definitions and reconciliations for Twilio's non-GAAP financial and operating measures Forward-Looking Statements This section outlines that the press release and conference call contain forward-looking statements regarding future financial and operating performance, strategies, growth, and market conditions. It cautions against relying on these statements as predictions of future events due to inherent risks, uncertainties, and other factors that could cause actual results to differ materially. The company disclaims any obligation to update these statements - Forward-looking statements relate to future financial/operating performance, strategies, and market conditions, and are subject to risks and uncertainties[15][16] - Readers should not rely on forward-looking statements as predictions, and the company does not commit to updating them except as required by law[15][18] Non-GAAP Financial Measures Twilio uses various non-GAAP financial measures to evaluate operations, facilitate period-to-period comparisons, and assist in comparisons with other companies. These measures are supplemental to GAAP results and are not substitutes. The company provides definitions for non-GAAP gross profit, operating expenses, income from operations, net income, organic revenue, and free cash flow, along with their respective margins and growth rates - Non-GAAP financial measures are used for evaluating ongoing operations, internal planning, forecasting, and comparability, but are not substitutes for GAAP results[19][20] - Reconciliation of forward-looking non-GAAP measures to GAAP equivalents is not provided due to uncertainty and variability of reconciling items like stock-based compensation[21] [Non-GAAP Gross Profit and Margin](index=4