Why Twilio Rocketed Over 22% Today

Stock Performance and Investor Day Highlights - Shares of Twilio rallied 22 4% on Friday following the 2025 Investor Day presentation [1] - The company outlined new product innovations and medium-term financial targets, which were well-received by analysts and investors [1] Financial Strategy and Profitability Focus - Twilio is pivoting towards profitability after experiencing slowed revenue growth [3] - Management forecasts double-digit revenue growth through 2027, with adjusted operating margins expanding from 16% in 2024 to 21%-22% by 2027 [3] - Stock-based compensation (SBC) dilution is expected to be below 3% by 2027 [3] - The company plans to cut growth spending if revenue growth slows to maintain margin expansion [4] - Cumulative free cash flow is projected to be $3 billion from 2025 to 2027, compared to$650 million to $675 million in 2024 [4] - At least 50$2 billion repurchase program authorized [4] AI and Market Position - 90% of Fortune 50 AI start-ups use Twilio for their communications platform, generating $260 million in revenue to date [5] - Twilio enables access to ChatGPT through text and voice, with OpenAI being a notable user [5] Valuation and Future Outlook - Twilio's market cap has increased to$21 2 billion, with a valuation considered reasonable relative to the projected $1 billion-plus free cash flow in 2027 [6] - Management aims to reduce equity grants to less than$500 million in 2025, down from $1 9 billion in 2022 [6] - The company's shift towards focusing on profits and free cash flow is seen as a positive development [7]