Twilio Inc. (TWLO): A Bull Case Theory

Core Thesis - Twilio Inc. is experiencing a significant turnaround under new CEO Khozema Shipchandler, with improved profitability and operational discipline reflected in its recent financial results [2][5]. Financial Performance - Twilio reported a 15% revenue growth and a 23% non-GAAP EPS growth in Q3 2025, indicating a recovery from previous stock depreciation and organizational challenges [2]. - The company achieved a strong free cash flow of $248 million for the quarter, highlighting its financial health [3]. Strategic Initiatives - Twilio has refocused on its core communication API business, reducing its workforce from over 8,000 to 5,541 employees to enhance efficiency [3]. - The company returned capital to shareholders through a $350 million stock buyback while also acquiring Stytch, an AI-based identity platform, to strengthen its customer engagement capabilities [4]. Growth Outlook - Twilio raised its guidance for Q4 revenue to between $1.31 billion and $1.32 billion, with full-year revenue growth revised to 12.5%, reflecting confidence in its growth trajectory [4]. - Valuation analysis suggests a forward P/E of 20–25x FY26 EPS and a DCF-based intrinsic value of $130–$155 per share, indicating a favorable entry point for investors [5]. Market Position - The company has reestablished a disciplined, profitable, and growth-oriented model, generating robust cash flow and executing targeted acquisitions [5]. - The stock has appreciated approximately 31.12% since a previous bullish thesis, reinforcing the positive outlook on Twilio's operational improvements and strategic moves [6].