Twilio Exceeds Q2 Expectations, Stock Price Dips Despite AI Ramp

Shares of Twilio Inc (NYSE:TWLO) were down nearly 20% at last check Friday, despite the company’s upbeat second-quarter report.

Here are some key analyst takeaways.

• RBC Capital Markets analyst Rishi Jaluria reiterated an Underperform rating and price target of $75.
• Needham analyst Joshua Reilly maintained a Buy rating and price target of $125.

Check out other analyst stock ratings.

RBC Capital Markets: Twilio reported revenue of $1,228 million, topping consensus of $1,188 million, and non-GAAP earnings of $1.19 per share, higher than expectations of $1.05 per share, Jaluria said. Upside was driven by Communications, which was "supported by broad-based usage growth across messaging, voice, and email," he added.

Management raised their 2025 organic growth guidance to 9%-10%, from their previous forecast of 7.5%-8.5%, and free cash flow guidance to $875-$900 million, from their prior estimate of $850-$875 million, the analyst stated. "Management highlighted improved GTM execution, Al adoption, and Messaging wins, but investors remain cautious on growth durability and margin constraints," he further wrote.

Needham: Twilio's total revenues grew by 13.5% year-on-year, with Communications revenue up 14.5% and Segment up 0.4%, Rielly said. The company added 14,000 active customer accounts in the quarter, representing 4% sequential growth and 10% year-on-year growth, he added.

Twilio is likely to have gained market share in messaging both domestically and internationally, the analyst stated. "Momentum continues for AI voice solutions, and we expect these margin accretive products to only grow in the mix over time," he further wrote.

TWLO Price Action: Shares of Twilio had declined by 19.70% to $98.38 at the time of publication on Friday.

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