Joining me today are Khozema Shipchandler, Chief Executive Officer, Aidan Viggiano, Chief Financial Officer, and Thomas Wyatt, Chief Revenue Officer. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings presentation posted on our IR website at investors.twilio.com. We will also make forward-looking statements on this call, including statements about our future outlook and goals. Twilio had a great Q3, reaching $1.3 billion in revenue and $235 million in non-GAAP income from operations, another record for both.

The team's operational rigor and discipline is paying off as we executed across the board and exceeded our quarterly guidance. As a result, we've raised our revenue, profitability, and free cash flow targets for the full year, which Aidan will discuss in more detail. We saw broad-based strengths across customer segments, from innovative and high-growth startups to the world's largest global enterprises, all choosing Twilio to power their customer engagement. This momentum and the continued revenue growth across products like messaging, voice, and software add-ons are a testament to the growing trust in the Twilio platform to help brands create amazing experiences.

During the quarter, Twilio's ISV and self-serve customers continued to be excellent growth drivers, with both growing revenue more than 20% year-over-year. Self-serve, a foundational growth lever for us and an important entry path for our customers to build and grow their usage on Twilio, grew 20%+ year-over-year. More specifically, the solution helps businesses boost both human and virtual agent productivity, increase speed to resolution, and provide better call deflection and containment. A standout example is Inhabit, a leading property management software company, who chose Twilio as the partner for its multi-year hybrid agentic transformation.

What went well
  • Twilio posted a record third quarter with revenue of $1.3 billion, up 15% reported and 13% organic, and record non-GAAP income from operations of $235 million (up 29% year-over-year), exceeding its guidance.
  • Free cash flow was $248 million, and the company raised its full-year 2025 targets, lifting organic revenue growth guidance to 11.3%-11.5%, non-GAAP income from operations to $900 million-$910 million, and free cash flow to $920 million-$930 million.
  • Voice revenue accelerated to mid-teens growth, its fastest rate in over three years, with voice AI revenue up nearly 60% and revenue from the 10 largest voice AI startup customers up more than 10x year-over-year.
  • Verify grew more than 25%, both ISV and self-serve channels grew 20%+, and the company signed a nine-figure multi-product renewal with a leading cloud provider that was the largest deal in its history.
  • Twilio launched its new agent productivity solution and signed its first set of such deals, repurchasing $350 million of stock in the quarter (about 95% of year-to-date free cash flow deployed to buybacks).
What went wrong
  • Non-GAAP gross margin declined 280 basis points year-over-year to 50.1% - the steepest year-over-year compression of the trailing four quarters - driven by $20 million of Verizon A2P carrier pass-through fees.
  • The dollar-based net expansion rate remained subdued at 109%, and GAAP income from operations was only $41 million.
  • Q4 revenue guidance of $1.31 billion-$1.32 billion implied reported growth decelerating to 9.5%-10.5%, and management noted it was taking price actions to stabilize gross margins under fee pressure.

More on Twilio Inc

Reported 2025-10-30 · figures from the Twilio Inc Q3 2025 earnings call.

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