Analyst(s): Futurum Research
Publication Date: February 16, 2026
Twilio delivered double-digit year-on-year growth and higher non-GAAP profitability as voice AI, software add-ons, and solution bundles gained traction. Go-to-market execution in self-serve and the independent software vendor (ISV) channel, alongside disciplined cost actions, set up a solid framework for FY 2026 despite carrier fee headwinds.
What is Covered in this Article:
- Twilio’s Q4 FY 2025 financial results
- Solution-led go-to-market traction
- Voice and AI-driven usage scaling
- Margin discipline and cost actions
- Guidance and Final Thoughts
The News: Twilio (NYSE: TWLO) announced financial results for Q4 FY 2025. Revenue was $1.4 billion, up 14% year-on-year (YoY; consensus: $1.3 billion). Non-GAAP (adjusted) income from operations was $256 million, up 30% YoY, with an 18.7% non-GAAP operating margin. Non-GAAP net income was $211 million, and non-GAAP diluted EPS was $1.33, up 33% YoY. For FY 2025, revenue was $5.1 billion, up 14% YoY. Non-GAAP income from operations was $924 million (FY 2024: $714.4 million) with an 18.2% non-GAAP operating margin. Non-GAAP diluted EPS for FY 2025 was $4.89, up from $3.67 in FY 2024.
“2025 was one of the most balanced and successful years of execution in Twilio’s history and has fundamentally transformed our financial profile and innovation velocity,” said Khozema Shipchandler, CEO of Twilio. “We accelerated revenue growth, expanded operating margins, and delivered significant growth in free cash flow. Twilio is quickly becoming a foundational infrastructure layer in the age of AI.”
Twilio Q4 FY 2025: Revenue Beat, Margin Expansion, AI Voice Momentum
Analyst Take: Twilio’s Q4 FY 2025 capped a year of accelerated growth and improving profitability, driven by voice AI adoption, resilient messaging volumes, and solution-led selling. The company’s pivot from feature sales to multi-product solutions is visible in stronger self-serve and ISV momentum and higher large-deal velocity. Management is proactively managing gross margin optics amid U.S. carrier application-to-person (A2P) fee increases while protecting profit dollars and cash flow. With Q1 FY 2026 organic guidance at a three-year high and disciplined investment in platform capabilities, Twilio enters FY 2026 positioned to sustain double-digit organic growth over time. The key execution watchpoints are continued voice AI scale, RCS commercialization, and mix shift toward higher-margin software add-ons.
Solution-Led Go-To-Market Accelerates Across Channels
Twilio’s go-to-market (GTM) motion showed broad-based strength, with Q4 self-serve revenue up 28% YoY and ISV revenue up 26% YoY, underscoring durable channel health and developer-led land-and-expand. The number of large deals of $500,000 or more rose 36% YoY, reflecting traction with solution selling and multi-product expansion. Multi-product customer count grew 26% YoY, while software add-on revenue grew over 20% YoY, led by Verify, which grew more than 25% for the second consecutive quarter. Cyber Week activity highlighted platform scale with 6.99 billion messages (+34.5% YoY), 1.07 billion calls (+58% YoY), and 75.1 billion emails (+14.6% YoY). These KPIs point to the increasing relevance of Twilio’s bundled offerings (e.g., Flex, Messaging, Voice) for agent productivity and AI-enhanced workflows. The momentum indicates that solution-led selling is expanding deal sizes and deepening customer engagement.
Voice and AI-Driven Use Cases Scale
Voice revenue growth accelerated to the high-teens in Q4, its best pace since 2022, supported by voice AI revenue growth above 60% YoY. Voice add-ons are scaling: Branded Calling revenue grew roughly 6x YoY, and Conversational Intelligence and conferencing are expanding into multi-party and payments use cases. Rich Communication Services (RCS) volumes grew roughly 5x quarter-over-quarter (QoQ) from a small base, and early enterprise use cases are emerging across notifications and two-way engagement. Named customers across AI-native and enterprise segments (e.g., Sierra, Ramp) validate Twilio’s role as infrastructure for AI-driven, cross-channel interactions. As richer modalities rise, Twilio’s developer ecosystem and channel breadth can help translate usage gains into durable revenue mix improvements. Altogether, voice AI and adjacent software add-ons are shaping a higher-quality, more defensible growth vector.
Margin Discipline Amid Carrier Fee Headwinds
Non-GAAP gross margin was 49.9% in Q4, down sequentially by 20 basis points, largely due to $23 million in pass-through A2P fees from Verizon; Twilio expects approximately $190 million in incremental pass-through revenue from U.S. carriers in FY 2026. Management noted these fees are neutral to dollar profits but reduce reported non-GAAP gross margin by about 170 basis points and operating margin by 60–70 basis points in FY 2026, all else equal. Offsetting actions include carrier supply-chain optimizations (e.g., more direct connections, balance-sheet leverage) and hosting cost normalization post-email cloud migration (“double bubble” ends in 2026). Stock-based compensation (SBC) discipline continues, with SBC at 11.3% of revenue in Q4 and 11.8% for FY 2025, down 200 basis points YoY, alongside a cumulative 18% reduction in share count since 2023 through repurchases. These operational levers support non-GAAP gross profit growth converging toward organic revenue growth in FY 2026. Overall, Twilio is managing optics while protecting profit dollars and cash generation.
Guidance and Final Thoughts
For Q1 FY 2026, Twilio guides revenue of $1.335–$1.345 billion (organic +10% to +11%), non-GAAP income from operations of $240–$250 million, and non-GAAP diluted EPS of $1.21–$1.26 on 158 million diluted shares. For FY 2026, Twilio guides reported revenue growth of 11.5%–12.5%, organic growth of 8%–9%, non-GAAP income from operations of $1.04–$1.06 billion, and free cash flow of $1.04–$1.06 billion. Carrier fee pass-throughs are assumed to be approximately $190 million in FY 2026 and are expected to reduce non-GAAP gross margin by roughly 170 basis points and operating margin by 60–70 basis points. Management introduced a 2027 non-GAAP operating income target of at least $1.23 billion, reframing long-term targets on a dollar basis to neutralize the impact of fees. Execution priorities include sustained voice AI scale, commercialization of RCS in marketing and service use cases, and continued mix shift to higher-margin software add-ons and identity.
See the full press release on Twilio’s Q4 FY 2025 financial results on the company website.
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Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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