TWLO changes
Pick any two versions below to diff them.
- Price
- $219.48
- Discount category
- Far above intrinsic value
- Intrinsic value source
- AI estimate
- Next earnings
- Feb 11, 2027
- Next earnings is estimate
- Yes
- Company name
- added: Twilio
- Sector
- added: Cloud communications software
- About
- added: Twilio Inc. (Twilio) is a company in San Francisco that sells a cloud platform for customer communication. Its customers use it to send text messages, make voice calls, send email, verify identity and build conversations with AI. Most of its revenue comes from usage-based fees, mainly for Messaging and Voice. It serves customers in more than 180 countries and had 5,625 employees at September 30, 2026. It has one reportable segment. Revenue was $4,465.5 million for nine months of 2026, against $3,701.3 million a year before. Khozema Shipchandler is Chief Executive Officer. Twilio owns a stake in Syniverse, which it accounts for under the equity method. The Class A common shares trade on the New York Stock Exchange in US dollars.
- Thesis
- added: The market prices Twilio above the AI estimate, because investors pay for organic revenue growth in the mid teens with rising profit and free cash flow. In Q3 2026, revenue rose 20% to $1.56 billion, and organic revenue rose 16%. Non-GAAP operating income rose 39% to $325.7 million, and free cash flow was $369.6 million. The Dollar-Based Net Expansion Rate was 114%, against 109% a year before. The company raised its guidance for 2026 to organic growth of 15% and non-GAAP operating income of $1.19 billion to $1.20 billion. But it guides Q4 organic growth to 11% to 12%, which is slower. For the price to be earned, three things must be true. Demand from AI developers for messaging, voice and identity must keep organic growth near the current pace. Non-GAAP margins must keep rising while share-based pay, which was 9.9% of revenue in Q3, falls as a share of revenue. Buybacks must offset the dilution from share awards. The next tests are the Q4 2026 report in February 2027 and its outlook for 2027. If growth slows or share-based pay stays high, the price can fall toward the AI estimate.
- Valuation
- added: The intrinsic value for Twilio is an AI estimate from November 12, 2026. It is not an analyst's value. An AI research agent calculated it from the filings of Twilio with the SEC. The method is a multiple of earnings per share for 2027, plus net cash. The earnings are built from revenue, the non-GAAP operating margin of the company less share-based pay as a cost, a tax rate and a share count. The estimate treats share-based pay as a real cost, so it is not the non-GAAP measure of the company. The Q3 2026 release (8-K, October 29, 2026) gives revenue of $1,559.5 million for Q3, non-GAAP income from operations of $325.7 million (21% of revenue), a guide for Q4 2026 revenue of $1.595 billion to $1.605 billion and non-GAAP income from operations of $300 million to $310 million, and a guide for 2026 non-GAAP income from operations of $1.19 billion to $1.20 billion. The Form 10-Q for the quarter ended September 30, 2026 gives revenue of $4,465.5 million for nine months, share-based pay of $432.3 million for nine months (9.7% of revenue), 154,734,032 shares of Class A common stock outstanding at October 16, 2026, and 7,367,844 shares of dilution in Q3, which the estimate adds, for 162.10 million shares. It gives cash and cash equivalents of $1,061.5 million, short-term marketable securities of $1,829.9 million and senior notes with a principal of $1,000.0 million, so net cash is $1,891.5 million, or $11.67 per share. The estimate does not add the equity method investment of $225.2 million or the deferred tax asset of $1,059.5 million. It takes revenue for 2026 at about $6,066 million, which is nine months plus $1,600 million for Q4, the middle of the guidance. The revenue for 2027, the margins, the share-based pay, the tax rate of 21% and the multiples are assumptions. The low case assumes revenue of $6,611 million, up 9%, a non-GAAP operating margin of 18.5% and share-based pay of 9.5% of revenue, because growth slows to the Q4 pace. EPS is $2.90. At 20 times it gives $57.99, and with net cash it gives $69.66 per share. The base case assumes revenue of $6,914 million, up 14%, a margin of 20.5% and share-based pay of 9.0% of revenue. EPS is $3.87. At 25 times it gives $96.87, and with net cash it gives $108.54 per share. The high case assumes revenue of $7,157 million, up 18%, a margin of 22.5% and share-based pay of 8.5% of revenue, because organic growth stays near 15%. EPS is $4.88. At 30 times it gives $146.49, and with net cash it gives $158.16 per share. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is $111.22 per share. As of Nov 12, 2026.
- Risks
- added: Growth can slow. Reported growth of 20% in Q3 includes acquisitions, and organic growth was 16%. The company guides Q4 organic growth to 11% to 12%. Share-based pay is a large cost. It was $432.3 million for nine months, which is 9.7% of revenue, and the company excludes it from non-GAAP results. Diluted shares were 161.7 million in Q3, against 154.4 million basic shares. Most revenue is usage-based. Customers can cut message and call volumes fast, and prices depend on carriers and on rules for messaging. The Syniverse stake loses money. Twilio's share of losses was $77.1 million for nine months, and the carrying value was $225.2 million at September 30, 2026. Twilio can have to write it down. Twilio has $1.0 billion of senior notes due in 2029 and 2031. It has more cash than debt, so the risk is small, but buybacks and acquisitions can change this.
- Balance sheet
- added: At September 30, 2026, Twilio had cash and cash equivalents of $1,061.5 million and short-term marketable securities of $1,829.9 million, which is $2,891.5 million. Debt is $1,000 million of principal in two senior notes: $500 million at 3.625% due 2029 and $500 million at 3.875% due 2031. Net cash was about $1.89 billion. Operating cash flow was $389.2 million and free cash flow was $369.6 million in Q3. Twilio has completed about $1.3 billion of buybacks and has about $700 million left of its $2.0 billion program. It carried a deferred tax asset of $1,059.5 million after the release of a valuation allowance in Q2 2026, and an equity method investment of $225.2 million. As of Sep 30, 2026.
- Checkpoints
- added: Feb 11, 2027 (estimate): Q4 2026 results and the outlook for 2027. Pending. Watch: Revenue lands in the guided range of $1.595 billion to $1.605 billion and the outlook for 2027 keeps organic growth in the low to mid teens, and this passes; slower growth or lower margins fail. Apr 2027 (estimate): Q1 2027 results: organic growth and margin. Pending. Watch: Organic growth stays above 10% and non-GAAP operating margin keeps rising, and this passes; slower growth or a falling margin fails.
- Recent events
- added: Oct 29, 2026: Twilio reported Q3 2026 results. Revenue was $1,559.5 million, up 20%, and organic revenue was up 16%. GAAP income from operations was $148.6 million, and non-GAAP income from operations was $325.7 million. Non-GAAP EPS was $1.65, against $1.25 a year before. Oct 29, 2026: Twilio raised its guidance for 2026 to revenue growth of 20% and non-GAAP income from operations of $1.19 billion to $1.20 billion, and free cash flow of the same range. For Q4 it guided revenue of $1.595 billion to $1.605 billion, non-GAAP income from operations of $300 million to $310 million and non-GAAP EPS of $1.48 to $1.53. Oct 29, 2026: Twilio said that it bought back $127.2 million of shares in Q3. It has completed about $1.3 billion of its $2.0 billion program, which ends on December 31, 2027, and about $700 million is left. Aug 6, 2026: Twilio reported Q2 2026 results. In Q2 it released a US valuation allowance on deferred tax assets, a one-time tax benefit of $937.1 million. Net income attributable to common stockholders was $1,318.5 million for nine months. Jun 16, 2026: At its annual meeting, Twilio stockholders approved an amended and restated 2016 Stock Option and Incentive Plan and an amended and restated 2016 Employee Stock Purchase Plan.