Twilio Q3 2026 Earnings Call: Record Cash Flow and Higher Guidance
Source Tradingkey
Key Takeaways
- Q3 2026 revenue reached a record $1.56 billion, up 20% year over year on a reported basis and 16% organically.
- Non-GAAP gross profit increased 18% to a record $768 million. Non-GAAP income from operations rose 39% to a record $326 million, while free cash flow reached a record $370 million.
- Growth was broad-based: messaging revenue increased 24%, voice grew more than 20%, software add-ons rose more than 25%, and self-serve revenue expanded more than 30%.
- Dollar-based net expansion rate improved to 114%, including an approximately four-point contribution from incremental U.S. carrier fees.
- Twilio raised its full-year 2026 organic revenue growth outlook to 15% and increased its non-GAAP income from operations and free cash flow guidance to $1.19 billion-$1.20 billion.
- Management’s preliminary 2027 outlook calls for at least 10% organic revenue growth and at least $1.35 billion each in non-GAAP income from operations and free cash flow.
Key Financial Data
| Metric | Q3 2026 result | Change / context |
|---|---|---|
| Revenue | $1.56 billion | Up 20% reported; up 16% organically year over year |
| Non-GAAP gross profit | $768 million | Up 18% year over year |
| Non-GAAP gross margin | 49.2% | Down 90 bps year over year; up 20 bps sequentially |
| Non-GAAP income from operations | $326 million | Up 39% year over year |
| Non-GAAP operating margin | 21.0% | Up 290 bps year over year and 190 bps sequentially |
| GAAP income from operations | $149 million | Up 263% year over year |
| Free cash flow | $370 million | Record quarterly result |
| Dollar-based net expansion rate | 114% | Incremental carrier fees contributed about four points |
| Stock-based compensation / revenue | 9.9% | Down 230 bps year over year |
| Share repurchases | $127 million | Approximately $700 million remained authorized |
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