Twilio Inc. Q1 FY2026 earnings call

Twilio had a terrific Q1, accelerating revenue and gross profit to their highest growth rates in more than three years. Delivered over $1.4 billion in revenue, up 20% year-over-year on a reported basis, and drove 16% growth in both organic revenue and non-GAAP gross profits. Continued to see unprecedented demand for voice reimagined through AI. Messaging revenue growth accelerated aided by strong growth in WhatsApp and RCS. Go-to-market initiatives continue to perform, with self-serve and ISV cohorts driving exceptional revenue growth. Signed customers including AloeWare, Grupo Pro TG, etc., and landed key multi-year partnership with PGA of America. Upcoming Signal conference to unveil consequential innovations. Named a leader by industry analysts and welcomed Doug Robinson to the Board.

Twilio's Q1 2026 saw revenue exceed $1.4 billion, up 20% year-over-year on a reported basis. Organic revenue grew 16%, and non-GAAP gross profit grew 16%. Voice revenue grew 20% year-over-year, with AI being a catalyst and seeing sixth consecutive quarter of accelerated growth. Software add-ons like branded calling and conversational intelligence grew revenue more than 100% year-over-year. Messaging revenue growth accelerated to 25%, driven by strong growth in WhatsApp and RCS, with significant traction in international markets. Software add-on revenue growth exceeded 20% year-over-year, driven by Verify and newer products.

For Q2, initiating a revenue target of $1.42 to $1.43 billion, representing 15.5 to 16.5% reported growth and 10 to 11% organic growth, accounting for incremental U.S. carrier fees. Full-year organic growth range raised to 9.5 to 10.5% up from 8 to 9% previously. Raising reported revenue growth range to 14 to 15% up from 11.5 to 12.5% previously. Expect full-year non-GAAP gross profit dollar growth to be similar to organic revenue growth rate. Q2 non-GAAP income from operations expected to be $250 to $260 million. Raising full year 2026 non-GAAP income from operations range to $1.08 to $1.1 billion and free cash flow guidance to $1.08 to $1.1 billion.

Risks include incremental U.S. carrier fees impacting margin rates and macroeconomic uncertainties that could affect business performance.

Q: Alex Zukin asked about drivers and trajectory of messaging and voice.

A: Messaging grew ~25% with ~seven points from fees, broad-based geographically. Voice grew 20% y-o-y with AI use cases and software add-ons.

Q: Taylor McGinnis asked about durability of messaging growth.

A: Messaging has been growing mid to high teens for several quarters, and cross-channel use with AI provides ongoing durability.

Q: Itai Kidron asked about macro impact.

A: Macro not having significant effect, business performing nicely.

Q: Siti Panegrahi asked about scale of largest voice AI customer.

A: AI natives have takeoff velocity but off small base, higher adoption in non-regulated industries.

Q: Mark Murphy asked about headcount and SaaS applications.

A: Headcount roughly flat, inference costs manageable, SAS tooling costs not expected to grow meaningfully.

Q: Nick Altman asked about GAAP margins.

A: Driven by growing non-GAAP profit, decreasing stock-based comp, and lower intangible amortization.

Q: Derek Wood asked about next phase of segment.

A: Focus on using data to enrich communications, not standalone segment focus.

Q: Arjun Bhatia asked about AI tailwind for messaging and go-to-market readiness.

A: Longer-term opportunity with AI in messaging, sales organization optimized for multi-product selling.

Q: Koji Ikeda asked about not being disrupted.

A: Market leader with best technology, multi-channel ability, and strong brand.

Q: William Power asked about organic revenue growth inflection.

A: Driven by product performance, sales channel strength, and broad industry growth.

Q: Jim Fish asked about competitor opportunity.

A: Not concerned, support broad AI ecosystem and integrate with systems of record.

Q: Joshua Riley asked about neutrality helping opportunity.

A: Mild accelerant now, becomes larger as vibe coding and agent-based coding take off.

Q: Jackson Adder asked about self-serve channel.

A: Self-serve business strong with ongoing opportunities to improve, new capabilities to launch.

Q: Jamie Reynolds asked about ISV channel breadth.

A: Wide range of ISVs across verticals, growth from multiple channel adoption.

Q: Patrick Wallachrans asked about next steps for voice AI.

A: Expanding to outbound sales, compliance, and live seller augmentation.

Q: Ryan McWilliams asked about competitive takeaways.

A: Platform capabilities and global scale provide confidence for customers.

Q: Rishi Deloria asked about timeline for AI natives growth.

A: Early days, relatively small startups, tailwind as AI migrates to enterprises.

Q: Andrew King asked about AI accelerator for cross-sell and balance between profitability and AI investments.

A: AI accelerates cross-sell through software stack and spend consolidation, investing in AI tools with manageable costs, focus on profitability.