TWLO Q2 2025 Earnings

Call Details

• Call Title: Twilio Inc. Q2 2025 Earnings Call
• Date: August 7, 2025 at 9:00 PM UTC
• Management Team:
  • Bryan Vaniman (Senior Vice President of Investor Relations and Corporate Development)
  • Khozema Shipchandler (Chief Executive Officer)
  • Aiden Viggiano (Chief Financial Officer)
  • Thomas Wyatt (Chief Revenue Officer)

Call Summary

Financial Performance

• Twilio reported record Q2 revenue of $1.228B, up 13% year over year on both reported and organic bases.
• Communications revenue was $1.153B for the quarter, up 14% year over year.
• Twilio delivered record non-GAAP income from operations of $221M, up 26% year over year.
• The company generated record free cash flow of $263M in Q2.
• Non-GAAP gross profit was $623M, up 8% year over year, resulting in non-GAAP gross margin of 50.7%, down 260 bps year over year and down 60 bps quarter over quarter.
• GAAP income from operations was $37M, marking the third consecutive quarter of GAAP operating profitability.
• Segment revenue was $75M and was flat year over year, and non-GAAP income from operations for segment was $6M, surpassing the prior Q2 breakeven target.
• Messaging revenue mix increased by 260 bps year over year and was identified as the primary driver of the gross margin decline in Q2.

Guidance

• Q3 revenue guidance was initiated at $1.245B to $1.255B, representing 8% to 9% organic growth and 10% to 11% reported growth.
• The company raised full year 2025 organic revenue growth guidance to a range of 9% to 10%, which the company stated is up from a prior range reported on the call as ".5% to .5% previously".
• Revenue guidance assumes $20M in pass-through incremental carrier fees in both Q3 and Q4.
• Q3 non-GAAP income from operations was guided to $205M to $215M.
• Full year non-GAAP income from operations guidance was maintained at $850M to $875M.
• Full year free cash flow guidance was raised to $875M to $900M, up from $850M to $875M previously.
• Company stated it expects roughly $20M incremental Verizon carrier fee impact in Q3 and Q4, equivalent to about a 50 bps gross margin headwind in those quarters, and noted the fees are passed through at 0% gross margin.