Twilio Raises 2026 Revenue Growth Forecast to 18.5% After Quarterly Growth of 22%
Key Facts
Twilio raised its forecast for reported revenue growth in fiscal 2026 to a range of 18%–18.5%, after posting revenue of $1.50 billion in the second quarter, up 22% year over year, according to results announced by the company on August 6. Organic growth was lower, at 17%, showing that reported growth exceeded organic growth during the period. The new forecast puts the annual revenue trajectory above the previous range of 14%–15%. The company also raised its forecast for organic growth for the year to 13%–13.5%, compared with a previous range of 9.5%–10.5%. The revisions reflect Twilio’s view that its business will continue to grow, while third-quarter results remain a near-term test of the path the company has set.
Customer usage metrics reinforced the picture of quarterly growth: dollar-based net expansion reached 116% in the second quarter, compared with 108% in the same period of 2025. The rate measures spending by existing customers against the previous period, so an increase indicates higher spending within the customer base. Free cash flow rose to $352.6 million from $263.5 million in the second quarter of 2025. The year-over-year comparison offers evidence of improved cash generation during the quarter, alongside revenue growth. Non-GAAP diluted earnings per share were $1.47, compared with $1.19 a year earlier. GAAP net income included a large non-cash tax benefit, so earnings per share alone should not be read as a pure measure of operating performance.
The company’s chief executive linked the period’s performance to accelerating organic growth, describing the quarter as “another quarter of accelerating organic growth.” He said the upgraded platform gives customers the building blocks for conversations, with humans and AI agents working side by side. The strategy comes as Twilio expands its tools for AI-powered conversations. The company says Conversation Relay enables AI agents to handle voice calls by converting speech to text and text to speech in real time, using WebSockets and allowing the choice of any language model. These functions describe how the product is used; the company did not specifically attribute revenue growth or improved cash flow to Conversation Relay in its financial results.
In May 2026, Twilio announced the availability of Conversation Memory, Conversation Orchestrator, Conversation Intelligence and Agent Connect. It said the tools bring fragmented interactions together in connected, personalized conversations among humans, agents and systems. The expansion provides context for management’s comments on platform development, but does not by itself offer an independent financial measure of the new products’ impact. Among analysts, Stifel upgraded the stock from Hold to Buy on October 7 and raised its price target to $260 from $175. The firm attributed its decision to Twilio products’ ability to benefit from the AI cycle and an accelerating growth trajectory. The stock rose 3.6% in premarket trading after the upgrade, according to Investing.com.
Twilio expects third-quarter revenue, for the period ending September 30, 2026, to range from $1.505 billion to $1.515 billion. That equates to reported year-over-year growth of 16% to 16.5% and organic growth of 11% to 12%, according to the company’s guidance. The estimates are below the reported growth pace recorded in the second quarter, while still pointing to positive organic growth. The company set October 29 as the date for announcing third-quarter results. The results and accompanying guidance will provide the next indication of how closely performance tracks the ranges the company announced, following its increase to the annual forecast.