Updated Aug 11 at 5:04pm ET.
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Twilio delivered a strong quarter with $1.50 billion in revenue, beating the $1.43 billion analysts expected. The company is successfully moving beyond simple text messaging and into more complex software for AI agents, which helped organic growth speed up to 17 percent. Most importantly, the business is now consistently profitable on a GAAP basis, which is a standard accounting method that includes all costs like stock-based pay.
This is a major milestone for a company that spent years losing money to gain market share. By generating $85 million in operating income, Twilio is proving it can grow while also keeping more of every dollar it earns. While AI is not yet the main driver of sales, the company is positioning its global network as the essential plumbing for businesses that want to use AI to handle customer service calls and emails.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts expect the company to report revenue of about 1.43 billion dollars and earnings of 1.32 dollars per share. Twilio has a long history of beating these targets, having topped expectations in each of the last eight quarters.
The numbers to watch are the dollar-based net expansion rate, which shows if existing customers are spending more, and the growth in AI-powered voice services. These high-margin software tools are key to the company's plan to move beyond basic text messaging and improve its overall profitability.
The firm raised its target by about 14 percent, suggesting the stock has room to rise from its current level of roughly $193. This move comes just ahead of the company's quarterly results and signals confidence that the business is successfully shifting toward higher-margin software services.
Source: BTIG
The firm noted that while they expect a strong quarter, the focus for many will be on whether the company can maintain its growth in gross profit, the money left after paying for the direct costs of its services, through the end of the year.
Source: Proactive Investors
The 20 percent increase in the price target reflects a more positive outlook on the company's ability to grow its earnings. This target is well above the current stock price and higher than the average analyst target of $223.
Source: Mizuho Securities
Analysts rushed to raise their price targets following the company's strong earnings report on August 7. Most analysts are bullish, with 40 of 52 rating the stock a buy, and the average target is roughly equal to today's price.
The company has beaten analyst profit targets for eight straight quarters. Management consistently sets a bar they can clear, and lately, the business is outrunning even the more bullish forecasts.
| Expectation | |
|---|---|
| EPS | $1.37 |
| Revenue | $1.51B |
