NEW YORK, August 6, 2026, 18:00 EDT — U.S. equities were shut for regular trading, but after-hours sessions continued.
- Twilio shares were at $224.28 in after-hours trading, rising 16.1% from their closing price of $193.20.
- Revenue and adjusted earnings for the second quarter exceeded pre-earnings forecasts by 4.8% and 11.4%, respectively.
- Twilio increased its 2026 revenue growth outlook to 18%-18.5% and boosted free cash flow guidance to a range of $1.135-$1.155 billion.
Shares of Twilio Inc. NYSE:TWLO surged 16.1% to $224.28 in after-hours trading on Thursday. The communications platform company surpassed quarterly forecasts and raised its guidance for the full year.
The shift represents a notable turnaround. Twilio dropped roughly 18% following its second-quarter results last year, even though it surpassed earnings expectations. That update showed weaker forward progress.
This quarter, guidance led the way. Both reported and organic revenue growth picked up speed, and dollar-based net expansion climbed to 116%. A year ago, it was at 108%.
The quarter surpassed FactSet’s expectations for both revenue and adjusted earnings. The company’s forecast for revenue in the September quarter also exceeded analysts’ projections.
| Metric | Company figure | Street estimate | Difference |
|---|---|---|---|
| Q2 revenue | $1.499 billion | $1.430 billion | +4.8% |
| Q2 adjusted EPS | $1.47 | $1.32 | +11.4% |
| Q3 revenue midpoint | $1.510 billion | $1.466 billion | +3.0% |
Revenue increased by 22% compared with the previous year. Organic growth hit 17%, and free cash flow climbed 34% to $352.6 million. The free-cash-flow margin stood at 24%.
The comparison with last year highlights the reason investors reacted positively to this report. While both quarters saw earnings exceed expectations, the most recent report included a more pronounced uptick in growth.
| Post-Q2 measure | 2025 | 2026 |
|---|---|---|
| Reported revenue increase | 13% | 22% |
| Organic revenue gain | 13% | 17% |
| Dollar-based net expansion rate | 108% | 116% |
| Free cash flow margin | 21% | 24% |
| Full-year projected revenue growth range | 10%-11% | 18%-18.5% |
| Initial shares response | About −18% | +16.1% after hours |
The 2026 action was initial as extended trading was still ongoing.
Chief Executive Khozema Shipchandler described the outcome as “another quarter of organic growth acceleration as well as record profitability and free cash flow.” Business Wire
Exercise caution with GAAP diluted earnings of $6.68. A noncash tax-valuation benefit added $5.91 per share, so adjusted earnings are more relevant for assessing ongoing operations.
Twilio lifted all key full-year ranges, with the midpoint boost most pronounced for revenue growth. Cash-flow guidance climbed roughly 5%.
| 2026 guidance | Previous range | New range | Midpoint change |
|---|---|---|---|
| Reported revenue growth | 14%-15% | 18%-18.5% | +3.75 percentage points |
| Organic revenue growth | 9.5%-10.5% | 13%-13.5% | +3.25 percentage points |
| Non-GAAP operating income | $1.080-$1.100 billion | $1.135-$1.155 billion | +$55 million |
| Free cash flow | $1.080-$1.100 billion | $1.135-$1.155 billion | +$55 million, or 5.0% |
The valuation poses a trade-off for investors. Twilio shares climbed by over triple the rate of projected cash flow growth.
An initial estimate places enterprise value at approximately 29.4 times the updated free-cash-flow midpoint. Based on previous guidance, the equivalent multiple stood at around 26.4 times as of Thursday’s market close.
| Preliminary valuation bridge | Regular close | After-hours snapshot |
|---|---|---|
| Share price | $193.20 | $224.28 |
| Implied equity value | $30.48 billion | $35.38 billion |
| Estimated net cash | $1.66 billion | $1.66 billion |
| Implied enterprise value | $28.82 billion | $33.72 billion |
| FY2026 free-cash-flow midpoint | $1.090 billion | $1.145 billion |
| Enterprise value/free cash flow | 26.4 times | 29.4 times |
The consensus analyst targets, established prior to Thursday’s results, average $241, which implies just a 7.5% potential gain over the after-hours price.
| Firm and analyst | Latest rating | Target | Date | Upside to $224.28 |
|---|---|---|---|---|
| BTIG — Nick Altmann | Buy | $245 | July 28 | 9.2% |
| Citizens NYSE:CFG — Patrick Walravens | Market Outperform | $250 | July 20 | 11.5% |
| Wells Fargo NYSE:WFC — Ryan Macwilliams | Overweight | $225 | July 20 | 0.3% |
| Mizuho NYSE:MFG — Siti Panigrahi | Outperform | $240 | July 17 | 7.0% |
| TD Cowen / Toronto-Dominion (TSE:TD) — Derrick Wood | Buy | $245 | July 17 | 9.2% |
| Average for these five targets | — | $241 | — | 7.5% |
Twilio dropped 2.1% between the July 31 close and Thursday’s regular session. The after-hours price put it 13.6% higher than the previous Friday. This move also surpassed the pre-earnings options-implied swing of 14% by roughly two percentage points.
Friday’s regular session will gauge the strength of the move. Analyst estimate and target updates are expected the following week, as the stock is nearing a number of current targets.
Risks: Organic growth forecast for the third quarter is 11%-12%, trailing the 17% reported in the second quarter. Adjusted gross margin held steady at 49%, and a higher cash-flow multiple provides less tolerance for operational missteps. After-hours advances may also unwind as normal liquidity resumes.
