Twilio's 19.38% Plunge Driven by $1.78 Billion Trading Volume Surge Ranks 37th in Activity

Twilio (TWLO) fell 19.38% on August 8, 2025, with a trading volume of $1.78 billion, a 124.23% surge from the previous day. The stock ranked 37th in trading activity. The company reported Q2 2025 earnings, revealing $1.228 billion in revenue, a 13% year-over-year increase, alongside record non-GAAP operating income ($221 million) and free cash flow ($263 million). Communications revenue rose 14% to $1.153 billion, while Segment revenue remained flat at $75 million. Gross margins declined to 50.7%, pressured by messaging revenue mix and carrier fees.

Twilio highlighted strategic momentum, including a multi-year partnership with Microsoft and product innovations like Conversation Relay and conversational intelligence. Large deals exceeding $500,000 grew 57% year-over-year, driven by cross-sell opportunities and voice channel expansion. However, gross margin pressures persisted, with messaging mix and carrier fee hikes, including Verizon’s A2P fee impact, contributing to $6 million in Q2 costs. Management noted pricing adjustments in North America’s self-serve channel and cost optimization initiatives to stabilize margins.

Operational challenges included regulatory uncertainties in multiple markets and higher R&D spending on AI and RCS. The company raised FY 2025 guidance for organic revenue growth (9%-10%) and free cash flow ($875-$900 million), while Q3 revenue guidance of $1.245-$1.255 billion reflects 8%-9% organic growth. Despite strong customer acquisition (349,000 active accounts) and multi-product adoption, flat Segment revenue underscored ongoing investment needs for its data platform.

A strategy of buying the top 500 stocks by daily trading volume and holding for one day generated a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This highlights liquidity’s role in short-term performance, particularly in volatile markets, as high-liquidity stocks exhibit amplified price swings and resilience during volume declines.