Twilio's 2025 Q2 Earnings Call: Unpacking Contradictions in Margins, AI Growth, and Voice Performance

Gross Margin Trends, AI Business Impact on Revenue Growth, ISV Channel Growth and Strategy, Voice Performance and Market Opportunities, and Gross Margin Stability and Expectations are the key contradictions discussed in Twilio's latest 2025Q2 earnings call.



Revenue Growth and Segment Performance:
- Twilio reported revenue of $1.228 billion for Q2 2025, up 13% year-over-year.
- The growth was driven by double-digit messaging and voice growth, along with increased revenue from communications and the segment business surpassing their Q2 breakeven target.

Product Innovation and AI Impact:
- Twilio delivered significant innovation with products like ConversationRelay and conversational intelligence, contributing to a notable increase in account usage.
- AI-driven products, such as ConversationRelay, demonstrated speed and impact, with over 1 million calls in its first quarter of general availability.

Gross Margin and Cost Management:
- Twilio's non-GAAP gross margin was 50.7%, declining by 260 basis points year-over-year, mainly due to the messaging mix increase and FX impacts.
- The company announced pricing increases in messaging and voice to stabilize and improve gross margins and is investing at the platform level to enhance operational efficiency.

Large Deal Activity and Market Share Growth:
- Twilio saw a 57% year-over-year increase in the number of large deals in communications, with a notable increase in ISV and technology customers.
- Cross-selling and platform expansion initiatives contributed to increased market share and larger deal sizes, particularly in the U.S. and international markets.