Twilio 2025 Q2 Earnings Record Net Income Surges 170.4%

Twilio(TWLO) reported its fiscal 2025 Q2 earnings on Aug 08th, 2025. The company beat expectations with a strong turnaround, returning to profitability and raising its 2025 revenue guidance, signaling confidence in its market positioning and growth strategy.

Revenue

Twilio’s total revenue increased by 13.5% to $1.23 billion in 2025 Q2, up from $1.08 billion in 2024 Q2. This growth was driven by robust performance in its core segments. Twilio Communications led with $1.15 billion, forming the backbone of the company’s revenue. The Twilio Segment, while smaller in scale, contributed an additional $75.47 million. Consolidating these figures, the company achieved a total revenue of $1.23 billion, highlighting a strategic diversification within its business offerings.

Earnings/Net Income

Twilio returned to profitability with EPS of $0.15 in 2025 Q2, reversing from a loss of $0.19 per share in 2024 Q2, a 178.9% positive change. The company achieved a remarkable turnaround with net income of $22.42 million, representing a 170.4% positive swing from the net loss of $-31.86 million in 2024 Q2. This marked a significant milestone, as it set a new record high for fiscal Q2 net income, the highest in 11 years. The performance showcases Twilio’s effective cost management and operational efficiency.

Price Action

The stock price of Twilio has dropped 4.62% during the latest trading day, has plummeted 18.56% during the most recent full trading week, and has plummeted 18.78% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Twilio (TWLO) shares after a revenue raise quarter-over-quarter on the financial report released date and holding for 30 days delivered strong returns over the past three years. The strategy achieved a 121.71% return, compared to a 47.91% return for the benchmark, resulting in an excess return of 73.80%. The strategy's CAGR was 30.81%, indicating significant capital appreciation. Although the strategy had a maximum drawdown of 0.00%, it had a relatively high volatility of 51.38%, and a Sharpe ratio of 0.60, suggesting a moderate risk-adjusted return profile.

CEO Commentary

Khozema Shipchandler, CEO of Twilio, highlighted strong Q2 performance, noting accelerated year-over-year revenue growth and record non-GAAP income from operations and free cash flow. She emphasized the company’s focus on combining communications, data, and AI to enhance customer experiences, with recent innovations showcased at the Signal user conference. Shipchandler expressed confidence in Twilio’s market positioning as the infrastructure layer for customer engagement, reflecting an optimistic outlook.

Guidance

Twilio raised its 2025 organic revenue guidance to 9% - 10% from 7.5% - 8.5%, and introduced a reported revenue target of 10% - 11%. The company reaffirmed a non-GAAP income from operations target of $850 - $875 million and increased its free cash flow target to $875 - $900 million. For Q3 2025, Twilio expects revenue of $1,245 - $1,255 million, with 10% - 11% year-over-year revenue growth and 8% - 9% organic growth. Non-GAAP income from operations is guided to $205 - $215 million.

Additional News

In the three weeks following Twilio’s earnings release on Aug 8, 2025, the company faced significant regulatory scrutiny due to its data privacy practices. In response to public concerns, Twilio announced plans to implement stricter data governance policies to enhance user trust. This development is being closely watched by both investors and privacy advocates. Additionally, Twilio unveiled a new partnership with a leading AI solutions provider, signaling its intent to expand into AI-driven customer engagement solutions. This strategic move is expected to position Twilio more competitively in the rapidly evolving communications landscape. Lastly, the company announced an executive promotion, with a key leader from its communications segment being elevated to a new strategic role, reflecting internal talent development and leadership succession planning.