Twilio positioned for high-margin growth fueled by AI partnerships and cross-selling: analyst

Twilio positioned for high-margin growth fueled by AI partnerships and cross-selling: analyst

Twilio Inc. (NYSE:TWLO) has drawn significant attention on Wall Street as analysts recognize its transformation into a full-stack Customer Experience as a Service (CXaaS) platform. The shift integrates Twilio’s core messaging, voice, and email tools with customer data (CDP via Segment) and AI-driven engagement capabilities, creating a unified ecosystem designed to boost stickiness and higher-margin growth. Rosenblatt Securities analyst Catharine Trebnick initiated coverage on Twilio with a Buy rating and $140 price forecast [1].

The analysts stated that Twilio is currently at an “inflection point,” where years of investment are poised to facilitate profitable growth and the generation of free cash flow. The research firm projects revenue to reach $4.93 billion in fiscal 2025, up 10.5% from the prior year, and $5.30 billion in fiscal 2026. Earnings per share are expected to rise to $4.51 in 2025 and $5.09 in 2026 [1].

Twilio’s cross-selling opportunity remains a central theme. Despite 90% of revenue already coming from multi-product users, 63% of its 349,000-plus customers rely on just one product. The analysts also highlight Twilio’s role as a communications backbone for AI. More than 9,000 AI companies, including nearly all of the Forbes 50 AI Startups, are building on Twilio’s APIs, contributing $260 million in annual revenue [1].

Twilio posted 13% year-over-year revenue growth in the second quarter of 2025 to $1.23 billion, with operating margins at 18%. The company raised full-year free cash flow guidance to $875–900 million and aims for sustained GAAP profitability in 2025, 21–22% margins by 2027, and over $3 billion in cumulative free cash flow through 2027, half of which will be returned via buybacks [1].

Strategic alliances with AI leaders, OpenAI, Amazon’s (NASDAQ:AMZN) AWS, and Alphabet’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, strengthen this positioning. At OpenAI’s 1-800-ChatGPT launch, Twilio boosted throughput by 6,000%, showcasing enterprise-grade scalability and reliability [1].

TWLO stock is trading higher by 1.77% to $107.90 at last check Friday [1].

References:
[1] https://finance.yahoo.com/news/twilio-positioned-high-margin-growth-183448653.html