Twilio (TWLO) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $1.50 billion, up 22% year-over-year and 17% organic growth, driven by increased usage, higher A2P messaging fees, and strong customer expansion.

• Non-GAAP income from operations was $285 million, with free cash flow of $353 million; GAAP net income was $1.07 billion, boosted by a $944 million non-cash tax benefit.

• Launched next-generation conversational platform and redesigned Console, driving strong customer adoption and conversion rates.

• Secured major enterprise and AI-native customer wins, including multiple seven-figure deals across industries.

• Recognized as a leader in Gartner's 2026 Magic Quadrant CPaaS Report and IDC MarketScape for AI-enabled CDP.

Financial highlights

• Non-GAAP gross profit was $736 million (49.1% margin), up 18% year-over-year; GAAP gross profit was $726 million (48% margin), up 20%.

• Messaging revenue grew 28% year-over-year, with WhatsApp and RCS contributing significantly.

• Voice and software add-on revenues grew over 20% and 25% respectively, led by Verify at 30%+ growth.

• Dollar-Based Net Expansion Rate improved to 116% from 108% in Q2 2025, indicating strong customer retention.

• Free cash flow margin was 24%, with cash and equivalents at $823 million and $1.83 billion in short-term securities.

Outlook and guidance

• Q3 2026 revenue guidance: $1.505–$1.515 billion, 16–16.5% reported and 11–12% organic growth.

• Full-year 2026 revenue growth guidance raised to 18–18.5% (reported) and 13–13.5% (organic); non-GAAP income from operations and free cash flow guidance raised to $1.135–$1.155 billion.

• Q3 2026 non-GAAP income from operations expected at $285–$295 million; non-GAAP EPS guidance of $1.42–$1.47.