Twilio (TWLO) Q4 2025 earnings summary

Executive summary

• Achieved Q4 2025 revenue of $1.37B, up 14% year-over-year, and full-year revenue of $5.07B, with non-GAAP income from operations of $256M in Q4 and $924M for the year.

• Free cash flow reached $256M in Q4 and $945M for the year, reflecting robust collections and payment timing.

• Ended 2025 with over 402,000 active customer accounts, up 24% year-over-year, and a dollar-based net expansion rate of 109%.

• Positioned as a foundational infrastructure layer for AI-driven communications, with strong customer validation and industry recognition.

• Accelerated revenue growth, expanding operating margins, and significant free cash flow growth marked 2025.

Financial highlights

• Q4 non-GAAP gross profit was $682M with a 49.9% margin; full-year non-GAAP gross profit was $2.56B with a 50.5% margin.

• Q4 non-GAAP operating margin was 18.7%–19%; full-year non-GAAP operating margin was 18%–18.2%.

• Stock-based compensation as a percentage of revenue declined to 11.3%–12% in Q4 and 11.8%–12% for the year.

• Q4 free cash flow margin was 19%; full-year free cash flow margin was 19%.

• Q4 dollar-based net expansion rate was 109%.

Outlook and guidance

• Q1 2026 revenue guidance: $1.335B–$1.345B, 14%–15% reported growth, 10%–11% organic growth.

• Full-year 2026 revenue growth expected at 11.5%–12.5% reported, 8%–9% organic.

• Full-year 2026 non-GAAP income from operations and free cash flow both guided at $1.04B–$1.06B.

• Q1 2026 non-GAAP income from operations expected at $240M–$250M; non-GAAP EPS $1.21–$1.26.

• 2027 non-GAAP operating income target of at least $1.23B, unaffected by carrier fees.