Key Highlights

  • Revenue was $1.56 billion, up 20% reported and 16% organic from a year earlier.
  • GAAP income from operations was $148.6 million, up 263%, and non-GAAP income from operations was $325.7 million, up 39%.
  • GAAP diluted EPS was $1.00 versus $0.23, while non-GAAP diluted EPS was $1.65 versus $1.25.
  • Free Cash Flow was $369.6 million, compared with $247.5 million in the third quarter of 2025.
  • Dollar-Based Net Expansion Rate was 114%, up from 109%.

A communications platform posts 20% growth with 16% organic

Twilio (NYSE:TWLO) provides infrastructure for customer engagement, combining global communications, memory and AI orchestration with identity, governance and observability so businesses can run conversations across messaging, voice, email and other channels. It reported third quarter 2026 results on October 29, 2026.

Revenue reached $1.56 billion, up 20% reported and 16% organic year over year. CEO Khozema Shipchandler called it a great quarter driven by disciplined execution and broad-based strength across the product portfolio.

Gross profit and Operating Income widen the profit picture

GAAP Gross Profit was $760.5 million, up 20%, for a 49% margin. Non-GAAP gross profit was $767.8 million, up 18%, also at a 49% margin.

GAAP income from operations was $148.6 million, a 10% Margin and a 263% increase. Non-GAAP income from operations was $325.7 million, a 21% margin and up 39%. GAAP Net Income attributable to common stockholders was $161.2 million, compared with $37.2 million a year earlier.

Per-share Earnings and a 114% net expansion rate

GAAP diluted net income per share was $1.00 on 161.7 million weighted average shares, versus $0.23 on 159.2 million shares. Non-GAAP diluted EPS was $1.65, compared with $1.25.

The Dollar-Based Net Expansion Rate, which tracks how much existing customers expand their spending, was 114%, against 109% a year ago. The company ended the quarter with 5,625 employees.

Cash generation, Buybacks and the balance sheet

Net cash provided by Operating Activities was $389.2 million, compared with $263.6 million, and free cash flow was $369.6 million, a 24% margin, against $247.5 million. Free cash flow growth was about 49% on a calculated basis.

During the quarter, Twilio repurchased $127.2 million of its Class A common stock. Under the $2.0 billion program authorized in January 2025, about $1.3 billion has been completed and roughly $700 million remains available through December 31, 2027. Cash and cash equivalents were $1.06 billion at September 30, 2026, against $682.3 million at December 31, 2025, alongside $1.83 billion of short-term marketable securities and long-term Debt of $993.6 million.

Guidance: fourth quarter range and a higher full-year outlook

For the fourth quarter ending December 31, 2026, the company is guiding Revenue to $1.595 billion to $1.605 billion, implying 17% to 17.5% reported growth and 11% to 12% organic growth. It expects non-GAAP income from operations of $300 million to $310 million and non-GAAP diluted EPS of $1.48 to $1.53 on 163 million shares.

For fiscal 2026, reported revenue growth is now expected at 20%, up from 18% to 18.5%, and organic growth at 15%, up from 13% to 13.5%. Non-GAAP income from operations is guided to $1.19 billion to $1.20 billion, from $1.135 billion to $1.155 billion, and free cash flow to the same $1.19 billion to $1.20 billion range.

What to watch next

The fourth quarter organic growth range of 11% to 12% sits below the 16% reported for the third quarter. Readers following the company will likely watch how that organic pace develops, whether the net expansion rate holds near 114%, and how margins and buybacks evolve.