Key Highlights

  • TWLO shares trading down 22.05% today to $188.55 following third-quarter results released October 29.
  • Third-quarter Revenue rose 20% to $1.56 billion, with organic revenue up 16% to about $1.50 billion.
  • Non-GAAP diluted EPS reached $1.65, versus $1.25 a year earlier, and free Cash Flow was $369.6 million.
  • Fourth-quarter revenue guidance of $1.595 billion to $1.605 billion implies organic growth of 11% to 12%.
  • Full-year free cash flow guidance was raised to a range of $1.19 billion to $1.20 billion.

Strong Third Quarter Meets a Sharp Slowdown in the Fourth-Quarter Organic Outlook

Twilio (NYSE:TWLO) shares are trading down 22.05% today at $188.55, after the company reported third-quarter 2026 results on October 29. The headline numbers were solid and annual targets were raised, but the guidance for the final quarter of the year appears to be what has drawn attention.

Revenue climbed 20% to $1,559.5 million from $1,300.4 million a year earlier. Organic revenue grew 16% to $1,504.6 million, and the dollar-based net expansion rate improved to 114% from 109%.

For the fourth quarter, Twilio guided revenue of $1.595 billion to $1.605 billion, or reported growth of 17% to 17.5%. Organic growth in that range is only 11% to 12%, a clear step down from the 16% posted in the third quarter.

Profit and Free Cash Flow Rise, but Fourth-Quarter Earnings Guidance Sits Below the Third Quarter

Non-GAAP income from operations rose 39% to $325.7 million, a 21% margin. GAAP income from operations was $148.6 million, up from a much smaller base a year earlier, and GAAP diluted EPS was $1.00 compared with $0.23.

Non-GAAP diluted EPS came in at $1.65 versus $1.25. Free cash flow reached $369.6 million, a 24% margin, up from $247.5 million in the third quarter of 2025.

The fourth-quarter outlook calls for non-GAAP income from operations of $300 million to $310 million and non-GAAP diluted EPS of $1.48 to $1.53 on about 163 million diluted shares. Both ranges sit below the third-quarter results.

Raised Full-Year Targets and a $2 Billion Buyback Frame the Valuation Reset

Twilio lifted its full-year reported revenue growth outlook to 20% from 18% to 18.5%, and organic growth to 15% from 13% to 13.5%. Non-GAAP Operating Income and free cash flow are each now expected between $1.19 billion and $1.20 billion, up from $1.135 billion to $1.155 billion.

The company repurchased $127.2 million of stock in the quarter. About $1.3 billion of the $2.0 billion authorization has been used, leaving roughly $700 million through December 31, 2027.

Before today's drop, data providers showed a market Capitalization near $39 billion, a price-to-earnings ratio of about 35 and a 52-week range of $105.00 to $308.40. The consensus rating among 31 analysts was Buy, with an average price target of $274.44, though those figures predate the results.

Organic Growth Trajectory and Margin Delivery Will Shape the Next Report

The market response suggests investors are weighing a strong third quarter and a higher annual outlook against a notably slower organic pace into year-end. The company ended the quarter with 5,625 employees, and updated analyst estimates and price targets following the report will show how views are shifting, and the next quarterly results will test whether organic growth stabilizes near the guided 11% to 12% range.