Twilio Inc. TWLO

The business

Twilio sells communications as building blocks: application programming interfaces, or APIs, that let developers embed messaging across SMS, WhatsApp, and RCS, plus voice and email through SendGrid, directly into their software. It is the plumbing behind the texts, calls, and notifications businesses send their customers. The segment doing most of the work today is Messaging, at roughly $2.88B of FY25 revenue, about 57% of the $5.07B total, a usage-based, carrier-fee-heavy line whose margins are structurally moderate. Other Communications (voice and email) adds about $747M, and the higher-margin Segment customer-data platform contributes about $303M and carries the stickiness-and-margin upside. The numbers that matter are organic growth, gross-profit growth, and how much existing customers expand their spend.

The fact the financials do not show is the scale of the turnaround and the AI tailwind now behind it. Twilio lost more than a billion dollars in 2022 and again in 2023, then under CEO Khozema Shipchandler it pivoted hard to profitability, cutting costs, exiting non-core efforts, and prioritizing durable growth and free cash flow. It worked: the first GAAP profit arrived in FY25 ($0.21 diluted), operating cash flow reached $1.04B, and growth reaccelerated, with Q1 2026 revenue of $1.41B up roughly high-teens, the fastest pace in three years, as AI-driven customer engagement pushed more messaging and voice volume through the platform. Management raised its 2026 outlook alongside the print.