Twilio Inc. (NYSE:TWLO) shares surged 16.5% in premarket trading on Friday after the cloud communications company reported second-quarter earnings that comfortably exceeded Wall Street expectations and raised its outlook for both the current quarter and the full 2026 financial year.
The stronger-than-expected results were driven by accelerating organic revenue growth, record profitability and robust free cash flow generation.
Revenue and Earnings Outperform Expectations
Twilio reported adjusted earnings of $1.47 per share, beating analysts’ consensus forecast of $1.32 by $0.15.
Quarterly revenue climbed 22% year over year to $1.50 billion, exceeding market expectations of $1.43 billion. On an organic basis, revenue increased 17%, reflecting continued momentum across the company’s customer engagement platform.
Chief Executive Khozema Shipchandlero said, “We are in a powerful new chapter at Twilio, marked by another quarter of organic growth acceleration as well as record profitability and free cash flow.”
Third-Quarter Forecast Tops Wall Street Estimates
For the third quarter, Twilio expects revenue of between $1.505 billion and $1.515 billion. The midpoint of $1.510 billion is well above analysts’ consensus estimate of $1.464 billion.
The company also forecasts adjusted earnings per share of $1.42 to $1.47, with the midpoint exceeding the market expectation of $1.40 per share.
Company Raises 2026 Outlook
Twilio increased its guidance for the full 2026 financial year, now expecting reported revenue growth of between 18% and 18.5%, compared with its previous forecast of 14% to 15%.
Management also raised its adjusted operating income outlook to between $1.135 billion and $1.155 billion, up from the prior range of $1.08 billion to $1.10 billion.
In addition, the company lifted its free cash flow guidance to match the revised operating income range after generating $352.6 million in free cash flow during the second quarter, compared with $263.5 million in the same period last year.
Analysts See Further Upside
Following the results, analysts at Stifel said management continues to adopt a cautious approach despite improving fundamentals.
“Squaring management’s positive commentary with the raised outlook, we believe Twilio continues to offer a conservative near-term outlook and manage expectations around the benefits” from the build-out of agentic artificial intelligence.
The combination of stronger earnings, accelerating revenue growth and upgraded guidance reinforced investor confidence, helping drive Twilio shares sharply higher ahead of the opening bell.
Twilio stock price
