Twilio Q2 Earnings Call Highlights

Twilio delivered strong Q2 growth: Revenue rose 22% year over year to $1.5 billion, while non-GAAP operating income reached $285 million and free cash flow totaled $353 million. Messaging, voice and software add-ons all contributed, with voice AI demand showing broad-based traction. AI and platform expansion are becoming key growth drivers: Twilio launched its next-generation conversational platform and redesigned Console, which has generated more than a 90% increase in conversion versus the prior experience. Management expects these tools to support future cross-selling and wider adoption of AI-enabled customer interactions. Twilio raised its full-year outlook despite carrier-fee pressure: Organic revenue growth guidance increased to 13%–13.5%, while non-GAAP operating income and free-cash-flow guidance rose to $1.135 billion–$1.155 billion. Incremental U.S. carrier fees reduced reported margins, but the company said they do not affect gross-profit dollars, operating-income dollars or free cash flow. Twilio NYSE: TWLO reported second-quarter 2026 revenue of $1.5 billion, up 22% year over year on a reported basis and 17% on an organic basis excluding incremental U.S. carrier pass-through fees. The communications platform company said its results reflected strong volumes, customer additions and growth across messaging, voice and software products. Chief Executive Officer Khozema Shipchandler called the quarter “exceptional,” citing $285 million in non-GAAP income from operations and $353 million in free cash flow. Non-GAAP gross profit rose 18% year over year to $736 million, marking the company’s fifth consecutive quarter of accelerating non-GAAP gross-profit growth, according to Chief Financial Officer Aidan Viggiano. Messaging revenue grew 28% year over year, aided by strong volumes and growth in WhatsApp and Rich Communication Services, or RCS. Viggiano said incremental carrier fees accounted for roughly 10 percentage points of messaging growth. Excluding those fees, messaging grew approximately 18%, she said during the question-and-answer session. Voice revenue growth exceeded 20% year over year, supported by both usage volumes and software add-ons. Twilio said Branded Calling and Conversational Intelligence each posted triple-digit growth. Total software add-on revenue rose more than 25%, led by Verify, which grew more than 30%. Twilio’s dollar-based net expansion rate was 116% in the quarter. Incremental carrier fees contributed about five percentage points to that figure, Viggiano said, though she added that expansion improved sequentially even excluding the fee effect. The company also cited accelerating revenue growth from customers using multiple Twilio products. Chief Revenue Officer Thomas Wyatt said demand for voice artificial-intelligence capabilities was broad-based across enterprise customers, large independent software vendors and AI-native companies. He highlighted a horizontal conversational AI customer that grew into a $6 million annual run-rate customer and a vertical conversational AI company that reached a $9 million run rate after initially beginning with Twilio’s voice services. At its SIGNAL user conference, Twilio announced general availability of its next-generation platform, including Conversation Memory, Conversation Orchestrator, Conversation Intelligence, Conversation Relay and Agent Connect. Shipchandler said the products are intended to hel.