Home / Business and Economy / Twilio Soars on AI Demand & Strong Earnings
Twilio Soars on AI Demand & Strong Earnings
19 Dec
Summary
- Analyst initiated coverage with a Buy rating and $165 price target.
- Third quarter revenue grew 15% year over year to $1.3 billion.
- Revenue from top AI start-up customers increased tenfold year-over-year.
Twilio Inc. (NYSE:TWLO) is positioned for long-term growth, bolstered by strong third-quarter financial performance and a surge in demand from AI companies. Analysts have initiated coverage with positive ratings, citing the company's market leadership and expanding total addressable market, with expectations for accelerated growth in 2026. This positive outlook supports a belief in sustainable double-digit growth over the medium term.
The company's third quarter of 2025 demonstrated robust financial health. Twilio surpassed earnings per share expectations, delivering $1.25 per share on $1.3 billion in revenue, a 15% year-over-year increase. This broad-based strength was observed across various customer segments. Furthermore, free cash flow climbed over 30% to $247.5 million, highlighting exceptional cash generation during the period.
Twilio is particularly benefiting from the burgeoning AI sector. Several AI companies are leveraging its platform to develop conversational AI tools. Notably, revenue from its top 10 voice AI start-up customers has increased more than tenfold compared to the previous year. This trend is expected to continue, as AI adoption in cloud contact centers is projected to grow significantly over the next decade.
