AI presents a huge opportunity to improve and expand the impact of CPaaS solutions to truly enhance the customer experience.
— Khozema Shipchandler
03Detailed Report
TWLO
Company TWLO
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 14, 2026
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Executive Summary
Twilio reported a strong Q3 2024 despite ongoing mix migrations and investments in AI-enabled capabilities. Revenue reached $1.134 billion, up 10% year over year, with non-GAAP income from operations of $182 million and free cash flow of $189 million, underscoring continued cash generation and operating discipline. The quarter highlighted meaningful acceleration in core communications metrics, aided by AI-enabled product offerings, ongoing Cross-sell into ISVs, and advances in self-serve adoption. Management emphasized a differentiated value proposition from the combination of communications data and contextual data, powered by Twilio Segment and AI integrations, which positions the company to capture a large AI-enabled CPaaS opportunity over time. The company provided a constructive 2025 framework, signaling 7-8% revenue growth and meaningful non-GAAP operating margin expansion, with GAAP profitability targeted for the full year 2025; Investor Day is planned for late January to lay out longer-term assumptions.
Key Performance Indicators
Revenue
Increasing
1.13B
QoQ: 4.72% | YoY: 9.67%
Gross Profit
Increasing
578.63M
51.04% margin
QoQ: 6.49% | YoY: 12.07%
Operating Income
Increasing
-4.89M
QoQ: 74.70% | YoY: 95.51%
Net Income
Increasing
-9.73M
QoQ: 69.47% | YoY: 93.14%
EPS
Increasing
-0.06
QoQ: 67.84% | YoY: 92.17%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $1.134B in Q3 2024, up 10% YoY; Communications revenue: $1.060B, up 10% YoY; Segment revenue: $73M, flat YoY. Non-GAAP gross profit: $600M, +9% YoY; Non-GAAP gross margin: 52.9% (down 50 bps YoY, -40 bps QoQ) driven by Segment migration. Non-GAAP operating income: $182M, +34% YoY; Non-GAAP operating margin: 16.1% (+290 bps YoY, -10 bps QoQ). Free cash flow: $189M in the quarter; trailing 12-month FCF: $775M. Diluted EPS: -$0.061; GAAP net income: -$9.73M. Weighted average shares: ~159.1M. Cash and equivalents: $584M; total cash, equivalents and investments: $2.69B. Net debt: -$541.97M (net cash position). Segment and balance sheet highlights include: Dollar-based net expansion rate (DBNER): total 105% (Communications 106%, Segment 91%). 2024 guidance for Q4: Revenue $1.15B-$1.16B; full-year organic revenue growth 7.5%-8%; Non-GAAP OI $185M-$195M; full-year non-GAAP OI guidance $700M-$710M; Free cash flow expected $650M-$675M. 2025 preliminary: revenue growth 7%-8% with meaningful non-GAAP operating margin expansion and GAAP profitability, with Investor Day guidance to follow.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.13B
9.67%
4.72%
Gross Profit
578.63M
12.07%
6.49%
Operating Income
-4.89M
95.51%
74.70%
Net Income
-9.73M
93.14%
69.47%
EPS
-0.06
92.17%
67.84%
Key Financial Ratios
Gross Profit Margin
Good
51.00%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Weak
0.00%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.01%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
0.00%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
5.06
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.14
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-266.71x
Negative earnings make P/E ratio not meaningful
Price to Book
Fair Value
1.26x
Price-to-book ratio reasonable for profitable companies
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