Twilio Inc. reported third‑quarter 2025 revenue of $1.30 billion, up 15% year‑over‑year, and adjusted earnings per share of $1.25 versus analyst estimates of $1.08. Non‑GAAP operating income reached $235 million, giving a margin of 18.0%, while GAAP operating income was $41 million (3.1% margin). The company generated $264 million in operating cash flow and $248 million in free cash flow, and it repurchased $349.8 million of its own shares during the quarter.
Compared with Q3 2024, Twilio’s revenue grew from $1.13 billion to $1.30 billion, and adjusted EPS rose from $1.02 to $1.25. GAAP operating income swung from a $4.9 million loss to a $41 million profit. Non‑GAAP gross margin fell 280 basis points to 50.1% due to higher carrier fees, but stock‑based compensation as a percentage of revenue declined, improving operating efficiency. The company’s free cash flow increased from $189.1 million to $248 million, reflecting stronger cash generation.
For the fourth quarter, Twilio lifted revenue guidance to $1.31–$1.32 billion, a 9.5–10.5% year‑over‑year increase, and non‑GAAP operating income to $230–$240 million. Adjusted EPS for Q4 is projected at $1.17–$1.22, above the $1.14 consensus. Full‑year 2025 guidance now expects revenue growth of 12.4–12.6%, non‑GAAP operating income of $900–$910 million, and free cash flow of $920–$930 million.
Twilio entered into a definitive agreement to acquire Stytch, Inc., an identity‑platform provider for AI agents, for approximately $2 billion. The transaction is expected to close in mid‑November. The acquisition expands Twilio’s developer‑centric product suite and accelerates its AI‑driven customer‑engagement capabilities by combining Stytch’s identity stack with Twilio’s communication infrastructure.
Segment performance highlights that messaging revenue grew in the high teens, voice revenue accelerated to the mid‑teens—the fastest rate in over three years—and revenue from top voice AI startup customers increased more than tenfold year‑over‑year. Verify and AI segments also contributed to the overall growth.
CEO Jeff Lawson emphasized that the Stytch deal positions Twilio to deliver “trusted, AI‑powered customer experiences” and that the company will integrate Stytch’s identity solutions into its platform to support developers building secure, personalized AI applications. He noted that the company’s focus on AI and international expansion underpins its strategy to remain competitive in the CPaaS market.
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