Twilio (TWLO) Q1 FY26 earnings call: guidance and Q&A

Asked for drivers of strong messaging growth, including geographic and product specifics, and unique experiences driving voice acceleration, particularly with AI agents.

Messaging grew 25% (18% organic ex-fees), broad-based geographically, with early RCS adoption and some AI native volume. Voice grew 20%, its highest in 19 quarters, driven by AI use cases and software add-ons. Self-service voice grew 45%, and voice add-on software grew mid-30s. Use cases include self-service agents for small businesses, AI Copilots for live agents, and AI assistants for sales leads.

“Voice continues to accelerate, 20% growth in that product. That's the highest growth rate in that product in 19 quarters.”

asked by Aleksandr Zukin · answered by Aidan Viggiano

Inquired about the quantification of RCS and AI native contribution to messaging acceleration and the durability of messaging growth given emerging trends.

RCS and AI natives are not yet contributing super meaningfully to messaging's large revenue base. Organic messaging growth is about 18% YoY, consistent with mid-to-high teens trends. Management expects longer-term durability as voice customers expand to cross-channel and conversational AI, benefiting messaging and email.

“I don't think RCS and the AI natives are contributing super meaningfully. Remember, messaging is like almost 60% of our business, right? So it's got a huge revenue base. RCS is very small. It's grown very quickly, but it's not contributing meaningfully.”

asked by Taylor McGinnis · answered by Aidan Viggiano

Asked about the impact of the macro environment on Twilio's business and the acceleration of multiproduct adoption across the customer base.

The macro environment is dynamic but not significantly impacting Twilio's performance, which is broadly strong with an AI tailwind. Multiproduct customer count was up 29% in Q1, with revenue from these customers accelerating. Customers are adopting multiproduct solutions for personalization and consistent experiences across channels, consolidating spend with Twilio as critical infrastructure.

“I don't think macro is like -- I mean it's a super dynamic macro environment, right? I mean -- which is probably the understatement of the year. So I wouldn't say it's really having any effect one way or the other.”

asked by George Iwanyc · answered by Khozema Shipchandler

Asked about the scale of the largest Voice AI customers and whether deployments are moving from experimentation to full-scale production, identifying any bottlenecks.

AI natives show high takeoff velocity but from a small base. Non-regulated industries (e-commerce, retail, food service) are translating experimentation into production, often with human-to-agent interactions. Regulated industries are slower due to high stakes, with heavy experimentation but longer adoption cycles, which provides a long-term tailwind.

“On the regulated side, I would say it's pretty slow. You're definitely seeing very, very heavy experimentation. But I think just given the high stakes nature of what many of those companies do, it's going to take some time, which I think is good for us because it sort of provides like a longer-term tailwind, if you will, and certainly larger spend, but I think it's going to take some time.”

asked by Sitikantha Panigrahi · answered by Khozema Shipchandler

Asked about the structural thinking on headcount requirements with AI tooling and budgeting for seat-based SaaS applications internally.

Headcount has been roughly flat for 2-3 years and is expected to remain around that level, with continued focus on OpEx control. AI inference costs are manageable and embedded in guidance. SaaS tooling investments are regular but not expected to grow meaningfully, with no plans to vibe code solutions in-house.

“From a headcount perspective, we've been roughly flat for, I don't know, 2 or 3 years at this point. I would -- for your modeling purposes, I'd keep it around that level, Mark.”

asked by Mark Murphy · answered by Aidan Viggiano

Asked about any one-time items contributing to the 8% GAAP operating margins and future goalposts for GAAP operating margins.

No unusual one-time items contributed to GAAP operating margins. The improvement is driven by growing non-GAAP operating profit, reduced stock-based compensation (now below 10% of revenue ahead of 2027 target), and lower intangible amortization. The company remains focused on both non-GAAP OpEx and SBC.

“No, there's nothing I would call out that's unusual. Like when you look at our GAAP operating margins, it's really driven by a couple of things. Number one, obviously, our non-GAAP op profit is growing. We saw margins expand there.”

asked by Nicholas Altmann · answered by Aidan Viggiano

Asked about Twilio's confidence in not being disrupted in Voice AI given the early stage of the opportunity and what differentiates its offering.

Twilio is the market leader with superior technology and higher pricing. Its multichannel ability is unprecedented, and its brand is a first choice for developers. The company's moat includes the complexity of 4,800 interconnections across 180+ countries, compliance, and regulatory hurdles. Future differentiation will come from migrating to multichannel orchestration, leveraging data for context, memory, and persistency in interactions, which no other company can fully offer.

“I mean, it's very, very challenging for any AI-related company to be able to get 4,800 different kinds of interconnections across 180 and plus growing countries. And going through all of the compliance checks and KYC hurdles, that is like a very complex body of work that's very regulated and turns out to be like quite operational and relatively physical, not necessarily entirely software-driven.”

asked by Koji Ikeda · answered by Thomas Wyatt

Asked about the timeline for AI native companies to scale and how Twilio's consumption-based model and expanding footprint will benefit, tempering expectations.

It's still early days for AI native companies, which are growing fast but from relatively small revenue bases. Twilio will take a piece of their growth. The bigger opportunity lies as this migrates to enterprises, either directly or through AI start-ups acting as ISVs. Adoption is faster in non-regulated industries (retail, e-commerce) and slower in regulated ones, providing a long-term tailwind as Voice AI workloads deploy and evolve into conversational AI across channels.

“I mean, frankly, I think the bigger pony here is probably as this migrates over to enterprises, whether those AI companies -- AI start-ups that is act as ISVs on our behalf or whether we end up deploying directly to enterprises, I would say that is happening just more slowly given the nature of enterprises and their buying cycles.”

asked by Rishi Jaluria · answered by Khozema Shipchandler