Twilio (TWLO) Q4 FY25 earnings call: guidance and Q&A

What drove the voice strength in Q4 (voice AI vs. traditional voice) and the outlook for 2026?

Voice adoption was broad-based across self-service, ISV, and direct enterprise channels, with voice AI start-ups and ISVs embedding voice AI agents contributing significantly. Enterprise use cases in customer care and sales automation are also driving growth.

“So it's been pretty broad and whether it's on the infrastructure or on the voice add-ons software, we've seen great penetration there as well.”

asked by Alex Zukin · answered by Thomas Wyatt

Why is Q1 organic guidance more aggressive than last year, but full-year guidance more prudent? Clarify gross profit dollar growth for FY26.

Q1 guidance reflects broad-based strength across products (voice, messaging), sales channels (ISV, self-serve), and multiproduct adoption. Full-year guidance is prudent due to usage-based revenue. Gross profit dollar growth similar to organic revenue growth is expected due to accelerated growth of higher-margin products (voice, software add-ons), supply chain cost optimizations, and the absence of email business migration double-bubble costs.

“So it's really all of those things that gave us the confidence to say that we expect gross profits to grow in line with organic revenue.”

asked by Alex Zukin · answered by Aidan Viggiano

What would the operating income margin guide be without A2P fees? Are there anticipated expenses or investments front-loaded in Q1?

A2P fees are a 60-70 basis point headwind to operating margin, masking underlying leverage. Q1 has some front-loaded expenses, including a full quarter of the Stytch acquisition and product investments in the platform and systems for cross-sell/solution selling, which will moderate later in the year.

“So I think the important thing is we are seeing leverage in the business from our cost savings and our efficiency initiatives, it's just masked by the impact of these carrier fees on a margin basis.”

asked by Taylor McGinnis · answered by Aidan Viggiano

What is driving the 5x sequential increase in RCS volume, its adoption curve, and Twilio's economics from it?

The 5x growth is from a relatively small base. Adoption is driven by rich experiences, particularly for marketing use cases. It's beneficial for small businesses without app real estate and for infrequent users of large brands (e.g., tickets). Twilio is cautiously optimistic and gaining optimism.

“So very, very excited about where it is today, very excited about the growth that we've experienced recently. And I think just given the nature of it, we said many times that we're sort of cautiously optimistic about it, I think we're gaining optimism as we go.”

asked by Mark Murphy · answered by Khozema Shipchandler

Where is Twilio seeing stronger growth in voice AI today, from large enterprises or next-gen AI companies, and which will ramp faster in 2026?

Growth is seen on both sides, but enterprise is expected to ultimately drive it due to larger spend. While voice AI start-ups contribute to growth, enterprise adoption for sales and support use cases, combined with Twilio's multichannel orchestration capabilities, will lead to more durable volume. Large ISVs embedding voice capabilities are also a significant cohort.

“And so my bet would be probably enterprise is what drives it and carries the day ultimately. But not at the expense of what we're seeing in voice AI.”

asked by Samad Samana · answered by Khozema Shipchandler

How would an increase in AI-driven spam communications traffic impact Twilio Verify and RCS, given their role in authenticating messages?

Twilio is ideally positioned due to its branded communication capabilities (e.g., Branded Calling with logos). This provides better authentication and identity, leading to higher pickup rates. The same technology will extend to SMS. Products like Verify and RCS (with inherent branding) will see increased adoption as channels require authentication, especially for agent-to-agent interactions.

“The products that you referenced like a Verify, certainly RCS already has kind of branding in the nature of the product, like you'll start to see pickups in those products because the channels only work if you know that everything is authenticated, especially in an agent to agent interaction, like that's one where we've got to make sure that we know the originator is, who the receiver is so that we're conducting a proper transaction.”

asked by Ryan MacWilliams · answered by Khozema Shipchandler

What can be shared about use cases scaling, production, and long-term customer commitments for voice and voice AI to ensure durability?

Voice growth is broad-based across enterprise, ISVs, and start-ups, and is a global phenomenon. It's a key driver for new business and direct sales team success. Voice is seen as a fundamental part of next-generation AI-powered applications, making its growth durable. Twilio is accelerating product capabilities and go-to-market partnerships.

“I think just fundamentally, voice is having its renaissance. It is a key part of the next-generation user experience of AI-powered applications and agents. And so we feel it's pretty durable, and we're doing everything we can to accelerate our product capabilities and our go-to-market partnerships at scale even faster.”

asked by Nicholas Altmann · answered by Thomas Wyatt

Are there changes to comp plans for 2026 to drive more cross-sell and multiproduct adoption, including incentivizing ISVs?

Yes, comp plans for 2026 were changed to drive more cross-sell and upsell incentives. The global sales team was unified, and a specialist function was created. AEs are incentivized to land customers and expand their use of the platform, leading to multiproduct adoption.

“So yes, we did make some changes in our comp plan in '26 to drive more cross-sell and upsell incentives into the sales plan.”

asked by James Fish · answered by Thomas Wyatt