- Twilio recently reported strong third-quarter 2025 results under new CEO Khozema Shipchandler, highlighting 15% revenue growth, 23% non-GAAP EPS growth, robust free cash flow and improved full-year revenue outlook, while also acquiring AI-powered identity platform Stytch and disclosing an insider stock sale of US$129 million by director Andrew Stafman and related parties.
- Together, the rebound in activity, the focused push toward AI-enhanced customer engagement, and a significant internal transaction give investors new insights into Twilio’s operational dynamics and internal confidence levels.
- We’ll now look at how Twilio’s stronger third-quarter performance and improved outlook could reshape its existing investment narrative around AI-driven communications.
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Twilio Investment Narrative Recap
To own Twilio, you must believe that AI-powered omnichannel communications will continue to drive more customer engagement spending to its platform, and that management can convert that demand into sustainable profits. Last quarter’s revenue and EPS growth, as well as stronger free cash flow, support this thesis in the near term, while the biggest current risk remains margin pressure if low-margin messaging and higher operator fees once again outpace higher-value software and AI products. The recent insider selling is significant, but does not materially alter this risk-reward balance.
Among recent developments, Twilio’s acquisition of AI-powered identity platform Stytch seems most relevant to the current catalyst: deepening AI into its customer engagement stack. By more tightly tying authentication and identity data to communications APIs, Twilio aims to make AI-driven interactions more secure and personalized, directly aligning with the market’s shift toward higher-value, integrated engagement solutions that could help offset gross margin pressure from commoditized messaging volumes.
However, with this improvement in execution, investors should be aware that rising transportation costs and a greater mix of low-margin traffic could still…
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Twilio’s narrative projects revenue of $5.9 billion and profits of $449.9 million by 2028. This requires annual revenue growth of 7.9% and an increase in profits of approximately $429.7 million, up from $20.2 million today.
See how Twilio’s forecast gives a fair value of $138.04, an 8% increase from its current price.
Explore other perspectives
Seven estimates of Simply Wall St Community’s fair value range between US$68 and US$167 per share, showing how far apart individual views can be. When you compare them to Twilio’s reliance on AI and higher-margin software to offset margin pressure from messaging, it highlights why comparing multiple perspectives can refine your own expectations for the company.
Explore 7 more Twilio fair value estimates – why the stock could be worth up to 31% more than the current price!
Build your own Twilio story
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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