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Twilio shares tumble after hours despite beating Q3 earnings and raising full-year outlook

Twilio reported better-than-expected third-quarter results and raised its full-year guidance, but its stock plunged over 12% in extended trading amid projections of slower fourth-quarter growth.

A 5-minute stock chart for Twilio (TWLO) showing a steep after-hours price drop of 12.92% from $241.90 to $210.64.
Image: @TrendSpider

Twilio reported third-quarter revenue of $1.56 billion, representing a 20% increase year over year and surpassing consensus expectations of $1.51 billion to $1.52 billion, according to financial data shared by Wall St Engine and MarketWatch. Organic revenue growth reached 16%, while net income surged 333% from a year earlier to $161 million.[4][5][3][2]

The company posted adjusted earnings per share of $1.65, beating estimates of $1.47, with adjusted operating income climbing 39% to $326 million. Free cash flow rose 49% year over year to $369.6 million, and non-GAAP net income reached $266.9 million. Twilio reported a dollar-based net expansion rate of 114% and bought back $127.2 million of its shares during the quarter.[4][2]

Bolstered by its third-quarter performance, Twilio lifted its full-year 2026 revenue growth forecast to 20%, up from a previous range of 18% to 18.5%, while raising organic growth guidance to 15%. Full-year adjusted operating income and free cash flow were both lifted to between $1.19 billion and $1.20 billion. In company commentary, management noted that consumer adoption of artificial intelligence has accelerated AI development and highlighted strong demand for fast, reliable infrastructure built for AI speed.[4][5]

Despite the upbeat quarterly metrics and guidance boost, Twilio warned of slower revenue growth ahead, projecting fourth-quarter organic revenue growth of 11% to 12% on total sales between $1.60 billion and $1.61 billion. Wall Street responded with a steep sell-off, as Barron's observed that the results failed to satisfy investors. TrendSpider data showed Twilio's stock falling 12.92% after hours to $210.64 from a close of $241.90, while MarketWatch reported declines exceeding 15%.[1][2][3][4][5]

Key facts

  • Twilio generated Q3 revenue of $1.56 billion, up 20% year over year and above analyst expectations of $1.51 billion to $1.52 billion.
  • Q3 adjusted EPS was $1.65 versus the $1.47 estimate, while net income rose 333% year over year to $161 million.
  • Twilio raised its full-year 2026 revenue growth guidance to 20% from 18%–18.5%, with organic growth lifted to 15%.
  • Full-year guidance for both adjusted operating income and free cash flow was raised to $1.19 billion–$1.20 billion.
  • Twilio guided for slower Q4 organic revenue growth of 11%–12%, with revenue forecast at $1.60 billion–$1.61 billion.
  • Shares dropped between 12.92% (to $210.64) and more than 15% in after-hours trading following the release.

Sources · 5 sources

  1. BA

    Barron's@barronsonlinePost on X ·

    Twilio’s better-than-expected third-quarter earnings fail to win over Wall Street. https://t.co/M7w0JIQrZ6

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  2. TR

    TrendSpider@TrendSpiderPost on X ·

    $TWLO Q3 EARNINGS DUMP Adj EPS: $1.65 vs $1.47 est ✅ Sales: $1.559B vs $1.514B est ✅ Raises FY2026 Sales Guidance ✅ 🟥 -12.92% in after-hours https://t.co/HS6XKWATYb

    Open source
  3. TE

    Techmeme@TechmemePost on X ·

    Twilio reports Q3 revenue up 20% YoY to $1.56B, vs. $1.52B est., net income up 333% to $161M, and expects slower Q4 revenue growth; TWLO drops 15%+ after hours (Elias Schisgall / MarketWatch) (Visit Techmeme dot com for the link and full context!)

    Open source
  4. WS

    Wall St Engine@wallstenginePost on X ·

    TWILIO $TWLO Q3’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $1.56B (Est. $1.51B) 🟢; +20% YoY 🔹 Adj. EPS: $1.65 (Est. $1.47) 🟢; +32% YoY 🔹 Adj. Op. Income: $326M (Est. $290M) 🟢; +39% YoY 🔹 FCF: $369.6M (Est. $315.5M) 🟢; +49% YoY 🔹 Organic Revenue Growth: +16% YoY Raises FY26 Guide: 🔹 Adj. Op. Income: $1.19B-$1.20B (Est. $1.15B) 🟢 🔹 FCF: $1.19B-$1.20B (Est. $1.14B) 🟢 🔹 Revenue Growth: +20%; from +18%-+18.5% 🔹 Organic Growth: +15%; from +13%-+13.5% Q4 Guide: 🔹 Revenue: $1.60B-$1.61B (Est. $1.58B) 🟢 🔹 Adj. EPS: $1.48-$1.53 (Est. $1.49) 🟡 🔹 Adj. Op. Income: $300M-$310M (Est. $297M) 🟢 🔹 Organic Revenue Growth: +11%-+12% YoY Other Q3 Metrics: 🔹 Dollar-Based Net Expansion Rate: 114% 🔹 Non-GAAP Net Income: $266.9M (Est. $233M) 🟢 Capital Return: 🔹 Share Repurchases: $127.2M Key Updates: 🔹 FY26 Adj. Op. Income and FCF raised to $1.19B-$1.20B Comments: 🔸 “Consumer AI has accelerated AI development, and its adoption demands fast, reliable infrastructure built for AI speed. Twilio is well positioned to capitalize on this moment and meet this demand.”

    Open source
  5. TE

    TechmemeArticle ·

    Twilio reports Q3 revenue up 20% YoY to $1.56B, vs. $1.52B est., net income up 333% to $161M, and expects slower Q4 revenue growth; TWLO drops 15%+ after hours (Elias Schisgall/MarketWatch) Elias Schisgall / MarketWatch : Twilio reports Q3 revenue up 20% YoY to $1.56B, vs. $1.52B est., net income up 333% to $161M, and expects slower Q4 revenue growth; TWLO drops 15%+ after hours — Twilio lifted its full-year revenue growth outlook after the company reported a higher profit and revenue growth in the third quarter.

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