Twilio shares jumped 15.7% after the company reported stronger-than-expected first-quarter results and offered a second-quarter forecast that came in above Wall Street’s view. The move came after Twilio posted Q1 CY2026 revenue of $1.41 billion, up 20% from a year earlier, and non-GAAP profit of $1.50 per share.
The company also beat on the bottom line by a wider margin than it did on sales. Revenue topped analyst estimates of $1.34 billion by 4.7%, while adjusted earnings per share beat the $1.27 consensus by 18%. Adjusted operating income was $278.9 million, above estimates of $245.7 million, and operating margin widened to 7.7% from 2% in the same quarter last year.
Twilio’s guidance carried the same tone. For Q2 CY2026, it projected revenue of $1.43 billion at the midpoint, above the $1.39 billion analysts had expected, and adjusted EPS of $1.30. Management said that outlook implies 16% year-on-year sales growth next quarter. For investors, that is the number that mattered most: after a stretch of slower expansion, Twilio is still showing it can grow and earn more at the same time.
That matters because Twilio is a customer engagement platform that helps businesses communicate through voice, messaging, email and other digital channels. The company has grown sales at a 21.7% compounded annual rate over the last five years, but that pace has eased to 12.4% on an annualized basis over the last two years. Sell-side analysts expect revenue growth of 9.7% over the next 12 months, so the latest quarter and guidance offered a fresh case that the slowdown may not be sliding much further.
Still, the report was not spotless. Free cash flow margin fell to 9.4% from 18.7% in the previous quarter, even as net revenue retention improved to 114% from 108%. That split suggests Twilio is keeping more business than before, but doing so with less cash conversion than investors saw in the prior period. For Twlo stock, the market’s sharp reaction says the beat and the outlook outweighed that shortfall — at least for now.
The next test is whether Twilio can keep converting that improved retention and stronger margin profile into another quarter that outpaces expectations. If it does, the stock’s 15.7% pop may look less like a one-day reaction and more like a reset in how investors value the business.
