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SAN FRANCISCO - Twilio Inc. (NYSE:TWLO) shares surged 5% in afterh-hours trading Thursday after the customer engagement platform reported third-quarter earnings that exceeded analyst expectations and raised its full-year outlook, driven by broad-based customer growth across all segments.
The company reported adjusted earnings of $1.25 per share for the quarter ended September 30, significantly beating analyst estimates of $1.08. Revenue reached $1.3 billion, up 15% YoY and above the consensus forecast of $1.25 billion. Organic revenue growth was 13% compared to the same period last year.
"Twilio saw another record quarter of revenue and non-GAAP income from operations and as a result, we’ve raised our revenue, profitability and free cash flow targets for the full year," said Khozema Shipchandler, CEO of Twilio. "We saw broad-based strength across customer segments, ranging from startups to enterprises to ISVs, that continue to choose Twilio to power their customer engagement."
The company’s adjusted operating income jumped 29% YoY to $234.5 million, representing an 18% operating margin compared to 16.1% in the year-ago quarter. Twilio also reported strong free cash flow of $247.5 million, a 31% increase from the same period last year.
For the fourth quarter, Twilio provided guidance above Wall Street expectations, projecting revenue between $1.31 billion and $1.32 billion, compared to analyst estimates of $1.28 billion. The company expects adjusted earnings of $1.17 to $1.22 per share, also above the consensus of $1.14.
Twilio raised its full-year 2025 outlook, now expecting revenue growth of 12.4% to 12.6%, up from its previous guidance of 10% to 11%. The company also increased its adjusted operating income forecast to $900-$910 million from $850-$875 million previously.
The company’s active customer accounts grew to more than 392,000, compared to 320,000 a year ago, while its dollar-based net expansion rate improved to 109% from 105% in the third quarter of 2024.
Additionally, Twilio announced it has entered into a definitive agreement to acquire Stytch, Inc., an identity platform for AI agents, with the transaction expected to close in mid-November.
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