01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Twilio Inc. reported third-quarter 2025 revenue of $1.30 billiona, up from $1.13 billion a year earlier, and net income attributable to common stockholders of $37.2 million, compared with a net loss of $9.7 million in the prior-year quarter.
Income from operations was $40.9 millionb versus a loss of $4.9 million, and non-GAAP income from operations was $234.5 million (18% non-GAAP operating margin). For the nine months, revenue was $3.70 billion and net income was $79.7 million, compared with a net loss of $96.9 million a year earlier. The filing attributes revenue growth mainly to existing-customer usage (Dollar-Based Net Expansion Rate of 109% for the quarter) and $61.0 million from new Active Customer Accounts, which numbered 392,000 at September 30, 2025.
Management notes that a major U.S. carrier's A2P fee increase passes through at cost, adding revenue and cost of revenue without affecting gross profit dollars but creating a modest gross margin headwind. The balance sheet shows cash and cash equivalents of $734.8 millionc and short-term marketable securities of $1.72 billion, against long-term debt of $991.9 million (2029 and 2031 Senior Notes). Nine-month operating cash flow was $731.7 million and free cash flow for the quarter was $247.5 million (19% margin).
During the nine months, the company repurchased $656.7 milliond of Class A common stock under a $2.0 billion program authorized in January 2025, leaving about $1.3 billion available. The filing also discloses a pending acquisition of Stytch, Inc., agreed on October 30, 2025 and expected to close in the fourth quarter of 2025.
02—Key points
Key Highlights
- Q3 2025 revenue rose to $1.30 billion from $1.13 billion, with 15% total revenue growth stated in the filing.
- Q3 2025 net income was $37.2 million versus a net loss of $9.7 million in Q3 2024; nine-month net income was $79.7 million versus a $96.9 million loss a year earlier.
- Non-GAAP income from operations was $234.5 million in Q3 2025 (18% non-GAAP operating margin), compared with $182.4 million (16%) a year earlier.
- Dollar-Based Net Expansion Rate was 109% for Q3 2025 versus 105% in Q3 2024; Active Customer Accounts reached 392,000 versus 320,000.
- Cash and cash equivalents of $734.8 million and short-term marketable securities of $1.72 billion at September 30, 2025, against $991.9 million of long-term debt.
- Nine-month operating cash flow was $731.7 million; Q3 free cash flow was $247.5 million (19% margin).
- The company repurchased $656.7 million of Class A stock in the nine months under a $2.0 billion program, with about $1.3 billion remaining; it also agreed on October 30, 2025 to acquire Stytch, Inc., expected to close in Q4 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Twilio kept $0.03.
- Revenue$1.30B100.0%
- Cost of revenue−$668.3M51.4%
- Gross profit$632.1M48.6%
- Operating costs−$591.1M45.5%
- Operating income$40.9M3.1%
- Interest, other & tax−$3.7M0.3%
- Net income$37.2M2.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 31, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.30B$1.13B | +14.7% |
| Cost of Revenue | $668.33M$555.02M | +20.4% |
| Gross Profit | $632.08M$578.63M | +9.2% |
| R&D Expenses | $262.31M$261.51M | +0.3% |
| Operating Expenses | $591.13M$583.52M | +1.3% |
| Operating Income | $40.95M-$4.89M | +936.7% |
| Net Income | $37.25M-$9.73M | +483.0% |
| EPS (Basic) | $0.24$-0.06 | +500.0% |
| EPS (Diluted) | $0.23$-0.06 | +483.3% |
| Shares Outstanding (Basic) | 153.12M159.09M | −3.8% |
| Shares Outstanding (Diluted) | 159.21M159.09M | +0.1% |
05—Questions
Frequently Asked Questions
How did Twilio perform in the third quarter of 2025?
Revenue was $1.30 billion, up from $1.13 billion, and the company reported net income of $37.2 million compared with a net loss of $9.7 million a year earlier. Income from operations was $40.9 million versus a loss of $4.9 million in the prior-year quarter.
What drove revenue growth?
The filing attributes the increase mainly to existing customers' higher usage, reflected in a 109% Dollar-Based Net Expansion Rate, plus $61.0 million of revenue from new Active Customer Accounts and $20.2 million tied to incremental A2P fees introduced by a major U.S. carrier.
Is the company's balance sheet and cash generation strong?
At September 30, 2025, cash and cash equivalents were $734.8 million and short-term marketable securities were $1.72 billion. Long-term debt, net, was $991.9 million. Nine-month operating cash flow was $731.7 million, and the company stated its cash and securities are sufficient for the next 12 months and beyond.
What is the impact of the new carrier A2P fees on margins?
The company passes these fees through to customers at cost, so they raise revenue and cost of revenue equally without changing gross profit dollars. The filing states they create a modest headwind to gross margins going forward, and other U.S. carriers may follow.
What capital allocation actions and pending deals are disclosed?
The company repurchased $656.7 million of Class A common stock in the nine months ended September 30, 2025, with about $1.3 billion left under the $2.0 billion program expiring December 31, 2027. On October 30, 2025 it agreed to acquire Stytch, Inc., with closing expected in the fourth quarter of 2025, subject to customary conditions.
06—Continue