Twilio (TWLO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $1.172 billion, up 12% year-over-year, with Communications revenue up 13% and Segment revenue up 1%.

• Non-GAAP income from operations was $213 million (18% margin), up from $160 million last year, and free cash flow was $178 million.

• Net income was $20 million, compared to a net loss of $55.3 million in Q1 2024; GAAP income from operations was $23 million.

• Active customer accounts exceeded 335,000, with Dollar-Based Net Expansion Rate improving to 107% from 102%.

• Strong execution in go-to-market levers, AI-enabled product innovation, and notable customer wins drove broad-based business strength.

Financial highlights

• Non-GAAP gross profit was $602 million with a 51.3% margin; GAAP gross margin was 49.6%–50%, down year-over-year.

• Non-GAAP operating margin improved to 18.2% from 15.2% year-over-year.

• Stock-based compensation as a percentage of revenue declined to 11.9%–12%.

• Free cash flow margin was 15%, nearly flat year-over-year.

• Share repurchases totaled $130 million in Q1 under a $2 billion authorization expiring in 2027.

Outlook and guidance

• Q2 2025 revenue guidance: $1.18–$1.19 billion, up 9–10% year-over-year; non-GAAP income from operations: $195–$205 million.

• Full-year 2025 organic revenue growth guidance raised to 7.5–8.5%.

• Full-year non-GAAP income from operations and free cash flow guidance both raised to $850–$875 million.

• Q2 2025 non-GAAP diluted EPS guidance is $0.99–$1.04.

• Guidance reflects a prudent approach due to macro uncertainty, flowing through only a portion of Q1 outperformance.