Twilio Inc. (TWLO) Q2 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you for joining us today. Top line performance was driven by strong volumes and solid go-to-market execution, resulting in another quarter of organic revenue growth acceleration. We saw strong customer additions in the quarter, aided by the release of our new conversations layer and Twilio console. Our self-serve channel delivered revenue growth of 30% plus, while ISV revenue grew 25% plus. We are also seeing continued strength across the product portfolio. Messaging revenue growth was 28%, driven primarily by strong volumes and aided by growth in WhatsApp and RCS. Incremental carrier fees contributed roughly 10 points to messaging's growth. Voice growth accelerated above 20% year over year, driven by a balance of volume growth and software add-ons, including triple-digit growth in branded calling and conversational intelligence. Finally, total software add-on revenue grew 25% plus, led by Verify, which accelerated to 30% plus growth. Our Q2 dollar-based net expansion rate was 116%, reflecting the improving growth trends we've seen in our business over the last several quarters. Incremental carrier fees contributed roughly five points to BB&E. We delivered record non-GAAP gross profit of $736 million with growth accelerating to 18% year-over-year, our fifth consecutive quarter of accelerating non-GAAP gross profit growth. This was driven by continued momentum in our higher margin products in addition to our proactive efforts to deliver meaningful cost efficiencies. Non-GAAP gross margin was 49.1% down 160 basis points year-over-year and 50 basis points quarter-over-quarter. We incurred incremental US carrier pass-through fees of $71 million, which drove the year-over-year and quarter-over-quarter declines. Without these incremental fees, non-GAAP gross margins ...