Twilio’s second quarter results were met with a significant negative market reaction, as shares declined sharply following the report. Management highlighted that revenue growth was supported by accelerated momentum in messaging and double-digit expansion in voice, driven by both established enterprise customers and new AI-centric startups. Chief Executive Officer Khozema Shipchandler cited strong customer wins and large deal activity, particularly among independent software vendors (ISVs), as primary growth drivers. However, a decline in gross margin and increased operating costs, attributed in part to carrier fees and platform investments, were areas of concern discussed on the call.

Is now the time to buy TWLO? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Twilio’s Q2 Earnings Call

• Meta Marshall (Morgan Stanley) asked about the strongest areas of ISV traction. Chief Revenue Officer Thomas Wyatt responded that verticals like financial services and healthcare are leading, with ISV use cases expanding from messaging into voice and RCS.
• James Edward Fish (Piper Sandler) questioned the rationale for the recent U.S. messaging price increase. CFO Aidan Viggiano clarified the increase was independent of carrier fee hikes, targeting self-service customers, while Wyatt noted it would roll out gradually through enterprise renewals.
• Michael James Turrin (Wells Fargo Securities) pressed for details on the durability of growth and timeline for gross margin stabilization. CEO Shipchandler stated growth is broad-based, while Viggiano explained that margin improvements from pricing and efficiencies will take time to impact results.
• Mark Ronald Murphy (JPMorgan) inquired about the impact of AI model providers on Twilio’s voice business. Shipchandler said Twilio supports both basic voice infrastructure and advanced AI solutions, with demand varying by customer segment.
• Taylor Anne McGinnis (UBS) asked how tougher year-over-year comparisons in messaging affect second-half growth. Viggiano acknowledged challenging comparisons due to last year’s political traffic and new platform features, but expressed confidence in ongoing momentum from self-serve and cross-sell initiatives.

Catalysts in Upcoming Quarters

Looking ahead, our team will monitor (1) the impact of Twilio’s new AI-powered products and Microsoft partnership on customer adoption, (2) progress in stabilizing gross margins through pricing and platform efficiency efforts, and (3) the rate of multiproduct adoption among new and existing clients. Additionally, we will track the adoption curve for RCS and the effect of increased R&D spending on both innovation and profitability.

Twilio currently trades at $102.10, down from $122.62 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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