Twilio Inc. (TWLO): 2Q26 Earnings Preview: Feedback to our Initiation at Buy

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Twilio Inc. (TWLO): 2Q26 Earnings Preview: Feedback to our Initiation at Buy

Goldman Sachs Twilio Inc. (TWLO)

magnitude of the deviation vs. historical trends has led to investors wanting a more

nuanced explanation. Some color given on the call included:

n Seasonal volumes were stronger earlier in the quarter than anticipated. The

company indicated that results were partly aided by higher seasonal volumes earlier

in 1Q. Importantly, this was characterized as only part of the upside, with

performance otherwise broad-based across products, geographies, and customer

channels.

n Self-serve and ISV strength added incremental usage outside the traditional

seasonal pattern. Self-serve and ISV revenue each grew more than 25% YoY. ISV

growth was broad-based across verticals and ISVs are increasingly adding more

channels which could be benefiting messaging growth.

n Strong performance in WhatsApp and RCS.

Other factors we consider:

n Strong customer adds in 1Q. Twilio disclosed that they added 43k new Active

Customer Accounts in 1Q26, meaningfully above prior years which supports the

stronger seasonal trend, with more growth in the quarter coming from new

customers. This is consistent with Twilio’s commentary on growth in their self-serve

business.

n Twilio did a pricing increase (absent carrier fees) in both messaging and voice last

year that had a more immediate impact to the self-serve business but is folding into

enterprise contracts on renewal.

As outlined in our initiation, we believe Twilio is benefiting from changes in the customer

service market. While this is well understood for their voice business, we believe this

could ultimately also impact the messaging business as LLMs have made customer

service cases more channel agnostic.

2. 2Q Expectations