Twilio Stock Sheds 13% Premarket: Here’s Why

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Twilio reported adjusted earnings per share of $1.19 for the second quarter of the fiscal year 2025, up from $0.87 a year ago and exceeding the Fiscal.ai-compiled consensus of $1.05.

Shares of Twilio (TWLO), a cloud communications company, fell nearly 13% in Friday’s early premarket session despite a beat-and-raise quarter. Traders apparently didn’t take kindly to the company merely reiterating its full-year operating earnings guidance. 

If the premarket losses are sustained in the regular session, the stock would have its worst day in about six months, according to Koyfin data.

Twilio stock, however, elicited an ‘extremely bullish’ reaction from Stocktwits platform users by early Friday, an improvement from the ‘bullish’ mood seen a day ago. The message volume also improved to ‘extremely high’ levels.

The 24-hour message volume leading up to late Thursday spurted by 1,330%.

TWLO sentiment and message volume as of 5:20 a.m. ET,  Aug. 8 | source: Stocktwits

San Francisco, California-based Twilio reported adjusted earnings per share of $1.19 for the second quarter of the fiscal year 2025, up from $0.87 a year ago and exceeding the Fiscal.ai-compiled consensus of $1.05.

Revenue climbed 13% year-over-year (YoY) to $1.23 billion, bettering the $1.186 billion consensus estimate.

CEO Khozema Shipchandler said, “The company’s focus and execution is paying off as Q2 marked another quarter of accelerated year-over-year revenue growth as well as record non-GAAP income from operations and free cash flow.”

Among operational metrics, active customer accounts stood at 349,000 at the end of the second quarter, up from 316,000 at the end of the year-ago quarter. The dollar-based net expansion rate for the quarter was 108%, up from 102% for the year-ago quarter.

Twilio’s third-quarter guidance is as follows:

  • Revenue: $1.245 billion-$1.255 billion versus $1.218 billion consensus

  • Adj. EPS: $1.01-$1.06 

     

The company raised its organic revenue growth guidance for the full year 2025 to 10%-11% from 7.5%-8.5%, and its free cash flow guidance to a range of $875 million to $900 million from a range of $850 million to $875 million. 

It maintained its adjusted income from operations guidance at $850 million to $875 million. The full-year revenue growth outlook exceeded the consensus estimate of 9.61%.

Twilio stock has gained over 13% year-to-date, and the one-year consensus analyst’s stock price target, compiled by Koyfin, is $133.19, implying roughly 9% upside potential.

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