Shares of Twilio (TWLO) fell about 3% premarket on Friday despite fourth quarter results beating estimates, while analysts expressed mixed reactions on the outlook.
RBC Capital kept its Underperform rating and $100 price target on Twilio — which provides a cloud-based customer engagement platform — noting that 2026 guidance “underwhelms.”
Analysts led by Rishi Jaluria said Twilio delivered solid fourth quarter results with revenue (+14% year-over-year/+12% organic), non-GAAP operating margin (18.7%), non-GAAP EPS ($1.33), and free cash flow, or FCF, ($256.1M) all above consensus.
“While we’re pleased to see continued traction with Voice AI and software add-ons, we remain cautious around long-term margin profiles and the potential for accelerating organic topline growth. Last, we think a sub-10% organic growth outlook is likely not enough to get investors excited given prevailing software sentiment,” Jaluria and his team.
Wells Fargo maintained its Overweight rating and $147 price target on the stock.
“TWLO printed a solid 4Q, underpinned by reaccels in Voice revenue and gross profit dollar growth. We believe investors likely continue to own the name here as they feel comfortable in a reasonably priced consumption trade with AI defensiveness,” said analysts led by Ryan MacWilliams.
The analysts noted that Twilio posted an acceleration in gross profit dollar growth in the fourth quarter (despite higher SMS mix) and provided a more constructive initial outlook for 2026 versus past years.
MacWilliams and his team added that while some investors may have been looking for an organic revenue reacceleration, better self-serve/direct go-to-market, or GTM, performance driving strong net new business in the fourth quarter was a highlight.
“We believe investors can feel better on the setup for next year given a solid 1Q outlook and improved visibility on underlying trends,” the analysts added.