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Twilio delivered its fourth straight quarter of accelerating double-digit growth. It grew revenue 13% YoY to $1.228B in Q2, beating estimates, and it pulled in free cash flow of $263M.
Messaging remained the growth engine. Voice returned to double-digit gains. And RCS moved from pilots to signed deals. The company reported a go-to-market motion now working in both PLG and enterprise sales; however, Segment continues with declining growth, and cross-sell’s scalability is unproven.
The Good
Twilio remains the CPaaS growth juggernaut. It has now posted four straight quarters of accelerating double-digit revenue growth. For the first time in two years, Voice is back in double-digit territory. And in its bread-and-butter ISV segment, multi-channel product adoption is outpacing the rest of the business.
Enterprise sales is working, with the number of $500K+ accounts up 57% YoY, fueled by platform selling and cross-sell into products like Verifi, FraudGuard, and voice add-ons.
Proof that Twilio is the first stop for any startup (and its SF roots), AI-native startups founded in the last three years are already spending seven figures annually with 80%+ SaaS-like gross margins. I remember seeing the Ask Your Developer billboard in SF and grudgingly acknowledging its genius. Those developers are now likely the engineering managers making these decisions. Don Draper was right: Advertising works.
As the strongest comment on RCS yet, Twilio sees it as a “once in a generation” opportunity. The holiday season will be the first real test of RCS at scale. Longtime customer Postscript.io signed on as an RCS pilot partner, giving Twilio a marquee brand to showcase features like read tracking and suggested replies.
The Interesting
Twilio’s growth streak is a balance between winning new logos and protecting margins. While growth is supposed to pressure margins, the company sees room to push pricing in both the self-serve channel and enterprise contracts. That runs counter to the broader market view that price elasticity is tapped out, and if Twilio is right, it could extend the streak without resorting to deep cost cuts.
International expansion is steady, but every gain in share comes with a profitability trade-off. Twilio appears willing to lean into that risk for now, betting that scale and network effects will pay back the margin sacrifice over time.
In voice AI, Twilio is keeping its options open—offering itself as infrastructure, as a full-stack partner, or both. That flexibility lets it capture spend regardless of how the AI tooling landscape evolves, positioning Twilio to ride the AI buildout in the same way it rode the early wave of CPaaS adoption.
The Unknown
Cross-selling remains in The Unknown. You might think that’s harsh, given I just praised Twilio’s multi-channel PLG. But here’s the thing—everything outside messaging, voice, and email still feels like a sidecar to the messaging engine, which accounts for more than half of Twilio’s revenue. I’d need to see other products take meaningful share before moving cross-sell into The Interesting, let alone The Good.
Segment is a red flag. With 0% organic revenue growth and a 95% dollar-based net expansion rate, the business is actually shrinking. New customer gains are only offsetting churn. Even at $75M in quarterly revenue, product-market fit still feels clunky.
I believe we’re very early in the AI hype cycle, and Twilio should ride that wave hard—winning every AI startup that needs agents to talk or text. But it brings faint echoes of the crypto boom, when Twilio did the prudent thing by taking the business yet was punished by the market when the boom went bust. If AI demand fades the same way, it won’t just hit Twilio—it would be a sector-wide nuclear winter.
Finally
I doubt Twilio had an easy quarter. In fact, based on my day job advising its clients, I know the work behind the scenes was anything but easy. Yet the company didn’t look like it broke a sweat. Champions have the ability to make winning seem effortless, even predictable. You can debate whether Federer, Nadal, or Djokovic is the greatest tennis player of all time, but Federer was the one who made moving on the court look masterfully casual. He’s admitted that it wasn’t casual at all—it took tireless work to make it look that easy. Twilio’s quarter felt the same. The grind was there, but the performance looked smooth. Just like Federer.