Twilio shares climbed 1.85% on the latest trading day, outpacing the 0.7% decline in the S&P 500. This relative strength marks the third consecutive session of gains and brings year-to-date outperformance to 22%, reflecting growing investor confidence despite broader market volatility driven by rising Treasury yields and sector rotation away from growth names.

In the third quarter of fiscal 2025, Twilio reported revenue growth of 15% year-over-year, up from 12% in Q2, driven by strong demand for its communications platform. Subscription revenue accounted for 83% of total sales, while usage revenue – which carries higher gross margins – expanded by 28%. The company added 1,200 net new customers during the quarter, bringing its total base to over 300,000.

Non-GAAP operating margins held steady at 18% in Q3, compared with 16% a year earlier, benefiting from operating leverage as fixed costs were spread over a larger revenue base. Management raised full-year fiscal 2025 guidance to 12.5% revenue growth (from 11%) and 18% non-GAAP operating margin (from 17%), underscoring confidence in ongoing profitability improvements and disciplined expense management.

Twilio highlighted several new product launches, including enhancements to its Conversational AI toolkit and expanded branded communication offerings for high-volume customers. Cross-sell of add-on modules such as programmable video and IoT connectivity grew 35% year-over-year, demonstrating success in monetizing its existing customer base and reducing reliance on one-off usage fees.