Twilio Shares Surge Over 22% on Optimistic 2027 Profit Forecast, Announces $2B Share Buyback

Jan 24, 2025, 12:08 PM

Twilio Inc. has announced an optimistic profit forecast for 2027 at its investor day, projecting an adjusted operating margin of 21% to 22%, surpassing the Visible Alpha consensus of 19.68%. The company's preliminary results for the fourth quarter of 2024 showed an 11% year-over-year revenue growth, with adjusted operating income exceeding the top end of its prior guidance range of $185 million to $195 million. Twilio also committed to generating $3 billion in free cash flow over the next three years, a significant increase from the approximately $692 million generated over the previous three years. For 2025, Twilio expects to achieve $825 million to $850 million in both free cash flow and adjusted operating income, with revenue growth projected at 7% to 8% year over year. The company's stock surged over 22% following the announcement, marking its biggest gain since the Covid pandemic. Twilio aims to expand into conversational artificial intelligence, targeting a $158 billion total addressable market by 2028, up from $119 billion when focusing solely on communications and customer data platforms. Additionally, Twilio announced a $2 billion share buyback program, and several Wall Street analysts raised their price targets on the stock, reflecting optimism about its growth and AI potential.