Twilio (TWLO), the customer-engagement infrastructure company, reported third-quarter revenue of $1.56 billion, up 20% from a year earlier, as GAAP income from operations reached $148.6 million and the company raised its full-year 2026 growth outlook.

Reported growth slowed from 22% in the second quarter, when revenue was $1.50 billion. Organic revenue growth was 16%, down from 17% in the prior quarter.

GAAP operating profit more than tripled from $40.9 million a year earlier, lifting the GAAP operating margin to 10% from 3%. Non-GAAP income from operations was $325.7 million, up 39% year-over-year, with a 21% non-GAAP operating margin.

GAAP gross profit was $760.5 million, up 20% year-over-year, with a 49% GAAP gross margin. Non-GAAP gross profit was $767.8 million, up 18%, with a 49% non-GAAP gross margin.

GAAP net income attributable to common stockholders was $161.2 million, or $1.00 a share on 161.7 million diluted shares, compared with $37.2 million, or $0.23 a share, a year earlier. Non-GAAP net income attributable to common stockholders was $266.9 million, or $1.65 a share.

Net cash provided by operating activities was $389.2 million, and free cash flow was $369.6 million, compared with $263.6 million and $247.5 million a year earlier. Free cash flow margin was 24%.

The dollar-based net expansion rate was 114%, compared with 109% a year earlier. Headcount was 5,625 as of September 30, 2026.

Chief Executive Khozema Shipchandler said the quarter was driven by disciplined execution and broad-based strength across the product portfolio, and that consumer AI has accelerated AI development and its adoption demands fast, reliable infrastructure.

Twilio repurchased $127.2 million of Class A common stock in the quarter. As of September 30, it had completed about $1.3 billion of repurchases under a $2.0 billion authorization that expires December 31, 2027, leaving about $700 million available.

For the fourth quarter ending December 31, 2026, Twilio is initiating a revenue range of $1.595 billion to $1.605 billion, implying reported growth of 17% to 17.5% and organic growth of 11% to 12%. It expects fourth-quarter non-GAAP gross profit to be similar to that organic range, non-GAAP income from operations of $300 million to $310 million, and non-GAAP diluted earnings of $1.48 to $1.53 a share on 163 million shares.

For fiscal 2026, Twilio is raising its reported revenue growth outlook to 20% from 18% to 18.5% previously, and its organic revenue growth outlook to 15% from 13% to 13.5% previously. It expects full-year non-GAAP gross profit growth to be similar to the organic range. It is raising 2026 non-GAAP income from operations and free cash flow ranges to $1.19 billion to $1.20 billion from $1.135 billion to $1.155 billion previously.