Twilio (TWLO -1.83%) enables companies to improve their customer communications. Through its customer engagement platform (CEP), clients are empowered to build direct and personalized customer relationships.
At its core, Twilio is a cloud communications platform-as-a-service company. It provides customers with a platform to build applications to send voice, video, and text messages.
In addition, Twilio has a rapidly growing data and applications business. The company aims to help customers leverage their data with software powered by artificial intelligence (AI) to enhance customer engagement.
Twilio believes it's just scratching the surface of its potential to help companies improve their communication with customers. The communications technology company estimates that the total addressable market could reach $158 billion by 2028 when including when including new areas of expansion, like conversational AI. That provides a long runway to continue growing revenue and, eventually, profitability at a healthy clip.
Twilio's growth potential likely has many investors interested in investing in its stock. Here's a step-by-step guide on how to buy it and some factors to consider before adding it to your portfolio.
How to buy Twilio stock
Buy shares of Pinterest or any other publicly traded company by following these steps:
- Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
- Search for Twilio: Enter the ticker "TWLO" into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Should you invest in Twilio?
Doing research is essential before buying any stock. It could change your mind about buying shares or further enhance your conviction that shares are a worthwhile investment.
Reasons to consider it:
- You're seeking investments with above-average growth potential.
- You understand the company's business model, including that it's a usage-based system that's more sensitive to changes in the economy.
- You're interested in companies seeking to capitalize on the potentially massive opportunity for AI.
- You believe Twilio can eventually become very profitable.
- You prefer to invest in financially strong companies with cash-rich balance sheets.
- You don't need dividend income from your investment.
- You understand the risks, including the possibility that shares of Twilio could lose value.
When it's not right for you:
- You don't understand what Twilio does or how it makes money.
- You think the hype surrounding AI is overblown.
- You're not sure whether Twilio will ever reach its goal of delivering durable profit growth.
- You're in or nearing retirement and need investments that produce income.
- You're seeking investments with lower volatility.
- You're worried that a recession could significantly impact Twilio's growth.
NYSE: TWLO
Key Data Points
Is Twilio profitable?
Digging into a company's profitability is a vital aspect of an investor's research because profit growth tends to drive a company's stock price over the long term. Twilio has only recently turned the corner on generally accepted accounting principles (GAAP) profitability as of mid-2025.
During the fourth quarter of 2024, Twilio reported a GAAP income from operations of $14 million on almost $1.2 billion of revenue (up 11% year over year), although it was still a full year GAAP loss from operations of $54 million. Twilio reported a growing GAAP income in both the first and second quarters of 2025.
While the company has recently become profitable on a GAAP basis, it has also been focusing on durable profit growth. That's driving a significant improvement in its underlying earnings.
It's producing non-GAAP (adjusted) earnings. During the second quarter of 2025, Twilio reported $221 million of non-GAAP income from operations. It expects that number to be between $850 million and $875 million for the full year. The company is also generating free cash flow ($263 million in the second quarter of 2025).
Does Twilio pay a dividend?
Twilio didn't pay dividends to shareholders as of mid-2025. The company also didn't anticipate initiating a dividend in the foreseeable future. It's reinvesting most of its cash flow to grow its business.
While Twilio doesn't pay dividends, it has started returning cash to shareholders by repurchasing stock. It launched a $1 billion share repurchase program in early 2023. Subsequently, it authorized an additional $2 billion of share repurchases in early 2024 and again in early 2025. During the second quarter of 2025, Twilio repurchased $176.7 million of its stock.
How to invest in Twilio through ETFs
An alternative option to directly buying shares of Twilio is to consider passively investing in the company through a fund that holds its shares. One of the most common passive investment vehicles is an exchange-traded fund (ETF).
Exchange-Traded Fund (ETF)
The bottom line
Twilio built a powerful communications platform to help companies improve their customer communications. The company is steadily bringing new clients to its platform, driving healthy revenue growth. It sees a huge growth runway ahead, especially as it starts leveraging the power of AI. Twilio's continued revenue growth and profitability could drive its stock price much higher in the future.
However, the communications stock isn't for everyone. It's only recently turned the corner on profitability, which could affect its ability to grow shareholder value over the long term. Investors need to carefully consider the risk-reward potential before investing in Twilio stock.
Related investing topics
FAQ
About the Author
