MW Twilio's stock is soaring. The company says it's because of 'unprecedented demand' for one AI function.

By Nora Redmond

Twilio's revenue climbed 20% year-over-year in the first quarter.

Software investors have a new reason to be optimistic as shares in Twilio surged 20% in after-hours trading.

The 18-year-old company, which provides a platform for businesses to communicate with customers through messaging, emailing and calling, comfortably beat expectations in its first quarter as companies adopt more artificial-intelligence tools to complete tasks.

Twilio $(TWLO)$ reported earnings per share for the three months ending March 31 of $1.50, almost 20% higher than analysts' estimates of $1.27. That marks its fifth earnings beat in a row, according to data provided by FactSet.

The San Francisco-based company posted revenue of $1.4 billion, up 20% year-over-year and higher than the Wall Street consensus of $1.34 billion.

Twilio CEO Khozema Shipchandler said the "terrific" results were a multiyear effort by the group to transform how it performs financially after struggling post-COVID-19 pandemic to remain relevant as people worldwide returned to in-person communication. Sales have now shot up 71% since the same quarter four years ago.

"We continued to see unprecedented demand for 'Voice,' reimagined through the lens of AI, which is increasingly an entry point to the Twilio platform for AI natives and enterprises alike," the former chief financial officer at General Electric - before it was separated into three companies - told analysts in a call on Friday.

The estimate-beating results will bring some solace to software investors in a sector that has faced concerns of permanent AI disruption. The iShares Expanded Tech-Software Sector exchange-traded fund IGM has fallen 15% since November, when fears first started to weigh on traders. However, it's up about 8% in the past 30 days after April achieved the best month for earnings since 2020.

Shipchandler said sales for "Voice," its phone-call offering, grew 20% since the first quarter of 2025, with revenue for its branded-calling feature - which allows companies to add details like logo name and call reason for outbound calls - and its call-transcription service increasing 100% year-over-year.

For 2026, Twilio raised its revenue-growth forecast to between 14% and 15%, up from previous guidance of between 11.5% and 12.5%. It also lifted its outlook for operating income to between $1.08 billion and $1.1 billion after it soared 31% in a year.

Twilio's stock has jumped just over 20% in premarket trading since results were reported after the closing bell on Thursday, bringing total gains to more than 50% since the start of the year.

-Nora Redmond

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 01, 2026 07:03 ET (11:03 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.