What Happened?
Shares of customer engagement platform Twilio (NYSE: TWLO) jumped 17.1% in the afternoon session after the company reported better-than-expected third-quarter 2025 financial results and provided an optimistic forecast for the fourth quarter.
For the third quarter, the customer engagement platform announced revenue of $1.3 billion, up 14.7% from the prior year, surpassing analysts' expectations. Its adjusted earnings per share of $1.25 also came in significantly ahead of Wall Street's consensus estimates. Looking ahead, Twilio's management guided for fourth-quarter revenue and earnings to be above what analysts were forecasting, signaling continued business momentum. The strong results were further supported by a significant increase in its customer base, with the company adding 43,000 new customers during the quarter, indicating its go-to-market strategy is proving effective.
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What Is The Market Telling Us
Twilio’s shares are very volatile and have had 24 moves greater than 5% over the last year. But moves this big are rare even for Twilio and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 4.2% on the news that President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears. The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
Twilio is up 21.2% since the beginning of the year, but at $132.20 per share, it is still trading 10.9% below its 52-week high of $148.35 from January 2025. Investors who bought $1,000 worth of Twilio’s shares 5 years ago would now be looking at an investment worth $483.56.
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