William Power Lifts Twlo Stock Target to $160 Before Q1
Twlo stock traded near $141 as Twilio heads into Q1 results later today, with revenue guidance set at $1.335 billion to $1.345 billion and non-GAAP operating income projected at $240 million to $250 million. The update puts growth, cash generation, and margin pressure in the same release, leaving investors to weigh how much of the recent run is already priced in.
Twilio reported $1.4 billion in Q4 revenue and $5.1 billion for the full year, while posting its first full year of GAAP profit and improving operating margin. The company also generated $945 million in free cash flow for the year, up 44% from the prior year, a shift that gives the next quarter's guidance more weight than a simple top-line print.
William Power Raises $160 Target
William Power lifted his price target to $160 from $145 and kept a Buy rating, saying the firm “remains positive on improving growth”. The new target sits above the stock's near-$141 trading level and lines up with a broader analyst picture that still leans constructive.
20 analyst reviews now give Twilio a Moderate Buy rating, with an average TWLO stock price target of $153.39, about 9% above current levels. That spread leaves the Q1 report as the next test of whether the market will focus more on the recent operating gains or on the costs still coming through the business.
Margins And Cash Flow
170 basis points (hundredths of a percent) is the expected gross margin hit from higher carrier messaging fees in 2026, according to management. Twilio said those costs are mostly passed through, but they still reduce overall margin rates, which means the company can grow revenue without fully protecting each dollar of sales at the gross level.
$100 million is Twilio's expected Q1 free cash flow, and that estimate includes a planned $140 million cash bonus. The gap between annual free cash flow of $945 million and the smaller quarterly figure shows why investors are watching both profit and cash conversion, not just the revenue range.
Q1 Guidance Range
$1.335 billion to $1.345 billion is Twilio's Q1 revenue guide, equal to about 10% to 11% organic growth. Voice revenue rose at a faster pace in Q4, AI-related products grew over 60% year-over-year, and contracts above $500,000 increased 36%, giving the company several operating markers beyond the headline revenue line.
$240 million to $250 million is the non-GAAP operating income range Twilio expects later today. If the company reaches the middle of both guidance bands, the report should reinforce the move from scale toward profitability, while the 2026 carrier-fee pressure keeps a clear ceiling on how smooth that path may be.
