Needham bullish on Twilio on upside on AI, free cash flow

April 30, 2025 12:47 AM AEST | By Investing

Google News:

Needham bullish on Twilio on upside on AI, free cash flow

Recent News

World Digital Introduces Innovative E‑Commerce Strategies Amid Global...

Alex Miller Keeps Classic Country Flame Burning With Alan Jackson Song...

Trump earns over $600 million from crypto, holds assets worth at least...

Oil in biggest gain since 2022 as Israel hits Iran, but Citi warns gai...

Investing.com -- Needham is bullish on Twilio (NYSE:TWLO) Inc, which is Buy rating, added the stock to its Conviction List, citing confidence in the company’s ability to meet its long-term financial goals and capitalize on artificial intelligence and operational improvements.

The firm said Twilio is well positioned to meet its recently outlined FY27 targets, which include 7–8% organic revenue growth and $3 billion in cumulative free cash flow.

It noted that if Twilio can modestly exceed these targets, delivering 10% growth, shares could outperform over the next several years.

“We believe Twilio will benefit from AI by building adjacent solutions to their core,” analyst wrote, pointing to company position in the communications-platform-as-a-service (CPaaS) space, a growing pipeline of AI-enabled use cases, and improved operating efficiency after restructuring.

Needham added that Twilio’s messaging API business is globally differentiated and under-appreciated by investors, creating a stronger competitive moat than is widely recognized.

Twilio has also streamlined its go-to-market approach and improved cross-selling, supported by a base of more than 325,000 active customer accounts.

These changes follow a large-scale restructuring that eliminated roughly 40% of its workforce between 2023 and 2024.

The firm said Twilio is approaching a potential valuation inflection point, trading at 15 times FY26 expected free cash flow and 12.5 times EV/EBITDA.

That multiple could expand, Needham said, as Twilio is now operating more like a mature, profitable software company.

While the CPaaS market is maturing, Needham said Twilio’s innovation engine, combined with targeted investments in AI and customer data capabilities, gives it optionality to move up the value chain and achieve higher margins.

Twilio replaces Verint on Needham’s Conviction List.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.