---
title: "Twilio's $1.07 billion profit was a one-time tax entry; four banks still raised price targets"
description: "Twilio's $1.07 billion second-quarter net profit rests on a one-time, non-cash tax entry, not on the $285 million its operations earned. Four banks raised price targets anyway, and the October 29 print will compare against the same distorted quarter."
publisher: "The Inference"
section: "Markets"
published: 2026-10-21T15:17:50.887Z
modified: 2026-10-21T15:17:50.887Z
canonical: https://theinference.org/article/twilio-s-1-07-billion-profit-was-a-one-time-tax-entry-four-banks-still-raised-price-targets
language: en
keywords: "Earnings, Analyst Ratings, Accounting, Software, Guidance"
---

# Twilio's $1.07 billion profit was a one-time tax entry; four banks still raised price targets

> Twilio's $1.07 billion second-quarter net profit rests on a one-time, non-cash tax entry, not on the $285 million its operations earned. Four banks raised price targets anyway, and the October 29 print will compare against the same distorted quarter.

[Twilio](https://theinference.org/markets/companies/twilio)'s second quarter produced a headline net profit of $1.07 billion, but $944.1 million of that was a one-time, non-cash release of the valuation allowance against Twilio's US deferred tax assets, worth $5.91 of the $6.68 diluted earnings per share [8].

[The total benefit from income taxes on the income statement](https://markets.financialcontent.com/prnews.pressre/article/bizwire-2026-8-6-twilio-announces-second-quarter-2026-results) was $991.7 million; the rest is the accounting release, not cash earned [8]. Strip the tax entries out and the quarter that four banks just raised price targets on earned $285 million of non-GAAP operating income and $353 million of free cash flow [1][8].

*Chart: **The operating line Twilio actually earns: a steady climb, not a $1.07 billion spike** Column chart of Twilio's quarterly operating income from Q1 2024 to Q2 2026*

*Twilio's GAAP operating income by quarter, in USD billions, from its SEC filings, Q1 2024 to Q2 2026. The headline $1.07 billion profit sits below the operating line, in a one-time tax entry the operating series never shows. Source: Twilio, quarterly figures from its SEC filings, retrieved 21 October 2026 [9]. [9]*

On October 29 the company reports again, and the year-ago comparison carries the same distortion [1]. Any model built on the June quarter's GAAP earnings is wrong before the print lands.

## The street raised targets on a profit line that will not repeat

The week after the August release, JPMorgan lifted its target to $335 on October 12, [Bank of America](https://theinference.org/markets/companies/bank-of-america) to $320 and [Stifel](https://theinference.org/markets/companies/stifel) to $325 on October 15, and [BTIG to $315 on October 16](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/twilio-aktie-btig-hebt-kursziel-an/70341461), all Buy ratings [1][2][3][4]. [RBC's Rishi Jaluria is the lone Sell, at $165](https://www.theglobeandmail.com/investing/markets/stocks/TWLO/pressreleases/8153149/twilio-twlo-new-sell-recommendation-for-this-technology-giant/) [4].

The street's average target sat at $267.52 on October 15 while the stock closed at $273.40 [2][4], and Twilio fell 7.3% on October 16, the day BTIG raised its number, though the report itself disclaims any link between the two [5]. The market is already paying above consensus for a quarter whose profit came mostly from below the operating line.

*Chart: **Four banks raised Twilio targets above a street average the price already beats** Ranked bars of analyst price targets for Twilio against the recent share price close*

*Price targets in US dollars for Twilio (TWLO), October 12 to 16, 2026, against the October 16 close; the street average is TipRanks' figure as of October 15. Sources: TipRanks via The Globe and Mail (2,3,4), ad-hoc-news (1). [1][2][3][4]*

## What was real, and what was not

The real part is worth having. Revenue of $1.5 billion grew 22% reported and 17% organic, and guidance for full-year reported growth went up to 18% to 18.5% [1][8].

Messaging, voice and software add-ons all grew in double digits. The Traffic Optimization Engine, a tool that cuts messaging costs, [went generally available for Programmable SMS/MMS customers on October 6](https://www.ad-hoc-news.de/boerse/news/nebenwerte/btig-raised-twilio-target-to-usd-315-for-twilio-stock/70373521) [5]. [At SIGNAL Mexico on October 19 Twilio launched four agent products](https://global-it-media.com/twilio-impulsa-nueva-era-de-agentes-en-signal-mexico/): Conversation Memory, Conversation Orchestrator, Conversation Intelligence and Agent Connect [6][7]. The Mexican used-car platform Kavak [says more than 90% of its voice and text conversations this year ran through AI agents on Twilio's APIs](https://portalerp.com/mx/articulo/twilio-actualiza-su-plataforma-para-adaptarse-a-la-era-de-los-agentes) [7].

## Read the October 29 print from the operating line

The agent business is real revenue at the operating level, which is exactly why the operating line is the one to judge. That makes the underlying business real. It does not make the $1.07 billion real [1][8]. The quarter's profit was an accounting entry; the growth is what deserves the premium.

## Judge the print on operating income, not net income

When results land after the close on October 29, judge them on operating income, free cash flow and organic growth, not on a net income line compared against a quarter that contained the same one-time benefit [1][8].

Sources: 1. ad-hoc-news.de, BTIG raised Twilio target to USD 315 for Twilio stock, October 20, 2026 — https://www.ad-hoc-news.de/boerse/news/nebenwerte/btig-raised-twilio-target-to-usd-315-for-twilio-stock/70373521 2. [TipRanks via The Globe and Mail](https://www.theglobeandmail.com/investing/markets/stocks/TWLO-N/pressreleases/7809620/bank-of-america-securities-reaffirms-their-buy-rating-on-twilio-twlo/), Bank of America Securities Reaffirms Their Buy Rating on Twilio (TWLO), October 15, 2026 — https://www.theglobeandmail.com/investing/markets/stocks/TWLO-N/pressreleases/7809620/bank-of-america-securities-reaffirms-their-buy-rating-on-twilio-twlo/ 3. TipRanks via The Globe and Mail, Stifel Nicolaus Remains a Buy on Twilio (TWLO), October 15, 2026 — https://www.theglobeandmail.com/investing/markets/stocks/TWLO-N/pressreleases/7850076/stifel-nicolaus-remains-a-buy-on-twilio-twlo/ 4. TipRanks via The Globe and Mail, Twilio (TWLO): New Sell Recommendation for This Technology Giant, October 17, 2026 — https://www.theglobeandmail.com/investing/markets/stocks/TWLO/pressreleases/8153149/twilio-twlo-new-sell-recommendation-for-this-technology-giant/ 5. ad-hoc-news.de, Twilio Aktie: BTIG hebt Kursziel an, October 21, 2026 — https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/twilio-aktie-btig-hebt-kursziel-an/70341461 6. Global IT Media, Twilio impulsa nueva era de agentes en SIGNAL México, October 19, 2026 — https://global-it-media.com/twilio-impulsa-nueva-era-de-agentes-en-signal-mexico/ 7. Portal ERP, Twilio actualiza su plataforma para adaptarse a la era de los agentes, October 15, 2026 — https://portalerp.com/mx/articulo/twilio-actualiza-su-plataforma-para-adaptarse-a-la-era-de-los-agentes 8. Twilio Inc. via Business Wire, Twilio Announces Second Quarter 2026 Results, August 6, 2026 — https://markets.financialcontent.com/prnews.pressre/article/bizwire-2026-8-6-twilio-announces-second-quarter-2026-results

## Takeaway

Judge Twilio's October 29 print on operating income, free cash flow and organic growth, not a net income line inflated by a $944.1 million one-time tax entry that will not repeat.

## Sources

1. [ad-hoc-news.de, BTIG raised Twilio target to USD 315 for Twilio stock, 20 October 2026](https://www.ad-hoc-news.de/boerse/news/nebenwerte/btig-raised-twilio-target-to-usd-315-for-twilio-stock/70373521)
2. [TipRanks via The Globe and Mail, Bank of America Securities Reaffirms Their Buy Rating on Twilio (TWLO), 15 October 2026](https://www.theglobeandmail.com/investing/markets/stocks/TWLO-N/pressreleases/7809620/bank-of-america-securities-reaffirms-their-buy-rating-on-twilio-twlo/)
3. [TipRanks via The Globe and Mail, Stifel Nicolaus Remains a Buy on Twilio (TWLO), 15 October 2026](https://www.theglobeandmail.com/investing/markets/stocks/TWLO-N/pressreleases/7850076/stifel-nicolaus-remains-a-buy-on-twilio-twlo/)
4. [TipRanks via The Globe and Mail, Twilio (TWLO): New Sell Recommendation for This Technology Giant, 17 October 2026](https://www.theglobeandmail.com/investing/markets/stocks/TWLO/pressreleases/8153149/twilio-twlo-new-sell-recommendation-for-this-technology-giant/)
5. [ad-hoc-news.de, Twilio Aktie: BTIG hebt Kursziel an, 21 October 2026](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/twilio-aktie-btig-hebt-kursziel-an/70341461)
6. [Global IT Media, Twilio impulsa nueva era de agentes en SIGNAL México, 19 October 2026](https://global-it-media.com/twilio-impulsa-nueva-era-de-agentes-en-signal-mexico/)
7. [Portal ERP, Twilio actualiza su plataforma para adaptarse a la era de los agentes, 15 October 2026](https://portalerp.com/mx/articulo/twilio-actualiza-su-plataforma-para-adaptarse-a-la-era-de-los-agentes)
8. [Twilio Inc. via Business Wire, Twilio Announces Second Quarter 2026 Results, 6 August 2026](https://markets.financialcontent.com/prnews.pressre/article/bizwire-2026-8-6-twilio-announces-second-quarter-2026-results)
9. [Twilio, quarterly figures from its SEC filings, retrieved 21 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001447669)


---

Twilio's $1.07 billion profit was a one-time tax entry; four banks still raised price targets — The Inference. Canonical: https://theinference.org/article/twilio-s-1-07-billion-profit-was-a-one-time-tax-entry-four-banks-still-raised-price-targets