Twilio Inc. (TWLO) did the thing companies are supposed to do on earnings day. It beat on revenue. It beat on earnings. It raised guidance. And then its stock dropped 15% after the closing bell on Thursday. Earnings season, everybody.

The Numbers Were Good. Genuinely.

Twilio posted third-quarter revenue of $1.56 billion, beating analyst estimates of $1.51 billion. The cloud-based customer engagement company reported adjusted earnings of $1.65 per share, comfortably ahead of the $1.47 per share analysts expected.

Total revenue was up 20% on a year-over-year basis, driven by broad-based strength across the company's product portfolio. Operating cash flow was $389.2 million in the quarter and free cash flow totaled $369.6 million.

CEO Khozema Shipchandler framed the moment around AI: "Consumer AI has accelerated AI development, and its adoption demands fast, reliable infrastructure built for AI speed. Twilio is well positioned to capitalize on this moment and meet this demand."

Twilio also put some money where its mouth is, repurchasing $127.2 million of its common stock in the third quarter. As of Sept. 30, roughly $700 million remained under its buyback authorization.

The Outlook Was Fine Too

For the fourth quarter, Twilio sees revenue in the range of $1.595 billion to $1.605 billion versus estimates of $1.582 billion. Adjusted earnings are expected to land between $1.48 and $1.53 per share versus estimates of $1.49 per share. That earnings range straddles the consensus rather than blowing past it, which may be part of what spooked investors.

The company also raised its full-year 2026 revenue growth guidance from a range of 18% to 18.5% to a new target of 20%.

Management will discuss the quarter on an earnings call scheduled for 5 p.m. ET.

TWLO Shares Move Lower

Twilio shares were down 15.09% in after-hours, trading at $205.40 at the time of publication on Thursday. So a beat, a raise, and a selloff. The market apparently wanted more, or maybe it just wanted an excuse. Either way, the call at 5 p.m. ET should be interesting.