UBS analysts are still bullish on Twilio Inc (NYSE:TWLO), citing growing evidence from customer checks that the communications software company is emerging as a key infrastructure layer for enterprise artificial intelligence deployments.
In a note, UBS said more than 10 recent customer checks suggest a rising number of companies are evaluating or deploying Twilio to support AI-driven customer support and sales workflows, reinforcing the view that the company’s AI opportunity is “real and building,” even if still in its early stages.
“We came away more constructive on Twilio’s AI opportunity,” UBS analysts wrote, adding that the company is well-positioned to underpin AI interactions across voice and messaging channels.
UBS estimates Twilio’s Voice AI business is currently running at roughly $50 million in annualized revenue, or about 1% of total revenue, but sees a much larger opportunity over time. The bank estimates an annual Voice AI revenue opportunity ranging from $215 million to as much as $2.7 billion, depending on adoption rates and Twilio’s share of automated customer interactions.
Several enterprises are already live with Twilio-powered AI voice agents, including a large US technology company and a major Canadian financial institution, UBS noted. Customer checks also suggest strong early adoption of related products such as ConversationRelay and Conversational Intelligence, with some customers expecting AI-driven interactions to increase messaging volumes by 25% to 100%.
UBS said early AI deployments are already lifting customer spending by 10% to 30%, with broader rollouts potentially driving spending increases of more than 50% over the next few years. One large customer expects its Twilio AI budget to grow four- to fivefold by the end of fiscal 2026 as it expands globally, the note said.
While UBS flagged that AI-driven efficiency gains could eventually lead to headcount reductions in customer support roles beginning in 2026, it said overall demand for usage-based software remains healthy. Customers continue to favor pricing models tied to interactions rather than seat-based licenses, supporting Twilio’s core business.
UBS maintained its base-case assumption of 7.5% to 9% year-on-year revenue growth excluding application-to-person (A2P) messaging in fiscal 2026 and 2027, with an upside scenario of 10% to 11% growth if AI adoption accelerates. The bank said this could support more than 20% growth in free cash flow.
The analysts reiterated a “Buy” rating on Twilio with a 12-month price target of $150, based on a valuation of 15 times projected 2027 enterprise value to free cash flow, arguing that the premium is justified by stronger demand trends and lower long-term AI disruption risk compared with peers.