Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $1.56 billion | Up 20% reported, 16% organic |
| Non-GAAP income from operations | $326 million | Up 39% |
| Free cash flow | $370 million | Record |
| Non-GAAP gross profit | $768 million | Up 18% |
| Dollar-based net expansion rate | 114% | Not stated |
Guidance and outlook
- For Q4, we're initiating a revenue target of $1.595 billion to $1.605 billion.
- For Q4, we expect non-GAAP income from operations of $300 million to $310 million.
- We expect full year 2027 organic revenue growth of at least 10%.
- We expect 2027 non-GAAP income from operations of at least $1.35 billion.
- We also expect free cash flow of at least $1.35 billion for 2027.
How management sounded
Positive (+6 on our -10 to +10 scale). Management raised full-year guidance for organic revenue and operating income, citing strong go-to-market execution and early AI adoption. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Messaging Deceleration
Asked: Morgan Stanley asked about the drivers of the revenue beat and messaging deceleration.
Answer: Management noted that messaging decelerated modestly from 18% growth in Q2 to 17% in Q3 due to tougher comparisons with the previous year.
AI Voice Adoption
Asked: Wolfe Research asked about the tailwinds from consumer AI agents and the right to win in identity.
Answer: Management stated that voice AI is currently underpenetrated at about 1% of voice interactions, representing a significant long-term tailwind.
Identity Product Monetization
Asked: Jefferies asked about the monetization model for the new identity product.
Answer: The product is in private beta, but management expects it to be usage-based and provide a gross margin uplift similar to software products.
Voice Growth Drivers
Asked: JPMorgan asked for a breakdown of voice growth between volume and software add-ons.
Answer: Growth is balanced, with strong performance in software add-ons like branded calling and conversation intelligence alongside volume growth.
What to watch before the next call
- Adoption rates of voice AI and consumer agent technologies in regulated industries like financial services and healthcare.
- The general availability launch of the new identity offering expected next year.
- Performance of messaging revenue during the holiday shopping season in Q4.
