Shares of cloud communications platform Twilio rose sharply—gaining about 10% in after-hours trading—after the San Francisco-based company’s latest quarterly earnings topped Wall Street’s expectations on both the top and bottom lines. Twilio continues to show resilience amid economic uncertainty and a pivotal technological shift, positioning itself as a key beneficiary of the ongoing Artificial Intelligence build-out that is captivating investors and enterprise customers alike.

Speaking exclusively to CNBC’s “Closing Bell: Overtime” ahead of the company’s earnings call, CEO Khozema Shipchandler expressed confidence in Twilio’s strategy, the sustainability of its financial performance, and the promise of AI-led innovation—even as hyperscalers’ results stoke a sector-wide debate over the timing and scale of AI adoption.

Delivering in a Tumultuous Environment

Shipchandler acknowledged that, while Twilio is not entirely immune to macroeconomic turbulence—tariffs, tepid customer budgets, and shifting technology priorities continue to cast a long shadow across the software industry—the communications software provider demonstrated its relative strength and adaptability this quarter. “Despite some of the uncertainty, customers want certain outcomes,” Shipchandler said, underscoring a clear focus from clients on return on investment. “Just being at such a critical inflection point with communications, data, and AI, we have an opportunity to deliver that for them.”

Twilio’s latest financials reflect this optimism: the company posted accelerating revenue growth, healthy cash flow, and what Shipchandler described as “really strong profitability in a tough environment.” It is a notable performance, considering Twilio’s historical pattern of robust—but sometimes uneven—growth, and follows an industry-wide pattern in which enterprise tech vendors weather volatility more effectively when closely aligned with evolving customer priorities, such as cost efficiency and strategic digital transformation.

Cost Discipline Remains Center Stage

One lingering concern for investors heading into the call was Twilio’s guidance on adjusted earnings per share. The company’s projected range of $0.99 to $1 per share for the next quarter fell slightly short of Wall Street’s consensus of $1.04—raising questions about the underlying cost structure and spending discipline.

Shipchandler was quick to reassure. “Costs are in line more or less,” he said, noting that the company’s long-term operating framework is both “balanced” and underpinned by consistent operating leverage. “In any given quarter, you’ve always got some puts and takes… in this particular quarter, it just so happens to be timing around merit and our big customer conference.” Labor costs and investment in customer-facing events, he suggested, are the primary drivers behind the momentary deviation rather than a sign of broader cost escalation.

Moreover, Twilio’s headcount remains flat—no small feat amidst fierce competition for AI talent and escalating wage pressures in Silicon Valley—and the company plans to “continue to do the smart things to manage our cost position and overall opex,” according to the CEO.

AI: Still Early Days, But Building Momentum

With hyperscalers like Microsoft, Amazon, and Alphabet reporting sky-high AI infrastructure investments, the market has honed in on who will win the next stage of the AI revolution—and when those productivity gains will materialize for customers and vendors alike.

Shipchandler offered a realistic, if optimistic, perspective. “We’re still probably at batting practice at some level,” he told CNBC, describing the current moment as one defined more by experimentation than by maturity. “We’re seeing a lot of activity with respect to AI…a lot of customers building on our platform. But I think in terms of the real productivity benefits, it’s very, very early. A lot of that benefit is on the come.”

Even so, Twilio is already capturing tangible gains from AI. “We’ve deployed AI pretty successfully, especially as it relates to support and inside sales,” Shipchandler explained, highlighting a striking data point: Twilio now deflects 85% of its customer support tickets using AI tools, drastically reducing the need for human intervention and showcasing the technology’s transformative efficiency in a core operational area.

Serving Startups and Scaling AI Products

Twilio’s pace of AI-related innovation has not gone unnoticed. At the company’s recent Investor Day, executives described surging traction among startups launching new products and services with AI at their core. This trend, said Shipchandler, is accelerating.

“In the last quarter, we released a couple more products. One in particular that we’re very excited about is our conversation relay product,” Shipchandler revealed. The offering, which helps companies quickly deploy voice AI agents, is tailor-made for a rising generation of businesses eager to automate and humanize customer interactions.

“There are thousands of startups that are starting with voice AI capabilities. Our conversation relay product makes it really, really simple for you to be able to deploy voice AI agents,” he added. The emphasis is on accessibility and the naturalness of the human voice—a recognition that while technology may power the back-end, ease of use and intuitiveness continue to drive adoption at the front end.

Looking Ahead: Twilio’s Place in the Communications-AI Nexus

Twilio’s recent results and leadership signals capture a broader set of transformations sweeping across the technology sector. As enterprises seek to maintain customer intimacy in a digital age—navigating tariffs, macroeconomic uncertainty, and the rapid proliferation of AI—vendors like Twilio that can deliver tangible outcomes and reliable cost control stand to benefit.

The coming quarters will test Twilio’s ability to convert early AI adoption into repeatable, defensible business outcomes, and to scale its suite of AI-powered products beyond pilot programs. But, for now, as Shipchandler insists, the company remains confident in both its strategic direction and its capacity to thrive in a changing world. “The more natural, the more interactive we can make experiences for customers—and the more simple we can make it for them to deploy—makes us a really attractive partner to so many of our customers.”

Investors appear to agree, sending shares higher and underscoring faith in Twilio’s ability to deliver not only communications infrastructure, but the intelligence to shape the next chapter of digital customer engagement.