Microsoft vs Twilio: Revenue, Profit and Business Model
Microsoft reported $331.8B of revenue in FY2026 and $133.7B of net income. Twilio reported $5.1B of revenue in FY2025 and $33.8M of net income.
Latest financial snapshot
Financial summary
Microsoft
Microsoft's FY2026 revenue rose 17.8% to $331.8 billion, operating income rose 21% to $155.2 billion, and GAAP net income rose 31% to $133.7 billion. Fourth-quarter revenue was $90.0 billion (up 18%) with net income of $35.8 billion, helped by a $3.2 billion gain on its Anthropic investment. Microsoft Cloud revenue reached $59.3 billion in Q4, up 27%. The main pressure point is capital intensity: AI data center spending has pushed free cash flow growth well below earnings growth.
Twilio
Twilio moved from heavy losses to profit in three years. Net loss attributable to common stockholders was $1.256 billion in 2022 and $1.015 billion in 2023, narrowed to $109.4 million in 2024, and turned into net income of $33.8 million in 2025 on revenue of $5.067 billion. In Q2 2026 Twilio reported revenue of $1.499 billion, GAAP income from operations of $84.5 million, non-GAAP income from operations of $284.6 million, and record free cash flow of $352.6 million. Q2 2026 GAAP net income of $1.067 billion was inflated by a one-time, non-cash release of a valuation allowance on U.S. deferred tax assets worth $5.91 per diluted share. Dollar-based net expansion improved to 116% from 108% a year earlier. A $2.0 billion buyback authorized in January 2025 continues the capital-return program that followed a $3.0 billion repurchase plan.
Revenue and profit by year
Microsoft
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $331.8B | $133.7B | 40.3% | +17.8% | Source |
| FY2025 | $281.7B | $101.8B | 36.1% | +14.9% | Source |
| FY2024 | $245.1B | $88.1B | 36.0% | +15.7% | Source |
| FY2023 | $211.9B | $72.4B | 34.1% | +6.9% | Source |
| FY2022 | $198.3B | $72.7B | 36.7% | +18.0% | Source |
| FY2021 | $168.1B | $61.3B | 36.5% | +17.5% | Source |
| FY2020 | $143B | $44.3B | 31.0% | +13.6% | Source |
| FY2019 | $125.8B | $39.2B | 31.2% | +14.0% | Source |
| FY2018 | $110.4B | $16.6B | 15.0% | +14.3% | Source |
| FY2017 | $96.6B | $25.5B | 26.4% | — | Source |
Twilio
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $5.1B | $33.8M | 0.7% | +13.7% | Source |
| FY2024 | $4.5B | -$109.4M | -2.5% | +7.3% | Source |
| FY2023 | $4.2B | -$1B | -24.4% | +8.6% | Source |
| FY2022 | $3.8B | -$1.3B | -32.8% | +34.6% | Source |
| FY2021 | $2.8B | -$949.9M | -33.4% | +61.3% | Source |
| FY2020 | $1.8B | -$491M | -27.9% | +55.3% | Source |
| FY2019 | $1.1B | -$307.1M | -27.1% | +74.5% | Source |
| FY2018 | $650.1M | -$121.9M | -18.8% | +62.9% | Source |
| FY2017 | $399M | -$63.7M | -16.0% | +43.9% | Source |
| FY2016 | $277.3M | -$41.3M | -14.9% | — | Source |
Where the revenue comes from
Microsoft
- Productivity And Business ProcessesMajor
Office, Microsoft 365, LinkedIn, Dynamics, and related cloud services.
- Intelligent CloudMajor
Azure, server products, enterprise services, and cloud infrastructure.
- More Personal ComputingMajor
Windows, devices, gaming, search, and advertising.
- AI Services And CopilotsGrowth
AI features and model-powered services embedded across Azure, Microsoft 365, GitHub, security, and developer tools.
Twilio
- Core Communications (Messaging, Voice, Video)
Majority of revenue
High-volume, usage-based revenue from programmable messaging, voice, email, verification, and contact-center APIs. Messaging generated $2.878 billion in FY2025, while voice, email, Verify, Flex, and related products diversify Twilio beyond raw SMS routing.
- Customer Data and Engagement (Segment, CustomerAI)
Not separately disclosed
Subscription and consumption-hybrid revenue from Segment, CustomerAI, data activation, and engagement workflows. Twilio does not break this stream out as a standalone FY2025 revenue total in the headline financial profile.
- Email and Other (SendGrid, Verify, Flex)
Not separately disclosed
Revenue from SendGrid email, Verify, Flex, and adjacent engagement products that complement the core communications API platform.
Business model and strategy
Microsoft
How it makes money
Microsoft reports three segments. Intelligent Cloud covers Azure, SQL Server, Windows Server, GitHub, Nuance, and enterprise services; server products and cloud services alone brought in $129.4 billion in FY2026, and Azure passed $100 billion in annual revenue for the first time.
Growth strategy
Microsoft's growth plan centers on AI capacity and AI subscriptions. It is spending heavily on data centers and chips to meet Azure demand that management says remains capacity constrained, and it is selling Microsoft 365 Copilot as a paid add-on, which passed 30 million paid seats by the end of FY2026.
Competitive advantage
Microsoft's main advantage is distribution inside enterprises. Identity (Entra), email and documents (Microsoft 365), collaboration (Teams), developer tools (GitHub, Visual Studio), and cloud infrastructure (Azure) are often bought together, which raises switching costs and lets Microsoft attach new products such as Copilot to existing contracts.
Twilio
How it makes money
Twilio makes most of its money from usage-based fees: customers pay per message, per voice minute, per email, or per verification sent through its APIs, so revenue rises with their traffic. Messaging alone generated $2.878 billion of FY2025 revenue.
Growth strategy
Twilio is positioning itself as communications and identity infrastructure for AI agents. Its plan combines usage growth in messaging and voice, cross-selling Segment customer data, Flex, and Verify to existing accounts, adding agent identity through the November 2025 Stytch acquisition, and keeping operating costs in check while returning cash through buybacks.
Competitive advantage
Twilio's advantage comes from developer mindshare, API breadth, carrier relationships, global routing, customer integrations, data products, and mission-critical communications workflows.
Questions about Microsoft vs Twilio
Which company has higher revenue — Microsoft Corporation or Twilio Inc.?
Microsoft Corporation reported $331.8B (FY2026), while Twilio Inc. reported $5.1B (FY2025). By last reported revenue, Microsoft Corporation is the larger business, with Twilio Inc. reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Microsoft Corporation vs Twilio Inc.?
Microsoft Corporation's market capitalisation stands at $3.83T, while Twilio Inc.'s is $37.8B. Microsoft Corporation carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Twilio Inc..
Which is more financially efficient — Microsoft Corporation or Twilio Inc.?
Microsoft Corporation generates $1.49M / employee in revenue per employee, while Twilio Inc. generates $923k / employee. Microsoft Corporation shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Microsoft Corporation and Twilio Inc. make money?
Microsoft Corporation and Twilio Inc. generate revenue in fundamentally different ways. Microsoft Corporation: Microsoft reports three segments. Twilio Inc.: Twilio makes most of its money from usage-based fees: customers pay per message, per voice minute, per email, or per verification sent through its APIs, so revenue rises with their traffic.
Which company is valued higher relative to revenue — Microsoft Corporation or Twilio Inc.?
On a price-to-sales (P/S) basis, Microsoft Corporation trades at 11.5x P/S and Twilio Inc. at 7.5x P/S. Microsoft Corporation commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Twilio Inc.. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Microsoft Corporation bigger than Twilio Inc.?
By last reported revenue, Microsoft Corporation ($331.8B (FY2026)) is the larger company compared to Twilio Inc. ($5.1B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Microsoft vs Twilio overview