Twilio Expands RCS With Orange: Will Secure Messaging Drive Growth?

Twilio TWLO is taking another step toward transforming business messaging through its new partnership with Orange to scale Rich Communication Services (RCS) across France. This move could help Twilio strengthen its presence in Europe while meeting growing demand for more secure, interactive and engaging messaging experiences.RCS is seen as the natural evolution of SMS, offering businesses features like branded messages, images, carousels, actionable buttons and verified sender identity. In France, RCS messaging now covers more than 70% of smartphones, and projections indicate this will climb to 85% coverage by the end of 2025.This growth opens significant market potential for Twilio. According to the company's own research, 81% of consumers prefer RCS over SMS, and 75% of businesses plan to invest in it this year.As demand for cloud communication services continues to grow, security remains at the forefront of enterprise priorities. Twilio's RCS addresses this by enabling verified, branded communication that builds consumer confidence.As more companies look to stand out in crowded digital channels, secure and trusted messaging could become a key growth driver for Twilio's communications platform. In the first quarter of 2025, the communication segment delivered $1.10 billion in revenues, reflecting a 13% year-over-year increase. Messaging remains the largest revenue contributor to this growth, supported by rising adoption across key international markets such as Europe, Latin America and Asia-Pacific.
Twilio faces formidable competition from Bandwidth Inc. BAND, a CPaaS provider distinguished by its ownership of a Tier 1 global network. Bandwidth's diversified client base, spanning telecom operators to tech giants like Microsoft, Google and Cisco, reflects its strong developer trust and platform flexibility. Bandwidth's ability to embed voice, messaging, and 911 services directly into applications makes it a strategic choice for embedded communications, boosting its revenue potential.RingCentral, Inc. RNG challenges Twilio with a full-stack UCaaS platform offering integrated voice, video, messaging and contact center capabilities. RingCentral's subscription model ensures steady cash flow, while its recent AI innovations, like AI Receptionist and RingSense, position RingCentral as a leader in intelligent enterprise communications.
Shares of Twilio have returned 7.9% year to date compared with the Zacks Internet – Software industry's growth of 12.9%.
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From a valuation standpoint, TWLO trades at a forward price-to-sales ratio of 3.58, significantly below the industry's average of 5.67. The company carries a Value Score of F.
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The Zacks Consensus Estimate for Twilio's 2025 earnings is pegged at $4.49 per share, revised downward by a cent over the past 30 days. The estimated earnings figure suggests year-over-year growth of 22.34%.
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Twilio currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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