Core Insights - Bandwidth (BAND) reported revenue of $180.01 million for the quarter ended June 2025, reflecting a year-over-year increase of 3.7% [1] - The earnings per share (EPS) for the quarter was $0.38, up from $0.29 in the same quarter last year, indicating a significant improvement [1] - The reported revenue exceeded the Zacks Consensus Estimate of $178.68 million by 0.75%, while the EPS surpassed the consensus estimate of $0.32 by 18.75% [1] Financial Performance Metrics - The net retention rate for Bandwidth was reported at 112%, slightly below the average estimate of 115% from three analysts [4] - Revenue from messaging surcharges was $44.2 million, exceeding the average estimate of $42.43 million from four analysts [4] - Revenue from cloud communications was $135.9 million, which was slightly below the average estimate of $136.25 million from four analysts [4] Stock Performance - Over the past month, Bandwidth's shares have returned +2%, compared to a +3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Company Performance - Bandwidth (BAND) reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, and up from $0.29 per share a year ago, representing an earnings surprise of +18.75% [1] - The company posted revenues of $180.01 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.75% and increasing from $173.6 million year-over-year [2] - Over the last four quarters, Bandwidth has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.38 on revenues of $190.5 million, and for the current fiscal year, it is $1.53 on revenues of $750.4 million [7] - The company's earnings outlook and management's commentary on the earnings call will be crucial for assessing the sustainability of the stock's price movement [3][4] Industry Context - Bandwidth operates within the Zacks Communication - Infrastructure industry, which is currently ranked in the top 21% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The performance of Bandwidth's stock may be influenced by the overall industry trends, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Revenue for the second quarter of 2025 was $180 million, representing a 9% year-over-year increase, with adjusted EBITDA of $22 million, exceeding expectations [4][17] - Over the last twelve months, revenue grew by 15%, EBITDA by 36%, and free cash flow by 26% [5] - Non-GAAP gross profit reached $79 million, marking an 11% year-over-year increase, with non-GAAP gross margin improving to 58% [17][18] - Free cash flow was reported at $26 million, representing a 19% margin [18] Business Line Data and Key Metrics Changes - Cloud communications revenue was $136 million, an 8% year-over-year increase on a normalized basis [17] - Enterprise voice revenue grew by 29% year-over-year, driven by demand from existing customers and new migrations to the cloud [18] - Global voice plans, the largest customer category, saw a 7% revenue growth year-over-year, the highest growth rate since 2021 [18] - Programmable messaging achieved a normalized 7% year-over-year growth [18] Market Data and Key Metrics Changes - The net retention rate for the first quarter was 112%, with customer name retention above 99% [19] - Average annual revenue per customer reached a record of $230,000, or $216,000 when excluding political campaign revenue [19] Company Strategy and Development Direction - The company is focused on executing a clear strategy that prioritizes business execution, scaling global enterprise business, and accelerating AI voice innovation [15][21] - Bandwidth aims to be the essential platform for the AI voice revolution, integrating AI into customer experience call flows [6][12] - The company is expanding its customer base in regulated sectors, emphasizing compliance, security, and performance [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of 2025, projecting continued acceleration in growth and reaffirming full-year guidance [20][21] - The demand for mission-critical enterprise communications is described as durable, with AI integration expected to enhance customer experiences [5][16] - Management highlighted the importance of the Maestro platform in driving higher revenue per customer and deeper integration [12][16] Other Important Information - The company reported a strong performance in the first half of 2025, with record high non-GAAP gross margins, EBITDA, and operating cash flows [20][21] - The AI strategy is seen as a significant growth driver, with potential revenue generation from AI-powered calls expected to be three to four times that of standard voice calls [11][41] Q&A Session Summary Question: Outlook on AI use cases for customer support - Management affirmed that the AI use case thesis is manifesting, with Maestro being critical to enterprise wins, and expects second-half acceleration in growth [24][26] Question: Average revenue per customer growth drivers - Management noted that the adoption of Maestro services is contributing to the uptick in average revenue per customer [29][30] Question: Pace of integrations into the Maestro platform - Management indicated a standard adoption pattern, with customers starting with fixed platforms and gradually adding more services [36] Question: AI potential per call and realization - Management clarified that the potential for AI interactions to generate three to four times the revenue is being realized in real-time, driven by increased usage [40][41] Question: Messaging business performance and competitive differentiation - Management reported 7% growth in commercial messaging, focusing on large enterprises and profitability, while targeting messaging formats like RCS and RBM [47] Question: Global Voice Plan segment growth drivers - Management highlighted that the growth in Global Voice Plans was driven by new use cases and AI voice, with a significant increase in customer demand [52][54]

Financial Performance - Total revenue reached $758 million[12], with cloud communications revenue accounting for $552 million[12] - Cloud communications revenue experienced a year-over-year growth of 10%[12] - Adjusted EBITDA grew by 36% year-over-year, reaching $91 million[12] - Free cash flow increased by 26% year-over-year, totaling $57 million[12] Revenue Growth - Total revenue grew by 15% year-over-year[12] - 2Q25 total revenue growth was 9% year-over-year, normalized for campaign messaging revenue[19, 21] - 2Q25 cloud communications revenue growth was 8% year-over-year, normalized for campaign messaging revenue[19, 21] Customer Metrics - The company maintained strong customer loyalty, with a top 20 customer median tenure of 11 years[16] - Net Retention Rate was 112%[16, 38] - Average annual customer revenue increased by 16% year-over-year[38] Gross Margin and EBITDA - Non-GAAP gross margin expanded, reaching 59% in the first half of 2025[24] - 2Q25 Adjusted EBITDA grew by 17% year-over-year[28] - 2Q25 Adjusted EBITDA margin was 16%[28] Future Outlook - The company raised its full-year 2025 EBITDA guidance[42] - The company expects approximately 10% total revenue growth year-over-year for 2025, normalized for political campaign revenue[42, 43, 44, 46]

[Q2 2025 Earnings Release](index=1&type=section&id=Q2%202025%20Earnings%20Release) [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company surpassed Q2 2025 expectations, driven by core voice offerings and AI solution adoption - The company **exceeded top and bottom-line expectations for Q2 2025**, driven by momentum in its core voice offerings and disciplined execution[2](index=2&type=chunk)[4](index=4&type=chunk) - Enterprise adoption of **AI voice integrations is building momentum**, with the Maestro and AIBridge platforms being key drivers[2](index=2&type=chunk) - **Key customer wins** in banking, healthcare, and insurance underscore the platform's value for enhancing customer experience and resilience[13](index=13&type=chunk) Q2 2025 Financial Highlights ($ in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $180 | $174 | $354 | $345 | | Gross Margin | 40% | 37% | 40% | 38% | | Non-GAAP Gross Margin | 58% | 56% | 59% | 56% | | Net (Loss) Income | $(5) | $4 | $(9) | $(5) | | Adjusted EBITDA | $22 | $19 | $44 | $35 | | Net cash provided by operating activities | $32 | $24 | $29 | $27 | | Free cash flow | $26 | $18 | $12 | $14 | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) The company projects continued growth for Q3 and the full year 2025, with adjusted revenue growth of 9% to 11% - Full-year 2025 revenue guidance reflects **9% to 11% year-over-year growth** after adjusting for the cyclical decrease in political messaging revenue[10](index=10&type=chunk) Q3 & Full Year 2025 Guidance ($ in millions) | Metric | 3Q 2025 Guidance | Full Year 2025 Guidance | | :--- | :--- | :--- | | Revenue | $189 - $191 | $745 - $760 | | Adjusted EBITDA | $19 - $21 | $86 - $91 | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements in accordance with GAAP [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Revenue and gross profit increased in Q2 2025, though the company reported a net loss versus a net income in the prior-year period Key Income Statement Data (In thousands) | Line Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $180,013 | $173,602 | $354,254 | $344,635 | | Gross Profit | $71,664 | $64,829 | $143,176 | $130,313 | | Operating Loss | $(3,748) | $(6,074) | $(8,435) | $(16,490) | | Net (Loss) Income | $(4,931) | $4,055 | $(8,671) | $(5,178) | | Diluted Net (Loss) per Share | $(0.16) | $(0.17) | $(0.29) | $(0.19) | [Balance Sheets](index=6&type=section&id=Balance%20Sheets) Total assets and stockholders' equity increased as of June 30, 2025, while total liabilities and cash decreased Key Balance Sheet Data (In thousands) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $60,136 | $81,812 | | Total current assets | $176,413 | $187,812 | | Total assets | $1,022,482 | $989,166 | | Total current liabilities | $134,892 | $140,323 | | Total liabilities | $637,944 | $676,633 | | Total stockholders' equity | $384,538 | $312,533 | [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows) Cash from operations increased slightly for the six months ended June 30, 2025, but a net decrease in cash was recorded Cash Flow Summary - Six Months Ended June 30 (In thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,638 | $26,901 | | Net cash used in investing activities | $(22,067) | $(5,303) | | Net cash used in financing activities | $(29,067) | $(91,020) | | Net decrease in cash | $(21,839) | $(70,030) | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP measures to provide a clearer view of core operating performance [Non-GAAP Gross Profit and Non-GAAP Gross Margin](index=8&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Non-GAAP%20Gross%20Margin) Non-GAAP gross profit and margin both increased in Q2 2025 compared to the prior-year period Non-GAAP Gross Profit Reconciliation (In thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Profit (GAAP) | $71,664 | $64,829 | | Adjustments | $7,732 | $6,994 | | **Non-GAAP Gross Profit** | **$79,396** | **$71,823** | | **Non-GAAP Gross Margin %** | **58%** | **56%** | [Non-GAAP Net Income](index=9&type=section&id=Non-GAAP%20Net%20Income) Non-GAAP net income increased to $11.8 million in Q2 2025 from $8.7 million in the prior-year period Non-GAAP Net Income Reconciliation (In thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income (GAAP) | $(4,931) | $4,055 | | Stock-based compensation | $12,545 | $11,360 | | Amortization of acquired intangibles | $4,565 | $4,336 | | Other Adjustments | $(1,349) | $(11,053) | | **Non-GAAP Net Income** | **$11,830** | **$8,719** | [Adjusted EBITDA](index=10&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased to $21.9 million in Q2 2025, up from $18.7 million in the prior-year quarter Adjusted EBITDA Reconciliation (In thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income (GAAP) | $(4,931) | $4,055 | | Adjustments (Taxes, Interest, D&A, SBC, etc.) | $26,821 | $14,686 | | **Adjusted EBITDA** | **$21,890** | **$18,741** | [Free Cash Flow](index=10&type=section&id=Free%20Cash%20Flow) Free cash flow increased significantly year-over-year for Q2 2025 but decreased for the six-month period Free Cash Flow Reconciliation (In thousands) | Line Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $31,721 | $24,436 | $28,638 | $26,901 | | Net cash used in investing in capital assets | $(6,090) | $(6,116) | $(16,302) | $(12,988) | | **Free Cash Flow** | **$25,631** | **$18,320** | **$12,336** | **$13,913** | [About the Company & Disclosures](index=3&type=section&id=About%20the%20Company%20%26%20Disclosures) This section provides a corporate overview, forward-looking statements, and an explanation of non-GAAP measures - Bandwidth is a **global CPaaS provider** with a Communications Cloud covering over 65 countries[15](index=15&type=chunk) - The report contains **forward-looking statements** subject to various risks and uncertainties[16](index=16&type=chunk) - The company uses **non-GAAP financial measures** to supplement GAAP statements and aid in period-to-period comparisons[17](index=17&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk)

Core Viewpoint - Bandwidth Inc. announced its financial results for the second quarter ended June 30, 2025, highlighting its position as a leading global enterprise cloud communications company [1]. Financial Results - The financial results for the second quarter were disclosed, with a live webcast scheduled for discussion at 8:00 AM Eastern Time on July 29, 2025 [2][3]. Company Overview - Bandwidth Inc. is a global cloud communications software company that provides voice calling, text messaging, and emergency services, covering over 65 countries and more than 90 percent of global GDP [4]. - The company is recognized as a pioneer in the cloud communications sector, being the first and only global Communications Platform-as-a-Service (CPaaS) to offer a unique combination of composable APIs, AI capabilities, and an owner-operated network [4]. - Bandwidth's solutions are trusted by major players in unified communications and cloud contact centers, including Amazon Web Services, Cisco, Google, Microsoft, and others, as well as Global 2000 enterprises and SaaS builders [4].

Core Insights - The India Communication Platform as a Service (CPaaS) market is projected to grow from USD 1.03 Billion in 2025 to USD 3.43 Billion by 2031, with a compound annual growth rate (CAGR) of 22.20% [1][16]. Market Drivers - The surge in demand for CPaaS in India is driven by the digitization of various sectors such as retail, healthcare, BFSI, and e-commerce, alongside increased smartphone penetration and internet accessibility [2]. - Digital transformation across Indian enterprises is significantly boosting CPaaS adoption, with organizations integrating real-time communication capabilities to enhance service quality [4]. - Supportive government initiatives like Digital India and the expansion of digital payment systems have further increased the demand for cloud-based communication tools [5]. Market Challenges - The expansion of CPaaS services has raised concerns regarding data privacy and regulatory compliance, particularly with the implementation of the Digital Personal Data Protection Act, 2023 [6][7]. - Ambiguities in regulations concerning data localization and cross-border transfer complicate the operational landscape for CPaaS providers [8]. Market Trends - The integration of artificial intelligence in CPaaS is a key trend, enabling intelligent and conversational interactions through tools like chatbots and voice assistants [9]. - AI-driven communication enhances service consistency and response times in high-volume environments such as retail and banking, while advancements in natural language processing improve accessibility [10]. Key Players - Notable companies in the India CPaaS market include Twilio Inc., Infobip Ltd., Bandwidth Inc., Plivo Inc., Kaleyra Inc., Route Mobile Ltd., Sinch AB, and 8x8, Inc. [14].

Core Insights - Bandwidth Inc. hosted a roundtable in London with European enterprise leaders to address the challenge of securing trust in AI-powered communications [1][4] - The event focused on compliance, fraud prevention, AI readiness, and regulatory uncertainty, highlighting the need for collaboration among industry leaders [3][4] Group 1: Event Overview - The roundtable was part of a series of customer insight sessions aimed at discussing industry pain points and developing new strategies [4] - Bandwidth's Chief Product Officer, John Bell, led the session and introduced the company's Trust Services strategy to combat communications fraud [4][5] Group 2: Industry Challenges - Participants shared concerns about various fraud schemes and the complexities of regulatory frameworks that hinder effective remediation [5] - Bandwidth presented its Trust Solutions framework, which includes onboarding, traffic management, anomaly detection, and remediation processes [5] Group 3: Customer Engagement - Customers expressed appreciation for Bandwidth's proactive approach in shaping public policies to enhance regulations while addressing communications fraud [6] - Feedback from the roundtable will inform Bandwidth's Trust Services API strategy and public policy objectives [6] Group 4: Company Background - Bandwidth is a global cloud communications software company that provides voice calling, text messaging, and emergency services across 65+ countries [8] - The company is recognized for its unique combination of composable APIs, AI capabilities, and extensive regulatory experience, serving major enterprises and SaaS builders [8]

Core Viewpoint - Bandwidth Inc. is set to report its financial results for the second quarter of 2025 on July 29, 2025, before market opening [1]. Company Overview - Bandwidth Inc. is a global cloud communications software company that provides voice calling, text messaging, and emergency services to enterprises [4]. - The company operates in over 65 countries and covers more than 90 percent of global GDP, serving major clients such as Amazon Web Services, Cisco, Google, Microsoft, and others [4]. - Bandwidth is recognized as a pioneer in the cloud communications sector, being the first global Communications Platform-as-a-Service (CPaaS) provider to offer a combination of composable APIs, AI capabilities, and an owner-operated network [4].

Core Insights - Pennymac, a leading U.S. mortgage lender, has achieved over 50% annual telecom savings and significantly accelerated loan processing times by migrating to Bandwidth's cloud communication platform [1][3][4] Group 1: Cost Efficiency - The migration to Bandwidth's platform has resulted in more than 50% annual telecom savings for Pennymac [1][3] - The partnership has improved business-critical performance metrics, including a faster time to close for each loan [4][7] Group 2: Customer Experience - Pennymac's customer service communication is now faster and more agile, with automation expediting underwriting and shortening loan finalization times [5] - New conveniences for customers include 24/7 payment options through an automated contact center, enhancing overall customer experience [5] Group 3: Compliance and Risk Management - Pennymac leverages its new cloud communications systems to support compliance and mitigate risk, automating critical TCPA compliance checks for outbound calls [6] - The system ensures calls are not made to individuals on the National Do Not Call Registry or outside reasonable hours, enhancing regulatory compliance [6] Group 4: Technological Advancements - The use of Bandwidth's platform has provided Pennymac with advanced capabilities such as sophisticated call routing, conversational AI, and pre-built integrations with leading marketplace technologies [4][7] - The ability to tap into rich metadata from IP voice calls has allowed for enhanced performance analysis [4]