Company Performance - Bandwidth reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and up from $0.19 per share a year ago, representing an earnings surprise of 58.33% [1] - The company achieved revenues of $165.39 million for the quarter ended December 2023, surpassing the Zacks Consensus Estimate by 7.32%, compared to $156.97 million in the same quarter last year [1] - Bandwidth has consistently surpassed consensus EPS estimates over the last four quarters [1] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $153.29 million, and for the current fiscal year, it is $1.40 on revenues of $669.95 million [4] - The estimate revisions trend for Bandwidth is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [4] Industry Context - The Communication - Infrastructure industry, to which Bandwidth belongs, is currently ranked in the top 13% of over 250 Zacks industries, suggesting a strong industry outlook [5] - DZS Inc., another company in the same industry, is expected to report quarterly earnings of $0.43 per share, reflecting a year-over-year increase of 530%, although its consensus EPS estimate has been revised 100% lower in the last 30 days [5]

Financial Performance - Bandwidth achieved 39% profitability growth in 2023, with net operating cash flow of $39 million and record Free Cash Flow[1][6] - Revenue for Q4 2023 was $165 million, up from $157 million in Q4 2022, while full year revenue reached $601 million compared to $573 million in 2022[5][6] - Gross margin for Q4 2023 was 38%, down from 41% in Q4 2022, and full year gross margin was 39%, compared to 42% in 2022[5][6] - Adjusted EBITDA for Q4 2023 was $19 million, significantly up from $8 million in Q4 2022, with full year adjusted EBITDA at $48 million compared to $35 million in 2022[5][6] - Bandwidth expects 16% revenue growth and 50% profitability growth in 2024, with guidance for Q1 2024 revenue between $164 million and $166 million[1][9] - The company reported a record Free Cash Flow generation of $31 million in the second half of 2023[6] - Revenue for the three months ended December 31, 2023, was $165,386 thousand, an increase from $156,974 thousand for the same period in 2022, representing a growth of 8.9%[25] - Operating loss for the three months ended December 31, 2023, was $(10,035) thousand, compared to $(7,017) thousand for the same period in 2022, reflecting a deterioration of 42.9%[25] - Net loss for the year ended December 31, 2023, was $(16,343) thousand, compared to a net income of $19,570 thousand in 2022, marking a significant decline[25] - Free Cash Flow for Q4 2023 was $13,040,000, a significant improvement from a negative $14,060,000 in Q4 2022[39] - Adjusted EBITDA for Q4 2023 was $18,785,000, compared to $8,344,000 in Q4 2022, indicating a year-over-year increase of 125.5%[38] Assets and Liabilities - Total current assets as of December 31, 2023, were $252,775 thousand, down from $279,608 thousand as of December 31, 2022, a decrease of 9.6%[27] - Total assets increased to $1,101,048 thousand as of December 31, 2023, from $929,318 thousand as of December 31, 2022, representing a growth of 18.5%[27] - Total liabilities as of December 31, 2023, were $803,658 thousand, an increase from $657,141 thousand as of December 31, 2022, reflecting a rise of 22.2%[27] Research and Development - Research and development expenses for the year ended December 31, 2023, were $104,188 thousand, up from $97,990 thousand in 2022, indicating an increase of 6.3%[25] Stock-Based Compensation - Stock-based compensation expense for the three months ended December 31, 2023, was $14,667 thousand, compared to $5,596 thousand for the same period in 2022, a significant increase of 162.5%[26] - The company incurred stock-based compensation of $14,667,000 in Q4 2023, up from $5,596,000 in Q4 2022[38] Market Position and Strategy - Bandwidth secured significant contracts, including a large infrastructure-as-a-service provider and a premier health technology firm, enhancing its market position[7] - The company is focused on strong growth in commercial messaging and enterprise business, aiming for double-digit revenue growth in 2024[6][8] - Bandwidth's adjusted EBITDA midpoint for 2024 is projected at $72 million, representing a 50% increase in profitability[6][8] - The company is committed to innovation in cloud communications, leveraging its global platform and software APIs to drive future growth[3][6] Tax and Shares - The estimated Non-GAAP effective income tax rate for the year ended December 31, 2023, was 10.1%, compared to 7.0% in 2022[37] - The weighted average number of diluted shares outstanding for Q4 2023 was 29,158,858, down from 30,536,481 in Q4 2022[36]

Core Viewpoint - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their growth potential does not justify high valuations [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [2] Group 2: Bandwidth (BAND) Stock Analysis - Bandwidth (BAND) has shown a four-week price change of 0.4%, indicating growing investor interest [2] - Over the past 12 weeks, BAND's stock price has increased by 19.3%, demonstrating its ability to deliver positive returns over a longer timeframe [3] - BAND has a beta of 1.42, suggesting it moves 42% more than the market in either direction, indicating fast-paced momentum [3] Group 3: Earnings Estimates and Valuation - BAND has a Momentum Score of B and a Zacks Rank 2 (Buy), supported by upward revisions in earnings estimates, which attract more investors [4] - The stock is currently trading at a Price-to-Sales ratio of 0.59, indicating it is undervalued as investors pay only 59 cents for each dollar of sales [4] Group 4: Additional Investment Opportunities - Besides BAND, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [5] - The Zacks Premium Screens offer over 45 strategies to help identify potential winning stocks based on individual investing styles [5]

Financial Data and Key Metrics Changes - Q3 2023 revenue reached $152 million, a 5% increase year-over-year when excluding surcharges and the impact of $7 million from political campaign messaging in 2022 [13] - Adjusted EBITDA for Q3 was $14 million, with a cash and securities balance of $139 million, providing significant financial flexibility [18] - Free cash flow accelerated to a record $18 million in Q3, indicating strong cash flow potential [19] Business Line Data and Key Metrics Changes - Commercial messaging revenue grew 51% year-over-year, driven by e-commerce conversational marketing and financial services [13][14] - Revenue from programmable services increased by 47% year-over-year, excluding prior year's political campaign messaging revenue [14] - Direct to enterprise revenue grew 19% year-over-year, supported by new customer additions and growth with existing customers [15] Market Data and Key Metrics Changes - Total messaging revenue represented 17% of total revenue excluding carrier surcharges, with pass-through carrier surcharges at $32 million in Q3 compared to $27 million last year [14] - Average annual revenue per customer reached $177,000 in Q3, reflecting success in serving large customer opportunities [16] Company Strategy and Development Direction - The company focuses on three customer categories: global communications plans, programmable services, and direct to enterprise, each showing solid customer wins [8] - The Maestro software platform is a key strategic initiative, aimed at streamlining global communications and reducing IT development time [7] - The company aims to achieve greater than 60% gross margins by 2026 through the addition of enterprise customers and a favorable product mix [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a choppy macroeconomic environment and expects usage trends to continue positively into Q4 and 2024 [24] - The digital transformation and movement to the cloud are ongoing, with significant activity in the contact center space [26] - The company anticipates strong growth drivers from both commercial messaging and campaign messaging in 2024 [20] Other Important Information - The company was recognized as a Best Place to Work in Raleigh, North Carolina, highlighting its unique culture [12] - Management reiterated confidence in achieving 2026 medium-term targets, including revenue CAGR of 15% to 20% and free cash flow margins greater than 15% [21] Q&A Session Summary Question: How did usage volumes trend throughout Q3? - Management noted that usage trends supported results for the period and are expected to continue positively into Q4 [24] Question: How are enterprise customers thinking about usage and budgets for 2024? - Management indicated varied responses across sectors, with ongoing digital transformation driving activity in the contact center space [26] Question: Where is initial traction with Maestro, and what is the priority for integrations? - Management reported six customers on the Maestro platform since its launch, with broad appeal across various sectors [28] Question: What is the durability of commercial messaging growth? - Management expressed confidence in the durability of commercial messaging, citing high open rates and customer support as key factors [33] Question: Are there any verticals performing better or worse given the macro backdrop? - Management did not identify specific verticals under pressure but noted overall healthy usage trends [35]

Bandwidth 3Q23 Earnings Results Legal Disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical fa ...

Financial Performance - Total revenue for the three months ended September 30, 2023, was $152 million, a 2% increase from $148 million in the same period of 2022[142]. - Net loss for the three months ended September 30, 2023, was $5 million, compared to a net loss of $1 million in the same period of 2022[142]. - Total revenue for the three months ended September 30, 2023, increased by $4 million, or 2%, compared to the same period in 2022, driven by stronger growth in commercial messaging[167]. - For the nine months ended September 30, 2023, total revenue increased by $20 million, or 5%, compared to the same period in 2022[180]. - Gross profit for Q3 2023 was $59,499,000, down from $63,464,000 in Q3 2022, representing a decrease of 4.9%[212]. - Non-GAAP gross profit for Q3 2023 was $65,696,000, compared to $68,791,000 in Q3 2022, a decline of 3.1%[212]. - Non-GAAP gross margin for Q3 2023 was 55%, down from 57% in Q3 2022[212]. - Net loss for Q3 2023 was $(5,130,000), compared to a net loss of $(802,000) in Q3 2022[215]. - Non-GAAP net income for Q3 2023 was $6,347,000, compared to $7,998,000 in Q3 2022, a decrease of 20.7%[215]. - Adjusted EBITDA for Q3 2023 was $13,758,000, up from $12,784,000 in Q3 2022, an increase of 7.6%[218]. Revenue Sources and Retention - 78% of revenue for the three months ended September 30, 2023, was derived from recurring sources, compared to 79% in the same period of 2022[151]. - The dollar-based net retention rate for the three months ended September 30, 2023, was 104%, down from 109% in the same period of 2022[148]. Expenses and Margins - Cost of revenue for the same period increased by $7.7 million, or 9%, resulting in a gross profit of $59 million, a decrease of $4 million from the prior year[168]. - The total gross margin percentage declined to 39% for the three months ended September 30, 2023, down from 43% in the same period of 2022[169]. - Total operating expenses for the three months ended September 30, 2023, were $65.6 million, an increase of $0.8 million, or 1%, compared to the same period in 2022[170]. - Research and development expenses decreased by $0.3 million, or 1%, while sales and marketing expenses increased by $2 million, or 8%[171]. - For the nine months ended September 30, 2023, total cost of revenue increased by $19.7 million, or 8%, to $261.6 million compared to $241.9 million in the same period of 2022[181]. - Gross profit for the same period was $174.1 million, a slight decrease of less than $1 million from $174.3 million in 2022, resulting in a total gross margin of 40%, down from 42%[182]. - Research and development expenses rose by $3.6 million, or 5%, to $75.3 million, primarily due to higher facilities and IT expenses[183]. - Sales and marketing expenses increased by $6.1 million, or 9%, to $75.8 million, mainly driven by higher sales personnel costs[185]. - Total operating expenses for the nine months ended September 30, 2023, were $199.5 million, an increase of $7.9 million, or 4%, compared to $191.6 million in 2022[183]. Cash Flow and Financing - Net cash provided by operating activities was $19.7 million for the nine months ended September 30, 2023, down from $24.3 million in the same period of 2022[199]. - Net cash provided by investing activities was $26.9 million, primarily from the sales and maturities of marketable securities[202]. - Net cash used in financing activities was $52.7 million, mainly due to the repurchase of $65 million aggregate principal amount of the 2026 Convertible Notes[205]. - As of September 30, 2023, the company had cash and cash equivalents of $107.4 million and marketable securities of $31.7 million[191]. - Net cash provided by operating activities for the three months ended September 30, 2023, was $23,001 thousand, a decrease of 4.22% from $24,016 thousand for the same period in 2022[220]. - Free cash flow for the three months ended September 30, 2023, was $18,190 thousand, an increase of 35.67% compared to $13,492 thousand for the same period in 2022[220]. - As of September 30, 2023, the company had cash and cash equivalents of $107 million and marketable securities of $32 million[226]. - The company entered into a $50 million Credit Facility on August 1, 2023, with interest rates tied to a base rate or SOFR[228]. - As of September 30, 2023, the company had $175 million and $250 million outstanding from its 2026 and 2028 Convertible Notes, respectively[229]. - There were no outstanding borrowings under the Credit Facility as of September 30, 2023[228]. - The company has not experienced significant fluctuations in interest income due to the short-term nature of its investments[227]. Taxation - The effective tax rate for the three months ended September 30, 2023, was 4.1%, a significant decrease from 53.5% in the same period of 2022[160]. - The effective tax rate for the three months ended September 30, 2023, was 4.1%, significantly lower than 53.5% in 2022, primarily due to increased operating losses in the U.S.[175]. - The effective tax rate for the nine months ended September 30, 2023, was 37.1%, significantly higher than 7.7% in 2022, primarily due to increased operating losses outside the U.S.[187]. - The company recognized an income tax benefit of less than $1 million for the three months ended September 30, 2023, a decrease from the prior year[174]. - The Non-GAAP effective income tax rate for the nine months ended September 30, 2023, was 11.0%, down from 18.6% in the same period of 2022[215]. Legal Matters - The company is involved in multiple lawsuits regarding the failure to bill, collect, and remit certain taxes and surcharges associated with 911 services[238]. - Lawsuits have been filed by jurisdictions including San Francisco, Cook and Kane Counties, and the State of New York, alleging tax-related failures[238]. - The company intends to vigorously defend against these lawsuits, believing it has meritorious defenses[239]. - Future litigation may arise related to number management and intellectual property rights, which could impact the company's resources and operations[239]. Internal Controls - No changes in internal control over financial reporting were identified during the quarter ended September 30, 2023, that materially affected internal controls[234]. - The company is subject to inherent limitations in the effectiveness of internal control over financial reporting, which may not provide absolute assurances[235].

Financial Data and Key Metrics Changes - In Q2 2023, the company reported revenue of $146 million, exceeding the midpoint of guidance by $5 million [20] - Adjusted EBITDA for the quarter was $11 million, surpassing the midpoint of guidance by $6 million [20] - Year-over-year, messaging usage increased by 11%, while monthly recurring charges for phone numbers and emergency services rose by 8% [20][21] - Non-GAAP gross margin improved to 55%, up two percentage points from the previous year [22] - The company ended the quarter with a cash and securities balance of $123 million, providing significant financial flexibility [23] Business Line Data and Key Metrics Changes - Global Communications plans revenue remained essentially unchanged year-over-year due to macroeconomic conditions [21] - Programmable services and direct-to-enterprise customer categories grew by 15% and 21% year-over-year, respectively [21] - The messaging segment represented 17% of total revenue, excluding surcharges [20] Market Data and Key Metrics Changes - The company noted a strong demand for commercial messaging across various sectors, including healthcare, retail, and fintech [21] - The enterprise customer segment is seeing a significant migration to cloud communications, with 75% of global enterprises planning to migrate [15][21] Company Strategy and Development Direction - The company aims to build sustainable leadership with a focus on medium and long-term targets, having been recognized as a leader in the CPaaS market for the third consecutive time by IDC [9] - The strategy includes leveraging a global owned and operated network and deep regulatory experience to capture growth in large markets [9] - The introduction of the Maestro platform is intended to facilitate cloud migration for enterprises and enhance customer engagement [15][16] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains uncertain, with customers being cautious in their investment decisions [8] - The company has raised its revenue outlook for the year, projecting a 30% growth in profitability [8][24] - Management expressed confidence in achieving financial targets for 2023 despite the challenging environment [8][24] Other Important Information - The company received $4 million in proceeds from insurance related to a prior cyber incident [23] - A new undrawn $50 million revolving credit facility was established to enhance working capital [23] Q&A Session Summary Question: How do you see the macro outlook impacting results in the second half? - Management indicated that the macro environment remains cautious, with customers making intelligent decisions [28] Question: What triggers customers to evaluate Maestro? - The complexity in contact center environments is a key factor driving interest in Maestro [34] Question: What were the sources of revenue upside in the quarter? - Revenue exceeded guidance due to strong performance in messaging and monthly recurring charges [38] Question: What is the company's exposure to 2-factor authentication? - The company has no exposure to 2-factor authentication, which is not a concern [42] Question: How is the customer count trend affecting margins? - The focus is on profitability potential rather than customer count, with an increase in average revenue per customer [44] Question: What is the company's cash flow generation outlook? - The company has sufficient cash and is monitoring the convertible debt market for potential repurchases [47] Question: How does the Cisco relationship enhance the go-to-market strategy? - The Cisco partnership allows for a smoother transition for customers moving from premise-based solutions to the cloud [56] Question: How are conversations with CIOs evolving regarding spend consolidation? - CIOs are increasingly looking to consolidate their communications needs with trusted partners like the company [64]

Bandwidth Announces Second Quarter 2023 Financial Results NEWS PROVIDED BY Bandwidth Inc.  02 Aug, 2023, 16:02 ET Second quarter revenue and protability exceeded guidance ranges Messaging revenue up 11% year-over-year RALEIGH, N.C., Aug. 2, 2023 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND), a leading global enterprise cloud communications company, today announced nancial results for the second quarter ended June 30, 2023. "I am pleased with our business performance and nancial results in the second qua ...

Financial Performance - Total revenue for the three months ended June 30, 2023, was $146 million, a 7% increase from $136 million in the same period of 2022[149]. - Net loss for the three months ended June 30, 2023, was $4 million, improved from a net loss of $6 million in the same period of 2022[149]. - Total revenue for the three months ended June 30, 2023, increased by $9 million, or 7%, compared to the same period in 2022, driven by higher usage of core messaging offerings[170]. - For the six months ended June 30, 2023, total revenue increased by $15.865 million, or 6%, compared to the same period in 2022[183]. - The company reported a net cash decrease of $22.6 million for the six months ended June 30, 2023, compared to a decrease of $166.1 million in the same period of 2022[202]. - Non-GAAP gross profit for the six months ended June 30, 2023, was $126.6 million, representing an increase from $121.7 million in the same period of 2022[215]. - Non-GAAP net income for Q2 2023 was $4.4 million, compared to a loss of $0.9 million in Q2 2022, indicating a significant improvement[219]. - The company reported a net loss of $3.89 million for the three months ended June 30, 2023, an improvement from a net loss of $6.25 million in the same period last year[219]. Revenue Sources - 77% of total revenue for the three months ended June 30, 2023, was derived from recurring sources, consistent with the previous year[157]. - Unbilled revenue accounted for 52% of outstanding accounts receivable as of June 30, 2023, compared to 47% in the same period of 2022[158]. - Approximately 15% of total revenue was generated outside North America for the six months ended June 30, 2023[235]. Operating Expenses - Operating expenses for the three months ended June 30, 2023, totaled $66.5 million, an increase from $64.5 million in the same period of 2022[168]. - Total operating expenses for the three months ended June 30, 2023, were $66.474 million, representing 46% of revenue, a decrease from 47% in the same period of 2022[174]. - Research and development expenses for the three months ended June 30, 2023, increased by $588,000, or 2%, compared to the same period in 2022[175]. - Sales and marketing expenses for the three months ended June 30, 2023, increased by $2 million, or 10%, primarily due to higher sales personnel costs[176]. - Total operating expenses for the six months ended June 30, 2023, were $133.883 million, representing 47% of revenue, consistent with the same period in 2022[186]. Tax and Valuation - The effective tax rate for the three months ended June 30, 2023, was (4.1)%, a decrease from 6.3% in the same period of 2022[165]. - The effective tax rate for the six months ended June 30, 2023, was 91.4%, significantly higher than 1.8% in 2022, primarily due to increased operating losses outside the U.S.[190]. - The effective tax rate for the six months ended June 30, 2023, was impacted by a valuation allowance, with an estimated state effective tax rate of 4.3% excluding this allowance[191]. - The Non-GAAP effective income tax rate was 2.8% for the six months ended June 30, 2023, significantly lower than 55.4% for the same period in 2022[220]. - The company expects to maintain a valuation allowance against all U.S. federal and state deferred tax assets until realization becomes more likely than not[192]. Cash Flow and Liquidity - For the six months ended June 30, 2023, net cash used in operating activities was $3 million, with a net cash inflow from operating assets aggregating $3 million[203]. - Cash provided by investing activities for the six months ended June 30, 2023, was $33 million, primarily from sales and maturities of marketable securities[205]. - The company had cash and cash equivalents of $92 million and marketable securities of $31 million as of June 30, 2023, providing a solid liquidity position[232]. - The company reported a net cash used in operating activities of $3.09 million for Q2 2023, down from $7.02 million in Q2 2022[226]. - Free cash flow for Q2 2023 was $(1.23) million, compared to $2.68 million in Q2 2022, indicating cash usage in operations[226]. Debt and Financing - Approximately $65 million of 2026 Convertible Notes were repurchased for about $51 million, resulting in a gain of $13 million recorded in the first half of 2023[152]. - The company entered into a $50 million revolving credit facility on August 1, 2023, with an accordion feature allowing for an increase of up to $25 million[195]. - The company repurchased $65 million of its 2026 Convertible Notes in March 2023, contributing to a net cash used in financing activities of $52 million for the same period[208]. - The company issued $400 million and $250 million in aggregate principal amount of the 2026 and 2028 Convertible Notes, respectively[234]. Legal Matters - The company has been named in multiple lawsuits related to the collection and remittance of 911 taxes and surcharges[241]. - The company intends to vigorously defend against lawsuits alleging failure to bill, collect, and remit certain taxes[243]. Operational Highlights - The company aims to strengthen its position in the communications market through cross-selling, direct-to-enterprise growth, and becoming a preferred provider for SaaS platforms[148]. - The company recognized a gain of $4 million on business interruption insurance recoveries in Q2 2023, contributing to the overall financial results[219]. - Stock-based compensation increased to $8.01 million in Q2 2023 from $4.82 million in Q2 2022, reflecting higher employee incentives[219]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended June 30, 2023[238]. - The company does not currently engage in any hedging activity to reduce potential exposure to currency fluctuations[235]. - A hypothetical 10% adverse change in foreign currency exchange rates would have negatively impacted net income by approximately $1.6 million for the six months ended June 30, 2023[235].

Financial Data and Key Metrics Changes - The company achieved revenue of $138 million in Q1 2023, with adjusted EBITDA of $5 million, positioning well for the full year outlook [14][20] - Revenue growth was driven by monthly recurring charges for phone numbers and emergency services, which were up 6% year-over-year, and higher messaging revenue, which increased by 8% [15][16] - Non-GAAP gross margin was 54%, up 1 percentage point from the prior year's quarter, benefiting from economies of scale and a rich mix of higher-margin products [17][18] Business Line Data and Key Metrics Changes - The direct-to-enterprise category grew by 27% year-over-year, while programmable services grew by 8% [17] - The commercial messaging segment saw a sequential growth of 16% when adjusting for political campaign messaging effects from the previous quarter [15] - The customer count was 3,361, but the focus remains on larger, more profitable customers, with average annual revenue per customer reaching $172,000 [18][35] Market Data and Key Metrics Changes - The global communications plans market remained flat year-over-year due to softness in UCaaS customers [16] - The company noted strong demand in verticals such as healthcare, retail, e-commerce, fintech, and civic engagement, contributing to messaging growth [15][17] Company Strategy and Development Direction - The company is focused on maximizing direct-to-enterprise momentum and capitalizing on innovations like Maestro, while also increasing product penetration across all customer categories [13][30] - The strategy includes leveraging a unique global network to support its software platform and following customer demand for geographic expansion [29] - The company aims to grow profitability by 30% this year, emphasizing innovation as a foundation for growth [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the plan for the year despite macroeconomic challenges, with no significant slowdowns noted in business trends [24] - The outlook for full-year revenue remains unchanged at $576 million to $584 million, with adjusted EBITDA guidance of $43 million to $47 million [20][44] - Management highlighted the importance of adapting to macroeconomic conditions affecting UCaaS usage patterns, while maintaining a positive outlook for CCaaS [32][33] Other Important Information - The company repurchased $65 million of 2026 convertible notes, reducing outstanding debt significantly and enhancing financial flexibility [19][20] - The company continues to prioritize R&D and innovation, with recent product launches receiving industry recognition [11][12] Q&A Session Summary Question: Any impact from macro issues post-Silicon Valley Bank? - Management noted that they are executing as expected and have not seen significant slowdowns, maintaining confidence in their guidance [24] Question: Insights on Q2 guidance and revenue mix? - Management expects modest revenue growth in Q2 with similar adjusted EBITDA, indicating operational flexibility despite macroeconomic conditions [26] Question: Coverage in APAC and future expansion plans? - The company is following demand for geographic expansion and has opened new markets like Turkey based on customer needs [29] Question: Softness in UCaaS and largest customer trends? - Management attributed UCaaS softness to macroeconomic factors and noted strong momentum in CCaaS with direct enterprise wins [31][32] Question: Customer count rationalization and gross additions? - The decrease in customer count is part of a strategy to focus on larger, more profitable customers, with average customer revenue increasing [35] Question: Pricing environment in UCaaS and CCaaS? - Pricing had a favorable impact in Q1, driven by a richer mix of higher-priced products [38] Question: Impact of AI on customer service roles and seat counts? - The company is excited about the role of AI in enhancing customer support and believes it will adapt to changing business models [41][42] Question: Long-term growth outlook and election impact? - Management reiterated confidence in long-term growth targets and guidance for the year, despite fluctuations in growth rates [44]