Bandwidth(US:BAND)2025-05-07 20:03Financial Performance - For the three months ended March 31, 2025, total revenue was $174 million, representing a 2% increase from $171 million in the same period of 2024[129]. - The net loss for the three months ended March 31, 2025, was $4 million, an improvement from a net loss of $9 million in the same period of 2024[129]. - The net retention rate increased to 116% for the three months ended March 31, 2025, compared to 107% for the same period in 2024[133]. - Non-GAAP net income for Q1 2025 was $11.13 million, compared to $7.82 million in Q1 2024, representing a 42% increase[187]. - Adjusted EBITDA for Q1 2025 was $22.21 million, up from $15.92 million in Q1 2024, indicating a 39% growth[190]. - The company reported a net loss of $(3.74) million for Q1 2025, an improvement from a net loss of $(9.23) million in Q1 2024[187]. Revenue Breakdown - Cloud communications revenue grew by $5 million, or 4%, to $133 million for the three months ended March 31, 2025, driven by higher voice traffic[153]. - Messaging surcharges revenue decreased by $2 million, or 4%, to $40 million for the three months ended March 31, 2025, primarily due to lower political messaging[154]. - Average annual customer revenue was $0.2 million for the three months ended March 31, 2025, showing a slight increase compared to the same period in 2024[155]. - Approximately 13% of total revenue for Q1 2025 was generated outside North America, indicating a stable international presence[203]. Cost and Expenses - Cost of revenue decreased to $102 million for the three months ended March 31, 2025, from $105 million in the same period of 2024, resulting in a gross profit of $71 million[151]. - Gross margin improved to 41% for the three months ended March 31, 2025, compared to 38% for the same period in 2024[151]. - For the three months ended March 31, 2025, total cost of revenue decreased by $3 million, or 3%, to $102.7 million compared to the same period in 2024, while gross profit increased by $6 million, or 9%, to $71.5 million[156][160]. - Research and development expenses rose by $1.7 million, or 6%, to $30.6 million, primarily due to increased headcount expenses[161]. - Sales and marketing expenses decreased by $2.7 million, or 9%, to $26.5 million, mainly due to lower headcount expenses[161]. - General and administrative expenses increased by $1.3 million, or 7%, to $19.1 million, driven by higher headcount expenses[162]. Cash Flow and Financing - Net cash used in operating activities was $3 million for the three months ended March 31, 2025, compared to net cash provided of $2.5 million in 2024[174]. - Net cash used in investing activities was $13.8 million, primarily for the purchase of property, plant, and equipment, and capitalized software development costs[176]. - Net cash used in financing activities was $29 million, consisting mainly of $26 million for the 2025 Repurchases[177]. - As of March 31, 2025, the company had cash and cash equivalents of $36 million and marketable securities of $6 million[169]. - As of March 31, 2025, the company had cash and cash equivalents of $36 million and marketable securities of $6 million[199]. Taxation - The effective tax rate for the three months ended March 31, 2025, was 1.8%, a decrease from 2.1% in the same period of 2024[148]. - The effective tax rate for the three months ended March 31, 2025, was 1.8%, compared to 2.1% in 2024, primarily due to a valuation allowance against deferred tax assets[164][165]. - The estimated Non-GAAP effective income tax rate was 19.4% for Q1 2025, compared to 13.0% for Q1 2024, influenced by research and development tax credits[187]. Stock and Market Impact - Stock-based compensation increased to $13.58 million in Q1 2025 from $12.34 million in Q1 2024, a rise of 10%[190]. - The company had gross carrying amounts of $258 million in outstanding Convertible Notes as of March 31, 2025[201]. - A hypothetical 10% adverse change in foreign currency exchange rates would have negatively impacted the net loss by approximately $1 million for Q1 2025[203].