Bandwidth(BAND) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Financial & Operational Highlights 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][4] - Enterprise adoption of AI voice integrations is building momentum, with the Maestro and AIBridge platforms being key drivers[2] - Key customer wins in banking, healthcare, and insurance underscore the platform's value for enhancing customer experience and resilience[13] 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 | $14 | Financial Outlook The company projects continued growth for Q3 and the full year 2025, with adjusted revenue growth of 9% to 11% - Full-year 2025 revenue guidance reflects 9% to 11% year-over-year growth after adjusting for the cyclical decrease in political messaging revenue[10] Q3 & Full Year 2025 Guidance ($ in millions) | Metric | 3Q 2025 Guidance | Full Year 2025 Guidance | | :--- | :--- | :--- | | Revenue | $189 - $191 | $745 - $760 | | Adjusted EBITDA | $19 - $21 | $86 - $91 | Consolidated Financial Statements This section presents unaudited condensed consolidated financial statements in accordance with GAAP Statements of Operations 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 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 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 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 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 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 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 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 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] - The report contains forward-looking statements subject to various risks and uncertainties[16] - The company uses non-GAAP financial measures to supplement GAAP statements and aid in period-to-period comparisons[17][19][22]