Bandwidth(US:BAND)2025-10-30 11:01Financial Performance - Bandwidth reported Q3 2025 revenue of $192 million, a slight decrease from $194 million in Q3 2024, but a year-to-date revenue increase to $546 million from $539 million in 2024[6] - The company's gross margin remained stable at 38% for Q3 2025, with a Non-GAAP gross margin of 58%[6] - Bandwidth's Adjusted EBITDA for Q3 2025 was $24 million, consistent with Q3 2024, while year-to-date Adjusted EBITDA increased to $68 million from $59 million[6] - The net loss for Q3 2025 was $1 million, compared to a net income of $0 million in Q3 2024, with a year-to-date net loss of $10 million versus $5 million in 2024[6] - Bandwidth raised its full-year Adjusted EBITDA outlook to approximately $91 million, driven by growth in Voice AI and software-driven revenue[6] - The company projects full-year 2025 revenue guidance of $747 million to $760 million, reflecting a 9% to 11% year-over-year growth after adjusting for a cyclical reduction in political campaign messaging activity[8][9] Operating Metrics - Bandwidth's cash flow from operating activities for Q3 2025 was $22 million, up from $20 million in Q3 2024, with free cash flow of $13 million compared to $14 million in the prior year[6] - Revenue for Q3 2025 was $191.9 million, a slight decrease of 1% compared to $193.9 million in Q3 2024[24] - Gross profit for Q3 2025 increased to $73.8 million, up 1% from $73.1 million in Q3 2024, maintaining a gross profit margin of 38%[24][31] - Operating loss for Q3 2025 was $2.0 million, compared to a loss of $0.9 million in Q3 2024[24] - Total operating expenses for Q3 2025 were $75.8 million, an increase of 2% from $74.0 million in Q3 2024[24] Research and Development - Research and development expenses rose to $33.0 million in Q3 2025, up from $30.2 million in Q3 2024, reflecting a focus on innovation[24] Cash and Assets - Cash and cash equivalents as of September 30, 2025, were $73.4 million, down from $81.8 million as of December 31, 2024[26] - Total assets increased to $1.03 billion as of September 30, 2025, compared to $989.2 million as of December 31, 2024[26] Stock-Based Compensation - The company recognized total stock-based compensation expense of $12.3 million for Q3 2025, compared to $11.4 million in Q3 2024[24] - Stock-based compensation for the nine months ended September 30, 2025, totaled $38,448,000, an increase from $35,148,000 in 2024[34] Non-GAAP Metrics - For the three months ended September 30, 2025, Bandwidth Inc. reported a Non-GAAP net income of $11,462,000, compared to $12,791,000 for the same period in 2024, reflecting a decrease of 10.4%[34] - The Adjusted EBITDA for the nine months ended September 30, 2025, was $68,432,000, an increase of 16.7% from $58,634,000 in the same period of 2024[36] - Free cash flow for the three months ended September 30, 2025, was $13,135,000, a decrease of 7.8% compared to $14,245,000 in 2024[37] - The net cash provided by operating activities for the nine months ended September 30, 2025, was $50,877,000, up from $47,365,000 in 2024, indicating a growth of 5.3%[37] - The company reported a Non-GAAP net income per diluted share of $0.36 for the three months ended September 30, 2025, compared to $0.43 in 2024, reflecting a decrease of 16.3%[34] - The Non-GAAP effective income tax rate for the nine months ended September 30, 2025, was 17.2%, compared to 15.5% in 2024[34] Strategic Initiatives - Bandwidth announced the launch of new AI-powered services, including the AI Receptionist and AI Activation Agent, aimed at enhancing customer engagement and operational efficiency[11] - The company emphasized its strategy of embedding AI across its cloud platform to enhance service offerings and customer engagement[4] - The company secured a record number of million-dollar-plus deals for mission-critical communications during the quarter[4] Debt and Financial Adjustments - Bandwidth Inc. incurred a net loss of $1,241,000 for the three months ended September 30, 2025, compared to a net income of $413,000 in 2024[34] - Bandwidth Inc. reported a net gain on extinguishment of debt of $(1,082,000) for the nine months ended September 30, 2025, compared to $(10,267,000) in 2024[34]