Bandwidth(BAND) - 2023 Q4 - Annual Results

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]