Bandwidth Announces Partial Repurchase of 0.50% Convertible Senior Notes Due 2028

Core Viewpoint - Bandwidth Inc. has announced a partial repurchase of its 0.50% Convertible Senior Notes due 2028, reducing the outstanding amount from an initial $250 million to $150 million, which is part of a broader strategy to strengthen its balance sheet and invest in growth initiatives [1]. Group 1: Financial Actions - The company has entered into agreements to repurchase $100 million of the 2028 Notes at a discount to par value, with the repurchase expected to close on March 4, 2026 [1]. - Following the repurchase, approximately $150 million principal amount of the 2028 Notes will remain outstanding [1]. - Bandwidth fully retired its 0.25% Convertible Senior Notes due 2026 on March 1, 2026, using cash on hand, thereby eliminating all convertible notes maturing before April 1, 2028 [1]. Group 2: Financial Performance and Outlook - Bandwidth reported record levels of profitability and free cash flow for the fourth quarter of 2025, with expectations of 16% revenue growth and nearly 30% Adjusted EBITDA growth in 2026 [1]. - The company is implementing a balanced capital allocation strategy that includes an $80 million share repurchase program and an accelerated de-levering campaign through the repurchase of convertible debt [1]. Group 3: Strategic Initiatives - The repurchase of convertible notes is part of a strategy to simplify the capital structure and reduce the debt profile while continuing to invest in AI innovation [1]. - Bandwidth has previously engaged in capped call transactions related to the 2028 Notes, which will remain effective despite the repurchases [1].