Slide 1: Bandwidth 2Q24 Earnings Results
Bandwidth 2Q24 Earnings Results August 1, 2024
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance for the quarter ending September 30, 2024 and year ending December
Slide 3: Bandwidth by the numbers
Bandwidth by the numbers Bandwidth powers cloud communications at scale $17b 2023 market opportunity1 >65 countries Communications cloud global coverage $662m 15% CAGR 2 2Q24 TTM Total Revenue 11 years Median tenure of top 20 customers $67m up 83% y/y 2Q24 TTM Adjusted EBITDA3 >99% Customer name ret
Slide 4: Providing global comms at scale across three target markets
Providing global comms at scale across three target markets GLOBAL Powering employees talking to each other and their customers COMMUNICATIONS through Unified Communications and Contact Center platforms PLANS PROGRAMMABLE Powering digital engagements and notifications SERVICES with programmable voic
Slide 5: 2Q 2024 Customer Highlights
2Q 2024 Customer Highlights U.S. claims Our customer needed a flexible platform to orchestrate their communications stack management provider Bandwidth won for our our exceptional customer support and the flexibility of our Maestro product to orchestrate and enhance functionality across their platfo
Slide 6: 2Q 2024 Financial Highlights
2Q 2024 Financial Highlights Solid revenue growth Total revenue of $174m, up 19% y/y Cloud communications revenue1 of $128m, up 8% y/y Messaging grew 33% y/y to 21% of cloud Accelerating profitability communications revenue exceeding projections Adjusted EBITDA of $19m, up 77% y/y Free cash flow of
Slide 7: Quarterly Revenue Performance
Quarterly Revenue Performance 19% 2Q24 total revenue growth y/y 8% 2Q24 cloud comms revenue growth y/y (USD Millions) Cloud communications revenue Messaging surcharges1 1 Messaging surcharges is defined as pass-through messaging surcharges levied by carriers on Application to Person (A2P) text messa
Slide 8: Customer Metrics Performance
Customer Metrics Performance Net Retention Average Annual (“NRR”) Customer Revenue 111% Net retention rate 13% Increase in average annual customer revenue y/y (USD Thousands) Note: Information regarding average annual customer revenue and NRR including definitions and how they are calculated is incl
Slide 9: Non-GAAP Gross Margin Performance
Non-GAAP Gross Margin Performance Quarterly Annual Fueling gross margin expansion Scale and platform ownership Product mix Global coverage Operational efficiencies Note: We calculate Non-GAAP gross margin by dividing non-GAAP gross profit by Cloud communications revenue, which is revenue less pass t
Slide 10: Adjusted EBITDA Performance
Adjusted EBITDA Performance 77% Quarterly Annual 2Q24 Adjusted EBITDA growth y/y 54% Adjusted EBITDA growth y/y 2024 guidance (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of August 1, 2024 earnings press release. Bandwidth has not reconciled full year 20
Slide 11: Repurchased 2026 convertible notes
Repurchased 2026 convertible notes 2026 convertible notes outstanding reduced $160m by more than 90% $400m maturing $65m 2026 $240m maturing Realized $63 million gain 2026 $175m Maturing $140m $35m from repurchasing debt 2026 maturing 2026 $76m at a discount 9/30/22 Partial 12/31/22 Partial 3/31/23
Slide 12: 3Q24 and Full Year 2024 Outlook
3Q24 and Full Year 2024 Outlook 3Q 2024 FY 2024 19% (midpoint) (midpoint) Total revenue Revenue $182m $715m growth y/y 2024 guidance Adjusted EBITDA1 $19m $74m 54% Adjusted EBITDA growth y/y 2024 guidance 1 Bandwidth has not reconciled its third quarter and full year 2024 guidance related to adjuste
Slide 13: Thank you!
Thank you! 12
Slide 14: Appendix
Appendix 13
Slide 15: Historical Metrics
Historical Metrics USD millions, except for Average Annual Customer Revenue in USD thousands FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Total Revenue 490.9 131.4 136.5 148.3 157.0 573.2 137.8 145.9 152.0 165.4 601.1 171.0 173.6 Cloud communications 449.7 113.9 115.5 121.5 123.7
Slide 16: GAAP to Non-GAAP Reconciliation - Net Income
GAAP to Non-GAAP Reconciliation - Net Income USD millions, except per share amounts FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Net (loss) income (27.4) (6.8) (6.2) (0.8) 33.4 19.6 3.6 (3.9) (5.1) (10.9) (16.3) (9.2) 4.1 Stock-based compensation 14.5 5.3 4.8 4.9 5.6 20.7 7.4 8.0
Slide 17: GAAP to Non-GAAP Reconciliation - Earnings per share
GAAP to Non-GAAP Reconciliation - Earnings per share USD millions, except per share amounts FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Net (loss) income per share Basic (1.09) (0.27) (0.25) (0.03) 1.32 0.77 0.14 (0.15) (0.20) (0.42) (0.64) (0.35) 0.15 Diluted (1.09) (0.27) (0.2
Slide 18: GAAP to Non-GAAP Reconciliation - Gross Profit, Adjusted EBITDA, Free Cash Flow
GAAP to Non-GAAP Reconciliation - Gross Profit, Adjusted EBITDA, Free Cash Flow USD millions, except per share amounts FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Gross Profit 213.8 55.4 55.4 63.5 64.1 238.4 55.7 59.0 59.5 62.1 236.2 65.5 64.8 Gross Margin % 44% 42% 41% 43% 41%
Slide 19: Definitions
Definitions Adjusted EBITDA: Net income or losses from continuing operations, adjusted to reflect the addition or elimination of certain statement of operations items including, but not limited to: income tax (benefit) provision, interest (income) expense, net, depreciation and amortization expense,