Slide 1: Bandwidth 3Q24 Earnings Results
Bandwidth 3Q24 Earnings Results October 31, 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 and year ending December 31, 2024, the success of
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 $704m up 19% y/y 3Q24 TTM Total Revenue 11 years Median tenure of top 20 customers $77m up 105% y/y 3Q24 TTM Adjusted EBITDA2 >99% Customer name re
Slide 4: Providing global comms at scale across three target markets
Providing global comms at scale across three target markets DIRECT Powering innovative customer experiences for the Global 2000 with composable solutions that integrate best-in-class CX and AI tools ENTERPRISE PROGRAMMABLE Powering digital engagements and notifications SERVICES with programmable voi
Slide 5: Featured Customer Win: Enterprise
Featured Customer Win: Enterprise Large, diversified credit union CHALLENGE • Migrating complex on-prem contact center to the cloud • Needed a provider to meet today’s needs AND add new services in the future SOLUTION • Maestro provided flexibility to modernize tech stack and easily plug in future c
Slide 6: Featured Customer Win: Messaging
Featured Customer Win: Messaging High-volume patient engagement platform CHALLENGE • Deliverability issues from incumbent led to revenue- draining missed appointments • Needed validation to ensure timely patient communications SOLUTION • Bandwidth’s Communications Cloud ensures reliable, high- throu
Slide 7: 3Q 2024 Financial Highlights
3Q 2024 Financial Highlights Total revenue of $194m, up 28% y/y Exceeded revenue and profitability guidance ranges Cloud communications revenue of $139m, up 15% y/y Messaging grew 56% y/y to 24% of cloud communications revenue Solid growth across all three customer categories Adjusted EBITDA of $24m
Slide 8: Quarterly Revenue Performance
Quarterly Revenue Performance 28% 3Q24 total revenue growth y/y 15% 3Q24 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 mess
Slide 9: 3Q24 Cloud Communications Revenue by Customer Category
3Q24 Cloud Communications Revenue by Customer Category DIRECT ENTERPRISE 30% y/y Solid growth across all customer categories PROGRAMMABLE SERVICES 55% y/y Continuing to execute on our market opportunity GLOBAL COMMUNICATIONS PLANS 5% y/y 8
Slide 10: Customer Metrics Performance
Customer Metrics Performance Net Retention Average Annual (“NRR”) Customer Revenue 117% Net retention rate 20% 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 11: 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 12: Adjusted EBITDA Performance
Adjusted EBITDA Performance 74% Quarterly Annual 3Q24 Adjusted EBITDA growth y/y 65% Adjusted EBITDA growth y/y 2024 guidance (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of the October 31, 2024 earnings press release. Bandwidth has not reconciled full y
Slide 13: 3Q24 Bandwidth Financial Performance Summary
3Q24 Bandwidth Financial Performance Summary Revenue grew by 28% y/y Cloud communications revenue grew by 15% y/y Strong business model performance Non-GAAP Gross Profit up 22% y/y Record Non-GAAP Gross Margin 58% Adjusted EBITDA up 74% y/y 12
Slide 14: 4Q24 and Full Year 2024 Outlook
4Q24 and Full Year 2024 Outlook 4Q 2024 FY 2024 23% (midpoint) (midpoint) Total revenue Revenue $203m $742m growth y/y 2024 guidance Adjusted EBITDA1 $20m $79m 65% Adjusted EBITDA growth y/y 2024 guidance 1 Bandwidth has not reconciled its third quarter and full year 2024 guidance related to adjuste
Slide 15: Thank you!
Thank you! 14
Slide 16: Appendix
Appendix 15
Slide 17: 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 3Q24 Total Revenue 490.9 131.4 136.5 148.3 157.0 573.2 137.8 145.9 152.0 165.4 601.1 171.0 173.6 193.9 Cloud communications 449.7 113.9 115.5
Slide 18: 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 3Q24 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 0.4 Stock-based compensation 14.5 5.3 4.8 4.9 5.6 20.
Slide 19: 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 3Q24 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 0.02 Diluted (1.09) (
Slide 20: 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 3Q24 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 73.1 Gross Margin % 44% 42% 41
Slide 21: 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,