Slide 1: Bandwidth 2Q23 Earnings Results
Bandwidth 2Q23 Earnings Results August 2, 2023
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, 2023 and year ending December
Slide 3: Communications cloud for global enterprises
Communications cloud for global enterprises $12b 55% 1 2 Powering A communications cloud covering business-critical 2022 Total communications 2022 Non-GAAP >60 countries Addressable Market Gross Margin and >90% GDP $573m Worldwide 2022 Revenue CPaaS Leader 2020-2023 1 Source: Analyst and company est
Slide 4: Bandwidth solves complex communications challenges across three target markets
Bandwidth solves complex communications challenges across Target markets Go-to-market Example customers three target markets Global Communications B2B2B Plans Powering 100% Programmable of the UCaaS and B2B2C CCaaS Leaders Services Direct Enterprise B2B Solutions 3
Slide 5: 2Q 2023 Customer Highlights
2Q 2023 Customer Highlights Cloud migration services Contact center services provider provider • Providing communications services globally • Providing communications services across EMEA Unlocking • Values Bandwidth’s reliability, premium support, global network, regulatory • Values Bandwidth’s glo
Slide 6: 2Q 2023 Financial Highlights
2Q 2023 Financial Highlights Total revenue of $146m, up 7% y/y Exceeded revenue and profitability Messaging, excluding surcharges, grew 11% y/y to guidance 17% of revenue Adjusted EBITDA of $11m Solid execution in a choppy macro Dollar-based net retention rate of 106% environment Average annual cust
Slide 7: Quarterly Revenue Performance
Quarterly Revenue Performance Quarterly Geographic Revenue Revenue2 Direct enterprise up 21% y/y Programmable services up 15% y/y Global communications plans flat y/y (USD Millions) North America2 Messaging surcharges1 Rest of World 1 Messaging surcharges is defined as pass-through messaging surchar
Slide 8: Customer Metrics Performance
Customer Metrics Performance Net Retention Average Annual (“DBNRR”) Customer Revenue Average annual customer revenue $176k Focused on larger enterprise customers (USD Thousands) Note: Information regarding average annual customer revenue and DBNRR including definitions and how they are calculated is
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 revenue less pass through messaging surcharges. See Append
Slide 10: Adjusted EBITDA Performance
Adjusted EBITDA Performance Quarterly Annual Longstanding 50 commitment to 45 profitability 35 26 Guiding 30% annual EBITDA growth 2020 2021 2022 2023E1 (USD Millions) 1 Represents mid-point of guidance provided in the Financial Outlook section of August 2, 2023 earnings press release. Bandwidth has
Slide 11: 3Q23 and Full Year 2023 Outlook
3Q23 and Full Year 2023 Outlook Expecting continued 3Q 2023 FY 2023 macroeconomic (midpoint) (midpoint) choppiness Revenue $149m $590m Adjusted EBITDA 1 $11m $45m Raising full year revenue outlook 30% annual EBITDA growth 1 Bandwidth has not reconciled its third quarter and full year 2023 guidance r
Slide 12: Thank you!
Thank you!
Slide 13: Appendix
Appendix
Slide 14: Historical Metrics
Historical Metrics USD millions FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Total Revenue 343.1 113.5 120.7 130.6 126.1 490.9 131.4 136.5 148.3 157.0 573.2 137.8 145.9 Total Gross Profit 153.9 51.2 53.5 57.1 52.1 213.8 55.4 55.4 63.5 64.1 238.4 55.7 59.0 Non-GAAP Gross Profit 16
Slide 15: GAAP to Non-GAAP Reconciliation - Net Income
GAAP to Non-GAAP Reconciliation - Net Income USD millions, except per share amounts FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Net (loss) income (44.0) (5.3) (6.9) (6.9) (8.2) (27.4) (6.8) (6.2) (0.8) 33.4 19.6 3.6 (3.9) Stock-based compensation 9.9 4.4 3.4 3.8 2.9 14.5 5.3 4.8
Slide 16: GAAP to Non-GAAP Reconciliation – Earnings Per Share
GAAP to Non-GAAP Reconciliation – Earnings Per Share USD millions, except per share amounts FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Net income (loss) per share Basic (1.83) (0.21) (0.28) (0.28) (0.33) (1.09) (0.27) (0.25) (0.03) 1.32 0.77 0.14 (0.15) Diluted (1.83) (0.21) (0
Slide 17: 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 FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Gross Profit 153.9 51.2 53.5 57.1 52.1 213.8 55.4 55.4 63.5 64.1 238.4 55.7 59.0 Gross Margin % 45 % 45 % 44 % 44 %
Slide 18: Definitions
Definitions Non-GAAP Net Income: net income or loss adjusted for certain items affecting period to period comparability. Non-GAAP net income excludes stock-based compensation, amortization of acquired intangible assets related to acquisitions, amortization of debt discount and issuance costs for con