Bandwidth Inc. · NASDAQ:BAND
Bandwidth — Investor Presentation (February 2024)
26 slides from Bandwidth's investor presentation, Feb 29, 2024
Slide 1: Investor Presentation February 2024
Investor Presentation FEBRUARY 2024
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance or goals, the success of Bandwidth Inc.’s (the “Company”) of our p
Slide 3: Leading the worldwide cloud communications revolution
Leading the worldwide cloud communications revolution Bandwidth software embeds voice, messaging and emergency calling into apps, AI-ready contact centers and workplaces 2
Slide 4: Bandwidth by the numbers
Bandwidth by the numbers >65 countries Communications cloud global coverage 11 years Median tenure of top 20 customers $178k up 5% y/y Average annual customer revenue $17b 2023 market opportunity1 $601m 21% CAGR2 2023 Revenue $48m up 39% y/y 2023 Adjusted EBITDA3 $19m up >2x y/y 2023 Free cash flow3
Slide 5: Bandwidth is to global enterprise communications what Azure or AWS are for enterprise computing
Bandwidth is to global enterprise communications what Azure or AWS are for enterprise computing bandwidth 4
Slide 6: The Problem: Choices are incomplete for global communications
THE PROBLEM: CHOICES ARE INCOMPLETE FOR GLOBAL COMMUNICATIONS Limitations of Pure-play CPaaS Limited scalability Lacks direct network control Poor support experience Limitations of Network only operators Geographically restricted Slow-to-market on new innovations Lacks software platform and integrat
Slide 7: Bandwidth is well positioned to solve this problem
Bandwidth is well positioned to solve this problem Bandwidth Network operators CPaaS providers Software platform Innovation AI capabilities Sole global provider Scalability Direct network control Best-in-class support experience 6
Slide 8: The Bandwidth difference
The Bandwidth difference CONSUMABLE BY SOFTWARE Making communications consumable by software Control and automation Universal flexibility AI-ready A trusted expert 20+ years of global regulatory experience Global network delivers quality, insights, and deep monitoring 15 years and 6 million work hou
Slide 9: Providing global comms at scale across three target markets
Powering employees talking to each other and their customers through Unified Communications and Contact Center platforms Powering digital engagements and notifications with programmable voice and messaging Powering innovative customer experiences for the Global 2000 with composable solutions that in
Slide 10: Global Communications Plans
GLOBAL COMMUNICATIONS PLANS Leverage our cloud to scale Powering 100% of the UCaaS and CCaaS leaders Global reach covering >90% GDP across 65+ countries Benefit from global reach, software automation, and network resiliency UCaaS: Unifed Communications as a Service. CCaaS: Cloud Contact center as a
Slide 11: Programmable Services
#1 sender in toll- free messaging PROGRAMMABLE SERVICES Consume communications via software Benefit from trusted messaging channels with high-throughput for reliability, scalability, and deliverability Bandwidth’s software- powered messaging “With Bandwidth, our deliverability rates are higher than
Slide 12: Direct Enterprise
● One contract ● One customer experience ● One operating procedure ● One source for global expertise ● One-click integrations for best-in-class apps ● One relationship DIRECT ENTERPRISE Transform communications for the global 2000 ONE control point for critical integrations Future proofed with AI-re
Slide 13: Maestro Platform: AI-ready integrations for Global 2000
Fraud and spoof detection for inbound customer authentication Direct-to-carrier integration to power employee communications at scale Direct-to-carrier integration for greater control and flexibility over contact center telecom Maestro™ Platform: AI-ready integrations for Global 2000 Integration wit
Slide 14: An experienced leadership team
An experienced leadership team David Morken Cofounder, Chief Executive Officer, and Chairman Daryl Raiford Chief Financial Officer Anthony Bartolo Chief Operating Officer Rebecca Bottorff Chief People Officer and Director Devesh Agarwal Chief Software Strategy Officer Scott Mullen Chief Technology O
Slide 15: Success powered by strong culture and values
Success powered by strong culture and values RECOGNIZED NATIONALLY AND LOCALLY Bandwidth’s unique culture has been featured in several national media outlets, including: ACCESS TO LOCAL TOP TECH TALENT • Based in Research Triangle Park, NC • Vibrant tech community with strong talent pool • Top unive
Slide 16: Financial Information and Medium-Term Targets
Financial Information and Medium-Term Targets
Slide 17: Three core operating principles expected to guide profitable growth through 2026
>15% >60% Three core operating principles expected to guide profitable growth through 2026 Profitable growth Operating leverage Cash flow generation 15-20% REVENUE CAGR1 NON-GAAP GROSS MARGIN >20% ADJUSTED EBITDA MARGIN FCF MARGIN 12023-2026 revenue CAGR. Note: Medium-term targets exclude revenue fr
Slide 18: Consistent Revenue growth
Consistent Revenue growth +21% CAGR 2020-2023 Revenue (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of February 28, 2024 earnings press release. Note: Definitions for Cloud communications revenue, messaging surcharges, usage-based reoccurring revenue, and
Slide 19: Non-GAAP Gross Margin expansion fueled by four value drivers
2019 2023 Medium-term target Non-GAAP Gross Margin expansion fueled by four value drivers Note: Non-GAAP gross margin calculated by dividing non-GAAP gross profit by Cloud communications revenue, which is revenue less pass through messaging surcharges. See Appendix for GAAP to Non-GAAP reconciliatio
Slide 20: Exceptional Adj. EBITDA performance
Exceptional Adj. EBITDA performance 39% 2023 Adjusted EBITDA growth y/y 10% 2023 Adjusted EBITDA margin 35 48 72 2022 2023 2024E1 +39% +50% (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of February 28, 2024 earnings press release. Bandwidth has not reconc
Slide 21: Progress towards medium-term financial targets
Progress towards medium-term financial targets 2022 2023 Medium-term target2 3-Year Revenue CAGR1 35% 21% 15-20% Non-GAAP gross margin 55% 55% >60% Adjusted EBITDA margin 7% 10% >20% Free cash flow margin (2%) 4% >15% 1 2022 revenue CAGR represents 2019-2022, 2023 revenue CAGR represents 2020-2023,
Slide 22: Bandwidth Key Takeaways
Bandwidth Key Takeaways A global communications leader in large and growing market of $17b Platform positioned at the center of AI momentum across CPaaS, CCaaS, and UCaaS Large-scale blue-chip customer base delivering sustainable profitable growth Founder-led leadership team and strong culture Uniqu
Slide 23: Appendix
Appendix
Slide 24: GAAP to Non-GAAP Reconciliation - Gross Profit
GAAP to Non-GAAP Reconciliation - Gross Profit USD millions 1 Calculated by dividing Non-GAAP gross profit by cloud communications revenue, which is total revenue less pass-through surcharges of $1.3m in FY19, $98.6m in FY22, and $122.2m in FY23. FY19 FY22 FY23 Gross profit 104.2 238.4 236.2 Gross m
Slide 25: GAAP to Non-GAAP Reconciliation – Adjusted EBITDA, Free Cash Flow
GAAP to Non-GAAP Reconciliation – Adjusted EBITDA, Free Cash Flow USD millions 1 Non-recurring items not indicative of ongoing operations and other include $0.9 million of foreign currency losses on the settlement of intercompany borrowings, which were repatriated in conjunction with the repurchase
Slide 26: Definitions of non-GAAP metrics
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, acquisition