Slide 1: Bandwidth 1Q23 Earnings Results
Bandwidth 1Q23 Earnings Results May 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 June 30, 2023 and year ending December 31,
Slide 3: Creating exceptional experiences for global enterprises
Creating exceptional experiences 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 1 Source: Analyst and company e
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 4
Slide 5: 1Q 2023 Customer and Operational Highlights
1Q 2023 Customer and Operational Highlights Leading online bank in the U.S. Large life insurance company The leading online bank in the U.S. chose Bandwidth to A large mutual life insurance and investment services power its Genesys contact center. The resiliency and company selected Bandwidth to mig
Slide 6: 1Q 2023 Financial Highlights
1Q 2023 Financial Highlights Total revenue of $138m Solid execution in a Messaging, excluding surcharges, grew 8% y/y to challenging macro 15% of revenue environment Adjusted EBITDA of $5m Repurchased debt at Dollar-based net retention rate of 109% significant discount Continued de-levering balance
Slide 7: Quarterly Revenue Performance
Quarterly Revenue Performance Quarterly Revenue by Revenue Geography2 1Q revenue slightly exceeded expectations Powering business critical communications globally (USD Millions) North America2 Messaging surcharges1 Rest of World 1 Messaging surcharges is defined as pass-through messaging surcharges
Slide 8: Customer Metrics Performance
Customer Metrics Performance Net Retention (“DBNRR”) $172k Average Annual Customer Revenue 111% DBNRR customers >$100k annual revenue Note: Information regarding average annual customer revenue and DBNRR including definitions and how they are calculated is included in the Appendix. 8
Slide 9: Non-GAAP Gross Margin Performance
Non-GAAP Gross Margin Performance Fueling gross Quarterly Annual 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 to 30% annual EBITDA growth 2020 2021 2022 2023E1 (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of February 23, 2023 earnings press release. 1 Repres
Slide 11: Repurchased 2026 convertible notes
Repurchased 2026 convertible notes 2026 convertible $160m notes outstanding reduced by more than 55% $400m $65m maturing 2026 $240m maturing $57m cash savings 2026 $175m Maturing compared to par 2026 $124m value 9/30/22 Partial 12/31/22 Partial 3/31/23 3/31/23 repurchase repurchase cash and at a dis
Slide 12: 2Q23 and Full Year 2023 Outlook
2Q23 and Full Year 2023 Outlook Ongoing 2Q 2023 FY 2023 macroeconomic considerations Total Revenue $140m-$142m $576m-$584m Adjusted EBITDA 1 $4m - $6m $43m - $47m Full year guidance unchanged 30% annual EBITDA growth 1 Bandwidth has not reconciled its second quarter and full year 2023 guidance relat
Slide 13: Core Operating Principles and Medium-term Targets
Core Operating Principles and Medium-term Targets 1 Medium-term targets exclude revenue from pass through messaging surcharges. 2 The Company has not reconciled its long-term goals for the non-GAAP measures of gross margin, adjusted EBITDA margin or free cash flow margin to their most closely compar
Slide 14: Thank you!
Thank you!
Slide 15: Appendix
Appendix
Slide 16: Historical Metrics
Historical Metrics USD millions FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 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 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 Non-GAAP Gross Profit 165.7 56.6 58.8 62
Slide 17: 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 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 Stock-based compensation 9.9 4.4 3.4 3.8 2.9 14.5 5.3 4.8 4.9 5.6 20
Slide 18: GAAP to Non-GAAP Reconciliation - Net Income (cont.)
GAAP to Non-GAAP Reconciliation - Net Income (cont.) USD millions, except per share amounts FY20 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 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 Diluted (1.83) (0.21) (0.28) (0.28)
Slide 19: 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 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 Gross Margin % 45 % 45 % 44 % 44 % 41 % 44 %
Slide 20: Definitions
Definitions Non-GAAP Net Income: net income 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 convertibl