Slide 1: Bandwidth 4Q23 and 2023 Earnings Results
Bandwidth 4Q23 and 2023 Earnings Results February 28, 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 March 31, 2024 and year ending December 31,
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 $601m 21% CAGR 2 2023 Total Revenue 11 years Median tenure of top 20 customers $48m up 39% y/y 2023 Adjusted EBITDA3 >99% Customer name retention r
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 with programmable voice and mes
Slide 5: 4Q23 Customer Highlights
4Q23 Customer Highlights INFRASTRUCTURE- Our customer provides communications services for thousands of small AS-A-SERVICE businesses across the U.S. Bandwidth won due to our capacity to handle the volume they needed and PROVIDER for our support experience HEATLH AND Our customer needs high volume H
Slide 6: 2023 Financial Highlights
2023 Financial Highlights Exceeded full year Total revenue of $601m, up 5% y/y guidance Cloud communications revenue1 of $479m, up 5% y/y2 Messaging 18% of cloud communications revenue Strong commercial messaging Commercial messaging3 up 32% y/y performance Adjusted EBITDA of $48m, up 39% y/y Record
Slide 7: Annual Revenue Performance
Annual Revenue Performance 700 601 5% 573 491 2023 total revenue growth y/y 343 +21% 5% 1 CAGR 2023 cloud comms revenue growth y/y 16% 2 2020 2021 2022 2023 2024E2 2024 total revenue guidance (USD Millions) growth y/y Cloud communications revenue Messaging surcharges3 1 Excludes campaign messaging u
Slide 8: Quarterly Revenue Performance
Quarterly Revenue Performance 165 157 5% 113 126 4Q23 total revenue growth y/y 12% 1 4Q23 cloud comms revenue growth y/y 4Q20 4Q21 4Q22 4Q23 (USD Millions) Cloud communications revenue Messaging surcharges2 1 Excludes campaign messaging usage revenue of $10.9m in 4Q22. 2 Messaging surcharges is defi
Slide 9: Customer Metrics Performance
Customer Metrics Performance Net Retention Average Annual (“NRR”) Customer Revenue 109% NRR excluding campaign revenue $178k Average annual customer revenue (USD Thousands) Note: Information regarding average annual customer revenue and NRR including definitions and calculations is included in the A
Slide 10: Annual Non-GAAP Gross Margin Performance
Annual Non-GAAP Gross Margin Performance Fueling gross margin expansion 55% 55% Scale and platform 52% ownership 50% Product mix Global coverage Operational efficiencies 2020 2021 2022 2023 Note: We calculate Non-GAAP gross margin by dividing non-GAAP gross profit by Cloud communications revenue, wh
Slide 11: Annual Adjusted EBITDA Performance
Annual Adjusted EBITDA Performance +50% 72 Longstanding commitment to +39% profitability 48 35 50% Adjusted EBITDA y/y growth 2024 guidance 2022 2023 2024E1 (USD Millions) 1 Represents midpoint of guidance provided in the Financial Outlook section of February 28, 2024 earnings press release. Bandwid
Slide 12: First Quarter and Full Year 2024 Outlook
First Quarter and Full Year 2024 Outlook 16% 1Q 2024 (midpoint) FY 2024 (midpoint) Total Revenue growth y/y 2024 guidance Revenue $165m $700m Adjusted EBITDA1 $12m $72m 50% Adjusted EBITDA y/y growth 2024 guidance 1 Bandwidth has not reconciled its first quarter and full year 2024 guidance related t
Slide 13: Three core operating principles expected to guide profitable growth through 2026
Three core operating principles expected to guide profitable growth through 2026 Profitable growth 15-20% >60% REVENUE CAGR1 NON-GAAP GROSS MARGIN Operating leverage Cash flow generation >20% >15% ADJUSTED EBITDA MARGIN FCF MARGIN 12023-2026 revenue CAGR. Note: Medium-term targets exclude revenue fr
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 2Q23 3Q23 4Q23 FY23 Total Revenue 343.1 113.5 120.7 130.6 126.1 490.9 131.4 136.5 148.3 157.0 573.2 137.8 145.9 152.0 165.4 601.1 Cloud communications 331.9 109.5 114.4 116.4 109.4 449.7 113.9 115.5 121.5 123
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 2Q23 3Q23 4Q23 FY23 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) (5.1) (10.9) (16.3) Stock-based compensati
Slide 18: 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 3Q23 4Q23 FY23 Net (loss) income 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) (0.20) (0
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 2Q23 3Q23 4Q23 FY23 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 59.5 62.1 236.2 Gros
Slide 20: Definitions
Definitions Active customers: an active customer account at the end of any period as an individual account for which we have recognized at least $100 of revenue in the last month of the period. Adjusted EBITDA: net income or losses from continuing operations, adjusted to reflect the addition or elim