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Bandwidth Announces Second Quarter 2025 Financial Results
Accelerating revenue growth fueled by core voice platform
Enterprise adoption of AI voice integrations continues to build momentum

July 29, 2025
  
Conference Call
Bandwidth will host a conference call to discuss financial results for the second quarter ended June 30, 2025 on July 29, 2025. Details can be found below and on the investor section of its website at https://investors.bandwidth.com where a replay will also be available shortly following the call.
Raleigh, NC - Bandwidth Inc. (NASDAQ: BAND), a leading global enterprise cloud communications company, today announced financial results for the second quarter ended June 30, 2025.
“Bandwidth delivered a solid second quarter, exceeding expectations on both top and bottom-lines, demonstrating continued momentum and disciplined execution,” said David Morken, CEO of Bandwidth. “Our investments in AI voice are yielding results, with enterprises adopting our software-driven Maestro and AIBridge platforms to seamlessly integrate AI voice into their customer experience call flows, establishing Bandwidth as the essential platform for the enterprise AI voice revolution.”

Second Quarter 2025 Financial Highlights
The following table summarizes the condensed consolidated financial highlights for the three and six months ended June 30, 2025 and 2024 ($ in millions).

Conference Call Details
July 29, 2025
8:00 am ET
Domestic dial-in:
844-481-2707
International dial-in:
412-317-0663

Replay information
An audio replay of this conference call will be available through August 5, 2025 by dialing 877-344-7529 or
412-317-0088 for international callers, and entering passcode 4790498.


Investor Contact
Sarah Walas
Bandwidth
919-504-6585
ir@bandwidth.com
Three months ended
June 30,		Six months ended
June 30,
2025202420252024
Revenue$180 $174 $354 $345 
Gross Margin40 %37 %40 %38 %
Non-GAAP Gross Margin (1)
58 %56 %59 %56 %
Net (loss) income$(5)$4 $(9)$(5)
Adjusted EBITDA (1)
$22 $19 $44 $35 
Net cash provided by operating activities$32 $24 $29 $27 
Free cash flow (1)
$26 $18 $12 $14 

(1) Additional information regarding the Non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to Non-GAAP financial measures has also been provided in the financial tables included below.

“Bandwidth’s second quarter results underscore our commitment to sustainable, profitable growth, with accelerating momentum in our core voice offerings,” said Daryl Raiford, CFO of Bandwidth. “Our record first-half 2025 Non-GAAP gross margin, Adjusted EBITDA and operating cash flows demonstrate our strong execution and platform leadership, keeping us firmly on track toward our strategic and financial goals. We’re building on a foundation of strong execution, expanding customer value through AI-powered use cases, and leveraging our platform’s scale and flexibility.”
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Second Quarter Customer Highlights
•A major U.S. bank integrated third-party conversational AI with Bandwidth’s software-driven Maestro platform and network-level voice anomaly detection to enhance customer experience across complex contact center environments.
•One of Tennessee’s largest healthcare providers selected Bandwidth as its sole voice communications provider, citing the unmatched resilience of our Call Assure solution for essential services.
•A leading insurance brokerage migrated its unified communications and contact center to the cloud with Bandwidth after a successful test phase demonstrated the programmable power of Maestro’s software for sophisticated call routing and our technical support.
•Our channel partnerships delivered multiple wins, including large-scale migrations of healthcare organizations from on-premises Cisco systems to the cloud, enabled by Bandwidth’s reliability and comprehensive migration support to de-risk the transitions.

Financial Outlook
Bandwidth is providing guidance for its third quarter and full year 2025 as follows (in millions) based on current indications for its business, which are subject to change.
For the full year 2025, Bandwidth’s revenue guidance now projects 9 percent to 11 percent year-over-year growth when adjusting for the expected cyclical reduction in political campaign messaging activity, which resulted in revenue in the third quarter and full year 2024 of approximately $21 million and $62 million, respectively.

3Q 2025 Guidance
Full Year 2025 Guidance
Revenue
$189 - $191
$745 - $760
Adjusted EBITDA
$19 - $21
$86 - $91

Bandwidth has not reconciled its third quarter and full year 2025 guidance related to Adjusted EBITDA to GAAP net income or loss, because stock-based compensation cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Upcoming Investor Conference
•Piper Sandler’s Voice AI Day. Virtual fireside chat and investor meetings hosted by John Bell, Chief Product Officer on Friday, August 22nd, 2025 at 12:30pm ET.
•Piper Sandler’s Growth Frontiers Conference in Nashville, TN. Investor meetings hosted by John Bell, Chief Product Officer, on Tuesday, September 10th, 2025.

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About Bandwidth Inc.
Bandwidth (NASDAQ: BAND) is a global cloud communications software company that helps enterprises deliver exceptional experiences through voice calling, text messaging and emergency services. Our solutions and our Communications Cloud, covering 65+ countries and over 90 percent of global GDP, are trusted by all the leaders in unified communications and cloud contact centers–including Amazon Web Services (AWS), Cisco, Google, Microsoft, RingCentral, Zoom, Genesys and Five9–as well as Global 2000 enterprises and SaaS builders like Docusign, Uber and Yosi Health. As a founder of the cloud communications revolution, we are the first and only global Communications Platform-as-a-Service (CPaaS) to offer a unique combination of composable APIs, AI capabilities, owner-operated network and broad regulatory experience. Our award-winning support teams help businesses around the world solve complex communications challenges to reach anyone, anywhere. For more information, visit www.bandwidth.com.
Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, future financial and business performance for the quarter ending September 30, 2025 and year ending December 31, 2025, the success of our product offerings and our platform, and the value proposition of our products, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “intend,” “guide,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to expand effectively into new markets, macroeconomic conditions both in the U.S. and globally, legal, reputational and financial risks which may result from ever-evolving cybersecurity threats, our ability to operate in compliance with applicable laws, as well as other risks and uncertainties set forth in the “Risk Factors” section of our latest Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and any subsequent reports that we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no obligation to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP, we provide investors with certain Non-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use these Non-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that these Non-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation of Non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our Non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.
We define Non-GAAP gross profit as gross profit after adding back depreciation, amortization of acquired intangible assets related to acquisitions and stock-based compensation. We add back depreciation, amortization of acquired intangible assets related to acquisitions and stock-based compensation because they are non-cash items. We eliminate the impact of these non-cash items, because we do not consider them indicative of our core operating performance. Their exclusion facilitates comparisons of our operating performance on a period-to-period basis. Therefore, we believe that showing gross margin, as adjusted to remove the impact of these non-cash expenses, is helpful to investors in assessing our gross profit and gross margin
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performance in a way that is similar to how management assesses our performance. We calculate Non-GAAP gross margin by dividing Non-GAAP gross profit by cloud communications revenue, which is revenue less pass-through messaging surcharges.
We define Non-GAAP net income (loss) as net income or loss adjusted for certain items affecting period to period comparability. Non-GAAP net income (loss) excludes stock-based compensation, amortization of acquired intangible assets related to acquisitions, amortization of debt discount and issuance costs for convertible debt, acquisition related expenses, impairment charges of intangibles assets, net cost associated with early lease terminations and leases without economic benefit, (gain) loss on sale of business, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, non-recurring items not indicative of ongoing operations and other, and estimated tax impact of above adjustments, net of valuation allowances.
We define Adjusted EBITDA as 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 related expenses, stock-based compensation expense, impairment of intangible assets, (gain) loss on sale of business, net cost associated with early lease terminations and leases without economic benefit, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, and non-recurring items not indicative of ongoing operations and other. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business.
We define free cash flow as net cash provided by or used in operating activities less net cash used in the acquisition of property, plant and equipment and capitalized development costs for software for internal use. We believe free cash flow is a useful indicator of liquidity and provides information to management and investors about the amount of cash generated from our core operations that can be used for investing in our business. Free cash flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, it does not take into consideration investment in long-term securities, nor does it represent the residual cash flows available for discretionary expenditures. Therefore, it is important to evaluate free cash flow along with our condensed consolidated statements of cash flows.
We believe that these Non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. While a reconciliation of Non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, many of these costs and expenses that we may incur in the future, we have provided a reconciliation of Non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.
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BANDWIDTH INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three months ended June 30,Six months ended June 30,
2025202420252024
Revenue$180,013 $173,602 $354,254 $344,635 
Cost of revenue108,349 108,773 211,078 214,322 
Gross profit71,664 64,829 143,176 130,313 
Operating expenses
Research and development31,749 28,132 62,381 57,044 
Sales and marketing24,818 26,066 51,274 55,205 
General and administrative18,845 16,705 37,956 34,554 
Total operating expenses75,412 70,903 151,611 146,803 
Operating loss(3,748)(6,074)(8,435)(16,490)
Other (expense) income(1,047)9,798 (170)10,781 
(Loss) income before income taxes(4,795)3,724 (8,605)(5,709)
Income tax (provision) benefit(136)331 (66)531 
Net (loss) income$(4,931)$4,055 $(8,671)$(5,178)
Net (loss) income per share
Basic$(0.16)$0.15 $(0.29)$(0.19)
Diluted$(0.16)$(0.17)$(0.29)$(0.19)
Numerator used to compute net (loss) income per share:
Basic$(4,931)$4,055 $(8,671)$(5,178)
Diluted$(4,931)$(5,043)$(8,671)$(5,178)
Weighted average number of common shares outstanding
Basic29,889,020 27,079,333 29,438,230 26,786,568 
Diluted29,889,020 29,500,598 29,438,230 26,786,568 

Bandwidth recognized total stock-based compensation expense as follows:
Three months ended June 30,Six months ended June 30,
2025202420252024
Cost of revenue$530 $375 $1,055 $771 
Research and development5,524 4,684 11,081 10,000 
Sales and marketing1,867 2,105 4,141 4,270 
General and administrative4,624 4,196 9,843 8,658 
Total$12,545 $11,360 $26,120 $23,699 

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BANDWIDTH INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
As of June 30,As of December 31,
20252024
Assets
Current assets:
Cash and cash equivalents$60,136 $81,812 
Marketable securities8,000 1,975 
Accounts receivable, net of allowances89,158 86,455 
Deferred costs4,410 3,729 
Prepaid expenses and other current assets14,709 13,841 
Total current assets176,413 187,812 
Property, plant and equipment, net178,622 176,823 
Operating right-of-use asset, net153,481 153,601 
Intangible assets, net149,730 145,355 
Deferred costs, non-current3,614 4,355 
Other long-term assets4,437 3,977 
Goodwill356,185 317,243 
Total assets$1,022,482 $989,166 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$21,292 $28,362 
Accrued expenses and other current liabilities94,196 101,819 
Current portion of deferred revenue8,169 7,031 
Operating lease liability, current3,628 3,111 
Current portion of convertible senior notes7,607 — 
Total current liabilities134,892 140,323 
Other liabilities584 576 
Operating lease liability, net of current portion221,870 219,191 
Deferred revenue, net of current portion6,735 7,955 
Deferred tax liability26,838 27,304 
Convertible senior notes247,025 281,284 
Total liabilities637,944 676,633 
Stockholders’ equity:
Class A and Class B common stock30 29 
Additional paid-in capital466,358 435,927 
Accumulated deficit(80,085)(71,414)
Accumulated other comprehensive loss(1,765)(52,009)
Total stockholders’ equity384,538 312,533 
Total liabilities and stockholders’ equity$1,022,482 $989,166 

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BANDWIDTH INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six months ended June 30,
20252024
Cash flows from operating activities
Net loss$(8,671)$(5,178)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization25,818 24,714 
Non-cash reduction to the right-of-use asset1,620 2,007 
Amortization of debt discount and issuance costs709 962 
Stock-based compensation26,120 23,699 
Deferred taxes and other(2,923)(4,116)
Net gain on extinguishment of debt(1,082)(10,267)
Changes in operating assets and liabilities:
Accounts receivable, net of allowances(1,763)(7,642)
Prepaid expenses and other assets(1,465)1,886 
Accounts payable(8,247)(1,112)
Accrued expenses and other liabilities(1,490)3,968 
Operating right-of-use liability12 (2,020)
Net cash provided by operating activities28,638 26,901 
Cash flows from investing activities
Purchase of property, plant and equipment(10,938)(7,145)
Capitalized software development costs(5,364)(5,843)
Purchase of marketable securities(10,702)(31,096)
Proceeds from sales and maturities of marketable securities4,731 38,312 
Proceeds from sale of business206 469 
Net cash used in investing activities(22,067)(5,303)
Cash flows from financing activities
Borrowings on line of credit28,500 65,000 
Repayments on line of credit(28,500)(25,000)
Payments on finance leases(30)(44)
Net cash paid for debt extinguishment(26,144)(128,451)
Payment of debt issuance costs— (354)
Proceeds from exercises of stock options46 119 
Value of equity awards withheld for tax liabilities(2,939)(2,290)
Net cash used in financing activities(29,067)(91,020)
Effect of exchange rate changes on cash, cash equivalents and restricted cash657 (608)
Net decrease in cash, cash equivalents, and restricted cash(21,839)(70,030)
Cash, cash equivalents, and restricted cash, beginning of period82,234 132,307 
Cash, cash equivalents, and restricted cash, end of period$60,395 $62,277 

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BANDWIDTH INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
(Unaudited)
Non-GAAP Gross Profit and Non-GAAP Gross Margin
Three months ended June 30,Six months ended June 30,
2025202420252024
Gross Profit$71,664 $64,829 $143,176 $130,313 
Gross Profit Margin %40 %37 %40 %38 %
Depreciation5,160 4,678 9,838 9,456 
Amortization of acquired intangible assets2,042 1,941 3,939 3,900 
Stock-based compensation530 375 1,055 771 
Non-GAAP Gross Profit$79,396 $71,823 $158,008 $144,440 
Non-GAAP Gross Margin % (1)
58 %56 %59 %56 %
________________________
(1) Calculated by dividing Non-GAAP gross profit by cloud communications revenue of $136 million and $269 million for the three and six months ended June 30, 2025, respectively, and $128 million and $257 million for the three and six months ended June 30, 2024, respectively.



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BANDWIDTH INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
(Unaudited)
Non-GAAP Net Income
Three months ended June 30,Six months ended June 30,
2025202420252024
Net (loss) income$(4,931)$4,055 $(8,671)$(5,178)
Stock-based compensation12,545 11,360 26,120 23,699 
Amortization of acquired intangibles4,565 4,336 8,852 8,697 
Amortization of debt discount and issuance costs for convertible debt278 384 576 869 
Net cost associated with early lease terminations and leases without economic benefit
— 877 — 2,033 
Net gain on extinguishment of debt— (10,267)(1,082)(10,267)
Non-recurring items not indicative of ongoing operations and other (1)
278 49 817 129 
Estimated tax effects of adjustments (2)
(905)(2,075)(3,652)(3,443)
Non-GAAP net income$11,830 $8,719 $22,960 $16,539 
Interest expense on Convertible Notes (3)
238 300 488 617 
Numerator used to compute Non-GAAP diluted net income per share$12,068 $9,019 $23,448 $17,156 
Net (loss) income per share
Basic$(0.16)$0.15 $(0.29)$(0.19)
Diluted$(0.16)$(0.17)$(0.29)$(0.19)
Non-GAAP net income per Non-GAAP share
Basic$0.40 $0.32 $0.78 $0.62 
Diluted$0.38 $0.29 $0.74 $0.55 
Weighted average number of shares outstanding
Basic29,889,020 27,079,333 29,438,230 26,786,568 
Diluted29,889,020 29,500,598 29,438,230 26,786,568 
Non-GAAP basic shares29,889,020 27,079,333 29,438,230 26,786,568 
Convertible debt conversion1,478,379 2,421,265 1,568,075 2,869,144 
Stock options issued and outstanding14,988 28,513 19,471 30,108 
Nonvested RSUs outstanding— 1,284,862 482,045 1,260,376 
Non-GAAP diluted shares31,382,387 30,813,973 31,507,821 30,946,196 
________________________
(1) Non-recurring items not indicative of ongoing operations and other include (i) $0.2 million of losses on disposals of property, plant and equipment during the three and six months ended June 30, 2025, (ii) $0.1 million of losses on sale of business during the three and six months ended June 30, 2025, (iii) $0.5 million of nonrecurring litigation expense during the six months ended June 30, 2025, and (iv) less than $0.1 million and $0.1 million of losses on disposals of property, plant and equipment during the three and six months ended June 30, 2024, respectively.
(2) The estimated tax-effect of adjustments is determined by recalculating the tax provision on a Non-GAAP basis. The Non-GAAP effective income tax rate was 13.9% and 15.0% for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the Non-GAAP effective income tax rate differed from the federal statutory tax rate of 21% in the U.S. primarily due to the research and development tax credits generated in 2025. We analyze the Non-GAAP valuation allowance position on a quarterly basis. As of June 30, 2025, we have no valuation allowance against our deferred tax assets for Non-GAAP purposes.
(3) Non-GAAP net income is increased for interest expense as part of the calculation for diluted Non-GAAP earnings per share.

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BANDWIDTH INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except share and per share amounts)
(Unaudited)
Adjusted EBITDA
Three months ended June 30,Six months ended June 30,
2025202420252024
Net (loss) income$(4,931)$4,055 $(8,671)$(5,178)
Income tax provision (benefit)136 (331)66 (531)
Interest expense, net547 698 1,035 65 
Depreciation8,750 7,964 16,966 16,017 
Amortization4,565 4,336 8,852 8,697 
Stock-based compensation12,545 11,360 26,120 23,699 
Net cost associated with early lease terminations and leases without economic benefit— 877 — 2,033 
Net gain on extinguishment of debt— (10,267)(1,082)(10,267)
Non-recurring items not indicative of ongoing operations and other (1)
278 49 817 129 
Adjusted EBITDA$21,890 $18,741 $44,103 $34,664 
________________________
(1) Non-recurring items not indicative of ongoing operations and other include (i) $0.2 million of losses on disposals of property, plant and equipment during the three and six months ended June 30, 2025, (ii) $0.1 million of losses on sale of business during the three and six months ended June 30, 2025, (iii) $0.5 million of nonrecurring litigation expense during the six months ended June 30, 2025, and (iv) less than $0.1 million and $0.1 million of losses on disposals of property, plant and equipment during the three and six months ended June 30, 2024, respectively.

Free Cash Flow
Three months ended June 30,Six months ended June 30,
2025202420252024
Net cash provided by operating activities$31,721 $24,436 $28,638 $26,901 
Net cash used in investing in capital assets (1)
(6,090)(6,116)(16,302)(12,988)
Free cash flow$25,631 $18,320 $12,336 $13,913 
________________________
(1) Represents the acquisition cost of property, plant and equipment and capitalized development costs for software for internal use.
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