(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit No. | Description | |||||||
Bandwidth Inc. press release, dated May 7, 2024 | ||||||||
104 | Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document) |
BANDWIDTH INC. | ||||||||
Date: May 7, 2024 | By: | /s/ Daryl E. Raiford | ||||||
Name: | Daryl E. Raiford | |||||||
Title: | Chief Financial Officer |
May 7, 2024 Conference Call Bandwidth will host a conference call to discuss financial results for the first quarter ended March 31, 2024 on May 7, 2024. 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 first quarter ended March 31, 2024. “We’ve had an impressive start to 2024, exceeding our initial forecasts and raising our projections for the remainder of the year. Our direct-to-enterprise business has shown robust growth, marking a 20 percent increase in the first quarter,” said David Morken, CEO of Bandwidth. “The combination of our innovative MaestroTM platform, global presence and award-winning customer service are greatly valued by our customers and differentiate us in the market. Looking ahead, we are dedicated to leveraging our communications cloud to revolutionize enterprise communications across the globe.” First Quarter 2024 Financial Highlights The following table summarizes the condensed consolidated financial highlights for the three months ended March 31, 2024 and 2023 (in millions). | ||||||||||||||||
Conference Call Details May 7, 2024 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 May 14, 2024, by dialing (877)-344-7529 or (412)-317-0088 for international callers, and entering passcode 5428752. Investor Contact Sarah Walas Bandwidth 919-504-6585 ir@bandwidth.com | Three months ended March 31, | ||||||||||||||||
2024 | 2023 | ||||||||||||||||
Revenue | $ | 171 | $ | 138 | |||||||||||||
Gross Margin | 38 | % | 40 | % | |||||||||||||
Non-GAAP Gross Margin (1) | 57 | % | 54 | % | |||||||||||||
Adjusted EBITDA(1) | $ | 16 | $ | 5 | |||||||||||||
Free Cash Flow (1) | $ | (4) | $ | (11) | |||||||||||||
(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. | |||||||||||||||||
“Revenue and profitability exceeded our expectations in the first quarter, driven by solid performance across all three market offerings,” said Daryl Raiford, CFO of Bandwidth. “Delivering on our promise of profitable growth we are raising our full-year guidance with revenue expected to grow approximately 19 percent and Adjusted EBITDA to increase 54 percent. We also enhanced our capital structure by upsizing our revolving credit facility to $100 million and repurchasing approximately $140 million of our 2026 convertible notes at a discount, strengthening our balance sheet and improving operating flexibility.” |
2Q 2024 Guidance | Full Year 2024 Guidance | ||||||||||
Revenue | $171 - $175 | $710 - $720 | |||||||||
Adjusted EBITDA | $15 - $17 | $72 - $76 | |||||||||
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenue | $ | 171,033 | $ | 137,844 | |||||||
Cost of revenue | 105,549 | 82,191 | |||||||||
Gross profit | 65,484 | 55,653 | |||||||||
Operating expenses | |||||||||||
Research and development | 28,912 | 25,661 | |||||||||
Sales and marketing | 29,139 | 25,029 | |||||||||
General and administrative | 17,849 | 16,719 | |||||||||
Total operating expenses | 75,900 | 67,409 | |||||||||
Operating loss | (10,416) | (11,756) | |||||||||
Other income, net | 983 | 12,239 | |||||||||
(Loss) income before income taxes | (9,433) | 483 | |||||||||
Income tax benefit | 200 | 3,128 | |||||||||
Net (loss) income | $ | (9,233) | $ | 3,611 | |||||||
Net (loss) income per share: | |||||||||||
Basic | $ | (0.35) | $ | 0.14 | |||||||
Diluted | $ | (0.35) | $ | (0.28) | |||||||
Numerator used to compute net (loss) income per share: | |||||||||||
Basic | $ | (9,233) | $ | 3,611 | |||||||
Diluted | $ | (9,233) | $ | (8,087) | |||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 26,493,802 | 25,448,452 | |||||||||
Diluted | 26,493,802 | 29,273,258 |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cost of revenue | $ | 396 | $ | 192 | |||||||
Research and development | 5,316 | 3,141 | |||||||||
Sales and marketing | 2,166 | 1,237 | |||||||||
General and administrative | 4,461 | 2,808 | |||||||||
Total | $ | 12,339 | $ | 7,378 |
As of March 31, | As of December 31, | ||||||||||
2024 | 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 105,390 | $ | 131,987 | |||||||
Marketable securities | 41,839 | 21,488 | |||||||||
Accounts receivable, net of allowance for doubtful accounts | 89,452 | 78,155 | |||||||||
Deferred costs | 3,740 | 4,155 | |||||||||
Prepaid expenses and other current assets | 16,606 | 16,990 | |||||||||
Total current assets | 257,027 | 252,775 | |||||||||
Property, plant and equipment, net | 173,824 | 177,864 | |||||||||
Operating right-of-use asset, net | 156,353 | 157,507 | |||||||||
Intangible assets, net | 160,511 | 166,914 | |||||||||
Deferred costs, non-current | 4,333 | 4,586 | |||||||||
Other long-term assets | 4,911 | 5,530 | |||||||||
Goodwill | 328,572 | 335,872 | |||||||||
Total assets | $ | 1,085,531 | $ | 1,101,048 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 23,407 | $ | 34,208 | |||||||
Accrued expenses and other current liabilities | 68,113 | 69,014 | |||||||||
Current portion of deferred revenue | 7,816 | 8,059 | |||||||||
Advanced billings | 4,275 | 6,027 | |||||||||
Operating lease liability, current | 5,089 | 5,463 | |||||||||
Total current liabilities | 108,700 | 122,771 | |||||||||
Other liabilities | 371 | 386 | |||||||||
Operating lease liability, net of current portion | 219,728 | 220,548 | |||||||||
Deferred revenue, net of current portion | 8,384 | 8,406 | |||||||||
Deferred tax liability | 31,138 | 33,021 | |||||||||
Convertible senior notes | 419,011 | 418,526 | |||||||||
Total liabilities | 787,332 | 803,658 | |||||||||
Stockholders’ equity: | |||||||||||
Class A and Class B common stock | 27 | 26 | |||||||||
Additional paid-in capital | 410,420 | 391,048 | |||||||||
Accumulated deficit | (74,123) | (64,890) | |||||||||
Accumulated other comprehensive loss | (38,125) | (28,794) | |||||||||
Total stockholders’ equity | 298,199 | 297,390 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,085,531 | $ | 1,101,048 |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities | |||||||||||
Net (loss) income | $ | (9,233) | $ | 3,611 | |||||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | |||||||||||
Depreciation and amortization | 12,414 | 8,894 | |||||||||
Non-cash reduction to the right-of-use asset | 1,141 | 1,601 | |||||||||
Amortization of debt discount and issuance costs | 525 | 1,011 | |||||||||
Stock-based compensation | 12,339 | 7,378 | |||||||||
Deferred taxes and other | (1,373) | (4,683) | |||||||||
Net gain on extinguishment of debt | — | (12,767) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net of allowances | (11,464) | 11,335 | |||||||||
Prepaid expenses and other assets | 1,230 | (1,509) | |||||||||
Accounts payable | (8,640) | (10,707) | |||||||||
Accrued expenses and other liabilities | 6,707 | (8,619) | |||||||||
Operating right-of-use liability | (1,181) | (1,899) | |||||||||
Net cash provided by (used in) operating activities | 2,465 | (6,354) | |||||||||
Cash flows from investing activities | |||||||||||
Purchase of property, plant and equipment | (3,316) | (2,889) | |||||||||
Capitalized software development costs | (3,556) | (1,657) | |||||||||
Purchase of marketable securities | (21,764) | (10,849) | |||||||||
Proceeds from sales and maturities of marketable securities | 1,422 | 43,938 | |||||||||
Proceeds from sale of business | 208 | 418 | |||||||||
Net cash (used in) provided by investing activities | (27,006) | 28,961 | |||||||||
Cash flows from financing activities | |||||||||||
Payments on finance leases | (17) | (55) | |||||||||
Net cash paid for debt extinguishment | — | (51,146) | |||||||||
Proceeds from exercises of stock options | 103 | 155 | |||||||||
Value of equity awards withheld for tax liabilities | (1,893) | (1,016) | |||||||||
Net cash used in financing activities | (1,807) | (52,062) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (394) | 308 | |||||||||
Net decrease in cash, cash equivalents, and restricted cash | (26,742) | (29,147) | |||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 132,307 | 114,622 | |||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 105,565 | $ | 85,475 | |||||||
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Gross Profit | $ | 65,484 | $ | 55,653 | |||||||
Gross Profit Margin % | 38 | % | 40 | % | |||||||
Depreciation | 4,778 | 3,529 | |||||||||
Amortization of acquired intangible assets | 1,959 | 1,945 | |||||||||
Stock-based compensation | 396 | 192 | |||||||||
Non-GAAP Gross Profit | $ | 72,617 | $ | 61,319 | |||||||
Non-GAAP Gross Margin % (1) | 57 | % | 54 | % |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net (loss) income | $ | (9,233) | $ | 3,611 | |||||||
Stock-based compensation | 12,339 | 7,378 | |||||||||
Amortization of acquired intangibles | 4,361 | 4,274 | |||||||||
Amortization of debt discount and issuance costs for convertible debt | 485 | 562 | |||||||||
Net cost associated with early lease terminations and leases without economic benefit | 1,156 | — | |||||||||
Net gain on extinguishment of debt | — | (12,767) | |||||||||
Non-recurring items not indicative of ongoing operations and other (1) | 80 | 559 | |||||||||
Estimated tax effects of adjustments (2) | (1,368) | (2,427) | |||||||||
Non-GAAP net income | $ | 7,820 | $ | 1,190 | |||||||
Interest expense on Convertible Notes (3) | 317 | 338 | |||||||||
Numerator used to compute Non-GAAP diluted net income per share | $ | 8,137 | $ | 1,528 | |||||||
Net (loss) income per share | |||||||||||
Basic | $ | (0.35) | $ | 0.14 | |||||||
Diluted | $ | (0.35) | $ | (0.28) | |||||||
Non-GAAP net income per Non-GAAP share | |||||||||||
Basic | $ | 0.30 | $ | 0.05 | |||||||
Diluted | $ | 0.27 | $ | 0.05 | |||||||
Weighted average number of shares outstanding | |||||||||||
Basic | 26,493,802 | 25,448,452 | |||||||||
Diluted | 26,493,802 | 29,273,258 | |||||||||
Non-GAAP basic shares | 26,493,802 | 25,448,452 | |||||||||
Convertible debt conversion | 3,317,023 | 3,824,806 | |||||||||
Stock options issued and outstanding | 30,602 | 78,341 | |||||||||
Nonvested RSUs outstanding | 731,127 | — | |||||||||
Non-GAAP diluted shares | 30,572,554 | 29,351,599 | |||||||||
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net (loss) income | $ | (9,233) | $ | 3,611 | |||||||
Income tax benefit | (200) | (3,128) | |||||||||
Interest (income) expense, net | (633) | 914 | |||||||||
Depreciation | 8,053 | 4,620 | |||||||||
Amortization | 4,361 | 4,274 | |||||||||
Stock-based compensation | 12,339 | 7,378 | |||||||||
Net cost associated with early lease terminations and leases without economic benefit | 1,156 | — | |||||||||
Net gain on extinguishment of debt | — | (12,767) | |||||||||
Non-recurring items not indicative of ongoing operations and other (1) | 80 | 157 | |||||||||
Adjusted EBITDA | $ | 15,923 | $ | 5,059 |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash provided by (used in) operating activities | $ | 2,465 | $ | (6,354) | |||||||
Net cash used in investing in capital assets (1) | (6,872) | (4,546) | |||||||||
Free cash flow | $ | (4,407) | $ | (10,900) |
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Cover |
May 07, 2024 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | May 07, 2024 |
Entity Registrant Name | BANDWIDTH INC. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-38285 |
Entity Tax Identification Number | 56-2242657 |
Entity Address, Address Line One | 2230 Bandmate Way |
Entity Address, City or Town | Raleigh |
Entity Address, State or Province | NC |
Entity Address, Postal Zip Code | 27607 |
City Area Code | (800) |
Local Phone Number | 808-5150 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share |
Trading Symbol | BAND |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001514416 |
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