(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 2, 2023 | ||||||||||||||
104 | Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document) |
BANDWIDTH INC. | ||||||||
Date: May 2, 2023 | By: | /s/ Daryl E. Raiford | ||||||
Name: | Daryl E. Raiford | |||||||
Title: | Chief Financial Officer |
May 2, 2023 Conference Call Conference call to discuss Bandwidth's financial results for the first quarter ended March 31, 2023 on May 2, 2023, via the investor section of its website at https://investors.bandwidth.com where a replay will also be available shortly following the conference 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, 2023. “Our results for the quarter demonstrate solid progress adding enterprise customers, developing innovative award-winning products, and advancing our strategic initiatives with a focus on profitability,” said David Morken, Bandwidth’s Chief Executive Officer. “Looking ahead, we remain focused on maximizing our direct-to-enterprise momentum, capitalizing on new innovations like Maestro and emerging AI technologies, increasing product penetration across our three key customer categories, and exploiting the competitive advantage of being the only CPaaS provider with our own global network.” First Quarter 2023 Financial Highlights The following table summarizes the consolidated financial highlights for the three months ended March 31, 2023 and 2022 (in millions, except per share amounts).(1) | ||||||||||||||||
Conference Call Details May 2, 2023 5:00 pm 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 9, 2023, by dialing (877)-344-7529 or (412)-317-0088 for international callers, and entering passcode 6702378. Investor Contact Sarah Walas Bandwidth 919-504-6585 ir@bandwidth.com | Three months ended March 31, | ||||||||||||||||
2023 | 2022 | ||||||||||||||||
Total Revenue | $ | 138 | $ | 131 | |||||||||||||
Gross Margin | 40 | % | 42 | % | |||||||||||||
Non-GAAP Gross Margin (1) | 54 | % | 53 | % | |||||||||||||
Adjusted EBITDA(1) | $ | 5 | $ | 8 | |||||||||||||
Dollar-based net retention rate (2) | 109 | % | 114 | % | |||||||||||||
(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. (2) Additional information regarding our dollar-based net retention rate and how it is calculated is included below. | |||||||||||||||||
“We are pleased with our start to the year delivering first quarter revenue of $138 million, exceeding our expectations, and adjusted EBITDA of $5 million. Those results position us to deliver our full year outlook growing profitability 30 percent,” said Daryl Raiford, Bandwidth’s Chief Financial Officer. “Our guidance for the remainder of the year remains unchanged – with continued growth amid a challenging economic backdrop and driving profitability through operating leverage. We will remain focused on what we can control, serving and delighting our customers every day, being disciplined with our costs and growing profitability for the longer term.” |
Q2 2023 Guidance | Full Year 2023 Guidance | ||||||||||
Total Revenue (millions) | $140 - $142 | $576 - $584 | |||||||||
Adjusted EBITDA (millions) | $4 - $6 | $43 - $47 | |||||||||
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue | $ | 137,844 | $ | 131,364 | |||||||
Cost of revenue | 82,191 | 75,950 | |||||||||
Gross profit | 55,653 | 55,414 | |||||||||
Operating expenses: | |||||||||||
Research and development | 25,661 | 22,427 | |||||||||
Sales and marketing | 25,029 | 23,152 | |||||||||
General and administrative | 16,719 | 16,705 | |||||||||
Total operating expenses | 67,409 | 62,284 | |||||||||
Operating loss | (11,756) | (6,870) | |||||||||
Other income, net | |||||||||||
Net gain on extinguishment of debt | 12,767 | — | |||||||||
Other (expense) income, net | (528) | 235 | |||||||||
Total other income, net | 12,239 | 235 | |||||||||
Income (loss) before income taxes | 483 | (6,635) | |||||||||
Income tax benefit (provision) | 3,128 | (179) | |||||||||
Net income (loss) | $ | 3,611 | $ | (6,814) | |||||||
Net income (loss) per share: | |||||||||||
Basic | $ | 0.14 | $ | (0.27) | |||||||
Diluted | $ | (0.28) | $ | (0.27) | |||||||
Numerator used to compute net income (loss) per share: | |||||||||||
Basic | $ | 3,611 | $ | (6,814) | |||||||
Diluted | $ | (8,087) | $ | (6,814) | |||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 25,448,452 | 25,220,052 | |||||||||
Diluted | 29,273,258 | 25,220,052 |
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cost of revenue | $ | 192 | $ | 99 | |||||||
Research and development | 3,141 | 1,868 | |||||||||
Sales and marketing | 1,237 | 899 | |||||||||
General and administrative | 2,808 | 2,480 | |||||||||
Total | $ | 7,378 | $ | 5,346 |
As of March 31, | As of December 31, | ||||||||||
2023 | 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 85,298 | $ | 113,641 | |||||||
Marketable securities | 38,214 | 71,231 | |||||||||
Accounts receivable, net of allowance for doubtful accounts | 63,224 | 74,465 | |||||||||
Deferred costs | 3,651 | 3,566 | |||||||||
Prepaid expenses and other current assets | 19,569 | 16,705 | |||||||||
Total current assets | 209,956 | 279,608 | |||||||||
Property, plant and equipment, net | 102,075 | 99,753 | |||||||||
Operating right-of-use asset, net | 8,447 | 9,993 | |||||||||
Intangible assets, net | 176,242 | 177,370 | |||||||||
Deferred costs, non-current | 4,935 | 4,938 | |||||||||
Other long-term assets | 28,192 | 31,251 | |||||||||
Goodwill | 331,275 | 326,405 | |||||||||
Total assets | $ | 861,122 | $ | 929,318 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 16,376 | $ | 26,750 | |||||||
Accrued expenses and other current liabilities | 57,514 | 62,577 | |||||||||
Current portion of deferred revenue | 7,302 | 7,181 | |||||||||
Advanced billings | 7,322 | 10,049 | |||||||||
Operating lease liability, current | 6,476 | 7,450 | |||||||||
Total current liabilities | 94,990 | 114,007 | |||||||||
Other liabilities | 13,312 | 11,176 | |||||||||
Operating lease liability, net of current portion | 3,778 | 4,640 | |||||||||
Deferred revenue, net of current portion | 8,220 | 8,306 | |||||||||
Deferred tax liability | 34,328 | 38,466 | |||||||||
Convertible senior notes | 417,085 | 480,546 | |||||||||
Total liabilities | 571,713 | 657,141 | |||||||||
Stockholders’ equity: | |||||||||||
Class A and Class B common stock | 26 | 25 | |||||||||
Additional paid-in capital | 370,814 | 364,913 | |||||||||
Accumulated deficit | (44,936) | (48,547) | |||||||||
Accumulated other comprehensive loss | (36,495) | (44,214) | |||||||||
Total stockholders’ equity | 289,409 | 272,177 | |||||||||
Total liabilities and stockholders’ equity | $ | 861,122 | $ | 929,318 |
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | $ | 3,611 | $ | (6,814) | |||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||||||||
Depreciation and amortization | 8,894 | 9,170 | |||||||||
Non-cash reduction to the right-of-use asset | 1,601 | 1,910 | |||||||||
Amortization of debt discount and issuance costs | 1,011 | 760 | |||||||||
Stock-based compensation | 7,378 | 5,346 | |||||||||
Deferred taxes and other | (4,683) | 94 | |||||||||
Net gain on extinguishment of debt | (12,767) | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net of allowances | 11,335 | (7,416) | |||||||||
Prepaid expenses and other assets | (1,509) | (11,334) | |||||||||
Accounts payable | (10,707) | 11 | |||||||||
Accrued expenses and other liabilities | (8,619) | 3,690 | |||||||||
Operating right-of-use liability | (1,899) | (2,112) | |||||||||
Net cash used in operating activities | (6,354) | (6,695) | |||||||||
Cash flows from investing activities | |||||||||||
Purchase of property, plant and equipment | (2,889) | (5,272) | |||||||||
Capitalized software development costs | (1,657) | (653) | |||||||||
Purchase of marketable securities | (10,849) | — | |||||||||
Proceeds from sales and maturities of marketable securities | 43,938 | — | |||||||||
Proceeds from sale of business | 418 | — | |||||||||
Net cash provided by (used in) investing activities | 28,961 | (5,925) | |||||||||
Cash flows from financing activities | |||||||||||
Payments on finance leases | (55) | (48) | |||||||||
Net cash paid for debt extinguishment | (51,146) | — | |||||||||
Proceeds from exercises of stock options | 155 | 125 | |||||||||
Value of equity awards withheld for tax liabilities | (1,016) | (1,701) | |||||||||
Net cash used in financing activities | (52,062) | (1,624) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 308 | (1,056) | |||||||||
Net decrease in cash, cash equivalents, and restricted cash | (29,147) | (15,300) | |||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 114,622 | 332,289 | |||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 85,475 | $ | 316,989 | |||||||
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Gross Profit | $ | 55,653 | $ | 55,414 | |||||||
Gross Profit Margin % | 40 | % | 42 | % | |||||||
Depreciation | 3,529 | 3,376 | |||||||||
Amortization of acquired intangible assets | 1,945 | 2,032 | |||||||||
Stock-based compensation | 192 | 99 | |||||||||
Non-GAAP Gross Profit | $ | 61,319 | $ | 60,921 | |||||||
Non-GAAP Gross Margin % (1) | 54 | % | 53 | % |
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net income (loss) | $ | 3,611 | $ | (6,814) | |||||||
Stock-based compensation | 7,378 | 5,346 | |||||||||
Amortization of acquired intangibles | 4,274 | 4,566 | |||||||||
Amortization of debt discount and issuance costs for convertible debt | 562 | 760 | |||||||||
Gain on sale of business | — | (918) | |||||||||
Net gain on extinguishment of debt | (12,767) | — | |||||||||
Non-recurring items not indicative of ongoing operations and other (1) | 559 | 155 | |||||||||
Estimated tax effects of adjustments (2) | (2,427) | (551) | |||||||||
Non-GAAP net income | $ | 1,190 | $ | 2,544 | |||||||
Interest expense on Convertible Notes (3) | 338 | 393 | |||||||||
Numerator used to compute Non-GAAP diluted net income per share | $ | 1,528 | $ | 2,937 | |||||||
Net income (loss) per share | |||||||||||
Basic | $ | 0.14 | $ | (0.27) | |||||||
Diluted | $ | (0.28) | $ | (0.27) | |||||||
Non-GAAP net income per Non-GAAP share | |||||||||||
Basic | $ | 0.05 | $ | 0.10 | |||||||
Diluted | $ | 0.05 | $ | 0.09 | |||||||
Weighted average number of shares outstanding | |||||||||||
Basic | 25,448,452 | 25,220,052 | |||||||||
Diluted | 29,273,258 | 25,220,052 | |||||||||
Non-GAAP basic shares | 25,448,452 | 25,220,052 | |||||||||
Convertible debt conversion | 3,824,806 | 5,788,805 | |||||||||
Stock options issued and outstanding | 78,341 | 136,770 | |||||||||
Non-GAAP diluted shares | 29,351,599 | 31,145,627 | |||||||||
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net income (loss) | $ | 3,611 | $ | (6,814) | |||||||
Income tax (benefit) provision | (3,128) | 179 | |||||||||
Interest expense, net | 914 | 1,250 | |||||||||
Depreciation | 4,620 | 4,604 | |||||||||
Amortization | 4,274 | 4,566 | |||||||||
Stock-based compensation | 7,378 | 5,346 | |||||||||
Gain on sale of business | — | (918) | |||||||||
Net gain on extinguishment of debt | (12,767) | — | |||||||||
Non-recurring items not indicative of ongoing operations and other (1) | 157 | 155 | |||||||||
Adjusted EBITDA | $ | 5,059 | $ | 8,368 |
Three months ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash used in operating activities | $ | (6,354) | $ | (6,695) | |||||||
Net cash used in investing in capital assets (1) | (4,546) | (5,925) | |||||||||
Free cash flow | $ | (10,900) | $ | (12,620) |
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Cover |
May 02, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | May 02, 2023 |
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 | 900 Main Campus Drive |
Entity Address, City or Town | Raleigh |
Entity Address, State or Province | NC |
Entity Address, Postal Zip Code | 27606 |
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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