Bandwidth Inc. Q4 FY2025 earnings call

• David Morken noted a solid fourth quarter, with sustained business performance in 2025. Success in large enterprise space with record million - dollar - plus deals in Q4. Invested in high - margin innovation like AI voice tools, trust portfolio, global communications cloud, and Maestro orchestration software. Entering 2026, confident in upward business trajectory. - Daryl Raiford mentioned 2025 strong execution with solid revenue, profitability, and free cash flow. 2026 expected to be a year of continued growth and margin expansion with total revenue growth of approx 16%, adjusted EBITDA improvement of nearly 30%, and non - GAAP earnings per share of approx $1.66 to $1.74. Bandwidth has a durable cloud communications platform with software - like expansion economics due to durable customer relationships, owned and operated scaled infrastructure - based global cloud communications platform, strong traction in large deals, growing opportunity for upsell and cross - sell with software services, and model designed to grow profitably. - Announced inaugural share repurchase program.

In 2025, total revenue saw an 11% year - over - year organic increase. Voice segment had 11% year - over - year growth driven by increased voice usage, rising adoption of voice - based AI applications, and growing software services revenue. Messaging segment had 12% year - over - year organic growth due to robust holiday messaging demand. Full year 2025 total revenue was $754,000,000, up 10% organically. Non - GAAP gross margin was 58%, adjusted EBITDA was $93,000,000, and free cash flow was $57,000,000. Global Voice Plans had 8% revenue growth, enterprise voice customer category grew 21% with a record number of million - dollar - plus deals. Programmable messaging achieved 7% organic year - over - year growth.

• 2026 outlook is on track to achieve goals for gross margin, EBITDA margin, and free cash flow margin. - Total revenue growth of approximately 16% year - over - year, including cloud communications growth of approximately 10%. - Adjusted EBITDA improvement of nearly 30% year - over - year to achieve a 20% full - year adjusted EBITDA margin. - Non - GAAP earnings per share of approximately $1.66 to $1.74, representing growth of approximately 19%. - Political campaign contribution this year expected to be roughly 2.5% of cloud communications revenue.

Q: Touch on enterprise voice segment Q4 trends and 2026 outlook.

A: Had a lapping and tougher compare but annual rate of 21% in Q4, record number of million - plus deals driving growth in 2026. Software services contribution with each $1,000,000-plus deal including it as upsell/cross - sell.

Q: Difference between cloud communication growth outlook for 10% and total revenue growth of 15%?

A: Difference is surcharge growth rate from carrier messaging surcharges, with two carriers having announced price increases affecting the guide.

Q: Explain insurance example with Google Conversational AI?

A: Complex preexisting Cisco environment for insurance company's contact center, Maestro from Bandwidth facilitated integrating Google's AI solution.

Q: How AI is for the business and moats?

A: AI is a tailwind with voice growth and acceleration. Moats include owning and operating global infrastructure with structural margin and cost advantage, exploding ARPU per customer due to software services adoption, and interconnections with global incumbents.

Q: Pipeline for voice AI and inflection point?

A: AI is a component of enterprise conversations, 2026 is a vital year to see AI adoption in voice hit top and bottom line.

Q: Record number of million - plus deals and composition of newer Global 2000 deals?

A: Closed more million - dollar - plus deals in 2025 than previous years combined due to expanded product portfolio answering value questions, Maestro having strong enterprise value proposition around integrations and supporting move to cloud.