Second quarter revenue and profitability
exceeded guidance ranges
Messaging revenue up 11%
year-over-year
RALEIGH,
N.C., Aug. 2, 2023 /PRNewswire/ -- Bandwidth
Inc. (NASDAQ: BAND), a leading global enterprise cloud
communications company, today announced financial results for the
second quarter ended June 30,
2023.
"I am pleased with our business performance and financial
results in the second quarter of 2023 demonstrating solid execution
and a focus on serving our customers through a challenging economic
environment," said David Morken,
Bandwidth's Chief Executive Officer. "Looking to the remainder of
the year, we will maintain our strong focus on disciplined
execution and expanded profitability while leveraging our global
reach, regulatory experience, enterprise-grade APIs, and
breakthrough innovations like Maestro for the benefit of our
customers."
Second Quarter 2023 Financial Highlights
The following table summarizes the consolidated financial
highlights for the three months ended June
30, 2023 and 2022 (in millions, except per share
amounts).(1)
|
Three months ended
June 30,
|
|
2023
|
|
2022
|
Revenue
|
$
146
|
|
$
136
|
Gross Margin
|
40 %
|
|
41 %
|
Non-GAAP Gross Margin
(1)
|
55 %
|
|
53 %
|
Adjusted
EBITDA(1)
|
$
11
|
|
$
5
|
Dollar-based net
retention rate (2)
|
106 %
|
|
112 %
|
|
(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 achieved second quarter revenue of $146 million and Adjusted EBITDA of $11 million, both of which exceeded their
respective guidance ranges," said Daryl
Raiford, Bandwidth's Chief Financial Officer. "Against a
backdrop of a choppy economic environment, these results
demonstrate our value proposition is strong and core business model
is resilient. Accordingly, we are increasing our full year
revenue guidance to reflect our first half revenue over achievement
and continue to target year-over-year profitability growth of 30
percent."
Second Quarter Customer and Operational
Highlights
- A cloud services provider chose Bandwidth to power their
contact center services following major challenges with their
incumbent provider. They valued Bandwidth's reliability,
resiliency, and premium support. Bandwidth's global reach,
regulatory experience, and scalability were also key to supporting
their rapidly growing international business.
- A large contact center services provider in Central Europe selected Bandwidth to serve
their customers in the EMEA region. Looking to expand their
geographic presence, Bandwidth solved their global and regulatory
challenges while enabling new capabilities for customized local
services.
- A children's hospital network turned to Bandwidth to migrate
its contact center and collaboration communications to the cloud.
The strong combination of Bandwidth's new Cisco Webex
integration with Maestro, number management API and flexible call
routing provided the capabilities and assurance they needed to
begin their move.
- A Fortune 200 energy technology company modernized their
communications with Bandwidth to enable their Teams deployment
globally. The customer chose Bandwidth for its superior support
capability, global reach, and deep experience as a Microsoft direct
routing provider.
- Bandwidth named a leader in IDC's Worldwide CPaaS
MarketScape for the third consecutive time.
Financial Outlook
Bandwidth's outlook is based on current indications for its
business, which are subject to change. Bandwidth is providing
guidance for its third quarter and full year 2023 as follows:
|
Q3 2023
Guidance
|
|
Full Year 2023
Guidance
|
Revenue
(millions)
|
$148 -
$150
|
|
$588 -
$592
|
Adjusted EBITDA
(millions)
|
$10 - $12
|
|
$44 - $46
|
Bandwidth has not reconciled its third quarter and full year
2023 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 Schedule
- KeyBanc Technology Leadership Forum in Vail, CO. Fireside chat on August 7, 2023 at 1:30PM
Mountain Time.
- Canaccord Genuity 43rd Annual Growth Conference in
Boston, MA. Fireside chat on
August 9, 2023 at 8:30AM Eastern Time.
Conference Call
Bandwidth will host a conference call
to discuss financial results for the second quarter ended
June 30, 2023 on August 2, 2023. 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 conference call.
Conference Call Details
August
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 August 9,
2023, by dialing (877)-344-7529 or (412)-317-0088 for
international callers, and entering passcode 3263287.
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 60+
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,
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, 2023 and year ending December 31, 2023, 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 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 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 above, 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 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 revenue less
pass-through messaging surcharges, expressed as a percentage of
revenue.
We define Non-GAAP net income as net income or loss adjusted for
certain items affecting period to period comparability. Non-GAAP
net income 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 consolidated statements of
cash flows.
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.
To calculate the dollar-based net retention rate, we first
identify the cohort of customers that generated revenue in the same
quarter of the prior year. The dollar-based net retention rate is
obtained by dividing the revenue generated from that cohort in a
quarter, by the revenue generated from that same cohort in the
corresponding quarter in the prior year. The dollar-based net
retention rate reported in a quarter is then obtained by averaging
the result from that quarter by the corresponding results from each
of the prior three quarters. Customers of acquired businesses are
included in the subsequent year's calendar quarter of acquisition.
Our dollar-based net retention rate increases when such customers
increase usage of a product, extend usage of a product to new
applications or adopt a new product. Our dollar-based net retention
rate decreases when such customers cease or reduce usage of a
product or when we lower prices on our solutions.
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
145,874
|
|
$
136,489
|
|
$
283,718
|
|
$
267,853
|
Cost of
revenue
|
86,919
|
|
81,085
|
|
169,110
|
|
157,035
|
Gross profit
|
58,955
|
|
55,404
|
|
114,608
|
|
110,818
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
24,852
|
|
24,264
|
|
50,513
|
|
46,691
|
Sales and
marketing
|
25,754
|
|
23,327
|
|
50,783
|
|
46,479
|
General and
administrative
|
15,868
|
|
16,863
|
|
32,587
|
|
33,568
|
Total operating
expenses
|
66,474
|
|
64,454
|
|
133,883
|
|
126,738
|
Operating
loss
|
(7,519)
|
|
(9,050)
|
|
(19,275)
|
|
(15,920)
|
Other income,
net
|
|
|
|
|
|
|
|
Net gain on
extinguishment of debt
|
—
|
|
—
|
|
12,767
|
|
—
|
Gain on business
interruption insurance recoveries
|
4,000
|
|
—
|
|
4,000
|
|
—
|
Other (expense)
income, net
|
(218)
|
|
2,385
|
|
(746)
|
|
2,620
|
Total other income,
net
|
3,782
|
|
2,385
|
|
16,021
|
|
2,620
|
Loss before income
taxes
|
(3,737)
|
|
(6,665)
|
|
(3,254)
|
|
(13,300)
|
Income tax (provision)
benefit
|
(153)
|
|
417
|
|
2,975
|
|
238
|
Net loss
|
$
(3,890)
|
|
$
(6,248)
|
|
$
(279)
|
|
$
(13,062)
|
|
|
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
$
(0.15)
|
|
$
(0.25)
|
|
$
(0.01)
|
|
$
(0.52)
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding, basic and diluted
|
25,555,219
|
|
25,279,615
|
|
25,502,131
|
|
25,249,998
|
|
The Company recognized
total stock-based compensation expense as follows:
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cost of
revenue
|
$
204
|
|
$
91
|
|
$
396
|
|
$
190
|
Research and
development
|
3,315
|
|
1,663
|
|
6,456
|
|
3,531
|
Sales and
marketing
|
1,428
|
|
727
|
|
2,665
|
|
1,626
|
General and
administrative
|
3,058
|
|
2,340
|
|
5,866
|
|
4,820
|
Total
|
$
8,005
|
|
$
4,821
|
|
$
15,383
|
|
$
10,167
|
BANDWIDTH
INC.
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
As of June 30,
|
|
As of December 31,
|
|
2023
|
|
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
91,824
|
|
$
113,641
|
Marketable
securities
|
30,750
|
|
71,231
|
Accounts receivable,
net of allowance for doubtful accounts
|
74,864
|
|
74,465
|
Deferred
costs
|
4,385
|
|
3,566
|
Prepaid expenses and
other current assets
|
18,520
|
|
16,705
|
Total current
assets
|
220,343
|
|
279,608
|
Property, plant and
equipment, net
|
173,276
|
|
99,753
|
Operating right-of-use
asset, net
|
7,120
|
|
9,993
|
Intangible assets,
net
|
173,911
|
|
177,370
|
Deferred costs,
non-current
|
4,895
|
|
4,938
|
Other long-term
assets
|
7,591
|
|
31,251
|
Goodwill
|
330,144
|
|
326,405
|
Total assets
|
$
917,280
|
|
$
929,318
|
Liabilities and stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
20,626
|
|
$
26,750
|
Accrued expenses and
other current liabilities
|
58,690
|
|
62,577
|
Current portion of
deferred revenue
|
7,929
|
|
7,181
|
Advanced
billings
|
5,510
|
|
10,049
|
Operating lease
liability, current
|
5,090
|
|
7,450
|
Total current
liabilities
|
97,845
|
|
114,007
|
Other
liabilities
|
64,252
|
|
11,176
|
Operating lease
liability, net of current portion
|
3,457
|
|
4,640
|
Deferred revenue, net
of current portion
|
8,269
|
|
8,306
|
Deferred tax
liability
|
33,996
|
|
38,466
|
Convertible senior
notes
|
417,559
|
|
480,546
|
Total
liabilities
|
625,378
|
|
657,141
|
Stockholders'
equity:
|
|
|
|
Class A and Class B
common stock
|
26
|
|
25
|
Additional paid-in
capital
|
376,909
|
|
364,913
|
Accumulated
deficit
|
(48,826)
|
|
(48,547)
|
Accumulated other
comprehensive loss
|
(36,207)
|
|
(44,214)
|
Total stockholders'
equity
|
291,902
|
|
272,177
|
Total liabilities and
stockholders' equity
|
$
917,280
|
|
$
929,318
|
BANDWIDTH
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
Six months ended June 30,
|
|
2023
|
|
2022
|
Cash flows from operating
activities
|
|
|
|
Net loss
|
$
(279)
|
|
$
(13,062)
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities
|
|
|
|
Depreciation and
amortization
|
18,692
|
|
18,087
|
Non-cash reduction to
the right-of-use asset
|
3,242
|
|
3,724
|
Amortization of debt
discount and issuance costs
|
1,485
|
|
1,533
|
Stock-based
compensation
|
15,383
|
|
10,167
|
Deferred taxes and
other
|
(5,225)
|
|
(2,187)
|
Net gain on
extinguishment of debt
|
(12,767)
|
|
—
|
Gain on business
interruption insurance recoveries
|
(4,000)
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net of allowances
|
3,712
|
|
(16,672)
|
Prepaid expenses and
other assets
|
(957)
|
|
(10,497)
|
Accounts
payable
|
(6,171)
|
|
11,742
|
Accrued expenses and
other liabilities
|
(12,464)
|
|
1,433
|
Operating right-of-use
liability
|
(3,919)
|
|
(3,944)
|
Net cash (used in)
provided by operating activities
|
(3,268)
|
|
324
|
Cash flows from investing
activities
|
|
|
|
Purchase of property,
plant and equipment
|
(3,859)
|
|
(9,035)
|
Deposits for
construction in progress
|
—
|
|
(14,545)
|
Capitalized software
development costs
|
(5,001)
|
|
(1,231)
|
Purchase of marketable
securities
|
(40,625)
|
|
(137,786)
|
Proceeds from sales
and maturities of marketable securities
|
81,233
|
|
—
|
Proceeds from sale of
business
|
835
|
|
—
|
Net cash provided by
(used in) investing activities
|
32,583
|
|
(162,597)
|
Cash flows from financing
activities
|
|
|
|
Payments on finance
leases
|
(90)
|
|
(126)
|
Net cash paid for debt
extinguishment
|
(51,259)
|
|
—
|
Payment of debt
issuance costs
|
—
|
|
(487)
|
Proceeds from
exercises of stock options
|
413
|
|
162
|
Value of equity awards
withheld for tax liabilities
|
(1,000)
|
|
(1,937)
|
Net cash used in
financing activities
|
(51,936)
|
|
(2,388)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
27
|
|
(1,434)
|
Net decrease in cash,
cash equivalents, and restricted cash
|
(22,594)
|
|
(166,095)
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
114,622
|
|
332,289
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
92,028
|
|
$
166,194
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross Profit
|
$
58,955
|
|
$
55,404
|
|
$
114,608
|
|
$
110,818
|
Gross Profit Margin %
|
40 %
|
|
41 %
|
|
40 %
|
|
41 %
|
Depreciation
|
4,205
|
|
3,362
|
|
7,734
|
|
6,738
|
Amortization of
acquired intangible assets
|
1,959
|
|
1,934
|
|
3,904
|
|
3,966
|
Stock-based
compensation
|
204
|
|
91
|
|
396
|
|
190
|
Non-GAAP Gross Profit
|
$
65,323
|
|
$
60,791
|
|
$
126,642
|
|
$
121,712
|
Non-GAAP Gross Margin %
(1)
|
55 %
|
|
53 %
|
|
54 %
|
|
53 %
|
|
|
|
|
|
(1)
Calculated by dividing Non-GAAP gross profit by revenue less
pass-through messaging surcharges of $27 million and $21 million in
the three months ended June 30, 2023 and 2022, respectively, and
$51 million and $38 million in the six months ended June 30, 2023
and 2022, respectively.
|
BANDWIDTH
INC.
|
Reconciliation of
Non-GAAP Financial Measures
|
(In thousands,
except share and per share amounts)
|
(Unaudited)
|
|
Non-GAAP Net
Income (Loss)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss
|
$
(3,890)
|
|
$
(6,248)
|
|
$
(279)
|
|
$
(13,062)
|
Stock-based
compensation
|
8,005
|
|
4,821
|
|
15,383
|
|
10,167
|
Amortization of
acquired intangibles
|
4,338
|
|
4,334
|
|
8,612
|
|
8,900
|
Amortization of debt
discount and issuance costs for convertible debt
|
474
|
|
761
|
|
1,036
|
|
1,521
|
Gain on sale of
business
|
—
|
|
(2,859)
|
|
—
|
|
(3,777)
|
Net gain on
extinguishment of debt
|
—
|
|
—
|
|
(12,767)
|
|
—
|
Gain on business
interruption insurance recoveries
|
(4,000)
|
|
—
|
|
(4,000)
|
|
—
|
Non-recurring items
not indicative of ongoing operations and other
(1)
|
180
|
|
34
|
|
739
|
|
189
|
Estimated tax effects
of adjustments (2)
|
(708)
|
|
(1,735)
|
|
(3,135)
|
|
(2,286)
|
Non-GAAP net income (loss)
|
$
4,399
|
|
$
(892)
|
|
$
5,589
|
|
$
1,652
|
Interest expense on
Convertible Notes (3) (4)
|
317
|
|
732
|
|
655
|
|
1,125
|
Numerator used to compute Non-GAAP diluted net income
(loss) per share (4)
|
$
4,716
|
|
$
(892)
|
|
$
6,244
|
|
$
2,777
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted
|
$
(0.15)
|
|
$
(0.25)
|
|
$
(0.01)
|
|
$
(0.52)
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per Non-GAAP
share
|
|
|
|
|
|
|
|
Basic
|
$
0.17
|
|
$
(0.04)
|
|
$
0.22
|
|
$
0.07
|
Diluted
|
$
0.16
|
|
$
(0.04)
|
|
$
0.21
|
|
$
0.09
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding
|
|
|
|
|
|
|
|
Basic and diluted shares
|
25,555,219
|
|
25,279,615
|
|
25,502,131
|
|
25,249,998
|
|
|
|
|
|
|
|
|
Non-GAAP basic shares
|
25,555,219
|
|
25,279,615
|
|
25,502,131
|
|
25,249,998
|
Convertible debt
conversion
|
3,317,023
|
|
—
|
|
3,569,511
|
|
5,788,805
|
Stock options issued
and outstanding
|
27,413
|
|
—
|
|
60,583
|
|
120,167
|
Non-GAAP diluted shares
|
28,899,655
|
|
25,279,615
|
|
29,132,225
|
|
31,158,970
|
|
|
|
|
|
|
(1)
Non-recurring items not indicative of ongoing operations and other
include (i) $0.2 million and less than $0.1 million of losses on
disposals of property, plant and equipment in the three months
ended June 30, 2023 and 2022, respectively, (ii) $0.4 million of
expense resulting from the early termination of the Company's
undrawn SVB credit facility and $0.3 million of losses on disposals
of property, plant and equipment for the six months ended June 30,
2023 and (iii) $0.2 million of losses on disposals of property,
plant and equipment for the six months ended June 30,
2022.
|
(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 2.8% and 55.4% for the six months ended June
30, 2023 and 2022, respectively. For the six months ended June 30,
2023, 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 2023. We analyze
the Non-GAAP valuation allowance position on a quarterly basis. In
the fourth quarter of 2022, we removed the valuation allowance
against all U.S. deferred tax assets for Non-GAAP purposes as a
result of cumulative Non-GAAP U.S. income over the past three years
and a significant depletion of net operating loss and tax credit
carryforwards on a Non-GAAP basis. As of June 30, 2023, we have no
valuation allowance against our remaining deferred tax assets for
Non-GAAP purposes.
|
(3) Upon the
adoption of ASU 2020-06 on January 1, 2022, net income is increased
for interest expense as part of the calculation for diluted
Non-GAAP earnings per share
|
(4) As we
had a Non-GAAP net loss for the three months ended June 30, 2022,
the interest expense on the Convertible Notes was not used to
compute Non-GAAP diluted net loss per share. This figure is
presented to show the activity during the quarter resulting in the
interest expense on the Convertible Notes used to compute Non-GAAP
diluted net income per share for the six months ended June 30,
2022.
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net loss
|
$
(3,890)
|
|
$
(6,248)
|
|
$
(279)
|
|
$
(13,062)
|
Income tax provision
(benefit)
|
153
|
|
(417)
|
|
(2,975)
|
|
(238)
|
Interest expense,
net
|
322
|
|
874
|
|
1,236
|
|
2,124
|
Depreciation
|
5,460
|
|
4,583
|
|
10,080
|
|
9,187
|
Amortization
|
4,338
|
|
4,334
|
|
8,612
|
|
8,900
|
Stock-based
compensation
|
8,005
|
|
4,821
|
|
15,383
|
|
10,167
|
Gain on sale of
business
|
—
|
|
(2,859)
|
|
—
|
|
(3,777)
|
Net gain on
extinguishment of debt
|
—
|
|
—
|
|
(12,767)
|
|
—
|
Gain on business
interruption insurance recoveries
|
(4,000)
|
|
—
|
|
(4,000)
|
|
—
|
Non-recurring items
not indicative of ongoing operations and other
(1)
|
180
|
|
34
|
|
337
|
|
189
|
Adjusted EBITDA
|
$
10,568
|
|
$
5,122
|
|
$
15,627
|
|
$
13,490
|
|
|
|
|
|
|
(1)
Non-recurring items not indicative of ongoing operations and other
include $0.2 million and less than $0.1 million of losses on
disposals of property, plant and equipment in the three months
ended June 30, 2023 and 2022, respectively, and $0.3 million and
$0.2 million of losses on disposals of property, plant and
equipment in the six months ended June 30, 2023 and 2022,
respectively.
|
Free Cash
Flow
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
(used in) operating activities
|
$
3,086
|
|
$
7,019
|
|
$
(3,268)
|
|
$
324
|
Net cash used in
investing in capital assets (1)
|
(4,314)
|
|
(4,341)
|
|
(8,860)
|
|
(10,266)
|
Free cash flow
|
$
(1,228)
|
|
$
2,678
|
|
$
(12,128)
|
|
$
(9,942)
|
|
|
|
|
|
(1)
Represents the acquisition cost of property, plant and equipment
and capitalized development costs for software for internal
use.
|
View original
content:https://www.prnewswire.com/news-releases/bandwidth-announces-second-quarter-2023-financial-results-301891789.html
SOURCE Bandwidth Inc.