Revenue of $174
million, up 19% year-over-year
Accelerating profitability, exceeding
guidance
Expanding cash flow generation
RALEIGH,
N.C., Aug. 1, 2024 /PRNewswire/ -- Bandwidth
Inc. (NASDAQ: BAND), a leading global enterprise cloud
communications company, today announced financial results for the
second quarter ended June 30,
2024.
"We're pleased to report a very strong first half, making
significant progress toward our plan for 2024. In the second
quarter, we delivered solid revenue growth while accelerating
profitability and cash flow," said David
Morken, CEO of Bandwidth. "Our team's disciplined approach,
coupled with innovative solutions like Maestro and AI Bridge, is
driving strong performance in a dynamic market. I am incredibly
proud of our Bandmates' execution and grateful for the trust our
customers place in us. As we move forward, we remain focused on
delivering exceptional value and transforming the communications
landscape."
Second Quarter 2024 Financial Highlights
The following table summarizes the condensed consolidated
financial highlights for the three months ended June 30, 2024 and 2023 ($ in millions).
|
Three months
ended
June 30,
|
|
2024
|
|
2023
|
Revenue
|
$
174
|
|
$
146
|
Gross Margin
|
37 %
|
|
40 %
|
Non-GAAP Gross Margin
(1)
|
56 %
|
|
55 %
|
Adjusted
EBITDA(1)
|
$
19
|
|
$
11
|
Free Cash Flow
(1)
|
$
18
|
|
$
(1)
|
|
(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 total revenue reaching
$174 million and Adjusted EBITDA up
77% from the prior year, we are performing well across all
categories," said Daryl Raiford, CFO
of Bandwidth. "Our strategic investments and disciplined financial
management have driven impressive free cash flow and operational
efficiency. We are well-positioned to continue this momentum into
the second half of the year, further enhancing our financial
strength and growth trajectory."
Second Quarter Customer and Operational
Highlights
- A nationwide provider of medical claims management selected
Bandwidth as their exclusive provider for voice calling, valuing
our exceptional customer support and the flexibility of our Maestro
product to orchestrate and enhance functionality across their
platform.
- A prominent provider of healthcare integrated supportive care
solutions chose Bandwidth to power its cloud contact center. Our
communications cloud reliability and the comprehensive protection
offered by our Call Assure product resonated with the customer,
ensuring redundancy and safeguarding mission critical
communications.
- A trusted provider of business insurance switched to Bandwidth
as their sole provider for voice calling. They valued our Advanced
Call Routing solution, which offers robust resiliency and
redundancy for their contact center traffic, along with our
superior back-end reporting tools.
- A well-established customer and provider of communications
management software significantly increased their messaging
business with us. Our deep industry knowledge and outstanding
customer service played pivotal roles in securing this additional
business.
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 2024 as follows (in
millions):
|
3Q 2024
Guidance
|
|
Full Year 2024
Guidance
|
Revenue
|
$180 - $184
|
|
$710 - $720
|
Adjusted
EBITDA
|
$18 - $20
|
|
$72 - $76
|
Bandwidth has not reconciled its third quarter and full year
2024 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
- Canaccord Genuity Growth Conference in Boston, MA. Presentation by Daryl Raiford, CFO on Wednesday, August 14th at 10:00AM Eastern Time.
- Piper Sandler Growth Frontiers Conference in
Nashville, TN. Fireside chat with
David Morken, CEO and Daryl Raiford, CFO on Tuesday, September 10th at 10:00AM Central Time.
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.
Conference Call
Bandwidth will host a conference call to discuss financial
results for the second quarter ended June
30, 2024 on August 1, 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.
Conference Call Details
August 1, 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 August 8, 2024, by dialing
877-344-7529 or 412-317-0088 for international callers, and
entering passcode 9676778.
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, 2024 and year ending December 31, 2024, 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 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 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.
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
$
173,602
|
|
$
145,874
|
|
$
344,635
|
|
$
283,718
|
Cost of
revenue
|
108,773
|
|
86,919
|
|
214,322
|
|
169,110
|
Gross profit
|
64,829
|
|
58,955
|
|
130,313
|
|
114,608
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
28,132
|
|
24,852
|
|
57,044
|
|
50,513
|
Sales and
marketing
|
26,066
|
|
25,754
|
|
55,205
|
|
50,783
|
General and
administrative
|
16,705
|
|
15,868
|
|
34,554
|
|
32,587
|
Total operating
expenses
|
70,903
|
|
66,474
|
|
146,803
|
|
133,883
|
Operating
loss
|
(6,074)
|
|
(7,519)
|
|
(16,490)
|
|
(19,275)
|
Other income,
net
|
9,798
|
|
3,782
|
|
10,781
|
|
16,021
|
Income (loss) before
income taxes
|
3,724
|
|
(3,737)
|
|
(5,709)
|
|
(3,254)
|
Income tax benefit
(provision)
|
331
|
|
(153)
|
|
531
|
|
2,975
|
Net income
(loss)
|
$
4,055
|
|
$
(3,890)
|
|
$
(5,178)
|
|
$
(279)
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.15
|
|
$
(0.15)
|
|
$
(0.19)
|
|
$
(0.01)
|
Diluted
|
$
(0.17)
|
|
$
(0.15)
|
|
$
(0.19)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
Numerator used to
compute net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
$
4,055
|
|
$
(3,890)
|
|
$
(5,178)
|
|
$
(279)
|
Diluted
|
$
(5,043)
|
|
$
(3,890)
|
|
$
(5,178)
|
|
$
(279)
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
27,079,333
|
|
25,555,219
|
|
26,786,568
|
|
25,502,131
|
Diluted
|
29,500,598
|
|
25,555,219
|
|
26,786,568
|
|
25,502,131
|
|
The Company recognized
total stock-based compensation expense as follows:
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cost of
revenue
|
$
375
|
|
$
204
|
|
$
771
|
|
$
396
|
Research and
development
|
4,684
|
|
3,315
|
|
10,000
|
|
6,456
|
Sales and
marketing
|
2,105
|
|
1,428
|
|
4,270
|
|
2,665
|
General and
administrative
|
4,196
|
|
3,058
|
|
8,658
|
|
5,866
|
Total
|
$
11,360
|
|
$
8,005
|
|
$
23,699
|
|
$
15,383
|
BANDWIDTH
INC.
Condensed
Consolidated Balance Sheets
(In
thousands)
(Unaudited)
|
|
|
As of June
30,
|
|
As of December
31,
|
|
2024
|
|
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
62,044
|
|
$
131,987
|
Marketable
securities
|
14,399
|
|
21,488
|
Accounts receivable,
net of allowance for doubtful accounts
|
85,576
|
|
78,155
|
Deferred
costs
|
3,871
|
|
4,155
|
Prepaid expenses and
other current assets
|
15,492
|
|
16,990
|
Total current
assets
|
181,382
|
|
252,775
|
Property, plant and
equipment, net
|
173,400
|
|
177,864
|
Operating right-of-use
asset, net
|
155,484
|
|
157,507
|
Intangible assets,
net
|
155,966
|
|
166,914
|
Deferred costs,
non-current
|
4,800
|
|
4,586
|
Other long-term
assets
|
4,851
|
|
5,530
|
Goodwill
|
326,220
|
|
335,872
|
Total assets
|
$
1,002,103
|
|
$
1,101,048
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
31,933
|
|
$
34,208
|
Accrued expenses and
other current liabilities
|
69,256
|
|
69,014
|
Current portion of
deferred revenue
|
7,685
|
|
8,059
|
Advanced
billings
|
4,111
|
|
6,027
|
Operating lease
liability, current
|
3,478
|
|
5,463
|
Line of credit,
current portion
|
40,000
|
|
—
|
Total current
liabilities
|
156,463
|
|
122,771
|
Other
liabilities
|
354
|
|
386
|
Operating lease
liability, net of current portion
|
220,497
|
|
220,548
|
Deferred revenue, net
of current portion
|
8,142
|
|
8,406
|
Deferred tax
liability
|
28,540
|
|
33,021
|
Convertible senior
notes
|
280,660
|
|
418,526
|
Total
liabilities
|
694,656
|
|
803,658
|
Stockholders'
equity:
|
|
|
|
Class A and Class B
common stock
|
27
|
|
26
|
Additional paid-in
capital
|
418,503
|
|
391,048
|
Accumulated
deficit
|
(70,068)
|
|
(64,890)
|
Accumulated other
comprehensive loss
|
(41,015)
|
|
(28,794)
|
Total stockholders'
equity
|
307,447
|
|
297,390
|
Total liabilities and
stockholders' equity
|
$
1,002,103
|
|
$
1,101,048
|
BANDWIDTH
INC.
Condensed
Consolidated Statements of Cash Flows
(In
thousands)
(Unaudited)
|
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(5,178)
|
|
$
(279)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities
|
|
|
|
Depreciation and
amortization
|
24,714
|
|
18,692
|
Non-cash reduction to
the right-of-use asset
|
2,007
|
|
3,242
|
Amortization of debt
discount and issuance costs
|
962
|
|
1,485
|
Stock-based
compensation
|
23,699
|
|
15,383
|
Deferred taxes and
other
|
(4,116)
|
|
(5,225)
|
Net gain on
extinguishment of debt
|
(10,267)
|
|
(12,767)
|
Gain on business
interruption insurance recoveries
|
—
|
|
(4,000)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net of allowances
|
(7,642)
|
|
3,712
|
Prepaid expenses and
other assets
|
1,886
|
|
(957)
|
Accounts
payable
|
(1,112)
|
|
(6,171)
|
Accrued expenses and
other liabilities
|
3,968
|
|
(12,464)
|
Operating right-of-use
liability
|
(2,020)
|
|
(3,919)
|
Net cash provided by
(used in) operating activities
|
26,901
|
|
(3,268)
|
Cash flows from
investing activities
|
|
|
|
Purchase of property,
plant and equipment
|
(7,145)
|
|
(3,859)
|
Capitalized software
development costs
|
(5,843)
|
|
(5,001)
|
Purchase of marketable
securities
|
(31,096)
|
|
(40,625)
|
Proceeds from sales
and maturities of marketable securities
|
38,312
|
|
81,233
|
Proceeds from sale of
business
|
469
|
|
835
|
Net cash (used in)
provided by investing activities
|
(5,303)
|
|
32,583
|
Cash flows from
financing activities
|
|
|
|
Borrowings on line of
credit
|
65,000
|
|
—
|
Repayments on line of
credit
|
(25,000)
|
|
—
|
Payments on finance
leases
|
(44)
|
|
(90)
|
Net cash paid for debt
extinguishment
|
(128,451)
|
|
(51,259)
|
Payment of debt
issuance costs
|
(354)
|
|
—
|
Proceeds from
exercises of stock options
|
119
|
|
413
|
Value of equity awards
withheld for tax liabilities
|
(2,290)
|
|
(1,000)
|
Net cash used in
financing activities
|
(91,020)
|
|
(51,936)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
(608)
|
|
27
|
Net decrease in cash,
cash equivalents, and restricted cash
|
(70,030)
|
|
(22,594)
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
132,307
|
|
114,622
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
62,277
|
|
$
92,028
|
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Gross
Profit
|
$
64,829
|
|
$
58,955
|
|
$
130,313
|
|
$
114,608
|
Gross Profit Margin
%
|
37 %
|
|
40 %
|
|
38 %
|
|
40 %
|
Depreciation
|
4,678
|
|
4,205
|
|
9,456
|
|
7,734
|
Amortization of
acquired intangible assets
|
1,941
|
|
1,959
|
|
3,900
|
|
3,904
|
Stock-based
compensation
|
375
|
|
204
|
|
771
|
|
396
|
Non-GAAP Gross
Profit
|
$
71,823
|
|
$
65,323
|
|
$
144,440
|
|
$
126,642
|
Non-GAAP Gross
Margin % (1)
|
56 %
|
|
55 %
|
|
56 %
|
|
54 %
|
________________________
|
(1)
Calculated by dividing Non-GAAP gross profit by cloud
communications revenue of $128 million and $257 million in the
three and six months ended June 30, 2024, respectively, and $118
million and $233 million for the three and six months ended June
30, 2023, respectively.
|
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income
(loss)
|
$
4,055
|
|
$
(3,890)
|
|
$
(5,178)
|
|
$
(279)
|
Stock-based
compensation
|
11,360
|
|
8,005
|
|
23,699
|
|
15,383
|
Amortization of
acquired intangibles
|
4,336
|
|
4,338
|
|
8,697
|
|
8,612
|
Amortization of debt
discount and issuance costs for convertible debt
|
384
|
|
474
|
|
869
|
|
1,036
|
Net cost associated
with early lease terminations and leases without economic
benefit
|
877
|
|
—
|
|
2,033
|
|
—
|
Net gain on
extinguishment of debt
|
(10,267)
|
|
—
|
|
(10,267)
|
|
(12,767)
|
Gain on business
interruption insurance recoveries
|
—
|
|
(4,000)
|
|
—
|
|
(4,000)
|
Non-recurring items
not indicative of ongoing operations and other
(1)
|
49
|
|
180
|
|
129
|
|
739
|
Estimated tax effects
of adjustments (2)
|
(2,075)
|
|
(708)
|
|
(3,443)
|
|
(3,135)
|
Non-GAAP net
income
|
$
8,719
|
|
$
4,399
|
|
$
16,539
|
|
$
5,589
|
Interest expense on
Convertible Notes (3)
|
300
|
|
317
|
|
617
|
|
655
|
Numerator used to
compute Non-GAAP diluted net income per share
|
$
9,019
|
|
$
4,716
|
|
$
17,156
|
|
$
6,244
|
|
|
|
|
|
|
|
|
Net income (loss)
per share
|
|
|
|
|
|
|
|
Basic
|
$
0.15
|
|
$
(0.15)
|
|
$
(0.19)
|
|
$
(0.01)
|
Diluted
|
$
(0.17)
|
|
$
(0.15)
|
|
$
(0.19)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per Non-GAAP share
|
|
|
|
|
|
|
|
Basic
|
$
0.32
|
|
$
0.17
|
|
$
0.62
|
|
$
0.22
|
Diluted
|
$
0.29
|
|
$
0.16
|
|
$
0.55
|
|
$
0.21
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
27,079,333
|
|
25,555,219
|
|
26,786,568
|
|
25,502,131
|
Diluted
|
29,500,598
|
|
25,555,219
|
|
26,786,568
|
|
25,502,131
|
|
|
|
|
|
|
|
|
Non-GAAP basic
shares
|
27,079,333
|
|
25,555,219
|
|
26,786,568
|
|
25,502,131
|
Convertible debt
conversion
|
2,421,265
|
|
3,317,023
|
|
2,869,144
|
|
3,569,511
|
Stock options issued
and outstanding
|
28,513
|
|
27,413
|
|
30,108
|
|
60,583
|
Nonvested RSUs
outstanding
|
1,284,862
|
|
—
|
|
1,260,376
|
|
—
|
Non-GAAP diluted
shares
|
30,813,973
|
|
28,899,655
|
|
30,946,196
|
|
29,132,225
|
________________________
|
(1) Non-recurring items not
indicative of ongoing operations and other include (i) less than
$0.1 million and $0.2 million of losses on disposals of property,
plant and equipment during the three months ended June 30, 2024 and
2023, respectively, (ii) $0.1 million of losses on disposals of
property, plant and equipment during the six months ended June 30,
2024, and (iii) $0.4 million of expense resulting from the early
termination of our undrawn SVB credit facility and $0.3 million of
losses on disposals of property, plant and equipment during the six
months ended June 30, 2023.
|
(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 15.0% and 2.8% for the six months ended June
30, 2024 and 2023, respectively. For the six months ended June 30,
2024, 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 2024. 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, 2024, we have no
valuation allowance against our remaining 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.
|
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,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income
(loss)
|
$
4,055
|
|
$
(3,890)
|
|
$
(5,178)
|
|
$
(279)
|
Income tax (benefit)
provision
|
(331)
|
|
153
|
|
(531)
|
|
(2,975)
|
Interest expense,
net
|
698
|
|
322
|
|
65
|
|
1,236
|
Depreciation
|
7,964
|
|
5,460
|
|
16,017
|
|
10,080
|
Amortization
|
4,336
|
|
4,338
|
|
8,697
|
|
8,612
|
Stock-based
compensation
|
11,360
|
|
8,005
|
|
23,699
|
|
15,383
|
Net cost associated
with early lease terminations and leases without economic
benefit
|
877
|
|
—
|
|
2,033
|
|
—
|
Net gain on
extinguishment of debt
|
(10,267)
|
|
—
|
|
(10,267)
|
|
(12,767)
|
Gain on business
interruption insurance recoveries
|
—
|
|
(4,000)
|
|
—
|
|
(4,000)
|
Non-recurring items
not indicative of ongoing operations and other
(1)
|
49
|
|
180
|
|
129
|
|
337
|
Adjusted
EBITDA
|
$
18,741
|
|
$
10,568
|
|
$
34,664
|
|
$
15,627
|
________________________
|
(1) Non-recurring items not
indicative of ongoing operations and other include less than $0.1
million and $0.2 million of losses on disposals of property,
plant and equipment during the three months ended June 30, 2024 and
2023, respectively, and $0.1 million and $0.3 million for the six
months ended June 30, 2024 and 2023, respectively.
|
Free Cash
Flow
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net cash provided by
(used in) operating activities
|
$
24,436
|
|
$
3,086
|
|
$
26,901
|
|
$
(3,268)
|
Net cash used in
investing in capital assets (1)
|
(6,116)
|
|
(4,314)
|
|
(12,988)
|
|
(8,860)
|
Free cash
flow
|
$
18,320
|
|
$
(1,228)
|
|
$
13,913
|
|
$
(12,128)
|
________________________
|
(1) Represents the acquisition cost
of property, plant and equipment and capitalized development costs
for software for internal use.
|
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SOURCE Bandwidth Inc.