Yahoo Finance

• Total Revenue: $174 million, a 7% year-over-year increase, normalized for 2024 cyclical political campaign revenue.

• Cloud Communications Revenue: $133 million, a 6% year-over-year increase, normalized for 2024 political campaign revenue.

• Non-GAAP Gross Profit: $79 million, an 8% year-over-year increase, or 11% normalized for 2024 political campaign.

• Non-GAAP Gross Margin: Improved to 59%, a 2 percentage point increase.

• EBITDA: Grew by 40% to $22 million.

• Enterprise Voice Revenue Growth: 26% year-over-year.

• Global Voice Plans Revenue Growth: 4% year-over-year.

• Programmable Messaging Revenue: Accounted for 19% of cloud communications revenue, with a 9% year-over-year increase, normalized for 2024 political campaign revenue.

• Net Retention Rate: 116% for the first quarter.

• Customer Name Retention: Well above 99%.

• Average Annual Revenue Per Customer: $228,000, or $211,000 excluding the political campaign benefit in 2024.

• Capital Expenditures: $10 million.

• Cash and Securities Balance: $42 million, with no borrowings under the $150 million line of credit.

• Full Year 2025 Revenue Outlook: Raised to a range of $745 to $760 million, reflecting an increased organic growth outlook of 10% at the midpoint.

• Full Year 2025 EBITDA Outlook: Raised to $87 million at the midpoint.

• Warning! GuruFocus has detected 5 Warning Signs with BAND.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bandwidth Inc (NASDAQ:BAND) reported a strong start to 2025, exceeding both top and bottom line expectations.

• The company saw significant traction in its Enterprise Voice business, with more million-dollar-plus annual revenue deals signed than ever before.

• Bandwidth Inc (NASDAQ:BAND)'s Maestro platform is proving to be a strong competitive differentiator, particularly in sectors like financial services, healthcare, and hospitality.

• The company expanded its channel program, enabling engagement with large enterprise transformations through MSPs and system integrators.

• Bandwidth Inc (NASDAQ:BAND) raised its full-year revenue outlook, reflecting confidence in continued growth across its core offerings.

Negative Points

• The macroeconomic environment remains volatile, and while Bandwidth Inc (NASDAQ:BAND) has built contingency into its projections, there is still uncertainty.

• Programmable messaging, which accounts for 19% of cloud communications revenue, could be more exposed to macro volatility, particularly in retail and digital engagement sectors.

• Despite growth, the messaging business is growing beneath larger competitors in the space, indicating potential challenges in gaining market share.

• Capital expenditures were higher than the previous year, which could impact free cash flow if not managed carefully.

• The company has not publicly disclosed the percentage of sales achieved through its channel partnerships, indicating potential uncertainty in the contribution of this growth strategy.