BAND

A month has gone by since the last earnings report for Bandwidth (BAND). Shares have added about 33.5% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Bandwidth due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. BAND’s Q2 Revenue Growth Fueled by Voice and Messaging Bandwidth delivered total revenues of $220 million, up from $180 million in the year-ago quarter, supported by healthy demand across its cloud communications platform.Cloud communications revenues, excluding messaging surcharge revenues, increased 12% year over year to $152 million. Voice solutions generated revenues of $121 million, rising 9%, while programmable messaging revenues climbed 22% to $31 million, benefiting from strong commercial messaging demand and approximately $1 million of political campaign-related messaging revenues. Software services attached to voice and messaging expanded 66% year over year as AI adoption increased platform usage. Bandwidth Expands Enterprise AI Momentum Bandwidth continued to strengthen its position as a communications infrastructure provider for AI-driven applications through large enterprise wins and customer expansions.During the quarter, the company secured five new million-dollar-plus customer wins and expansions, with every deal including Maestro or AI services. New customers included a large Midwest healthcare system and a European appliance care provider, while existing customers such as a global electronic brokerage, a hyperscaler partner and a large U.S. messaging platform expanded their relationships. Management also highlighted growing momentum from its exclusive infrastructure partnership with Salesforce for Agentforce Contact Center, with initial customer traffic already flowing through the platform. BAND’s Margins Improve as Platform Scales Profitability improved alongside revenue growth, reflecting operating leverage from Bandwidth's owned communications network.Non-GAAP gross margin expanded 100 basis points year over year to 59.4%, while non-GAAP gross profit increased 14% to $90 million. Adjusted EBITDA rose 27% year over year to $28 million, with the adjusted EBITDA margin reaching a record 18.3%. Management attributed the margin improvement to continued investments in its owned-and-operated network, which are generating structural efficiency gains as transaction volumes increase. Bandwidth Delivers Strong Cash Flow and Balance Sheet Bandwidth continued to generate healthy cash flows while strengthening its capital structure during the second quarter.Free cash flow totaled $24 million, reflecting another quarter of solid execution. The company also reported customer name retention above 99%, while average annual revenue per customer reached a record $256,000 as larger enterprise customers expanded their spending.Capital allocation remained active. During the quarter, Bandwidth repurchased $15 million of shares, buying back approximately 263,000 shares. It also completed a $316 million offering of 0.00% convertible senior notes due 2032 and used about $122 million of the proceeds to repurchase a substantial portion of its 2028 convertible notes, improving its debt maturity profile while maintaining net leverage at 1.6x. BAND Raises Outlook on Sustained Demand Encouraged by its second-quarter execution, Bandwidth raised its full-year 2026 financial outlook. For the third quarter of 2026, management expects revenues between $231 million and $235 million, adjusted EBITDA of $32 million to $34 million and non-GAAP earnings per share of 45 cents to 49 cents.For the full year, the company now projects revenues between $900 million and $910 million, up from the prior outlook of $880 million to $900 million. Adjusted EBITDA is expected in the range of $123 million to $125 million, compared with the previous guidance of $119 million to $125 million, while non-GAAP earnings per share are projected between $1.71 and $1.79.Management expects recent enterprise customer wins, increasing AI voice adoption and continued expansion of software services to support future revenue growth, profitability and cash generation as customers increasingly standardize on Bandwidth's communications platform. Management attributed the upbeat outlook to strong demand trends, increasing software contribution and improved customer metrics, including retention and average revenue per customer. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 44.68% due to these changes. Currently, Bandwidth has a nice Growth Score of B, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Bandwidth has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bandwidth Inc. (BAND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:00 a.m. ET Senior Vice President, Investor Relations - Nils Erdmann Chief Executive Officer - David Morken Chief Financial Officer - Daryl Raiford Chief Product Officer - John Bell Need a quote from a Motley Fool analyst? Email [email protected] Operator: Hello, ladies and gentlemen, thank you all for standing by. My name is Mark and I will be your conference operator for today. At this time, I would like to welcome everyone to the Bailiwick Second Quarter 2026 Earnings Call. All lines have been placed only to prevent any background noises. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press star and number one again. Thank you. And I would now like to turn the call over to Niels Erdmann, Senior Vice President, Investor Relations. Please go ahead. Niels Erdmann: Thank you, Operator. Good morning and welcome to Bandwidth's second quarter 2026 earnings conference call. I'm joined today by David Morkin, Chief Executive Officer, and Daryl Ray, Chief Financial Officer. We will begin with prepared remarks and then open up the call for Q&A. During this call, we will make forward-looking statements, including statements related to our future financial performance, expectations regarding the growth of our business, our outlook for the third quarter and full year 2021, and other indications of future opportunities. These forward-looking statements are subject to certain risks, uncertainties and assumptions, and actual results may differ materially. These forward-looking statements represent our beliefs and assumptions only as of today, undertake no obligation to revise or update any statements to reflect changes that occur after this call. Further information on factors and other risks that could cause actual results to differ materially from these forward-looking statements is included in our reports filed with the SEC, including our most recent Form 10-K and our forthcoming Form 10-Q, and in our second quarter earnings press release and earnings presentation that were issued this morning. During the call, we refer to certain metrics, including non-GAAP financial measures. Definitions of these non-GAAP metrics and other operating metrics, as well as reconciliations with the most comparable historical GAAP measures, are available in our earnings press release and our earnings presentation, both of which can be found on the investor relations page of our website at investors.gov. www.bandwidth.com. With that, I will now turn the discussion over to David. David Morken: Thank you and welcome everyone. We are pleased to report outstanding second quarter results with revenue and profitability exceeding expectations. Based upon our performance, we are raising our full-year financial outlook. AI is changing how enterprises buy communications infrastructure. shifting the decision toward providers that can support mission critical AI interactions. AI and AI voice agents are driving customers to highly value our services that provide trust, compliance, and global performance. This is creating numerous strategic opportunities for bandwidth. We're capitalizing on this shift to secure larger customer wins across a wide range of AI native companies, global 2000 enterprises, hyperscalers, and software platforms. And we're innovating to strengthen our competitive position, growing faster and creating durable long-term shareholder value. In the second quarter, these themes yielded revenue growth of 22%, EBITDA growth of 27%, and five new million-dollar-plus customer wins and expansions. Additionally, we strengthened our balance sheet with a convertible notes offering in June. This offering reduces our financing costs, retires the large bulk of our 2028 maturity, and reinforces our capacity to invest profitably in AI voice infrastructure. Daryl will walk through the details shortly. I'd like to thank our customers for trusting bandwidth with their most important customer interactions. I'd also like to thank our bandmates, whose passion for innovation and serving customers continues to set us apart. And I thank God for the opportunity to serve alongside such an exceptional team. A year ago, AI came up in only a fraction of our customer conversations. Today, it leads nearly every time. Whether we're talking with AI-native startups, global enterprises, or hyperscalers, they're increasingly reaching the same conclusion. AI is only as good as the communications platform. it runs on. That means customer buying decisions are now driven by a partner's ability to consistently deliver the trusted, compliant, high-performance communications foundation that production AI demands. We're seeing that shift play out across every category of our business. A great example is one of the fastest growing AI native voice agent developers, which we signed in the second quarter. As the company scaled, they quickly outgrew the provider they used to initially build their business. To serve larger enterprises, they needed the higher quality voice infrastructure, global reach, regulatory compliance, and higher control, observability, and auditability that bandwidth provides. This win demonstrates something we're seeing across this space. Many AI-native companies began with speed and experimentation. As they mature into enterprise platforms, we see them needing high-performing trusted communications infrastructure that can support production workloads around the world. That's exactly where bandwidth is uniquely positioned and where our business model creates more value. As a Gentic voice adds more legs to every interaction, each of those legs becomes a new source of usage on our platform. sentiment analysis, transcription, translation, and orchestration between systems. We're also making it easier for these next-generation AI companies to build on our platform. In June, we introduced bandwidth build, enabling authenticated AI agents to autonomously provision and launch communication services on our network. already seeing early signups generating real traffic. As AI voice agents proliferate, we're ensuring bandwidth is easy to discover, authenticate with, integrate, and deploy. Every major frontier AI lab is racing toward the same conclusion, that the primary way people will engage with AI is through speaking and listening. This is a conclusion being heard by our customers around the world. They require the same carrier grade regulated global voice network we've spent two decades building. And it's why we're already integrating leading voice agents into Maestro, so our customers can deploy them faster and with more control over their voice AI tech stack. There are elements of that voice AI tech stack infrastructure which belong closer to the end user in our global network in order to perform faster, better, and more cost-effectively. We're seeing those same AI-driven requirements translate into larger opportunities with global 2000 enterprises as they modernize customer engagement for the next generation of AI-enabled experiences. That trend continued in the second quarter with five new $1 million-plus customer wins and expansions, 100% of which included Maestro or AI services. A great example is a growing healthcare system operating dozens of hospitals and 400 clinics across five states in the Midwest. This million-dollar plus opportunity came through one of our channel partners, as the customer needed to modernize their complex legacy environment for the Cloud. They selected Bandwidth's Communications Cloud and Maestro orchestration platform for our native Webex calling integration, automated migration capabilities that reduce porting times from weeks to days, and centralized operational control. This modernization with bandwidth creates a foundation for the customer's planned Cloud Contact Center adoption and future AI-enabled communications. Another new million-dollar-plus customer is a leading European appliance care and warranty provider that's selected bandwidth to modernize its customer engagement platform. Operating across multiple European markets left the customer with a fragmented communications environment across different incumbent carriers and regulatory requirements in each country. The customer simplified that complexity by consolidating onto a single trusted communications partner. Bandwidth's Global Communications Cloud, combined with our native Genesys Cloud BYOC integration, enables the customer to improve performance, simplify operations, and increase control across its European communications environment. As the customer expands its use of AI within Genesys Cloud, it will do so on our trusted carrier-grade infrastructure required to deliver those experiences at scale. In addition to these new logos, here are $3 million-plus examples of existing customers deepening their strategic partnerships with bandwidth. A global electronic brokerage serving investors in more than 200 countries expanded a multi-year messaging relationship into global voice, replacing regional carriers across its highly regulated markets with one global partner in bandwidth. And one of our longest standing hyperscaler partners significantly expanded our role supporting a key digital service internationally, which is continued proof that as these partners scale their AI and cloud platforms, they scale on bandwidth. We also saw this pattern in messaging with a million-dollar plus existing customer expansion by one of the largest text messaging platforms in the US, serving approximately 2,500 brands. This customer had been managing traffic across six different vendors. As their business scaled, they needed more capacity, better deliverability, and stronger digital campaign management. Consolidating with Bandwidth, they've moved over 95% of their messaging volume onto our platform. We now support their business across all key channels and expect to add RCS as they evaluate a 2027 launch. This is a strong example of how our messaging business continues to win when customers need scale, deliverability, and operational discipline, not just volume. We announced in March that Salesforce selected Bandwidth as its exclusive critical infrastructure partner for voice and messaging within agent force contact center. Salesforce has publicly discussed customer momentum following the March launch, including wins across both mid-sized organizations and growing interest from large enterprises. encouraged by what we're seeing and pleased to have already begun supporting the opportunities Salesforce is bringing to market. It's exciting to see the first traffic flowing across our platform and we expect revenue to begin growing as customer deployments scale. This is a relationship we believe in deeply. Salesforce's own vision is that every customer call should become a conference call with a human, an AI agent, and the full context of that customer relationship on the line together. We share that vision, and we built Maestro on top of our global network to make it possible. We're embedded in Salesforce's governed workflows today with the controls, the tools, and the tools. observability and integration depth their platform requires. Over the last 18 months, we have been accelerating innovation behind the opportunities we believe will create the greatest value proposition for our customers. That decision reflects our confidence that we've just begun one of the most significant technology shifts in history. We are already seeing these investments pay off. The upgrades to our owned and operated network have contributed to the gross margin and adjusted EBITDA expansion we reported this quarter, giving us confidence that continued investment is self-reinforcing. our innovation investments are broadening our portfolio in four key areas. First, we're extending our global communications Cloud's network footprint, regulatory coverage, and capacity into additional strategic markets where our global 2,000 customers are growing. This positions us to support our customers wherever they choose to do business. Second, we're expanding Maestro and have launched Bandwidth Build to give enterprises even more integration choices and flexibility in how they deploy, orchestrate, and manage AI-powered communications across their technology environments. Third, we're continuing to broaden our trust portfolio with capabilities that help enterprises improve answer rates, strengthen customer trust, mitigate fraud, and protect their brands at a time when trust and security have never been more important. We're also protecting new IP in this area. with a patent awarded for AI voice bot authentication this quarter, which reinforces the defensibility of the platform we're building. And finally, we're investing in our global infrastructure at the edge and data center level to power even more secure, compliant, high-performance AI-driven communications. In total, investments like these examples, with rapid returns, are designed to widen our competitive moat, increase the value we deliver to customers, and strengthen our ability to create durable growth and shareholder value. As we progress into the second half of 2026, our momentum is strong. We see voice AI adoption driving enterprise modernization and larger platform wins, and we expect those wins to translate into stronger owner economics, growing software services attachment and continued expansion of profitability and cash generation. The examples we shared today span AI-native startups, global 2,000 enterprises, messaging and software platforms, and hyperscalers, different customers, different verticals, different use cases. Yet they're all increasingly making the same strategic decision to standardize on bandwidth. Thank you. We've spent years building the owned infrastructure, orchestration software, and consumption pricing model needed for this moment. As AI reshapes enterprise communications, we believe our innovations position us to be the mission-critical foundation of AI-driven communications, creating more value for our customers and for our shareholders. Now, I'll turn it over to Daryl to walk through the financial details of the quarter. Daryl Ray: Thank you, David, and good morning, everyone. We delivered another outstanding quarter with results exceeding our expectations. Our performance reflects disciplined execution, durable customer demand, and the growing benefits of the strategic innovation we've made over the past several years. This comprehensive execution across all key metrics, including revenue, gross profit, adjusted EBITDA, non-GAAP earnings per share, and free cash flow, provides us with the confidence to raise our full-year financial guidance today. Now diving into our second quarter 2026 results. Total revenue was $220 million, an increase of 22% year-over-year. Cloud communications revenue, which is total revenue less messaging surcharge revenue of $68 million, reached $152 million, a 12% year-over-year increase. Non-GAAP gross profit of $90 million increased 14% year over year. representing a gross profit yield of approximately 68% on incremental cloud communications revenue growth. Non-GAAP gross margin improved one percentage point to 59.4%, illustrating the structural margin advantage of our trusted, global-owned, and operated communications platform. Adjusted EBITDA grew by 27% to $28 million. Adjusted EBITDA margin reached a record 18.3%, demonstrating the scalability of our business model and our ability to convert revenue growth into meaningful profit expansion. Non-GAAP net income was 15% higher, while non-GAAP earnings per share was 37 cents, reflecting net movement in fully diluted shares from our new convertible issuance, 2028 convertible repurchase, and other capital activities during the quarter. Free cash flow was $24 million, showing another quarter of strong execution and reinforcing our confidence in the long-term earnings and cash-generating power of our business, focusing on our second quarter cloud communications revenue growth of 12%. both voice and programmable messaging solutions exceeded our expectations. For our voice solutions, we reported revenue of $121 million, growing 9%. On programmable messaging, revenue of $31 million grew 22%, resulting from strong commercial messaging growth of 18%, combined with approximately $1 million of earned messaging revenue during the quarter from political campaign activities. Additionally, attached revenue across both voice and messaging from software services grew 66% compared with last year. While software services remained a relatively small contributor to total revenue last quarter because we monetize on usage rather than seats or licenses, AI adoption converts directly into revenue as interaction scale. As a result, growing AI activity across our platform flows through to our top line. rather than remaining an adoption metric alone. Turning to our operating metrics. Our reported net retention rate for the second quarter was 107 percent. Adjusted to normalize for the cyclical political campaign revenue impact, our commercial net retention rate was 113%, growing 3% sequentially. Customer name retention rate remained above 99%, reflecting the mission critical nature of our communications cloud and the very low churn we have consistently delivered. Average annual revenue per customer reached a record $256,000. reflecting both continued customer expansion and our success attracting larger enterprise customers to the platform. Collectively, these metrics underscore the strength of our existing customer relationships. customers expand their usage, adopt more of our solutions, and trust our platform for a broader set of mission-critical communications. Turning to our capital allocation strategy, during the quarter we deployed an incremental $15 million toward share repurchases, opportunistically buying back 263,000 shares at an average price of $57.06. This brings the total cash used this year for share repurchases to $20 million. We further completed an offering of $316 million of 0.00% convertible senior notes due 2032, which included the full exercise of the initial purchaser's option. Strong demand for the offering reflected deep investor confidence in our long-term strategy and financial profile. After underwriting discounts, capped call costs, and other transaction expenses, the offering generated approximately $282 million in net proceeds. We utilized approximately $122 million of these proceeds to repurchase a large portion of our 2028 convertible notes. reducing that outstanding principal balance to approximately $28 million. Our net leverage closed the quarter at 1.6 times, compared with 1.5 times at the end of the first quarter of 2026, resulting in an essentially stable leverage ratio while adding cash to the balance sheet, lowering financing costs, and improving the maturity profile. Turning to our third quarter 2026 outlook, we expect revenue to be in the range of $231 million and $235 million, representing approximately 21% growth year over year. Adjusted EBITDA to be in the range of $32 million and $34 million, representing approximately 36% growth year-over-year, and non-GAAP EPS to be in the range of $0.45 and $0.49, implying approximately 66% non-GAAP net income growth. For the full year 2026, we are raising our guidance to reflect our second quarter beat and sustained demand strength. Our confidence in the remainder of the year is supported by two key growth drivers. First, the revenue ramp from our recent enterprise customer wins, with a total of 13 new million dollar plus annual contracts won since the beginning of last year. That is, six last year and seven already this year, with two in the first quarter and five in the second quarter, the phased deployment of these large-scale implementations provides meaningful visibility into future revenue growth that we expect to layer into our financial results over the next 12 months. Second, our owned and operated global network is driving structural margin and efficiency gains. As transaction volumes scale, our unique infrastructure allows us to capture higher incremental gross profit, converting top-line growth into efficient, bottom-line adjusted EBITDA and cash flow. Thanks to our usage-based model, our platform and software innovations begin contributing to cash flow almost immediately after release. We now expect for the full year 2026, total revenue to be in the range of $900 million and $910 million, representing 20% growth year-over-year at the midpoint, compared to our prior range of $880 million and $900 million. Within total revenue, we expect cloud communication to be in the range of $622 million and $626 million, representing 11% growth year over year at the midpoint. Adjusted EBITDA outlook to be in the range of $123 million and $125 million, representing 33% growth year-over-year at the midpoint, and a 20% EBITDA margin compared to our prior range of $119 million and $125 million. non-GAAP EPS to be in the range of $1.71 and $1.79, implying full-year non-GAAP net income growth of 48%, and the true-up for a higher fully diluted share count estimate, resulting from the second quarter convertible offering and other capital activities. Additional modeling details underlying our full year 2026 outlook are as follows. We expect net interest income to be in the range of $500,000 and $1 million. Depreciation expense to be in the range of $38 million and $42 million. Adjusted effective tax rate to be in the range of 20 and 22%. Weighted average diluted shares outstanding of approximately 39 million. And for capital expenditures, we expect these to be in the range of $24 million dollars and 26 million dollars. In summary, our second quarter results reinforce that bandwidth is becoming a larger, more profitable, and increasingly differentiated communications platform. We continue to benefit from durable customer demand, growing adoption of AI-enabled communications, and the structural advantages of our usage-based, owned and operated global network. Combined with our strength and balance sheet and discipline capital allocation strategy, we believe we are well positioned to deliver sustainable, profitable growth and create long-term value for our shareholders. With that, I'll now turn the call over to the operator for Q&A. Operator: This time I would like to remind everyone in order to ask a question, please press star then the number one on your telephone keypad. If you want to withdraw your question, please press star and the number one again. I will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Patrick Walravens from Citizens. Please go ahead. Patrick Walravens: Oh, great. Thank you and congratulations you guys on the acceleration in business. Hey, Dave, can we talk a little more about the Salesforce AgentForce Contact Center? And two questions in particular. One, just when you look on their website, it says it's generally available. in the US and Canada, but not the rest of the world yet. And is that something that would make a difference for you guys? And then secondly, Salesforce closed a massive deal with the Veterans Administration that was publicly disclosed, where basically they're going to help all our vets, you included, schedule their appointments in a much easier way. Is that the sort of thing that you guys would fit into? Yes. David Morken: Thank you, Pat, and appreciate your compliments. And the short answer to both dimensions of your Salesforce question are yes. Global expansion serving customers around the world fits very nicely into our underlying global platform and network. and would be beneficial. And the second part, yes, again, we are already seeing traffic flowing across our platform, large opportunities. Larger than our garden variety run-of-the-mill opportunities are one of the reasons why we're so excited about this relationship and why we believe so deeply in it. Patrick Walravens: Great. And if I could ask a follow-up on the finance side. Can you guys just touch on the gross margin? It came in a little below what I was expecting. Daryl Ray: Yes, hey, good morning, Pat, and thanks again for your nice comments at the top of the... Margin came in essentially right where we expected, which is sequentially essentially stable, and one point over last year. As revenue grows again with our 20% guide, 21% guide in the third quarter, we're expecting margin expansion through the third quarter and fourth quarter. And we're on target for what we believe to be 60% approximately non-GAAP gross margin for the full year. Patrick Walravens: Okay, great. Thank you. Thank you, Pat. Operator: Your next question comes from the line of Eric Schapiger from D Riley Securities. Please go ahead. Eric Schapiger: Yes, thanks for taking the question. I think in the past you've talked about an inflection in the second half of the year. If I look at the cloud communications outlook, Looks like a slight deceleration in the second half of the year on a year-over-year basis. And so I was just wondering if I'm doing my math right on that. Then secondly, what is your expectation for contribution from political campaigns in the second half of the year?. Daryl Ray: Yes, so thank you. Hey, this is Daryl, and thank you for that question. We are, you're right, on a first half to second half, and a over last year growth rate works. We have guided cloud communications at being slightly less than the first half growth rate. I think there's some conservatism in our model. We have left out from our model the guiding for you today any future benefit related to Salesforce. as well as the newest five enterprise deals ramping. So we believe that there's tailwinds for that, but we'll be conservative with our guide. In the second question, we initially entered the year and reaffirmed it, so to speak, in the first quarter that we believe approximately $15 billion the political campaign revenue benefit would be earned by us, principally in the second half. We've revised that expectation to $13 million, and our guide reflects that. Now clearly, so while we are growing revenue to the extent that we are in the third quarter, and now since you understand the full year, you have the implied fourth quarter, we've actually raised our commercial cloud communications revenue expectations while lowering the political campaign revenue expectations just very moderately. Eric Schapiger: Okay, very good. Thank you. Operator: Your next question comes from the line of Joshua Reilly from . Joshua Reilly: All right, great. Thanks for taking my questions. I believe last quarter you discussed for the $1 million-plus customers that you won in 2025, one was above 100% of the initial plan that you had for that customer. I'm curious, have any others now are on track to exceed 100% of their original plan. And then on the five $1 million-plus customers that you won in the quarter, I know a few of them were expansions relative to net new customers. Can you help us just maybe understand with some more color how you expect these customers to layer in the model over the coming quarters versus what a million dollar plus customer may have in the past where it may have taken a bit longer to get them ramped up? What's the right way to think about that dynamic?. David Morken: The right way to think about that dynamic for the expansions, indeed, as you indicate, is a faster ramp. They're already provisioned in many cases and it's scaling. Some of them do have new services that are either coverage related or different product, but I think it's a good assumption that they scale more quickly. As to the first, there are customers that are scaling at a pace that should allow them to exceed 100% of our expectation. We didn't call any out in the script, but that's a reasonable assumption. There's no reason to believe that there's some slowdown among those large customers. Thank you. Daryl Ray: And this is Dale. And hey, Josh, I would like to put a fine point on that just to clarify. We are very excited about the ramp of those particular customers. We're expecting two to be nearly twice as much the estimated contract value when they exit 26 than what we had originally assessed in the previous year. last year. So we're very excited about that. All six taken together will exit the year at a deployment rate of approximately 80%, which we feel really, really good about. We're also really excited, to reinforce David's comment, we're really excited about the faster ramping of some. We reported 22% growth in programmable messaging this last quarter. That's 18% commercial with the benefit of $1 million of political campaign revenue. That 18% is twice, it's double what we estimate to be a growth rate in programmable messaging. And it's a point, nearly two points, is being added by the large messaging win of last year as they ramp onto our platform. We're really excited about looking forward into the second half and into the first half of 27. We announced another messaging a very large messaging win this quarter, which given the speed at which messaging can ramp, we believe that's going to really benefit our results as we grow into next year. Joshua Reilly: Got it. That's super helpful. And then just following up on that, one of the questions I get a lot from investors is, as the million-dollar-plus customers are coming onto your platform, how much of their initial volumes are related to AI use cases versus what they're planning over the next few years? Because I think investors are trying to get a sense of how much of their initial volumes are related to AI use cases versus what they're planning over the next few years. of as you win these new customers, can then they grow off their base of what they're bringing to the platform by adding more and more AI use cases or are they already involved with AI voice use cases when they're starting right now in real time? So let me start and then invite John Bell, our Chief Product Officer. David Morken: to chime in as well, but the short answer is many of these customers have moved from prototyping AI use cases to beginning to scale. Almost all of them have additional use cases planned and are experimenting or trialing capabilities in AI voice that we can use will come online later in their contract lifecycle. Let me pause and invite John to add to that. John Bell: Yes, great question. We definitely see initial use cases coming on, along with the established legacy communications customers bring and but at the same time those deployments are Very often coming with future use cases and multiple platforms Multiple AI platforms that they want to continue to work with us to expand on Joshua Reilly: Got it. That's helpful. Thank you, guys. Operator: Your next question comes from the line of Arjun Bhatia from William Blair. Please go ahead. Arjun Bhatia: Perfect. Thank you so much. Maybe if I can just start with a question on the voice business. It sounds like there's a lot of positive developments happening, the new wins, the AI native customers, obviously expansion deals continuing, but it did seem like This quarter, there was a bit of a decel in the voice business, both on the global communication side and the enterprise side. What would you guys just sort of chalk that up to? Is that just you're waiting for some of these customers in the pipeline to ramp, or is there some other sort of dynamic at play there that we should consider from Q2?. David Morken: I'll invite Darryl to comment on the metrics, but there's no new competitive dynamic. There's no noticeable new headwind and the AI voice acceleration continues. We see the product market fit of what we're bringing to market with Maestro and the need for orchestration across multiple platforms and regional providers and many other dynamics to be still very much part of our exceeding, beating, raising and focus on continuing the growth that we have this year into next year. Let me pause and invite Darrell to comment on any of the metrics that you indicated. Daryl Ray: Yes, sir. For the full year, in the second quarter, year over year, our total voice did grow 9%. That is a little less than last quarter. That is primarily due to an enterprise growth that was less than last quarter. That is completely related to the timing. of ramping of new customers we continue to have embedded in our second half as I said three months ago that we were we are expecting a large growth and acceleration of our enterprise customers as the six into the second half as well as the installed base growth and what we see in terms of our pipeline. So I think that's just a quarter to quarter timing and quarter to quarter growth rates on any particular product will vary a little bit, but I'm very confident in what we're looking at. looking at for the second half and into 27. Arjun Bhatia: All right, perfect. That's great to hear. And then, David, I think you talked about, you know, when you were kind of discussing some of the investment areas for the business, you mentioned expanding the network footprint. Can you just expand a little bit on what that entails? You know, I can certainly see how that would be beneficial to your to your large customers. but does that require just incremental spending? I didn't notice the CapEx guide didn't pick up. So maybe just walk us through the pieces there and, you know, how you go about expanding your footprint there. David Morken: Yes, so geographic expansion is historically very efficient on CapEx. It takes time because you have to become a regulated provider in that territory. You do deploy gear and that is something that's vital for the value of the large global enterprises that we serve. These voice agents, these use cases have an expectation to reach multiple markets. And so it's incumbent upon us to identify those next markets that are most important. And we invest behind that demand that we see in those geographic areas, but in addition There are two other aspects of investment that we're focused on right now, expanding Maestro's capability to orchestrate across varied and emerging different AI platforms, voice platforms, and to have pre-integration and orchestration capabilities that are broad across different AI vendors so enterprises can choose. and select and benefit from the already existing integration and administration that Maestro provides. And so expanding Maestro and investing behind the 100% adoption rate we're seeing is vital. And then last, it's really exciting to see how our global platform and network can lend itself vitally to the AI voice experience? And so elements of the AI voice tech stack, can they be more accurately, more accurate, time efficient, more cost efficient, and in terms of regulatory, maybe more jurisdictionalized in an important way for our enterprise customers by moving elements of the AI tech stack closer to the user within our network. will be responsible CapEx by us. We have begun deploying GPUs into various POPs for that reason. We're excited about how those developments are looking, but we'll always be focused on durable, profitable growth when we do those CapEx spends. But those are three areas, including coverage that you mentioned, that are vital for our growth in the future. Arjun Bhatia: All right, wonderful. Thank you. Operator: Again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Your next question comes from the line of James Fish from Piper Sandler. Please go ahead. James Fish: Hey guys, just to touch on, and I know it's very new here, but what type of funnel has Build, bandwidth Build generated at this point? Does this change how you're thinking about your own internal hiring that we can leverage here as this builds up pipeline?. David Morken: Yes, it's been awesome to see meaningful business customers hit a command line interface and sign up and provision and begin flowing traffic through the build process. the build process. It's a totally different buying cycle, buying process, buying behavior. it supports autonomous agent sign up. And so it's, it's really cool. It's a frontier James that we're excited about and it's generating already revenue. And that's exciting to see. And those are business customers that are hitting that interface and buying from us. So we are excited about what it means. We've lived through API as an, innovative way for software developers to begin generating communications through different use cases. Right now, we're living through, instead of API for developers, we're living through CLI for agents. And that's exciting. James Fish: Got it. And Daryl, for you, you guys raised the annual guide on the top line by about $15 million, but the cloud communications only by about four. I think you even just said political down from $15 million for the year to $13 million, correct me if I'm wrong. So it does suggest you're just implying more fees are coming, and that's the upside here on the messaging piece. Is there an update to how you guys are thinking about messaging versus that, voice side of the business as well, just kind of help us as we think about the back half of the year. Daryl Ray: Right, the walk down of the guidance is simply the flow through of the overachievement in the second quarter, the lowering, so to speak, of political campaign revenue from 15 to 13, the increase in both voice and commercial messaging, and then the, since commercial messaging is increasing the increasing in what we expect to be messaging surcharges as well. So we have the flow through of our beat, we have voice increasing, we have commercial messaging increasing, we have political campaign revenue benefit, the cyclicality decreasing some, and then we have those surcharges increasing on the volume of commercial messaging. Jim, we might have, if you're still there, we might have lost you. James Fish: No, I'm good. Thanks, guys. Appreciate it. Operator: Thank you, sir. That will conclude our question and answer session. And I will now turn the call back over to David Morgan for closing remarks. Please go ahead. David Morken: Thank you, Operator. The themes we opened with today played out across our business. AI is reshaping enterprise buying decisions. Those decisions are driving record customer wins, and we're innovating to lead the AI transformation. Before we conclude, I'd like to invite you to join us at Reverb 2026 here in Raleigh, North Carolina on November 10th. Reverb has become our flagship customer and product event where we'll showcase how enterprises are deploying AI into production and how bandwidth is making it possible. We hope to see you then. Thank you. Operator: Thank you. Before you buy stock in Bandwidth, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bandwidth wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Bandwidth. The Motley Fool has a disclosure policy. Bandwidth (BAND) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Bandwidth Inc. BAND used its second-quarter 2026 earnings call to highlight accelerating demand for AI-enabled communications infrastructure, with management pointing to larger enterprise wins and expanding adoption of its platform. Executives raised the full-year outlook after results exceeded expectations, while analyst questions focused on AI deployments, customer ramps, margins and the pace of growth from recent wins. CEO David Morken said AI is changing enterprise purchasing decisions, increasing demand for trusted communications platforms that can support production AI interactions. He highlighted opportunities across AI-native companies, Global 2000 customers, hyperscalers and software platforms. Morken noted that Bandwidth secured five new $1 million-plus customer wins and expansions in the second quarter, with all including Maestro or AI services. He emphasized that customers are moving from AI experimentation to scaled deployments. The company reported revenues of $219.9 million, which exceeded the Zacks Consensus Estimate of $217 million, while non-GAAP EPS of $0.37 surpassed the Zacks Consensus Estimate of $0.36. Bandwidth Inc. price-consensus-eps-surprise-chart | Bandwidth Inc. Quote Bandwidth highlighted several strategic customer additions, including healthcare, European enterprise, brokerage, hyperscaler and messaging platform expansions. Management said these wins reflect demand for global coverage, compliance and orchestration capabilities. CFO Daryl Raiford said cloud communications revenues reached $152 million, up 12% year over year, while voice revenue grew 9% and programmable messaging revenues increased 22%. Management also pointed to customer expansion metrics, including a 107% reported net retention rate and a commercial net retention rate of 113% after adjusting for political campaign revenue effects. Morken discussed investments in Bandwidth’s global Communications Cloud, Maestro orchestration platform and trust capabilities as key priorities. The company also introduced Bandwidth Build to enable autonomous agent-based provisioning of communication services. Management said Maestro adoption is expanding as enterprises seek greater control over AI-powered communications across multiple platforms. The company is also investing in network expansion and infrastructure closer to end users. Bandwidth said its owned and operated network contributed to margin expansion, with non-GAAP gross margin improving to 59.4% and Adjusted EBITDA margin reaching 18.3%. Bandwidth raised full-year 2026 guidance, citing sustained demand strength and improving profitability. Revenues are now expected to be between $900 million and $910 million, with Adjusted EBITDA projected at $123 million to $125 million. For the third quarter, management expects revenues of $231-$235 million, Adjusted EBITDA of $32 million to $34 million and non-GAAP EPS of $0.45 to $0.49. Raiford said recent enterprise wins provide visibility, with 13 new $1 million-plus annual contracts won since the beginning of last year. He also cited the company’s usage-based model as a driver of cash generation. Analysts pressed management on Salesforce Agentforce Contact Center, voice growth timing and the ramp of large customer contracts. Morken said Salesforce-related opportunities are already generating traffic across Bandwidth’s platform. A Citizens JMP Securities analyst asked about margins, and Raiford said the company remains on track for approximately 60% non-GAAP gross margin for the full year. A Needham analyst asked about AI-related customer volumes, and management explained that many customers are beginning with AI use cases while planning additional deployments throughout contract lifecycles. Bandwidth ended the call emphasizing AI adoption, enterprise modernization and continued investment in communications infrastructure. Management said these themes are driving customer wins across multiple categories. The company also strengthened its balance sheet during the second quarter through a convertible notes offering and reduced its 2028 convertible maturity exposure. BAND carries a Zacks Rank #2 (Buy). The Zacks Rank focuses on earnings estimate revisions and is designed to help identify stocks with stronger potential over the next one to three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The stock has a Value Score of B, Growth Score of A, Momentum Score of A, and VGM Score of A. Zacks Style Scores of A or B combined with Zacks Rank #1 or 2 stocks have historically shown stronger performance characteristics, though the Zacks Rank can change as analysts update earnings estimates after quarterly results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bandwidth Inc. (BAND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Strong demand for AI-enabled communications and enterprise customer wins drove record revenue and adjusted EBITDA, prompting Bandwidth to increase its full-year guidance. Bandwidth (NASDAQ:BAND) reported record second-quarter revenue of $220 million, up 22% year over year, while adjusted EBITDA increased 27% to $28 million. The company raised its full-year 2026 revenue and adjusted EBITDA outlook, citing sustained customer demand and improving business fundamentals. AI-enabled communications continued to drive enterprise adoption, with every new $1 million-plus customer win including Maestro™ or AI services. GAAP net income improved to $2 million from a $5 million loss a year earlier, while free cash flow remained positive. Management highlighted growing demand from AI-native companies, Global 2000 enterprises, and hyperscale cloud providers. Bandwidth (NASDAQ:BAND) delivered record quarterly revenue of $220 million, a 22% increase from the prior year, while adjusted EBITDA rose 27% to $28 million, producing a record adjusted EBITDA margin of 18%. The company returned to GAAP profitability, reporting net income of $2 million, or $0.07 per share, compared with a net loss of $5 million, or $0.16 per share, in the second quarter of 2025. Non-GAAP net income increased to $14 million, while operating cash flow reached $29 million and free cash flow totaled $24 million. Management attributed the performance to continued demand across its voice and messaging businesses, particularly as enterprises modernize communications infrastructure to support artificial intelligence applications. Bandwidth also highlighted several enterprise customer expansions during the quarter, including healthcare providers, financial services companies, hyperscale cloud partners, and messaging platform operators. Every customer contract worth more than $1 million included the company’s Maestro orchestration platform or AI services. Reflecting this momentum, Bandwidth raised its full-year guidance, forecasting 2026 revenue of $900 million to $910 million and adjusted EBITDA of $123 million to $125 million. The results suggest Bandwidth is benefiting from growing enterprise investment in AI-powered communications infrastructure. As organizations deploy AI agents, virtual assistants, and automated customer engagement tools, demand for scalable voice and messaging platforms may continue to expand. The company’s improving profitability also stands out. Revenue growth outpaced expense growth sufficiently to deliver record adjusted EBITDA while returning to GAAP profitability. Continued margin expansion could strengthen the long-term earnings profile if operating leverage persists. Bandwidth’s customer mix also provides diversification, with demand coming from healthcare, financial services, hyperscale cloud providers, and enterprise software companies. Management’s decision to raise full-year guidance indicates confidence that recent customer wins and AI-related adoption trends will continue supporting growth through the remainder of 2026. Investors will likely monitor: Execution against the increased full-year revenue and adjusted EBITDA guidance. Continued adoption of Maestro and AI-enabled communications services. Growth in large enterprise customer wins and hyperscaler partnerships. Whether profitability and free cash flow continue to improve as revenue scales. Bandwidth stock price

Interested in Bandwidth Inc.? Here are five stocks we like better. Strong Q2 performance: Bandwidth reported revenue of $220 million, up 22% year over year, while adjusted EBITDA increased 27% to $28 million and margin reached a record 18.3%. AI is driving growth: Five customer wins or expansions exceeded $1 million, all involving Maestro or AI services. Salesforce-related traffic and the new Bandwidth Build platform also began generating revenue. 2026 outlook raised: Bandwidth increased its full-year revenue forecast to $900 million–$910 million and adjusted EBITDA outlook to $123 million–$125 million, while continuing share repurchases and refinancing part of its convertible debt. Bandwidth (NASDAQ:BAND) reported second-quarter 2026 results that exceeded its expectations, citing demand for AI-enabled communications, enterprise modernization projects and operating leverage from its owned network. The company raised its full-year outlook after reporting 22% year-over-year revenue growth and a 27% increase in adjusted EBITDA. Chief Executive Officer David Morken said artificial intelligence is increasingly shaping customer decisions around communications infrastructure. “AI is only as good as the communications platform it runs on,” Morken said, arguing that enterprises and AI-native companies are placing greater value on network performance, compliance, trust and global reach. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Revenue for the quarter totaled $220 million, up 22% from a year earlier. Cloud Communications revenue, excluding $68 million in messaging surcharge revenue, was $152 million, representing 12% growth. Adjusted EBITDA rose 27% to $28 million, while adjusted EBITDA margin reached a record 18.3%. Morken said Bandwidth signed or expanded five customer relationships worth more than $1 million during the quarter, with all five including Maestro, the company’s orchestration platform, or AI services. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Among the new customers was an AI-native voice-agent developer that had outgrown its original provider, according to Morken. The customer selected Bandwidth for higher-quality voice infrastructure, global coverage, regulatory compliance, and greater operational control and auditability as it expanded toward enterprise deployments. Bandwidth also cited a healthcare system with dozens of hospitals and 400 clinics across five Midwestern states. The customer selected Bandwidth’s Communications Cloud and Maestro platform in part for Webex calling integration, automated migration tools and centralized management, the company said. The deployment is intended to support the healthcare system’s planned cloud contact-center and AI communications initiatives. → Innovative ETF Strategies That Are Paying Off This Summer Another new million-dollar customer, a European appliance care and warranty provider, chose Bandwidth to consolidate communications operations that had been spread across carriers and regulatory frameworks in multiple markets. The company said its Communications Cloud and Genesys Cloud integration will support the customer’s planned use of AI within Genesys Cloud. Bandwidth also highlighted expansions with a global electronic brokerage, a longtime hyperscaler partner and a U.S. text-messaging platform serving about 2,500 brands. The messaging customer moved more than 95% of its volume to Bandwidth from six vendors, according to Morken, and could add Rich Communication Services, or RCS, as it considers a 2027 launch. The company said it has begun supporting customer opportunities through its relationship with Salesforce, which selected Bandwidth in March as its exclusive critical infrastructure partner for voice and messaging within Agentforce Contact Center. Morken said the first traffic has begun flowing across Bandwidth’s platform and that revenue should grow as customer deployments scale. In response to an analyst question about potential Salesforce expansion outside the U.S. and Canada, Morken said global availability would fit Bandwidth’s network and “would be beneficial.” He also said larger opportunities are a key reason the company is enthusiastic about the partnership. Bandwidth introduced Bandwidth Build in June, a platform intended to enable authenticated AI agents to provision and launch communications services on its network. Morken said early users are already generating traffic and revenue, describing the product as a new purchasing channel that supports autonomous-agent sign-ups. The company is also investing in global network coverage, Maestro integrations with AI and voice platforms, trust and security features, and edge infrastructure. Morken said Bandwidth has begun deploying graphics processing units in certain points of presence to move elements of the AI voice technology stack closer to end users. Chief Financial Officer Daryl Raiford said non-GAAP gross profit increased 14% to $90 million, and non-GAAP gross margin improved by one percentage point to 59.4%. The company expects gross margin to expand during the third and fourth quarters and is targeting approximately 60% non-GAAP gross margin for the full year. Voice revenue was $121 million, up 9% year over year. Programmable Messaging revenue was $31 million, up 22%. Commercial messaging grew 18%, supplemented by about $1 million in political campaign-related messaging revenue. Software-services revenue attached to voice and messaging rose 66% from the prior year. Reported net retention was 107%; commercial net retention, adjusted for political campaign activity, was 113%. Customer name retention remained above 99%, while average annual revenue per customer reached a record $256,000. Raiford said the company expects about $13 million in political campaign revenue for 2026, down from its prior expectation of approximately $15 million. However, he said the company increased its expectations for commercial Cloud Communications revenue, including voice and commercial messaging. Management said the timing of larger customer deployments affected quarterly voice growth, but it expects enterprise revenue growth to accelerate as recent wins ramp. Bandwidth has won 13 annual contracts worth more than $1 million since the start of 2025, including seven so far in 2026. For the third quarter, Bandwidth forecast revenue of $231 million to $235 million, representing roughly 21% year-over-year growth. It expects adjusted EBITDA of $32 million to $34 million and non-GAAP earnings per share of $0.45 to $0.49. For the full year, the company raised its total revenue outlook to $900 million to $910 million, from a previous range of $880 million to $900 million. It now expects Cloud Communications revenue of $622 million to $626 million and adjusted EBITDA of $123 million to $125 million, implying a 20% midpoint EBITDA margin. During the quarter, Bandwidth repurchased 263,000 shares for $15 million at an average price of $57.06 per share, bringing year-to-date repurchases to $20 million. The company also issued $316 million of 0% convertible senior notes due 2032, generating approximately $282 million in net proceeds after related costs. It used about $122 million of the proceeds to repurchase much of its 2028 convertible notes, leaving approximately $28 million outstanding on those notes. Free cash flow was $24 million, and net leverage ended the quarter at 1.6 times, compared with 1.5 times at the end of the first quarter. Bandwidth Inc operates a cloud-based communications platform that provides voice, messaging and emergency services APIs for enterprises and developers. Through its proprietary network and software-as-a-service model, the company enables customers to integrate programmable voice calls, text messaging and 9-1-1 routing into their applications. Bandwidth's solutions aim to reduce complexity and improve reliability in mission-critical communications, serving industries such as healthcare, financial services, on-demand mobility and customer engagement. Founded in 1999 in Raleigh, North Carolina by co-founders David Morken and Henry Kaestner, Bandwidth initially focused on voice-over-IP infrastructure before evolving into a full communications API provider. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Bandwidth Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Bandwidth (BAND) came out with quarterly earnings of $0.37 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.78%. A quarter ago, it was expected that this enterprise software developer would post earnings of $0.32 per share when it actually produced earnings of $0.38, delivering a surprise of +18.75%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Bandwidth, which belongs to the Zacks Communication - Infrastructure industry, posted revenues of $219.9 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.34%. This compares to year-ago revenues of $180.01 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Bandwidth shares have added about 238.2% since the beginning of the year versus the S&P 500's gain of 8.5%. While Bandwidth has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Bandwidth was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $223.58 million in revenues for the coming quarter and $1.79 on $891.55 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Infrastructure is currently in the top 3% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Anterix (ATEX), another stock in the same industry, has yet to report results for the quarter ended June 2026. This wireless communications company is expected to post quarterly loss of $0.58 per share in its upcoming report, which represents a year-over-year change of -20.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Anterix's revenues are expected to be $1.97 million, up 38.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bandwidth Inc. (BAND) : Free Stock Analysis Report Anterix Inc. (ATEX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenue of $220 million, up 22% year-over-year, and Adjusted EBITDA of $28 million, up 27% year-over-year, with record Adjusted EBITDA margin of 18% Raising full-year 2026 outlook on sustained demand strength and accelerating business model fundamentals Voice AI adoption driving enterprise modernization and $1m+ strategic customer wins RALEIGH, N.C., July 29, 2026 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND), a leading global enterprise cloud communications company, today announced financial results for the second quarter ended June 30, 2026. "AI is reshaping how enterprises evaluate communications infrastructure, increasing demand for trusted, scalable platforms capable of supporting mission-critical AI interactions," said David Morken, Bandwidth's Co-Founder, Chief Executive Officer, and Chairman. "We are capitalizing on this shift to secure larger strategic customer wins across AI-native innovators, Global 2000 enterprises, and hyperscalers as organizations increasingly standardize on Bandwidth. As adoption of AI-enabled communications accelerates, we believe our global Communications Cloud, Maestro orchestration platform, and growing portfolio of trust capabilities position us to expand our leadership, capture a larger share of the AI communications stack, and create durable long-term shareholder value." "We delivered record quarterly results for Revenue and Adjusted EBITDA, which exceeded our expectations," said Daryl Raiford, CFO of Bandwidth. "Our performance demonstrates the earnings power of our business model as strong customer demand across Voice and Messaging, combined with the structural advantages of our owned-and-operated global network, drove another quarter of margin expansion and profit growth. With growing visibility from recent enterprise customer wins, continued momentum in AI-enabled communications, and a strengthened balance sheet, we are again raising our full-year 2026 outlook for both revenue and Adjusted EBITDA." Second Quarter Customer Highlights Each of our $1m+ customer wins and expansions in the second quarter included Maestro™ or AI services. A growing healthcare system operating hospitals and clinics across the Midwest selected Bandwidth's Communications Cloud and Maestro orchestration platform to modernize its legacy communications, enabling a future cloud contact center and AI services. A leading European appliance care and warranty provider selected Bandwidth to consolidate communications across multiple markets onto our global Communications Cloud, simplifying operations while creating a trusted foundation for AI-driven customer engagement. A global electronic brokerage serving investors in more than 200 countries expanded its long-standing relationship with Bandwidth into global voice, unifying communications with a single trusted partner across highly regulated markets. A long-standing global hyperscaler partner significantly expanded its use of Bandwidth to support a key digital service internationally, reinforcing our role as the communications infrastructure that scales alongside leading AI and cloud platforms. One of the largest text messaging platforms in the U.S., serving approximately 2,500 brands, expanded its relationship with Bandwidth by consolidating more than 95 percent of its messaging traffic onto our platform to improve scale, deliverability, and operational performance. Financial Outlook Bandwidth is providing guidance for its third quarter and full year 2026 as follows (in millions, except per share amounts) based on current indications for its business, which are subject to change. Bandwidth has not reconciled its third quarter and full year 2026 guidance related to (i) Adjusted EBITDA to GAAP net income or loss, (ii) non-GAAP net earnings or loss to GAAP net earnings or loss or (iii) non-GAAP earnings or loss per share to GAAP earnings or loss per share, because stock-based compensation cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort. Upcoming Investor Conferences B. Riley Securities' Consumer & TMT Conference in New York, NY. Investor meetings hosted with management on Thursday, September 10, 2026. Benchmark-StoneX Tech Conference in New York, NY. Investor meetings hosted with management on Thursday, September 10, 2026. Piper Sandler Growth Frontiers Conference in Nashville, TN. Fireside chat with John Bell, Chief Product Officer on Tuesday, September 15, 2026 at 1:00 PM Central Time. About Bandwidth Inc. Bandwidth Inc. (NASDAQ: BAND) is a global cloud communications company that helps enterprises deliver exceptional experiences through voice calling, text messaging and emergency services. Our solutions and our Communications Cloud, covering ~70 countries and 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 transform their communications every day. Conference CallBandwidth will host a conference call to discuss financial results for the second quarter ended June 30, 2026 on July 29, 2026. 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 DetailsJuly 29, 20268:00 am ETDomestic dial-in: 800-715-9871International dial-in: 646-307-1963 Replay informationAn audio replay of this conference call will be available through August 5, 2026 by dialing 855-669-9658 or 412-317-0088 for international callers, and entering passcode 7551038. 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, 2026 and year ending December 31, 2026, 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 successfully leverage the use of artificial intelligence in our business operations and in our service offerings, 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 Annual Report on 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 and related payroll taxes. We add back depreciation, amortization of acquired intangible assets related to acquisitions and stock-based compensation and related payroll taxes 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 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 surcharge revenue. 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 and related payroll taxes, 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 and related payroll taxes, 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 and Adjusted EBITDA margin because they are key measures 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 and Adjusted EBITDA margin can produce a useful measure for period-to-period comparisons of our business. We calculate Adjusted EBITDA margin by dividing Adjusted EBITDA by cloud communications revenue, which is revenue less pass-through messaging surcharge revenue. 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/bandwidth-announces-second-quarter-2026-financial-results-302837047.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. AI is fundamentally shifting enterprise buying decisions toward providers capable of supporting mission-critical, compliant, and high-performance voice interactions. The company secured five new million-dollar-plus customer wins and expansions in Q2, all of which included Maestro or AI services, signaling strong product-market fit. Management highlighted that AI voice agents are driving increased platform usage across sentiment analysis, transcription, and orchestration, creating new revenue streams per interaction. The Salesforce Agentforce partnership has begun flowing traffic, with management viewing it as a critical long-term growth driver for large enterprise and mid-market contact centers. Operational efficiency gains from the owned and operated global network contributed to gross margin expansion and record adjusted EBITDA margins of 18.3%. Strategic investments are focused on expanding the global network footprint and deploying GPUs at the edge to move AI processing closer to end-users for better performance. A successful convertible notes offering in June strengthened the balance sheet by retiring 2028 maturities and lowering overall financing costs. Full-year 2026 guidance was raised to reflect sustained demand and the phased deployment of 13 new million-dollar-plus contracts won since early 2025. Management expects revenue from the Salesforce partnership to begin scaling as customer deployments move from initial launch to broader production workloads. The 'Bandwidth Build' platform is expected to capture new traffic from autonomous AI agents capable of provisioning services via command-line interfaces. Guidance for the second half of the year remains conservative, intentionally excluding potential upside from the most recent enterprise wins and the Salesforce relationship. The company anticipates reaching approximately 60% non-GAAP gross margin for the full year as higher-margin software services and commercial messaging scale. Political campaign revenue expectations for the full year were revised downward from $15 million to $13 million due to shifting cyclical dynamics. The company is navigating a transition where AI-native startups are outgrowing initial experimental providers and requiring Bandwidth's carrier-grade infrastructure for scale. A new patent for AI voice bot authentication was awarded, which management believes reinforces the defensibility of their trust and security portfolio. Net leverage remained stable at 1.6 times following capital activities, including $20 million in year-to-date share repurchases. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that Salesforce's global expansion aligns perfectly with Bandwidth's international network footprint. Large-scale opportunities, such as the Veterans Administration deal, represent the type of high-volume traffic Bandwidth is positioned to support. The slight deceleration in the H2 cloud communications guide reflects management's decision to exclude un-ramped enterprise wins and Salesforce revenue from current projections. Commercial cloud expectations were actually raised, while the overall guide was tempered by lower projected political campaign revenue. Existing customer expansions are ramping faster than new logos because infrastructure is often already provisioned. Two major wins from 2025 are expected to exit 2026 at nearly twice their original estimated contract value due to high adoption rates. Geographic expansion is being driven by global enterprise demand for jurisdictionalized and regulated voice services. Deploying GPUs into Points of Presence (POPs) is intended to make AI voice interactions more accurate and time-efficient by processing at the network edge.

Bandwidth Inc. BAND is scheduled to report second-quarter 2026 earnings before the opening bell on July 29. The Zacks Consensus Estimate for sales and earnings is pegged at $217 million and 36 cents per share, respectively. Earnings estimates for BAND for 2026 have remained static at $1.79 over the past 60 days, while those for 2027 have increased 1.5% to $2.02. Image Source: Zacks Investment Research The company delivered a trailing four-quarter earnings surprise of 8.06%, on average, beating estimates on the previous two occasions. In the last reported quarter, the company pulled off an earnings surprise of 18.75%. Image Source: Zacks Investment Research Our proven model does not conclusively predict an earnings beat for Bandwidth for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Bandwidth currently has an ESP of 0.00% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. During the to-be-reported quarter, Bandwidth launched Build, a platform that enables AI agents to independently access the Bandwidth Communications Cloud for voice, messaging and authentication capabilities. The launch expands the company's AI-focused communications offerings and strengthens its position in the emerging AI agent ecosystem by enabling developers to integrate real-time communications into AI-driven applications. This is likely to have supported communications platform revenues in the second quarter of 2026, with a significant revenue impact expected as customer adoption accelerates.Bandwidth's usage-based business model is likely to have benefited from higher communications traffic during the June quarter. Growing demand for voice, messaging and authentication services across its enterprise customer base is expected to have increased platform utilization and interaction volumes, supporting usage-based communications platform revenues. Higher usage by existing customers and continued adoption of the company's cloud communications services are likely to have contributed to top-line growth during the second quarter.In the quarter under review, Bandwidth's continued investments in strengthening its communications infrastructure and expanding its global platform capabilities are likely to have enhanced service reliability and scalability for enterprise customers. The company's focus on delivering carrier-grade network performance and supporting mission-critical communications is expected to have reinforced its competitive position in the CPaaS market. These investments are likely to have improved operating efficiency and strengthened the company's ability to support increasing communications volumes, providing a solid foundation for long-term growth. Over the past year, Bandwidth shares have surged 261.9% compared with the industry’s growth of 102.9%, outperforming competitors like Twilio Inc. TWLO and RingCentral, Inc. RNG. Twilio has gained 49%, and RingCentral has rallied 87.3% over the said time frame. Image Source: Zacks Investment Research From a valuation standpoint, Bandwidth appears to be relatively cheaper compared to the industry but trades above its mean. Going by the price-to-sales ratio, the company’s shares currently trade at 2.1 forward sales, lower than 9.2 for the industry but higher than the stock’s mean of 0.65. Image Source: Zacks Investment Research Bandwidth's long-term growth prospects remain supported by its focus on expanding its enterprise business and improving financial performance. As demand for cloud communications continues to grow, the company is expected to benefit from its scalable business model and disciplined execution. The company's ability to deliver consistent revenue growth while enhancing margins and profitability is likely to remain a key area of focus for investors.The company's strong balance sheet and disciplined capital allocation provide financial flexibility to pursue growth opportunities. Successful execution of its long-term strategy, combined with disciplined cost management and continued expansion of its enterprise business, should strengthen Bandwidth's competitive position and support long-term shareholder value. Bandwidth is steadily strengthening its position in the cloud communications market through continued innovation and consistent execution. The company's ability to adapt to evolving enterprise communication needs and capitalize on favorable industry trends should support its growth trajectory over the long term. With a solid business model, improving financial profile and a Zacks Rank #1, BAND appears to be a smart investment option at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bandwidth Inc. (BAND) : Free Stock Analysis Report Ringcentral, Inc. (RNG) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research