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Bandwidth Announces First Quarter 2026 Financial Results

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Bandwidth (NASDAQ:BAND) reported record Q1 2026 revenue of $209 million (+20% YoY) and record Q1 Adjusted EBITDA of $26 million (+17% YoY). GAAP net income was $4 million vs a loss of $4 million a year ago. Free cash flow improved to $(1) million. Management raised full-year 2026 guidance to $880–$900 million revenue and $119–$125 million Adjusted EBITDA, citing AI-driven platform adoption, large enterprise wins, Salesforce selection, debt retirement, and share repurchases.

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Positive

  • Revenue $209M, +20% year-over-year
  • Adjusted EBITDA $26M, +17% year-over-year
  • Raised full-year 2026 revenue guidance to $880–$900M
  • GAAP net income turned positive at $4M
  • Operating cash flow improved to $9M

Negative

  • GAAP gross margin declined to 37% from 41%
  • Free cash flow still negative at $(1)M
  • Non-GAAP reconciliation unavailable for guidance due to stock-based comp

Market Reaction – BAND

+45.45% $35.20 5.8x vol
15m delay 49 alerts
+45.45% Since News
$35.20 Last Price
$30.88 $36.06 Day Range
+$352M Valuation Impact
$1.13B Market Cap
5.8x Rel. Volume

Following this news, BAND has gained 45.45%, reflecting a significant positive market reaction. Our momentum scanner has triggered 49 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $35.20. This price movement has added approximately $352M to the company's valuation. Trading volume is exceptionally heavy at 5.8x the average, suggesting very strong buying interest.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Key Figures

Q1 2026 revenue: $209M Revenue growth: 20% Adjusted EBITDA: $26M +5 more
8 metrics
Q1 2026 revenue $209M Quarter ended March 31, 2026; record level, up 20% year-over-year
Revenue growth 20% Q1 2026 year-over-year revenue increase
Adjusted EBITDA $26M Q1 2026, up 17% year-over-year and a record first quarter
GAAP net income $4M Q1 2026 vs. $(4)M in Q1 2025
Non-GAAP net income $13M Q1 2026 vs. $11M in Q1 2025
Q1 gross margin 37% GAAP gross margin for Q1 2026 (vs. 41% in Q1 2025)
FY 2026 revenue guide $880M–$900M Raised full-year 2026 revenue outlook
FY 2026 Adj. EBITDA guide $119M–$125M Raised full-year 2026 Adjusted EBITDA outlook

Market Reality Check

Price: $24.20 Vol: Volume 556,901 vs 20-day ...
normal vol
$24.20 Last Close
Volume Volume 556,901 vs 20-day average 446,095 (relative volume 1.25) ahead of the earnings release. normal
Technical Price $24.20 is trading above the 200-day MA of $15.60 and 5.8% below the 52-week high.

Peers on Argus

BAND was up 1.13% pre-release while peers were mixed: ALLT up 0.98%, CCSI down 5...

BAND was up 1.13% pre-release while peers were mixed: ALLT up 0.98%, CCSI down 5.11%, XNET down 5.52%, BLZE down 2.21%, DAVA flat. This points to company-specific drivers.

Previous Earnings Reports

5 past events · Latest: Feb 19 (Positive)
Same Type Pattern 5 events
Date Event Sentiment Move Catalyst
Feb 19 Q4/FY 2025 earnings Positive +11.9% Record Adjusted EBITDA, strong free cash flow and 2026 growth guidance.
Oct 30 Q3 2025 earnings Positive -3.9% Solid revenue, Adjusted EBITDA and raised 2025 outlook despite lower political messaging.
Jul 29 Q2 2025 earnings Neutral -18.5% Release of Q2 2025 results and call logistics without detailed metrics disclosed.
May 07 Q1 2025 earnings Neutral +12.1% Announcement of Q1 2025 results and webcast details for investors.
Feb 20 Q4/FY 2024 earnings Positive -4.4% Strong 2024 growth and cash flow with outlook for continued revenue expansion.
Pattern Detected

Recent earnings have produced mixed reactions: some strong rallies on positive reports, but also notable selloffs even when results and guidance were described as strong.

Recent Company History

Over the past year, BAND’s earnings releases have featured record profitability, growing revenue, and increased guidance. Q4 2025 results on Feb 19, 2026 highlighted record Adjusted EBITDA $25M and an $80M repurchase authorization, prompting a double‑digit gain. Earlier, Q3 2025 on Oct 30, 2025 showed $192M revenue and raised full‑year guidance but the stock fell. Today’s Q1 2026 report, with record $209M revenue and higher 2026 outlook, continues this narrative of improving scale and profitability.

Historical Comparison

-0.6% avg move · In the last five earnings releases, BAND’s average next‑day move was -0.59%, with both sharp rallies...
earnings
-0.6%
Average Historical Move earnings

In the last five earnings releases, BAND’s average next‑day move was -0.59%, with both sharp rallies and selloffs. The Q1 2026 beat and raised outlook follows prior strong prints but against a historically mixed price reaction.

Earnings updates show a progression from strong 2024 growth to record Q4 2025 Adjusted EBITDA and increasing 2026 growth targets, now extended by Q1 2026 record revenue and higher full‑year guidance.

Market Pulse Summary

The stock is up +7.4% following this news. A strong positive reaction aligns with record Q1 performa...
Analysis

The stock is up +7.4% following this news. A strong positive reaction aligns with record Q1 performance, including $209M revenue and $26M Adjusted EBITDA, plus raised 2026 guidance. Historically, BAND’s earnings moves averaged about -0.59% with both rallies and selloffs, so a large gain would stand out. Investors could also weigh insider net selling over the last 90 days and prior post‑earnings volatility when considering how durable such a move might be.

Key Terms

adjusted ebitda, non-gaap gross margin, non-gaap earnings per share, free cash flow
4 terms
adjusted ebitda financial
"Record quarterly revenue of $209 million, up 20% year-over-year, and Adjusted EBITDA of $26 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
non-gaap gross margin financial
"Non-GAAP Gross Margin (1) | 59 % | | 59 %"
Non-GAAP gross margin is a measure of a company's profitability that shows how much money it makes from sales after subtracting the direct costs of producing its products or services, but without applying certain accounting adjustments required by standard rules. It helps investors understand the company's core earning ability by excluding items like one-time expenses or accounting changes. This metric provides a clearer picture of ongoing business performance beyond official financial reports.
non-gaap earnings per share financial
"Non-GAAP earnings per share (1) | $0.35 - $0.37 | | $1.77 - $1.83"
Non-GAAP earnings per share is a company’s reported profit per share after removing certain items that management considers one-time, unusual, or not part of regular operations, such as restructuring costs, stock-based compensation, or asset write-downs. Investors use it like an “adjusted score” to see what management believes is the company’s ongoing, core profitability, but because the adjustments vary between firms it should be compared carefully across companies.
free cash flow financial
"Free cash flow (1) | $ (1) | | $ (13)"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

AI-generated analysis. Not financial advice.

Record quarterly revenue of $209 million, up 20% year-over-year, and Adjusted EBITDA of $26 million, up 17% year-over-year; raising full-year 2026 outlook

AI-driven platform adoption accelerating usage and value capture

Strong large enterprise momentum, including $1M+ wins and selection by Salesforce for Agentforce Contact Center

Strengthened balance sheet through disciplined capital allocation, including debt retirement and share repurchases

RALEIGH, N.C., April 30, 2026 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND), a leading global enterprise cloud communications company, today announced financial results for the first quarter ended March 31, 2026.

"Bandwidth entered 2026 with historic momentum. In the first quarter, we exceeded the top end of guidance ranges with record revenue of $209 million, up 20 percent year-over-year, and record first-quarter Adjusted EBITDA of $26 million," said David Morken, Bandwidth's Cofounder, Chief Executive Officer, and Chairman. "These results show our structural advantage as the mission-critical foundation for the AI-driven enterprise. Customers are deploying voice AI into production on our platform, as evidenced by our selection as Salesforce's critical infrastructure partner for Agentforce Contact Center, alongside strong momentum with million-dollar-plus deals in financial services and continued growth in high-volume messaging. Based on this momentum, we are raising our full-year outlook for both revenue and Adjusted EBITDA."

First Quarter 2026 Financial Highlights

 

The following table summarizes the condensed consolidated financial highlights for the three months
ended March 31, 2026 and 2025 ($ in millions, except per share amounts).



Three months ended

March 31,


2026


2025

Revenue

$                209


$                174

Gross Margin

37 %


41 %

Non-GAAP Gross Margin (1)

59 %


59 %

Net income (loss)

$                    4


$                   (4)

Non-GAAP net income (1)

$                  13


$                  11

Net income (loss) per share, basic

$               0.13


$              (0.13)

Net loss per share, diluted

$              (0.08)


$              (0.13)

Non-GAAP net income per Non-GAAP share (1)

$               0.38


$               0.36

Adjusted EBITDA (1)

$                  26


$                  22

Net cash provided by (used in) operating activities

$                    9


$                   (3)

Free cash flow (1)

$                   (1)


$                 (13)


(1) Additional information regarding the Non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of GAAP to Non-GAAP financial measures has also been provided in the financial tables included below.

"We delivered better-than-expected performance across our key financial metrics in the first quarter, while deleveraging our balance sheet and reducing dilution through share repurchases," said Daryl Raiford, Bandwidth's Chief Financial Officer. "These results reflect the strength of our business model, the operating leverage of our cloud communications platform and the depth of our competitive moat as we capitalize on the AI opportunity. With strong demand across Voice and Messaging, increasing software contribution, and improving net retention and average annual revenue per customer, we are raising our full-year guidance."

First Quarter Customer Highlights

  • Salesforce selected Bandwidth as its critical infrastructure partner to power voice and messaging for its groundbreaking new Agentforce Contact Center platform, embedding our Communications Cloud and Maestro™ orchestration directly into governed AI-driven workflows for intelligent customer engagement at scale.
  • A leading U.S. consumer financial services company with over 70 million active accounts selected Bandwidth to replace its legacy telecom provider and migrate its contact center to the cloud, leveraging our Maestro integration with Genesys and our ultra-reliable Call Assure toll-free voice solution to enable its transition to AI-driven customer experiences.
  • One of the largest mutual life insurers in the world chose Bandwidth to replace a long-standing legacy carrier for its comprehensive customer experience transformation, deploying our Maestro platform with Genesys, Call Assure toll-free voice, and Trust Services including Call Verification and Number Reputation Management–reinvesting cost savings into AI-driven customer engagement initiatives.
  • A high-volume messaging customer supporting major consumer brands in retail and restaurant verticals switched to Bandwidth for superior delivery performance and scalability, managing tens of millions of messages per month across short code, 10DLC, and toll-free channels as it expands AI-powered campaigns and customer interactions.
  • Continued strong momentum from a growing ecosystem of third-party AI application developers building vertical agentic solutions on our platform across industries such as hospitality, healthcare, home services, and customer support.

Financial Outlook

Bandwidth is providing guidance for its second 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.


2Q 2026
Guidance


Full Year 2026
Guidance

Revenue

$214 - $220


$880 - $900

Adjusted EBITDA

$24 - $27


$119 - $125

Non-GAAP earnings per share (1)

$0.35 - $0.37


$1.77 - $1.83


(1) Assumes weighted average diluted share count of approximately 34.7 million in 2Q 2026 and weighted average diluted share count of approximately 35.3 million in full year 2026.

Bandwidth has not reconciled its second 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

  • Needham Technology, Media, and Consumer Conference in New York, NY. Fireside chat with David Morken, CEO and Daryl Raiford, CFO on Wednesday, May 13, 2026 at 2:15 PM Eastern Time.
  • B. Riley Securities Institutional Investor Conference in Marina Del Rey, CA. Hosted by David Morken, CEO and John Bell, CPO on Wednesday, May 20, 2026.
  • Jefferies Software, Internet, and AI Conference in Newport Coast, CA. Hosted by John Bell, CPO on Wednesday, May 27, 2026.

About Bandwidth Inc.

Bandwidth (NASDAQ: BAND) is a global cloud communications software company that helps enterprises deliver exceptional experiences through voice calling, text messaging and emergency services. Our solutions and our Communications Cloud, covering 65+ countries and over 90 percent of global GDP, are trusted by all the leaders in unified communications and cloud contact centers–including Amazon Web Services (AWS), Cisco, Google, Microsoft, RingCentral, Zoom, Genesys and Five9–as well as Global 2000 enterprises and SaaS builders like Docusign, Uber and Yosi Health. As a founder of the cloud communications revolution, we are the first and only global Communications Platform-as-a-Service (CPaaS) to offer a unique combination of composable APIs, AI capabilities, owner-operated network and broad regulatory experience. Our award-winning support teams help businesses around the world solve complex communications challenges to reach anyone, anywhere.

Conference Call

Bandwidth will host a conference call to discuss financial results for the first quarter ended March 31, 2026 on April 30, 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 Details

April 30, 2026
8:00 am ET 
Domestic dial-in: 
844-481-2707 
International dial-in: 
412-317-0663

Replay information

An audio replay of this conference call will be available through May 7, 2026 by dialing 855-669-9658 or 412-317-0088 for international callers, and entering passcode 9573448.

Forward-Looking Statements

This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, future financial and business performance for the quarter ending June 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. We add back depreciation, amortization of acquired intangible assets related to acquisitions and stock-based compensation because they are non-cash items. We eliminate the impact of these non-cash items, because we do not consider them indicative of our core operating performance. Their exclusion facilitates comparisons of our operating performance on a period-to-period basis. Therefore, we believe that showing gross margin, as adjusted to remove the impact of these non-cash expenses, is helpful to investors in assessing our gross profit and gross margin performance in a way that is similar to how management assesses our performance. We calculate Non-GAAP gross margin by dividing Non-GAAP gross profit by cloud communications revenue, which is revenue less pass-through messaging surcharges.

We define Non-GAAP net income (loss) as net income or loss adjusted for certain items affecting period to period comparability. Non-GAAP net income (loss) excludes stock-based compensation, amortization of acquired intangible assets related to acquisitions, amortization of debt discount and issuance costs for convertible debt, acquisition related expenses, impairment charges of intangibles assets, net cost associated with early lease terminations and leases without economic benefit, (gain) loss on sale of business, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, non-recurring items not indicative of ongoing operations and other, and estimated tax impact of above adjustments, net of valuation allowances.

We define Adjusted EBITDA as net income or losses from continuing operations, adjusted to reflect the addition or elimination of certain statement of operations items including, but not limited to: income tax (benefit) provision, interest (income) expense, net, depreciation and amortization expense, acquisition related expenses, stock-based compensation expense, impairment of intangible assets, (gain) loss on sale of business, net cost associated with early lease terminations and leases without economic benefit, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, and non-recurring items not indicative of ongoing operations and other. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business.

We define free cash flow as net cash provided by or used in operating activities less net cash used in the acquisition of property, plant and equipment and capitalized development costs for software for internal use. We believe free cash flow is a useful indicator of liquidity and provides information to management and investors about the amount of cash generated from our core operations that can be used for investing in our business. Free cash flow has certain limitations in that it does not represent the total increase or decrease in the cash balance for the period, it does not take into consideration investment in long-term securities, nor does it represent the residual cash flows available for discretionary expenditures. Therefore, it is important to evaluate free cash flow along with our condensed consolidated statements of cash flows.

We believe that these Non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. While a reconciliation of Non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, many of these costs and expenses that we may incur in the future, we have provided a reconciliation of Non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.

 

BANDWIDTH INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)




Three months ended March 31,


2026


2025

Revenue

$              208,784


$              174,241

Cost of revenue

130,870


102,729

Gross profit

77,914


71,512

Operating expenses




Research and development

38,466


30,632

Sales and marketing

24,627


26,456

General and administrative

19,442


19,111

Total operating expenses

82,535


76,199

Operating loss

(4,621)


(4,687)

Other income, net

7,213


877

Income (loss) before income taxes

2,592


(3,810)

Income tax benefit

1,526


70

Net income (loss)

$                 4,118


$               (3,740)





Net income (loss) per share




Basic

$                  0.13


$                 (0.13)

Diluted

$                 (0.08)


$                 (0.13)





Numerator used to compute net income (loss) per share:




Basic

$                 4,118


$               (3,740)

Diluted

$               (2,579)


$               (3,740)





Weighted average number of common shares outstanding:




Basic

31,681,879


28,982,432

Diluted

32,957,834


28,982,432

 

BANDWIDTH INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)










As of March 31,


As of December 31,


2026


2025

Assets




Current assets:




Cash and cash equivalents

$               47,283


$              102,788

Marketable securities

2,990


8,476

Accounts receivable, net of allowance

101,170


91,409

Deferred costs

4,558


4,830

Prepaid expenses and other current assets

15,883


11,557

Total current assets

171,884


219,060

Property, plant and equipment, net

172,157


174,251

Operating right-of-use asset, net

152,126


152,950

Intangible assets, net

128,830


138,742

Deferred costs, non-current

2,609


3,098

Other long-term assets

7,896


7,754

Goodwill

348,694


356,772

Total assets

$              984,196


$            1,052,627

Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$               31,694


$               42,600

Accrued expenses and other current liabilities

87,381


91,151

Current portion of deferred revenue

8,815


8,742

Operating lease liability, current

4,130


3,947

Current portion of convertible senior notes


7,627

Line of credit, current portion

50,500


Total current liabilities

182,520


154,067

Other liabilities

1,625


555

Operating lease liability, net of current portion

219,892


221,019

Deferred revenue, net of current portion

3,950


4,972

Deferred tax liability

21,839


24,479

Convertible senior notes

148,699


247,562

Total liabilities

578,525


652,654

Stockholders' equity:




Class A and Class B common stock

32


31

Treasury common stock

(5,009)


Additional paid-in capital

503,269


485,836

Accumulated deficit

(80,208)


(84,326)

Accumulated other comprehensive loss

(12,413)


(1,568)

Total stockholders' equity

405,671


399,973

Total liabilities and stockholders' equity

$              984,196


$            1,052,627

 

BANDWIDTH INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)




Three months ended March 31,


2026


2025

Cash flows from operating activities




Net income (loss)

$                 4,118


$               (3,740)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities




Depreciation and amortization

17,387


12,503

Non-cash reduction to the right-of-use asset

788


753

Amortization of debt discount and issuance costs

310


365

Stock-based compensation

12,990


13,575

Deferred taxes and other

(2,019)


(1,776)

Net gain on extinguishment of debt

(7,283)


(1,082)

Changes in operating assets and liabilities:




Accounts receivable, net of allowance

(9,991)


(253)

Prepaid expenses and other assets

(4,004)


(5,366)

Accounts payable

(9,245)


(10,932)

Accrued expenses and other liabilities

6,625


(8,072)

Operating right-of-use liability

(908)


942

Net cash provided by (used in) operating activities

8,768


(3,083)

Cash flows from investing activities




Purchase of property, plant and equipment

(7,092)


(7,368)

Capitalized software development costs

(2,258)


(2,844)

Purchase of marketable securities

(1,979)


(4,717)

Proceeds from sales and maturities of marketable securities

7,467


987

Proceeds from sale of business


103

Net cash used in investing activities

(3,862)


(13,839)

Cash flows from financing activities




Borrowings on line of credit

84,000


15,000

Repayments on line of credit

(33,500)


(15,000)

Net cash paid for debt extinguishment

(99,621)


(26,120)

Repurchase of Class A common stock

(5,009)


Value of equity awards withheld for tax liabilities and other

(5,627)


(2,913)

Net cash used in financing activities

(59,757)


(29,033)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(840)


(124)

Net decrease in cash, cash equivalents, and restricted cash

(55,691)


(46,079)

Cash, cash equivalents, and restricted cash, beginning of period

103,160


82,234

Cash, cash equivalents, and restricted cash, end of period

$               47,469


$               36,155

 

BANDWIDTH INC.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share amounts)

(Unaudited)


Non-GAAP Gross Profit and Non-GAAP Gross Margin







Three months ended March 31,


2026


2025

Gross Profit

$            77,914


$            71,512

Gross Profit Margin %

37 %


41 %

Depreciation

5,826


4,678

Amortization of acquired intangible assets

5,074


1,897

Stock-based compensation

465


525

Non-GAAP Gross Profit

$            89,279


$            78,612

Non-GAAP Gross Margin % (1)

59 %


59 %










(1) Calculated by dividing Non-GAAP gross profit by cloud communications revenue of $150 million and $133 million for the three months ended March 31, 2026 and 2025, respectively.

 

BANDWIDTH INC.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share amounts)

(Unaudited)

 


Non-GAAP Net Income



Three months ended March 31,


2026


2025

Net income (loss)

$                 4,118


$               (3,740)

Stock-based compensation

12,990


13,575

Amortization of acquired intangibles

7,604


4,287

Amortization of debt discount and issuance costs for convertible debt

243


298

Net gain on extinguishment of debt

(7,283)


(1,082)

Non-recurring items not indicative of ongoing operations and other (1)

(388)


539

Estimated tax effects of adjustments (2)

(4,766)


(2,747)

Non-GAAP net income

$               12,518


$               11,130

Interest expense on Convertible Notes (3)

210


250

Numerator used to compute Non-GAAP diluted net income per share

$               12,728


$               11,380





Net income (loss) per share




Basic

$                  0.13


$                 (0.13)

Diluted

$                 (0.08)


$                 (0.13)





Non-GAAP net income per Non-GAAP share




Basic

$                  0.40


$                  0.38

Diluted

$                  0.38


$                  0.36





Weighted average number of shares outstanding




Basic

31,681,879


28,982,432

Diluted

32,957,834


28,982,432





Non-GAAP basic shares

31,681,879


28,982,432

Convertible debt conversion

1,275,955


1,658,767

Stock options issued and outstanding

15,078


21,302

Nonvested RSUs outstanding

863,381


767,704

Non-GAAP diluted shares

33,836,293


31,430,205











(1) Non-recurring items not indicative of ongoing operations and other include (i) $0.6 million of foreign exchange charges primarily related to balance sheet revaluations during the three months ended March 31, 2026, (ii) $0.2 million and less than $0.1 million of losses on disposals of property, plant and equipment during the three months ended March 31, 2026 and 2025, respectively, and (iii) $0.5 million of nonrecurring litigation expense during the three months ended March 31, 2025.

(2) The estimated tax-effect of adjustments is determined by recalculating the tax provision on a Non-GAAP basis. The Non-GAAP effective income tax rate was 20.6% and 19.4% for the three months ended March 31, 2026 and 2025, respectively. We analyze the Non-GAAP valuation allowance position on a quarterly basis. As of March 31, 2026, we have no valuation allowance against our deferred tax assets for Non-GAAP purposes.

(3) Non-GAAP net income is increased for interest expense as part of the calculation for diluted Non-GAAP earnings per share.

 

BANDWIDTH INC.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share amounts)

(Unaudited)

 


Adjusted EBITDA



Three months ended March 31,


2026


2025

Net income (loss)

$                 4,118


$               (3,740)

Income tax benefit

(1,526)


(70)

Interest expense, net

673


488

Depreciation

9,783


8,216

Amortization

7,604


4,287

Stock-based compensation

12,990


13,575

Net gain on extinguishment of debt

(7,283)


(1,082)

Non-recurring items not indicative of ongoing operations and other (1)

(388)


539

Adjusted EBITDA

$               25,971


$               22,213











(1) Non-recurring items not indicative of ongoing operations and other include (i) $0.6 million of foreign exchange charges primarily related to balance sheet revaluations during three months ended March 31, 2026, (ii) $0.2 million and less than $0.1 million of losses on disposals of property, plant and equipment during the three months ended March 31, 2026 and 2025, respectively, and (iii) $0.5 million of nonrecurring litigation expense during the three months ended March 31, 2025.

 

Free Cash Flow



Three months ended March 31,


2026


2025

Net cash provided by (used in) operating activities

$                 8,768


$               (3,083)

Net cash used in investing in capital assets (1)

(9,350)


(10,212)

Free cash flow

$                  (582)


$              (13,295)








(1) Represents the acquisition cost of property, plant and equipment and capitalized development costs for software for internal use.

 

Stock-Based Compensation Expense




Bandwidth recognized total stock-based compensation expense as follows:





Three months ended March 31,


2026


2025

Cost of revenue

$                   465


$                   525

Research and development

5,789


5,557

Sales and marketing

1,732


2,274

General and administrative

5,004


5,219

Total

$               12,990


$               13,575

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/bandwidth-announces-first-quarter-2026-financial-results-302758047.html

SOURCE Bandwidth Inc.

FAQ

What did Bandwidth (BAND) report for Q1 2026 revenue and growth?

Bandwidth reported $209 million in Q1 2026 revenue, a 20% year-over-year increase. According to the company, growth was driven by AI platform adoption, large enterprise deals, and higher software contribution across voice and messaging.

How did Bandwidth (BAND) perform on Adjusted EBITDA in Q1 2026?

Adjusted EBITDA for Q1 2026 was $26 million, up 17% year-over-year. According to the company, operating leverage from its cloud communications platform and enterprise momentum supported margin expansion.

What is Bandwidth's updated full-year 2026 guidance for revenue and Adjusted EBITDA?

Bandwidth raised full-year 2026 revenue guidance to $880–$900 million and Adjusted EBITDA guidance to $119–$125 million. According to the company, this reflects accelerating AI-driven deployments and large customer wins.

Did Bandwidth (BAND) report positive GAAP net income in Q1 2026?

Yes. Bandwidth reported GAAP net income of $4 million in Q1 2026 versus a GAAP loss of $4 million a year earlier. According to the company, improved results reflect higher revenue and operating improvements.

What customer wins did Bandwidth announce that could affect BAND stock outlook?

Bandwidth cited selection by Salesforce for Agentforce and multiple $1M+ enterprise deals across financial services and insurance. According to the company, these wins validate platform demand for AI-driven contact center and messaging solutions.