0001514416-26-000017
SEC filingRevenue grew 1% YoY to $754M, with gross margin expansion to 39% driven by voice growth and lower messaging surcharges.
Bandwidth Inc. describes itself as being at the center of a global communications transformation, with a mission to develop and deliver the power to communicate. The company enables innovative organizations—from startup app developers to the world's largest enterprises—to engage their end-users and deliver exceptional experiences everywhere people live, learn, work, and play. Backed by the Bandwidth Communications Cloud, its global owned-and-operated network spanning more than 65 countries and reaching over 90% of global GDP, enterprises use Bandwidth's APIs to easily embed voice, messaging, emergency services, and AI capabilities into software and applications. Bandwidth was the first cloud communications provider to offer a robust selection of APIs built on its own cloud platform.
Bandwidth operates in a single reportable segment. The company's revenue is derived from two primary domains: Voice, which accounted for approximately 60% of consolidated revenue for the year ended December 31, 2025, serving the Global Voice Plans and Enterprise Voice customer categories; and Messaging, which accounted for approximately 40% of consolidated revenue for the same period, serving the Programmable Messaging customer category.
Bandwidth's key products and platforms include the Bandwidth Communications Cloud, which is the foundation of its business, providing a communications developer platform on top of an all-IP, owned-and-operated network with global reach. The Maestro platform is described as a first-of-its-kind, next-generation enterprise cloud communications platform that enables customers to integrate best-in-class, real-time voice applications across UCaaS, CCaaS, AI, and fraud mitigation platforms. Other named products include Global Voice Plans, Enterprise Voice, Programmable Messaging, Call Assure (providing redundancy with hands-free alternative routing), the Bandwidth App (a user-friendly interface for number management), Bandwidth Insights (providing detailed view of voice and messaging performance), Trust Services (number reputation management and fraud mitigation), and BYOC Integrations (the largest ecosystem of BYOC of any provider).
Bandwidth's go-to-market strategy is designed around the global shift from on-premises technology to cloud-based communications, with three key market offerings: Global Voice Plans, Enterprise Voice, and Programmable Messaging. The company engages potential and existing customers through an enterprise-focused sales approach, with sales and marketing executives directly engaging C-level executives and other senior decision makers. Bandwidth has a broad and diversified customer base with long-standing relationships with some of the largest technology companies. No single customer represented 10% or more of total revenue for the year ended December 31, 2025. The company powers all the 2025 Gartner Magic Quadrant Leaders in UCaaS and CCaaS, including Microsoft, Google, Zoom, Cisco, RingCentral, Genesys, and Five9. At the end of 2025, the twelve-month customer retention rate stood at greater than 98.8%, with a number of the largest enterprise customers having been on the platform for more than ten years.
Bandwidth's competitors fall into two primary categories: CPaaS companies that may offer a broader set of software APIs and services but may be limited by higher messaging concentration, more limited global reach, less robust customer support, or reliance on third-party networks; and incumbent telecommunications operators with limited geographical reach and limited developer functionality. Bandwidth believes that none of its competitors currently competes directly with it across the combination of its global scale, all-IP Communications Cloud, enterprise-grade APIs, and broad experience with regulatory frameworks. The company expects competition to intensify in the future.
Bandwidth's strategy is built on three pillars: (1) cross-sell and up-sell existing customers as they benefit from the company's global footprint, powerful APIs, and AI orchestration capabilities to automate and scale cloud communications; (2) focus on direct-to-enterprise growth to serve Global 2000 enterprises that directly leverage Bandwidth services to accelerate their digital transformations; and (3) be the preferred provider for enterprises and SaaS platforms that use conversational voice and messaging to create digital engagements that enhance the customer experience.
As of December 31, 2025, Bandwidth had approximately 1,100 employees, primarily located in the United States, Europe, and Asia Pacific. None of the employees are represented by a labor union or covered by a collective bargaining agreement. Bandwidth offers robust medical benefits (paying 100% of premiums for medical, dental, and vision insurance), 401(k), industry-leading parental leave, and access to mental health resources. The company's culture is described as mission-first, service-oriented, and focused on a "whole person promise" to offer meaningful work and work/life balance.
For the year ended December 31, 2025, Bandwidth Inc. reported total revenue of $753.8 million, a 1% increase from $748.5 million in 2024. The modest top-line growth was driven by a 4% increase in cloud communications revenue to $561.4 million, which benefited from 8% growth in Global Voice Plans and 21% growth in Enterprise Voice, reflecting strong momentum from the Maestro platform and higher voice traffic. This was partially offset by a 13% decline in Programmable Messaging and an 8% decline in messaging surcharges revenue to $192.4 million, both primarily due to lower political messaging activity following the 2024 U.S. presidential election.
Gross profit increased 5% to $295.1 million, with gross margin expanding 200 basis points to 39% from 37% in 2024. The margin improvement was driven by lower pass-through messaging surcharges within the revenue mix and ongoing efficiencies from scaling larger volumes of voice traffic on the company's network. Cost of revenue decreased 2% to $458.8 million, reflecting a $14 million reduction in messaging cost of revenue from lower political messaging.
Operating expenses increased 3% to $309.4 million, with research and development expenses rising 12% to $132.5 million due to continued investment in network infrastructure. Sales and marketing expenses decreased 7% to $101.7 million, primarily from lower headcount costs related to resource optimization efforts. General and administrative expenses increased 5% to $75.2 million, driven by expanded headcount for business support activities. As a result, operating loss improved to $14.4 million from $20.1 million in 2024.
Net loss widened to $12.9 million from $6.5 million in 2024, primarily due to a significant decrease in net gain on extinguishment of debt ($1.1 million in 2025 vs. $10.3 million in 2024) and lower other income. The income tax benefit increased to $3.7 million from $2.4 million, driven by favorable U.S. tax law changes under the One Big Beautiful Bill Act.
Bandwidth reports two revenue segments: Cloud Communications and Messaging Surcharges. Cloud Communications revenue grew 4% to $561.4 million, representing 74% of total revenue. Within this segment, Global Voice Plans revenue grew 8% on higher voice traffic, while Enterprise Voice revenue surged 21%, reflecting strong customer adoption of the Maestro platform's vendor-agnostic UCaaS/CCaaS strategy. Programmable Messaging revenue declined 13% due to lower political messaging. Messaging Surcharges revenue declined 8% to $192.4 million, also impacted by the post-election drop in political messaging. Average annual customer revenue increased 3% to $0.2 million, reflecting the company's strategy to attract larger customers.
Management's discussion emphasizes secular tailwinds from AI adoption in cloud communications, enterprise migration to the cloud, and CCaaS platform adoption. The company's strategic priorities include cross-selling and up-selling existing customers, focusing on direct-to-enterprise growth for Global 2000 companies, and becoming the preferred provider for conversational voice and messaging. Bandwidth believes its Maestro platform and Communications Cloud position it well for AI voice orchestration. The company expects operating expenses to increase in absolute dollars as the business grows. Liquidity remains strong with $103 million in cash and cash equivalents, $8 million in marketable securities, and $150 million available under the Credit Facility. Management believes existing cash and operating cash flows will be sufficient for at least the next 12 months.
As of December 31, 2025, Bandwidth held $102.8 million in cash and cash equivalents and $8.5 million in marketable securities, providing a combined $111.3 million in liquid assets. Total debt consisted of $255.2 million in convertible senior notes (current portion $7.6 million; long-term $247.6 million), a net decrease of $26.1 million from $281.3 million at year-end 2024 due to repurchases of the 2026 Convertible Notes. The company had no outstanding borrowings under its $150.0 million revolving credit facility, leaving full undrawn capacity. Shareholders' equity increased to $400.0 million from $312.5 million, driven by foreign currency translation gains and stock-based compensation.
Total non-cancellable purchase commitments were $24.2 million as of December 31, 2025, primarily related to network equipment maintenance and software license contracts. Of this, $9.2 million is expected to be fulfilled within one year. Operating lease commitments amount to $452.1 million in future minimum rent payments, with the most significant lease being the corporate headquarters in Raleigh, North Carolina (20-year term through 2043). The company also has a sublease agreement with related party Relay, Inc. providing $10.0 million in future minimum rent payments receivable.
Bandwidth's Board authorized an $80.0 million share repurchase program on February 19, 2026, signaling a shift toward returning capital to shareholders. No dividends were declared in 2025, 2024, or 2023. Capital expenditures (including capitalized software) totaled $32.9 million in 2025, representing 4.4% of revenue, up from $25.4 million (3.4% of revenue) in 2024. Debt reduction continued with the repurchase of $27.4 million principal of the 2026 Convertible Notes for $26.1 million in cash, generating a $1.1 million gain on extinguishment.
Bandwidth operates as a single reportable segment: cloud communications platform-as-a-service (CPaaS). Revenue is disaggregated into two categories: cloud communications ($561.4 million, 74.5% of total) and messaging surcharges ($192.4 million, 25.5%). Geographically, U.S. revenue was $654.0 million (86.8%) and international revenue was $99.8 million (13.2%). Long-lived assets are predominantly in the U.S. ($320.4 million) with only $6.8 million international.
The provided document does not contain the actual cash flow statement figures. The excerpt includes the audit report and index but omits the numerical data for operating, investing, and financing cash flows, as well as capex and free cash flow. Therefore, no analysis can be performed. To proceed, the full cash flow statement for Bandwidth Inc. for the years ended December 31, 2025, 2024, and 2023 is required.