Q1 2026 Bandwidth Inc Earnings Call

April 30, 2026

Operator: Good morning, welcome to the Bandwidth's Q1 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then 1 on your telephone keypad. To withdraw your question, please press Star then 2. Please note this event is being recorded. I would now like to turn the conference over to Ankit Hira of Investor Relations. Please go ahead.

Operator: Good morning, welcome to the Bandwidth's Q1 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ankit Hira of investor relations. Please go ahead.

Speaker #2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad.

Speaker #2: To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Ankit Hira of Investor Relations, please go ahead.

Speaker #2: Good morning, and welcome to Bandwidth's first quarter 2026 earnings call. I'm joined today by David Morken, our CEO, and Daryl Raiford, our CFO. They will begin with prepared remarks, and then we will open up the call for Q&A.

Ankit Hira: Good morning, and welcome to Bandwidth's first quarter 2026 earnings call. I'm joined today by David Morken, our CEO, and Daryl Raiford, our CFO. They will begin with prepared remarks, then we will open up the call for Q&A. Our earnings press release was issued earlier today. The press release and an earnings presentation with historical financial highlights and a reconciliation of GAAP to non-GAAP financial results can be found on the investor relations page at investors.bandwidth.com. During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our financial guidance for the full year 2026. We caution you not to put undue reliance on these forward-looking statements as they may involve risks and uncertainties that could cause actual results to vary materially from any future results or outcomes expressed or implied by the forward-looking statements.

Ankit Hira: Good morning, and welcome to Bandwidth's Q1 2026 Earnings Call. I'm joined today by David Morken, our CEO, and Daryl Raiford, our CFO. They will begin with prepared remarks, then we will open up the call for Q&A. Our earnings press release was issued earlier today. The press release and an earnings presentation with historical financial highlights and a reconciliation of GAAP to non-GAAP financial results can be found on the investor relations page at investors.bandwidth.com. During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our financial guidance for the full year 2026. We caution you not to put undue reliance on these forward-looking statements as they may involve risks and uncertainties that could cause actual results to vary materially from any future results or outcomes expressed or implied by the forward-looking statements.

Speaker #2: Our earnings press release was issued earlier today. The press release and an earnings presentation with historical financial highlights and a reconciliation of gap to non-gap financial results can be found on the Investor Relations page at investors.bandwidth.com.

Speaker #2: During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our financial guidance for the full year 2026.

Speaker #2: We caution you not to put undue reliance on these forward-looking statements, as they may involve risk and uncertainties that could cause actual results to vary materially from any future results or outcomes expressed or implied by the forward-looking statements.

Speaker #2: Any forward-looking statements made on this call and in the presentation slides reflect our analysis as of today. And we have no plans or obligation to update them.

Ankit Hira: Any forward-looking statements made on this call and in the presentation slides reflect our analysis as of today, and we have no plans or obligation to update them. For a discussion of material risk and other important factors that could affect our actual results, please refer to those contained in our latest 10-K filing as updated by other SEC filings. With that, let me turn the call over to David.

Speaker #2: For a discussion of material risk and other important factors that could affect our actual results, please refer to those contained in our latest 10-K filing as updated by other SEC filings.

Speaker #2: With that, let me turn the call over to David. Thank you. And welcome, everyone. Bandwidth has entered 2026 with historic momentum. In the first quarter, we exceeded our expectations with record revenue of $209 million, up 20% year over year, and record first-quarter adjusted EBITDA of $26 million.

David Morken: Thank you, and welcome everyone. Bandwidth has entered 2026 with historic momentum. In Q1, we exceeded our expectations with record revenue of $209 million, up 20% year over year, and record Q1 Adjusted EBITDA of $26 million. Based on this performance, we are raising our full-year outlook. These results represent far more than a quarterly beat. They are a definitive proof point of our structural advantage in a technology sector undergoing a profound transformation. Our global communications cloud and Maestro orchestration layer are essential infrastructure that make voice AI possible. Bandwidth is flourishing as the mission-critical foundation for the AI-driven enterprise. Thank you to our customers for growing and innovating with us and to our bandmates for your amazing work. I thank God for giving this team the opportunities to serve together.

Speaker #2: Based on this performance, we are raising our full-year outlook. These results represent far more than a quarterly beat. They are a definitive proof point of our structural advantage in a technology sector undergoing a profound transformation.

Speaker #2: Our global communications cloud and maestro orchestration layer are essential infrastructure that make voice AI possible. Bandwidth is flourishing as the mission-critical foundation for the AI-driven enterprise.

Speaker #2: Thank you to our customers for growing and innovating with us, and to our bandmates for your amazing work. And I thank God for giving this team the opportunities to serve together.

Speaker #2: We are executing against a clear strategy. To power mission-critical communications for the AI-driven enterprise. For voice AI to succeed in production it requires ultra-low latency, carrier-grade reliability, and deep regulatory control capabilities that only a company that owns the underlying network can provide.

David Morken: We are executing against a clear strategy to power mission-critical communications for the AI-driven enterprise. For voice AI to succeed in production, it requires ultra-low latency, carrier-grade reliability, and deep regulatory control capabilities that only a company that owns the underlying network can provide. This is our moat. It creates durable advantages in economics and performance that are impossible for virtual providers to replicate. We are no longer just enabling AI, we are orchestrating it. Through our Maestro platform, Bandwidth participates in every interaction, allowing us to capture more value as customer usage grows. As AI increases the frequency and complexity of interactions, our model allows us to grow revenue per interaction, not just per minute. We are seeing this play out as customers deploy AI into their live workflows and rely upon our platform to support mission-critical interactions. A key example is our expanded partnership with Salesforce.

Speaker #2: This is our moat. It creates durable advantages in economics and performance that are impossible for virtual providers to replicate. We are no longer just enabling AI.

Speaker #2: We are orchestrating it. Through our maestro platform, we participate in every interaction, allowing us to capture more value as customer usage grows. As AI increases the frequency and complexity of interactions, our model allows us to grow revenue, per interaction.

Speaker #2: Not just per minute. We are seeing this play out as customers deploy AI into their live workflows, and relie upon our platform to support mission-critical interactions.

Speaker #2: A key example is our expanded partnership with Salesforce. We recently announced that Salesforce selected Bandwidth as their critical infrastructure partner to power voice and agent-force contact center platform.

David Morken: We recently announced that Salesforce selected Bandwidth as their critical infrastructure partner to power voice and messaging for their groundbreaking new Agentforce Contact Center platform. Salesforce is fundamentally re-architecting the contact center for the AI era, bringing together their customer data, digital engagement, and agentic AI capabilities into a single AI-first platform. In Salesforce's vision, Agentforce Contact Center becomes a native execution layer for CRM. This gives enterprises a single source of truth to achieve faster, more intelligent customer engagement. Salesforce is a long time customer, and to realize its bold vision for Agentforce, they turn to Bandwidth once again as their critical infrastructure partner. Only we are able to deliver the unique combination of network ownership, real time orchestration, and global regulatory expertise required to support Agentforce's high volume AI driven interactions.

Speaker #2: Salesforce is fundamentally re-architecting the contact center for the AI era, bringing together their customer data, digital engagement, and agentic AI capabilities into a single AI-first platform.

Speaker #2: In Salesforce's vision, agent-force contact center becomes a native execution layer for CRM. This gives enterprises a single source of truth to achieve faster, more intelligent customer engagement.

Speaker #2: Salesforce is a long-time customer, and to realize its bold vision for agent-force, they turned to Bandwidth once again as their critical infrastructure partner. Only we are able to deliver the unique combination of network ownership, real-time orchestration, and global regulatory expertise required to support agent-force's high-volume AI-driven interactions.

Speaker #2: This is the result of our years of powering hyperscalers and all the Gartner leaders in CCAS and UCAS. In our partnership, Salesforce has embedded Bandwidth's communications cloud directly into their governed workflows.

David Morken: This is the result of our years of powering hyperscalers and all the Gartner leaders in CCaaS and UCaaS. In our partnership, Salesforce has embedded Bandwidth's communications cloud directly into their governed workflows, enabling the control, observability, and integration depth required for agentic interactions at scale. This is significant for two reasons. First, it adds CRM as a new category of platforms we power. In addition to CCaaS, UCaaS, and conversational AI leaders, we are now partnered with the leading CRM platform as it becomes the system of execution for customer engagement. This expands our total addressable market and positions us to capture meaningful share as CRM platforms take on a larger role in customer interactions. Second, it reinforces our emerging role as critical infrastructure embedded inside governed workflows, where every interaction represents a unit of usage and value creation.

Speaker #2: Enabling the control, observability, and integration depth required for agentic interactions at scale. This is significant for two reasons. First, it adds CRM as a new category of platforms we power.

Speaker #2: In addition to CCAS, UCAS, and conversational AI leaders, we are now partnered with the leading CRM platform as it becomes the system of execution for customer engagement.

Speaker #2: This expands our total addressable market and positions us to capture meaningful share as CRM platforms take on a larger role in customer interactions. Second, it reinforces our emerging role as critical infrastructure embedded inside governed workflows.

Speaker #2: Where every interaction represents a unit of usage and value creation. This is a blueprint for how we expand value. By embedding deeper into core enterprise systems and participating in more workflows on our platform.

David Morken: This is a blueprint for how we expand value by embedding deeper into core enterprise systems and participating in more workflows on our platform. As Agentforce adoption grows, we believe revenue will build over time. With AI becoming the primary interface for customer engagement, the traditional contact center stack is being re-architected around agentic workflows. We have a long history of working closely with the leading CCaaS providers, and they continue to innovate and invest in exciting new AI capabilities. The evolution of the category will expand the range of platforms enterprises can choose from, and Bandwidth is positioned to support them all. Our open platform strategy ensures that regardless of which application or AI provider an enterprise selects, Bandwidth remains the underlying communications infrastructure.

Speaker #2: As agent-force adoption grows, we believe revenue will build over time. With AI becoming the primary interface for customer engagement, the traditional contact center stack is being re-architected around agentic workflows.

Speaker #2: We have a long history of working closely with the leading CCAS providers, and they continue to innovate and invest in exciting new AI capabilities.

Speaker #2: The evolution of the category will expand the range of platforms enterprises can choose from, and Bandwidth is positioned to support them all. Our open platform strategy ensures that regardless of which application or AI provider an enterprise selects, Bandwidth remains the underlying communications infrastructure.

Speaker #2: We're seeing this same need for mission-critical infrastructure play out in highly regulated industries, particularly in financial services, where we've secured large wins over several consecutive quarters including two new million-dollar-plus deals.

David Morken: We're seeing this same need for mission-critical infrastructure play out in highly regulated industries, particularly in financial services, where we've secured large wins over several consecutive quarters, including 2 new million-dollar-plus deals. The first is with a leading US consumer financial services company that has over 70 million active accounts. This customer selected Bandwidth to replace its legacy telecom provider and migrate its contact center to the cloud through our Maestro integration with Genesys and our ultra-reliable Call Assure toll-free voice solution. Our solution delivers the reliability, control, and integration they needed while also enabling their transition to AI-driven customer engagement. We're now positioned for significant expansion as the customer integrates AI into the next phase of their customer experience transformation. Our second million-dollar-plus deal during the quarter is with one of the largest mutual life insurance companies in the world.

Speaker #2: The first is with a leading U.S. consumer financial services company that has over 70 million active accounts. This customer selected Bandwidth to replace its legacy telecom provider and migrate its contact center to the cloud through our maestro integration with Genesys and our ultra-reliable CallAssure toll-free voice solution.

Speaker #2: Our solution delivers the reliability, control, and integration they needed while also enabling their transition to AI-driven customer engagement. We're now positioned for significant expansion as the customer integrates AI into the next phase of their customer experience transformation.

Speaker #2: Our second million-dollar-plus deal during the quarter is with one of the largest mutual life insurance companies in the world. This customer selected Bandwidth to replace a long-standing legacy carrier.

David Morken: This customer selected Bandwidth to replace a long-standing legacy carrier. Like many enterprises in regulated industries, this customer required both performance and trust, areas where our owned network and integrated platform provide a clear advantage. Their comprehensive customer experience transformation leverages our Maestro integration with Genesys, our Call Assure toll free voice, and our trust services, including call verification and number reputation management. Cost savings from modernization are being reinvested into new AI services, which could further increase usage on our platform, redirecting spend away from legacy systems and toward more intelligent, scalable customer engagement with Bandwidth. These examples demonstrate our continued strong momentum in financial services, where scalability, compliance, and resiliency are non-negotiable. Standardizing on Bandwidth enables best-in-class integrations, intelligent call routing, built-in failover, and a clear path to deploying new AI services.

Speaker #2: Like many enterprises in regulated industries, this customer required both performance and trust, areas where our owned network and integrated platform provide a clear advantage.

Speaker #2: Their comprehensive customer experience transformation leverages our maestro integration with Genesys, our CallAssure toll-free voice, and our trust services including call verification and number reputation management.

Speaker #2: Cost savings from modernization are being reinvested into new AI services which could further increase usage on our platform. Redirecting spend away from legacy systems and toward more intelligent scalable customer engagement with Bandwidth.

Speaker #2: These examples demonstrate our continued strong momentum in financial services, where scalability, compliance, and resiliency are non-negotiable. Standardizing on Bandwidth enables best-in-class integrations, intelligent call routing, built-in failover, and a clear path to deploying new AI services.

Speaker #2: This is a land and expand model where initial platform wins immediately demonstrate Bandwidth's value proposition, leading to higher usage, increased software attachment, and long-term durable revenue growth.

David Morken: This is a land and expand model where initial platform wins immediately demonstrate Bandwidth's value proposition, leading to higher usage, increased software attachment, and long term durable revenue growth. We're seeing a similar dynamic play out in our messaging business, where enterprises need a robust, reliable platform partner to scale real-time customer engagement across digital channels. During the first quarter, we won an additional high-volume messaging customer with major consumer brands across the retail and restaurant verticals. This customer reached a level of throughput where their previous large provider could no longer meet their requirements and switched to Bandwidth for our proven delivery performance and ability to scale, particularly as they manage tens of millions of messages per month across short code, 10DLC, and toll-free channels.

Speaker #2: We're seeing a similar dynamic play out in our messaging business, where enterprises need a robust, reliable platform partner to scale real-time customer engagement across digital channels.

Speaker #2: During the first quarter, we won an additional high-volume messaging customer with major consumer brands across the retail and restaurant verticals. This customer reached a level of throughput where their previous large provider could no longer meet their requirements, and switched to Bandwidth for our proven delivery performance and ability to scale.

Speaker #2: Particularly as they managed tens of millions of messages per month across short code, 10 DLC, and toll-free channels. As they add new AI workflows to automate campaign management and customer interactions, Bandwidth's messaging platform and campaign registration tools ensure reliable execution.

David Morken: As they add new AI workflows to automate campaign management and customer interactions, Bandwidth's messaging platform and campaign registration tools ensure reliable execution. This example shows how we're extending the same land and expand model into messaging. As customers grow and scale their engagement, activity flows directly through our platform, driving revenue and margin performance over time. In addition to our customer acquisition success in voice and messaging, we are increasingly supporting a growing ecosystem of AI developers building vertical applications on top of our platform. We're seeing continued momentum in this space with developers building agentic solutions across a wide variety of use cases, from restaurants and hospitality to healthcare, home services, and customer support, where real-time voice and messaging are central to the customer experience. These AI app developers are choosing Bandwidth for the same reasons as our enterprise customers.

Speaker #2: This example shows how we're extending the same land and expand model into messaging. As customers grow and scale their engagement, activity flows directly through our platform, driving revenue and margin performance over time.

Speaker #2: In addition to our customer acquisition success in voice and messaging, we are increasingly supporting a growing ecosystem of AI developers building vertical applications on top of our platform.

Speaker #2: We're seeing continued momentum in this space with developers building agentic solutions across a wide variety of use cases, from restaurants and hospitality to healthcare, home services, and customer support, where real-time voice and messaging are central to the customer experience.

Speaker #2: These AI app developers are choosing Bandwidth for the same reasons as our enterprise customers: the ultra-low latency, reliability, and scalability required to run AI applications in production, along with the orchestration capabilities of maestro.

David Morken: The ultra-low latency, reliability, and scalability required to run AI applications in production, along with the orchestration capabilities of Maestro. As enterprises increasingly adopt verticalized applications built by third-party developers, Bandwidth becomes the essential communications layer powering additional usage on our platform. In summary, we are the mission critical communications platform for AI-driven enterprises. First, we are executing against a clear and consistent strategy to power mission critical communications for the AI-driven enterprise, and we are seeing this focus translate into large enterprise adoption across our platform. Second, we are expanding our role inside governed customer workflows as AI moves into production. Third, we are scaling a business model that drives increasing usage, expands revenue per customer, and delivers exceptional incremental gross profit growth. Taken together, we are positioned as the mission critical communications platform for AI-driven enterprises.

Speaker #2: As enterprises increasingly adopt verticalized applications built by third-party developers, Bandwidth becomes the essential communications layer powering additional usage on our platform. In summary, we are the mission-critical communications platform for AI-driven enterprises.

Speaker #2: First, we are executing against a clear and consistent strategy to power mission-critical communications for the AI-driven enterprise, and we are seeing this focus translate into large enterprise adoption across our platform.

Speaker #2: Second, we are expanding our role inside governed customer workflows as AI moves into production, and third, we are scaling a business model that drives increasing usage expands revenue per customer, and delivers exceptional incremental gross profit growth.

Speaker #2: Taken together, we are positioned as the mission-critical communications platform for AI-driven enterprises. Now, I'll turn it over to Daryl to walk through the financial details of the quarter.

David Morken: Now, I'll turn it over to Daryl to walk through the financial details of the quarter.

Speaker #2: Thank you, David, and good morning, everyone. Bandwidth's 2026 is off to a historic start. Our first quarter performance was exceptionally strong, with demand for both voice and messaging exceeding our projections, and driving results above the top end of our guidance ranges.

Daryl Raiford: Thank you, David. Good morning, everyone. Bandwidth's 2026 is off to a historic start. Our Q1 performance was exceptionally strong, with demand for both voice and messaging exceeding our projections and driving results above the top end of our guidance ranges. This robust momentum across all key financial metrics, including revenue, gross profit, Adjusted EBITDA, Non-GAAP EPS, and free cash flow, has given us the confidence to raise our financial guidance for the full year. Our market performance and execution underscore the depth of our competitive moat and the resilience of our business model as we continue to scale our cloud communications platform and drive long-term value for our shareholders. Diving into our Q1 2026 results, total revenue was $209 million, an increase of 20% year over year.

Speaker #2: This robust momentum across all key financial metrics, including revenue, gross profit, adjusted EBITDA, non-gap earnings per share, and free cash flow, has given us the confidence to raise our financial guidance for the full year.

Speaker #2: Our market performance and execution underscore the depth of our competitive moat and the resilience of our business model as we continue to scale our cloud communications platform and drive long-term value for our shareholders.

Speaker #2: Now, diving into our first quarter 2026 results. Total revenue was $209 million, an increase of 20% year over year. Cloud communications revenue, which is total revenue, less messaging surcharge revenue of $59 million, reached $150 million (a 13% year over year increase), driven by growth across our core communications platform.

Daryl Raiford: Cloud communications revenue, which is total revenue less messaging surcharge revenue of $59 million, reached $150 million, a 13% year over year increase, driven by growth across our core communications platform. Non-GAAP gross profit of $89 million increased 14% year over year and marked another quarter of improving gross profit yield on incremental cloud communications revenue. Non-GAAP gross margin improved 50 basis points to 59.5%, illustrating the structural margin advantage of our unique global owned and operated communications platform. Adjusted EBITDA grew by 17% to $26 million, driven by gross profit growth and the scale of higher revenue across our operating expense base.

Speaker #2: Non-GAAP gross profit of $89 million increased 14% year over year and marked another quarter of improving gross profit yield on incremental cloud communications revenue.

Speaker #2: Non-gap gross margin improved 50 basis points to $59.5%, illustrating the structural margin advantage of our unique, global-owned and operated communications platform. Adjusted EBITDA grew by 17% to $26 million, driven by gross profit growth and the scale of higher revenue across our operating expense base.

Speaker #2: Non-gap earnings per share rose to $38, representing 6% growth, and operating cash flow grew significantly to yield essentially break-even free cash flow, representing a marked year-over-year improvement despite the typical first quarter working capital cycle.

Daryl Raiford: Non-GAAP earnings per share rose to $0.38, representing 6% growth, and operating cash flow grew significantly to yield essentially break-even free cash flow, representing a marked year over year improvement despite the typical Q1 working capital cycle. Focusing on our Q1 cloud communications revenue growth, both voice and Programmable Messaging solutions exceeded our expectations. For our voice solutions, we reported revenue of $121 million, growing 12%. Both of our voice market categories contributed towards the total voice growth. Within our Global Voice Plans category, we saw broad-based demand producing revenue growth of 12% year over year, underscoring both the strength and durability of our installed customer base and the tailwind of AI-influenced voice usage. For our enterprise voice category, revenue grew 14% year over year to $13 million.

Speaker #2: Focusing on our first quarter cloud communications revenue growth, both voice and programmable messaging solutions exceeded our expectations. For our voice solutions, we reported revenue of $121 million, growing 12%.

Speaker #2: Both of our voice market categories contributed towards the total voice growth. Within our global voice plans category, we saw broad-based demand producing revenue growth of 12% year over year.

Speaker #2: Underscoring both the strength and durability of our installed customer base and the tailwind of AI-influenced voice usage, and for our enterprise voice category revenue grew 14% year over year to $13 million.

Speaker #2: Growth was driven by both recent customer additions and increasing momentum as enterprises scale on our maestro platform. In programmable messaging, revenue rose 15% year over year to approximately $30 million.

Daryl Raiford: Growth was driven by both recent customer additions and increasing momentum as enterprises scale on our Maestro platform. In Programmable Messaging, revenue rose 15% year over year to approximately $30 million. This performance exceeded our projections, particularly given the typical Q1 seasonal headwinds we often encounter. Turning to our operating metrics, our reported net retention rate for Q1 was 102%. Adjusted to normalize the cyclical political campaign revenue impact, our commercial net retention rate was a healthy 110%. We believe this adjusted view more accurately reflects underlying organic commercial demand and customer expansion. Customer name retention remained well above 99%, indicating near zero customer churn, a remarkable and unique track record that we expect to continue.

Speaker #2: This performance exceeded our projections, particularly given the typical first quarter seasonal headwinds we often encounter. Turning to our operating metrics, our reported net retention rate for the first quarter was 102%.

Speaker #2: Adjusted to normalize the cyclical political campaign revenue impact, our commercial net retention rate was a healthy 110%. We believe this adjusted view more accurately reflects underlying organic commercial demand and customer expansion.

Speaker #2: Customer name retention remained well above 99%, indicating near-zero customer churn—a remarkable and unique track record that we expect to continue. Average annual revenue per customer reached a new high of $244,000, reflecting the mission-critical nature of our platform and deep integration with our customers.

Daryl Raiford: Average annual revenue per customer reached a new high of $244,000, reflecting the mission critical nature of our platform and deep integration with our customers. Taken together, these metrics demonstrate continued expansion within our existing customer base as customers increase their usage, adopt more of our services, and deepen their reliance on our platform. In Q1, we progressed our balanced capital allocation strategy. We deployed approximately $11 million in cash to mitigate share dilution by 700,000 shares. While repurchasing $100 million in aggregate principal of our 2028 convertible notes at a discount to par. This resulted in a long-term debt leverage ratio of less than 1.25 times. Shares acquired under our $80 million repurchase authorization were purchased at an average price of $15.93.

Speaker #2: Taken together, these metrics demonstrate continued expansion within our existing customer base, as customers increase their usage, adopt more of our services, and deepen their reliance on our platform.

Speaker #2: In the first quarter, we progressed our balanced capital allocation strategy. We deployed approximately $11 million in cash to mitigate share dilution by $700,000 shares.

Speaker #2: While repurchasing $100 million in aggregate principal of our 2028 convertible notes at a discount to par. This resulted in a long-term debt leverage ratio of less than 1.25 times.

Speaker #2: Shares acquired under our $80 million repurchase authorization were purchased at an average price of $15.93. Looking ahead, we intend to maintain this opportunistic approach, prioritizing debt reduction and dilution management, while remaining steadfast in our commitment to prudent cash flow management and a strong, flexible balance sheet.

Daryl Raiford: Looking ahead, we intend to maintain this opportunistic approach, prioritizing debt reduction and dilution management, while remaining steadfast in our commitment to prudent cash flow management and a strong, flexible balance sheet. Turning to our Q2 2026 outlook, we expect revenue to be in the range of $214 million and $220 million, representing 20% growth year over year. Adjusted EBITDA to be in the range of $24 million and $27 million, representing 20% growth year over year, and non-GAAP EPS to be in the range of $0.35 and $0.37. Turning to our improving full-year outlook, we are raising our full-year 2026 guidance to reflect the Q1 beat and continued demand strength. Our positive outlook for the remainder of the year is underpinned by three significant growth catalysts.

Speaker #2: Turning to our second quarter 2026 outlook, we expect revenue to be in the range of $214 million and $220 million. Representing 20% growth year over year.

Speaker #2: Adjusted EBITDA to be in the range of $24 million and $27 million. Representing 20% growth year over year. And non-gap EPS to be in the range of $35.37.

Speaker #2: Turning to our improving full-year outlook, we are raising our full-year 2026 guidance to reflect the first quarter beat and continued demand strength. Our positive outlook for the remainder of the year is underpinned by three significant growth catalysts.

Speaker #2: First, the transition of AI-driven traffic into high-volume production. We are seeing a marked acceleration in our global voice category as AI voice agents move beyond the pilot phase into full-scale deployment.

Daryl Raiford: First, the transition of AI-driven traffic into high-volume production. We are seeing a marked acceleration in our global voice category as AI voice agents move beyond the pilot phase into full-scale deployment. This organic growth is generating volume that leverages the carrier-grade reliability and ultra-low latency of our owned network, further expanding our competitive moat. Second, a robust enterprise pipeline poised for a H2 inflection. We expect growth to accelerate as our record pipeline of large-scale deals completes onboarding. Our role as a mission-critical partner is validated by Salesforce selecting Bandwidth to power Agentforce alongside our significant $1 million-plus wins in financial services this quarter. These partnerships cement our position as the foundational infrastructure for next-generation engagement. Third, the continued expansion of high-margin software services. As enterprises integrate more deeply with our platform, they are increasingly adopting unique services within the Bandwidth communications cloud.

Speaker #2: This organic growth is generating volume that leverages the carrier-grade reliability and ultra-low latency of our owned network, further expanding our competitive moat. Second, a robust enterprise pipeline poised for a second half inflection.

Speaker #2: We expect growth to accelerate as our record pipeline of large-scale deals completes onboarding. Our role as a mission-critical partner is validated by Salesforce selecting bandwidth to power agent force alongside our significant million-dollar-plus wins in financial services this quarter.

Speaker #2: These partnerships cement our position as the foundational infrastructure for next-generation engagement. Third, the continued expansion of high-margin software services. As enterprises integrate more deeply with our platform, they are increasingly adopting unique services within the Bandwidth Communications Cloud.

Speaker #2: During the quarter, software services revenue nearly doubled year over year, with its sequential ARR exit rate growing 67% to 25 million dollars. This provides a powerful tailwind for both long-term business durability and incremental profitability as we scale.

Daryl Raiford: During the quarter, software services revenue nearly doubled year over year, with its sequential ARR exit rate growing 67% to $25 million. This provides a powerful tailwind for both long-term business durability and incremental profitability as we scale. We now expect for the full year 2026 total revenue to be in the range of $880 million and $900 million, representing 18% growth year over year at the midpoint, compared to our prior range of $864 million and $884 million. Within total revenue, we expect cloud communications to be in the range of $616 million and $624 million, representing 10% growth year over year at the midpoint.

Speaker #2: We now expect for the full-year 2026 total revenue to be in the range of $880 million and $900 million. Representing 18% growth year over year at the midpoint.

Speaker #2: Compared to our prior range of $864 million and $884 million. Within total revenue, we expect cloud communications to be in the range of $616 million and $624 million representing 10% growth year over year at the midpoint.

Speaker #2: Adjusted EBITDA outlook to be in the range of $119 million and $125 million. Representing 31% growth year over year at the midpoint. Compared to our prior range of $117 million and $123 million.

Daryl Raiford: Adjusted EBITDA outlook to be in the range of $119 and $125 million, representing 31% growth year over year at the midpoint, compared to our prior range of $117 and $123 million. Non-GAAP EPS to be in the range of $1.77 and $1.83, representing growth of 26% year over year at the midpoint, compared to our prior range of $1.66 and $1.74. Additional modeling details underlying our full-year 2026 outlook are as follows. We expect net interest expense to be in the range of $1 and $3 million. Depreciation expense to be in the range of $38 and $42 million.

Speaker #2: Non-gap EPS to be in the range of $1.77 and $1.83. Representing growth of 26% year over year at the midpoint. Compared to our prior range of $1.66 and $1.74.

Speaker #2: Additional modeling details underlying our full-year 2026 outlook are as follows. We expect net interest expense to be in the range of $1 million and $3 million.

Speaker #2: 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 21%.

Daryl Raiford: Adjusted effective tax rate to be in the range of 20% and 21%. Weighted average diluted shares outstanding of approximately 35 million. For capital expenditures, we expect these to be in the range of $24 million and $26 million. With that, I'll now turn the call over to the operator for Q&A.

Speaker #2: Weighted average diluted shares outstanding of approximately $35 million. And for capital expenditures, we expect these to be in the range of $24 million and $26 million.

Speaker #2: With that, I'll now turn the call over to the operator for Q&A.

Speaker #1: Thank you. We'll now begin the question-and-answer session. Task a question. You may press starter than one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Operator: Thank you. We'll now begin the question and answer session. To ask a question, you may press star 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star 2. In the interest of time, please limit yourself to 1 question and 1 follow-up. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Erik Suppiger from B. Riley Securities. Please go ahead.

Speaker #1: To withdraw your question, please press star then two. In the interest of time, please limit yourself to one question and one follow-up. At this time, we'll pause momentarily to assemble our roster.

Speaker #1: And our first question comes from Eric Suppiger from B Riley Securities. Please go ahead.

Speaker #3: Yeah. Thanks for taking the question and congrats on a solid quarter there. Can you speak a little bit about some of the developments going on with some of the frontier model providers like Google and OpenAI in terms of their advances in their ability to support AI voice technologies?

Erik Suppiger: Yeah. Thanks for taking the question. Congrats on a solid quarter there. Can you speak a little bit about some of the developments going on with some of the frontier model providers like Google and OpenAI in terms of their advances in their ability to support AI voice technologies?

Speaker #3: And if that.

Speaker #1: Certainly, Eric. And thanks for.

Daryl Raiford: Certainly, Erik.

Erik Suppiger: Is that making a difference to Bandwidth?

Speaker #3: Making any and is that making a difference to bandwidth?

Erik Suppiger: Is that making a difference to Bandwidth?

Speaker #1: Yeah, certainly. And thanks for joining, Eric. There are a number of these announcements just in the last 10 days. I think most recently, the voice model that Grok came out with before that Gemini, OpenAI.

Daryl Raiford: Yeah, certainly. Thanks for joining, Erik. There are a number of these announcements just in the last 10 days. I think most recently, the voice model that Grok came out with, before that Gemini, OpenAI. These models are focused on improving the text-to-speech, speech-to-text legacy experience that has a number of different challenges associated with it. We're excited about the voice focus that the frontier models have. It really does accelerate lots of the performance and quality for voice agents.

Speaker #1: These models are focused on improving the text-to-speech and speech-to-text legacy experience, which has a number of different challenges associated with it. So we're excited about the voice focus that the frontier models have.

Speaker #1: It really does accelerate lots of the performance and quality for voice agents. And that is very favorable as a tailwind for our platform and our approach to serving voice agents globally on our platform.

David Morken: That is very favorable as a tailwind for our platform and our approach to serving voice agents globally on our platform.

Speaker #3: Are they putting much behind marketing those services? And are they fully are you fully capable of integrating with those services?

Erik Suppiger: Are they putting much behind marketing those services? Are you fully capable of integrating with those services?

Speaker #1: So on the first point, they have been very forthright and expansive in talking about the new voice-focused models. In fact, one of them talked about it displacing one of their sister companies' contact center legacy experience and resolving 70% of tickets in the contact center environment just with that voice model last week.

David Morken: On the first point, they have been very forthright and expansive in talking about the new voice-focused models. In fact, one of them talked about it displacing one of their sister company's contact center legacy experience in resolving 70% of tickets in the contact center environment just with that voice model last week. These things have just been announced. There's no reason that we shouldn't be able to support voice agents utilizing these models fully, and that they will complement the quality that we offer for PSTN delivery of voice agent experiences, again, across 80 countries plus.

Speaker #1: So these things have just been announced. There's no reason that we shouldn't be able to support voice agents utilizing these models fully and that they will complement the quality that we offer for PSTN delivery of voice agent experiences, again, across 80 countries plus.

Speaker #3: Very good. Thank you.

Erik Suppiger: Very good. Thank you.

Speaker #1: Thank you, Eric.

David Morken: Thank you, Erik.

Speaker #2: Our next question comes from Patrick Walravens from Citizens. Please go ahead.

Operator: Our next question comes from Patrick Walravens from Citizens. Please go ahead.

Speaker #4: Oh, thank you. And Dave, congratulations to you and all the bandmates. Really fantastic. So two questions. I guess one's a follow-up. So first of all, can you tell us a little bit more about the Salesforce partnership and your remarks?

Patrick Walravens: Thank you. David, congratulations to you and all the bandmates. Really fantastic. Two questions. I guess one's a follow-up. First of all, can you tell us a little bit more about the Salesforce partnership? In your remarks, you talked about how they're fundamentally re-architecting the contact center. Tell us a little bit more about that and where you fit in. Also, are customers buying into the way they're fundamentally re-architecting the contact center?

Speaker #4: You talked about how they’re fundamentally re-architecting the contact center. Tell us a little bit more about that and where you fit in. And also, are customers buying into the way they’re fundamentally re-architecting the contact center?

Speaker #1: Hey, Pat. Thanks. Appreciate the congrats. And I want to also congratulate our chief operating officer, Devesh Agarwal, for delivering fantastic results with all of our bandmates.

David Morken: Hey, Pat. Thanks. Appreciate the congrats. Want to also congratulate our Chief Operating Officer, Devesh Agarwal, for delivering fantastic results with all of our bandmates. To answer your question on Salesforce.

Speaker #1: To answer your question on Salesforce, I think the team at Salesforce Mark Benioff, the longtime founder and CEO, and their whole team have a compelling vision for every sales call to be a conference call.

Patrick Walravens: Yeah

David Morken: I think, the team at Salesforce, Marc Benioff, the longtime founder and CEO, and their whole team have a compelling vision for every sales call to be a conference call. That vision of having an agent aware of all the context of your customer experience is powerful. We believe in it as well. When we say that they are absolutely challenging the legacy assumptions around contact center, it's more like a context center now, where an agent is both fully aware of all your needs, wants, wishes, your sentiment, and can share or suggest or complement or correct a sales rep or an operations representative of your company in real time. It is a revolution, no question about it.

Speaker #1: And that vision of having an agent aware of all the context of your customer experience is powerful. And we believe in it as well.

Speaker #1: So when we say that they are absolutely challenging the legacy assumptions around contact center, it's more like a context center now where an agent is both fully aware of all your needs, wants, wishes, your sentiment, and can share or suggest or complement or correct a sales rep or an operations representative of your company in real time.

Speaker #1: So it's a revolution, no question about it. They're headless approach just last week saying that they're taking the face off the UI and allowing agents to directly engage with the system of execution within their CRM Salesforce platform.

David Morken: Their headless approach just last week saying that they're taking the face off the UI and allowing agents to directly engage with the system of execution within their CRM Salesforce platform. It's powerful. I don't think that it can be overstated very easily. In terms of the second part of your question, Pat, are companies embracing this? I don't think companies have a choice. The level of intelligence that is now going to be available to real-time customer interactions through an approach like Agentforce is taking is differentiated. It is competitively ahead of its peer group and cohort, and I think everyone will follow.

Speaker #1: It's powerful. I don't think that it's it can be overstated very easily. And in terms of the second part of your question, Pat, are companies embracing this?

Speaker #1: I don't think companies have a choice. The level of intelligence that is now going to be available to real-time customer interactions through an approach like Agentforce is taking is differentiated.

Speaker #1: It is competitively ahead of its peer group and cohort. And I think everyone will follow.

Speaker #4: All right. Fantastic. And so for my follow-up, if someone does if you have a big airline or a big bank or whatever that decides that they're going to move forward with Salesforce on their new approach, how does bandwidth make money?

Patrick Walravens: All right. Fantastic. For my follow-up, if someone does, you know, if you have a big airline or a big bank or whatever that decides that they're gonna move forward with Salesforce on their new approach, how does Bandwidth make money? What are the dynamics there?

Speaker #4: What are the dynamics there?

Speaker #1: You bet. Great question. So we make money on a usage-based model based on interactions. So we are powering in announcement already every one of those calls.

David Morken: You bet. Great question. We make money on a usage-based model based on interactions. We are powering in announcement already every one of those calls. When every call becomes a conference call, there are multiple usage components to that we benefit from. They're obviously rely on us for high quality, resiliency, footprint, all kinds of our advantages that we've enjoyed for the last 15 years. Our usage-based model is the approach we take to powering these experiences, and there are multiple units of usage now with AI involved.

Speaker #1: And so when every call becomes a conference call, there are multiple usage components to that that we benefit from. And they're obviously relying on us for high, high-quality resiliency, footprint, all kinds of our advantages that we've enjoyed for the last 15 years.

Speaker #1: But our usage-based model is the approach we take to powering these experiences. And there are multiple units of usage now with AI involved.

Speaker #4: Fantastic. Thank you.

Patrick Walravens: Fantastic. Thank you.

Speaker #1: Thank you, Pat.

David Morken: Thank you, Pat.

Speaker #2: Again, if you have a question, please press star, then one. And our next question comes from Joshua Riley from Needham. Please go ahead.

Operator: Again, if you have a question, please press star then one. Our next question comes from Joshua Riley from Needham. Please go ahead.

Speaker #5: All right. Thanks for taking my question. Maybe just starting off, global voice plan, revenue growth was really strong at 12% year over year. I guess, what are you seeing from these customers in terms of their adoption of AI driving incremental growth relative to maybe some other factors like new customer RAMs?

Joshua Riley: All right. Thanks for taking my question. Maybe just starting off, you know, Global Voice Plan revenue growth was really strong at 12% year over year. I guess, what are you seeing from these customers in terms of their adoption of AI driving incremental growth relative to maybe some other factors like new customer ramps? We know there's been a lot of million-dollar plus customers ramping there. Maybe you can just give us a sense of what was the relative driver of that strong 12% growth there.

Speaker #5: We know there's been a lot of million-dollar-plus customers ramping there. Maybe you can just give us a sense of what was the relative driver of that strong 12% growth there.

Speaker #1: Josh, thanks. And thanks for your good question. I've got with me today John Bell, our Chief Product Officer. Let me invite him to respond to your good question.

David Morken: Joshua Riley, thanks, and thanks for your good question. I've got with me today John Bell, our Chief Product Officer. Let me invite him to respond to your good question.

Speaker #6: Yeah. So we see broad-based adoption of AI and integration of voice agent technologies by our customers. It means our customers are making it very easy for enterprises to realize real economic value from voice agents.

John Bell: Yeah. We see broad-based adoption of AI and integration of voice agent technologies by our customers. Our customers are making it very easy for enterprises to realize real economic value from voice agents, and we see that consistently across our customer base. In addition to that, we do see new entrants as well, coming into the market, AI native companies that we are enabling. We also announced our Bandwidth Build program, which allows new entrants to easily onboard as customers, and we're really excited about that as well. Both a mix of existing customers, integrating voice agents and driving their business, as well as new entrants coming into the market.

Speaker #6: And we see that consistently across our customer base. And in addition to that, we do see new entrants as well. Coming into the market, AI-native companies that we are enabling, we also announced our bandwidth build program, which allows new entrants to easily onboard as customers.

Speaker #6: And we're really excited about that as well. So both a mix of existing customers integrating voice agents and driving their business, as well as new entrants coming into the market.

Speaker #5: Got it. And then maybe just a follow-up on the million-dollar-plus customers. If you look at the million-dollar-plus customers that you added in 2025, would you say that all of those now are in the run rate here of revenue as of this point in 2026?

Joshua Riley: Got it. Then maybe just a follow-up on the million dollar plus customers. If you look at the, you know, million dollar plus customers that you added in 2025, would you say that all of those now are in the run rate tier of revenue as of this point in 2026? Then how are you thinking about, you know, the net new million dollar plus customers that you've added year to date thus far in 2026 relative to 2025? Can you add a similar number, even more, million dollar plus customers this year versus last year? Thank you.

Speaker #5: And then, how are you thinking about the net new million-dollar-plus customers that you've added year to date thus far in 2026, relative to 2025?

Speaker #5: Can you add a similar number or even more million-dollar-plus customers this year versus last year? Thank you.

Speaker #7: Hello. Hey, this is Daryl. I'll take that question. It's nice to speak with you. The short answer is no. The $6 million, much larger than the million-dollar deals we announced last year, are not fully in the run rate right now.

Daryl Raiford: Hello. Hey, this is Daryl. I'll take that question. It's nice to speak with you. The short answer is no. The $6 million much larger than $1 million deals we announced last year are not fully in the run rate right now. In fact, five of them are less than 50% deployed, with one being fully deployed and now nearly exceeding 120% of our initial estimated contract value. We're really excited about what's to come when I said the inflection in terms of enterprise and H2 acceleration.

Speaker #7: In fact, five of them are less than 50% deployed. With one being fully deployed and now nearly exceeding 120% of our initial estimated contract value.

Speaker #7: So we're really excited about what's to come when I said the inflection in terms of enterprise and second-half acceleration. And we're really excited about the one that has fully deployed and more because as I said in the prepared remarks, as soon as that occurs, the client immediately understands the value proposition that the communication cloud brings and it allows for our land and expand and cross-sell upsell model.

Daryl Raiford: We're really excited about the one that has fully deployed and more because as I said in the prepared remarks, as soon as that occurs, the client immediately understands the value proposition that the communication cloud brings, and it allows for our land and expand and cross-sell, upsell model. We're really excited about that. In terms of your second point about the momentum of enterprise greater, much greater than million-dollar deals, we did announce 2 this quarter. We have a view into our pipeline, and we think that we're very much on pace with last year or to exceed.

Speaker #7: So we're really excited about that. In terms of your second point about the momentum of enterprise greater much greater than million-dollar deals, we did announce to this quarter we have a view into our pipeline and we think that we're very much on pace with last year or to exceed.

Speaker #5: Got it. Very helpful. Thank you, guys.

Joshua Riley: Got it. Very helpful. Thank you, guys.

Speaker #1: Thank you.

Daryl Raiford: Thank you.

Speaker #2: And the next question comes from Arjun Bhatia from William Blair. Please go ahead.

Operator: The next question comes from Arjun Bhatia from William Blair. Please go ahead.

Speaker #8: Perfect. Congrats on the solid quarter here, guys. Maybe I'll start on the messaging side because it seems usually I think Daryl, you called me out, but usually there's a Q1 seasonality dynamic where there's a dip down in Q1 from Q4.

Arjun Bhatia: Perfect. Congrats on the solid quarter here, guys. Maybe, I'll start on the messaging side because it seems, you know, usually, I think Daryl, you called it out, but usually there's a Q1 seasonality dynamic where there's a dip down in Q1 from Q4. It seems like the year-over-year growth rate is actually accelerating there. I'm curious what's driving that. Is that AI volumes starting to layer in? How do you expect that to sort of play out through the rest of the year, even with political layering in the back half here?

Speaker #8: But it seems like the year-over-year growth rate is actually accelerating there. So I'm curious what's driving that. Is that AI volumes starting to layer in?

Speaker #8: And how do you expect that to sort of play out through the rest of the year with even with political layering into the back half year?

Speaker #7: We were pleasantly surprised with the strength given the in-programmable messaging. As you said, given the typical seasonal headwinds that occur in the first quarter, we saw pretty strong commercial and civic engagement messaging.

Daryl Raiford: We were pleasantly surprised with the strength in programmable messaging. As you said, given the typical seasonal headwinds that occur in Q1, we saw, you know, pretty strong commercial and civic engagement messaging. Of course, we had announced a couple messaging customers won last year that began to deploy and onboard more fully as well. We had a favorable compare for that. Yeah, the dynamics, the market dynamics plus our customer onboarding exceeded our expectations.

Speaker #7: And of course, we had announced a couple of messaging customers one last year that began to deploy and onboard more fully as well. So we had a favorable compare for that.

Speaker #7: But yeah, the dynamics of the market dynamics plus our customer onboarding exceeded our expectations.

Speaker #1: And Arjun, I'd only add to that. This is David. That performance wasn't due to political in the quarter. It was largely commercial. And that squares with the announcement that we had about our messaging win that was a commercial consumer brand messaging platform for both retail and restaurant verticals.

David Morken: Arjun, I'd only add to that, this is David, that performance wasn't due to political in the quarter. It was largely commercial, and that squares with the announcement that we had about our messaging win. That was a commercial consumer brand messaging platform for both retail and restaurant verticals, and that was a major win and consistent with the success we're seeing that has nothing to do with the seasonal civic traffic.

Speaker #1: And that was a major win and consistent with the success we're seeing that has nothing to do with the seasonal civic traffic.

Speaker #8: All right. That's very helpful. And then just maybe a broader question. If I can, and I don't know, maybe this is for you, David, but just as AI becomes more prominent, what is the change you expect in the business to play out?

Arjun Bhatia: All right. That's very helpful. Then just maybe a broader question if I, if I can, and I don't know, maybe this is for you, David. Just as AI becomes more prominent, like what is the change you expect in the business to play out, you know, not just through 2026, but over the next couple of years? Like, it seems like your product is there, but how does it impact the revenue model, your visibility into your revenue stream, the customers maybe that you even are going to serve? I'm just curious what this evolution might look like for Bandwidth over the next couple of years.

Speaker #8: Not just through 2026, but over the next couple of years. It seems like your product is there, but how does it impact the revenue model your visibility into your revenue stream, the customers maybe that you even are going to serve?

Speaker #8: I'm just curious what this evolution might look like for bandwidth over the next couple of years.

Speaker #1: We believe the next billion users of the global PSTN are significantly going to be voice agents. And so we're building for those agents as our many other broad AI infrastructure companies.

David Morken: We believe the next billion users of the global PSTN are significantly going to be voice agents. We're building for those agents, as are many other broad AI infrastructure companies. We've launched ways like command line interface for agents to be able to autonomously sign up and secure service. We obviously know how to comply with Know Your Customer while we do that. Look, over the next 2 years, to your good question, we're going to do a terrific job in being understood broadly as the best place for voice agents to speak with people around the world over the PSTN. We think we'll do that with differentiation on our vertically integrated universal platform and our global footprint. We're starting to see the beginning of that, I think, in these results.

Speaker #1: And we've launched ways like command line interface for agents to be able to autonomously sign up and secure service we obviously know how to comply with Know Your Customer.

Speaker #1: While we do that, but look, over the next two years, to your good question, we're going to do a terrific broadly as the best place for voice agents to speak with people around the world over the PSTN.

Speaker #1: And we think we'll do that with differentiation on our vertically integrated universal platform and our global footprint. And we're starting to see the beginning of that, I think, in these results.

Speaker #1: But let me pause and invite John Bell, our chief product officer, to also opine on your question.

David Morken: Let me pause, and invite John Bell, our Chief Product Officer, to also opine on your question.

Speaker #9: Yeah. And I would just add that oh, a big part of our role right now is helping our customers transition to this new world and helping both the human agents and the voice agents work together in a harmonized way.

John Bell: Yeah. I would just add that a big part of our role right now is helping our customers transition to this new world and helping both the human agents and the voice agents work together in a harmonized way. That creates a very big opportunity for us and a lot of value for our customers to help them quickly realize the economic value of voice agents in their businesses.

Speaker #9: And that creates a very big opportunity for us, and a lot of value for our customers, to help them quickly realize the economic value of voice agents in their businesses.

Speaker #8: Wonderful. Very helpful. Thank you, guys. And congrats again.

Arjun Bhatia: Wonderful. Very helpful. Thank you, guys, and congrats again.

Speaker #1: Thank you.

Daryl Raiford: Thank you.

Speaker #2: And the next question comes from Jim Fish from Piper Sandler. Please go ahead.

Operator: The next question comes from James Fish from Piper Sandler. Please go ahead.

Speaker #10: Hey, guys. Congrats on the Agent 4 side of things. Just wanted to circle back to on the political side. Was there any political messaging impact this quarter?

James Fish: Hey, guys. Congrats on the Agentforce side of things. Just wanted to circle back on the political side. Was there any political messaging impact this quarter?

Speaker #7: There was no meaningful political impact this quarter. Again, we are for full transparency, we are really believing that that impact will be exactly like we've seen in the last two cycles, which is very second-half weighted, just given the dynamic of how campaigns work.

Daryl Raiford: There was no meaningful political impact this quarter. Again, we are, you know, for full transparency, we are really believing that that impact will be exactly like we've seen in the last two cycles, which is very, you know, H2 weighted, just given the dynamic of how campaigns work. We're calling in our guide for right at $15 million of a political campaign messaging benefit and that's what we see right now. We haven't really changed that. As we get into the first of July and then beyond, we're gonna have a lot better sense with our customers of where this campaign dynamic is headed, but we're looking for about $15 million net effect in cloud communications revenue this year, H2.

Speaker #7: We're calling in our guide for right at 15 million dollars of political campaign messaging benefit. And that's what we see right now. So we haven't really changed that.

Speaker #7: As we get into the first of July and then beyond, we're going to have a lot better sense with our customers of where this campaign dynamic is headed.

Speaker #7: But we're looking for about 15 million dollars net effect in cloud communications revenue this year, second half.

Speaker #10: Yep. Makes sense. Thanks, Daryl. And then look, your new business looked pretty strong here. Agent Force isn't even kind of in the numbers at this point from your language here.

James Fish: Yep, makes sense. Thanks, Darryl. Your new business look pretty strong here. Agentforce isn't even kind of in the numbers at this point from your language here, but what are you guys seeing with cloud conversions across kind of that core unified and CX market? Are we finally getting to a point where enterprises are really starting to shift over towards the cloud on especially the CCaaS side? Could the new FCC proposals of more human onshoring here change anything for you guys underneath?

Speaker #10: But what are you guys seeing with cloud conversions across kind of that core unified and CX market? Are we finally getting to a point where enterprises are really starting to shift over towards the cloud on especially the CCAS side?

Speaker #10: And could the new SEC proposals of more human onshoring here change anything for you guys underneath?

David Morken: I'll handle the second part of your question first and then invite John to talk to the first, if I could. Nothing about the regulatory change augurs negatively for us. The voice agent revolution will apply equally, and if anything, I think bodes well for the partners we work with and the call volumes we support. We've got an extraordinary global and domestic network underneath all of these initiatives. We're not deterred or concerned about that migration or change at all.

Speaker #1: I'll handle the second part of your question first, and then invite John to talk to the first if I could. So nothing about the regulatory change augers negatively for us.

Speaker #1: The voice agent revolution will apply equally and, if anything, I think bodes well for the partners we work with and the call volumes we support.

Speaker #1: We've got an extraordinary global and domestic network underneath all of these initiatives. So we're not deterred or concerned about that migration or change at all.

Speaker #9: Yeah. I'd add, so the move to the cloud did certainly enable a lot of the enterprises to easily adopt voice agents, which we're excited about.

John Bell: Yeah, I'd add, the move to the cloud did certainly enable a lot of the enterprises to easily adopt voice agents, which we're excited about. I would also add that a core benefit of Maestro is even for customers who still have a lot of their human agents and the software for their human agents on-prem, we are still able to voice agent enable them, and that is a tremendous benefit of our Maestro platform.

Speaker #9: But I would also add a core benefit of Maestro is even for customers who still have a lot of their human agents and the software for their human agents on-prem, we are still able to voice agent enable them.

Speaker #9: And that is a tremendous benefit of our Maestro platform.

Speaker #10: Thanks, guys.

James Fish: Thanks, guys.

Speaker #1: Thank you.

David Morken: Thank you.

Speaker #7: Thank you, Jim.

Daryl Raiford: Thank you, James.

Speaker #2: This concludes our question and answer session. I would like to turn the conference back over to David Morgan for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to David Morken for any closing remarks.

Speaker #1: Thank you, operator. In closing, our first quarter performance underscores Bandwidth's expanding role as the mission-critical foundation for the AI-driven enterprise. By combining our unique global owned and operated network with the increasing velocity of the Maestro platform, we are capturing more value as customers deploy a Gen AI into live production workflows.

David Morken: Thank you, operator. In closing, our Q1 performance underscores Bandwidth's expanding role as the mission-critical foundation for the AI-driven enterprise. By combining our unique global owned and operated network with the increasing velocity of the Maestro platform, we are capturing more value as customers deploy agentic AI into live production workflows. Compared to prior cycles, our growth today is increasingly complemented by embedded AI workflows and software attachment rather than episodic traffic alone. Our raised full year guidance reflects this momentum and the scale of our record deal pipeline. We remain committed to a disciplined capital allocation strategy that balances strategic investment in our AI moat with opportunistic shareholder returns, ensuring long-term value creation. Thank you very much.

Speaker #1: Compared to prior cycles, our growth today is increasingly complemented by embedded AI workflows and software attachment rather than episodic traffic alone. Our raised full-year guidance reflects this momentum and the scale of our record deal pipeline.

Speaker #1: We remain committed to a disciplined capital allocation strategy that balances strategic investment in our AI moat with opportunistic shareholder returns, ensuring long-term value creation.

Speaker #1: Thank you very much.

Operator: This concludes our conference call today. You may disconnect your lines. Have a nice day.

Q1 2026 Bandwidth Inc Earnings Call

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