Achieved 39% profitability growth, net
operating cash flow of $39 million
and record Free Cash Flow in 2023
Expects 16% revenue growth and 50%
profitability growth in 2024
RALEIGH,
N.C., Feb. 28, 2024 /PRNewswire/ -- Bandwidth
Inc. (NASDAQ: BAND), a leading global enterprise cloud
communications company, today announced financial results for the
fourth quarter and full year ended December
31, 2023.
"We are proud to conclude 2023 with outstanding results,
reflecting our commitment to innovation in cloud communications and
profitable growth. Thanks to the disciplined execution of the team
in the fourth quarter we surpassed our guidance and set new records
in profitability," said David
Morken, Bandwidth's Chief Executive Officer. "As we enter
our 25th year, Bandwidth remains at the forefront of the cloud
communications revolution, driven by our unique global platform and
software APIs, and commitment to customer success. We are confident
in our medium-term plan and excited about our momentum as we start
2024."
Fourth Quarter and Full Year 2023
Financial Highlights
The following table
summarizes the consolidated financial highlights for the three
months and year ended December 31, 2023 and 2022 (in
millions).
|
|
Three months
ended
December 31,
|
|
Year
ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
165
|
|
$
157
|
|
$ 601
|
|
$ 573
|
Gross Margin
|
38 %
|
|
41 %
|
|
39 %
|
|
42 %
|
Non-GAAP Gross Margin
(1)
|
55 %
|
|
56 %
|
|
55 %
|
|
55 %
|
Adjusted
EBITDA(1)
|
$
19
|
|
$
8
|
|
$
48
|
|
$
35
|
Free Cash Flow
(1)
|
$
13
|
|
$
(14)
|
|
$
19
|
|
$
(11)
|
(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.
|
"In 2023 we grew profitability 39 percent which contributed to
our record second half 2023 free cash flow generation of
$31 million," said Daryl Raiford, Bandwidth's Chief Financial
Officer. "We are particularly pleased with our strong growth in
commercial messaging and our enterprise business. For 2024 we are
guiding double-digit revenue growth and an adjusted EBITDA midpoint
of $72 million representing a 50
percent increase in profitability. We believe our 2023 results and
2024 outlook place us clearly on-track to achieve our 2026
medium-term targets, which we laid out at our Investor Day in
February 2023."
Fourth Quarter Customer Highlights
- A large infrastructure-as-a-service provider serving 27,000
business customers switched to Bandwidth, trusting us to be the
sole provider for their mission-critical toll-free calling and
other voice services.
- A premier health and community care technology firm selected
Bandwidth as its exclusive provider for HIPAA-compliant text
messaging services and voice services across their massive network
of care agencies, to enhance the delivery of their critical
healthcare communications at scale.
- A rapidly growing global active lifestyle brand selected
Bandwidth to power their Genesys contact center, choosing our
reliable and resilient toll-free calling solution and premium
support to help scale their business, and resulting in significant
operating efficiencies and cost savings.
Financial Outlook
Bandwidth's outlook is based on current indications for its
business, which are subject to change. Bandwidth is providing
guidance for its first quarter and full year 2024 as follows:
|
1Q 2024
Guidance
|
|
Full Year 2024
Guidance
|
Revenue
(millions)
|
$164
- $166
|
|
$695
- $705
|
Adjusted EBITDA
(millions)
|
$11
- $13
|
|
$70
- $74
|
Bandwidth has not reconciled its first quarter
and full year 2024 guidance related to Adjusted EBITDA to GAAP net
income or loss, because stock-based compensation cannot be
reasonably calculated or predicted at this time. Accordingly, a
reconciliation is not available without unreasonable effort.
Upcoming Investor Conference Schedule
- JMP Securities Technology Conference in San Francisco, CA. Fireside chat on
Tuesday, March 5th at 1:00PM Pacific Time.
- Morgan Stanley Technology, Media, & Telecom
Conference in San Francisco,
CA. Fireside chat on Wednesday, March
6th at 8:00AM Pacific
Time.
- William Blair Tech Innovators Conference virtual
investor meetings hosted on Friday, March
15th.
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,
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. For
more information, visit www.bandwidth.com.
Conference Call
Bandwidth will host a conference call to discuss
financial results for the fourth quarter and full year ended
December 31, 2023 on
February 28, 2024. 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
conference call.
Conference Call Details
February 28,
2024
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 March 6, 2024, by dialing
(877)-344-7529 or (412)-317-0088 for international callers, and
entering passcode 3157084.
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
March 31, 2024 and year ending
December 31, 2024, 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 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 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 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 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
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
165,386
|
|
$
156,974
|
|
$
601,117
|
|
$
573,152
|
Cost of
revenue
|
103,336
|
|
92,903
|
|
364,960
|
|
334,799
|
Gross profit
|
62,050
|
|
64,071
|
|
236,157
|
|
238,353
|
Operating
expenses
|
|
|
|
|
|
|
|
Research and
development
|
28,883
|
|
26,255
|
|
104,188
|
|
97,990
|
Sales and
marketing
|
26,269
|
|
26,995
|
|
102,063
|
|
96,658
|
General and
administrative
|
16,933
|
|
17,838
|
|
65,363
|
|
68,029
|
Total operating
expenses
|
72,085
|
|
71,088
|
|
271,614
|
|
262,677
|
Operating
loss
|
(10,035)
|
|
(7,017)
|
|
(35,457)
|
|
(24,324)
|
Other (expense) income,
net
|
(665)
|
|
39,348
|
|
16,154
|
|
41,630
|
(Loss) income before
income taxes
|
(10,700)
|
|
32,331
|
|
(19,303)
|
|
17,306
|
Income tax (provision)
benefit
|
(234)
|
|
1,103
|
|
2,960
|
|
2,264
|
Net (loss)
income
|
$
(10,934)
|
|
$
33,434
|
|
$
(16,343)
|
|
$
19,570
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
(0.42)
|
|
$
1.32
|
|
$
(0.64)
|
|
$
0.77
|
Diluted
|
$
(0.42)
|
|
$
(0.16)
|
|
$
(0.64)
|
|
$
(0.48)
|
|
|
|
|
|
|
|
|
Numerator used to
compute net (loss) income
per share:
|
|
|
|
|
|
|
|
Basic
|
$
(10,934)
|
|
$
33,434
|
|
$
(16,343)
|
|
$
19,570
|
Diluted
|
$
(10,934)
|
|
$
(4,946)
|
|
$
(16,343)
|
|
$
(14,897)
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
25,829,587
|
|
25,326,063
|
|
25,612,724
|
|
25,282,796
|
Diluted
|
25,829,587
|
|
30,465,279
|
|
25,612,724
|
|
30,907,869
|
|
The Company recognized
total stock-based compensation expense as follows:
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cost of
revenue
|
$
558
|
|
$
121
|
|
$
1,136
|
|
$
404
|
Research and
development
|
6,383
|
|
2,225
|
|
15,661
|
|
7,523
|
Sales and
marketing
|
2,448
|
|
589
|
|
6,273
|
|
2,808
|
General and
administrative
|
5,278
|
|
2,661
|
|
13,922
|
|
9,920
|
Total
|
$
14,667
|
|
$
5,596
|
|
$
36,992
|
|
$
20,655
|
BANDWIDTH
INC.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
|
|
|
As of December
31,
|
|
2023
|
|
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
131,987
|
|
$
113,641
|
Marketable
securities
|
21,488
|
|
71,231
|
Accounts receivable,
net of allowance for doubtful accounts
|
78,155
|
|
74,465
|
Deferred
costs
|
4,155
|
|
3,566
|
Prepaid expenses and
other current assets
|
16,990
|
|
16,705
|
Total current
assets
|
252,775
|
|
279,608
|
Property, plant and
equipment, net
|
177,864
|
|
99,753
|
Operating right-of-use
asset, net
|
157,507
|
|
9,993
|
Intangible assets,
net
|
166,914
|
|
177,370
|
Deferred costs,
non-current
|
4,586
|
|
4,938
|
Other long-term
assets
|
5,530
|
|
31,251
|
Goodwill
|
335,872
|
|
326,405
|
Total assets
|
$
1,101,048
|
|
$
929,318
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
34,208
|
|
$
26,750
|
Accrued expenses and
other current liabilities
|
69,014
|
|
62,577
|
Current portion of
deferred revenue
|
8,059
|
|
7,181
|
Advanced
billings
|
6,027
|
|
10,049
|
Operating lease
liability, current
|
5,463
|
|
7,450
|
Total current
liabilities
|
122,771
|
|
114,007
|
Other
liabilities
|
386
|
|
11,176
|
Operating lease
liability, net of current portion
|
220,548
|
|
4,640
|
Deferred revenue, net
of current portion
|
8,406
|
|
8,306
|
Deferred tax
liability
|
33,021
|
|
38,466
|
Convertible senior
notes
|
418,526
|
|
480,546
|
Total
liabilities
|
803,658
|
|
657,141
|
Stockholders'
equity:
|
|
|
|
Class A and Class B
common stock
|
26
|
|
25
|
Additional paid-in
capital
|
391,048
|
|
364,913
|
Accumulated
deficit
|
(64,890)
|
|
(48,547)
|
Accumulated other
comprehensive loss
|
(28,794)
|
|
(44,214)
|
Total stockholders'
equity
|
297,390
|
|
272,177
|
Total liabilities and
stockholders' equity
|
$
1,101,048
|
|
$
929,318
|
BANDWIDTH
INC.
Condensed Consolidated Statements of Cash
Flows
(In thousands)
(Unaudited)
|
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
Net (loss)
income
|
$
(16,343)
|
|
$
19,570
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities
|
|
|
|
Depreciation and
amortization
|
41,717
|
|
35,599
|
Non-cash reduction to
the right-of-use asset
|
9,323
|
|
6,977
|
Amortization of debt
discount and issuance costs
|
2,520
|
|
3,082
|
Stock-based
compensation
|
36,992
|
|
20,655
|
Deferred taxes and
other
|
(5,942)
|
|
(5,557)
|
Net gain on
extinguishment of debt
|
(12,767)
|
|
(40,205)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net of allowances
|
(3,454)
|
|
(13,341)
|
Prepaid expenses and
other assets
|
2,141
|
|
(5,795)
|
Accounts
payable
|
5,385
|
|
17,210
|
Accrued expenses and
other liabilities
|
(10,592)
|
|
4,291
|
Operating right-of-use
liability
|
(9,979)
|
|
(7,580)
|
Net cash provided by
operating activities from continuing operations
|
39,001
|
|
34,906
|
Cash flows from
investing activities
|
|
|
|
Purchase of property,
plant and equipment
|
(9,257)
|
|
(41,661)
|
Deposits for
construction in progress
|
—
|
|
(18,674)
|
Capitalized software
development costs
|
(10,642)
|
|
(3,755)
|
Purchase of marketable
securities
|
(80,625)
|
|
(179,598)
|
Proceeds from sales and
maturities of marketable securities
|
130,120
|
|
108,681
|
Proceeds from sale of
business
|
1,253
|
|
1,558
|
Net cash provided by
(used in) investing activities
|
30,849
|
|
(133,449)
|
Cash flows from
financing activities
|
|
|
|
Payments on finance
leases
|
(157)
|
|
(190)
|
Net cash paid for debt
extinguishment
|
(51,259)
|
|
(117,286)
|
Payment of debt
issuance costs
|
(710)
|
|
(553)
|
Proceeds from exercises
of stock options
|
413
|
|
163
|
Value of equity awards
withheld for tax liabilities
|
(1,062)
|
|
(2,139)
|
Net cash used in
financing activities
|
(52,775)
|
|
(120,005)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
610
|
|
881
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
17,685
|
|
(217,667)
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
114,622
|
|
332,289
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
132,307
|
|
$
114,622
|
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
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Gross
Profit
|
$
62,050
|
|
$
64,071
|
|
$
236,157
|
|
$
238,353
|
Gross Profit Margin
%
|
38 %
|
|
41 %
|
|
39 %
|
|
42 %
|
Depreciation
|
4,483
|
|
3,461
|
|
16,273
|
|
13,602
|
Amortization of
acquired intangible assets
|
1,947
|
|
1,860
|
|
7,810
|
|
7,657
|
Stock-based
compensation
|
558
|
|
121
|
|
1,136
|
|
404
|
Non-GAAP Gross
Profit
|
$
69,038
|
|
$
69,513
|
|
$
261,376
|
|
$
260,016
|
Non-GAAP Gross
Margin % (1)
|
55 %
|
|
56 %
|
|
55 %
|
|
55 %
|
________________________
|
(1) Calculated by
dividing Non-GAAP gross profit by cloud communications revenue of
$126 million and $124 million in the three months ended December
31, 2023 and 2022, respectively, and $479 million and $475 million
in the years ended December 31, 2023 and 2022,
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
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net (loss)
income
|
$
(10,934)
|
|
$
33,434
|
|
$
(16,343)
|
|
$
19,570
|
Stock-based
compensation
|
14,667
|
|
5,596
|
|
36,992
|
|
20,655
|
Amortization of
acquired intangibles
|
4,314
|
|
4,162
|
|
17,274
|
|
17,180
|
Amortization of debt
discount and issuance
costs for convertible debt
|
484
|
|
693
|
|
2,004
|
|
2,977
|
Gain on sale of
business
|
—
|
|
—
|
|
—
|
|
(3,777)
|
Net cost associated
with early
lease terminations and leases
without economic benefit
|
2,779
|
|
—
|
|
3,954
|
|
—
|
Net gain on
extinguishment of debt
|
—
|
|
(40,205)
|
|
(12,767)
|
|
(40,205)
|
Gain on business
interruption insurance
recoveries
|
—
|
|
—
|
|
(4,000)
|
|
—
|
Non-recurring items
not indicative of
ongoing operations and other (1)
|
378
|
|
1,702
|
|
1,171
|
|
1,992
|
Estimated tax effects
of adjustments (2)
|
(864)
|
|
(36)
|
|
(5,525)
|
|
(3,396)
|
Non-GAAP net
income
|
$
10,824
|
|
$
5,346
|
|
$
22,760
|
|
$
14,996
|
Interest expense on
Convertible Notes (3)
|
317
|
|
414
|
|
1,287
|
|
1,666
|
Numerator used to
compute Non-GAAP
diluted net income per share
|
$
11,141
|
|
$
5,760
|
|
$
24,047
|
|
$
16,662
|
|
|
|
|
|
|
|
|
Net (loss) income
per share
|
|
|
|
|
|
|
|
Basic
|
$
(0.42)
|
|
$
1.32
|
|
$
(0.64)
|
|
$
0.77
|
Diluted
|
$
(0.42)
|
|
$
(0.16)
|
|
$
(0.64)
|
|
$
(0.48)
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per Non-GAAP
share
|
|
|
|
|
|
|
|
Basic
|
$
0.42
|
|
$
0.21
|
|
$
0.89
|
|
$
0.59
|
Diluted
|
$
0.38
|
|
$
0.19
|
|
$
0.83
|
|
$
0.54
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
25,829,587
|
|
25,326,063
|
|
25,612,724
|
|
25,282,796
|
Diluted
|
25,829,587
|
|
30,465,279
|
|
25,612,724
|
|
30,907,869
|
|
|
|
|
|
|
|
|
Non-GAAP basic
shares
|
25,829,587
|
|
25,326,063
|
|
25,612,724
|
|
25,282,796
|
Convertible debt
conversion
|
3,317,023
|
|
5,139,216
|
|
3,442,229
|
|
5,625,073
|
Stock options issued
and outstanding
|
12,248
|
|
71,202
|
|
39,152
|
|
100,088
|
Non-GAAP diluted
shares
|
29,158,858
|
|
30,536,481
|
|
29,094,105
|
|
31,007,957
|
________________________
|
(1) Non-recurring
items not indicative of ongoing operations and other include (i)
$0.4 million of losses on disposals of property, plant and
equipment in the three months ended December 31, 2023, (ii) $0.9
million of foreign currency losses on the settlement of
intercompany borrowings, which were repatriated in conjunction with
the repurchase of a portion of the 2026 Convertible Notes, $0.6
million of nonrecurring litigation expense and $0.2 million of
losses on disposals of property, plant and equipment during the
three months ended December 31, 2022, (iii) $0.4 million of expense
resulting from the early termination of the Company's undrawn SVB
credit facility and $0.8 million of losses on disposals of
property, plant and equipment for the year ended December 31, 2023
and (iv) $0.9 million of foreign currency losses on the settlement
of intercompany borrowings, which were repatriated in conjunction
with the repurchase of a portion of the 2026 Convertible Notes,
$0.6 million of nonrecurring litigation expense and $0.5 million of
losses on disposals of property, plant and equipment for the year
ended December 31, 2022.
|
(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 10.1% and 7.0% years ended December 31, 2023 and 2022,
respectively. For the years ended December 31, 2023 and 2022, the
Non-GAAP effective income tax rate differed from the federal
statutory tax rate of 21% in the U.S. primarily due to the research
and development tax credits generated in 2023. We analyze the
Non-GAAP valuation allowance position on a quarterly basis. In the
fourth quarter of 2022, we removed the valuation allowance against
all U.S. deferred tax assets for Non-GAAP purposes as a result of
cumulative Non-GAAP U.S. income over the past three years and a
significant depletion of net operating loss and tax credit
carryforwards on a Non-GAAP basis. As of December 31, 2023, we have
no valuation allowance against our remaining deferred tax assets
for Non-GAAP purposes.
|
(3) Upon the
adoption of Accounting Standards Update 2020-06 on January 1, 2022,
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
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net (loss)
income
|
$
(10,934)
|
|
$
33,434
|
|
$
(16,343)
|
|
$
19,570
|
Income tax provision
(benefit)
|
234
|
|
(1,103)
|
|
(2,960)
|
|
(2,264)
|
Interest (income)
expense, net
|
(369)
|
|
187
|
|
808
|
|
3,048
|
Depreciation
|
7,716
|
|
4,571
|
|
24,443
|
|
18,419
|
Amortization
|
4,314
|
|
4,162
|
|
17,274
|
|
17,180
|
Stock-based
compensation
|
14,667
|
|
5,596
|
|
36,992
|
|
20,655
|
Gain on sale of
business
|
—
|
|
—
|
|
—
|
|
(3,777)
|
Net cost associated
with early lease
terminations and leases without economic
benefit
|
2,779
|
|
—
|
|
3,954
|
|
—
|
Net gain on
extinguishment of debt
|
—
|
|
(40,205)
|
|
(12,767)
|
|
(40,205)
|
Gain on business
interruption insurance
recoveries
|
—
|
|
—
|
|
(4,000)
|
|
—
|
Non-recurring items
not indicative of
ongoing operations and other (1)
|
378
|
|
1,702
|
|
769
|
|
1,992
|
Adjusted
EBITDA
|
$
18,785
|
|
$
8,344
|
|
$
48,170
|
|
$
34,618
|
________________________
|
(1) Non-recurring
items not indicative of ongoing operations and other include (i)
$0.4 million of losses on disposals of property, plant and
equipment in the three months ended December 31, 2023, (ii) $0.9
million of foreign currency losses on the settlement of
intercompany borrowings, which were repatriated in conjunction with
the repurchase of a portion of the 2026 Convertible Notes, $0.6
million of nonrecurring litigation expense and $0.2 million of
losses on disposals of property, plant and equipment during the
three months ended December 31, 2022, (iii) $0.8 million of losses
on disposals of property, plant and equipment for the year ended
December 31, 2023 and (iv) $0.9 million of foreign currency losses
on the settlement of intercompany borrowings, which were
repatriated in conjunction with the repurchase of a portion of the
2026 Convertible Notes, $0.6 million of nonrecurring litigation
expense and $0.5 million of losses on disposals of property, plant
and equipment for the year ended December 31, 2022.
|
|
Free Cash
Flow
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
$
19,268
|
|
$
10,566
|
|
$
39,001
|
|
$
34,906
|
Net cash used in
investing in capital assets (1)
|
(6,228)
|
|
(24,626)
|
|
(19,899)
|
|
(45,416)
|
Free cash
flow
|
$
13,040
|
|
$
(14,060)
|
|
$
19,102
|
|
$
(10,510)
|
________________________
|
(1) Represents the
acquisition cost of property, plant and equipment and capitalized
development costs for software for internal use.
|
View original
content:https://www.prnewswire.com/news-releases/bandwidth-announces-fourth-quarter-and-full-year-2023--financial-results-exceeding-revenue-and-profitability-guidance-302073447.html
SOURCE Bandwidth Inc.