Bandwidth Inc. Q4 FY2024 earnings call

• 2024 results: 27% revenue growth, record annual non-GAAP gross margins, 25% EBITDA growth, 122% net retention rate, average annual recurring revenue per customer at $226,000. • Operational momentum: record-breaking quarterly messaging volume, global rollout of universal platform, hundreds of enterprises using Maestro platform, Maestro's AIBridge enabling voice AI capabilities. • AI initiatives: AI analytics engine detected call volume surges and auto-scaled capacity, AI-driven support for mission-critical communications. • Customer wins: Leading global hospitality brand using voice API for AI agent, Fortune 25 healthcare provider using Maestro for seamless CCaaS transition with AI capabilities. • Promotion: Devesh Agarwal promoted to Chief Operating Officer.

For Q4 2024, total revenue was $210 million with a 27% growth. Cloud communications revenue was $144 million, a 15% YOY increase. For full year 2024, total revenue reached $748 million, up 25% YOY. Cloud communications revenue was $540 million, up 13% YOY. Enterprise voice revenue grew 29% YOY in 2024, driven by strong CCaaS and UCaaS adoption. Global voice plans had 3% revenue growth YOY, serving Gartner Magic Quadrant leaders in UC and CX. Programmable messaging accounted for 23% of cloud communications revenue, growing 46% YOY, driven by verticals like e-commerce, financial services, etc., and political campaign messaging.

• 2025 full year total revenue expected to be $740 million to $760 million, normalized for political campaign messaging fluctuation. • EBITDA expected to grow, benefiting from operating leverage. • Factored in off year fluctuation in political campaign messaging, with 2024 election cycle activity generating $62 million not recurring in 2025.

Forward-looking statements may involve risks and uncertainties causing actual results to vary from projections. Refer to SEC filings for material risks.

Q: Arjun Bhatia asked about Q4 results excluding political noise and 2025 growth drivers.

A: Daryl responded on growth across segments, including global voice plans, enterprise voice, and programmable messaging.

Q: Ryan MacWilliams asked about voice AI agent demand and contact center relationships.

A: David Morken discussed current AI agent implementations and how Maestro helps with contact center transitions.

Q: Patrick Walravens asked about enterprise go-to-market and debt.

A: David Morken talked about direct enterprise sales, and Daryl discussed debt repurchase and manageable leverage.

Q: Meta Marshall asked about Maestro traction.

A: Daryl mentioned hundreds of enterprise customers using Maestro, focusing on AI agent use cases.

Q: Ryan Koontz asked about A2P fees and AI impact on messaging.

A: David Morken discussed A2P fee mix and AI's impact on voice, with surcharges expected to regress in 2025.

Q: Will Power asked about global voice plan growth drivers.

A: David Morken talked about universal platform footprint, enterprise adoption, and voice agent opportunities.