RALEIGH, N.C., July 31, 2019 /PRNewswire/ — Bandwidth Inc. (NASDAQ: BAND), a software company focused on communications for the enterprise, today announced financial results for the second quarter ended June 30, 2019.
“Our relentless focus on customer success along with our investments in our platform and people continue to drive our growth. The business performed well in the second quarter, as we saw further growth with both new and existing customers,” stated David Morken, chief executive officer of Bandwidth. “Our go-to-market investments continue to attract innovative companies to our platform and our proven ability to foster deep multi-faceted relationships with existing enterprise customers will increasingly contribute to our success. We remain focused on executing our plan and helping our customers succeed.”
Second Quarter 2019 Financial Highlights
Revenue: Total revenue for the second quarter of 2019 was $56.8 million, up 18% compared to $48.3 million in the second quarter of 2018. Within total revenue, CPaaS revenue was $48.0 million, up 20% compared to $39.8 million for the second quarter of 2018. Other revenue contributed the remaining $8.8 million for the second quarter of 2019. Other revenue was $8.5 million in the same period last year.
Gross Profit: Gross profit for the second quarter of 2019 was $26.7 million, compared to $21.7 million for the second quarter of 2018. Gross margin for the second quarter of 2019 was 47%, compared to 45% for the second quarter of 2018. Non-GAAP gross profit for the second quarter of 2019 was $28.2 million, compared to $22.8 million for the second quarter of 2018. Non-GAAP gross margin was 50% for the second quarter of 2019, compared to 47% for the second quarter of 2018.
Net Income: Net income for the second quarter of 2019 was $3.5 million, or $0.14 per share, based on 24.4 million weighted average diluted shares outstanding. During the second quarter of 2018, net income was $10.5 million, or $0.50 per share, based on 20.9 million weighted average diluted shares outstanding for the second quarter of 2018.
Non-GAAP Net Income (Loss): Non-GAAP net loss for the second quarter of 2019 was $(0.9) million, or $(0.04) per share, based on 23.1 million weighted average shares outstanding. This compares to a Non-GAAP net income of $4.1 million, or $0.20 per share, based on 20.9 million weighted average diluted shares outstanding for the second quarter of 2018.
Adjusted EBITDA: Adjusted EBITDA was $0.02 million for the second quarter of 2019, compared to $3.2 million for the second quarter of 2018.
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.
Second Quarter 2019 Key Metrics
The number of active CPaaS customers was 1,467 as of June 30, 2019, an increase of 34% from 1,092 as of June 30, 2018.
The dollar-based net retention rate was 113% during the second quarter of 2019, compared to 119% during the second quarter of 2018.
Additional information regarding our active CPaaS customers and dollar-based net retention rate and how each are calculated are included below.
Financial Outlook
As of July 31, 2019, Bandwidth is providing guidance for its third quarter and full year 2019 as follows:
Third Quarter 2019 Guidance: CPaaS revenue is expected to be in the range of $50.4 million to $50.9 million. Total revenue is expected to be in the range of $58.4 million to $58.9 million. Non-GAAP loss per share is expected to be in the range of ($0.14) to ($0.16) per share, using 23.4 million weighted average shares outstanding.
Full Year 2019 Guidance: CPaaS revenue is expected to be in the range of $201.8 million to $202.8 million. Total revenue is expected to be in the range of $234.8 million to $235.8 million. Non-GAAP loss per share is expected to be in the range of approximately of ($0.43) to ($0.48) per share, using 22.6 million weighted average shares outstanding.
Bandwidth has not reconciled its third quarter and full-year guidance related to non-GAAP net loss to GAAP net loss and non-GAAP loss per share to GAAP loss, because stock-based compensation cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
Quarterly Conference Call
Bandwidth will host a conference call today at 5:00 p.m. Eastern Time to review the Company’s financial results for the second quarter ended June 30, 2019. To access this call, dial (877) 407-0792 for the U.S. or Canada, or (201) 689-8263 for international callers. A live webcast of the conference call will be accessible from the Investors section of Bandwidth’s website at https://investors.bandwidth.com, and a recording will be archived and accessible at https://investors.bandwidth.com. An audio replay of this conference call will also be available through August 7, 2019, by dialing (844) 512-2921 for the U.S. or Canada, or (412) 317-6671 for international callers, and entering passcode 13692217.
About Bandwidth Inc.
Bandwidth (NASDAQ: BAND) is a software company focused on communications for the enterprise. Companies like Google, Microsoft, and RingCentral use Bandwidth’s APIs to easily embed voice, messaging and 9-1-1 access into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own nationwide IP voice network – one of the largest in the nation. More information available at www.bandwidth.com.
George Perry
George Perry
George Perry is the Content Strategist on the Marketing team at Bandwidth. He’s taller than Captain America and almost as beardy.
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