Earnings call transcript: Bandwidth Inc. Q3 2025 results miss EPS expectations

Bandwidth Inc. (BAND) reported its Q3 2025 earnings, revealing a slight miss on earnings per share (EPS) estimates but surpassing revenue expectations. The company posted an EPS of $0.36, just shy of the forecasted $0.37, while revenue came in at $192 million, exceeding the anticipated $189.91 million. Despite the EPS miss, Bandwidth’s stock reacted positively in pre-market trading, rising 2.39% to $17.17. According to InvestingPro data, analysts predict Bandwidth will be profitable this fiscal year with an EPS forecast of $1.72, despite not being profitable over the last twelve months.

Key Takeaways

• Bandwidth’s revenue grew by 11% year-over-year, driven by cloud communications services.
• The company launched several AI-driven products, including an AI Receptionist prototype.
• Stock rose 2.39% in pre-market trading despite a minor EPS miss.
• Bandwidth raised its full-year adjusted EBITDA guidance to $91 million.

Company Performance

Bandwidth Inc. demonstrated solid performance in Q3 2025, with total revenue increasing by 11% compared to the same quarter last year. The growth was primarily fueled by an 8% rise in cloud communications services revenue. The company is focusing on transitioning towards a recurring software-driven revenue model, aiming to enhance its market position in AI-powered communication services.

Financial Highlights

• Revenue: $192 million (11% YoY increase)
• Cloud Communications Services revenue: $142 million (8% YoY increase)
• Non-GAAP gross margin: 58%
• Adjusted EBITDA: $24 million
• Free cash flow: $13 million
• Net retention rate: 105% (107% excluding political campaign revenue)

Earnings vs. Forecast

Bandwidth’s EPS of $0.36 fell short of the $0.37 forecast, marking a negative surprise of 2.7%. However, the revenue of $192 million exceeded expectations by 1.1%. This mixed performance highlights the company’s ability to drive top-line growth despite challenges in meeting earnings projections.

Market Reaction

Following the earnings announcement, Bandwidth’s stock saw a 2.39% increase in pre-market trading, reaching $17.17. This positive reaction may reflect investor confidence in the company’s revenue growth and strategic initiatives, despite the EPS miss. The stock’s movement is notable given its 52-week range of $11.33 to $23.

Outlook & Guidance

Bandwidth raised its full-year adjusted EBITDA outlook to $91 million and set a full-year revenue guidance midpoint at $753 million. The company anticipates continued momentum in voice AI and global voice plans, targeting medium-term financial goals of above-market revenue growth, 60%+ gross margins, and 20%+ EBITDA margins by 2026.

Executive Commentary

• "AI is not a standalone product for Bandwidth. It’s integrated throughout our cloud and embedded in the services our customers use every day," stated Daryl Raiford, CFO.
• David Morken, CEO, emphasized the company’s strategic direction: "We’re building toward a future where every enterprise interaction is more than a transaction, it’s a conversation that is trusted, intelligent, secure, and AI-optimized."
• Raiford also highlighted the company’s role in AI adoption: "We are creating a synergistic effect. At times we are leading our customers to AI with our advanced offerings and at other times we are supporting our customers as they rapidly deploy their AI initiatives."

Risks and Challenges

• Competition in the AI and cloud communications space could pressure margins.
• Economic uncertainties may affect enterprise spending on communication solutions.
• Rapid technological advancements require continuous innovation and investment.
• Dependence on large customer deals might impact revenue stability.
• Regulatory changes in communication technologies could pose challenges.

Q&A

During the earnings call, analysts inquired about Bandwidth’s customer onboarding processes and AI product integration strategies. Discussions also covered gross margin dynamics and opportunities in Number Reputation Management, reflecting investor interest in the company’s strategic initiatives and operational efficiencies.

Full transcript - Bandwidth Inc (BAND) Q3 2025:

Conference Operator: Good morning and welcome to the Bandwidth Inc. third quarter 2025 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 remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. 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 Sarah Wallace, Vice President of Investor Relations. Please go ahead.

Sarah Wallace, Vice President of Investor Relations, Bandwidth Inc.: Good morning and welcome to Bandwidth’s third quarter 2025 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. 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 2025. 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.

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 risks 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 discussion over to David.

David Morken, CEO, Bandwidth Inc.: Thank you, Sarah, and good morning, everyone. Thank you for joining us. Bandwidth delivered another solid quarter of execution with outperformance in revenue and profitability that extended our momentum from the first half. We again saw accelerating growth in our core voice business, driven by broad-based demand across our Global Voice Plans and enterprise market offers. As real-world AI-powered voice usage continued to grow, we closed more million dollar plus deals in the third quarter, bringing us to a record pace year to date as the largest Global 2000 enterprises increasingly choose Bandwidth. To our customers, thank you for placing your trust in us for your most essential communications. To our bandmates, thank you for the talent, energy, and commitment you bring to our customers’ success, and I thank God for the blessings and purpose that continue to guide our work.

Our third quarter performance strengthens the foundation for continued growth fueled by large customer wins, conversational AI adoption, and disciplined execution. At the same time, we’re evolving our business model toward a higher mix of recurring software-driven revenue and adding intelligent automation and value-added services that customers love. We’re seeing especially strong traction in financial services and healthcare, where performance and trust matter most in mission-critical communications. An example of how much Bandwidth is valued is the Technology Disruptor award we won from Ally Financial, which recognized our key role in transforming their customer experience. It was especially meaningful to be honored by Ally, which is one of the original disruptors in digital banking. The story of this quarter is innovation powering our growth, strengthening our customer relationships, and moving AI-powered voice from potential to production.

At Reverb25, our award-winning annual product and customer showcase, we announced the next chapter of Bandwidth’s AI and software strategy to make cloud communications more intelligent, more automated, and more trusted. It was part of an entire Reverb week of customer roundtables, market offer deep dives, and hands-on sessions attended live by more than 100 customers and partners, along with nearly 3,000 online. Customer feedback was overwhelmingly positive as they saw how our product roadmap connected directly to their priorities and real-world use cases. Last year at Reverb, we talked about the promise of AI. This year we’re delivering it. Let me give you some highlights.

We shared our vision to be the most open and flexible provider for enterprises to integrate conversational AI into cloud communications through four key paths: native AI within CCaaS platforms, pre-built partner integrations, bring your own AI with third-party apps, and public APIs like OpenAI’s real-time interface. Whatever path customers choose, our new MCP Server empowers AI voice agents to control Bandwidth APIs in real time using natural language, enabling actions like searching phone numbers, sending texts, or triggering other actions mid-conversation. No custom code required. This open freedom of choice strategy gives customers the power to innovate on their terms and keep control over their tech stack without sacrificing optionality or scalability. It also reinforces our role as a platform partner that supports the full lifecycle of customer engagement. By building on Bandwidth, enterprises can move faster now and de-risk changes in the future.

In short, we are strongly positioned to be the provider of choice for conversational AI deployment no matter what path our customers choose. This strategy is already translating into meaningful deployments. For example, a long-time Bandwidth customer in digital commerce serving tens of millions of small business customers expanded their partnership with us for their new AI-powered voice ordering system for food venues nationwide. The service answers 100% of incoming calls with natural conversational AI and is sophisticated enough to allow customers to place complex orders by phone just as they would with a staff member. This is large-scale AI-powered voice in production today, made possible by our Maestro software and AI-optimized edge infrastructure, enabling enterprises to integrate AI voice on their terms. At Reverb25, we also did a live demo of the prototype for our AI Receptionist.

An automated front door for any business, it uses conversational AI to handle most calls without human intervention, answer questions in detail, and route inquiries efficiently. For small businesses sold through our resellers, it can deliver a professional, always-on customer experience at scale. For large enterprises, it could serve as a modern IVR replacement, streamlining call handling and improving operational efficiency. AI Receptionist processes calls natively within our communications cloud to ensure natural, human-like conversations and protection of customer data. Our team built the AI Receptionist to showcase our ability to develop intelligent voice solutions that unlock new opportunities for recurring scalable software revenue over time. We also see it as a potential extension of our Maestro software platform. We’re also applying AI to simplify our customers’ back office workflows.

At Reverb25, we introduced our first AI agent, the Bandwidth Activation Agent, to automate complex number activation through a guided compliance-aware chat interface. Designed for customers managing high-volume, multi-country deployments, it reduces operational workload and accelerates time to value. We’ll continue expanding its capabilities to help customers operate more efficiently, reduce support tickets, and scale faster. It’s another step toward embedding automation into the core of our cloud communications platform, improving customer experience while lowering our cost to serve. As we expand AI-driven intelligence and automation, we’re also strengthening the foundation. Every customer interaction depends on trust. At Reverb25, we announced an expanded Trust Services portfolio with new capabilities for our Number Reputation Management solution. Originally launched as an enterprise offering, we’ve now expanded NRM to serve our Global Voice Plans customers as well. This reflects growing interest from the power platforms we serve across the UCaaS and CCaaS landscape.

NRM addresses an urgent customer challenge to protect call answer rates in an era of spoofing and fraud. If end users don’t trust who’s calling, they don’t answer, leading to lost revenue and missed critical calls like medical test results or service notifications. Because we own the network layer, Bandwidth can embed trust directly into our cloud communications platform, authenticating identity, managing number reputation, and controlling how brands appear on mobile devices. The result is higher connection rates, stronger engagement, and greater platform usage as we elevate outbound phone calling as an essential and high-performing channel for enterprise communication. Number Reputation Management was the deciding factor for a leading transportation and logistics provider. They chose Bandwidth to modernize their communications stack, consolidated 161 call paths to 10, and installed Number Reputation Management to resolve spam likely flags that were negatively impacting answer rates with carriers and distributors.

Our Trust Services portfolio was a key lever for this win, and we expect it to deliver a significant competitive advantage going forward. Finally, we advanced our vision for next generation messaging through a new RCS for business partnership with Out There Media, which we announced at Reverb25. Based in Europe and trusted by global brands like Coca Cola, Unilever, Disney, and Netflix, Out There Media chose Bandwidth as the sole provider to launch its RCS portfolio in the U.S. It’s a strong validation of our platform’s deliverability and scalability as we partner to launch a new wave of exciting mobile-first brand experiences from some of the world’s most recognized companies. Trust and scalability continue to resonate with enterprises that depend on both messaging and voice, and this quarter brought another powerful example of Bandwidth as their unified platform for mission critical communications.

A leading property management software company chose Bandwidth as their primary voice and messaging provider for a cloud contact center migration using Genesys. With our bring your own carrier model, they ported more than 300,000 toll-free and local numbers from multiple legacy carriers and unified programmable voice and text messaging on the Bandwidth platform. They also activated our built-in transcription and call recording APIs for compliance. It’s a textbook Bandwidth win, showing how we can consolidate providers and deliver total communications transformation as a trusted partner. While many of our Reverb25 announcements scale over coming quarters, Global 2000 enterprises are choosing Bandwidth today for reliability, flexibility, scalability, and AI-powered voice. Let me walk through a few highlights. A financial services firm responsible for nearly $2 trillion in client assets chose Bandwidth to move their legacy on-prem call center to the cloud.

Their need to run both environments simultaneously during the migration is proof of our Maestro software’s strength in orchestrating complex compliance-driven contact center call flows. In another financial services win, a credit union serving employees of a U.S. government space administration selected Bandwidth for a comprehensive communications upgrade integrating Microsoft Teams Operator Connect for employee communications and Five9 with Pindrop for a new cloud contact center build. Our Maestro software’s ability to support the customer’s chosen multi-vendor environment across UCaaS, CCaaS, and fraud prevention without being locked in was the key differentiator. It’s our freedom of choice strategy in action. In summary, this quarter combined three powerful drivers of our business: disciplined execution, continuous innovation, and deep customer trust. In our mission-critical communications platform, we delivered another quarter of solid growth and profitability.

We showcased at Reverb25 how Bandwidth is shaping the future of trusted, intelligent communications enabled by AI, and we expanded customer adoption with more multi-solution deployments and a record number of million dollar wins. These are all clear demonstrations of solid momentum and durable growth powered by a trusted platform our customers rely upon and a team committed to delivering long-term value across AI, Voice, trust, and Messaging. Our focus is the same: to evolve Bandwidth toward a higher mix of software-driven revenue that broadens market differentiation and deepens customer loyalty while expanding margin performance. We’re building toward a future where every enterprise interaction is more than a transaction, it’s a conversation that is trusted, intelligent, secure, and AI-optimized. Now I’ll turn it over to Daryl to detail our financial results.

Daryl Raiford, CFO, Bandwidth Inc.: Thank you, David, and good morning, everyone. Building on our solid performance in the first half of the year, Bandwidth delivered another good quarter highlighted by further accelerating momentum in Voice. Profitability remains central to our strategy, and this quarter’s results reflect that discipline with both revenue and adjusted EBITDA exceeding the high end of our guidance ranges. Let me now walk you through our third quarter 2025 results. Total revenue of $192 million increased 11% year over year, normalized for third quarter 2024 cyclical political campaign revenue included. Within that result, Cloud Communications Services revenue reached $142 million, an 8% year over year increase on a normalized basis. Non-GAAP gross margin remained strong at 58%.

We are really pleased with that result as we had expected and did experience third quarter crosscurrents, namely the tougher comparison to last year’s quarter given the absent benefit of political campaign Messaging, completely overcome by the growing contribution from software and services revenue. That growing contribution is accelerating and has long-term staying power, positioning us for continuing margin expansion over the next year. Adjusted EBITDA was $24 million, exceeding our expectations due to a combination of higher revenue and lower spending from timing of cloud expansion operating expenses. We generated $13 million of free cash flow in the quarter, modestly below last year, driven by normal timing of working capital and capital investments for cloud expansion. Our trailing 12-month free cash flow grew 35% year over year, underscoring the durability of our cash generation focusing on our three market offers.

Enterprise Voice revenue increased 22% year over year, reflecting strong adoption among existing customers, expanding through Maestro software integrations and AI-powered voice initiatives along with contributions from new customers ramping on our Bandwidth Cloud Global Voice Plans. Our largest customer category grew revenue 7% year over year, more than doubling the growth rate from last year. It’s worth noting that the combined Voice growth of our Enterprise Voice and Global Voice Plans was 9% year over year, an acceleration from last year driven in part by expanding software revenue. Programmable Messaging achieved a normalized 6% year over year growth in line with our expectations. Moving to operating metrics, net retention rate for the third quarter was 105% and 107% when excluding the benefit from political campaign revenue. In 2024, customer name retention remained well above 99%.

Average annual revenue per customer set another record at $231,000 or $224,000 when excluding political campaign revenue in the 12-month period. Over the last three years, average annual revenue per customer has grown 46%. Reflecting on the quarter performance, both our operating and financial results again demonstrate the strength, resilience, and long-term value of our business model. AI is not a standalone product for Bandwidth. It’s integrated throughout our cloud and embedded in the services our customers use every day. You see its influence in our revenue growth, our gross margin expansion, and in the continued durability of our cash generation. AI is everywhere and is a central theme in every customer discussion. We are creating a synergistic effect. At times we are leading our customers to AI with our advanced offerings and at other times we are supporting our customers as they rapidly deploy their AI initiatives.

We believe this is just the beginning of how AI is accelerating innovation and creating new sources of value, value that we believe will continue to set us apart in 2026 and beyond. Looking ahead to the remainder of 2025 for full-year revenue guidance, we are tightening the range with the midpoint yielding 10% organic revenue growth year over year. This is due to moderated expectations for messaging surcharge growth and increased expectations for voice growth. As a result, we’ve increased our full-year cloud communications revenue growth to 8% organically year over year. For the third time this year, we are raising our full-year adjusted EBITDA outlook, now reaching $91 million at the midpoint, reflecting our third quarter overperformance and strong execution and financial discipline. We now expect the updated EBITDA outlook of $91 million to represent about $1.3 non-GAAP earnings per share.

In closing, we believe the growing momentum in voice AI, our increasing software revenue, strong customer focus, and our sharp business execution position us for a solid fourth quarter and start to the new year. Looking ahead to 2026, we anticipate continued momentum within our Global Voice Plans and Enterprise Voice customers, as well as another robust political campaign messaging season to drive us toward our 2026 medium-term financial targets. With that, I’ll now turn the call over to the operator for the question and answer portion of today’s call.

Conference Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you’re using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. At this time, we’ll pause momentarily to assemble our roster. Our first question comes from Pat Walravens from Citizens. Please go ahead.

Pat Walravens, Analyst, Citizens: Oh, great. Thank you very much, and congratulations to you guys.

David Morken, CEO, Bandwidth Inc.: David, for you first, can you maybe.

Pat Walravens, Analyst, Citizens: Drill down a little more on what your overall conversations are like and what you’re seeing, how you characterize sort of overall demand?

I thought the.

Property management example was particularly interesting.

On the financial side.

Maybe if you guys could remind us what those 2026 medium term targets actually are, what it means when you say that you’re driving towards them.

Daryl Raiford, CFO, Bandwidth Inc.: Thanks, Pat.

David Morken, CEO, Bandwidth Inc.: I’ll answer the first part of your question and then hand it over to Daryl. I’d characterize broadly the conversations that we’re having with customers consistently with signing a record number of $1 million plus revenue customers again this period for the second time this year. That stat reflects broad-based demand. Voice is growing in a way that’s really healthy and exciting, and every conversation is reflecting the AI moment that we’re all in. Maestro is a fundamental component of the example that you cited regarding the property management software company. I think that one illustrates a consistent dialogue we’re having with enterprises who are moving to the cloud. They have multiple vendors that they’re either consolidating or trying to orchestrate, and the combination of Maestro and the network that we own and operate is really resonating.

That is reflected by record number of large enterprise deals and average customer spend continuing to grow at record pace. Let me turn it over to Daryl for the second part of your question.

Daryl Raiford, CFO, Bandwidth Inc.: Good morning, Pat. It’s nice to say hello. Back at the first part of 2023 in our investor day, we set out our vision for the company over four years to drive us through the end of 2026, and we titled those our medium term targets we’re driving for. We believe that we’re very much on track to achieve above market revenue growth, 60% and greater gross margins, 20% and greater EBITDA margin, and 15% and greater free cash flow margin.

Conference Operator: Yeah.

Pat Walravens, Analyst, Citizens: Okay, just as a reminder for everyone, Daryl, you guys, 15 to 20%, 2023, 2026, that implies a range of $729 million to $827 million in 2026. $729 million at the low end. I’ve always thought that was probably too much of a stretch. Just where you really think you can get to the low end of that 15 to 20% CAGR.

Daryl Raiford, CFO, Bandwidth Inc.: We are continuing to focus on, you know, we’ve guided to $753 million at the midpoint this year in terms of total revenue, and we’re very much focused on above market revenue growth.

Pat Walravens, Analyst, Citizens: Okay, thank you.

Conference Operator: The next question comes from Joshua Riley from Needham. Please go ahead.

Pat Walravens, Analyst, Citizens: All right, great.

Thanks for taking my questions. Maybe just starting off, I know you had some strong customer additions in 1H2025. Curious how those have been ramping into revenue and going live now. You mentioned some strong customer additions here in Q3, million dollar plus customers. Can you just speak to broadly how long is the period transitioning from when you get the customer win to when you’re actually getting them live and how much is that compressing because of maybe internal processes that you continue to improve?

Conference Operator: Thank you.

John Bell, Chief Product Officer, Bandwidth Inc.: You bet.

David Morken, CEO, Bandwidth Inc.: Deal cycles from initiation to close have been consistent, although the channel opportunities that we’ve enjoyed have compressed that deal cycle significantly in an exciting way. As customers come on board, they have continued to ramp as we’ve projected based upon the systems that we have in place, the personnel that we have in place, the policies and practices that bring them aboard and allow them to move mission critical phone numbers and sites and services in a way that preserves continuity. There’s always a concern about making sure that services are uninterrupted.

Daryl Raiford, CFO, Bandwidth Inc.: We are very, very good at working.

David Morken, CEO, Bandwidth Inc.: With enterprises and have an extraordinarily high level of customer support that allows them to onboard elegantly and to scale in a way that we’re really familiar with projecting. The large number of significantly larger annual operating revenue deals or annual recurring revenue deals that we signed at the beginning of this year continue to contribute to the success and the solid results in this period and will continue to do so into next year.

Conference Operator: Got it.

You highlighted a number of new products at the September customer event. Obviously, those tend to have a higher gross margin because they’re more software-like margin structure. Curious how these have been layering into new deals for Enterprise Voice this year versus a year ago. How much are those also kind of bleeding into the Global Voice Plans deals as well? Maybe give us a sense of how much is getting bought by Enterprise Voice on the software side versus Global Voice. Thanks, guys.

John Bell, Chief Product Officer, Bandwidth Inc.: You bet.

David Morken, CEO, Bandwidth Inc.: Let me ask John Bell, our Chief Product Officer, to answer that one.

Daryl Raiford, CFO, Bandwidth Inc.: Yeah.

John Bell, Chief Product Officer, Bandwidth Inc.: We’re starting our launches with these products for enterprise customers, but they are immediately interesting to our Global Voice Plans customers as well. We build them initially for that target market, but do fast follows with releases to the Global Voice Plans customers. The topics are very interesting both to the enterprises, and since our Global Voice Plans key customers are serving the same enterprises, they are naturally adopted there as well.

Conference Operator: Got it.

Pat Walravens, Analyst, Citizens: Thank you.

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

Pat Walravens, Analyst, Citizens: Hey guys, on the digital commerce, when I found that one interesting, are you seeing customers like this more and more in terms of deploying a DIY strategy, or are you integrating more and more with some of these conversational AI tools that is leading to wins like this?

David Morken, CEO, Bandwidth Inc.: It’s a great example of a very large, at-scale e-commerce point-of-sale related customer allowing small business to take advantage of AI at a very local DIY level to enable food ordering and delivery. We are seeing this as one of the primary use cases for voice AI: scheduling, calendaring, ordering, and fulfilling at the very front lines of small and medium business nationwide. Yes, I think James, you’re accurate in saying this looks like or sounds like a real reference implementation for a growing trend. We are seeing conversations like this more frequently.

Pat Walravens, Analyst, Citizens: Right. My question on that is, is it more the DIY approach, or are you integrating with some of the other conversational players out there to help enable this?

John Bell, Chief Product Officer, Bandwidth Inc.: This is John, good to talk to you again. It really is both, and our approach has really been focusing more on this standards-based approach so we can help with more and more of those integrations, whether they are DIY or really reusing some of the do-it-yourself into turning them into pre-built. That’s really the pivot we’ve taken recently. We can support both because we do see a strong mix of different approaches customers are taking.

Pat Walravens, Analyst, Citizens: Okay, and then Daryl, for you, gross margin did come in a little lower than we all had modeled. Can you just talk us through what you’re seeing across the segment’s gross margin, particularly on the Messaging side given there was some lower pass through surcharges as you pointed out, and how should we think about the international versus domestic mix.

Daryl Raiford, CFO, Bandwidth Inc.: This quarter we have gross margin, had some cross currents moving through it in the third quarter, and we were able to hold it at a 58% rate, which we’re very happy about. On the headwind crosscurrent, we had lower messaging primarily because of the missing political messaging last year. That messaging contribution in gross margin is at a higher amount than our aggregate company gross margin. We were able to offset that completely and overcome it with our growing software revenue contribution. In fact, we’re really, really pleased with the way that is developing from a relatively recent start. We expect to end 2025 with an annualized MRR exit rate on software greater than $10 million, and that’s going to substantially be built upon in 2026. We’re excited about that.

We really think that that’s going to continue to propel the company along with our other pillars of gross margin improvements that will take us into the 60% and above. In terms of international, International Group very nicely. It grew at 11% year over year, and international is nearly all voice, and that was at the exact same rate as the overall company’s third quarter organic growth rate of 11%. Very good in terms of that mix.

John Bell, Chief Product Officer, Bandwidth Inc.: Got it.

Will Power, Analyst, Baird: Thanks guys.

Conference Operator: Again, if you have a question, please press star then one. Our next question comes from Will Power from Baird. Please go ahead.

John Bell, Chief Product Officer, Bandwidth Inc.: Okay, great.

Daryl Raiford, CFO, Bandwidth Inc.: Thanks.

Will Power, Analyst, Baird: I guess maybe first question for either Daryl or David, who wants to take it back just on the 2025 revenue guidance. I think you suggested you were narrowing the range a bit or looked like raising the low end a bit. I think you cited stronger voice trends. It would be great just to get any further color on the upside in your voice calling plans versus Enterprise Voice, or is it maybe both? Maybe just any other color on what’s happening on the Messaging side, it sounds like a somewhat weaker outlook there.

Conference Operator: Thanks.

Daryl Raiford, CFO, Bandwidth Inc.: Okay. Yes, so glad that you asked me to clarify that. We are. We tightened our range on the lower end with respect to revenue. Our midpoint is just with the decimal slightly above $753 million. Within that is two elements in cloud communications. We’ve raised that. We’ve raised that guidance, the implied guidance that builds into the $753 million on the strength of voice. Within cloud communications, we’ve held messaging as we had fully expected already in line with what we had guided previously. The other component, surcharges, we’ve lowered that modestly just based in terms of the carrier pricing environment, carrier mix, and the type of messaging mix as we’re entering in a very large fourth quarter messaging seasonality with Black Friday, Cyber Monday. We have good line of sight to our customers’ demand and we see surcharges coming in a little lower.

That lower surcharges, you know, as you know, doesn’t contribute anything to gross margin or EBITDA. We are very enthused when it comes to being able to raise our cloud communications revenue.

Will Power, Analyst, Baird: Okay, and then my second question, again if we want to say David or maybe John, but this Number Reputation Management product really seems like a nice opportunity and good market fit. I mean just given what a lot of us as consumers kind of see on a regular basis. Maybe just talk about the trends you’re seeing there and kind of how you view that opportunity. How meaningful could that be, you know, product edition be.

John Bell, Chief Product Officer, Bandwidth Inc.: Yeah, great, great question. The trends you see as a consumer, our customers see and it hurts their business. They are trying to. Businesses are trying to reach consumers and the consumers won’t pick up the phone. It is a very basic value proposition and it is something that we with our owned and operated network can attack head on. There’s immediate value in there. As you did hear, it’s driving customer wins now. We launched it with our direct to enterprise customers this week. We launched it to wholesale customers as well to address their unique needs. We do see global opportunity for that product. Okay, thank you.

Conference Operator: This concludes our question and answer session. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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