Good morning. And welcome to Bandwidth's first 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 second quarter and 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.

Thank you, Sarah, and good morning, everyone. Welcome to Bandwidth's first quarter 2025 earnings call. We're pleased to report a solid start to 2025 with results exceeding both our top and bottom line expectations, driven in large part by strong performance in our core offerings reflecting healthy demand for our cloud communications services and disciplined operating execution. We deeply appreciate the continued trust of our customers and the opportunity to serve them. To our dedicated bandmates, thank you for the talent, drive, and unwavering commitment to our mission. I thank God for each of you and for His many blessings on our company. Before we discuss our first quarter performance, I want to briefly address the recent attention around global trade policy. Based on what we know today, we don't believe the current tariff environment poses any material impact to our business. We continue to see healthy usage across our core offerings in voice and messaging, particularly in regulated mission-critical verticals like healthcare and financial services. In our 26-year history, Bandwidth has always been known for resilience, and we remain focused on disciplined execution, new innovations, and delivering the essential communications our customers rely on every day. Now let's turn to our first quarter performance. Bandwidth powers mission-critical communications across AI voice, messaging, and emergency services. Our Maestro platform is the orchestration layer for the modern enterprise, giving enterprises the freedom to integrate their choice of best-in-class CCaaS, UCaaS, and voice AI agent providers. As the only CPaaS company with our own global communications cloud, we deliver unmatched geographic reach and reliability. The results of our strategy to drive growth in our core platform are evident in our first-quarter performance across all three of our market offers; Enterprise Voice, Global Voice Plans, and Programmable Messaging. Our Enterprise Voice business is experiencing significant traction as enterprises increasingly choose Bandwidth to modernize their communications infrastructure. They are leveraging our software platform and global network to deliver mission-critical voice communications and enable AI-powered voice agents. Notably, over half of our enterprise customers are now utilizing our Maestro or AI Bridge platforms. Maestro's flexibility and orchestration capabilities are proving to be a strong competitive differentiator in sectors like financial services, healthcare, and hospitality, as enterprises choose us for the measurable ROI we deliver in streamlining operations and accelerating innovation. We saw this firsthand with significant customer wins in the healthcare sector. One prominent healthcare provider, with locations across the Midwestern U.S., selected Bandwidth for a new bring-your-own-carrier deployment on Maestro, seamlessly integrating with their existing cloud contact center. Their decision was driven by the comprehensive suite of cloud services Bandwidth offers, including the ability to integrate AI voice agents. Another key win involved a publicly traded group of hospitals and clinics, seeking to implement a hybrid environment to integrate their legacy on-premises applications. Bandwidth's Maestro platform is jump-starting their cloud journey by modernizing their communications infrastructure. Maestro's dynamic call routing feature provides superior reliability while allowing the customer to consolidate and own their telephone numbers for greater control. These examples demonstrate how Bandwidth's open and flexible architecture, powered by Maestro, serves both cloud-first and hybrid customers with the integrations of their choice, addressing a wide spectrum of enterprise needs. Our voice AI strategy resonates with enterprises, and we are making significant strides in our AI voice strategy, focusing on openness and flexibility, core tenets of our Maestro platform that align with our customers' preferred approach to building their solutions. As enterprises increasingly adopt specialized AI voice agents, integrating them into existing communication workflows presents a challenge. Maestro AI Bridge is specifically designed to simplify this complexity, allowing organizations to integrate their choice of new AI voice solutions with their current CCaaS and UCaaS platforms. This strategy is already contributing to our growth in wallet share. A long-term customer recently selected AI Bridge to power a new IVR replacement, using a third-party AI voice agent. This deployment has significantly improved efficiency by resolving inquiries about transaction status and payment confirmations, freeing up human agents for higher-value interactions, reducing operational costs, and enhancing both customer and agent satisfaction. Furthermore, AI Bridge's interoperability allowed the customer to deploy on their own timeline. In our Enterprise business, our channel program continues to expand, enabling us to engage with large and complex enterprise transformations through MSPs and system integrators. In the first quarter, we expanded our long-standing partnership with Miratek through another multimillion-dollar deal. This collaboration will power a new Genesys contact center for the largest regional auto club in the U.S. The customer chose Bandwidth for our rapid deployment capabilities via our Genesys integration on the Maestro platform and our ability to easily integrate AI voice agents for future automation of customer service functions. Turning to global voice plans, our largest voice offering, this category continues to provide a strong foundation for Bandwidth's growth. Our owned and operated global network coupled with our regulatory expertise and software automations on the universal platform remain key differentiators for our hyperscale and communications platform customers like Microsoft, Zoom, and Genesys. In the first quarter, we successfully secured new business and expanded existing relationships. Let me give you two examples. First, we secured a new relationship with a global IT services provider and Microsoft Gold partner serving over 3,000 customers across 57 countries. They selected Bandwidth to support mission-critical contact center operations for several U.S. state governments and large enterprise clients. A key factor in their decision was the failover protection provided by our Call Assure solution for their 7,000 toll-free numbers. This win highlights Bandwidth's reliability and platform resilience, positioning us for growth as this partner expands deployments. Second, we deepened our engagement with an existing longtime global voice plans customer that is pioneering a groundbreaking AI use case. They recently launched a real-time voice translation service powered by large language models, enabling seamless communication in English, Chinese, Japanese, and Spanish, with plans for more languages in the future. The customer continued building on the Bandwidth Cloud because of our ability to deliver the high fidelity, low latency, and reliability that voice AI applications demand. It's a powerful example of how enterprises are launching voice AI with Bandwidth, driving increased usage of our Bandwidth Cloud. Turning to our programmable messaging offer, customer use cases remain diversified, and we're pleased by the core platform demand we're seeing across commercial messaging use cases. Customers continue to choose Bandwidth for our reliability, scalability, and the deep expertise we have in messaging compliance. For example, in the first quarter, we welcomed another $1 million-plus customer, a rapidly growing consumer engagement platform in the personal care space with anticipated ramping throughout the year. They selected Bandwidth for the capacity and enhanced reliability needed to support their growth, along with AI-powered tools like our campaign registration center to simplify compliance. Our ability to support protected health information on our Bandwidth Cloud is crucial for their planned expansion into the wellness vertical. Before wrapping up, I want to congratulate our bandmates on earning two Gold Stevie Awards, the highest honors given in this global competition. Our customer success team received the top recognition for innovation and customer service for the second year in a row, and our inaugural Reverb user conference placed first for Best Customer Engagement initiative. These awards are a clear reflection of our mission to put customers at the heart of everything we do. In summary, demand is solid, our strategy is effective, and we're committed to growing our core business through focused execution, innovation, and delivering critical communications for our customers. With a growing market, loyal customer base, strong competitive position, profitable operations, and a solid capital structure, we believe Bandwidth is well positioned to drive long-term growth and profitability. I'll now turn it over to Daryl to walk through the details of our financial results and outlook.

Thank you, David, and good morning, everyone. We're pleased to report a strong first quarter underscored by particular strength in our core offerings, demonstrating Bandwidth's commitment to sustainable and profitable growth. Our team's execution led to revenue and adjusted EBITDA exceeding the high end of our guidance. This success was driven by continued growth in our enterprise and global voice customer categories, as well as the progress of our strategic initiatives. We are encouraged by this momentum and remain focused on balancing growth with disciplined financial management. As David remarked, our communication services are not currently subject to tariffs, and we do not anticipate that the current environment will materially affect our operating costs or service delivery. Our initial 2025 outlook assumed a stable to moderating macroeconomic environment. While we've seen some macro volatility year-to-date, our first quarter results exceeded expectations, and we're raising our full-year guidance to reflect that overperformance while continuing to retain contingency for macro volatility. Turning now to our first quarter 2025 results. Total revenue of $174 million increased 7% year-over-year, normalized for 2024 cyclical political campaign revenue of $8 million. Included within that result, cloud communications revenue reached $133 million, a 6% year-over-year increase, also normalized for 2024 political campaign revenue. Non-GAAP gross profit of $79 million marked an increase of 8% year-over-year or 11% normalized for 2024 political campaign. Non-GAAP gross margin improved to 59%, a 2 percentage point increase. EBITDA grew by 40% to $22 million. This result was higher than our expectation benefiting from higher revenue, stronger margin, and timing of operating expenses. Free cash flow performance in the quarter was directionally as expected, influenced by timing of capital expenditures and working capital. Focusing on our first quarter cloud communications revenue growth, Enterprise voice revenue grew 26% year-over-year driven by strong core platform demand from financial services and healthcare customers. Global voice plans revenue grew 4% year-over-year showing steady growth as long-term customers expand and channel partnerships drive new business. Programmable messaging accounted for 19% of cloud communications revenue and saw a 9% year-over-year increase, normalized for 2024 political campaign revenue driven by core platform demand from customers in key verticals including e-commerce, financial services, faith-based communities, and civic engagement. Moving to operating metrics, net retention rate for the first quarter was 116%. Customer name retention remained well above 99%. Average annual revenue per customer set another record at $228,000 or a record $211,000 when excluding the political campaign benefit in 2024. In terms of our first quarter capital structure activities, capital expenditures were $10 million, somewhat higher than this time last year as we focus on our network expansion activities. We further strengthened our balance sheet with a repurchase of 2026 convertible notes, leaving only $7 million remaining of the original $400 million. We ended the quarter with a cash and securities balance of $42 million and no borrowings under our $150 million line of credit. Looking ahead to the full year 2025, we remain focused on three key outcomes; double-digit core platform growth, profit expansion, and strengthening our capital structure. Our initial full year 2025 guidance was based upon an expectation of moderate stabilization in economic conditions and we are closely watching the volatility and macroeconomic uncertainty that was present in the first four months. Nevertheless, we are very encouraged with the $5 million overperformance in the first quarter, both in revenue and EBITDA. For that reason, we are raising the lower end of our revenue outlook to reflect the first quarter's overperformance and leaving the upper end of the range unchanged accounting for the continuing volatility. Accordingly, we have raised our full year revenue outlook to a range of $745 million to $760 million, which now reflects an increased organic growth outlook of 10% at the midpoint. First quarter EBITDA outperformance was partly due to expense timing, but we anticipate ongoing benefits from our operating leverage. Consequently, we've raised our full year EBITDA outlook to $87 million at the midpoint. In summary, our financial and operating performance in the first quarter represents a solid start to the year. We will continue to focus on what we can control, serving and delighting our customers every day, growing our margin, being disciplined with our costs, and becoming more profitable. With that, I'll now turn the call over to the operator for the question-and-answer portion of today's call.

Thank you. We will now begin the question-and-answer session. The first question that we have today comes from Arjun Bhatia of William Blair. Please go ahead.

Perfect. Thank you, and congrats on the strong Q1. Maybe first question I do want to touch on some of the success you're having. It clearly seems like enterprise voice is a big growth driver. There's momentum behind that business and you're gaining share there. I'm curious if you could just touch a little bit on the pipeline for enterprise voice. And then zooming out for a second, how do you effectively kind of go to market in that category? Are there partnerships? Is that mostly a direct motion? And how are you sourcing those opportunities? Thank you.

Thanks, Arjun. This is David. Our pipeline for enterprise voice customers is strong and I think best illustrated by the results in the quarter. We signed more million dollar-plus annual revenue deals in that quarter than we ever have in our history, and we continue to believe that we'll build on that throughout the rest of the year. So, the pipeline is strong. The go-to-market part of your question; we have a direct-to-enterprise sales motion historically, but we have built on partnerships and sold through MSPs and channel partners, and we're expanding those relationships with MSPs, many of whom are doing major contact center builds. And so, there are some examples that we've talked about in the past like NWN, Carousel with Southwest Airlines and others, but we have both a robust direct motion to enterprise as well as an emerging channel program.

All right. Perfect. And then maybe just one on the guidance. I'm curious how you're just thinking about the back half of the year. Clearly what we're hearing from a lot of other companies is a little bit more, I'll say, muted and uncertain. But what gives you the confidence that volumes or usage won't slow in the back half of the year, particularly in verticals like e-commerce or retail? And then I'm wondering if your confidence is maybe in part driven by just other growth drivers that can offset any sort of weakness or volatility in usage, perhaps like your enterprise voice traction where it seems like it's relatively early still?

Absolutely. Hey, good morning, Arjun; this is Daryl. We did. We were encouraged with the first quarter performance. It's implied that we're raising our second half outlook. We're now calling for 10% double-digit growth or organic growth at the midpoint for the full year. That's on the back of all three market offers. Enterprise, as David has already articulated, we feel really good about the pipeline. We're looking for our global voice plans to double its growth this year from last year in terms of percentage, and so that's going to contribute. And then we're expecting continued core platform commercial growth in programmable messaging. To your point on risk and macro, we do watch that. We have, without a doubt, built contingency into our projections for the full year. If I had to look at one of our offers and pick one that we would watch towards the macro that would likely be programmable messaging and commercial where that market could be more exposed to retail, as you said, retail and digital engagement and marketing. But that only represents 19% of our business. Our voice business, we think, is resilient and less exposed to macro volatility given the essential nature of the voice communications that we deliver for both our global voice plan customers and our enterprise customers.

All right. Very helpful. Thank you, both.

Thank you. The next question we have comes from Meta Marshall of Morgan Stanley. Please go ahead.

Hey. Good morning, everyone. This is Jamie on for Meta. Congrats on the strong results. I guess first question is just great to see kind of the continued increase in average revenue per customer. I guess could you just give a bit more detail as to what's kind of driving that further expansion so far into 2025?

Hey Jamie, this is David. As we mentioned in our script, over half now of our enterprise voice customers are using our Maestro platform and expanding their business with us using Maestro or AI Bridge. So the increased spend and utilization is broad. It may be AI use cases with AI Bridge. It may be orchestration with hybrid contact center deployments where you're bringing the benefit of cloud-based services down to your premise-based solution and extending that solution to the cloud, but ongoing spend can also include cross-sell, up-sell to messaging. And we are also encouraged and excited by that average annual spend.

Great. Thanks. And then just as a quick follow-up just given the strong gross margin performance you saw this quarter, how should we think about the durability of that through the rest of the year?

Good morning, Jamie, it's nice to speak with you. This is Daryl. We are looking at quarter-to-quarter margins that vary by about a point. We expect that the margins for the full year, as indicated in our guidance, will be similar to what we saw in the first quarter. This gives us confidence in achieving our medium-term targets of 60% or more by 2026. We believe we are on track, even ahead of schedule, towards reaching that medium-term goal.

Great. Thanks so much. I’ll jump back in the queue.

The next question we have comes from James Fish of Piper Sandler. Please go ahead.

Hey guys. Working actually off of Arjun's initial question, you guys really talked about the partnership side notably this quarter. I guess, how are you thinking about your partner ecosystem from here and where the contribution is today coming from partners versus direct and where that partnership contribution can be over the next few years, and sort of what it means to leverage over time?

Hey, James; this is David. We're excited about a number of attributes related to working with large MSPs. One of them is the point in time during a deal cycle where you're often brought to the table. It can be from a Genesis or a Five9s or a nice contact center engagement where they're bringing us in to replace the incumbent and do so more rapidly than we would normally in a direct motion be able to achieve. So deal cycle compression is exciting. The complexity and size of the opportunities when we're working with large integrators is larger. And what we're excited about is the ability of our Maestro platform to address some of the complexities with some of the pre-integrations. But let me pause. I've invited our Chief Product Officer, John Bell, to join us on the call. He's here and I'd like him to also chime in here about the channel and how we're seeing product and channel contribute.

Thank you. Currently, our core partners have a clear and mutually beneficial value proposition. As we explore opportunities for expansion, there are several avenues we can pursue. We can collaborate with different platforms and ecosystems through channel partners, explore vertical expansion, increase our market reach, and consider additional geographical markets beyond our current focus. It's important to us that our value proposition remains closely aligned with our partners. We are pleased with the progress we've made, and we recognize multiple areas for enhancing these relationships. Regarding your last question, while we haven't disclosed the exact percentage of our sales coming from the channel, I can confirm that it is increasing significantly.

Understood. Historically, you have been very enthusiastic about the messaging API opportunity. There have been some political influences on this. However, if we look past the political aspects and fees, it grew about 9% this quarter, although overall it was slightly down due to the political factors. It's now growing beneath a larger competitor in the space. My question is, how do you plan to increase awareness or regain market share for your messaging business? What initiatives are you undertaking for cross-selling? Will messaging grow as the comparables become easier in the upcoming quarters? I realize that’s a lot to unpack; I apologize.

That's all right. I'll try to address it. As you mentioned 9% commercial messaging growth in Q1, and that's driven by demand from a really broad set of customers—e-commerce, financial services, non-profits, and civic engagement. We do expect commercial messaging will grow in the low double-digits for the full year which is in line with the market. But in Q1, the cohort of political messaging customers who are diversifying into civic engagement and commercial—they did send fewer commercial and civic engagement messages. So our focus is going to continue to be on driving deliverability at high scale for our customers. And the breadth of those customers is really important to us continuing to grow programmable messaging at 9% or above. So we're expanding our channels to include RCS RBM, which is a more robust way of engaging consumers and end users, and we think that that's significant to help that. So the levers for growth we've got to win away from large senders that have outgrown their existing platforms, and we're doing so. One of the examples we gave in our script illustrates that. And then the increased usage as enterprises grow with us will contribute. We've seen that year-over-year once we scale with a good customer, how they build with us. And then last it is really important for these larger enterprise messaging customers to offer the kind of premium support that we're famous for and that we win awards for. And so that's another fundamental building block to continuing to grow the messaging business.

Thanks.

Thank you. The next question we have comes from Will Power of Baird. Please go ahead.

Okay. Great. Yes, I may actually direct a question to John since he's there. I know David mentioned success in healthcare in the prepared remarks. It would be helpful to elaborate on that. What distinguishes you in the healthcare sector? I understand Maestro is part of it. How significant are distribution and technology, as well as regulatory factors? Additionally, how do you plan to replicate that success in other sectors, and what steps are involved?

Yes. Great question. So when you look at healthcare and the needs of the healthcare system systems we work with and different providers, they're incredibly complex environments. And the beauty of Maestro is it allows them to easily bring innovation, innovation from the cloud into these complex environments without having to fully change those environments. So where there's complexity, where there's regulatory, and where there's opportunities for enterprises to differentiate on their customer experience, the Maestro platform works beautifully to help with that. So the complexity and the need to differentiate are wonderful places for us to bring the Maestro platform to help enterprise customers.

And what would you say are the next vertical opportunities? I mean, whether it's financial services; I mean, what else are you seeing? Where are you seeing the most success in Maestro, and maybe outside of healthcare, where is it going next?

We see it actually in a pretty broad set of other verticals. Hospitality, we've seen a lot of success. Travel we've seen success. Manufacturing we've seen success. Really I'd say, the larger enterprise where we're focused with the Global 2000, there's complexity across a lot of different verticals. And so really, I'd say, the size of enterprise that we're focusing on and the global nature of theirs, there's a lot of verticals where we're seeing success and opportunity. So while we're talking about a couple of verticals, there's actually a lot that we're seeing with our team.

Okay. Great. And then either probably for Daryl or David, I think actually Darryl may have said in one of his responses earlier that you're expecting the global voice business growth rate, I think, to double year-over-year. Just be great to get a little more color as to kind of the key drivers and kind of visibility around that.

Yes, certainly. We are implied in our guide for the year; we are expecting our global voice to global voice plan category to double its growth rate to approximately 6%, possibly slightly more. And the long-term kind of steady growth that we're seeing is the seeds were planted over the last 12 and 18 months as we've onboarded customers. We've been expanding with our resell customers through their new initiatives and their AI initiatives that bring us more volume and usage on our platform, as well as our channel partnerships that we've talked about and David has already mentioned but for example, NWB and Carousel and with a handful of very large enterprises that we are going to partner to market with our channel partners.

Great. Thank you.

Thank you. The final question we have comes from Pat Walravens of Citizens. Please go ahead.

Great. Thank you. Congratulations. Hey, David, can you just sort of high level for us for a second? Can you just tell us how AI is serving as a growth driver in each of those three categories or products just sort of the one-liner in global voice, enterprise voice, and programmable messaging?

Pat, I sure can. And what I'll start with is I'll illustrate the effectiveness and power and accuracy of AI voice generally. We didn't read the investor script that you just heard. Darryl has a voice agent. That was Darryl's voice agent reading his section. I read; my voice agent read my section. If you go to the website and see the investor deck that we've just posted, the voiceover in that deck was done by our voice agents. And so we have a firm conviction that the next new 100 million voice users in the business customer base we serve are going to be voice agents. And we're already a company that supports over 100 million phone numbers of the 600 million phone numbers supported in the North American dialing plan and globally. And so when you ask for how AI voice is going to benefit Bandwidth among the customers in our three product categories, the effectiveness, the accuracy, and the compelling nature of AI voice agents is becoming more and more manifest every day. And we wanted to illustrate that again today on the call. We've used our own voice agents in Q&A. But in Programmable Messaging and Voice, you have a lot of different approaches. The first I want to talk about is Maestro. And the reason I want to talk about that is, because it's an open strategy that allows orchestration of myriad AI solutions and implementations. And that's vital to the large enterprise. You’ve got to support multiple LLM-based agents. You've got to do it in a creative and open way. You can't try to lock in. We're not at a world yet where you’ve got a single ecosystem that offers all the benefits. So for our Enterprise Voice customers, Maestro and AIBridge are critical. For Global Voice Plans, whether it's UCaaS, CCaaS, or Conferencing, these customers are all building extraordinary AI voice experiences that make IVRs like, 'press one for sales, press two for ops' seem like a prison camp. And so if you replace IVRs with really intelligent voice agents, the conversations become resolution conversations and creative conversations with a customer or a prospect. And so the call durations go up, the resolutions go up. And so we're excited about the underlying customers in our global voice plans business and what they're building, and how that's benefiting us, and how they want their voice agents to be proximate to a low-latency global voice platform. And then the third, the programmability of all these things is vital because your agents are going to go in the background and do tons of sub-agent magic. And so you've got to be able to engage and avoid abandonment in conversations with voice and messaging by having very, very fast response times and low-latency response times. So generally, the overall impact of this moment in technology is favorable for Bandwidth. Voice agents are coming or are already here, and we are seeing already the impact of that. And we think that the long-lasting nature of this technology moment is much more durable, for example, than the demand pull-through that happened during lockdowns in the past that we saw when business decision-makers had to really scramble to support work from home. In this case, you've got to have AI applied to your goods and services, and you've got to do it quickly or else you're going to fall behind. And so we're seeing a similar inflection point or demand moment around AI voice in all three categories.

That is super helpful. Thank you.

Thank you, sir. Ladies and gentlemen, that was the final question of today's question-and-answer session. Thank you for joining us on today's conference call. You may now disconnect your lines.