Bandwidth (BAND) 23 Feb 232022 Q4 Earnings call transcript

Welcome to Bandwidth's Inaugural Investor Day. Thank you for joining us virtually today. I'm Sarah Wallace, Bandwidth's Vice President of Investor Relations.

We have an exciting agenda focused on Bandwidth's key differentiators, our long-term strategy and the opportunity ahead. In a moment, you'll hear from David Morken, our Co-Founder, Chairman and Chief Executive Officer. story, strategy. origin Bandwidth's share vision and He'll allocation Anthony our Chief vision; Operating in Officer, our our Financial comes plan. it on operationalizing will elaborate capital performance, and financial will long our Bartolo, and together discuss how all Chief Officer, recent strategy, Daryl range Raiford, our

fourth question-and-answer year speaker content presenters today's covering earnings, Investor Day At our closing released we with presentations the earlier end full will session remarks, well quarter as which we our as and XXXX of have and a live today. the

we'll of the be today, All shortly video speaker presentations, our on the materials after will present slides including event. the accompanying the website and available

statements regarding details additional next our typical provides safe harbor Before related to contain I apply. see you and like risk SEC factors we forward-looking that where review so statements remind the three forward-looking now the financial information, to factors about would in presentations, risks performance, over for about you years, goals risk our and any may slide the made begin statements to that additional filings. Please today, those information obtain including

are similar non-GAAP that that year for which otherwise be details found on quarters, presentation basis a prior be Investor accessed related fourth our separate Please of on financial end are revenue, performance this website. XXXX full our non-GAAP unless to provided quarter be our presentation. and presented aware our specified. in GAAP historical except investor measure, GAAP between may periods Relations earnings to can All is Reconciliations and measures for a results at the a

Bandwidth. to get let's now to my pleasure you started. So introduce It's

[Video Presentation Starts]

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Ends] Presentation [Video

Bandwidth and Welcome serve CEO our Investor My David name is to Day. and as I Co-Founder, Morken team Chairman.

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You'll and from presentation. Daryl hear progression our his on more in growth expectations detail

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years five our Just had we a when third than ago the revenue have IPO, less we of launched Bandwidth today. that

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Following Anthony. Raiford, it Anthony outlook who away, longer XXXX Daryl Take results, be our cover our will term targets. will XXXX financial and CFO,

hello and David Thanks everyone.

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further. are Now that we taking

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to and XXXX we the Call the Global Bandwidth a pre-integrated number is the native have portfolios Assure, AI, will cloud, ecosystem and as want CCaaS the once technology. scoring to coming was these us to integrate Duet which enterprises. new months, innovative most few to In including solutions, our of the past for named for product, fraud finalist well Since conversational with UCaaS access as just expansions launched

hybrid Our emergency believe of customers create longtime help a all alike. messaging the contact engagement, range to center, intelligent be whether this a services. and solutions near-term will of roadmap better our new with We it experience, or work, includes in text accelerate enterprises momentum total

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of full XXXX results. a quarterly First, review year our and

three-year Second, targets. our XXXX financial And lastly, outlook. our

very guidance by was Turning fourth Fourth midpoint expected, of quarter higher million. to our million, the exceeded diluted EPS revenue $XXX our $XX well $X.XX. $X.XX, our quarter of a had than by first exceeding strong which guidance with topic, likewise, we of fully

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total our up full the For prior year. the revenue XXXX, was from XX% year

grew start the X%, pass exceeding through from Excluding our surcharges, our year. the certainly of revenue expectations

gross year’s points fourth X Our prior non-GAAP from quarter margin the XX% was percentage quarter. up

annual XX%, record XXXX X year at rising last all-time an set percentage non-GAAP from points margin Our year. gross full also

notes the for nearly convertible this year. quarter and EBITDA in Also, fourth expansion, the fourth the our was shows at margin $XXX quarter, sheet balance strengthen discount. million we on $X XX% record million result full for a $XX of focused by our Adjusted million We’re and XXXX repurchasing that.

to sequentially clearly greater dollar-based than enterprise customer higher DBNR direct focusing DBNR XXX%, customers the opportunities. customer larger and retention XXX% rate total Turning our demonstrating for or our on percentage to annual the than metric X KPIs, from grew net revenue, to recurring and benefits points grew to $XXX,XXX a

our with performance pleased also We’re in other customer metrics.

Our customer count grew to X,XXX.

deliver our Average high revenue on to continue $XXX,XXX. customer its we continued ARR of focusing sales trajectory strategy customers. upward reaching on While annual

retention For rate name $XXX,XXX, of ARR with we customer XX.X%. an than achieved a customers greater

I ARR, to customer a go this than greater XXXX all $XXX,XXX our Communications and for customer amazing retention name customer an with know Cloud, of customer no other is if our proof of fact, stays three adopts of of our nearly point showcases once over we to revenue. years with our relationships that every Communications our quality the way durability point truly the these performance. better It which amplify Cloud. Bandwidth demonstrates In customers, a XX.X%, Bandwidth that was our rate back customers cohort the

uncertain details also But commitment name customer rates longstanding more clearly important This our had that to leverage even long-term. is inherited produce commitment Our Those demonstrate and retention durable combined of model. experience Anthony and drivers we’ve today’s profitable the important operating revenue a a in our confidence revenue growth. base of growth, us business drivers cash environment. belief management durability. team profitable with generation some model business over leverage sustainable our will give flow the in

critical expansion of offers, also expanding result mates profitable in here Bandwidth globally non-GAAP business customer revenue we these is years. focus Profitable and The growth, are additions it EBITDA services income and our enabler the proud results see especially, the believe to delivering this gross on and the profitably results you last growth. margin direct of communications. because growing I’m growth positions has product non-GAAP during adjusted five our made, in is continue profitable cloud us progress on evident DNA commitment of Band the time. The did our growth adding for establishing this accomplishments, and as over and we net strong

the core Turning faster and our second margin revenue outlook. our topic constrained leverage. to profitability first that half gross from be that grow operating XXXX benefit we my will as around believe we our will relatively our in Overall, growth, and especially

me address revenue and separately. both Let profitability

In our terms two of view. revenue, impact factors

uncertain First, through XXXX. macroeconomic we expect conditions persist to

enjoyed ARR rates, three of of than best-in-class last retention our $XXX,XXX years. XX.X% customers all we’ve customer the greater with recall, While we’ve retained over

will global plans growth weaker expect We our within category. usage against conditions customers, the communication from existing near-term the play specifically macro

X% in cyclicality. predictable messaging is The to XXXX from election States In $XX due years. second a U.S. growth retail, Revenue healthcare taken together messaging revenue factors revenue we our of Instead, campaign in cyclicality, campaign sustained occur continuing rate million United for waves in messaging won’t when election an year-over-year campaign messaging XXXX, the year. factor growth of and and where is and that adjusted growth rate along year. a aligns growth verticals financial campaign had expect strong we every These two elections. the two comes messaging revenue of be not civic in our messaging midterm approximately expect X%. with usage of wave other e-commerce a growth the result campaign with outlook we cycles XXXX engagement.

an combination non-GAAP on expected I’ve to increase the adhere top to operating our continue EBITDA and a growth will described, $XX profitability margin addressing we Now, of produce at adjusted million gross midpoint, long-standing favorable the principles. to approximately revenue leverage of expect of Based year-over-year. line XX%

an approximately We $X.XX year XX%. to share, expect per increase of $X.XX non-GAAP EPS for of the

year XXXX growth. revenue I’ve considerations represent a discussed, will Given the for average just all below

revenue targets, Zooming XX% years. a we three out over to longer-term the XX% expect of to subsequent our CAGR to see

improving conditions, dependably We from macro expect adoption revenue cyclical to acceleration growing and messaging. this campaign enterprise see faster

as We implied greater generation years. cash more to $XXX and These EBITDA achieve over in greater non-GAAP XX% approximately also free a flow expect margin. XXXX, gross free XX% targets XX% cash well the margin as flow than than of margin three next by the million than

business We’re about its financial capability. and excited our projected

you each of milestones will through the these these in Let drivers us help that achieve walk measures. me

next we dynamics three the see Let’s to the over years. first look at growth expect revenue

to moderate the contribute continued in services within is to communications plan years. We XX% of expected And to expect pace expected make revenue programmable customers. direct-to-enterprise foundation up approximately of three to XX% Messaging global grow within see faster category. our here revenue a continue reflected growth core at is to of

to enable two years. growing we which us achieve We’ve margin grown about over count margins, exciting believe that our long-term is the gross What’s accretive XXX% the streams are more within our our will diversification customer target than by years. of this direct-to-enterprise revenue two growth categories non-GAAP also to fastest and three last

North America faster a Our revenue markets more at pace. geographically diverse, are becoming where projected of to is grow also outside

XX% our American concluded utilize internationally. our of quarter third integration the customers cloud North essentially XXXX, then, since efforts We our in international now of communications

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many The the revenue resulting higher this comes is international locations. with benefit international that of profile of increasing margin the

achieved the to We These have we’ve four gross XXXX. non-GAAP increase in point percentage margin drivers X to XXXX margin expansion contributed from drivers. gross have

will achievement next add X percentage non-GAAP to the years. three over additional target. We our plus to All be gross of drivers margin expect instrumental four points gross margin non-GAAP XX% about in the

diversified There driving increasingly are two, addressed revenue across drivers are customer additionally revenue favorable mix expanding two further that markets. contributors. already international product I’ve equally and important

One of benefit from we operated our where these scale cloud platform. relates to Bandwidth

line model we spread as rent higher key has final The dynamic don’t cost inherent favorable top cloud, our comes This from in our over our we flywheel earlier, a stated both the Anthony operating driving and revenue efficiency. our been driver cloud David fixed margins. to economics As base. owner larger occur business communications and grow of

and As the smarter we’ve an operating aptitude costs developed has for organization scaled driving matured, working down. and

continue beyond improved our in the we non-GAAP last clearly power our and four have Taken few goals together, to the several years. next will margin drivers gross years, believe these over us

we costs, to to our operating leverage. in Turning investment expect see improved

invested R&D development communications right investment. to we a We of and both revenue in XX% expect research have XX% marketing Through of and at our and We the extend cloud. in capabilities XXXX, of are reach and now to range. sales marketing believe sales we ongoing levels to and settle and the both adoption

a G&A time our percent decline over to revenue operating of leverage. to also demonstrate as we expect continue We as

to is pure our taken that and well we’ve expected conservative years. three average is historically As next Bandwidth only to five the we a the stock-based compensation the has remain approach Stock-based percent continue over and future. scaled below into today over a will revenue compensation X%, last of years,

XX% a below well average you as expense see pure compensation chart, in as communication revenue In XXXX. fact, comparison can software the stock-based percent polite is of a from was understatement. The

drive When believe compensation we revenue compensation of viewed expect is to excessively of positive our workforce our diluting will engaged time, At the continue to percent highly culture practices stock-based tech outlier. total company and innovative, as be yielding our bandmates a success. Bandwidth same does not employee motivated Bandwidth award-winning the a shareholders. that

and Our our our continue with person to firm a is our towards our be but capital. whole promise talent workplace commitment to invested invest unsurpassed the financial discipline will also in and shareholders’ aim sufficiently view in We’ve our and with space. best, of the to stewardship

XX% targets XXXX our revenue XX% the margin expanding growth to of margin. summary, EBITDA gross In non-GAAP XX% to leads adjusted to and greater greater XX% us a than

in gross cash EBITDA of to profit as from produced increasing margin drive growing our combination gross me our power the referred here profit. with home dollars gross Let

XX% model expenses, gross business operating represents to This adjusted profitable in for strategy, Bandwidth our XXX% demonstrates gross our gross adjusted of to drive non-GAAP expenses, were invested those in within an the profit leaving in of cash and profit leaving of profit operating XXXX, we XXXX, EBITDA. our XX% profit and profit dollars. produced dollars business Through profit In for gross $XXX expect to invest million of clearly we EBITDA. dollars dollars grow XX% dollars XX% gross non-GAAP gross expect improvement of profit power of growth.

sustain Now capital how both range turn that our real structure. growth, targets profitable I’ll you plan long a we accelerate to and and to of sense have our

expected cash to earlier adequate sheet XXXX debt a balance XXXX than notes at flow quarter securities obligations. We in stated more I fourth our believe to discount nearly and our with million satisfy strengthen the we generation that of repurchase our of are and convertible of value. cash that $XXX our the XX% par

million the debt remains $XXX there Following maturing in repurchase, of XXXX.

targeted generate flow cash of approximate balance cash that next a $XXX to with flow margins That expect combined XXXX We retire the $XXX million note fully adjusted three Also, would of choose our retire more us business XX% XXXX securities than XXXX we balance and EBITDA convertible the that if cash million. notes XXXX be to free option. we our years sufficient to in and the needs. position fully the margin fund with XX% free obligations ended in cash and

in to heard day near-term every with our for leave summary, we we’re to for and uniquely cost profitability today. the believe control, what our with with reasons space macro, our serving weaker all longer you on XXXX I’ll message. win In key In you’ve focus can and being the term disciplined our the positioned continue we’ll we growing delighting one the and customers

momentum be Our next adhered since inception, goals North our we Star. achieve and the Guiding which beyond. our three continue we our core rigorously our will to years accelerate through as principles, to path have and forward

David. Now, I’ll hand it to back over

a In Q&A. a for it up terrific update. Daryl we’ll open you, moment, Thank for

allow me to heard what summarize together. So we’ve

assets, We are owned than moat. three at any next our strategy, team more flux an excited time the years capacitor market about before wide offers, cloud and amazing create extremely

go in are and our the XXXX. showing we for great profitability history leader. are back in And we We’ve future density. to a you first in a between We that time proven finally, our financial to control our cyclical, our predictably shared of the plan where a with and are space are us and we inviting we believe three-year businesses now

[Break]

Daryl. today be live and us session minutes. Bandwidth’s David, for question-and-answer Investor of last XXXX joining Day. The and Thank joined session I’m Wallace you Sarah happy for by the to I’m XX Anthony will Q&A

stream, for many joining those a there is as submit get can. on to If we to form We’ll you you’re of live as us questions. the

started. get let’s Now

of question Ryan. us comes Barclays. Our to Go ahead, from first Ryan McWilliams

idea. targets strategic and Bandwidth thanks the some guys, life made taking profitability question. over improve of years. how Great investments the the of by long-term for Hey the new also like already from the and way. you capitalize on this can here that five presentation Love I

better. the bridge in macro when about macro so these and just what mean think top-line targets we more we the and could now your near-term, for like, do improvements the So then how the strategy outlook is growth profitability

that just public next it. history range as off. and how I XXXX question, talk XXXX And to through a thanks think our exactly XX to first long bridge Ryan, targets, and sure us beyond understand company. good answer it that’s your an we five-year kick important Investor months appreciate wanted our to question from is XXXX to Day your in to I to why the for the to have time for

question. great So

and familiar issuer of Let well commercial in the moment commercial We great with began point XXXX our about back messaging aren’t for that achieved particular scale customers engagement really high support with talk and and me for who up those credit a block like We financial with business, And for attracted in like deliverability capabilities in largest XXXX. applications did messaging civic messaging. sale we growing United customers massive card customers. States. messaging and the for and

congregations. in midterm and classrooms season and And constituencies are These XXXX campaigns.

elections. of So XXXX. And aren’t campaign civic engagement The in in to now $XX and messaging, there campaigns. we XXXX, is did then million next directly related season political between

our think that should you that bridge there. articulated targets get toward here to we today do about we guide. the the so from XXXX And And long-term includes how

XXXX, bridge to from guiding growth. another of from seen political you’ve double And in net reason In as outperformance are digit for digits materials, or the we under our macro XXXX. single in there’s messaging a our XXXX an and just XXXX, that’s low

macro about UCaaS. we’re Quadrant many it Magic Gartner particular leaders for prudent in like means ours. the we’ve and what environment other teams, As XXXX heard a usage-based serve, in model example, for being from the also very We

initial us And consideration there, so to going appropriately. from you’re guiding macro see then and

cash can of what So EBITDA have growth gross in XXXX? can long-term control to what we’ve targets and what terminal we Well, and the our of, we take approach margins? in XX% do margins and that’s free control XX% as of is What XX% really profitability. done we margins we XX% flow do and XX%

by our growing we’re we’re tightening EBITDA So belts. XXXX, XX% and it in doing

binge And we aren’t this it’s profitability in that first We I hiring to purging way by not layoffs. on describe we’re profitable a and are spree XXXX. the really team is nor achieving a that would didn’t as XXXX And in understand a unhealthy. time, for important we

used healthy, We’re increase by as a achieving responsibly investing a that diet a in XX% to growth we’re for of way company. balanced

election civic the to got talk And from of about So at the outperformed including we us to appropriately banner then, a best in think got on we’re got big bridging And way that’s XXXX you’ve growing as to troubling $XX us is growing XXXX. engagement profitability about. campaign headed particularly many, messaging. we’ve macro in year prudent in XX% for I Until environment a of customers But when million. lots season. that be can to to and taking XXXX you’ve

Okay.

will Our from next question Blakey come Tom KeyBanc. at

hey, My great guys. That Well, sounds is the question [indiscernible]. opportunities. enterprise to on an market like opportunity go exciting around

Just wanted the where investment and know made to you’re how you back?

you, Thank Tom.

Let me one. ask Anthony handle to that

we the business for there’s in Look, one. firstly, their undeniable moving which question, It’s that critical the actually Thanks a enterprises the are good think IDC we cloud. articulated. communications That that Sure. presentation, the my Tom. to really shift articulated

thus moving cloud. Only moved them far. have XX% are about XX% of So to the them

our in we think definitely that’s So going favor.

software And themselves the for complexity combination our consumability tele network customers us attract ownership offers and regulatory two we The thousands other we these the is to and messaging think guys. of that because removes these experience. have unique enterprises, global that

markets is it’s XX%. seeing growing we’re our They’re the about area, X%, in for programmable all communications which growing services growing about us, global whether

Each And we we about outstrip. that to But to XX%, also matters. growing because that that. plan outstrip are market to three same offers consume platform. on all constituencies very how plan a you have the which go those those We consuming see of enterprise we focus

as account those large fine as well putting to tele some to channels our we’re them to nurture regards So that enterprises tuning dedicated complexity. go representatives help through to market of with

a a at a a it’s lot at base, part, it’s fast clip. of energy and it’s pretty Yes, paying spending behind your small growing pretty on relatively one So clip. but good it’s fast but off, a growing it’s pickup we’re

We’re proud of it.

Okay.

from Marshall Morgan will be next Stanley. Our at question Meta

trying little addressed invested them is question, the services just sales change just services there Great and But we of to kind one versus people just either, are more a more bit. what struggle of is and like in difference there? with you telephony traditional directed bit just that to you guess guys. services between or a always of guys little way should of – people kind to the are towards the programmable business traditional that the had like Quick whether communication? there’s sales the with kind and programmable think most these of difference I resources how another? I’m a just direct a back R&D the these kind Or like, have

handle thank and Meta morning, met I’ll for one joining and You us as Anthony this that you well. let

Sure.

team sales centralized. is Our

centralized Meta. sales team, We have a

to products. portfolio. our has our So And easily sales of team capacity They’re and they’re our the our all consumable. very simplified product handle We focused. cranial

and guys them sales each our are tailor can of of large position players them. to the the to and So every consuming each enterprises that one them or

being So those we haven’t to consuming really changed our or sales products. force with able particular regards to sell

communications that mean, that are today capabilities us packaging. their mission, just to that for critical for critical. real-time simplified they’re now customers another I real-time just communications is we’ve scale What coming than at becoming done moved And our we’ve are the Right it’s mission opened is that are now I a whereas your into them actually think messaging spam gets And about XX% and lot of folder. email. the prominent even seeing businesses. more customers of get time, filtered emails, looking

a communication. enterprise becoming critical it’s more much piece of So

extension natural having ourselves guys So are the already. just of a it’s conversation

Okay.

from question next Blair. Our William Matt come from Stotler will

Hey taking you partner Maybe everybody. just for ecosystem. the on one Thank question. the

to cohort key direct You love and the looking diversity expanding mentioned at especially get a that and forward enterprise to ecosystem, as on some investments there. We’d couple relationships you’re of the your specifically? revenue thoughts

talking when channel of some Hey, can say talking you you largest Matt, you are clarify partners, or you about enterprise are our customers? for about me,

I and customer channel integrators, about like But leveraging for implementation enterprises and value to you processes guess that. add some the comes well. and consulting that Talking are broadly, or solutions partners, maybe also could when system that as firms it maybe of things

Anthony Yes, take will well. perfect. that you very much. Thank And as

progression a our integrators and expanding is actually who our It’s – other customers to another natural natural is reselling systems that product. question. It’s are a Sure. our ecosystem great and existing also

critical customers of communications platforms. part you very initial customers is seeing large we a because a of natural It’s our putting So That’s power power are are of their power seeing business major communications. top with what progression key together. saw or that they’re that expand. our who any built solution They’ve platforms on platform

And platform that’s to all that's communications upon, et or would be Google, systems ride serves the Quadrant who Microsoft And wants it's Gartner Magic or integrator as power enterprise. large guys enterprise for and doing. a they're Zoom cetera. a a different Well, that a a – no and a of large what

extension. So natural it's a

consuming So seeing the your product. we question's on really of are it's focused progression customers our how and on right

question will from Okay. And Baird. next Power Will from our come

two what us, for again revenue of help XX% understand assuming of you're lot three-year for target the could think XX%. you you're going Question macro Thanks Great. be hosting in political fronts if messaging, on the would helpful in a again color. and growth us to to excluding XXXX on next wonder XXXX, we I great? in uplift have do an how growth hold those that? about And

You bet will.

the question on assumptions the to to answer macro your speak to initially. Daryl ask me Let

expect do It's customers heard latter our so XXXX? is mostly to prudent possible. been some half We from macro a of improvement uncertain, we're fairly possible. and taking We've Will. through of persist Hi, It's that. in approach the the on

macro, as and a to the improving economy the XXXX as – are stabilization digest that for moment. view XXXX Our begins inhibiting is federal an the policies the bank at through

growth messaging let half the messaging me is beyond, into to about the if from think see of plan and your role about part term you during a of the I growth second in Will, of attributable XXXX we'll and XXXX And longer Presidential question, our that XXXX take our year. what in could. When is campaign

that also You market with. Anthony's contributing our Gartner in really been have products portfolio new to well, velocity driving

is messaging durable. and but contributors, are those significant wonderfully predictable and So

it that political deck macro being that hands may end we the whatever So know during the year, be at on going up all to is campaigns.

get we contribution so level XXXX. to know about confident for customers those that we're as And

Anthony anything. Let add he me to if and wants ask pause

think would grounds only the model, rate. The our increased if we haven't in the up you but Yes. I is about add sales we've build we color additional invested close how organization,

Daryl some rate. put the conservative to there's into the we've takes sales that somewhat get and So for But up both to are time assumptions and close it articulated. running. David We have forces model with know regards

and We environment the are a view muted a through macroeconomic little into somewhat taking XXXX. stays that XXXX bit

Excellent. Okay.

from Our Needham. come next will Ryan at question Koontz

the for putting that is which applies Hi, and question. teams, environment relationship to particularly ecosystem, Microsoft I thanks from really doesn't to PSTN it the seem there growth Microsoft in as about up kind it the in connectivity, obviously. wanted ask revenues. that of doesn't of seem strong some, the some be teams core And voice bandwidth kind growth here in reflected really to competitive

if Thank you for strongly voice could of what's be the within revenue as the business in benefiting wonder this migration I bandwidth? reflect So really kind happening to you. to doesn't that on cloud seem line

a for are articulating, bet. and reasons is and it big is rates with precisely the forward. know really We've impact launching. really Microsoft a And for it directly from Microsoft, a admittedly the of we're Teams, we and should Connect important Operator about part getting for Connect, I team Operator with Connect which you're and Microsoft if launching development is impact the You thanks the question. Bandwidth subscription license been foundational about good the revenue that disproportionately its excited Operator the answer later excited you're going benefit

going And so with considered forward, we've share I in Microsoft in think see XXXX which in of terms beyond. factored greater and you'll both contribution

want to to you Do anything? add

it's Gartner primary Ryan, to in the important Quadrant of are one players. the each think we Magic of recognize Look players I

not one So – as of of see another, that. players we particular were, our may user shifts may players, one those growth player the as those that increase – it in of some though in in result net one as – to our even having a our from of should occur of – a of that some it XXX% net

be So our any shifts other, another market we, just perfectly moves because of the given one to from quarter honest. it to network share to part

fantastic their a right they what on we platform that's pull that's see. observations gravitational think power and we one. think what of been have – are that But because I Microsoft's your a We So partner.

Okay.

margin take to website. from you gross to and we'll question XX% Now about do what think a How margins? gross do the get going forward do need you

that one. take I'll

Please.

a firstly got question. have in – a we We've answer it. parts. three it's it I'll great Well,

believe is first attaining XX% record we is The easily because attainable of gross we a track is margin growth. have

three grow X%. years grown three last we've next X% predicting to we're another the and the Over years

it economic we've So that that owner highlighted presentation. I'd that We've got economic done in before. engine or my of engine sort

our product of the business portfolio. is other The mix

take – in growing you that whether that couple non-GAAP the margin, gross or are points business them the those services enterprise of it's margin, at in product of a mix portfolio, it's programmable look side. If XX excess

the aiding wind we've product well. So us as got mix

And then there's the business model value drivers.

been now The and that's country coverage function company network as ingested acquisition we that in aspire platform just lastly, efficiencies. them. totally Voxbone as the of the consistent The operating the enterprises providing global a a us ownership be the experience talk – to I and that then heard every And our have scale in. from into a You mix, result. just product about as articulated the helps a

with position., are be to I operating quite continue. think known are efficiencies going to those We prudent and our

Okay.

Walravens come next Our question Pat at JMP. will from

trache deeper we go into can your the a Daryl, on – that? of bar there, debt, Hey, At you. Thank end you'll Great. says your it the last can little slide have we you first I some later, right? you second XXX is pack, assumed $XXX but trache, options? the the are pay So million after it's years due two the and off need what

other XXXX, the see at notes, the it I we playout. thank That's well, come address retiring Pat. of advance If that greater assumptions you, earlier. how think and believe end chart flow our will that, free into it XXXX cash sufficient rates margins growth do continue as when sufficient great XXXX with cash margins, remarks resources and but did give the capability terms that through we'll question. a a rundown that did have that's revenue modest plenty to At and I they options you so XX% flow on in resources the do to very notes greater retire of due. than in at Well, the We the XXXX, and and company. XXXX the us and expecting than to and think XX% of in to address to we XXXX certainly EBITDA choose the of are the we have we're fund XX capitalize there of XXXX as will to

this Pat, I just par. would our continues debt is David. trade well also that Hey below add to

Okay.

Our from next at Tyler Citibank. question come Radke will

Hey, good morning. you me Can okay? hear

Yes.

Yes. hear fine. We you

Okay, wonderful.

think go-to-market should corporate tightening belt mentioned relates just which incremental you're some cost us you be growing in and of targets cash thinking of seems bridge the the you EBITDA just the that margins. that about see growth are just could flow help your to average? it that about above and hoping we headcount as was of you to long-term How I you targeting, relation free initiatives So opportunities terms the terms in how the in in to

if start I great question. it’s absolutely close. me I don’t suspect is for very, the Yes, but thanks this And very true, know let

EBITDA without we layoffs. the may think in that’s I and that in projecting be XXXX achieving growth only any doing we’re the beyond team

been team So that’s quite a healthy and when I say a belt while. mean we’re for tightening, already have because lean and

continuing hire. will We continue to are and

XXXX. that right and now [ph] growth Rex in open drive has roles Anthony beyond XXXX So for

in our repayment we’re And is right. And approach that is discipline will. belt about we’re talked tightening debt density, so really season that others being right, from of our that off, our EBITDA toward while built are you controlling cash our just that way. as if laying and Daryl reflects and free a flow, background just comes profitable this growing It’s absolutely

what So us it’s is acts season won’t anticipate we doing a that you growth. future good But for our unnatural period to sense. in macro see the related

in see significantly it line. return capital while to respectable and grow allocation the disciplined You’ll of bottom we be responsibly the

How CapEx about question web particular? as XXXX go should XXXX the a For business we next. and for to We’ll think in cycles Okay. a whole?

Daryl?

roughly CapEx we of X% approximately $XX XXXX expectations recur term to be for to expenditures line our longer in our expect million had a In of expect of we that with X% of to capital We nature XXXX. XXXX, revenue. one-time in don’t

of and X% between we expect about do greater than expect bridge XX% cash of EBITDA we than XX% flow when as bridge. we margins, CapEx greater part to that X% margins forward, XX% Going free

up we’ve And Okay. got from next Gabrielli Quinton Piper.

Hey our in question. routing. the that in for And CCaaS got for Jim players. really Fish. focused I’m [ph] up is that’s was call by the for this taking we on presentation guys, an AI One thanks interesting area been early the point specifically investment

toes can how won’t from step you’re… So that do you the you maybe what an the, of of bring view the to AI that some on customers

Quinton, applied call. have apologize, you’re breaking during We to the voice should bit. up a little your signal some there AI

what contact of hand would out AI, importance detail, our third conversational platform across to Anthony inputs means begin IP much just firing and intensity incredible us exciting. round too into and party we me and outputs is up getting the a Anthony apps for having the fidelity answer. the conveying and is Let in and global off audio excited the and ask to Without quickly. center about and network applications very emerging But all of software are flexible

AI important us. Great Great Quinton. is Hey Yes, to question. observation.

of important it’s is which to think a I more lot enterprises, our important.

to space. what approach AI is are rebuild building AI go Our off and not to in people other

enable to CIOs to AI. their our opportunity for Our strategy execute enterprises is

agnostic We’re with the AI platform. to regards

from all but conversational We capability built baseline you’ll way bridge the being see built to noise the intelligence it into power platform. AI And the have suppression, network. it an gets that’s native into

don’t who rides And uproot. them to is of So pick the enterprise powerful AI on the AI winners enable consistently they’ve to to that choice, pick to the We and solutions. and their integrate our allows their we in gets losers advantage to enterprise anybody which for the around winner not the that chosen space. allow AI them really player platform an execute to world, of

weeks like. lot a that see about you forward hear if to at Enterprise can in you you some of it more you’ll coming live Connect where the seeing look So and

Okay.

Canaccord Genuity. Our with next from Walkley Mike come question will

you presentation in All the details today. the all right, for the thank

relates guidance adverse and year? XXXX? XX effects gross gross more is Just bit with expect some through Or XXXX margin tough XXXX little to environment towards messaging to some given flattish the mix from more it this then dig wanted and in to and expands margins. the expansion a back XXXX we it Should more as

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