RALEIGH, N.C., Feb. 13,
2019 /PRNewswire/ -- Bandwidth Inc. (NASDAQ: BAND), a software
company focused on communications for the enterprise, today
announced financial results for the fourth quarter and full year
ended December 31, 2018.
"The fourth quarter was a strong finish to an outstanding year,"
stated David Morken, chief executive
officer of Bandwidth. "Demand for our offerings remains robust as
our combination of flexible APIs and a vertically integrated all-IP
voice network clearly resonates with enterprise customers. The
foundation of our strong results are rooted in serving our
enterprise customers well and continuing to expand those
relationships. Additionally, we significantly expanded
our sales, marketing and technology teams and are excited about the
potential of our augmented sales team coming to full productivity
throughout 2019. We believe we are well positioned to
capitalize on a growing CPaaS market in 2019 and are committed to
our customer's success in the year ahead."
Fourth Quarter 2018 Financial Highlights
- Revenue: Total revenue for the fourth quarter of 2018
was $52.3 million, up 23% compared to
$42.5 million for the fourth quarter
of 2017. Within total revenue, CPaaS revenue was $44.1 million, up 26% compared to $35.0 million for the fourth quarter of 2017.
Other revenue contributed the remaining $8.2
million for the fourth quarter of 2018. Other revenue was
$7.5 million in the same period last
year.
- Gross Profit: Gross profit for the fourth quarter of
2018 was $23.6 million, compared to
$19.6 million for the fourth quarter
of 2017. Gross margin for the fourth quarter of 2018 was 45%,
compared to 46% for the fourth quarter of 2017. Non-GAAP gross
profit for the fourth quarter of 2018 was $24.9 million, compared to $20.7 million for the fourth quarter of 2017.
Non-GAAP gross margin was 48% for the fourth quarter of 2018,
compared to 49% for the fourth quarter of 2017.
- Net Loss: Net loss for the fourth quarter of 2018 was
$(1.3) million, or $(0.07) per share, based on 18.4 million weighted
average diluted shares outstanding. During the fourth quarter of
2017, net loss attributable to common stockholders was $(0.6) million, or $(0.04) per share, based on 14.9 million weighted
average basic shares outstanding for the fourth quarter of 2017.
This includes a charge of $2.1
million or $0.14 per share
related to the enactment of the Tax Cuts and Jobs Act in
December 2017 due to the
remeasurement of our deferred tax assets at the lower corporate tax
rate.
- Non-GAAP Net (Loss) Income: Non-GAAP net loss for the
fourth quarter of 2018 was $(0.8)
million, or $(0.04) per share,
based on 18.4 million weighted average basic shares outstanding.
This compares to a Non-GAAP net income of $1.6 million, or $0.09 per share, based on 18.1 million weighted
average diluted shares outstanding for the fourth quarter of
2017.
- Adjusted EBITDA: Adjusted EBITDA was $(0.1) million for the fourth quarter of 2018,
compared to $4.4 million for the
fourth quarter of 2017.
Full Year 2018 Financial Highlights
- Revenue: Total revenue for the full year of 2018 was
$204.1 million, compared to
$163.0 million in 2017. Within total
revenue, CPaaS revenue was $164.4
million, up 25% compared to $131.6
million in 2017. Other revenue contributed the remaining
$39.7 million for the full year of
2018, compared to $31.4 million for
the full year of 2017.
- Gross Profit: Gross profit for the full year of 2018 was
$96.0 million, compared to
$73.7 million in 2017. Non-GAAP gross
profit for the full year of 2018 was $100.6
million, compared to $78.1
million in 2017. Gross margin for the full year of 2018 was
47%, compared to 45% in 2017. Non-GAAP gross margin was 49% for the
full year of 2018, compared to 48% in 2017.
- Net Income: Net income for the full year of 2018 was
$17.9 million, or $0.85 per share, based on 21.1 million weighted
average diluted shares outstanding. This includes the $11.9 million of excess tax benefits associated
with the exercise of stock options and vesting of restricted stock
units. This compares to net income from continuing operations
attributable to common stockholders of $5.3
million, or $0.37 per share,
based on 14.5 million weighted average diluted shares outstanding
in 2017. This includes the aforementioned charge of $2.1 million or $0.14 per share related to the enactment of the
Tax Cuts and Jobs Act in December
2017.
- Adjusted EBITDA: Adjusted EBITDA was $16.1 million for the full year of 2018, compared
to $22.2 million in 2017.
- Non-GAAP net income: Non-GAAP net income for the full
year of 2018 was $9.0 million, or
$0.43 per share, based on 21.1
million weighted average diluted shares outstanding. This compares
to a non-GAAP net income of $9.5
million, or $0.59 per share,
based on 16.1 million weighted average diluted shares outstanding
in 2017.
- Cash Flow: The Company generated $24.6 million in net cash provided by operating
activities for the full year of 2018, compared to $14.6 million during 2017. The Company generated
$10.2 million in free cash flow for
the year, compared to $6.7 million in
2017.
Additional information regarding the non-GAAP financial measures
discussed in this release, including an explanation of these
measures and how each is calculated are included below under the
heading "Non-GAAP Financial Measures." A reconciliation of GAAP to
non-GAAP financial measures has also been provided in the financial
tables included below.
Fourth Quarter 2018 Key Metrics
- The number of active CPaaS customers was 1,230 as of
December 31, 2018, an increase of 27%
from 965 as of December 31, 2017.
- The dollar-based net retention rate was 121% during the fourth
quarter of 2018, compared to 111% during the fourth quarter of
2017.
Additional information regarding our active CPaaS customers and
dollar-based net retention rate and how each are calculated are
included below.
Financial Outlook
As of February 13, 2019, Bandwidth is providing guidance
for its first quarter and full year 2019 as follows:
- First Quarter 2019 Guidance: CPaaS revenue is expected
to be in the range of $43.5 million
to $44.0 million. Total revenue is
expected to be in the range of $51.0
million to $51.5 million.
Non-GAAP loss per share is expected to be in the range of
($0.27) to ($0.30) per share, using 19.8 million weighted
average basic shares outstanding.
- Full Year 2019 Guidance: CPaaS revenue is expected to be
in the range of $201.0 million to
$203.0 million. Total revenue is
expected to be in the range of $231.5
million to $233.5 million.
Non-GAAP loss per share is expected to be in the range of
approximately of ($0.64) to
($0.74) per share, using 19.9 million
weighted average basic shares outstanding.
Bandwidth has not reconciled its first quarter and full-year
guidance related to non-GAAP net loss to GAAP net loss and non-GAAP
loss per share to GAAP loss, because stock-based compensation
cannot be reasonably calculated or predicted at this time.
Accordingly, a reconciliation is not available without unreasonable
effort.
Quarterly Conference Call
Bandwidth will host a conference call today at 5:00 p.m. Eastern Time to review the Company's
financial results for the fourth quarter ended December 31, 2018. To access this call,
dial (877) 407-0792 for the U.S. or Canada, or (201) 689-8263 for international
callers. A live webcast of the conference call will be accessible
from the Investors section of Bandwidth's website at
https://investors.bandwidth.com, and a recording will be archived
and accessible at https://investors.bandwidth.com. An audio replay
of this conference call will also be available through February 20, 2019, by dialing (844) 512-2921 for
the U.S. or Canada, or (412)
317-6671 for international callers, and entering passcode
13686329.
About Bandwidth Inc.
Bandwidth (NASDAQ: BAND) is a software company focused on
communications for the enterprise. Companies like Google,
Microsoft, and Ring Central use Bandwidth's APIs to easily embed
voice, messaging and 9-1-1 access into software and applications.
Bandwidth is the first and only CPaaS provider offering a robust
selection of communications APIs built around their own nationwide
IP voice network- one of the largest in the nation. More
information available at www.bandwidth.com.
Forward-Looking Statements
This press release includes forward-looking statements. All
statements contained in this press release other than statements of
historical facts, including, without limitation, statements
regarding our future financial and business performance for the
first quarter 2019 and full-year 2019, attractiveness of our
product offerings and platform and the value proposition of our
products, are forward-looking statements. The words "anticipate,"
"believe," "continue," "estimate," "expect," "intend," "guide,"
"may," "will" and similar expressions and their negatives are
intended to identify forward-looking statements. We have based
these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition, results
of operations, business strategy, short-term and long-term business
operations and objectives and financial needs. These
forward-looking statements are subject to a number of risks and
uncertainties, including, without limitation, risks related to our
rapid growth and ability to sustain our revenue growth rate,
competition in the markets in which we operate, market growth, our
ability to innovate and manage our growth, our ability to expand
effectively into new markets, our ability to operate in compliance
with applicable laws as well as other risks and uncertainties set
forth in the "Risk Factors" section of Form 10-Q for the period
ended September 30, 2018, filed with
the Securities and Exchange Commission and any subsequent reports
that we file with the Securities and Exchange Commission after
September 30, 2018. Moreover,
we operate in a very competitive and rapidly changing environment.
New risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. In light of these risks, uncertainties and
assumptions, we cannot guarantee future results, levels of
activity, performance, achievements or events and circumstances
reflected in the forward-looking statements will occur. We are
under no obligation to update any of these forward-looking
statements after the date of this press release to conform these
statements to actual results or revised expectations, except as
required by law. You should, therefore, not rely on these
forward-looking statements as representing our views as of any date
subsequent to the date of this press release.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with Generally Accepted
Accounting Principles in the United
States, or GAAP, we provide investors with certain non-GAAP
financial measures and other business metrics, which we believe are
helpful to our investors. We use these Non-GAAP financial measures
and other business metrics for financial and operational
decision-making purposes and as a means to evaluate
period-to-period comparisons. We believe that these Non-GAAP
financial measures and other business metrics provide useful
information about our operating results, enhance the overall
understanding of past financial performance and future prospects
and allow for greater transparency with respect to metrics used by
our management in its financial and operational
decision-making.
The presentation of Non-GAAP financial information and other
business metrics is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP. While our Non-GAAP financial
measures and other business metrics are an important tool for
financial and operational decision-making and for evaluating our
own operating results over different periods of time, we urge
investors to review the reconciliation of these financial measures
to the comparable GAAP financial measures included above, and not
to rely on any single financial measure to evaluate our
business.
We define Non-GAAP gross profit as gross profit after adding
back depreciation and amortization and stock-based
compensation. We add back depreciation and amortization and
stock-based compensation because they are non-cash items. We
eliminate the impact of these non-cash items, because we do not
consider them indicative of our core operating performance. Their
exclusion facilitates comparisons of our operating performance on a
period-to-period basis. Therefore, we believe that showing gross
margin, as adjusted to remove the impact of these non-cash
expenses, such as depreciation, amortization and stock-based
compensation, is helpful to investors in assessing our gross profit
and gross margin performance in a way that is similar to how
management assesses our performance. We calculate Non-GAAP gross
margin by dividing adjusted gross profit by revenue, expressed as a
percentage of revenue.
We define Non-GAAP net income (loss) as net income (loss)
adjusted for certain items affecting period to period
comparability. Non-GAAP net income (loss) excludes stock-based
compensation, change in fair value of shareholders' antidilutive
arrangement, amortization of acquired intangible assets related to
the Dash acquisition, impairment charges of intangibles assets,
loss (gain) on disposal of property and equipment, estimated tax
impact of above adjustments, income tax benefit resulting from
excess tax benefits associated with the exercise of stock options
and vested restricted stock, benefit resulting from the release of
the valuation allowance on our deferred tax assets ("DTA"), and
impact on remeasurement of DTA as a result of 2017 tax reform.
We define adjusted EBITDA as net income adjusted to reflect the
addition or elimination of certain income statement items
including, but not limited to: income tax expense (benefit),
interest expense, net, depreciation and amortization expense,
stock-based compensation expense, impairment of intangible assets,
and loss (gain) from disposal of property and equipment. We have
presented Adjusted EBITDA because it is a key measure used by our
management and board of directors to understand and evaluate our
core operating performance, generate future operating plans, and
make strategic decisions regarding the allocation of capital. In
particular, we believe that the exclusion of certain items in
calculating Adjusted EBITDA can produce a useful measure for
period-to-period comparisons of our business.
We define Free Cash Flow as net cash provided by or used in
operating activities less net cash used in investments of property,
plant and equipment activities and capitalized development costs
for software for internal use. We believe free cash flow is a
useful indicator of liquidity and provides information to
management and investors about the amount of cash generated from
our core operations that can be used for investing in our business.
Free cash flow has certain limitations in that it does not
represent the total increase or decrease in the cash balance for
the period, it does not take into consideration investment in
long-term securities, nor does it represent the residual cash flows
available for discretionary expenditures. Therefore, it is
important to evaluate free cash flow along with our
consolidated statements of cash flows.
We believe that these Non-GAAP financial measures provide useful
information about our operating results, enhance the overall
understanding of past financial performance and future prospects
and allow for greater transparency with respect to metrics used by
our management in its financial and operational
decision-making.
While a reconciliation of Non-GAAP guidance measures to
corresponding GAAP measures is not available on a forward-looking
basis as a result of the uncertainty regarding, and the potential
variability of, many of these costs and expenses that we may incur
in the future, we have provided a reconciliation of Non-GAAP
financial measures and other business metrics to the nearest
comparable GAAP measures in the accompanying financial statement
tables included in this press release.
We define an active CPaaS customer account at the end of any
period as an individual account, as identified by a unique account
identifier, for which we have recognized at least $100 of revenue in the last month of the period.
We believe that the use of our platform by active CPaaS customer
accounts at or above the $100 per
month threshold is a stronger indicator of potential future
engagement than trial usage of our platform at levels below
$100 per month. A single organization
may constitute multiple unique active CPaaS customer accounts if it
has multiple unique account identifiers, each of which is treated
as a separate active CPaaS customer account.
Our dollar-based net retention rate compares the CPaaS revenue
from customers in a quarter to the same quarter in the prior year.
To calculate the dollar-based net retention rate, we first identify
the cohort of customers that generate CPaaS revenue and that were
customers in the same quarter of the prior year. The dollar-based
net retention rate is obtained by dividing the CPaaS revenue
generated from that cohort in a quarter, by the CPaaS revenue
generated from that same cohort in the corresponding quarter in the
prior year. When we calculate dollar-based net retention rate for
periods longer than one quarter, we use the average of the
quarterly dollar-based net retention rates for the quarters in such
period.
Consolidated
Statements of Operations and
|
Comprehensive
(Loss) Income
|
(In Thousands,
Except Share and per Share Amounts)
|
(Unaudited)
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Revenue:
|
|
|
|
|
|
|
|
CPaaS
revenue
|
34,981
|
|
44,148
|
|
131,572
|
|
164,415
|
Other
revenue
|
7,485
|
|
8,195
|
|
31,383
|
|
39,698
|
Total
revenue
|
42,466
|
|
52,343
|
|
162,955
|
|
204,113
|
Cost of
revenue:
|
|
|
|
|
|
|
|
CPaaS cost of
revenue
|
19,465
|
|
25,258
|
|
75,859
|
|
94,296
|
Other cost of
revenue
|
3,366
|
|
3,483
|
|
13,403
|
|
13,849
|
Total cost of
revenue
|
22,831
|
|
28,741
|
|
89,262
|
|
108,145
|
|
|
|
|
|
|
|
|
Gross
profit
|
19,635
|
|
23,602
|
|
73,693
|
|
95,968
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
2,927
|
|
6,786
|
|
10,789
|
|
20,897
|
Sales and
marketing
|
3,119
|
|
6,133
|
|
11,218
|
|
20,731
|
General and
administrative
|
11,378
|
|
13,953
|
|
37,069
|
|
47,588
|
Total operating
expenses
|
17,424
|
|
26,872
|
|
59,076
|
|
89,216
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
2,211
|
|
(3,270)
|
|
14,617
|
|
6,752
|
Other income
(expense), net
|
222
|
|
59
|
|
(1,728)
|
|
301
|
Income (loss) before
taxes
|
2,433
|
|
(3,211)
|
|
12,889
|
|
7,053
|
Income tax
(provision) benefit
|
(3,032)
|
|
1,921
|
|
(6,918)
|
|
10,870
|
Net (loss)
income
|
$
|
(599)
|
|
$
|
(1,290)
|
|
$
|
5,971
|
|
$
|
17,923
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Unrealized gain (loss)
on marketable securities, net
of income taxes
|
—
|
|
2
|
|
—
|
|
(1)
|
Total comprehensive
(loss) income
|
$
|
(599)
|
|
$
|
(1,288)
|
|
$
|
5,971
|
|
$
|
17,922
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share:
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(599)
|
|
$
|
(1,290)
|
|
$
|
5,971
|
|
$
|
17,923
|
Less: net (loss)
income allocated to participating
securities
|
(21)
|
|
—
|
|
644
|
|
—
|
Net (loss) income
attributable to common stockholders
|
$
|
(578)
|
|
$
|
(1,290)
|
|
$
|
5,327
|
|
$
|
17,923
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.04)
|
|
$
|
(0.07)
|
|
$
|
0.42
|
|
$
|
0.96
|
Diluted
|
$
|
(0.04)
|
|
$
|
(0.07)
|
|
$
|
0.37
|
|
$
|
0.85
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
14,893,439
|
|
18,410,503
|
|
12,590,221
|
|
18,573,067
|
Diluted
|
14,893,439
|
|
18,410,503
|
|
14,543,170
|
|
21,140,382
|
The Company recognized total stock-based compensation expense in
continuing operations as follows:
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Cost of
revenue
|
$
|
23
|
|
$
|
34
|
|
$
|
80
|
|
$
|
114
|
Research and
development
|
54
|
|
179
|
|
155
|
|
555
|
Sales and
marketing
|
48
|
|
148
|
|
172
|
|
511
|
General and
administrative
|
576
|
|
961
|
|
1,396
|
|
2,159
|
Total
|
$
|
701
|
|
$
|
1,322
|
|
$
|
1,803
|
|
$
|
3,339
|
Consolidated
Balance Sheets
|
(In
Thousands)
|
(Unaudited)
|
|
|
As of December
31,
|
|
2017
|
|
2018
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
37,627
|
|
$
|
41,261
|
Marketable
securities
|
—
|
|
17,400
|
Accounts receivable,
net of allowance for doubtful accounts
|
21,225
|
|
24,009
|
Prepaid expenses and
other current assets
|
3,767
|
|
6,114
|
Deferred
costs
|
2,633
|
|
2,630
|
Total current
assets
|
65,252
|
|
91,414
|
Property and
equipment, net
|
14,946
|
|
25,136
|
Intangible assets,
net
|
7,643
|
|
7,089
|
Deferred costs,
non-current
|
2,068
|
|
1,828
|
Other long-term
assets
|
1,192
|
|
727
|
Goodwill
|
6,867
|
|
6,867
|
Deferred tax
asset
|
6,526
|
|
17,359
|
Total
assets
|
$
|
104,494
|
|
$
|
150,420
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
3,025
|
|
$
|
3,418
|
Accrued expenses and
other current liabilities
|
15,725
|
|
21,393
|
Current portion of
deferred revenue and advanced billings
|
5,768
|
|
7,912
|
Total current
liabilities
|
24,518
|
|
32,723
|
Deferred rent, net of
current portion
|
716
|
|
2,503
|
Deferred revenue, net
of current portion
|
2,549
|
|
6,424
|
Total
liabilities
|
27,783
|
|
41,650
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Class A and Class B
common stock
|
17
|
|
19
|
Additional paid-in
capital
|
102,465
|
|
116,600
|
Accumulated
deficit
|
(25,771)
|
|
(7,848)
|
Accumulated other
comprehensive loss
|
—
|
|
(1)
|
Total stockholders'
equity
|
76,711
|
|
108,770
|
Total liabilities and
stockholders' equity
|
$
|
104,494
|
|
$
|
150,420
|
Consolidated
Statements of Cash Flows
|
(In
Thousands)
|
(Unaudited)
|
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
Operating
activities
|
|
|
|
Net income
|
$
|
5,971
|
|
$
|
17,923
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
5,712
|
|
5,824
|
Accretion of bond
discount
|
—
|
|
(164)
|
Amortization of debt
issuance costs
|
376
|
|
64
|
Stock-based
compensation
|
1,803
|
|
3,339
|
Deferred
taxes
|
6,168
|
|
(10,833)
|
Loss on disposal of
property and equipment
|
91
|
|
191
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(4,387)
|
|
(2,784)
|
Prepaid expenses and
other assets
|
(1,622)
|
|
(1,926)
|
Deferred
costs
|
(906)
|
|
243
|
Accounts
payable
|
(2,429)
|
|
(169)
|
Accrued expenses and
other liabilities
|
1,040
|
|
4,826
|
Deferred revenue and
advanced billings
|
2,573
|
|
6,019
|
Deferred
rent
|
233
|
|
2,080
|
Net cash provided by
operating activities
|
14,623
|
|
24,633
|
Investing
activities
|
|
|
|
Purchase of property
and equipment
|
(5,021)
|
|
(12,419)
|
Capitalized software
development costs
|
(2,942)
|
|
(2,028)
|
Purchase of
marketable securities
|
—
|
|
(35,236)
|
Maturities of
marketable securities
|
—
|
|
18,000
|
Net cash used in
investing activities
|
(7,963)
|
|
(31,683)
|
Financing
activities
|
|
|
|
Borrowings on line of
credit
|
4,000
|
|
—
|
Repayments on line of
credit
|
(9,000)
|
|
—
|
Payments on capital
leases
|
(73)
|
|
(92)
|
Borrowings on term
loan
|
—
|
|
—
|
Repayments on term
loan
|
(40,000)
|
|
—
|
Payment of debt
issuance costs
|
(25)
|
|
(25)
|
Payment of costs
related to the initial public offering
|
(5,385)
|
|
(285)
|
Proceeds from the
initial public offering, net of underwriting discounts
|
74,400
|
|
—
|
Proceeds from
issuances of common stock
|
174
|
|
11,046
|
Proceeds from
exercised of warrants
|
91
|
|
37
|
Net cash provided by
financing activities
|
24,182
|
|
10,681
|
Net increase in cash,
cash equivalents, and restricted cash
|
30,842
|
|
3,631
|
Cash, cash
equivalents, and restricted cash, beginning of period
|
7,028
|
|
37,870
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
|
37,870
|
|
$
|
41,501
|
Reconciliation of
Non-GAAP Financial Measures
|
(In Thousands,
Except Share and per Share Amounts)
|
(Unaudited)
|
|
Non-GAAP Gross
Profit and Non-GAAP Gross Margin
|
|
Consolidated
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Consolidated Gross
Profit
|
$
|
19,635
|
|
$
|
23,602
|
|
$
|
73,693
|
|
$
|
95,968
|
Depreciation
|
1,071
|
|
1,275
|
|
4,315
|
|
4,490
|
Stock-based
compensation
|
23
|
|
34
|
|
80
|
|
114
|
Non-GAAP Gross
Profit
|
$
|
20,729
|
|
$
|
24,911
|
|
$
|
78,088
|
|
$
|
100,572
|
Non-GAAP Gross
Margin %
|
49%
|
|
48%
|
|
48%
|
|
49%
|
|
By
Segment
|
|
CPaaS
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
CPaaS Gross
Profit
|
$
|
15,517
|
|
$
|
18,890
|
|
$
|
55,713
|
|
$
|
70,119
|
Depreciation
|
1,071
|
|
1,275
|
|
4,315
|
|
4,490
|
Stock-based
compensation
|
23
|
|
34
|
|
80
|
|
114
|
Non-GAAP Gross
Profit
|
$
|
16,611
|
|
$
|
20,199
|
|
$
|
60,108
|
|
$
|
74,723
|
Non-GAAP CPaaS
Gross Margin %
|
47%
|
|
46%
|
|
46%
|
|
45%
|
|
Other
|
There
are no non-GAAP adjustments to gross profit for the Other
segment.
|
Adjusted
EBITDA
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Net
income
|
$
|
(599)
|
|
$
|
(1,290)
|
|
$
|
5,971
|
|
$
|
17,923
|
Income tax provision
/(benefit)(1)
|
3,032
|
|
(1,921)
|
|
6,918
|
|
(10,870)
|
Interest expense
(income), net
|
467
|
|
(59)
|
|
1,728
|
|
(301)
|
Depreciation
|
1,229
|
|
1,586
|
|
4,873
|
|
5,270
|
Amortization
|
210
|
|
130
|
|
839
|
|
554
|
Stock-based
compensation
|
701
|
|
1,322
|
|
1,803
|
|
3,339
|
Loss on disposal of
property and equipment
|
36
|
|
164
|
|
91
|
|
191
|
Change in fair value
of shareholders' anti-dilutive
arrangement (2)
|
(689)
|
|
—
|
|
—
|
|
—
|
Adjusted
EBITDA
|
$
|
4,387
|
|
$
|
(68)
|
|
$
|
22,223
|
|
$
|
16,106
|
________________________
|
(1) Includes $11,887 of
excess tax benefits associated with the exercise of stock options
and vesting of restricted stock units during the year ended
December 31, 2018.
|
(2) Relates to an
anti-dilutive agreement which allows certain principal non-founder
shareholders the ability to purchase additional common
shares.
|
Non-GAAP Net
Income (Loss)
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Net
income
|
$
|
(599)
|
|
$
|
(1,290)
|
|
$
|
5,971
|
|
$
|
17,923
|
Stock-based
compensation
|
701
|
|
1,322
|
|
1,803
|
|
3,339
|
Change in fair value
of shareholders' anti-dilutive
arrangement (1)
|
(689)
|
|
—
|
|
—
|
|
—
|
Amortization related
to acquisitions
|
130
|
|
130
|
|
520
|
|
520
|
Loss on disposal of
property and equipment
|
36
|
|
164
|
|
91
|
|
191
|
Estimated tax effects
of adjustments
|
(69)
|
|
(414)
|
|
(921)
|
|
(1,038)
|
Income tax benefit of
option exercises and vested
restricted stock
|
—
|
|
(672)
|
|
—
|
|
(11,887)
|
Remeasurement of DTA
associated with tax rate
change (2)
|
2,073
|
|
—
|
|
2,073
|
|
—
|
Non-GAAP net
income (loss)
|
$
|
1,583
|
|
$
|
(760)
|
|
$
|
9,537
|
|
$
|
9,048
|
|
|
|
|
|
|
|
|
Non-GAAP net
income (loss) per Non-GAAP share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.10
|
|
$
|
(0.04)
|
|
$
|
0.68
|
|
$
|
0.49
|
Diluted
|
$
|
0.09
|
|
$
|
(0.04)
|
|
$
|
0.59
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
Non-GAAP weighted
average number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
14,893,439
|
|
18,410,503
|
|
12,590,221
|
|
18,573,067
|
Series A redeemable
convertible preferred stock outstanding
|
771,739
|
|
—
|
|
1,522,123
|
|
—
|
Non-GAAP basic
shares
|
15,665,178
|
|
18,410,503
|
|
14,112,344
|
|
18,573,067
|
|
|
|
|
|
|
|
|
Diluted
|
17,355,722
|
|
18,410,503
|
|
14,543,170
|
|
21,140,382
|
Series A redeemable
convertible preferred stock outstanding
|
771,739
|
|
—
|
|
1,522,123
|
|
—
|
Non-GAAP diluted
shares
|
18,127,461
|
|
18,410,503
|
|
16,065,293
|
|
21,140,382
|
________________________
|
(1) Relates to an
anti-dilutive agreement which allows certain principal non-founder
shareholders the ability to purchase additional common
shares.
|
(2) On December 22,
2017, the Tax Cuts and Jobs Act was enacted into law. As a result
of this change in tax law, the Company recorded a remeasurement of
its deferred tax assets, which resulted in additional income tax
expense of $2,073.
|
Free Cash
Flow
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
Net cash provided by
operating activities
|
$
|
4,946
|
|
$
|
632
|
|
$
|
14,623
|
|
$
|
24,633
|
Net cash used in
investing in capital assets (1)
|
(3,222)
|
|
(6,015)
|
|
(7,963)
|
|
(14,447)
|
Free cash
flow
|
$
|
1,724
|
|
$
|
(5,383)
|
|
$
|
6,660
|
|
$
|
10,186
|
________________________
|
(1) Represents the
acquisition cost of property, equipment and capitalized development
costs for software for internal use.
|
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SOURCE Bandwidth Inc.