Bandwidth (BAND) Morgan Stanley Technology, Media & Telecom Conference summary

Platform evolution and product strategy

• Expanded from a domestic, voice-centric platform to a global solution supporting 65+ countries and deep pre-integrations with major UCaaS and CCaaS providers.

• Added messaging capabilities alongside voice, with messaging expected to grow from 5% to 10% of revenue by 2026.

• Maestro platform enables seamless cloud migration, flexible integration with third-party apps, and supports advanced AI use cases for large enterprises.

• Maintains an agnostic approach, integrating with best-of-breed partners and focusing on large enterprise customers through direct and channel sales.

• Prioritizes integration with established AI and communication vendors, focusing on the largest and most strategic opportunities.

Financial performance and growth outlook

• Achieved 25% revenue growth last year, with 29% growth in enterprise business and 3% growth in global voice communications plans.

• Guides for 8%-11% normalized revenue growth in 2025, offsetting the absence of $62 million in cyclical political campaign revenue.

• Medium-term targets remain at 15%-20% revenue CAGR through 2026, with a current CAGR of 16% through 2024.

• Gross margin reached a record 57% last year, driven by direct connect aggregator status and elimination of wholesaler costs.

• EBITDA margin is expected to exceed 20% by 2026, with profit growth outpacing revenue due to operational leverage and product mix.

Go-to-market and customer expansion

• Focuses on large enterprise customers, with average customer size growing from $140,000 to $218,000 annually.

• Net revenue retention rates remain high (112%-124%), and logo retention exceeds 99% year-over-year.

• Channel sales effectiveness has increased, bringing in larger opportunities and supporting expansion within existing accounts.

• International expansion now emphasizes cross-selling and upselling in existing 65+ markets rather than entering new countries.

• Sales incentives align with maximizing impact in current markets, leveraging natural upsell and cross-sell opportunities.