Bandwidth (BAND) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $209 million, up 20% year-over-year, and Adjusted EBITDA of $26 million, exceeding expectations and prompting a full-year guidance raise.

• Accelerated adoption of AI-driven platforms, with significant enterprise wins, including Salesforce selection for Agentforce Contact Center and multi-million-dollar deals in financial services.

• Strategic focus on powering mission-critical communications for AI-driven enterprises, leveraging owned network and Maestro orchestration platform.

• Strengthened balance sheet through debt reduction and share repurchase initiatives, including $100 million in convertible notes and $11 million in shares.

• Raised full-year 2026 outlook for both revenue and Adjusted EBITDA due to strong demand and operational momentum.

Financial highlights

• Q1 2026 total revenue: $209 million (+20% y/y); Cloud Communications revenue: $150 million (+13% y/y); messaging surcharges rose 44% to $59 million.

• Adjusted EBITDA: $26 million (+17% y/y); non-GAAP EPS: $0.38 (+6% y/y); net income: $4 million, up from a net loss of $4 million in Q1 2025.

• Non-GAAP gross profit: $89 million (+14% y/y); non-GAAP gross margin: 59.5% (+50 bps); GAAP gross margin: 37% (down from 41%).

• Average annual revenue per customer reached $244,000, up 16% year-over-year.

• Free cash flow margin for Q1 2026 was 12%; free cash flow was negative $582,000, an improvement from negative $10.2 million in Q1 2025.

Outlook and guidance

• Q2 2026 revenue guidance: $214–$220 million; Adjusted EBITDA: $24–$27 million; Non-GAAP EPS: $0.35–$0.37.

• Full-year 2026 revenue guidance: $880–$900 million (+18% at midpoint); Cloud Communications: $616–$624 million (+10%).

• Adjusted EBITDA outlook: $119–$125 million (+31% at midpoint); Non-GAAP EPS: $1.77–$1.83 (+26%).

• Political campaign messaging expected to contribute $15 million in H2 Cloud Communications revenue.

• Management expects continued growth driven by AI adoption, cloud migration, and enterprise demand for communications APIs.