Executive Summary

Q2 2025 delivered $180.013M revenue and Non-GAAP diluted EPS of $0.38, both above consensus; revenue beat by ~$1.16M* and EPS beat by ~$0.05*, with Non-GAAP gross margin rising to 58% (+200 bps YoY) .
Guidance: Q3 2025 revenue $189–$191M (in line with consensus ~$189.9M*) and Adjusted EBITDA $19–$21M; FY 2025 revenue $745–$760M (unchanged) and EBITDA raised to $86–$91M (from $84–$91M prior) .
Demand strength and AI voice adoption across Maestro/AIBridge underpinned enterprise wins; management reiterated an AI-driven consumption multiplier (3–4x per AI call vs standard voice) as a medium-term catalyst .
Key stock narrative drivers: sustained voice growth (enterprise +29% YoY), margin expansion, and FY EBITDA raise—balanced against continued GAAP net losses and modest QoQ gross margin compression .

What Went Well and What Went Wrong

What Went Well

Exceeded expectations “on both top and bottom-lines” with $180M revenue and ~$22M Adjusted EBITDA; CEO: “Our investments in AI voice are yielding results” .
Maestro/AIBridge adoption driving wins in regulated industries (bank integrating conversational AI with anomaly detection; healthcare provider choosing Bandwidth as sole voice provider for resilience with Call Assure) .
Record first-half Non-GAAP gross margin, Adjusted EBITDA, and operating cash flows; CFO: “We’re building on a foundation of strong execution…expanding customer value through AI-powered use cases” .

What Went Wrong

GAAP net loss of $(4.931)M and diluted EPS of $(0.16); QoQ gross margin dipped to 40% (from 41% in Q1) .
Adjusted EBITDA edged down QoQ ($21.890M in Q2 vs $22.213M in Q1) despite YoY growth; indicates mix and cost dynamics while investing in AI capabilities .
Messaging growth guided to high single digits and Bandwidth is selectively avoiding lower-margin opportunities, a constraint on top-line messaging contribution vs some peers .

Financial Results

Consolidated metrics vs prior periods

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$209.969	$174.241	$180.013
GAAP Gross Margin %	36%	41%	40%
Non-GAAP Gross Margin %	58%	59%	58%
GAAP Diluted EPS ($)	$(0.06)	$(0.13)	$(0.16)
Non-GAAP Diluted EPS ($)	$0.37	$0.36	$0.38
Adjusted EBITDA ($USD Millions)	$23.423	$22.213	$21.890
Free Cash Flow ($USD Millions)	$30.345	$(13.295)	$25.631

Notes:

YoY: Revenue up ~3.7% ($180.013M vs $173.602M) and Non-GAAP GM up 200 bps (58% vs 56%) .
QoQ: Revenue +3.3%; GAAP GM -100 bps; Adjusted EBITDA -$0.323M; FCF shifted materially positive .

Actuals vs Wall Street consensus (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual
Revenue ($USD)	$178.852M*	$180.013M
Primary EPS (Non-GAAP) ($)	$0.333*	$0.38

Beat: Revenue by ~$1.16M and EPS by ~$0.05 (bold, positive surprise).
Values with asterisk retrieved from S&P Global.

Segment and mix

Segment/KPI	Q2 2024	Q2 2025	YoY
Cloud Communications Revenue ($USD Millions)	$128	$136	+6.3%
Enterprise Voice Revenue Growth	—	+29%	+29%
Global Voice Plans Growth	—	+7% (highest since 2021)	+7%
Programmable Messaging Growth (normalized)	—	+7%	+7%

KPIs

KPI	Current Period	Notes
Net Retention Rate	112% (for first quarter, as reported on Q2 call)	Management cited NRR of 112% in remarks.
Customer name retention	>99%	High logo stickiness.
Avg annual revenue per customer	$230K (or $216K ex political)	Record level per CFO.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q3 2025	—	$189–$191	New
Adjusted EBITDA ($USD Millions)	Q3 2025	—	$19–$21	New
Revenue ($USD Millions)	FY 2025	$745–$760	$745–$760	Maintained
Adjusted EBITDA ($USD Millions)	FY 2025	$84–$91	$86–$91	Raised (midpoint +$2M)

Additional context:

Q2 2025 prior guidance was $178–$180M revenue and $18–$20M EBITDA ; actuals came in at the high end/top end (beat) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI voice adoption & Maestro	Established leader; 2024 “transformative” with Voice AI; Maestro integrations highlighted	“Every new enterprise win this quarter included Maestro”; AI voice multiplier 3–4x per call	Accelerating
Enterprise voice growth	Strong enterprise traction entering 2025	Enterprise voice +29% YoY	Improving
Channel/partners & migrations	Wins with Fortune healthcare, cruise line; cloud migrations highlighted	Record number of channel deals; Cisco on-prem to cloud migrations de-risked	Improving
Pricing/margin discipline	Record non-GAAP GM; profitability focus into 2025	Price-volume improved YoY; selective on low-margin messaging deals	Positive mix
Messaging	FY24 benefited from political cycles; normalized expectations set for 2025	Normalized +7% growth; pursuing RCS/RBM, margin accretive opportunities	Stable/modest
Capital structure	Repurchased ~$27.4M 2026 converts in Feb-2025	~$247.025M converts outstanding; ~$60.136M cash at 6/30	Deleveraging trend continues
Cash generation	FY24 record FCF $58.5M	Q2 FCF $25.6M; record first-half operating cash flows	Strong

Management Commentary

CEO: “We delivered a solid second quarter, demonstrating continued momentum…Revenue of $180 million and adjusted EBITDA of $22 million exceeded expectations…Our investments in AI voice are now translating into customer adoption…Bandwith is the essential platform for the enterprise AI voice revolution.”
CFO: “Record first-half 2025 Non-GAAP gross margin, Adjusted EBITDA and operating cash flows…on track toward our strategic and financial goals.”
CPO: “We continue to see more adoption of Maestro…customers add more services and applications into their call flows”
CEO on AI multiplier: “Each AI-powered call has the potential to drive as much as three to four times the revenue of a standard voice call…this is happening today.”
Competitive/pricing: “Recent pricing moves by others…are opening up competitive opportunities…we’re seeing that in real time.”

Q&A Highlights

AI adoption and guidance cadence: Management expects second-half acceleration; normalized organic revenue growth 10% in Q3 and 13% in Q4 implied at midpoint .
Maestro integrations and AI multiplier: Adoption follows cloud migration, then layering services; AI calls enable parallel streams (transcription, sentiment, fraud), driving consumption uplift .
Messaging pricing/competition: Price-volume improved YoY; Bandwidth focusing on higher-value, margin-accretive messaging; competitor price hikes create near-term competitive openings .
Global Voice Plans growth drivers: Partner traction, UCaaS/CCaaS use cases with AI, global expansion; GVP growth 7% YoY—the highest since 2021 .
Industry consolidation (NiCE/Cognigy): Validates Maestro as orchestration layer for AI voice agents; management sees underappreciated voice AI infrastructure value .

Estimates Context

Q2 2025 results vs consensus: Revenue $180.013M vs $178.852M*; Non-GAAP EPS $0.38 vs $0.333* → bold beat on both lines .
Q3 2025 revenue guide $189–$191M vs consensus $189.915M* → in line near midpoint .
FY 2025: Management maintained revenue guide ($745–$760M) and raised EBITDA ($86–$91M vs $84–$91M prior), supporting potential upward adjustments to profitability expectations .
Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

Bandwidth posted a clean beat with rising Non-GAAP margins and robust FCF; the AI voice narrative is translating into measurable demand across enterprise and partner channels .
Guidance signals continued second-half acceleration with FY EBITDA raised; Q3 revenue outlook sits essentially at consensus—reduces near-term estimate risk .
Enterprise voice growth (+29% YoY) and GVP strength (+7% YoY) indicate broad-based platform momentum; Maestro is embedded in new wins, reinforcing software-driven differentiation and stickiness .
Messaging remains disciplined and margin-focused; expect growth to be steady rather than outsized as Bandwidth avoids low-margin volumes while investing in RCS/RBM capabilities .
Near-term trading: Bias positive on AI adoption/margin expansion; watch GAAP profitability (still negative) and QoQ gross margin fluctuations for any signal of mix/price pressure .
Medium-term thesis: AI voice multiplier (3–4x per call) and orchestration leadership via Maestro/AIBridge can expand wallet share and consumption; infrastructure role in voice AI may be an underrecognized valuation lever .
Monitor upcoming events (Voice AI Day, Reverb25) for integration/product updates that could serve as catalysts and reinforce the AI platform narrative .

Additional Q2-relevant press release context: Case study with Pennymac—50% annual telecom cost savings, faster loan processing, AI-enabled call flows and TCPA compliance automation—supports Bandwidth’s value proposition in regulated financial services .

Bandwidth Inc. (BAND)·Q2 2025 Earnings Summary