BAND - Earnings call transcript Q2 2021

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Operator

Welcome to the Bandwidth Second Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Sarah Walas, Vice President of Investor Relations for opening remarks. ahead. go Please

Sarah Walas

With afternoon, earnings Good announced to second our market Bandwidth's our afternoon call Thank David is Today, and we'll XXXX Morken, close. the after call. release results on be quarter the press this you. will CEO; issued welcome They it and me discussing and in will CFO new become and pleasure up will with also remarks is open month. prepared begin Hoffman, we for Jeff CFO; welcome call to then our later my our Q&A. Daryl who the this Raiford, the

During provided our full for and the including period future the be call, statements we that forward-looking, extent quarter fiscal year will as make well. of statements related considered guidance third business XXXX to concerning and financial our the may to

may not words only views our considered reflect these we be such These or or update should statements views as forward-looking anticipate no any often date. with statements. revise and as be upcoming. today identified We we expect, undertake subsequent obligation statements to of our as of Forward-looking

performance Forward-looking future or results that differ cause actual not are subject of promises and guarantees could the of a uncertainties our from statements expectations. materially to risks to are variety and

SEC website section of Investor and on at risks all contained the discussion other please website refer as of other SEC's in filing on that important to our which available Relations our factors filings, sec.gov. affect a at For material by the updated those our and are could actual results, of latest bandwidth.com XX-K

issued the investors.bandwidth.com. call our located non-GAAP over the our A which today, we financial measures close reconciliation to David. turn let of will GAAP With on During refer after the market release me to measures. call, in at course is press to included website that, non-GAAP of of today's is certain

David Morken

and me start Sarah. last this God of by some I let thank of quarter. this him delighted healthy the opportunity giving our successes ambition. to call everyone, our team, and afternoon. for you, joining to Please Thank you huge And am share thanking a

and Our to enormous communications for need customers we revenue, digital combination is meticulously serve is strategy demand mission team understood change transformation, services No our expanded relationships, and jurisdiction. how to that a the increase The This of our a and a what And together gratitude Bandwidth day We innovation. emerging assets deliver embedded reflect needs, culture global and deepening powerful our it. to a for with network, are around Bandmates customer develop we business software flexibility, service by spent world work jurisdiction The And mission-critical of global CPaaS global trusting execution evident unprecedented us growth to globally. acquire power long-standing moving with profound began the are unique XXXX, the year-over-year to had and exceptional and Bandwidth's meet of tour moment our communications day a whose is soon. dynamic quarter not motivated the communications the the out. technological on industry In and late all success reliability scale is building communicate, in the Voxbone platform the fueled all in and that XX% to platform long in in unprecedented. cloud. customers global undergoing and That communications world hard with years solid across We've these us communicate offers all our center is long-term continued to company customer is in needs. midst coverage, CPaaS Thank a drove to at and too to expertise, broad-based XX power integrated has success a world, days drives global for are of a deep of you relationships. the of by footprint. the offering. successful testament our your and

is, to and around enterprises are that, a win the quality, world they this understand customer We expect only if world the that continue trend and after this will found cloud. to the offer They the compete now reopens. they because long experience. need can This need But stellar in flexibility migration in our to lagged scalability many organizations, cloud of providers customers together solution vary overcome. with a challenges The patch That's and regulatory migration. cumbersome why These have next. continents the don't larger one to Bandwidth. is is across and especially from the country hard, to want their hurdles to collection technical And cultures. be

new platform our the scale. dramatically another CCaaS that the the allow combination of capabilities recently and relationship voice is our enterprise communications we customers messaging alike. CCaaS powerful the demand consolidate quarter, legacy network, This of among more seeing doing of we to new with control. solutions both We is review a time. to powerful and with them software more is provider, to And Voxbone been of dollar was like Bandwidth platform. both and a to to growth its the signing for I'd differentiator than of deal, integration. markets multiple us. provider share best behind our has bandwidth multimillion leading providers of and software long-term examples and particular services comprehensive functionality, this on-premise software-based In primary across A our traffic contract and flexibility expanding Bandwidth's relationship legacy, a solve global by domestically making reach with we're do calling software-driven within down the enables communications to favor for UCaaS center primary driven nascent and this how contact leave their complexities on it customers scalable as Voxbone for an rapidly for automation enterprises platform US. of customer for believe UC customer help it already the second world double in internationally. focus and API in with Our and more with decade and starting of provider and We're built a has renewal, This and cloud we orchestration expanded and for within some global seeing the at yet around business, a with customers. cloud UCaaS The local a UCaaS the their move was inbound adoption for customer customer the us four-year made long. customer the Under of and almost strong signed our and both served expand for their numbers Bandwidth the first global us Bandwidth opportunity relationships the on renewal. because enormous decided our After global systems, existing

suite dynamic will Bandwidth's emergency superior also their emergency and provider. the routing in services solidify APIs We our become expand deciding exclusive and partnership. differentiated further location this to leading factors to for were services customer, of According them

to see in the legacy cross-sell momentum including strong also the Bandwidth meaningful segment CCaaS Voxbone opportunities offerings. We continue and within both

than scale the of that report able Using $X customer than WebRTC, fast-growing messaging recently markets example, Voxbone Voxbone to over countries. become player full had to CCaaS domestic power a what signed new signed this APIs, chose the to and the globally. desk will happy that agreement In two-year than rapid including to their their calling, in a broad player to This XX over with has because CPaaS and XX Bandwidth billion, past rapidly their CCaaS are the the integrates far on and services many valued years. domestic to providers. outbound an For second customer was faster internationally global provider reach platform with toll-free needed flexible productivity it at expertise numbers, relied and the CCaaS And Bandwidth for solution four previously we're commitment expand platform expected. excited it we had unlock growth. just emergency scale seamlessly popular relied voice, expansive primary the and customer tools. fuel on This now international US, regulatory inbound our I'm other more more to that in quarter help calling,

turn global We globe, footprint the announced is Blue secure this global growth Last, choice solution relies decade. number question was company verification provider that authentication exciting that countries including a to their voice at around Blue using another payment new step analog rapid hundreds expansion. a relationship our and for experiences. and Starbucks, Duet onboarding, recently reach Wells software Cross, cases IP was They this this PayPal and global unparalleled reach helps companies the center with support network of digital and scale. our cloud Bandwidth servicing, been customer's like over on provide innovative of bandwidth big opportunity This the platform RingCentral we also with Bandwidth ambitions hindered the Bandwidth to Fargo, clear Their is for to of authentication logins. meet quarter identity And territories Duet growing innovator's use the demand. no of have RingCentral. in include market-leading through growing rapidly and second prior service relationship. Shield the because we won to a that and in partners formed extension There to a ability to call all technology unique

possible it and example large software-driven is a for network. to cloud RingCentral the RingCentral's move for will global make enterprises platform we run of, Duet Our MVP to on bandwidth key how

able a and platform way control to be will a for maintain global to enterprises prepare manage for better a looking communications complexity, future reduce As scale. and greater result, better UCaaS new

have prospects large to it RingCentral for an and we for customers the believe enterprise our Duet shared we Our early this communications their trend. and than mover modernize space, simpler will make in ever advantage in

IT platforms control of communications connectivity even seamless enterprises platforms large the geographies. to power communications Bandwidth's providing multiple choice As empowers, and across solution multiple more leaders platform becomes employ agnostic critical. their

integration see continue well. to on as benefits the our momentum We of

ERP Our for teams compliance and the reporting course marching technology compliance on single hard critical back-office work a for are laying more integrated global importantly, But are our product at charting teams SOX our forward systems and implementation entity. like functions IT platform. the and fully as foundation together

motivated and global that platform the will big for the to to cloud communications. customers truly our this underpin build of future are We by opportunity dream

solutions best-in-class driven for value of our deliver our team and strong commitment long-term our to our by results, are to drive strategy indicative Our customers. is success of the

that the member we vigor after of that I executive continue when Daryl I'd like defined close, introduce knew serve our Before announced newest decade we and investors a with would team Jeff the needed to Jeff's as successor and who Raiford, Hoffman tenure. aside humility team this to CFO, our he stepping was our integrity, a

expansion. joining global Raiford jumped to in Daryl We are me upon grateful it help and is over telecommunications foundation through smooth wishing working through the financial multiple to a for in across our in the Daryl Jeff's, Daryl has right partnership we're is you Jeff band success. build handing executing building welcoming next know and and closely Daryl our with growth experience team person sectors chapter strong join and Jeff to best to right of transition. in walk deep this before to in thrilled outlook. technology I very financial and and ensure a results has will software, Jeff, us and very, to and have the to

Daryl. from hear Let's

Daryl Raiford

in history about us enjoying to David. the passion my had world communication Jeff, to too a strong of in whole from the of world-class over each of finance power the the decision capable team. on at you, the person meeting serving customers because to a our be the sales in a to up. Bandwidth's walk such with forward ability I've the just Thank our board market position band. innovate three I'll the unique performance. I enthusiasm through good for thrilled has every built grown. to compelling was to I'm and the alongside it with over IT organization collaborative interns. evident work I've part I the The for our leadership, much our working were look been join entire and to turn very highly is organization that, team of financial only across serve and interaction weeks Band opportunity And culture has to of the ahead chose join. events. I'm to my industry customers all investor to opportunity around strong to execution, Jeff just shift pass to And generational upcoming you cloud. and to

Jeff Hoffman

and Thanks, Daryl afternoon good everyone.

top both another line results exceeding Our with quarter strong in the team and delivered performance expectations. bottom

year-over-year. XX% million up up than midpoint million $X and higher $XXX total $XXX was year-over-year the revenue guidance. than Within was also revenue, total million quarter of Second our more CPaaS revenue XX%

growth approximately the needs. in was contributed same surcharges contributed year revenue, as revenue the and continued of a driven broad-based revenue in to our is customers $XX approximately $XX are platform by increasingly to overperformance global million $X period Other million Voxbone of communication meet total from Our revenue up remaining $X XX% million enterprise AXP million their which to messaging using the ago quarter. quarter. other CPaaS includes the and

Voxbone stand-alone revenue Bandwidth's growth CPaaS Excluding grew and revenue Bandwidth's total XX% XX% year-over-year year-over-year. was stand-alone

second million. this which in that quarter Bandwidth's been XX% benefited work growth remote standalone by have XX% COVID-related we we range total customers in be the year, from year-over-year Bandwidth's the year-over-year. would of reminder, revenue quarter second At time in increased $X standalone last impact XXXX. Normalizing As usage and to of the quarter a requirements have estimated, existing in XXXX driven second revenue peaked of CPaaS XXXX for to revenue $X.X impact, million COVID would of been the April

retention for our the have was retention COVID the by challenging in the would comparison COVID If dollar-based impact year, dollar-based also normalize this metric rate year XXX%. was net a one-time Our period ago. from confronted we rate XXX% been and from last second quarter net

with won't of the the ended net acquisition net accounts second CPaaS addition anniversary represents until in of XX quarter. We the a impact we quarter XXXX. customer active the of customers, fourth reminder, lap the Voxbone retention in which As the rate dollar-based the X,XXX quarter

Moving for pass-through non-GAAP a gross amount XX% quarter at profitability, in on the of came higher to surcharges. margins despite messaging

the higher-margin Voxbone to of Our by strong gross inclusion non-GAAP CPaaS margins be continue XX% at business. the enhanced and

net profit anticipated income gross million, than due non-GAAP and Our was to favorable second as the $X well operating higher in revenue stronger quarter as approximately expenses.

$XXX expect total for revenue to XX% quarter million. guidance the up million midpoint of of the at range. year-over-year Turning XXXX, contributes third million revenue range our our This $XXX be to $XXX to of the we to to CPaaS million guidance in the $XXX of or

average $X.XX is Third to quarter XX.X share non-GAAP in per range outstanding. the million diluted $X.XX share using be to per expected earnings shares of

midpoint for up Moving on $XXX XXXX, of the range range. XX% CPaaS at to year outlook remainder anticipate the in of revenue the $XXX financial the million, we to of full million the

of to range total $XXX the We XX% at revenue range. expect in XXXX to the be million, up of $XXX midpoint the million

raised includes revenue surcharges Our for by outlook scheduled toll-free driven on quarter. third is the total messaging begin messaging higher and the latest in surcharges to

per we Given full to per We're assuming our million raising to performance also our range $X.XX average in profitability of year-to-date, share weighted the XX shares outlook. year diluted non-GAAP are be share outstanding. approximately $X.XX earnings estimating our

our most last also investors the customers equity my who once to an during again David of other support this very all accomplished is and from it cheer to we that, very operator your will for future I'm I continued for the the turn I With back success together have proud analysts thank some Finally, for and I'd across for us covered fellow all to questions. all I a team my the experience like trust. amazing you sidelines. these thank I in Bandmates Bandwidth would company. have like as transformative years of XX company. wish tenure the the on milestones special and and

Operator

[Operator Thank Instructions] you.

Sarah Walas

Bhavan?

Bhavan Suri

hear. Sorry, me you I didn't okay? Can hear

David Morken

Bhavan, David you've got We sure can. Hey Jeff. and

Bhavan Suri

balanced that into numbers normalized Where I'll we'll out Daryl sort you would you job you're as QX netting see in in from relative understand That's other And sort normalized good of then going COVID with right friend usage the a my to those been the environment levels? you're as And like sure what And to a there. last pre-COVID maybe look like Obviously, a I'd of guys. again. Nice more out usual. Daryl. we'll I usage But out dive pleasure. customer, the delta welcome. Congrats usage? seeing Hi through what on start love from in. moderated. do to I'm what steady-state things, Jeff have think the environment of think played run of really saw but some seeing It which what looks the do year. we result forward? tailwinds lay was each

David Morken

Jeff start add this then Bhavan, and is on. invite David. the to I'll not sure is We're answer. short

time you I in customers uncertain think of that and the excited it cautious how our all know, into that to to in about broad-based an products economy mindset. are about we and approach we across be weren't segments. But are growth as the forward hoping we And general would continues the across future across our us accelerate, and are looking that's if and we imprudent but the future. think

Jeff Hoffman

add of don't like much Bhavan, to I monitoring just think the it but we're right. that's I have think I rest there the world.

Bhavan Suri

to not bit it is Yeah. And enough, with little really here. a I Fair then touch little bit Duet easy. RingCentral on a wanted

of way of of to the see with to? like you this bringing concept five partnership out. on applications bring to provider out get still piece. maybe and you Do think think how You've bring much drive I'm more this you do got do to of you big and Is that's business sort specific customer, that sort own some tied that's playing provider what your of that partnerships this? out on to that, and sort trying what the the plays think more of you're efficient years or if concept David, to of back think looks I'd sort like to And this have

David Morken

approach. are enterprises It's lagging XX% question, Bhavan. remain and adopting a largest in on-prem seats cloud a the good UCaaS of

with ideal $XX month from down So who of video messaging, suite $XX a market. a a and like terrific are have phone solutions RingCentral bundled partner to

more becomes myriad enterprise, from centers need call into unbundling a enterprise UCaaS As solutions, at to large because you of vital for different get the there's the level complexities flexibility.

the interface UCaaS, and we do and user user experience go-to-market this so globally. brings And brings what best-of-breed, it

And more very to so lots that combination the time adoption over think among your question I yield largest enterprises. will

about partnership And with so our Duet delighted we're RingCentral.

Bhavan Suri

Great. Helpful. taking Thank my guys. job. you Thanks Nice for question.

David Morken

Thanks, Bhavan.

Jeff Hoffman

Thanks.

Operator

from question Please the Will Power And with proceed your line next question. comes with of the Baird.

Charlie Erlikh

correctly may CPaaS Erlikh guide. Thanks with to revenue CPaaS that question. taking for imply on be the the numbers just growth doing This QX is is over bit I'm bit call a than start sequential Charlie or out wanted that for of the year in the full to the just implied to if normal. little conservatism, to a lower be terms I growth QX, the little seasonally there Seems Is revenues there? Will. something

Jeff Hoffman

Hey, Jeff. this Charlie, is Yeah.

messaging a messaging amount million for in was had terms as in right. driving a effective That fourth there's in quarter in the revenue was number seasonality volume business you're QX the is, out helps political of the that quarter looking US of that in do think $X tremendous there what that days. So quarter presidential of last very remember in fourth compare. that called we we That political we and last quarter it tough traffic year year I normalize. is at is year-over-year But some if election you're making what you the have less

Charlie Erlikh

you're normal, asking are just going how those to cycles hearing going interested and to like up? Yeah, renewals their what maybe more that's deal it from on helpful. flip are sounds I'd love And conversations they detail sometimes renewal the a momentum. them And also more on and customers than as still I lot get you're ask pricing are talking through -- Are concessions. coming just as lengthening or of about to wanted Thanks, side cycles. customers Jeff. then for contract in

David Morken

Voxbone's with five customers the past announced States. indeed their United the of that us the new out countries existing the cases where cross-selling partners other Two or that quarter we in base are into into expanding either cross-selling many had in with they from relationship individual legacy were globally

customer to partners already indeed we that. those are able the And excited And so over case globally. are Bandwidth the all existing that like large they decade relationship about two RingCentral in global Even with old offered in going one announced. footprint add to we're through a

of headwinds When of of your footprint the excited say and I So that doing yields customers global on best. about our the there question, a on, do second on addressable we short they to answer footprint, function partnership result of pricing. the we're is results dialogue because not one in that for partnership pricing and are which what And conversation both. And you're markets in contraction while during are a these what collaborating focused yields as focus was part conversations? well, creative do able and that it's it's no. And expansion new

Charlie Erlikh

on great. the right. guys. Congrats Thanks All Sounds result.

David Morken

Sure.

Operator

And proceed Mark comes your with of the the next Please question. with from question line Murphy JPMorgan.

Pinjalim Bora

Hey Daryl. I like well. Great. But about behalf on David from if you David, wanted my is not everybody welcome of understood pretty imagine it I guess. have working would This you Mark Pinjalim in extent Jeff, general that and I Voxbone is seems to ask

the new have because hesitant the global fair So which it and be is say as might big you coming to to a hesitant now footprint acting been enterprises, differentiation in large your are companies, market? which you before for that is of might

David Morken

accurate highly be Pinjalim. would That

Pinjalim Bora

Okay.

a acquisition some pieces part around you of of course, know moving had acquisitions. The -- of not the business, of I has are to acquisition some leaves of been with David should say. Twilio I Zipwhip's messaging respect there toll-free industry, but other is in -- was question kind reading how Twilio's your Zipwhip I and tea big messaging

David Morken

the last for needed the clear the of done We picture entire providing that enterprise it to cloud are vital internationally, are it an messaging also but focused puzzle enterprise. of become who customers We've for really for focus enterprise pieces to on messaging some asking domestically. is for for providing

advantageous and do that component we'll vital a as bilateral voice long-standing and to durable platform asked essential way our with a is market. and messaging robust addition Zipwhip competitive our we global a with both you to So believe in And very includes to in robust in and the we healthy that what relationship messaging. we continue to it's position toll-free have well serve

that think I enough steeped it's so bandwidth. long good for say a cup And the to tea have leaves

Pinjalim Bora

Okay, do lastly update for meaningful Any you that the Communication you traction? guess understood. see so over Azure you on far? the channel have pretty time? Services, seen And I what And becoming

David Morken

the We and believe enjoy we and with to services Their in teams lead. they've are will that about both scale Communication and how we remain enterprise with Microsoft. partnership thrilled is approach to creative and unique market Azure the excited massive taken follow that great

Pinjalim Bora

Thank Understood. you.

Operator

from Walkley And question Canaccord the next with proceed comes the with question. Please of Genuity. line Mike your

Mike Walkley

for taking Great. I question. is Jeff with traction of some great question to first Thanks guess, my Voxbone. for you the see

more maybe highlighted new that customers existing going that onboard with some for with just platform your global. update now now could you're of this the You on Any opportunity? global the customers -- pipeline you

Jeff Hoffman

number Hey from these I can Mike, Obviously differentiator initiated globe. that had and We no a think fluctuate the that Jeff. sales XX there's is global we're But and thrilled really companies doubt our has new Yeah, footprint this lot across we net really quarter-to-quarter. serve of to pleased the desk were on logos. a it's the quarter. in just multinational been conversations

Mike Walkley

what remember half puts on bit benefit? a for wishes in with year your walk political given along one best QX Could last help Jeff little But you've QX through that implied takes your And the of just the now benefit you. next full the was QX more Thanks. COVID guidance of and on and you us second Maybe steps. year. Great. maybe just question and us

Jeff Hoffman

Sure. Glad to.

then So let with me back full year about we'll talk half. and start the

we some So that year. results that our the what here, last we're talking tailwinds about amplified of Mike had

$XX for million the half $X.X weighted. the about of then million back was that back COVID was of So messaging, that year And more was the revenue, of which in of worth year. political

on million So third quarter. quarter, it the I in in earlier which -- call, balance that of fourth the $XX benefit that $X this and million of and was of said was

business our guidance. next our deep coming customers' period our in into what's incorporate and do the a and customers we Every of all guidance to hard. scrub key puts understanding that rooted takes, with our know up quarterly is of terms In we We that growth. reviews

things those move the So are sort for it that really us. of

I bit up, it's but it's how a Sometimes sometimes describe back, it. little that's

Mike Walkley

question Thanks. for me, last David. Great. And

-- Just thanks on and ones the some opportunity. color CCaaS for of the

any industry? pending Just wondering the the what to the competitive changes your FiveX, acquisition of of in Zoom thoughts dynamics that on if

David Morken

doesn't. seeing us, We global our that of combination love some For believe well. They're and many both that work cases forces. really serve terrific well end We customers it together Bandwidth. users customers join will in

to And support. we're in them. so we together best to that innovative teams just do the for world they view great -- we that's celebrate case we us, a and And of have serve and this up our got keep and going exciting with

Mike Walkley

Great. Thank you.

Operator

Please proceed And line the next question Stanley. with your Morgan question. comes from the of Meta with Marshall

Dave Nwokonko

do and at Morgan been integration. Voxbone also, on How in expectations? person? the have you to Dave you remotely going I Meta it Stanley. is Congrats This the quarter wondering do what Marshall versus thank on question. for Nwokonko waiting Hi. was to versus And then for is able

David Morken

your All and but been And well we all five a question. doing up. that. great The to make a examples intrepid and SOX of proud is Voxbone and footprint of the for making IT Thanks area in to our and are the grounded haven't But integrated, did are are ERP been But to. progress need that and teams integration who to integrated. were upon foundation beginning fundamental of able travel well. we're global on have reach. is already the the we been the Belgium going essential one sides that and All That working the ways teams results the operating huge we We're with Company quarter the included for thesis pond, Counsel, for was it's Voxbone. leadership David the General Dave, foray Hey, testament are show the Morken. hammering of to global it's for him because the this together teams the exception extraordinary. recently of on acquiring in both

Dave Nwokonko

one voice? you. And maybe expect you me. more multi-country would able meet for just be Thank customer When for to Great. to demands then,

David Morken

We have clear, provide region, have been we misunderstanding gave including already of -- in enterprise, five for serving points all than be and post XX acquisition. question, we presence over your countries maybe the I'm two to already And the each interconnectivity large examples PST of quarter. with more direct

misunderstanding I'm your So maybe question.

Dave Nwokonko

That’s you. fine. Thank

Operator

the the question Andrew And line King with with Please proceed comes next Colliers your... from of Securities.

Andrew King

to guys. Welcome Hey, my Thanks question. the Daryl. team taking for

a clear that tap bit you into RingCentral's double more customers? solution do opportunity targeted have? the is new see BYOC base, or Just And the wanted customer will to selling detail further, little this RingCentral any at within Really process solution. current can you that

David Morken

already is sales are sharing Bandwidth. contract solution complex separate is a RingCentral's the product Duet our need and with prospect the Bandwidth deeply a and with large that motion, in the We very customer with But proposed teams side-by-side an will sign enterprise arm-in-arm the through a decision-maker integrated work prospects with RingCentral. a contract has go-to-market enterprise activity activity we the where between

that may RFP into so, the you market complex barriers together breaking large are Bandwidth product in with offerings. really And the exist and of flexibility barriers a selling environment bundled smaller through enterprise platform

about already got we've begun going We've between RingCentral. together. a So, opportunities two with excited great market are companies the and sharing to partnership

Andrew King

detail DBNE COVID you you're impact to Could Great. still about the basis little DBNE down return? the as how And you XXX you the throughout a year points trending thinking that DBNE it's without that saw then just start about the bit in just at of people quarter-over-quarter. looking mentioned

Jeff Hoffman

Andrew Yes. is this Jeff.

said you So retention. XXX%. like the get our we when specifically remarks We guide net I to you results of normalize we -- prepared XXX quarterly don't dollar-based in as think

So ago and number the off in XXX% not year COVID normalized too quarter last from and 'XX. from line far quarter the a with second of

a that COVID are peak We again last quarter the -- reminder past this was of the year. benefit

the the So although we half there that comp, outlined of benefits were was as our toughest year. COVID last in

outlined customers. strong that demand their challenge of emphasize want So, be we use it that retention broad-based dollar-based dollar-based and as existing David continue the will but see net that retention to net cases number accretive to will a to

Andrew King

congrats the on and quarter. question Great. Thanks for taking my

Jeff Hoffman

Thank Andrew. you,

Operator

next Piper Please from Jim And question. proceed with Instructions] line Fish is with Sandler. [Operator the question your of the

Quinton Gabrielli

landscape. are competitor is for is This touch up exciting. net on big the CPaaS to Maybe regularly? more of or the for of coming still But the these competitive against from first Jim. our customers all majority questions. guys. new replacements coming want Quinton Hey US Thanks replacements, on the really win base taking Obviously, CPaaS I legacy are

David Morken

incumbents from aways win to as premise quite come did our Jim and great majority will The CPaaS remain that companies. footprint from and we additions examples to that from global question. talk with great are preponderance the new question conquest AT&T your other Verizon. of for incumbents. the you The our time grounded But the of did remain on provide Lumen wins customer some

Quinton Gabrielli

is Yes in multiple accounts the internalizing to the efforts too And in then that makes that major thinking And or voice customers those accounts? for maybe them now? solutions. take that kind amount there or those a of that been that changes too lot the And do just costly about you're you're of has are is share technical sustainable to sense. any messaging share? you think right using or then how How maintaining wallet services, within of

David Morken

only. were comparisons the Multi-sourcing platform, combination that the were focus certain Jim. asset now service degree. has are gone. you, is there global were that innovative Those culture the possible globally. on domestic one to And dynamic faced we the because and the is days No flexible reason we reach when Thank a apples-to-apples a

five rich by suite. having illustrated and that years giant years historical had senior blossom for of really this that in customers seeing As a quarter executive product footprint and certain dynamic We've they're expansive of with we're same enterprise or relationship examples large partner now and an a and that's the partnerships the areas outside are we're the of result, us. for And platform. conversations the customer of are procurement exciting dialogues the because global

Quinton Gabrielli

Great. Thanks for the color.

David Morken

Jim. Thanks,

Operator

comes line Securities. Please And the next question with proceed the your from question. JMP Pat of with Walravens

Joe Goodwin

how kind kind customer, customers kind how pipeline And maybe you're you Thank guess, about taking so just that coming for over. that -- back Can folks? motion of Pat. for question. for guys used A were changed I on strategic seeing actually kind much Goodwin you we'll of the there of our that's about while of little what say. Joe is those has the from caliber maybe to talk This you talk Hi.

David Morken

it of our seen offer uniqueness product a And quarter in activity Thanks GM's would team having as historically. motion identifying their and or we've our By direct conversations enterprise remains of consisting robust describe same executives function last owners and an and needs it's than did as the large is C-suite sales strategic its Joe. availability. I of I the about the them as with opportunities The more globally. pipeline

proud about about conversations activity and customers Certainly level, excited outbound is a of indicative a been hope we as the that about is we're most something the how that's We the excited the more us. described in-person but looks. with in think and a that continues. face-to-face, for I that. overcoming for more at but factored the including for impediments part, are it doing be return person to But of do key how into historically we world, that normalcy enterprise So that Very and society. driver our remain pipeline would to around sales the future the that not team the

Joe Goodwin

you. Thank Great.

David Morken

Thank you, Joe.

Operator

proceed line Enders question comes from Steve your next question. Markets. And with KeyBanc Please the the Capital with of

George Kurosawa

your larger of wanted of get base. And on Hi. seems you. George Thank a question you think Wanted that customer Steve. It part to of coming of and kind for that Thanks for the together on This impacts Zoom and question. UCaaS how be all's to follow-up the taking perspective is about to on your FiveX. CCaaS. trend

David Morken

bet. You

drive and happen will And is renewed customers. in watching partnership you're I vigor CCaaS UCaaS that think the spaces. I on among focus what think and those bundling

on they're they bundled trying a vital that that So future. in focus competencies their core can the to offer customers

of to end is about excited So new platform becomes than us old And the chipping are more in we're who while the failed that. join our reach a at way. away these to ours as important incumbents ultimately of have and customers global serve innovate. all that their users our ever, forces uniqueness XXX-year of flexibility the reason for

analog for and the we're future going we're some from exciting come. And so that enjoying that cloud-based shift to of is to away the uninspiring past that period vanguard support those migration transformation, that now in transition to secular

George Kurosawa

And you. you. quarter? Great. on quick commentary color dollar a Any Thank or expansion. Thank churn net in the follow-up on the gross retention

Jeff Hoffman

Hey, lot hasn't that of We George, Jeff. change report implicit there this particular metric. Obviously, retention, churn net is been dollar-based is the a there. on in and don't

results. strong continue we deliver So to

George Kurosawa

Got it. much. very Thank you

Operator

further this will turn no questions I are to there now at time. host. the back presentation And the

David Morken

joining all colleague here great incredible want professional close all Thanks to be we not Jeff for friend, us. on thanking just And us a seas. Godspeed, of without whom fair today. at Bandwidth, would and winds by Jeff been I behalf who's Hoffman, of and an following

Jeff Hoffman

and call. the on you everyone Thank David thanks

Operator

And your that please you does today's disconnect and conclude ask thank conference. that for you We your line. participation

Bandwidth (BAND) 6 Aug 212021 Q2 Earnings call transcript