Earnings call transcript Q2 2023

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Operator

Good day. And welcome to the Bandwidth Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Sarah Walas, Vice President of Investor Relations. Please go ahead.

Sarah Walas

you. Thank welcome quarter and earnings Bandwidth's to afternoon, XXXX second call. Good in discuss release the we'll our results close. Today, market announced press the issued after highlights and with the release earnings Relations can financial Investor investors.bandwidth.com. press on be at The page found an historical presentation

this call Q&A. They CEO; open CFO. is David begin up we will with prepared the the and on Morken, Raiford, for Daryl me afternoon With then call our will our remarks, and

vary considered of our outcomes plans the have including call, third results make any our forward-looking slides will to materially our analysis these this by that as made the presentation may of guidance that statements to from expressed we to forward-looking, Any implied During and today, may caution forward-looking be financial or statements related concerning no they forward-looking on not statements update involve business call quarter reflect may them. to or undue and as XXXX. we statements. obligation for on actual and future you or risks reliance the statements put the cause in full We results year and uncertainties

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

as website the are press the will non-GAAP after which close located is measures. reconciliation to A call, issued investors.bandwidth.com. During measures as market presentation, on the today earnings financial course our in of of refer our well of to non-GAAP at we in certain today's included GAAP release

let me over that, David. turn With to call the

David Morken

last our with joining I financial our Sarah, made our results. delighted during progress this everyone afternoon. you, and welcome and am quarter am with to the call we Thank pleased

let the me God successes has quarter, us. of all start he for some the please done thanking for last share I of Before by

and Our mission and motivated is to to serve develop and day communicate together in deliver customers out. power we are to the day

in of dynamic of accelerating and customers forefront. embedded with our for customer whose combination communications a our your meet communicate and and The bandwidth mates assets relationships emerging world the and drives communications profound to unique Band and No we critical longstanding service remains needs, Thank culture trusting the to innovation. cloud, hard has company a our us you all work mission powerful closely and technological change in expertise, communications deep global the around success. to is exceptional how

Just uncertain. as we behavior making environment decisions year, are start shrewdly remains from had customers We've macroeconomic and most it makes the for observed where environment sense the at the returns. greatest our investment who this of evaluating the continuing cautious and projected

are We investment operating growth scrutinizing through balancing likewise environment business and and product strategies our the profitability. by same while

played We season projected. it expected far we and has out this as thus

by year, we targets, on remain we outlook year. to have raised reflect to achieve and with Given our the profitability the quarter. remainder both of guidance. business second exceeded in our growing the XXXX our the and macroeconomic quarter so track including overperformance revenue revenue in a outperformance profitability I'm the We pleased our choppiness, full the toward and With for view our financial the execution XX%

again providing global a the long-term value named space. the on CPaaS market enduring building worldwide marketscape our with their focused in cloud we're us the the half within consecutive leadership time. validation for well our that in strategy believe IDC We third it's for from strong a and of was mind. as sustainable long-term communications medium and of as XXXX leader It fitting second business We're the our targets

enterprise-grade owned large our As APIs, well and deep we growing experience network and described and operated in markets. global consumable at regulatory us global Day February, our in position Investor

three categories: go-to-market plans, in focused delivered distinct services the programmable customer these around customer global second our enterprise. and communications quarter. solid momentum We've Each direct of to

examples each. highlight me few a from Let

plans, customer In all the our Magic are honored comprise that largest power customers, category, we our Global to as CCaaS. the UCaaS Communications both leading of count Gartner for Quadrants platforms XX and

upsell customers. footprint remain We our our global attracting new well on existing customer within leveraging focused as drive to and as base cross-sell

have business we for our the quarter, two in outside and new sustainable over and want This XX% that substantial U.S. of resiliency our customers chose this to GDP. Bandwidth global coverage reaching highlight category and country

is has customers their of was their unable answers reliability, SLAs, convince support outage resulting a Bandwidth. a range to for accounts. loss business-critical to in major concierge worldwide. several incumbent provider example a of honor of or that premium experience to move severely their resiliency give portfolio Bandwidth's After wide and that major operations first business, their services contact verticals relied across a thousands on disrupted provider center Our by industry them

are the our calling text offering, service including global international North and Pac emergency U.S. customer and messaging addition numbers toll-free Europe, America international and in and over They local America, new nearly now past telephone Asia to with along services, using XXX calling. year. South and complete customers This signed in in EXXX

to growth experience are So plans. and to our scale future key regulatory global reach, their ability

new across base to Bandwidth's but Another providers large into of in their provider contact complexity. in APIs incumbent their Europe, the was This collection expand customer home voice to XX-plus countries serve service EMEA region. customers handle geographies growing the from couldn't their Central looking chose center rapidly

the local same new customers' cost is clear. The bandwidth expertise, proposition it offers globally. streams, we Bandwidth We complexity. solve our do enabling lower create value customers to we allowing from services. allow We customers' and new their communications capabilities challenges solve our reach regulatory customized with our time, to benefit and revenue our capabilities at global and while

and rising of services the and retail messaging care, to about e-commerce baseline and which steadily banking use to ongoing category, as a issues In financial well as support continue customer activity patient day. programmable services, of leading from health powers engagement civic text commercial breaking primarily we our engagement the cases, including news platforms, benefit

our For bandwidth the engagement use existing pioneered programmable patient of a care for example, of customers automated scaling the variety services practices. on communications across of text cloud messaging One health

messages APIs a cases X-way reminders and connect patients texting care to be messaging through choice know enable journey. touch of step appointment because the their with every becoming of Bandwidth's customizable, these delivered. at for Bandwidth personalized is points customers text will use provider

standard reliability and seen scalability, is platform as a enterprise-grade Our of gold support throughput.

enterprises cloud-enabled their on-premises collaboration urgency this strong cloud and Finally, of internal because services our greater direct communications contact begin retention. a delivered dynamic to build growing seeing the from space. to engagement category and that migrating center larger also enterprise in capabilities to We're customer performance and and savings the a customer the operational greater

not to This enterprises is announced the our that having is and opportunity a becoming to our a for cloud, catalyst communications begun large IDC durable planning but migrate XX% Maestro platform in Research. March of communications to according next-generation long-term we global direct-to-enterprise yet with award-winning strategy.

through communication environments. best-in-class achieve and enterprises and and reducing machine interoperability Maestro of to complexity enables while need contact artificial intelligence the flexibility. learning the value stack technology enterprises provides of future deployment time communications a to configuration bridge platforms cloud deployment and modern ensuring create all and rapid the cloud crucial It solving centers, faster difficulties to unified

at pure example of with connectivity for in WebEx for stage one Maestro's This XX our million opportunity Cisco and announced large generally of which any calling, over Cisco to cloud. we a integration enterprise is or journey, Just provide whether capability opens hybrid June. users up migration the available newest on-premise, new bandwidth cloud

In on-premise United business fact, our its States. widely in system. in we health one customer This but first just disruptions Texas-based integration to and for the move as most was collaboration of a hospital complex large the network the with communications this new care contact won to to Cisco Maestro, prestigious provider children's eager with stages their it to needed do center legacy cloud avoid regarded

call time, another to our old on the environments new Bandwidth's continuity. how customers example to their experience on-prem able journey critical the every cloud. both business It's the routing maintain and transformation flexible management supports deep of digital way number of preserving same step and were in cloud their at API

team's how the growth one of this contracts. deployment company largest Teams exhausted was quarter, our ever direct their closed keep energy to failing needed Microsoft and communications -- example from enterprise enable we In routing a of providers past their legacy for globally. another complexity usage to solve their technology with A modern we provider Fortune XXX up badly

could provider over team global with be customer rapidly and reach customer deep ensuring maximize our direct worked up support bandwidth. their their experience a Microsoft to onboarding legacy the and multiple capability, to incredible align of because deployment tech stack, Bandwidth they accelerate their chose providers team's as telecom our our and with routing The running

through In summary, our with pleased XXXX. the I'm half progress first of

to current reach, experience, of the for continue commercial our will strong maintaining customers. the profitability we enterprise-grade navigate global forward, environment and on and Maestro execution all benefit leveraging APIs focus innovations disciplined regulatory while expanded like breakthrough our Looking our

to to I'll QX now of Daryl walk through turn it details our financial over the results.

Daryl Raiford

the bottom lines. exceeding afternoon, Thank another half top solid first expectations year and you, We good with completed and both David, quarter, of the on everyone. the

midpoint by of the Second million. quarter guidance revenue $XXX our $X exceeded million of

million the $XX exceeded midpoint of by of EBITDA guidance Adjusted $X million.

and and total higher benefited year which services, of charges surcharges. monthly compared the combined emergency up year-over-year. up revenue phone from last excluding recurring X% usage, with Messaging revenue, for XX% quarter represented numbers quarter Second in . messaging XX% were higher

cases, civic commercial surcharges the engagement. growth was messaging were fintech Our across e-commerce, with demand care, The variety health quarter. solid by in driven million $XX and of retail use pass-through second and a associated messaging including

line terms to large essentially surcharges, services revenue XX% and customer expectations, macroeconomic with softness grew component as year-over-year. performance, this and our continued conditions. XX%, voice to global was in market Programmable direct plans our results, see In excluding our respectively, communications from unchanged year-over-year categories current enterprise of

in in strong and with to just future cloud pipeline, confidence services we the enterprise Direct contributor customer continued a demand additions. a messaging. to benefited profitable from David to have evident customer migration XXXX is be strengthen new Global key aforementioned wins enterprise from enterprise market broad-based this communications driving The Programmable the will highlighted growth. coupled that

Non-GAAP gross our margin up out results. two year's the percentage XX%, prior second from Rounding and was points quarter. quarter

coverage leverage global of products of scale, continue increased EBITDA medium-term favorable and and of operating We continue to gross towards we to operating from as of combination than million. margin benefit march XX%. mix greater adjusted targets improvements of richer non-GAAP produced a A higher-margin our economies $XX

retention terms operating of was rate net dollar XXX%. metrics, first In quarter our

per percentage annual benefits the demonstrating direct the revenue $XXX,XXX of again annual Customer than larger well retention Average opportunities. customers opportunities. in which two second to For larger increased greater and revenue, with retention the logo remained on has in dollar past and six securing total steadily focusing than success the our was our reached customers clearly metric net customer higher quarters, points XX%. above over customer $XXX,XXX quarter, XXX%, enterprise customer large demonstrating

We needs and more business ended amount balance with securities of quarter sustain flexibility. a of a cash and than financial to $XXX sufficient million, deal our a meet the great

$X cyber XX. incident experienced Following of carrier quarter we July, reimbursement in our related in received lost in from September insurance as the million profits end proceeds to

working And facility $XX facility out America This maintained to recently, revolving SVB. we previously new we of with undrawn an Fargo the replaces established credit as capital Wells co-lead our and Bank million agents facility with undrawn round profile.

unilaterally facility terminated the we in SVB recall You'll March.

to Turning year full our outlook.

our to approximately first messaging guidance our million $XXX We reflect half revenue revenue higher-than-expected surcharges. overachievement to are and increasing

outlook our full from million, strengthen flexibility year. XX% will representing approximately projected year adjusted our EBITDA $XX by last of of for growth maintaining We operating a

adjusted third EBITDA quarter, and million. $XX we of approximately of revenue expect For $XXX the approximately million

we're choppy summary, with XXXX and operating of especially commercial pleased performance, environment that light same first In the our over financial half in period.

on into second and our our serving our margin, what continue move we'll cost the control, can being we and growing every customers half, disciplined profitability. with increasing day, delighting focus our to As we

Now I'll turn the for call back operator questions. over to the

Operator

go Ryan ahead. question Please [Operator from comes Instructions] with MacWilliams Barclays. first Our

Ryan MacWilliams

or outlook do you customers to of revenue Pleased as Like since? said see the David, macro today, at I signs quarter impacting second did the the see half? reacceleration the Dan's how in of the results in end the improving growth quarter. you see second from

David Morken

Ryan. Thanks,

things half continue are are I some businesses. year about the but deal both it I thought reflected customers remains we've There are shrewd think cycle making year. all in about these forecasting optimizing environment half. concerns, the and in we're the results that the we've and decisions how of and rest will are the and second intelligent macro their the the across half first in thought as the think There first throughout year

Ryan MacWilliams

Appreciate color. CPaaS market. from the questions impact the And how last Excellent. could on then investors Geneva

hear, seat, how opportunities. And for least do fit it's So could I'd bandwidth -- you your some Generative but together early, together from right? at AI think I love with know to new David,

David Morken

Thanks for asking.

All the large of customers have AI. are Certainly, within enterprise data real the resolve messaging looking that flows, -- multiplier voice customers, to accordingly. force the contact center contact and a a call sets attributes value opportunity our center router to to put customers, the you add where call a generative question is we're in to of for call

There many, are many opportunities.

to now this we've One two product that year and this in involves announced our available orchestration got be so that AI. value customers our And month. in to earlier approaches adding generally right we'll we Maestro

select approach to particular to bear that instead it locking AI of avoid elegant do And ideal flow is user experience. AI in bringing or way a a that garden that on call product a for their customer allows a on messaging and walled Maestro within customers experiences into in the tools to our their and vendor they're just open it very

specialized successful available both the contact will our I AI And The an very integrations just that that other and regard. is UCaaS. that and in being embrace for with in ecosystem providers all messaging And API center means best-of-breed We've emerging open. are has voice think the generally experiences. platform historically really tools that being in that been

several fact years customers excited change has that embrace means AI. . So to architected is that for we're and generative been the what now for about platform it our the our

Operator

Morgan Next Stanley. with question Marshall from comes Meta

Meta Marshall

do Maestro? point? center AI make what insertion Is that just Maybe following or would up contact they're or just what you and something kind that. project evaluating event customers solutions trigger it mean the will as of on trigger think I their you do like that see evaluate solutions trigger be

budget question, get kind as opportunities. And you I limiting of conscious. is it then new sales want Or there maybe that cycles a evaluating just more about just interaction their of kind on of to talked lengthening sense are second is some customers being a activity? of

David Morken

thanks, -- think Meta. I

both in lot Mastro's voice customers in the for teams, operating has both that customer I do externally is complexity with the think inflection are internally and many center enterprise emerging and that point environment. to bases. and to the contact experiences, so a There environment messaging

high-fidelity the layer so rests favorable And so that what's needed is operated provide now and an network orchestration we attributes all and global many upon that has a owned in different countries.

enterprises that But messages, capacity and has maker of seen. ever fundamental on top carrying the of voice calls most engaging in that decision are environment complex a text that

taking to developments center, your developments latest but manageable. in in contact of an user enterprise advantage assign latest experience, interface best layer prevention, and experiences AI to breed, what select or for you provides elegant fraud authentication the be the do it pay or user so activate, able in an your of And across to is allowing that's or configure, provision, in elegant orchestration

in a for seen we've log-in elsewhere. which seen seen in kind enterprise grappling inflection without decision today. a point has what we've with it analogue that makers the layer, And Maestro. we've complexity software, within natural the are management really And elsewhere and this with with it everything password do we're to think We -- these it's doing of

half. by affected we're the macro rest of forward first cautious the continue as economy. in have aspects environment to year the and decision-making look of been choppiness regarding towards generally, see this we and just And we different We the as

Operator

Power Will ahead. Our go next question from Baird. with Please comes

Will Power

couple kind guess color within the Maybe seeing business could of wonder provide now. know results I kind that the of down a surprise. the Great. drivers upside quarter. of quarter. areas just And on nice in messaging, questions. that if break I there I right of strong. to messaging revenue remains further was kind you're looked the if of in it but Yes, any you of any Okay. sources that a contributor, help key you guess like I a

David Morken

I results is monthly driven, at Daryl. in phone numbers messaging with in exceeding part from see This and in guidance. part recurring was as did We our XXX. good charges revenue said, That by quarter the by

messaging saw So all up We was messaging. essentially that half and broadly XX%. commercial half. across

overall enterprise nicely . do Those we some was as and recall, gross year. is very contribute performance grew that subscription-based over the to year last which the political recurring rich in company of and fourth or the last within year, experienced compare, messaging third products last our You'll grew margin nicely of in emergency well. phone time quarter Also profiles indeed. services monthly those numbers commercial are as this charges,

Will Power

That's Okay. perhaps front? unchanged. conservatism? full year that EBITDA that was financial further other to appreciate in that question. of a . it. the function of maybe just plans one Nice upside, to some color helpful. upside reinvest And I just guidance quarter, Is Any on

Daryl Raiford

You're right. we in in noted. to the of year terms with our We we overperformance terms did guide going collapse raise midpoint, pleased of the million of profitability for range. guide, $XX quarter. in as holding did see the revenue, the million we full were $XX We're forward we've the the at the

and into we to it's end account think We've derisk important But up to and range. to cautious the in the whole, that environment. lower the revenue to that brought of the on be derisk taking overperformance. the prudent year continue

midpoint million. guidance so we're $XX . holding And the of with

Operator

Our next comes Jim from Piper question Fish Sandler. with

Unidentified Analyst

growth. for other volumes, the concerns to authentication, X-factor Maybe Jim space post but guys has evaluating on traffic due first, with messaging Fish. [ph] you enterprises continue in talked for player pretty Quinton mainly options up is another This strong messaging to

that authentication passwords. dynamics SMS secondly, they're if any moving X-factor you are seeing changing within maybe solution us two from your benefit onetime your space? away or And factor then authentication remind voice where you could can First, to exposure

David Morken

Quinton, from don't any have all exposure that don't revenue have customers X-factor generate to We meaningful we at authentication. it. any

concern all. at ours not that's a So of

I to don't have really utilize any so And driving to folks insight other alternatives. what's as

Unidentified Analyst

Got you. it. then financial Makes a for of more sense. question maybe And

a to declining I these strategy continue is We a turning of get end which lower see of customers, total payers. the part number of

adds an the And we Or about we improvement maybe the that going is to what continued then this as up early kind stickiness kind we're or any on and too of was move impact As margins customer where are think next? see to see number? to of the we improvement throughout continue churn in gross starting enterprise? year here, still

Daryl Raiford

leading a this see We count May, Quinton, in consistent the in past particularly customer our is of -- and we we've again that customer enterprise indicator our the then is in not did as to we've average a Daryl. minds longer modest been -- customer count as decline in and category total grow. business grow in said February, any larger to our indeed, revenue into relevant continues continue has

It's this like grown something year. at time $XXX,XXX to XXX,XXX over last

growth. add new We customers. So we customers we per during really that consider quarter. XX we With in we're XX pleased did -- of growth. customer customer are did -- high-quality did with revenue that our said, to contributing These the logos average -- terms

worth we you the in median ARR XX churn then XX we or customers XX quarter. of And removed customers, the those was It's do math, customers -- if that $X,XXX. the mentioning the

longer that customers more acquire. So profitability as count of the focused customer potential the on any on we again, focused the not really .

Operator

with question Citizens. comes Austin Ko [ph] from next Our

Unidentified Analyst

just cash. balance flow long-term there looks out is pretty guys thinking updated this are good question that? million my mentioned any regards cash the in the turned kind on on quarter. sheet, -- of generation you and debt It flow guys like there cash then with with is the about thinking you to on And Congrats how $XXX

David Morken

remarks, our We flow that's marketable securities. that, Yes. with was finished $XXX said The line basically we business. the cash sufficient with of prepared in as the I for quarter think million expectations. -- our and cash in

I in we terminated we did replace we new had our of -- with facility. structure, capital undrawn did revolving our facility a said, In SBB March as credit terms that

contribute building that all part capital to the blocks structure. our of just It's

that like we'll is XXXX, forward. remains before, wise we terms of our on In a of repurchases monitor convertible the any convertible maturity ways to market debt be first away and forward, still continue and going quite in going lot to we've we have said time we that's feel do opportunistic to a think if so. evaluate

Unidentified Analyst

quick I Awesome. a throw And if just in could follow-up.

of last side. Just Is on about updated and you kind conversation then? since just usage-based more know guys are the AI the there space. with quarter, in seed overarching kind CCS since the reduction of I thinking any

what So that? any takeaways of larger kind players are of doing there the some any just with is

David Morken

lots good Nothing that enhance -- center new shared the reasons. we focused our add period. we to about and platform AI centers to product. our to they're recent utility or when for most perspective Maestro the to see think is going customers We of the user the And on contact that experience ultimately us flexibility experience in talking AI the contact we that see of of our for

technology so like innovation. terms of will in the when game moment it's or in but I this don't think I elsewhere, that or a it understand UCaaS And comes anxiety zero-sum the CCaaS anything certainly . ultimately, out. catalyst And be a

Operator

from [ph]. The comes next question Ryan Cole

Unidentified Analyst

drivers general see with there. your market. you do CCaaS, then you of your perceived which I Teams your remaining big big about obviously sounds routing Do ask And exposure space, the Connect take-up see the kind you vehicle? out and for you how of How do view phone, exposure still wanted in growth operator And exposure? your which to as the the the to . direct phones the cloud driver UCaaS your primary team progress. view is you you're CCaaS view the pleased how When penetration or like similarly,

David Morken

in I'll reverse order. those take

they we've our just team's enterprise Direct wins in of were each good most we so that bring your market those. path and us. own for our phone still and the quarter a to product this now, very carrier good partner very that growth contribute recent cited to in continue the traction continuing material examples and with got to Microsoft routing is So awesome

Connect Operator for been has particular. international growth, fantastic in

in So that's capturing with of our been in from share our to we've progress to vital center penetration, exposure contact in and center can still the contact Microsoft market of path terms got lots in a usage-based make improvement a -- and we perspective.

in a most internationally center, to relationships long go Verizon got incumbents. Lumen but We've like the way and of to the leaders with other contact displacing AT&T, incumbents great then and

And have for a which we to new wonderful customers. -- a it's to where so there's do long go us way like is of CCaaS space a that a can problem lot we've still for got lots

Unidentified Analyst

great days, of any can give couple of wins right hear, are That's dozen range? you of penetration it's moving of do the you're XXX now? kind yet? to early a major you Fortune up David. above that kind think like in Obviously, And us you idea Are you of but guys does in pretty where .

David Morken

but win shared Fortune not or grow a this between within going our in we now Fortune see proud XXX many the expect we as revenue, did total of although X% up We've XXX you're XXX, revenue, Fortune period, announce a and to XX% logos. many, XXX our to that which Fortune enterprise the total of, Yes. particular more of of number XXXX from we're

XXXX different we've really so we in more Global got just countries. think focus a And many of footprint because

share in believe wins of think they'll to on categories grow. I us and we just those continue you'll And to so XXXX, but not the the think Fortune continue . Global is focused will that XXX, best,

Operator

William from Blair. with question Matt comes Stotler next Our

Matt Stotler

relationship but one thoughts product Maestro here? thinking with that about your would to how kind more Mike on up then of get the Cisco you. start. just still Maybe of to Obviously, kind the early, on for And how you're from go-to-market monetization of love opens

David Morken

the talk of Matt, administrative in an about. from and a had the so And cloud to excited we very begin about Cisco cloud innovation that the with with view. in journey allows and way a premise-based Maestro we're engage somebody point to historically that to their elegant solution to that Maestro we do did announced has it

So about of forgot the In we're just Mister second with excited particular, that. your I question. part

Matt Stotler

forward. So monetization muster going the of .

David Morken

Yes.

the the it, software charges There And think So about for SaaS-based an -- revenue application. a when fee be offer associated in used be billing. will it orchestration will platform to software. product usage revenue-enhancing you cloud-based what that but a cloud-based to we you're to that is software be be planning Maestro we tool, model with understand and are with should element you is that as

Matt Stotler

very it. just get then on the a number let's prioritizing there on your with on your announcements expanded and Ribbon. -- partner what one Cisco, broader investments, right? It's Got Miratec, at partner maybe helpful. And you're question point. obviously, just quarter, -- this more relationship broader of update the a ecosystem, investments this

David Morken

we and executive brands mentioned, folks strategy that of more market whether we you go of the have folks it's known we're with reach whether it's partners, that to names from team market ones great and go lots out you've do that well whether folks just with, channel innings new related whether So senior the also, with. us you integrate to continued, historically. through more some like Cisco, with ecosystem it's buy engaging to to who early and We've distribution I think, the and the to of our leadership

we don't have changes to a the technology others collaboration being of help whether global And are AI. any particular complexity I providers, landscape in whether lots but like by on of application other to approached regulatory market, names ecosystem navigate announce of with this go them it's to call, it's

with in to time a UCaaS about other Everybody it's talking our and is they CCaaS enterprise. wonderful each how can so to And space. in collaborate and add value

we around the down and right stack upstacking like announcements, and going now, So the world. like conversations we on . the

Operator

question next Our Capital Tom comes Instructions] KeyBanc Markets. [Operator Blakey with from

Tom Blakey

more Wondering a in through spend, the on you you spend conversations on here do are prepared bit is about little in looking David, your CIOs -- mission starting for know from evolved talked context or -- the especially your consolidating more of how of in of you to spend, go-to-market those commentary consolidate remarks. mentioned there's and or I maybe to direct CIOs, we of Maybe, that terms kind cut given enterprise prepared year enterprise Congratulations bandwidth many this about less. the with wanted or in have the the just messaging can results. all we if direct remarks. to kind is the strong as

David Morken

country you, in one And XX% services out so. the using partners did talked we saved we provider Tom. those the that XX-plus us when seven contact another did are bandwidth. down We Yes. with into that We incumbents. took each remarks, them and about Thank prepared during them call consolidated and case, needs consolidated

And those and you need in very a weren't many a us, ultimately, could optimize trusted there partner. to on cost-sensitive among decision-makers before geographically you a really consolidate with. mission-critical and have CIOs to bet world, communications and And complex

your the the expanding do eight, XX CIO we've So nine, addition that? your to optimize third-party to us voice, that, communications you your with with and can decision or advantage orchestration and for Maestro, layer both space. In apps messaging now trust an in consolidate, have the a opportunity or maker Wow, to footprint to of allow even say, a of I XX I why partners, use instead wouldn't had bandwidth

software reduce And us CIOs consolidation reduce our historically, driving is bedding is a those to trusted bandwidth for our to and for So it's you've an now partner we've also and seen have platform driving, say on partner. complexity, that costs. primary got geography as opportunity bandwidth believe as time to to you

XXXX. developed is unit relationship or of the expect And among how volumes production indeed very these partners that and more that conversations we very about them those should price we have senior-most -- -- deep being in companies the the C-suite these in going architectural about just not about executives forward. and excited globally, the have partners are largest And conversations Global are conversations and we at I'm

Tom Blakey

That was second a my to perfect segue, question. David,

now terms in members sales made maybe more In architectural that What's strategic or of the conversations. the lack kind of with way, the takes this ship like comfortable much of more you're opportunity. infrastructure, attack maybe that the attack thank for like just again. the in GXK have opportunity potential you in and questions conversations Could a you think with a they that if very probability maybe in these I some -- expenses you the have us better this you're go-to-market bit team it of here. our the -- for of to my place of update from you're comfortable marketing past comment off little seeing spend that partner, that to you've in to And your and

David Morken

Yes.

The will invest to be opportunity Tom. bet, behind success. You

they're us reinforce. will sales from that we if they're that with leadership very -- We we with with discipline. GXK, we staffed yield if sales pipeline, the and to that's mentioned, you sales as on for are team happy it you materialize have profitability see would additional the building have global the the our But success within what That's we see they're investment enterprise team opportunity that the focused executing. reinforce

We've sales got leadership strong and globally. senior operations

So we had like channel a our in developing emerging that's and really got we've way before. a approach. promising that never We've

past. in made the you've So investments seen

The profitability it. in we've in the us that way on so discipline outlined within our You've any if leadership clearly was yield from seen is, invest . that midterm manner clear. focused you would current the doing additional guidance. again, Very see

Operator

presentation. question-and-answer This attending for session. you has our Thank concluded. also now concludes today's The conference

disconnect. now You may all

Bandwidth (BAND) 2 Aug 232023 Q2 Earnings call transcript