Financial Analysis

11. Commitments and Contingencies Operating Leases The Company leases office space under non-cancelable operating lease agreements that expire on various dates through July 2043. As of June 30, 2026, the Company has $441.1 million in future minimum rent payments for its office space. Contractual Obligations As of June 30, 2026, the Company has $20.9 million in non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $9.5 million will be fulfilled within one year. Legal Matters The Company is subject to certain legal proceedings described below, and from time to time may be subject to legal matters arising in the ordinary course of business. Where it is determined that a loss is probable and estimable in a given matter, the Company establishes an accrual. Any amounts accrued as of the balance sheet date are not material in any of the currently pending matters. In managements opinion, the Company does not expect that the ultimate resolution of any currently pending legal matter in future periods will have a material effect on our financial condition, but could have a material effect on our results of operations for a given reporting period. On July 10, 2025, the City and County of San Francisco Tax Collector (City of San Francisco) issued a Corrected Tax Collector Decision on Petition for Redetermination to Bandwidth, asserting an Access Line Tax (ALT) deficiency in the amount of $3.8 million. The Compa …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

7. Debt Revolving Credit Facility The Company maintains a revolving credit facility (the Credit Facility ) under a credit agreement with Bank of America, N.A., as administrative agent, as amended (the Credit Agreement ), providing for borrowings of up to $150.0 million , including a $15.0 million sublimit for letters of credit and a $10.0 million swingline subfacility. The Credit Facility matures on the earlier of (a) May 1, 2029 or (b) the date that is 91 days prior to the scheduled maturity date or mandatory conversion date of the Company s outstanding 2028 Convertible Notes. Borrowings under the Credit Facility bear interest, at the Company s election, based on a base rate or the Secured Overnight Financing Rate ( SOFR ), plus an applicable margin, and the Company pays a quarterly commitment fee on the unused portion of the Credit Facility, in each case, based on the Company s consolidated total leverage ratio. The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated senior secured leverage ratio and a minimum consolidated fixed charge coverage ratio, and the Credit Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries. See Note 7 , Debt , in the Company s Annual Report on Form 10-K filed with the SEC on February 19, 2026, for further information regarding the terms of the Credit Facility. As of June 30, 2026, unamortized debt issuance costs related to the Credit Facility were $ …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

10. Stock-Based Compensation Restricted Stock Units The following summarizes the restricted stock unit (RSU) activity for the six months ended June 30, 2026: Number of awards outstanding Weighted-average grant date fair value (Per share) Nonvested RSUs as of December 31, 2025 5,534,657 $ 15.91 Granted 975,013 17.31 Vested (1,751,490) 17.43 Forfeited (131,463) 15.27 Nonvested RSUs as of June 30, 2026 4,626,717 $ 15.65 As of June 30, 2026, total unrecognized compensation cost related to non-vested RSUs was $61.8 million, which will be amortized over a weighted-average period of 2.05 years. Stock-Based Compensation Expense The Company recognized total stock-based compensation expense as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (In thousands) Cost of revenue $ 424 $ 530 $ 889 $ 1,055 Research and development 5,622 5,524 11,411 11,081 Sales and marketing 1,731 1,867 3,463 4,141 General and administrative 4,830 4,624 9,834 9,843 Total $ 12,607 $ 12,545 $ 25,597 $ 26,120 …

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2. Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of June 30, 2026 and December 31, 2025 because of the relatively short duration of these instruments. Marketable securities consist of time deposits and commercial paper not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

5. Goodwill and Intangible Assets Goodwill The change in carrying amount of goodwill was as follows: Total (In thousands) Balance as of December 31, 2025 $ 356,772 Foreign currency translation adjustments (10,191) Balance as of June 30, 2026 $ 346,581 Intangible Assets Intangible assets, net consisted of the following: As of June 30, As of December 31, 2026 2025 Gross Amount Accumulated Amortization Net Carrying Value Gross Amount Accumulated Amortization Net Carrying Value (In thousands) Customer relationships $ 152,472 $ (61,643) $ 90,829 $ 154,492 $ (57,344) $ 97,148 Developed technology 82,296 (52,464) 29,832 84,765 (43,795) 40,970 Other, definite lived 2,828 (2,828) 2,828 (2,828) Licenses and other, indefinite lived 700 700 624 624 Total intangible assets, net $ 238,296 $ (116,935) $ 121,361 $ 242,709 $ (103,967) $ 138,742 The Company recognized amortization expense as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (In thousands) Cost of revenue $ 5,060 $ 2,042 $ 10,134 $ 3,939 Sales and marketing 2,526 2,523 5,056 4,913 Total amortization expense $ 7,586 $ 4,565 $ 15,190 $ 8,852 The remaining weighted average amortization period for definite lived intangible assets is 7.40 years. Future estimated amortization expense for definite lived intangible assets is as follows: As of June 30, 2026 (In thousands) 2026 (remaining) $ 14,940 2027 29,880 2028 9,992 2029 9,992 2030 9,992 Thereafter 45,865 $ 120,661 …

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13. Income Taxes At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, international, and state income taxes and the permanent impacts of differences in book and tax accounting. The Company recognized an income tax benefit of $2.8 million and $4.3 million for the three and six months ended June 30, 2026, respectively, compared with an income tax expense of $(0.1) million for each of the three and six months ended June 30, 2025. The effective tax rate was 693.8% and (197.0)% for the three and six months ended June 30, 2026, respectively, compared with (2.8)% and (0.8)% for the three and six months ended June 30, 2025, respectively. The change from a tax expense to a tax benefit was primarily attributable to favorable U.S. federal and state tax law changes enacted under the One Big Beautiful Bill Act (the OBBBA). The Companys accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered its historic performance, the nature of its deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. Based on an analysis of these factors, the Company det …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

6. Leases The Company primarily leases facilities for office space under non-cancelable operating leases for its U.S. and international locations. As of June 30, 2026, non-cancelable leases expire on various dates between 2026 and 2043, some of which include options to extend the leases for up to 20 years. On January 1, 2025, the Company commenced a sublease of a portion of its corporate headquarters to Relay, Inc., a related party. The sublease expires on December 31, 2029 and does not include any option to renew or purchase, nor does it include any residual value guarantees. As of June 30, 2026, t otal future minimum rent payments to the Company under this sublease were $9.5 million . The components of operating lease expense recorded in the condensed consolidated statements of operations were as follows: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (In thousands) Operating lease cost $ 5,721 $ 5,788 $ 11,389 $ 11,448 Sublease income (549) (545) (1,099) (1,090) Total net lease cost $ 5,172 $ 5,243 $ 10,290 $ 10,358 Other supplemental information related to operating leases were as follows: Six months ended June 30, 2026 2025 Weighted average remaining lease term (in years) 16.75 17.75 Weighted average discount rate 8.74 % 8.75 % Maturities of operating lease liabilities were as follows: As of June 30, 2026 (In thousands) 2026 (remaining) $ 11,881 2027 23,678 2028 23,717 2029 24,035 2030 24,418 Thereafter 333,331 Total lease payments 441,060 Less …

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Recently Adopted Accounting Standards In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-04, DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (ASU 2024-04), which provides additional guidance to stakeholders about how to determine whether a settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishment guidance. The Company adopted ASU 2024-04 effective January 1, 2026 and applied the guidance prospectively. The adoption had no impact on the Companys financial position or results of operations. In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which provides a practical expedient for the estimation of expected credit losses for current accounts receivable and current contract assets under ASC 606. The practical expedient election assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The Company adopted ASU 2025-05 effective January 1, 2026 and elected the practical expedient. ASU 2025-05 did not have a material impact on the Company's financial position or results of operations. Recent Accounting Pronouncements Not Yet Adopted In No …

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8. Revenue and Geographic Information Revenue The following table summarizes the Companys revenue by geographic region, which is apportioned based on the destination of the service: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (In thousands) United States $ 194,070 $ 156,554 $ 375,686 $ 308,346 International 25,827 23,459 52,995 45,908 Total $ 219,897 $ 180,013 $ 428,681 $ 354,254 For the three and six months ended June 30, 2026 and 2025, no country outside of the United States represented 10% or more of the Companys total revenues. Contract Assets and Liabilities The following table provides information about receivables and contract liabilities from contracts with customers: As of June 30, As of December 31, 2026 2025 (In thousands) Receivables (1) $ 110,294 $ 91,409 Contract liabilities (2) 12,022 13,714 ________________________ (1) Included in accounts receivable, net of allowance on the condensed consolidated balance sheets. (2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the condensed consolidated balance sheets. Deferred revenue is recorded when cash payments are received in advance of future usage on contracts. Revenue is typically recognized in the following month when service is rendered or, in the case of nonrefundable upfront fees, over the estimated period of benefit from the date the fee is incurred by the customer. Customer refundable payments are recorded as advanced billings. Dur …

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12. Segment Reporting The Company manages its business activities on a consolidated basis and operates in one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Operating Decision Maker (the CODM) in deciding how to make operating decisions, allocate resources and in assessing performance. The Companys CODM is its Chief Executive Officer. The CODM utilizes the Companys budgeted and forecasted expense information as a key input to resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business and monitors budget versus actual results using net income (loss), as reported in the accompanying condensed consolidated statements of operations. Significant expenses within net income (loss) include cost of revenue, research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Companys condensed consolidated statements of operations. Other segment items within net income (loss) include net gain on extinguishment of debt, interest expense, net, other (expense) income, net and income tax benefit (provision). …

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1. Description of Business and Summary of Significant Accounting Policies Description of Business Bandwidth Inc. (together with its subsidiaries, Bandwidth or the Company) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Companys headquarters are located in Raleigh, North Carolina. The Company is a global cloud-based, software-powered communications platform-as-a-service (CPaaS) provider that enables enterprises to create, scale and operate voice or messaging communications services across any mobile application or connected device. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the SEC) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Companys Annual Report on Form 10-K, filed with the SEC on February 19, 2026. The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited financial statements as of that dat …

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9. Stockholders Equity Common Stock The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of June 30, As of December 31, 2026 2025 Stock options issued and outstanding 23,751 67,297 Nonvested restricted stock units issued and outstanding 4,626,717 5,534,657 Stock-based awards available for grant under the 2017 Plan 4,759,880 3,751,786 Total 9,410,348 9,353,740 Share Repurchase Program On February 19, 2026, the Companys Board of Directors authorized a share repurchase program of up to $80.0 million of the Companys outstanding Class A common stock, subject to market conditions, contractual restrictions and other factors. Under the share repurchase program, the Company may purchase shares from time to time at the discretion of management through open market purchases, block trades, accelerated or other structured share repurchase programs, privately negotiated transactions, Rule 10b5-1 plans or other means. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The manner, timing, pricing and amount of any transactions will be subject to the discretion of management and may be based upon market conditions, regulatory requirements and alternative opportunities that the Company may have for the use or investment of its capital. The program does …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing