Bandwidth Inc.

Thank you. Good afternoon and welcome to Bandwidth.

This is the second quarter 2020 earnings call. Today we'll be discussing the results announced in our press release issued after the market closed. With me on the call this afternoon is David Morken, Bandwidth's Chief Executive Officer, and Jeff Hoffman, Chief Financial Officer of Bandwidth. They will begin with prepared remarks, and then we will open up the call for Q&A. During the call, we will make statements related to our business that may be considered forward-looking. including statements concerning our financial guidance for the third fiscal quarter and full year of 2020 and to the extent provided future periods, our plans to execute on our growth strategy, our ability to maintain existing and acquire new customers, and other statements regarding our plans and prospects. Forward-looking statements may often be identified with words such as we expect, we anticipate, or upcoming. These statements reflect our views only as of today and should not be considered our views as of any subsequent date. We undertake no obligation to update or revise these forward-looking statements. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our 10-K filing on February 21, 2020 as updated by other SEC filings, all of which are available on the Investor Relations section of our website at bandwidth.com and on the SEC's website at sec.gov. During the course of today's call, We will refer to certain non-GAAP financial measures. A reconciliation of GAAP and non-GAAP measures is included in our press release issued after the close of market today, which is located on our website at bandwidth.com. Finally, in these unprecedented times, within our prepared remarks, we have estimated the revenue impact of COVID-19 for this quarter. Our methodology attributes significantly elevated platform usage above and beyond expected thresholds to quantify current and estimate any future financial impacts as a result of COVID-19. Accordingly, identifying any potential impacts in future periods may become challenging as any increased residual usage and the corresponding revenue impact will be inherent to our business and indistinguishable. Management makes no assurances that we will make further COVID-19 distinctions in the future. Let me turn the call over to David.

Thank you, Sarah, and thanks to everyone joining us on our call today. Bandwidth's purpose and the passion that drives us are both rooted in connection. We work to connect people, and now, more than ever, is a time for us to connect with and support one another. My thoughts continue to be with the communities that have endured a multitude of tragedies and are in deep pain. We believe there is no place for discrimination anywhere in any form against any person. Bandwidth culture remains committed to celebrating diversity, equality, and unity. Unity that means a sincere love for one another and a celebration of the priceless differences that make us each uniquely who we are. I also continue to pray for all who have suffered great loss and sacrifice in this season of pandemic. I would like to extend my deepest sympathies to those who are sick or unemployed, and I am grateful to all those serving during these challenging times, working to navigate a swift, safe return to our cherished livelihoods. At Bandwidth, we remain committed to keeping America connected. We are making sure that healthcare systems, governments, businesses, and teachers can stay connected with those in need. We provide voice messaging and emergency service to the greatest productivity experiences for workers who need to connect remotely. If you dial into most video conferences these days and use your phone for audio, you are likely using a bandwidth number and the call is likely delivered on our network. Our team is relentlessly focused on serving our customers and their unprecedented demand for our services. As a result of our commitment to our mission and each other, we achieved our best year-over-year revenue growth performance ever. I'd like to take a moment to thank all bandmates for their ongoing excellence and execution. You are truly uplifting all of us. Our CPAS revenue increased 40% year-over-year, driving total revenue in the quarter of $67.1 million. The fundamental strength of our business is driving broad-based growth across our customer base. The acceleration in our CPAS revenue was clearly amplified in the second quarter by serving elevated demand from our customers, providing meeting solutions and UCAS solutions that are keeping Americans connected. We also saw continued momentum from messaging, which grew 108% in Q2. While achieving record velocity on revenue growth, We also made progress toward our profitability goals, achieving more than $3 million of non-GAAP net income. We see three strong pillars supporting our success. Our highly scalable platform of flexible APIs, our vertically integrated nationwide IP voice network that we build and operate, and our 911 capabilities that we believe are unique among CPaaS providers. Enterprises choose to build on these pillars because of their quality, Cost Benefits, and our amazing people who answer the call to serve our customers. And it is because of the strength of these pillars that we are able to significantly raise our annual CPaaS outlook as Jeff will outline momentarily. Our vertically integrated approach to CPaaS and overall value proposition are what disproportionately attract and benefit large customers operating at scale. Many leading technology enterprises are long-standing bandwidth customers, and RC-Path's revenue acceleration has been bolstered by their solutions being heavily used for remote connectivity in the current environment. At the onset of many more Americans working from home, our teams worked 24 by 7 to scale our platform and network to support the surge driven by our large enterprise customers who themselves experienced explosive growth among their users. In this season, we have once again demonstrated our mission-critical value to the most innovative companies in the world. Our customer-centric approach has yielded relationships with our enterprise customers that are multifaceted, deep-seated, and expanding. As a result of our ability to serve, our largest customers extended their contracts and we are pleased to announce that we signed a multi-year extension with one of our largest customers which retains our position as their primary provider. We look forward to serving this customer for years to come in their quest to provide productivity tools and connect knowledge workers. In this season, we also completed a two-year extension of an originally executed five-year multi-million dollar exclusive agreement with a Fortune 500 company that offers communications and technology solutions for residential small business and enterprises across the United States. We announced the original agreement this time last year. We are pleased by the early extension of this customer's commitment to the bandwidth platform, and we are eager to continue to exclusively serve this customer. Now I'd like to share a significant customer win from this quarter that marks an evolution of our engagement in serving enterprise customers migrating to the cloud. We are pleased to announce a five-year, multi-million dollar agreement to provide CPaaS services to a Fortune 100 company that is one of the nation's ten largest banks and one of the largest issuers of Visa and MasterCard credit cards in the U.S. This customer will exclusively utilize bandwidth's voice services and phone numbers to power their migration to a cloud contact center to support their card services. Enterprises are increasingly migrating to the cloud but remain challenged by managing complexity, ensuring operational continuity, and maintaining regulatory compliance. CIOs, as in the case of this customer, are challenged by tens of thousands of employees moving from on-premise legacy solutions to the cloud. Unpredictable migration timelines can span days. caused telephony issues and disrupts scheduled meetings. Additionally, migrating to a cloud provider can often entail reliance on a mix of incumbent network providers and local operators that can result in poor service quality. As a strategic partner to many leading UC collaboration and contact center providers, Bandwidth is ideally positioned to directly connect enterprise customers to cloud solutions. To do so requires agile, software-driven tools capable of provisioning and porting numbers in a predictable process, where automation is the only viable solution at scale. These capabilities are encompassed in our software platform and, in the case of this customer, most critical to maintaining control and avoiding disruption traditionally encountered in migrating large employee bases from on-premise to cloud solutions. Equally important to this customer and large scale customers alike is voice quality and reliability. Given that we operate our own all IP nationwide voice network, we can predict, quickly detect, and resolve voice issues in real time. Enterprises today need a migration partner that can connect them to the cloud and deliver an onboarding experience that allows them to continue to focus on their customers. I am proud that Bandwidth was able to deliver that experience to this customer. Likewise, we recently announced Duet for Microsoft Teams, which is a comprehensive solution for enterprises deploying Teams to accelerate their telephony migration while meeting complex 911 regulations through a single software-centric communications provider. Bandwidth is currently one of only two providers certified by Microsoft to provide dynamic E911 calling capabilities for direct routing, all built on a reliable, software-powered network, which has long been the voice standard for leading UCaaS and CCaaS platforms. We engage with enterprises and connect them on their digital transformation journey. On the international front, we continue to make progress toward extending our world-class network into 13 European countries. In the second quarter, we provided new services to both existing and new customers. We continue to pursue our international mission and objectives consistent with our profitability principle as a key part of our long-term growth strategy. I want to end by thanking all our customers for the opportunity to serve. and by thanking the Bandwidth team for their ongoing dedication to achieving our mission and to each other. With that, let me turn it over to Jeff.