Bandwidth Inc.

Good afternoon and welcome to the Bandwidth, Inc. Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal Conference Specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Sarah Wallace, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to Bandwidth's third quarter 2023 earnings call. Today, we'll discuss the results announced in our press release issued after the market closed. The press release and an earnings presentation with historical financial highlights can be found on the Investor Relations page at investors.bandwidth.com. With me on the call this afternoon is David Morgan, our CEO, and Daryl Rayford, our CFO. 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 fourth quarter and full year of 2023. We caution you not to put undue reliance on these forward-looking statements as they may involve risks and uncertainties that may cause actual results to vary materially from any future results or outcomes expressed or implied by the forward-looking statements. Any forward-looking statements made on this call and in the presentation slides reflect our analysis as of today, and we have no plans or obligation to update them. For a discussion of material risks and other important factors that could affect our actual Please refer to those contained in our latest 10-K filing 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 to non-GAAP measures is included in our press release issued after the close of market today as well as in the earnings presentation, which are located on our website at investors.bandwidth.com. With that, let me turn the call over to David. Thank you, Sarah.

Welcome to Bandwidth's Q3 2023 earnings announcement. Despite the continued choppy macroeconomic environment, we are pleased to announce that we have exceeded both our revenue and profitability guidance for the quarter and made strong progress toward our goal of growing profitability by 30% for the full year. We want to express our appreciation to our customers for building and scaling their mission-critical communications with us, to our bandmates around the world whose hard work drives all our success, and to God for giving us this opportunity. In today's economy, migrating voice, text messaging, and emergency calling to the cloud is the fastest way for enterprises to build a better brand experience, reduce operating costs, and leverage new AI technologies. At Bandwidth, we provide one of the most compelling routes to the cloud thanks to the global and owned and operated network that we have at Bandwidth. enterprise-grade APIs with best-in-class integrations through our Maestro software platform, and trusted expertise from years of powering Gartner leaders and hyperscalers. Our aim is to streamline complex global communications into one strategic partnership with one contract, one customer experience, one trusted advisor, and one source for software integrations. Our Maestro software platform is already integrated with the services we offer, reducing IT development time from months to hours. Further, we've added new best-in-class services to Maestro, such as our new AI bridge solution launched in Q3 with two recognized leaders in conversational AI, Google Dialogflow and Cognigy. Conversational AI is so powerful because it not only empowers enterprises to improve their customer experience and operate 24-7, but also reduces costs by resolving contact center calls right in the communications cloud without needing a live agent. And it's available today. We have focused our go-to-market strategy on bringing the future of cloud communications to three distinct customer categories. global communications plans, programmable services, and direct to enterprise. Each of these delivered solid customer wins in the third quarter. Let me highlight an example for each. In our global communications plan category, a European-based cloud contact center customer managing many carrier relationships around the world chose to make Bandwidth their primary provider across several regions. Our programmable voice quality and reliability, award-winning support, and the ease of use of our API-driven portal all help them now more efficiently and effectively manage fewer relationships for all their communication needs. They understand that the Bandwidth Communications Cloud provides effortless global expansion opportunities for wherever their business takes them in the future. In our programmable services portfolio, we recently welcomed a new client that specializes in consumer engagement for the automotive industry. Car dealerships are revving up their text message marketing strategies to connect with customers, and our customer has helped to lead the charge in this area. With our help, this customer was able to speed up their time to market and scale up operations to meet strong demand, especially during the peak season for car sales. This is just one example of the growing trend of text messaging being used for conversational commerce across various retail industries. As more and more retail sales shift online, 60% of brands have recognized the power of text messaging for marketing their products. Why? Because text messaging offers unparalleled engagement potential with a 98% open rate and 90% of messages being read within the first three minutes. We are proud to offer a dynamic and scalable messaging platform that powers some of the most demanding, high-volume customers in e-commerce. Our platform provides global reach, reliability, security, and unbeatable customer support. We are committed to helping our clients succeed and grow by providing them with the tools and solutions they need to connect with their customers effectively and efficiently. Turning to our enterprise category, I want to share an example of what we often hear from the largest multinational organizations, how to migrate to the cloud in stages rather than all at once. A Global 2000 manufacturing conglomerate with over 30,000 employees came to us with an extraordinary complex challenge to move the internal portion of their communications to the cloud while simultaneously preserving their contact center physical infrastructure on premises for a future migration. Solving this level of what we call telecomplexity has become one of our specialties. That's because with bandwidth, our communications cloud can support both types of environments simultaneously. We help the customer deploy state-of-the-art Dynamic 911 and voice services for their employee communications stack, and they will be able to take advantage of our Maestro platform as they migrate future phases to Microsoft Teams Direct Routing. While this customer's ultimate goal is to be 100% cloud-based, they chose bandwidth as their trusted guide to help them make the transition at their own pace. Our ability to meet the customer where they are and help them navigate even the most complex digital transformations is what sets us apart in the tech industry. Regardless of the challenge, we are committed to providing our customers with the best possible solutions, the highest level of support, and the kind of innovative thinking they need to thrive in a rapidly involving communications landscape. In summary, we are pleased with our progress and how we've navigated through this year as a team. For example, in recognition of our unique culture that lifts each other up to better serve our customers, we were honored yet again to win a Best Place to Work Award in our home region of Raleigh, North Carolina. We've executed well against the choppiness we expected at the beginning of this year, and we are looking forward to finishing out 2023 with strong momentum. With 2024 on the horizon, we are encouraged by our track record of success, strong financial position, and our commitment to innovation. We are confident Bandwidth will remain fully on track to achieve our 2026 medium-term targets we laid out at our Investor Day last February. I'll now turn it over to Darrell to walk through the details of our Q3 financial results.