Bandwidth Inc. reported its financial results for the first quarter of 2025, revealing a revenue increase of 2% to $174.2 million, compared to $171.0 million in the same period last year. The company achieved a gross profit of $71.5 million, up from $65.5 million, resulting in a gross margin of 41%, an improvement from 38% in the prior year. Despite the revenue growth, Bandwidth recorded a net loss of $3.7 million, a significant reduction from the $9.2 million loss reported in Q1 2024. This translates to a net loss per share of $0.13, compared to $0.35 in the previous year.
The company’s operational metrics showed positive trends, with a net retention rate of 116%, up from 107% in the prior year, indicating improved customer engagement and revenue growth from existing customers. Bandwidth's cloud communications revenue rose by 4% to $133.5 million, driven by increased voice traffic, while messaging surcharge revenue decreased by 4% to $40.8 million, attributed to reduced political messaging following the 2024 elections. The company also reported a slight decrease in operating expenses, which totaled $76.2 million, up marginally from $75.9 million in the previous year.
In terms of strategic developments, Bandwidth repurchased approximately $27.4 million of its 2026 Convertible Notes for about $26.1 million in cash during February 2025, resulting in a net gain of $1.1 million recorded in the financial statements. The company continues to focus on enhancing its product offerings and expanding its customer base, particularly among enterprise clients, as part of its long-term growth strategy. Bandwidth's global communications platform now spans over 65 countries, reaching more than 90% of global GDP.
As of March 31, 2025, Bandwidth had cash and cash equivalents of $36.2 million, down from $105.6 million a year earlier, primarily due to cash used in financing activities, including the repurchase of convertible notes. The company also reported a decrease in total cash flow from operations, which was negative at $3.1 million for the quarter, compared to a positive cash flow of $2.5 million in Q1 2024. Looking ahead, Bandwidth remains optimistic about its growth prospects, driven by ongoing demand for cloud-based communication solutions and the expansion of its service offerings.
About Bandwidth Inc.
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