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4Q25 and 2025 Earnings Results February 19, 2026
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Legal Disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance for the quarter ending March 31, 2026 and year ending December 31, 2026, the succes s of our product offerings and our platform, and the value proposition of our products, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “intend,” “guide,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to successfully leverage the use of artificial intelligence in our business operations and in our service offerings, our ability to expand effectively into new markets, macroeconomic conditions both in the U.S. and globally, legal, reputational and financial risks which may result from ever-evolving cybersecurity threats, our ability to operate in compliance with applicable laws, as well as other risks and uncertainties set forth in the “Risk Factors” section of our latest Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and any subsequent reports that we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no obligation to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. This presentation also includes certain guidance on non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company’s non-GAAP financial measures as tools for comparison. The Company provides a reconciliation of certain non-GAAP measures to the most directly comparable GAAP measures, which are available in the earnings press release for the relevant period and in the appendix of this presentation. Market data and industry information used throughout this presentation are based on management's knowledge of the industry and the good faith estimates of management. Management also relied, to the extent available, upon management's review of independent industry surveys and publications and other publicly available information prepared by a number of third party sources. The market data and industry information used in this presentation involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although we believe that these sources are reliable, we cannot guarantee the accuracy or completeness of this information, and we have not independently verified this information. While we believe the estimated market position, market opportunity and market size information included in this presentation are generally reliable, such information, which is derived in part from management's estimates and beliefs, is inherently uncertain and imprecise. No representations or warranties are made by the Company or any of its affiliates as to the accuracy of any such statements or projections. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. 2
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A global communications leader orchestrating AI, voice & messaging across cloud communications 3
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We develop and deliver the power to communicate Voice Messaging Emergency Services 4 AI
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5 Providing Global Comms at Scale Across Three Customer Categories Powering digital engagements and notifications with programmable text messaging solutionsProgrammable Messaging Powering employees communicating with each other and their customers through Unified Communications and Contact Center platforms Global Voice Plans Powering innovative customer experiences for the Global 2000 with composable solutions that integrate best-in-class CX and AI tools Enterprise Voice
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2025 Financial Highlights 6 9% 3 Cloud communications revenue2 y/y growth 100bps Non-GAAP Gross Margin4 y/y growth $754m Total revenue $561m Cloud communications revenue2 58% Non-GAAP Gross Margin4 10% 1 Total revenue y/y growth $93m Adjusted EBITDA 1 Normalized for political campaign revenue of $62m in 2024 total revenue. 2 Cloud communications revenue is total revenue less pass-through messaging surcharge revenue. 3 Normalized for political campaign revenue of $23m in 2024 cloud communications revenue. 4 See appendix for GAAP to non-GAAP reconciliation. Note: See Appendix for definitions and calculations of metrics presented on this slide. 14% Adjusted EBITDA4 y/y growth
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Lasting Customer Loyalty 7 99% Name Retention Rate 107% 1 Net Retention Rate 12 years Top 20 Customer Median Tenure 1 Net retention rate of 107% excludes the benefit of political campaign messaging revenue in 2024. Note: Customer metrics as of December 31, 2025. See Appendix for definitions of metrics presented in this slide.
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Annual Revenue Performance 8 (USD Millions) Cloud communications revenue4 Messaging surcharges5 1 Normalized for campaign messaging revenue of $62m in 2024 total revenue. 2 Normalized for campaign messaging revenue of $23m in 2024 cloud communications revenue. 3 Represents midpoint of guidance provided in the Financial Outlook section of the February 19, 2026 earnings press release. 4 Cloud communications revenue is total revenue less pass-through messaging surcharge revenue. 5 Messaging surcharges is defined as pass-through messaging surcharges levied by carriers on Application to Person (A2P) text messages.. 10% 1 2025 Total revenue growth y/y 9% 2 2025 Cloud communications revenue4 growth y/y $874 2022 2023 2024 2025 2026E3 $573 $601 $748 $754
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72% 9% 19% 2025 Cloud Communications Revenue by Customer Category % of revenue $561m 1 Global Voice Plans 8% y/y Enterprise Voice 21% y/y Programmable Messaging 7%2 y/y 1 Represents Cloud communications revenue, which is total revenue less pass-through messaging surcharge revenue, for the year ended December 31, 2025 2 Normalized for campaign messaging revenue of $23m in 2024 cloud communications revenue. 9
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Non-GAAP Gross Margin Performance Scale and AI adoption Software services mix Global coverage Operational efficiencies Fueling gross margin expansion Note: We calculate non-GAAP gross margin by dividing non-GAAP gross profit by Cloud communications revenue, which is total revenue less pass-through messaging surcharge revenue. See Appendix for GAAP to non-GAAP reconciliation. 10 2022 2023 2024 2025 55% 55% 57% 58%
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Adjusted EBITDA Performance 1 Calculated by dividing Adjusted EBITDA by Cloud communications revenue, which is total revenue less pass-through messaging surcharge revenue. 2 Represents midpoint of guidance provided in the Financial Outlook section of the February 19, 2026 earnings press release. Bandwidth has not reconciled full year 2026 guidance related to Adjusted EBITDA to GAAP Net income or loss, because stock-based compensation cannot be reasonably calculated or predicted at this time. 11 17% 2025 Adjusted EBITDA margin 1 20% Adjusted EBITDA margin 2026 guidance $35 $48 $82 $93 $120 2022 2023 2024 2025 2026E2 (USD Millions)
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Free Cash Flow Performance 1 Calculated by dividing Free cash flow by Cloud communications revenue, which is total revenue less pass-through messaging surcharge revenue. See appendix for GAAP to non-GAAP reconciliation. 12 10% 1 2025 Free cash flow margin Balanced capital allocation strategy (USD Millions) ($11) $19 $59 $57 2022 2023 2024 2025
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Customer Metrics 1 Normalized for campaign messaging revenue of $37m and $62m in 2022 and 2024, respectively. 2 Normalized for campaign messaging revenue of $62m in 2024 total revenue. 13 $232k Average annual customer revenue 12% 2 Average annual customer revenue growth y/y 2022 2023 2024 2025 105% 109% 112% 107% Adjusted NRR 1
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1Q26 and Full Year 2026 Outlook 1 Bandwidth has not reconciled its first quarter and full year 2026 guidance related to Adjusted EBITDA to GAAP net income or loss and non-GAAP net earnings or loss to GAAP net earnings or loss and non-GAAP earnings or loss per share to GAAP earnings or loss, because stock-based compensation cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort 2 Assumes weighted average diluted share count of approximately 34.2 million in 1Q 2026 and weighted average diluted share count of 36.1 million in full year 2026. 14 29% Adjusted EBITDA growth y/y 2026 guidance 16% Total revenue growth y/y 2026 guidance 1Q 2026 FY 2026 Revenue $200m - $203m $864m - $884m Adjusted EBITDA 1 $21m - $24m $117m - $123m Non-GAAP EPS1,2 $0.30 - $0.32 $1.66 - $1.74 Full year 2026 guidance is based upon the following estimates and assumptions: • Adjusted tax rate of 20%-23% • Depreciation of $42-$44m • Average diluted share count of approximately ~36m
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Inaugural program 15 Authorized Inaugural $80 million Share Repurchase Program • Authorized a share repurchase program of up to $80m • Opportunistic program to manage dilution from share based compensation Capital allocation • Strong free cash flow supporting disciplined capital allocation • Record R&D investment to support growth and innovation • Balanced capital strategy expected to enhance shareholder value
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Bandwidth is a Durable Cloud Communications Platform with Software-like Expansion Economics 4 2 3 1 5 Durable, long-term customer relationships Scale and infrastructure advantages Strength in large deals Upsell and cross-sell through software services Built for profitable growth 16
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17 4Q25 and 2025 Earnings Results Key Takeaways Solid Performance 2026 Outlook Financial Health Growth Drivers Growth driven by accelerating Voice usage, seasonal messaging demand, expanding AI voice adoption, and increased software services contribution. Bandwidth expects 2026 revenue to grow 16% y/y, with expanding margins and profitability; supported by AI-driven Voice growth, increased software services contribution and disciplined cost management. Customer adoption of AI voice progressed into production, supported by Bandwidth’s Communications Cloud and Maestro software, which enable enterprise-grade reliability, scale, and orchestration across AI environments. Record 4Q results and disciplined full-year 2025 performance, reflecting double-digit organic revenue growth, increasing software mix, and continued progress in margins and cash flow. Bandwidth’s scalable and durable business model, underpinned by long-term customer relationships, owned infrastructure, and expanding software services, supports software-like expansion economics and continued margin, profitability, and cash flow growth. AI Focus
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Thank you! 18
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19 Appendix
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20 1 Calculated by dividing non-GAAP gross profit by Cloud communications revenue. 2 Calculated by dividing adjusted EBITDA by Cloud communications revenue. 3 Cash and Investments excludes restricted cash beginning in 1Q23. Prior periods have been conformed to current definition. 4 Represents the acquisition cost of property, plant and equipment and capitalized development costs for software for internal use. Note: Totals may not sum due to rounding. Historical Metrics USD millions, except for Average Annual Customer Revenue in USD thousands FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 2Q25 3Q25 4Q25 FY25 Total Revenue 573.2 137.8 145.9 152.0 165.4 601.1 171.0 173.6 193.9 210.0 748.5 174.2 180.0 191.9 207.7 753.8 Cloud communications 474.6 114.4 118.4 120.2 125.8 478.9 128.5 128.4 138.8 144.1 539.8 133.5 135.9 141.8 150.3 561.4 Messaging surcharges 98.6 23.4 27.5 31.8 39.6 122.2 42.5 45.2 55.1 65.9 208.7 40.8 44.2 50.1 57.4 192.4 Total Gross Profit 238.4 55.7 59.0 59.5 62.1 236.2 65.5 64.8 73.1 76.5 280.0 71.5 71.7 73.8 78.1 295.1 Non-GAAP Gross Profit 260.0 61.3 65. 3 65.7 69.0 261.4 72.6 71.8 80.1 83.4 307.9 78.6 79.4 81.7 86.3 326.0 Non-GAAP Gross Margin1 55% 54% 55% 55% 55% 55% 57% 56% 58% 58% 57% 59% 58% 58% 57% 58% Net Income (loss) 19.6 3.6 (3.9) (5.1) (10.9) (16.3) (9.2) 4.1 0.4 (1.8) (6.5) (3.7) (4.9) (1.2) (3.0) (12.9) Non-GAAP Net Income 15.0 1.2 4.4 6.3 10.8 22.8 7.8 8.7 12.8 11.6 40.9 11.1 11.8 11.5 11.5 45.9 Adjusted EBITDA 34.6 5.1 10.6 13.8 18.8 48.2 15.9 18.7 24.0 23.4 82.1 22.2 21.9 24.3 24.8 93.3 Adjusted EBITDA Margin2 7% 4% 9% 11% 15% 10% 12% 15% 17% 16% 15% 17% 16% 17% 17% 17% Cash and Investments3 184.9 123.5 122.6 139.1 153.5 153.5 147.2 76.4 79.9 83.8 83.8 41.7 68.1 80.4 111.3 111.3 Net cash provided by (used in) operating activities 34.9 (6.4) 3.1 23.0 19.3 39.0 2.5 24.4 20.5 36.5 83.9 (3.1) 31.7 22.2 38.6 89.5 Net cash used in investing in capital assets4 (45.4) (4.5) (4.3) (4.8) (6.2) (19.9) (6.9) (6.1) (6.2) (6.2) (25.4) (10.2) (6.1) (9.1) (7.5) (32.9) Free Cash Flow (10.5) (10.9) (1.2) 18.2 13.0 19.1 (4.4) 18.3 14.2 30.3 58.5 (13.3) 25.6 13.1 31.1 56.6 Average Annual Customer Revenue 171 172 176 177 178 178 190 198 212 226 226 228 230 231 232 232 Net Retention Rate 112% 109% 106% 104% 101% 101% 107% 111% 117% 122% 122% 116% 112% 105% 98% 98% Adjusted Net Retention Rate 105% 102% 100% 103% 109% 109% 113% 115% 115% 112% 112% 109% 107% 107% 107% 107%
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21 GAAP to Non-GAAP Reconciliation - Net Income 1 Non-recurring items not indicative of ongoing operations and other include $0.9 million of foreign currency losses on the settlement of intercompany borrowings, which were repatriated in conjunction with the repurchase of the 2026 Convertible Notes and $0.6 million of nonrecurring litigation expense for the year ended December 31, 2022, (i) $0.4 million of expense resulting from early termination of undrawn SVB credit facility for the year ended December 31, 2023, (ii) a $1.0 million gain on the sale of an intangible asset for the year ended December 31, 2024, and (iii) $0.4 million, $0.8 million and $0.5 million of losses on disposals of property, plant and equipment during the years ended December 31 2024, 2023 and 2022, respectively. For the year ended December 31, 2025, non-recurring items not indicative of ongoing operations and other include $1.3 million of foreign exchange charges primarily related to balance sheet revaluations, $0.5 million in nonrecurring litigation expense, $0.9 million of losses on disposals of property, plant and equipment, and $0.1 million of losses on sale of business. 2 Non-GAAP net income is increased for interest expense as part of the calculation for diluted Non-GAAP earnings per share. Note: Totals may not sum due to rounding. FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 2Q25 3Q25 4Q25 FY25 Net income (loss) 19.6 3.6 (3.9) (5.1) (10.9) (16.3) (9.2) 4.1 0.4 (1.8) (6.5) (3.7) (4.9) (1.2) (3.0) (12.9) Stock-based compensation 20.7 7.4 8.0 6.9 14.7 37.0 12.3 11.4 11.4 13.2 48.4 13.6 12.5 12.3 13.9 52.3 Amortization of acquired intangibles 17.2 4.3 4.3 4.3 4.3 17.3 4.4 4.3 4.4 4.4 17.5 4.3 4.6 4.6 4.6 18.1 Amortization of debt discount and issuance costs for convertible debt 3.0 0.6 0.5 0.5 0.5 2.0 0.5 0.4 0.3 0.3 1.5 0.3 0.3 0.3 0.3 1.1 Gain on sale of business (3.8) - - - - - - - - - - - - - - - Net cost associated with early lease terminations and leases without economic benefit - - - 1.2 2.8 4.0 1.2 0.9 0.4 0.0 2.4 - - - - - Net gain on extinguishment of debt (40.2) (12.8) - - - (12.8) - (10.3) - - (10.3) (1.1) - - - (1.1) Gain on business interruption insurance recoveries - - (4.0) - - (4.0) - - - - - - - - - - Non-recurring items not indicative of ongoing operations and other 1 2.0 0.6 0.2 0.1 0.4 1.2 0.1 0.0 (1.0) 0.3 (0.6) 0.5 0.3 1.2 0.8 2.8 Estimated tax effects of adjustments (3.4) (2.4) (0.7) (1.5) (0.9) (5.5) (1.4) (2.1) (3.2) (4.8) (11.5) (2.7) (0.9) (5.7) (5.1) (14.5) Non-GAAP net income 15.0 1.2 4.4 6.3 10.8 22.8 7.8 8.7 12.8 11.6 40.9 11.1 11.8 11.5 11.5 45.9 Interest expense on convertible notes2 1.7 0.3 0.3 0.3 0.3 1.3 0.3 0.3 0.3 0.3 1.1 0.3 0.2 0.2 0.2 1.0 Numerator used to compute Non-GAAP diluted net income per share 16.7 1.5 4.7 6.7 11.1 24.0 8.1 9.0 13.0 11.8 42.0 11.4 12.1 11.7 11.7 46.9 USD millions, except per share amounts
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22 GAAP to Non-GAAP Reconciliation - Earnings Per Share Note: Totals may not sum due to rounding. FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 2Q25 3Q25 4Q25 FY25 Net income (loss) per share Basic 0.77 0.14 (0.15) (0.20) (0.42) (0.64) (0.35) 0.15 0.02 (0.06) (0.24) (0.13) (0.16) (0.04) (0.10) (0.43) Diluted (0.48) (0.28) (0.15) (0.20) (0.42) (0.64) (0.35) (0.17) 0.01 (0.06) (0.24) (0.13) (0.16) (0.04) (0.10) (0.43) Non-GAAP net income per Non-GAAP share Basic 0.59 0.05 0.17 0.25 0.42 0.89 0.30 0.32 0.47 0.41 1.50 0.38 0.40 0.38 0.37 1.53 Diluted 0.54 0.05 0.16 0.23 0.38 0.83 0.27 0.29 0.43 0.37 1.34 0.36 0.38 0.36 0.35 1.43 Weighted average number of common shares outstanding Basic shares 25.3 25.4 25.6 25.6 25.8 25.6 26.5 27.1 27.4 27.9 27.2 29.0 29.9 30.3 30.8 30.0 Diluted shares 30.9 29.3 25.6 25.6 25.8 25.6 26.5 29.5 28.6 27.9 27.2 29.0 29.9 30.3 30.8 30.0 Non-GAAP basic shares 25.3 25.4 25.6 25.6 25.8 25.6 26.5 27.1 27.4 27.9 27.2 29.0 29.9 30.3 30.8 30.0 Convertible debt conversion 5.6 3.8 3.3 3.3 3.3 3.4 3.3 2.4 1.8 1.8 2.3 1.7 1.5 1.5 1.5 1.5 Nonvested RSU and stock options issued and outstanding 0.1 0.1 0.0 0.0 0.0 0.0 0.8 1.3 1.2 2.0 1.9 0.8 0.0 0.5 1.4 1.3 Non-GAAP diluted shares 31.0 29.4 28.9 29.0 29.2 29.1 30.6 30.8 30.4 31.6 31.4 31.4 31.4 32.3 33.7 32.9 USD millions, except per share amounts
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23 GAAP to Non-GAAP Reconciliation – Gross Profit, Adjusted EBITDA, Free Cash Flow 1 Calculated by dividing Non-GAAP gross profit by revenue less pass-through messaging surcharges of $98.6M in FY22, $23.4M in 1Q23, $27.5M in 2Q23, $31.8M in 3Q23, $39.6M in 4Q23, $42.5M in 1Q24, $45.2M in 2Q24, $55.1M in 3Q24, $65.9M in 4Q24, $40.8M in 1Q25, $44.2M in 2Q25, $50.1M in 3Q25, and $57.4M in 4Q25. 2 Non-recurring items not indicative of ongoing operations and other include (i) $0.9 million of foreign currency losses on the settlement of intercompany borrowings, which were repatriated in conjunction with the repurchase of the 2026 Convertible Notes and $0.6 million of nonrecurring litigation expense for the year ended December 31, 2022, (ii) a $1.0 million gain on the sale of an intangible asset for the year ended December 31, 2024, and (iii) $0.4 million, $0.8 million, and $0.5 million of losses on disposals of property, plant and equipment during the years ended December 31, 2024, 2023, and 2022, respectively. For the year ended December 31, 2025, non-recurring items not indicative of ongoing operations and other include $1.3 million of foreign exchange charges primarily related to balance sheet revaluations, $0.5 million in nonrecurring litigation expense, $0.9 million of losses on disposals of property, plant and equipment, and $0.1 million of losses on sale of business. 3 Represents the acquisition cost of property, plant and equipment and capitalized development costs for software for internal us e. Note: Totals may not sum due to rounding. FY22 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 4Q24 FY24 1Q25 2Q25 3Q25 4Q25 FY25 Gross Profit 238.4 55.7 59.0 59.5 62.1 236.2 65.5 64.8 73.1 76.5 280.0 71.5 71.7 73.8 78.1 295.1 Gross Margin % 42% 40% 40% 39% 38% 39% 38% 37% 38% 36% 37% 41% 40% 38% 38% 39% Depreciation 13.6 3.5 4.2 4.1 4.5 16.3 4.8 4.7 4.7 4.4 18.5 4.7 5.2 5.3 5.5 20.7 Amortization of acquired intangible assets 7.7 1.9 2.0 2.0 1.9 7.8 2.0 1.9 2.0 1.9 7.8 1.9 2.0 2.1 2.1 8.1 Stock-based compensation 0.4 0.2 0.2 0.2 0.6 1.1 0.4 0.4 0.4 0.5 1.6 0.5 0.5 0.5 0.6 2.2 Non-GAAP Gross Profit 260.0 61.3 65.3 65.7 69.0 261.4 72.6 71.8 80.1 83.4 307.9 78.6 79.4 81.7 86.3 326.0 Non-GAAP Gross Margin %1 55% 54% 55% 55% 55% 55% 57% 56% 58% 58% 57% 59% 58% 58% 57% 58% Net Income (loss) 19.6 3.6 (3.9) (5.1) (10.9) (16.3) (9.2) 4.1 0.4 (1.8) (6.5) (3.7) (4.9) (1.2) (3.0) (12.9) Income tax (benefit) provision (2.3) (3.1) 0.2 (0.2) 0.2 (3.0) (0.2) (0.3) (0.7) (1.2) (2.4) (0.1) 0.1 (2.3) (1.5) (3.7) Interest expense (income), net 3.0 0.9 0.3 (0.1) (0.4) 0.8 (0.6) 0.7 1.0 0.8 1.9 0.5 0.5 0.5 0.5 2.0 Depreciation 18.4 4.6 5.5 6.6 7.7 24.4 8.1 8.0 8.0 7.7 31.7 8.2 8.8 9.2 9.5 35.7 Amortization 17.2 4.3 4.3 4.3 4.3 17.3 4.4 4.3 4.4 4.4 17.5 4.3 4.6 4.6 4.6 18.1 Stock-based compensation 20.7 7.4 8.0 6.9 14.7 37.0 12.3 11.4 11.4 13.2 48.4 13.6 12.5 12.3 13.9 52.3 Gain on sale of business (3.8) - - - - - - - - - - - - - - - Net cost associated with early lease terminations and leases without economic benefit - - - 1.2 2.8 4.0 1.2 0.9 0.4 - 2.4 - - - - - Net gain on extinguishment of debt (40.2) (12.8) - - - (12.8) - (10.3) - - (10.3) (1.1) - - - (1.1) Gain on business interruption insurance recoveries - - (4.0) - - (4.0) - - - - - - - - - - Non-recurring items not indicative of ongoing operations and other 2 2.0 0.2 0.2 0.1 0.4 0.8 0.1 - (1.0) 0.3 (0.6) 0.5 0.3 1.2 0.8 2.8 Adjusted EBITDA 34.6 5.1 10.6 13.8 18.8 48.2 15.9 18.7 24.0 23.4 82.1 22.2 21.9 24.3 24.8 93.3 Net cash provided by (used in) operating activities 34.9 (6.4) 3.1 23.0 19.3 39.0 2.5 24.4 20.5 36.5 83.9 (3.1) 31.7 22.2 38.6 89.5 Net cash used in investing in capital assets 3 (45.4) (4.5) (4.3) (4.8) (6.2) (19.9) (6.9) (6.1) (6.2) (6.2) (25.4) (10.2) (6.1) (9.1) (7.5) (32.9) Free cash flow (10.5) (10.9) (1.2) 18.2 13.0 19.1 (4.4) 18.3 14.2 30.3 58.5 (13.3) 25.6 13.1 31.1 56.6 USD millions, except per share amounts
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24 Adjusted EBITDA: Net income or losses from continuing operations, adjusted to reflect the addition or elimination of certain statement of operations items including, but not limited to: income tax (benefit) provision, interest (income) expense, net, depreciation and amortization expense, acquisition related expenses, stock-based compensation expense, impairment of intangible assets, (gain) loss on sale of business, net cost associated with early lease terminations and leases without economic benefit, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, and non-recurring items not indicative of ongoing operations and other. Adjusted EBITDA margin: Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by cloud communications revenue, which excludes pass-through messaging surcharge revenue. Average annual customer revenue: Average annual customer revenue is the trailing twelve month revenue divided by the average number of active customers from the current quarter and number of active customers from the same quarter of the prior year. Cloud communications revenue: Total revenue less pass-through messaging surcharge revenue. Customer name retention rate: Customer name retention rate (CNRR) is defined as the percentage of customers with $100k or greater revenue in the prior twelve month period that remain customers in the current twelve month period. Free cash flow: Free cash flow represents net cash provided by or used in operating activities less net cash used in the acquisition of property, plant and equipment and capitalized development costs of software for internal use. Free cash flow margin: Free cash flow margin is calculated by dividing free cash flow by cloud communications revenue, which excludes pass-through messaging surcharge revenue. Messaging surcharge revenue: Revenue derived from fees imposed by certain carriers within the messaging ecosystem, which are subsequently invoiced and passed through to customers. Net Retention Rate ("NRR"): To calculate the net retention rate, we first identify the cohort of customers that generated revenue in the same quarter of the prior year. The net retention rate is obtained by dividing the revenue generated from that cohort in a quarter, by the revenue generated from that same cohort in the corresponding quarter in the prior year. The net retention rate reported in a quarter is then obtained by averaging the result from that quarter by the corresponding results from each of the prior three quarters. Customers of acquired businesses are included in the subsequent year’s calendar quarter of acquisition. Non-GAAP Gross Profit: Gross profit after adding back the following items: depreciation and amortization; amortization of acquired intangible assets related to acquisitions; and stock-based compensation. Non-GAAP Gross Margin: Non-GAAP Gross Margin is calculated by dividing non-GAAP gross profit by cloud communications revenue, which excludes pass-through messaging surcharge revenue. Non-GAAP Net Income: Net income or loss adjusted for certain items affecting period to period comparability. Non-GAAP net income excludes stock-based compensation, amortization of acquired intangible assets related to acquisitions, amortization of debt discount and issuance costs for convertible debt, acquisition related expenses, impairment charges of intangibles assets, if any, net cost associated with early lease terminations and leases without economic benefit, (gain) loss on sale of business, net (gain) loss on extinguishment of debt, gain on business interruption insurance recoveries, non-recurring items not indicative of ongoing operations and other, and estimated tax impact of above adjustments, net of valuation allowances. Definitions