−Removed: Financial Statements and Supplementary Data
+Added: Financial Statements
BANDWIDTH INC.
3 unchanged sentences
Consolidated Statements of Operations
−Removed: Consolidated Statements of Comprehensive Loss
+Added: Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Changes in Stockholders’ Equity
5 unchanged sentences
We have audited the accompanying consolidated balance sheets of Bandwidth Inc.
−Removed: (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.
40 unchanged sentences
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 20, 2025 expressed an unqualified opinion thereon.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 19, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
24 unchanged sentences
Marketable securities 8,476 1,975
−Removed: Accounts receivable, net of allowance for doubtful accounts 86,455 78,155
+Added: Accounts receivable, net of allowances 91,409 86,455
Deferred costs 4,830 3,729
13 unchanged sentences
Current portion of deferred revenue 8,742 7,031
−Removed: Advanced billings 3,698 6,027
Operating lease liability, current 3,947 3,111
+Added: Current portion of convertible senior notes 7,627 —
Total current liabilities 154,067 140,323
39 unchanged sentences
Operating loss ( 14,369 ) ( 20,059 ) ( 35,457 )
−Removed: Other income:
+Added: Other (expense) income, net:
Net gain on extinguishment of debt 1,082 10,267 12,767
1 unchanged sentence
Interest expense, net ( 2,028 ) ( 1,861 ) ( 808 )
−Removed: Other income, net 2,700 195 4,473
−Removed: Total other income 11,106 16,154 41,630
−Removed: (Loss) income before income taxes ( 8,953 ) ( 19,303 ) 17,306
+Added: Other (expense) income, net ( 1,276 ) 2,700 195
+Added: Total other (expense) income, net ( 2,222 ) 11,106 16,154
+Added: Loss before income taxes ( 16,591 ) ( 8,953 ) ( 19,303 )
Income tax benefit 3,679 2,429 2,960
−Removed: Net (loss) income $ ( 6,524 ) $ ( 16,343 ) $ 19,570
+Added: Net loss $ ( 12,912 ) $ ( 6,524 ) $ ( 16,343 )
Earnings per share:
−Removed: Net (loss) income per share:
−Removed: Basic $ ( 0.24 ) $ ( 0.64 ) $ 0.77
−Removed: Diluted $ ( 0.24 ) $ ( 0.64 ) $ ( 0.48 )
−Removed: Numerator used to compute net (loss) income per share:
−Removed: Basic $ ( 6,524 ) $ ( 16,343 ) $ 19,570
−Removed: Diluted $ ( 6,524 ) $ ( 16,343 ) $ ( 14,897 )
−Removed: Weighted average number of common shares outstanding:
−Removed: Basic 27,209,698 25,612,724 25,282,796
−Removed: Diluted 27,209,698 25,612,724 30,907,869
+Added: Net loss per share, basic and diluted $ ( 0.43 ) $ ( 0.24 ) $ ( 0.64 )
+Added: Weighted average number of common shares outstanding, basic and diluted 29,996,861 27,209,698 25,612,724
See accompanying notes.
BANDWIDTH INC.
−Removed: Consolidated Statements of Comprehensive Loss
+Added: Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
1 unchanged sentence
2025 2024 2023
−Removed: Net (loss) income $ ( 6,524 ) $ ( 16,343 ) $ 19,570
−Removed: Other comprehensive (loss) income
−Removed: Unrealized (loss) gain on marketable securities, net ( 61 ) ( 248 ) 314
+Added: Net loss $ ( 12,912 ) $ ( 6,524 ) $ ( 16,343 )
+Added: Other comprehensive income (loss)
+Added: Unrealized gain (loss) on marketable securities, net 24 ( 61 ) ( 248 )
Foreign currency translation, net 50,297 ( 23,306 ) 15,698
Unrealized gain (loss) on employee benefit plan, net 120 152 ( 30 )
−Removed: Total other comprehensive (loss) income ( 23,215 ) 15,420 ( 31,174 )
−Removed: Total comprehensive loss $ ( 29,739 ) $ ( 923 ) $ ( 11,604 )
+Added: Total other comprehensive income (loss) 50,441 ( 23,215 ) 15,420
+Added: Total comprehensive income (loss) $ 37,529 $ ( 29,739 ) $ ( 923 )
See accompanying notes.
10 unchanged sentences
Equity awards withheld for tax liability ( 46,313 ) — — — ( 941 ) — — ( 941 )
−Removed: Adjustment to opening retained earnings due to adoption of ASU 2020-06 — — — — ( 156,248 ) — 8,750 ( 147,498 )
−Removed: Unrealized gain on marketable securities — — — — — 314 — 314
+Added: Conversion of Class B voting common stock to Class A voting common stock 7,142 — ( 7,142 ) — — — — —
+Added: Unrealized loss on marketable securities — — — — — ( 248 ) — ( 248 )
Foreign currency translation — — — — — 15,698 — 15,698
−Removed: Unrealized gain on employee benefit pension plan — — — — — 367 — 367
+Added: Unrealized loss on employee benefit pension plan — — — — — ( 30 ) — ( 30 )
Stock-based compensation — — — — 26,662 — — 26,662
−Removed: Net income — — — — — — 19,570 19,570
+Added: Net loss — — — — — — ( 16,343 ) ( 16,343 )
Balance at December 31, 2023 24,206,140 24 1,958,028 2 391,048 ( 28,794 ) ( 64,890 ) 297,390
2 unchanged sentences
Equity awards withheld for tax liability ( 118,357 ) — — — ( 2,296 ) — — ( 2,296 )
−Removed: Conversion of Class B voting common stock to Class A voting common stock 7,142 — ( 7,142 ) — — — — —
Unrealized loss on marketable securities — — — — — ( 61 ) — ( 61 )
Foreign currency translation — — — — — ( 23,306 ) — ( 23,306 )
−Removed: Unrealized loss on employee benefit pension plan — — — — — ( 30 ) — ( 30 )
+Added: Unrealized gain on employee benefit pension plan — — — — — 152 — 152
Stock-based compensation — — — — 47,008 — — 47,008
4 unchanged sentences
Equity awards withheld for tax liability ( 183,950 ) — — — ( 2,945 ) — — ( 2,945 )
−Removed: Unrealized loss on marketable securities — — — — — ( 61 ) — ( 61 )
+Added: Unrealized gain on marketable securities — — — — — 24 — 24
Foreign currency translation — — — — — 50,297 — 50,297
10 unchanged sentences
Cash flows from operating activities
−Removed: Net (loss) income $ ( 6,524 ) $ ( 16,343 ) $ 19,570
−Removed: Adjustments to reconcile net (loss) income to net cash provided by operating activities
+Added: Net loss $ ( 12,912 ) $ ( 6,524 ) $ ( 16,343 )
+Added: Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization 53,764 49,242 41,717
14 unchanged sentences
Purchase of property, plant and equipment ( 22,261 ) ( 13,986 ) ( 9,257 )
−Removed: Deposits for construction in progress — — ( 18,674 )
Refund of deposits for construction in progress — 2,707 —
15 unchanged sentences
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 440 ) ( 1,241 ) 610
−Removed: Net (decrease) increase in cash, cash equivalents, and restricted cash ( 50,073 ) 17,685 ( 217,667 )
+Added: Net increase (decrease) in cash, cash equivalents, and restricted cash 20,926 ( 50,073 ) 17,685
Cash, cash equivalents, and restricted cash, beginning of period 82,234 132,307 114,622
10 unchanged sentences
Supplemental disclosure of cash flow information
−Removed: Cash paid for (received from) interest $ 691 $ ( 1,500 ) $ 18
−Removed: Cash paid for taxes $ 3,815 $ 7,203 $ 3,932
+Added: Cash (received from) paid for interest $ ( 182 ) $ 691 $ ( 1,500 )
+Added: Cash (refunded) paid for taxes $ ( 55 ) $ 3,815 $ 7,203
Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,661 $ 1,905 $ 156,025
6 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: Organization and Description of Business
+Added: Description of Business and Summary of Significant Accounting Policies
+Added: Description of Business
Bandwidth Inc.
2 unchanged sentences
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.
−Removed: Summary of Significant Accounting Policies
Basis of Presentation
6 unchanged sentences
The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes.
−Removed: These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability components of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities.
+Added: These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability components of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies.
Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates.
54 unchanged sentences
________________________
−Removed: (1) Included in accounts receivable, net of allowance for doubtful accounts on the consolidated balance sheets.
+Added: (1) Included in accounts receivable, net of allowances on the consolidated balance sheets.
(2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the consolidated balance sheets.
8 unchanged sentences
Network operations costs are incurred for web services and cloud infrastructure, capacity planning and management, software licenses, hardware and software maintenance fees, customer support and network-related facility rents.
−Removed: Personnel costs (including non-cash stock-based compensation expenses) arise for employees who are responsible for the delivery of services, and operations and maintenance of, the communications network.
+Added: Personnel costs (including stock-based compensation expenses) arise for employees who are responsible for the delivery of services, and operations and maintenance of, the communications network.
Notes to Consolidated Financial Statements (continued)
23 unchanged sentences
Unrealized gains and losses are excluded from earnings and recorded as a separate component within accumulated other comprehensive loss on the consolidated balance sheets until realized.
−Removed: Interest income is reported within other income, net on the consolidated statements of operations.
+Added: Interest income is reported within other (expense) income, net on the consolidated statements of operations.
The Company evaluates its investments to assess whether the amortized cost basis is in excess of estimated fair value and determines what amount of that difference, if any, is caused by expected credit losses.
−Removed: Allowance for credit losses are recognized as a charge in other income, net on the consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the consolidated balance sheets.
+Added: Allowance for credit losses are recognized as a charge in other (expense) income, net on the consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the consolidated balance sheets.
Due to the nature and investment grade of the Company’s marketable securities, there were no credit losses recorded for the year ended December 31, 2025.
There have been no impairment charges for any unrealized losses during the period.
−Removed: The Company determines realized gains and losses on the sale of
+Added: The Company determines realized gains and
Notes to Consolidated Financial Statements (continued)
−Removed: marketable securities using the specific identification method and records such gains and losses in other income, net on the consolidated statements of operations.
+Added: losses on the sale of marketable securities using the specific identification method and records such gains and losses in other (expense) income, net on the consolidated statements of operations.
Accounts Receivable and Current Expected Credit Losses
17 unchanged sentences
For the years ended December 31, 2025, 2024 and 2023, no individual customer represented more than 10% of the Company’s revenue.
−Removed: Notes to Consolidated Financial Statements (continued)
The Company determines if an arrangement is or contains a lease at inception and reassesses that conclusion if the contract is modified.
6 unchanged sentences
The Company generally uses its incremental borrowing rate (“IBR”) based on the information available at commencement to determine the present value of lease payments, except when an implicit interest rate is readily determinable.
−Removed: Operating lease expense attributable to lease payments is recognized on a straight-line basis over the lease term and is part of allocated facilities costs based on employee headcount within the cost of revenue, research and development, sales and marketing, and general and administrative expense categories on the Company’s consolidated statements of operations.
+Added: Operating lease expense attributable to lease payments is recognized on a straight-line basis over the lease term and is part of allocated facilities costs based on employee headcount within the cost of revenue, research and development, sales and marketing, and general and administrative expense categories on the Company’s
+Added: Notes to Consolidated Financial Statements (continued)
+Added: consolidated statements of operations.
The Company presents the operating leases in long-term assets and current and long-term liabilities in the accompanying consolidated balance sheets.
12 unchanged sentences
These costs include installment fees, activation and other telecommunication fees.
−Removed: The Company capitalizes these costs and amortizes them over the longer of the term of the customer contract or the estimated period of benefit, which is approximately four years .
+Added: The Company capitalizes these costs and amortizes them over the longer of the term of the customer contract or the estimated period of benefit.
Internal-Use Software Development Costs
6 unchanged sentences
Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.
−Removed: Notes to Consolidated Financial Statements (continued)
Capitalized costs of platform and other software applications are included in property, plant and equipment, net.
5 unchanged sentences
The Company has a policy of deferring and amortizing these costs based on the effective interest method over the term of the credit agreements or the convertible notes, as applicable.
+Added: Notes to Consolidated Financial Statements (continued)
Amortization of Intangibles
15 unchanged sentences
As of December 31, 2025, the Company completed a qualitative assessment under ASC 350 to determine whether the existence of events or circumstances indicated that it was more likely than not that the fair value of its reporting unit was less than its respective carrying value.
−Removed: The Company concluded that based on the relevant events
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: and circumstances, it was more likely than not that the reporting unit’s fair value exceeded its related carrying value and therefore no quantitative assessment was required.
+Added: The Company concluded that based on the relevant events and circumstances, it was more likely than not that the reporting unit’s fair value exceeded its related carrying value and therefore no quantitative assessment was required.
No goodwill impairment charges were recorded for the years ended December 31, 2025, 2024 and 2023.
3 unchanged sentences
If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value.
+Added: Notes to Consolidated Financial Statements (continued)
Business Combinations
13 unchanged sentences
The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant.
+Added: Certain share-based payment arrangements contingent upon company performance are classified as liability-based awards with expense recognized ratably over the service period (typically one year) and based on the probability of achievement.
The Company used the Black-Scholes option pricing model, net of estimated forfeitures, to measure the fair value of its stock options.
13 unchanged sentences
The Company recognizes potential accrued interest and penalties associated with unrecognized tax positions in income tax benefit in the accompanying consolidated statements of operations.
−Removed: Basic and Diluted (Loss) Income per Common Share
−Removed: Basic net (loss) income per share attributable to common stockholders is calculated by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding for the period.
−Removed: Diluted net (loss) income per share is calculated by giving effect to all potentially dilutive shares of common stock, including stock options, and stock related to unvested restricted stock awards and convertible debt.
+Added: Basic and Diluted Loss per Common Share
+Added: Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period.
+Added: Diluted net loss per share is calculated by giving effect to all potentially dilutive shares of common stock, including stock options, and stock related to unvested restricted stock awards and convertible debt.
In periods of net loss, all potentially issuable shares of common stock are excluded from the diluted net loss per share computation because they are anti-dilutive.
The Company is in a net loss position for the years ended December 31, 2025, 2024 and 2023, and therefore diluted shares equals basic shares.
−Removed: Foreign currency translation
+Added: Foreign Currency
The Company has foreign operations with non-USD functional currencies.
6 unchanged sentences
They result from exchange rate changes during the period of time between the consummation and cash settlement of such transactions.
−Removed: When realized, foreign currency transaction gains and losses are recognized in current period earnings as incurred, and included in other income, net in the Company’s consolidated statements of operations.
−Removed: Foreign exchange gains and losses, which result from the process of remeasuring foreign currency assets and liabilities into the appropriate functional currency at exchange rates in place as of the reporting date, are included in other income, net in the Company’s consolidated statements of operations.
+Added: When realized, foreign currency transaction gains and losses are recognized in current period earnings as incurred, and included in other (expense) income, net in the Company’s consolidated statements of operations.
+Added: Foreign exchange gains and losses, which result from the process of remeasuring foreign currency assets and liabilities into the appropriate functional currency at exchange rates in place as of the reporting date, are included in other (expense) income, net in the Company’s consolidated statements of operations.
Notes to Consolidated Financial Statements (continued)
1 unchanged sentence
The Company minimizes its credit risk associated with investments by investing primarily in investment grade, liquid securities.
−Removed: The Company policy is designed to preserve capital, maintain liquidity and minimize credit risk, and the policy limits exposure to any one issuer and also establishes minimum credit ratings of approved investments.
+Added: The Company’s policy is designed to preserve capital, maintain liquidity and minimize credit risk, and the policy limits exposure to any one issuer and also establishes minimum credit ratings of approved investments.
Periodic evaluations of relative credit standing of those issuers are considered in the Company's investment strategy.
6 unchanged sentences
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
−Removed: Comprehensive Loss
−Removed: The Company has elected to present comprehensive loss and its components as a separate financial statement.
−Removed: Comprehensive loss refers to net (loss) income and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income.
+Added: Comprehensive Income (Loss)
+Added: The Company has elected to present comprehensive income (loss) and its components as a separate financial statement.
+Added: Comprehensive income (loss) refers to net loss and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income.
Business Interruption Insurance Recovery
5 unchanged sentences
Recently Adopted Accounting Standards
−Removed: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities, including public entities with a single reporting segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker (“CODM”) to allocate resources and assess performance.
−Removed: Additionally, the standard requires disclosures of significant segment expenses as well as incremental qualitative disclosures.
−Removed: The Company adopted ASU 2023-07 effective December 31, 2024, on a retrospective basis.
−Removed: The adoption of ASU 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company's segment-related disclosures.
−Removed: See Note 13 , “Segment Reporting,” to the consolidated financial statements, for additional details on the Company ’ s reportable segment.
−Removed: Recent Accounting Pronouncements Not Yet Adopted
−Removed: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740):
Improvements to Income Tax Disclosures (“ASU 2023-09”).
−Removed: The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).
+Added: The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a certain quantitative threshold.
The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid.
−Removed: ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with the option to apply the guidance prospectively or retrospectively.
−Removed: Early adoption is permitted.
−Removed: The Company is currently evaluating the impact of adopting ASU 2023-09 on its financial statements and expects to adopt the guidance upon its effective date.
+Added: The Company adopted ASU 2023-09 effective January 1, 2025, which had no impact on the Company’s financial position or results of operations.
+Added: See Note 14 , “Income Taxes,” to the consolidated financial statements, for the additional applicable disclosures.
+Added: Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):
2 unchanged sentences
Early adoption is permitted.
−Removed: The Company is currently evaluating the impact of adopting ASU 2024-03 on its financial statements.
+Added: The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):
2 unchanged sentences
Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06.
−Removed: The Company, which has adopted ASU 2020-06, is currently evaluating the impact of adopting ASU 2024-03 on its financial statements and expects to adopt the guidance upon its effective date.
+Added: The Company, which has adopted ASU 2020-06, is currently evaluating the impact of adopting ASU 2024-04 on its consolidated financial statements and will adopt the guidance upon its effective date.
+Added: In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):
+Added: 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.
+Added: The practical expedient election assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.
+Added: ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.
+Added: Entities should apply the guidance prospectively and early adoption is permitted.
+Added: The Company is currently evaluating the impact of adopting ASU 2025-05 on its consolidated financial statements and will adopt the guidance upon its effective date.
+Added: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
+Added: Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40.
+Added: The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs.
+Added: ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with the option to apply the guidance prospectively, retrospectively, or via a modified prospective transition method.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements.
Notes to Consolidated Financial Statements (continued)
+Added: In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) (“ASU 2025-11”), which updates the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.
+Added: The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods.
+Added: ASU 2025-11 does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosures requirements, but rather to provide clarification.
+Added: ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 with the option to apply the guidance prospectively or retrospectively.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of adopting ASU 2025-11 on its consolidated financial statements.
+Added: In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”), which addresses suggestions received from stakeholders on the accounting standards and to make other incremental improvements to GAAP.
+Added: ASU 2025-12 addresses thirty-three issues on a broad range of topics which are intended to be improvements that are not expected to have a significant effect on current accounting practice or result in significant costs to most entities.
+Added: ASU 2025-12 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with the option to apply the guidance prospectively or retrospectively.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of adopting ASU 2025-12 on its consolidated financial statements.
+Added: Notes to Consolidated Financial Statements (continued)
Fair Value Measurements
12 unchanged sentences
Marketable securities:
+Added: Time deposits 5,000 5 — 5,005 — — 5,005
Commercial paper 3,447 24 — 3,471 — — 3,471
8 unchanged sentences
Money market account $ 57,759 $ — $ — $ 57,759 $ — $ — $ 57,759
+Added: Commercial paper 18,489 — — 18,489 — — 18,489
Total included in cash and cash equivalents 76,248 — — 76,248 — — 76,248
Marketable securities:
−Removed: Time deposits 20,000 — — 20,000 — — 20,000
Commercial paper 1,970 5 — 1,975 — — 1,975
13 unchanged sentences
During the years ended December 31, 2025, 2024 and 2023, there were $ 9.7 million, $ 53.5 million, and $ 91.8 million , respectively, in maturities of marketable securities.
−Removed: There were no proceeds from sales of marketable securities for the year ended December 31, 2024.
−Removed: Proceeds from sales of marketable securities were $ 38.3 million and $ 34.4 million for the years ended December 31, 2023 and 2022, respectively.
+Added: There were no proceeds from sales of marketable securities for the years ended December 31, 2025 and 2024.
+Added: Proceeds from sales of marketable securities were $ 38.3 million for the year ended December 31, 2023.
Interest earned on marketable securities was $ 0.3 million, $ 1.0 million, and $ 2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: The interest is recorded in other income, net, on the accompanying consolidated statements of operations.
−Removed: As of December 31, 2024 and 2023, the accrued interest receivable, net of allowance for credit losses, was less than $ 0.1 million.
−Removed: Accrued interest receivable is recorded in prepaid expenses and other current assets on the accompanying consolidated balance sheets.
+Added: The interest is recorded in other (expense) income, net, on the accompanying consolidated statements of operations.
+Added: As of December 31, 2025 and 2024, the accrued interest receivable, net of allowance for credit losses, was not material.
As of December 31, 2025, the fair value of the 2026 Convertible Notes and 2028 Convertible Notes, as further described in Note 7, “Debt,” to these consolidated financial statements, was approximately $ 7.5 million and $ 219.7 million, respectively.
1 unchanged sentence
The fair value was determined based on the closing price for the Convertible Notes on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy.
−Removed: As of the years ended December 31, 2024 and 2023, the fair value of the Pension Plan’s assets, as further described in Note 14, “Employee Benefit Plans,” to these consolidated financial statements, was approximately $ 3.7 million and $ 3.6 million, respectively.
+Added: As of December 31, 2025 and 2024, the fair value of the Pension Plan’s assets, as further described in Note 13, “Employee Benefit Plans,” to these consolidated financial statements, was approximately $ 4.6 million and $ 3.7 million, respectively.
The fair value was determined by an independent actuary and is considered as Level 2 in the fair value hierarchy.
15 unchanged sentences
Total accounts receivable, net $ 91,409 $ 86,455
−Removed: Components of allowance for doubtful accounts and reserve for expected credit losses are as follows:
+Added: Components of the allowance for expected credit losses are as follows:
Year ended December 31,
2 unchanged sentences
Balance, beginning of period $ ( 2,172 ) $ ( 1,128 ) $ ( 1,191 )
−Removed: Charged to bad debt expense, net of reversals ( 2,984 ) ( 733 ) ( 543 )
+Added: Charged to credit loss expense, net of reversals ( 1,288 ) ( 2,984 ) ( 733 )
Deductions (1)
10 unchanged sentences
Accrued sales, use, VAT and telecommunications related taxes 4,421 7,898
+Added: Customer deposits 4,320 3,710
Other accrued expenses 1,197 554
1 unchanged sentence
Notes to Consolidated Financial Statements (continued)
−Removed: The Company has entered into various operating lease agreements for office space and finance lease agreements for automobiles.
−Removed: The Company primarily leases facilities for office space under non-cancelable operating leases for its U.S.
−Removed: and international locations.
−Removed: As of December 31, 2024, non-cancelable leases expire on various dates between 2025 and 2043, some of which include options to extend the leases for up to 20 years.
−Removed: For the years ended December 31, 2024, 2023 and 2022, operating lease cost recorded in the consolidated statements of operations was $ 23.1 million, $ 15.7 million and $ 7.8 million, respectively.
−Removed: During the years ended December 31, 2024, 2023 and 2022, short-term operating lease expense was $ 0.7 million, $ 0.6 million, and $ 0.6 million, respectively.
−Removed: Operating lease assets are recorded net of accumulated amortization of $ 7.3 million and $ 20.3 million as of December 31, 2024 and 2023, respectively.
−Removed: Other supplemental information related to operating leases were as follows:
−Removed: Year ended December 31,
−Removed: 2024 2023 2022
−Removed: Weighted average remaining lease term (in years) 18.29 19.30 2.12
−Removed: Weighted average discount rate 8.76 % 8.76 % 4.58 %
−Removed: Maturities of operating lease liabilities were as follows:
−Removed: As of December 31,
−Removed: (In thousands)
−Removed: 2025 $ 20,968
−Removed: Thereafter 357,016
−Removed: Total lease payments 470,327
−Removed: imputed interest ( 246,150 )
−Removed: accrued lease incentive ( 1,875 )
−Removed: Total lease obligations 222,302
−Removed: current obligations ( 3,111 )
−Removed: Long-term lease obligations $ 219,191
−Removed: Corporate Headquarters
−Removed: On August 1, 2023, the Company commenced a lease for a new corporate headquarters in Raleigh, North Carolina.
−Removed: The lease term will continue for a period of twenty ( 20 ) years (the “Initial Term”).
−Removed: The Company has the option to renew the Initial Term for two ten-year periods at a rental rate equal to 100 % of the then-prevailing market rental rate for comparable buildings in the Raleigh, North Carolina, market.
−Removed: The Company relocated its corporate headquarters to the leased property during the third quarter of 2023.
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: The Company evaluated the stated yield explicitly set forth in the lease, and determined it was not calculated in a manner as required by ASC 842.
−Removed: Therefore, the Company determined it appropriate to use its IBR as the discount rate for the lease.
−Removed: The IBR was estimated by determining the risk-free rate for a similar length security and applying a risk premium based on the Company’s estimated credit rating.
−Removed: Because the Company’s estimated credit rating was based on presumed unsecured credit, the rating was increased one level to estimate the yield on secured debt, consistent with ASC 842’s requirements.
−Removed: The estimated rate was 8.78 %.
−Removed: Upon commencement of the lease, the Company recognized ROU assets of $ 156.0 million and operating lease liabilities of $ 223.1 million, both of which do not include the two ten-year renewal options.
−Removed: The operating lease liabilities include $ 67.8 million of incentives provided by the landlord throughout development of the new corporate headquarters.
−Removed: Assets obtained through lease incentives are reported in property, plant and equipment, net, on the consolidated balance sheets.
−Removed: The Company also recorded $ 2.5 million in security deposits and $ 1.0 million in escrow deposits to fund additional improvements.
−Removed: As of December 31, 2024, there is no balance remaining on the escrow deposits to fund additional improvements.
−Removed: Deposits are reported as a component of other long-term assets on the Company’s consolidated balance sheets.
Property, Plant and Equipment
21 unchanged sentences
The Company capitalized $ 10.5 million, $ 11.7 million, and $ 10.6 million of software development costs for the years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: Notes to Consolidated Financial Statements (continued)
Amortization expense related to capitalized software development costs was $ 6.9 million, $ 4.2 million, and $ 3.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
−Removed: As of December 31, 2024, unamortized implementation costs related to cloud computing arrangements were less than $ 0.1 million, which is included in prepaid expenses and other current assets.
−Removed: The Company leases automobiles under leases accounted for as finance leases, which expire on various dates between 2025 and 2026.
−Removed: As of December 31, 2024, cost and accumulated depreciation of the assets under finance leases recorded by the Company were $ 0.4 million and $ 0.4 million, respectively.
−Removed: As of December 31, 2023, cost and accumulated depreciation of the assets under finance leases recorded by the Company were $ 0.5 million and $ 0.3 million, respectively.
−Removed: The Company recognized an impairment of $ 0.3 million during the year ended December 31, 2024, and $ 0.5 million in each of the years ended December 31, 2023 and 2022, related to capitalized software development costs that provided no future benefit.
−Removed: This expense is reflected within other income, net in the accompanying consolidated statements of operations.
+Added: As of December 31, 2025, all implementation costs related to cloud computing arrangements were fully amortized.
+Added: The Company recognized no material impairment during the years ended December 31, 2025, 2024 and 2023, related to capitalized software development costs that provided no future benefit.
+Added: Notes to Consolidated Financial Statements (continued)
The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows:
7 unchanged sentences
Total depreciation expense $ 35,670 $ 31,739 $ 24,443
−Removed: Notes to Consolidated Financial Statements (continued)
Goodwill and Intangible Assets
−Removed: The changes in carrying amount of goodwill were as follows:
+Added: The change in carrying amount of goodwill was as follows:
(In thousands)
17 unchanged sentences
Total intangible assets, net $ 242,709 $ ( 103,967 ) $ 138,742 $ 224,266 $ ( 78,911 ) $ 145,355
+Added: Notes to Consolidated Financial Statements (continued)
The Company recognized amortization expense as follows:
6 unchanged sentences
The remaining weighted average amortization period for definite lived intangible assets is 8.1 years.
−Removed: Notes to Consolidated Financial Statements (continued)
Future estimated amortization expense for definite lived intangible assets is as follows:
3 unchanged sentences
Thereafter 46,516
−Removed: Revolving Credit Facility
−Removed: On August 1, 2023, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, as borrower, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer.
−Removed: The Credit Agreement provides for a $ 50.0 million revolving credit facility (the “Credit Facility”), including a $ 15.0 million sublimit for the issuance of letters of credit and a swingline subfacility of up to $ 5.0 million.
−Removed: The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $ 25.0 million, subject to certain conditions.
−Removed: The Credit Facility matures on the earlier of (a) August 1, 2028 or (b) the date that is 91 days prior to the scheduled maturity date or mandatory conversion date of any of the Company’s outstanding convertible notes.
−Removed: The Credit Agreement requires that the Company maintain consolidated EBITDA, tested on a quarterly basis.
−Removed: The Company is also required to maintain minimum liquidity of $ 75.0 million, which includes the amount of undrawn borrowing commitments available under the Credit Agreement.
−Removed: Interest on borrowings under the Credit Facility accrues at an annual rate tied to a base rate or the Secured Overnight Financing Rate (“SOFR”), at the Company’s election.
−Removed: Loans based on SOFR bear interest at a rate equal to term SOFR for the applicable interest period plus 10 basis points plus an applicable margin between 2.25 % and 2.75 %, and loans based on the base rate bear interest at a rate equal to the base rate plus an applicable margin between 1.25 % and 1.75 %, in each case of the foregoing, depending upon the Company’s consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements have been delivered under the Credit Agreement.
−Removed: The Company is required to pay a quarterly commitment fee equal to between 0.05 % and 0.0625 % on the unused portion of the borrowing commitment, depending upon the Company’s consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements have been delivered under the Credit Agreement.
−Removed: On May 1, 2024, the Company entered into an amendment (the “Amendment”) to the Credit Agreement.
−Removed: The Amendment increased the aggregate revolving credit commitments to $ 100.0 million;
−Removed: increased the swingline sublimit to $ 10.0 million;
−Removed: increased the minimum liquidity to $ 82.5 million;
−Removed: and extended the maturity date to 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 any of the Company’s outstanding convertible notes.
+Added: The Company has entered into various operating lease agreements for office space and finance lease agreements for automobiles.
+Added: The Company primarily leases facilities for office space under non-cancelable operating leases for its U.S.
+Added: and international locations.
+Added: As of December 31, 2025, 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.
+Added: The components of operating lease expense recorded in the consolidated statements of operations were as follows:
+Added: Year ended December 31,
+Added: 2025 2024 2023
+Added: (In thousands)
+Added: Operating lease cost $ 22,843 $ 23,106 $ 15,655
+Added: Sublease income ( 2,199 ) — —
+Added: Total net lease cost $ 20,644 $ 23,106 $ 15,655
Notes to Consolidated Financial Statements (continued)
−Removed: On October 28, 2024, the Company entered into a second amendment (the “Second Amendment”) to the Credit Agreement, which increased the aggregate revolving credit commitments to $ 150.0 million and modified the maturity date to 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 any of the Company’s outstanding convertible senior notes due 2028.
−Removed: The Second Amendment also modified the applicable margin for loans based on SOFR to between 2.00 % and 2.50 %, and modified the applicable margin for loans based on the base rate to between 1.00 % and 1.50 %, in each case depending upon the Company’s consolidated total leverage ratio for the most recent fiscal quarter for which financial statements have been delivered under the Credit Agreement.
−Removed: The Company is now required to pay a quarterly commitment fee equal to between 0.20 % and 0.25 %, depending upon the Company’s consolidated total leverage ratio for the most recent fiscal quarter for which financial statements have been delivered under the Credit Agreement.
−Removed: The Second Amendment replaced existing financial covenants with the following new financial covenants:
−Removed: (a) (1) for each fiscal quarter ending on or prior to June 30, 2025, a consolidated senior secured leverage ratio not to exceed 2.75 to 1.00, and (2) for each fiscal quarter thereafter, a consolidated senior secured leverage ratio not to exceed 2.50 to 1.00;
+Added: During the years ended December 31, 2025, 2024 and 2023, short-term operating lease expense was $ 0.7 million, $ 0.7 million, and $ 0.6 million, respectively.
+Added: Operating lease assets are recorded net of accumulated amortization of $ 5.5 million and $ 7.3 million as of December 31, 2025 and 2024, respectively.
+Added: Other supplemental information related to operating leases were as follows:
+Added: Year ended December 31,
+Added: 2025 2024 2023
+Added: Weighted average remaining lease term (in years) 17.25 18.29 19.30
+Added: Weighted average discount rate 8.75 % 8.76 % 8.76 %
+Added: Maturities of operating lease liabilities were as follows:
+Added: As of December 31,
+Added: (In thousands)
+Added: 2026 $ 23,267
+Added: Thereafter 333,344
+Added: Total lease payments 452,058
+Added: imputed interest ( 227,092 )
+Added: Total lease obligations 224,966
+Added: current obligations ( 3,947 )
+Added: Long-term lease obligations $ 221,019
+Added: Corporate Headquarters
+Added: On August 1, 2023, the Company commenced a lease for a new corporate headquarters in Raleigh, North Carolina.
+Added: The lease term will continue for a period of twenty ( 20 ) years (the “Initial Term”).
+Added: The Company has the option to renew the Initial Term for two ten-year periods at a rental rate equal to 100 % of the then-prevailing market rental rate for comparable buildings in the Raleigh, North Carolina, market.
+Added: The Company relocated its corporate headquarters to the leased property during the third quarter of 2023.
+Added: Upon commencement of the lease, the Company recognized ROU assets of $ 156.0 million and operating lease liabilities of $ 223.1 million, both of which do not include the two ten-year renewal options.
+Added: The operating lease liabilities include $ 67.8 million of incentives provided by the landlord throughout development of the new corporate headquarters.
+Added: Assets obtained through lease incentives are reported in property, plant and equipment, net, on the consolidated balance sheets.
+Added: The Company also recorded $ 2.5 million in security deposits and $ 1.0 million in escrow deposits to fund additional improvements.
+Added: As of December 31, 2024, there is no balance remaining on the escrow deposits to fund additional improvements.
+Added: Notes to Consolidated Financial Statements (continued)
+Added: Related Party
+Added: On April 20, 2015, the Company created a wholly owned subsidiary, Relay, Inc., a Delaware corporation (f/k/a Republic Wireless, Inc.) ( “ Relay ” ) .
+Added: On November 30, 2016, the Company completed a pro-rata distribution of the common stock of Relay to its stockholders of record as of the close of business.
+Added: Due to equity ownership in Relay by certain members of Bandwidth’s Board of Directors, Relay is considered a related party to the Company.
+Added: On January 1, 2025, the Company commenced a sublease of a portion of its corporate headquarters to Relay.
+Added: 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.
+Added: During the year ended December 31, 2025, the Company received approximately $ 1.0 million in rental payments from Relay under the sublease.
+Added: As of December 31, 2025, total future minimum rent payments to the Company under this sublease were $ 10.0 million .
+Added: Revolving Credit Facility
+Added: In August 2023, the Company entered into a credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer.
+Added: The Credit Agreement provided for a $ 50.0 million revolving credit facility (the “Credit Facility”), including a $ 15.0 million sublimit for the issuance of letters of credit and a swingline subfacility of up to $ 5.0 million.
+Added: The Credit Facility has an accordion feature that allows for an increase in the total borrowing size of up to $ 25.0 million, subject to certain conditions.
+Added: The Credit Agreement was amended in 2024 to increase the Credit Facility to $ 150.0 million and increase the swingline sublimit to $ 10.0 million.
+Added: 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 any of the Company’s outstanding convertible notes due 2028.
+Added: The Credit Agreement requires that the Company maintain (a) (i) for each fiscal quarter ending on or prior to June 30, 2025, a consolidated senior secured leverage ratio not to exceed 2.75 to 1.00, and (ii) for each fiscal quarter thereafter, a consolidated senior secured leverage ratio not to exceed 2.50 to 1.00;
and (b) a consolidated fixed charge coverage ratio not less than 2.00 to 1.00, in each case tested as of the end of any fiscal quarter.
−Removed: The amendments modified exceptions to certain customary negative covenants to require a pro forma consolidated senior secured leverage ratio at least 0.50 to 1.00 inside the maximum then-applicable consolidated senior secured leverage ratio, and modified the exception to the restriction on additional convertible indebtedness to require a pro forma consolidated total leverage ratio over the most recent four fiscal quarters not to exceed 4.50 to 1.00.
+Added: Exceptions to certain customary negative covenants require a pro forma consolidated senior secured leverage ratio of at least 0.50 to 1.00 inside the maximum then-applicable consolidated senior secured leverage ratio, and exceptions to the restriction on additional convertible indebtedness require a pro forma consolidated total leverage ratio over the most recent four fiscal quarters not to exceed 4.50 to 1.00.
+Added: Interest on borrowings under the Credit Facility accrues at an annual rate tied to a base rate or the Secured Overnight Financing Rate (“SOFR”), at the Company’s election.
+Added: Loans based on SOFR bear interest at a rate equal to term SOFR for the applicable interest period plus 10 basis points plus an applicable margin between 2.00 % and 2.50 %, and loans based on the base rate bear interest at a rate equal to the base rate plus an applicable margin between 1.00 % and 1.50 %, in each case of the foregoing, depending upon the Company’s consolidated total leverage ratio for the most recent fiscal quarter for which financial statements have been delivered under the Credit Agreement.
+Added: The Company is required to pay a quarterly commitment fee equal to between 0.20 % and 0.25 % on the unused portion of the borrowing commitment, depending upon the Company’s consolidated total leverage ratio for the most recent fiscal quarter for which financial statements have been delivered under the Credit Agreement.
The obligations under the Credit Agreement are secured by a lien on substantially all of the Company’s tangible and intangible property and by a pledge of all of the equity interests of the Company’s direct domestic subsidiaries and 65 % of the voting capital stock and 100 % of the non-voting capital stock of any first-tier foreign subsidiaries, subject to limited exceptions.
In addition, the Company’s direct domestic subsidiaries guarantee the obligations under the Credit Agreement and grant a lien and pledge, as applicable, on substantially all of their tangible and intangible property to secure the obligations under the Credit Agreement.
+Added: Notes to Consolidated Financial Statements (continued)
As of December 31, 2025, unamortized debt issuance costs were $ 0.7 million, of which $ 0.2 million were included in prepaid expenses and other current assets and $ 0.5 million were included in other long-term assets.
8 unchanged sentences
The total net proceeds from the 2026 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2026 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $ 344.7 million.
−Removed: The excess of the principal amount of the liability component over its carrying
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.510 % over the contractual terms of the 2026 Convertible Notes.
+Added: The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.510 % over the contractual terms of the 2026 Convertible Notes.
Each $1,000 principal amount of the 2026 Convertible Notes is initially convertible into 10.9857 shares of the Company’s Class A common stock, par value $ 0.001 per share, which is equivalent to an initial conversion price of approximately $ 91.03 per share.
−Removed: During May 2024, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 Convertible Notes (the “2024 Repurchases”) to repurchase approximately $ 140.0 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $ 128.5 million.
−Removed: The 2024 Repurchases closed on May 9, 2024.
−Removed: Following the 2024 Repurchases and previous repurchases, approximately $ 35.0 million principal amount of the 2026 Convertible Notes remain outstanding.
−Removed: The difference between the consideration used for the 2024 Repurchases and the carrying value of the 2026 Convertible Notes resulted in a gain of $ 10.3 million recorded within net gain on extinguishment of debt on the Company’s condensed consolidated statements of operations for the year ended December 31, 2024.
+Added: During February 2025, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 Convertible Notes (the “2025 Repurchases”) to repurchase approximately $ 27.4 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $ 26.1 million.
+Added: The 2025 Repurchases closed on February 24, 2025.
+Added: Following the 2025 Repurchases and previous repurchases, approximately $ 7.6 million aggregate principal amount of the 2026 Convertible Notes remains outstanding.
+Added: The difference between the consideration used for the 2025 Repurchases and the carrying value of the 2026 Convertible Notes resulted in a gain of $ 1.1 million recorded within net gain on extinguishment of debt on the Company’s consolidated statements of operations for the year ended December 31, 2025.
The Company had previously entered into capped call transactions with certain financial institutions in connection with the 2026 Convertible Notes.
6 unchanged sentences
The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.442 % over the contractual terms of the 2028 Convertible Notes.
+Added: Notes to Consolidated Financial Statements (continued)
Each $1,000 principal amount of the 2028 Convertible Notes is initially convertible into 5.5781 shares of the Company’s Class A common stock, par value $ 0.001 per share, which is equivalent to an initial conversion price of approximately $ 179.27 per share.
4 unchanged sentences
The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest.
−Removed: In addition, upon the occurrence of a make-whole fundamental change (which includes the calling of any Convertible Notes for redemption), as defined in the applicable Notes Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period.
+Added: In addition, upon the occurrence of a make-whole fundamental change (which includes the calling of any Convertible Notes for redemption), as defined in the applicable Notes Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period.
The Company may redeem the Convertible Notes, in whole or in part, at its option at any time, and from time to time, on or after (i) March 6, 2023 for the 2026 Convertible Notes, or (ii) after April 6, 2025 for the 2028 Convertible Notes, in each case, on or before the fortieth ( 40 th ) scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding the redemption date, if the last reported sale price of the Class A common stock has exceeded 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading date immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including, the trading date immediately before the date on which the Company provides the related redemption notice.
6 unchanged sentences
The Convertible Notes may be convertible thereafter if one or more of the conversion conditions specified in each respective Notes Indenture are satisfied during future measurement periods.
−Removed: The Company continues to classify the Convertible Notes as a long-term liability in its consolidated balance sheets as of December 31, 2024, based on contractual settlement provisions.
+Added: The Company classifies the 2026 Convertible Notes as a current liability and the 2028 Convertible Notes as a long-term liability in its consolidated balance sheets as of December 31, 2025, based on contractual settlement provisions.
+Added: Notes to Consolidated Financial Statements (continued)
Upon the occurrence of a fundamental change (as defined in the applicable Notes Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the 2026 Convertible Notes or 2028 Convertible Notes for cash at a price equal to the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
−Removed: The net carrying amount of the liability components of the Convertible Notes were as follows:
+Added: The net carrying amount of the Convertible Notes were as follows:
As of December 31,
9 unchanged sentences
Total net carrying amount $ 255,189 $ 281,284
−Removed: Notes to Consolidated Financial Statements (continued)
The following table sets forth the interest expense recognized related to the Convertible Notes:
11 unchanged sentences
Total interest expense $ 2,421 $ 2,983 $ 3,719
+Added: Notes to Consolidated Financial Statements (continued)
In connection with the offering of the 2026 Convertible Notes and the 2028 Convertible Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “2026 Capped Calls” and the “2028 Capped Calls,” respectively and, collectively, the “Capped Calls”).
−Removed: The initial strike price of the Convertible Notes corresponds to the initial conversion price of the 2026 Convertible Notes and the 2028 Convertible Notes.
+Added: The initial strike price of the Capped Calls corresponds to the initial conversion price of the 2026 Convertible Notes and the 2028 Convertible Notes.
The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A common stock upon any conversion of the 2026 Convertible Notes and 2028 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price.
12 unchanged sentences
All of the Capped Calls were outstanding as of December 31, 2025.
−Removed: Notes to Consolidated Financial Statements (continued)
Geographic Information
−Removed: The following table summarizes revenue by geographic region, which is apportioned based on the destination of the service:
+Added: The following table summarizes the Company’s revenue by geographic region, which is apportioned based on the destination of the service:
Year ended December 31,
4 unchanged sentences
Total $ 753,817 $ 748,487 $ 601,117
−Removed: For the years ended December 31, 2024, 2023 and 2022, no country outside of the United States represented 10% or more of total revenues.
−Removed: The following table summarizes long-lived assets by geographic region:
+Added: For the years ended December 31, 2025, 2024 and 2023, no country outside of the United States represented 10% or more of the Company’s total revenues.
+Added: Notes to Consolidated Financial Statements (continued)
+Added: The following table summarizes the Company’s long-lived assets by geographic region:
As of December 31,
4 unchanged sentences
Stockholders’ Equity
−Removed: Preferred Stock
−Removed: As of December 31, 2024 and 2023, the Company had authorized 10,000,000 shares of undesignated preferred stock, par value $ 0.001 , of which no shares were issued and outstanding.
−Removed: As of December 31, 2024 and 2023, the Company had authorized 100,000,000 shares of Class A common stock, par value $ 0.001 per share and 20,000,000 shares of Class B common stock, par value $ 0.001 per share.
Shares of Class B common stock are convertible into shares of Class A common stock on a 1 :1 basis upon the stockholder’s voluntary written notice to the Company’s transfer agent or a transfer by the stockholder, subject to limited exceptions for transfers for estate planning purposes.
4 unchanged sentences
Dividend payments are not subject to restriction.
−Removed: Notes to Consolidated Financial Statements (continued)
Reserved Shares
11 unchanged sentences
However, the 2010 Plan continues to govern the terms and conditions of the outstanding awards granted thereunder.
−Removed: The Company’s Second Amended and Restated 2017 Incentive Award Plan (as amended from time to time, the “2017 Plan”) became effective on November 9, 2017.
+Added: Notes to Consolidated Financial Statements (continued)
+Added: The Company’s Third Amended and Restated 2017 Incentive Award Plan (as amended from time to time, the “2017 Plan”) originally became effective on November 9, 2017.
The 2017 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, and other stock or cash-based awards to employees, consultants and directors of the Company.
−Removed: A total of 1,050,000 shares of the Company’s Class A common stock were originally reserved for issuance under the 2017 Plan.
These available shares automatically increase each January 1, beginning on January 1, 2018, by 5 % of the number of shares of the Company’s Class A common stock outstanding on the final day of the immediately preceding calendar year.
On January 1, 2025, the shares available for grant under the 2017 Plan were automatically increased by 1,329,434 shares.
−Removed: On May 18, 2023, stockholders approved an amendment to the 2017 Plan that increased the number of shares available for grant by 2,500,000 shares.
+Added: On May 18, 2023 and May 29, 2025, stockholders approved amendments to the 2017 Plan that increased the number of shares available for grant by 2,500,000 and 4,500,000 shares, respectively.
The terms of the stock option grants are determined by the Company’s Board of Directors.
4 unchanged sentences
Stock compensation expense is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period.
−Removed: Depending on the nature of the underlying compensation plan, certain share-based payment arrangements may be classified as liability-based awards resulting in classification as accrued expenses on the consolidated balance sheets with the corresponding offset to stock-based compensation expense.
−Removed: As of December 31, 2024, awards granted under the 2010 Plan consisted of stock options and awards granted under the 2017 Plan consisted of stock options and RSUs.
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: Stock Options
−Removed: The following summarizes the stock option activity for the year ended December 31, 2024:
−Removed: outstanding Weighted-
−Removed: exercise price
−Removed: (Per share) Weighted-
−Removed: contract life
−Removed: (In years) Aggregate
−Removed: intrinsic value
−Removed: (In thousands)
−Removed: Outstanding as of December 31, 2023 97,480 $ 12.75 2.97 $ 332
−Removed: Exercised ( 17,305 ) 9.64
−Removed: Forfeited or expired ( 937 ) 22.81
−Removed: Outstanding as of December 31, 2024 79,238 $ 13.31 2.12 $ 377
−Removed: Options vested and exercisable at December 31, 2024 79,238 $ 13.31 2.12 $ 377
−Removed: Options vested and expected to vest as of December 31, 2024 79,238 $ 13.31 2.12 $ 377
−Removed: The total intrinsic value of stock options exercised for the years ended December 31, 2024, 2023 and 2022 was $ 0.2 million, $ 0.4 million and $ 0.6 million, respectively.
−Removed: Aggregate intrinsic value is computed based on the difference between the option exercise price and the fair value of the Company’s common stock at the time of such option exercises.
−Removed: No options were granted for the year ended December 31, 2024.
−Removed: As of December 31, 2021, all outstanding stock options were fully vested.
−Removed: As of December 31, 2024, the Company had no unrecognized compensation cost related to non-vested stock options.
+Added: Depending on the nature of the underlying compensation plan, certain share-based payment arrangements contingent upon company performance are classified as liability-based awards resulting in classification as accrued expenses on the consolidated balance sheets with the corresponding offset to stock-based compensation expense.
+Added: As of December 31, 2025, awards granted under the 2010 Plan consist of stock options and awards granted under the 2017 Plan consist of stock options and RSUs.
+Added: Outstanding stock options and related activity are not material for the periods presented.
Restricted Stock Units
30 unchanged sentences
Legal Matters
−Removed: The Company is involved as a defendant in various litigation, including, but not limited to, lawsuits alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services pursuant to applicable laws in various jurisdictions.
−Removed: The Company intends to vigorously defend these lawsuits and believes that it has meritorious defenses to each.
−Removed: However, litigation is inherently uncertain, and any judgment or injunctive relief entered against the Company or any adverse settlement could adversely affect the Company’s business, results of operations and financial condition.
+Added: 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.
+Added: Where it is determined that a loss is probable and estimable in a given matter, the Company establishes an accrual.
+Added: Any amounts accrued as of the balance sheet date are not material in any of the currently pending matters.
+Added: In management’s 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.
+Added: 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.
+Added: The Company disputes the City of San Francisco’s application of the ALT to Bandwidth as well as the amount of the deficiency.
+Added: On July 25, 2025, the Company paid and placed on deposit the amount under protest, as required by law.
+Added: On August 7, 2025, Bandwidth filed a Claim for Refund with the City of San Francisco seeking a refund of the full amount.
+Added: The Company to date has been unable to resolve the Claim for Refund with the City of San Francisco, and on December 31, 2025 the Company filed a Complaint for Refund challenging the assessment in the Superior Court of the State of California.
+Added: The Company believes it has meritorious arguments that support a refund of the full amount.
+Added: Notes to Consolidated Financial Statements (continued)
+Added: The Company is also involved as a defendant in a lawsuit alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services in Cook and Kane Counties, Illinois, the City of Chicago, Illinois, and the State of Illinois.
+Added: The Company intends to vigorously defend this lawsuit and believes that it has meritorious defenses.
Segment Reporting
The Company manages its business activities on a consolidated basis and operates in one operating segment.
−Removed: Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the CODM in deciding how to make operating decisions, allocate resources and in assessing performance.
+Added: 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 Company’s CODM is its Chief Executive Officer.
The CODM utilizes the Company’s budgeted and forecasted expense information as a key input to resource allocation.
−Removed: The CODM makes decisions on resource allocation, assesses performance of the business and monitors budget versus actual results using net (loss) income, as reported in the accompanying consolidated statements of operations.
−Removed: Significant expenses within net (loss) income include cost of revenue, research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Company’s consolidated statements of operations.
−Removed: Other segment items within net (loss) income include net gain on
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: extinguishment of debt, gain on business interruption insurance recoveries, interest expense, net, other income, net, and income tax benefit.
+Added: The CODM makes decisions on resource allocation, assesses performance of the business and monitors budget versus actual results using net loss, as reported in the accompanying consolidated statements of operations.
+Added: Significant expenses within net loss include cost of revenue, research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Company’s consolidated statements of operations.
+Added: Other segment items within net loss include net gain on extinguishment of debt, gain on business interruption insurance recoveries, interest expense, net, other (expense) income, net, and income tax benefit.
Employee Benefit Plans
14 unchanged sentences
The defined benefit obligation is calculated annually by an independent actuary using the Projected Unit Credit Method.
−Removed: The following table summarizes information for the pension plans:
−Removed: As of December 31,
−Removed: (In thousands)
−Removed: Change in benefit obligation:
−Removed: Benefit obligation at beginning of year $ 3,927 $ 3,502
−Removed: Service cost 309 264
−Removed: Interest cost 123 146
−Removed: Actuarial (gain) loss ( 138 ) 13
−Removed: Benefits paid ( 8 ) ( 41 )
−Removed: Taxes, insurance premiums and administrative expenses ( 52 ) ( 61 )
−Removed: Impact of foreign currency translation ( 222 ) 104
−Removed: Benefit obligation at end of year $ 3,939 $ 3,927
−Removed: Change in plan assets:
−Removed: Fair value of plan assets at beginning of year $ 3,607 $ 3,181
−Removed: Return on plan assets 64 41
−Removed: Actuarial loss ( 6 ) —
−Removed: Employer contribution 349 393
−Removed: Benefits paid ( 8 ) ( 41 )
−Removed: Taxes, insurance premiums and administrative expenses ( 52 ) ( 61 )
−Removed: Impact of foreign currency translation ( 205 ) 94
−Removed: Fair value of plan assets at end of year 3,749 3,607
−Removed: Funded status, net liability $ 190 $ 320
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: The Company’s pension liability for the Company’s non-U.S.
−Removed: defined benefit pension plans was $ 0.2 million and $ 0.3 million as of December 31, 2024 and 2023, respectively, which is included in other liabilities on the accompanying consolidated balance sheets.
−Removed: The following table summarizes information for the Company’s pension plans with an accumulated benefit obligation in excess of plan assets:
−Removed: As of December 31,
−Removed: (In thousands)
−Removed: Projected benefit obligation $ 3,939 $ 3,927
−Removed: Accumulated benefit obligation 3,737 3,623
−Removed: Fair value of plan assets 3,749 3,607
−Removed: The Company reports the service cost component of net periodic benefit cost in the same line item as other compensation costs arising from the services rendered by the employee and records the other components of net periodic benefit cost in other income, net .
−Removed: Pretax amounts for net periodic benefit cost and other amounts for the defined benefit pension plans consisted of the following components:
−Removed: Year ended December 31,
−Removed: 2024 2023 2022
−Removed: (In thousands)
−Removed: Service cost $ 309 $ 264 $ 268
−Removed: Interest cost 123 146 35
−Removed: Return on plan assets ( 64 ) ( 41 ) ( 26 )
−Removed: Amortization of actuarial gain ( 22 ) ( 27 ) —
−Removed: Net periodic pension cost 346 342 277
−Removed: Changes in plan assets and benefit obligations included in other comprehensive loss:
−Removed: Unrecognized net actuarial gain beginning of year ( 783 ) ( 705 ) ( 227 )
−Removed: Actuarial gain recognized during year 22 27 —
−Removed: Actuarial (gain) loss on benefit obligation ( 138 ) 13 ( 418 )
−Removed: Actuarial loss (gain) on fair value of plan assets 6 — ( 72 )
−Removed: Impact of foreign currency translation 44 ( 118 ) 12
−Removed: Total included in other comprehensive loss (before tax effect) ( 849 ) ( 783 ) ( 705 )
−Removed: Total recognized in net periodic benefit cost and included in other comprehensive loss $ ( 503 ) $ ( 441 ) $ ( 428 )
−Removed: The Company uses significant judgment to determine the measurement of their non-U.S.
−Removed: defined benefit pension plans’ assets and liabilities.
−Removed: These amounts are calculated by an independent actuary.
−Removed: The present value of the defined benefit obligation depends on a number of factors that are determined on an actuarial basis using a number of assumptions.
−Removed: Any change in these assumptions will impact the present value of the defined benefit obligation.
−Removed: The actuarial gains and losses recognized in the pension expense are determined using the so-called “10% corridor” method, i.e.
−Removed: actuarial gains and losses which exceed 10% of the higher of the plan assets and the projected
−Removed: Notes to Consolidated Financial Statements (continued)
−Removed: benefit obligation are amortized on a straight line basis over the average remaining service period of the active plan participants.
−Removed: Any prior service costs are amortized on a straight line basis over the average remaining service period of the active plan participants.
−Removed: The Company determines the appropriate discount rate at the end of each year.
−Removed: This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.
−Removed: In determining the appropriate discount rate, the Company considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related obligation.
−Removed: The other assumptions for pension obligations are based in part on market conditions.
−Removed: Significant assumptions used in determining benefit obligations and net periodic benefit cost are as follows:
−Removed: Year ended December 31,
−Removed: 2024 2023 2022
−Removed: Defined benefit obligations:
−Removed: Discount rate 3.70 % 3.25 % 3.80 %
−Removed: Rate of salary increase 1.00 % 2.70 % 4.67 %
−Removed: Inflation 2.00 % 1.80 % 2.30 %
−Removed: Defined benefit cost:
−Removed: Discount rate 3.70 % 3.25 % 3.80 %
−Removed: Rate of salary increase 1.00 % 2.70 % 4.67 %
−Removed: Rate of return on plan assets 1.70 % 1.80 % 1.20 %
−Removed: Inflation 2.00 % 1.80 % 2.30 %
−Removed: The Company’s non-U.S.
−Removed: defined benefit plans are insured by a third party.
−Removed: The investments are governed by the insurer, who oversees all investment decisions.
−Removed: The insurance contracts are classified as Level 2 because a portion of the underlying funds are valued using significant other observable inputs.
−Removed: The insurance contracts provide for a guaranteed interest credit and a profit-sharing adjustment based on the actual performance of the underlying investment assets of the insurer.
−Removed: The fair value of the contract is determined by the insurer based on the premiums paid by the Company plus interest credits plus the profit-sharing adjustment less benefit payments.
−Removed: The major category of plan assets are assets held by insurance companies (collective and individual) of $ 3.7 million and $ 3.6 million as of December 31, 2024 and 2023, respectively.
−Removed: Expected Cash Flows
−Removed: The Company expects to contribute $ 0.4 million to its non-U.S.
−Removed: defined benefit pension plans during 2025.
+Added: The net funded status and periodic benefit cost were not material for the years ended December 31, 2025, 2024 and 2023.
Notes to Consolidated Financial Statements (continued)
−Removed: The following table presents domestic and foreign components of (loss) income before income taxes for the tax years ended December 31, 2024, 2023 and 2022:
+Added: The following table presents domestic and foreign components of loss before income taxes for the tax years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
3 unchanged sentences
International ( 13,105 ) ( 16,623 ) ( 20,062 )
−Removed: (Loss) income before income taxes $ ( 8,953 ) $ ( 19,303 ) $ 17,306
+Added: Loss before income taxes $ ( 16,591 ) $ ( 8,953 ) $ ( 19,303 )
Benefit for income taxes from operations consists of the following:
7 unchanged sentences
Federal ( 23 ) 29 ( 75 )
−Removed: State — — ( 1 )
Foreign 5,121 5,376 7,216
2 unchanged sentences
Notes to Consolidated Financial Statements (continued)
−Removed: The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2024, 2023 and 2022:
+Added: The table below provides the updated requirements of ASU 2023-09 for 2025, as previously referred to in Note 1, “Description of Business and Summary of Significant Accounting Policies—Recently Adopted Accounting Standards,” to the consolidated financial statements.
+Added: The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate as follows:
Year Ended December 31, 2025
+Added: Amount Percent
+Added: (In thousands)
+Added: United States statutory tax rate $ 3,484 21.0 %
+Added: State and local income taxes, net of federal income tax effect (1)
( 307 ) ( 1.8 )
+Added: Foreign tax effects:
+Added: Effect of rates different than statutory 297 1.8
+Added: Innovation income deduction 702 4.2
+Added: Other ( 28 ) ( 0.2 )
+Added: Other ( 40 ) ( 0.2 )
+Added: United Kingdom:
+Added: Effect of rates different than statutory 323 1.9
+Added: Other ( 69 ) ( 0.4 )
+Added: Other foreign jurisdictions 115 0.7
+Added: Federal research credits 4,247 25.6
+Added: Other 150 0.9
+Added: Changes in valuation allowances ( 1,901 ) ( 11.5 )
+Added: Nontaxable or nondeductible items:
+Added: Meals and entertainment ( 195 ) ( 1.2 )
+Added: Stock-based compensation ( 1,700 ) ( 10.2 )
+Added: Non-deductible executive compensation ( 824 ) ( 5.0 )
+Added: Income from branch ( 288 ) ( 1.7 )
+Added: Other ( 125 ) ( 0.8 )
+Added: Changes in unrecognized tax benefits ( 284 ) ( 1.7 )
+Added: Other adjustments:
+Added: Other 122 0.8
+Added: Effective tax rate $ 3,679 22.2 %
+Added: ________________________
+Added: (1) State taxes in Washington, D.C.
+Added: and Virginia made up greater than 50% of the tax effect in this category.
+Added: Notes to Consolidated Financial Statements (continued)
+Added: For the year ended December 31, 2025, the Company recognized an income tax benefit of $ 3.7 million on pre-tax book loss of $ 16.6 million, resulting in an effective income tax rate of 22.2 %.
+Added: As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
+Added: Year Ended December 31,
Federal tax rate 21.0 % 21.0 %
12 unchanged sentences
For the year ended December 31, 2024, the Company recognized an income tax benefit of $ 2.4 million on pre-tax book loss of $ 9.0 million, resulting in an effective income tax rate of 27.1 %.
−Removed: For the year ended December 31, 2023, the Company recognized an income tax benefit of $ 3.0 million on pre-tax book loss of $ 19.3 million, resulting in an effective income tax rate of 15.3 %.
For the year ended December 31, 2023, the Company recognized an income tax benefit of $ 3.0 million on pre-tax book income of $ 19.3 million, resulting in an effective income tax rate of 15.3 %.
−Removed: In 2024, the Company’s valuation allowance in the U.S.
−Removed: continued to offset many of the permanent tax adjustments within the effective tax rate.
−Removed: These adjustments include state taxes, federal research tax credits under Internal Revenue Code Section 41, equity compensation in the U.S., and other non-deductible expenditures in the U.S.
−Removed: The Company has disclosed the statutory blended state income tax rate in the income tax rate reconciliation table.
−Removed: This statutory blended state income tax rate is the rate applied to the Company’s U.S.
−Removed: taxable earnings to calculate its state income tax liability.
−Removed: The Company has also disclosed other effective state tax adjustments which primarily include the state tax impact of permanent tax adjustments and the reconciling adjustment to remove the statutory blended state income tax rate effect from income or loss generated outside of the U.S.
−Removed: The Company continues to generate income tax benefits in the current period related to income tax credits recognized for qualified research activities in the U.S.
−Removed: The applicable federal tax law and regulations define qualified research activities as research and development activities conducted in the U.S.
−Removed: that involve a process of experimentation designed to discover new information intended to develop a new or improved business component.
−Removed: Absent the valuation allowance, equity compensation also impacts the effective tax rate to the extent the income tax deduction exceeds or is below the related book expense, as required under ASC 718-740-35-2.
−Removed: non-deductible expenses that are offset by the valuation allowance consist primarily of non-deductible executive compensation under Internal Revenue Code 162(m).
Notes to Consolidated Financial Statements (continued)
22 unchanged sentences
Net deferred tax liability $ 24,479 $ 27,304
+Added: On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.
+Added: The OBBBA did not change the statutory U.S.
+Added: federal tax rate.
+Added: Accordingly, the OBBBA did not require the Company to remeasure its deferred tax assets and liabilities solely because of a rate change.
+Added: However, the various changes in tax law did impact the Company’s current and deferred tax calculations.
+Added: The decreased deferred tax asset for capitalized research and development expenses and the increased deferred tax asset for net operating losses is primarily due to this new legislation.
The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets.
2 unchanged sentences
deferred tax assets was required.
+Added: The valuation allowance increased by $ 1.3 million during the year ended December 31, 2025.
As of December 31, 2025, the Company had approximately $ 44.1 million in U.S.
−Removed: federal net operating loss carryforwards, $ 20.1 million in U.K.
−Removed: loss carryforwards, and $ 15.7 million in U.S.
+Added: federal net operating loss carryforwards, and $ 19.8 million in U.S.
federal tax credits.
1 unchanged sentence
federal tax credits begin to expire in 2039.
+Added: Additionally, as of December 31, 2025 the Company had approximately $ 25.8 million in UK loss carryforwards.
+Added: Under current UK tax law, these losses can be carried forward indefinitely.
+Added: Notes to Consolidated Financial Statements (continued)
As of December 31, 2025, the Company had approximately $ 76.8 million in state net operating loss carryforwards.
If not utilized, some state net operating loss carryforwards will expire at various dates beginning in 2030.
−Removed: Notes to Consolidated Financial Statements (continued)
At December 31, 2025, the amount of unremitted earnings generated by the Company’s foreign subsidiaries is not significant.
14 unchanged sentences
For the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 0.0 million, $ 0.1 million and $ 0.3 million, respectively, in interest and penalties related to income taxes within income tax benefit in the accompanying consolidated statements of operations.
−Removed: The Company expects no material changes in the twelve months following December 31, 2024 in its uncertain tax positions.
The Company files U.S.
1 unchanged sentence
states and foreign jurisdictions.
−Removed: The tax years 2021 through 2023 remain open to examination by the major jurisdictions in which the Company is subject to tax.
+Added: As of December 31, 2025, the tax years 2022 through 2024 remain open to examination by the major jurisdictions in which the Company is subject to tax.
+Added: The Company is currently under audit by the Internal Revenue Service for the year ended December 31, 2023.
Notes to Consolidated Financial Statements (continued)
−Removed: Basic and Diluted (Loss) Income per Common Share
−Removed: The components of basic and diluted net (loss) income per share are as follows:
+Added: A summary of income taxes paid (refunded) by jurisdiction is as follows:
+Added: As of December 31,
+Added: (In thousands)
+Added: US Federal $ ( 280 )
+Added: California 674
+Added: Washington, D.C.
+Added: New Jersey 94
+Added: Pennsylvania ( 157 )
+Added: Other State ( 36 )
+Added: Belgium ( 821 )
+Added: Other Foreign 76
+Added: Net Refund $ ( 55 )
+Added: Basic and Diluted Loss per Common Share
+Added: The components of basic and diluted loss per share are as follows:
Year ended December 31,
2 unchanged sentences
Earnings per share:
−Removed: Net (loss) income attributable to common stockholders $ ( 6,524 ) $ ( 16,343 ) $ 19,570
−Removed: Net (loss) income per share:
−Removed: Basic $ ( 0.24 ) $ ( 0.64 ) $ 0.77
−Removed: Diluted $ ( 0.24 ) $ ( 0.64 ) $ ( 0.48 )
−Removed: Numerator used to compute net (loss) income per share:
−Removed: Basic $ ( 6,524 ) $ ( 16,343 ) $ 19,570
−Removed: Net gain on extinguishment of debt, net of taxes — — ( 39,614 )
−Removed: Interest expense on convertible notes, net of taxes — — 5,147
−Removed: Diluted $ ( 6,524 ) $ ( 16,343 ) $ ( 14,897 )
−Removed: Weighted average number of common shares outstanding:
−Removed: Basic 27,209,698 25,612,724 25,282,796
−Removed: Convertible debt conversion — — 5,625,073
−Removed: Diluted 27,209,698 25,612,724 30,907,869
−Removed: The following common share equivalents were excluded from the weighted average shares used to calculate diluted net (loss) income per common share because their effects would have been anti-dilutive:
−Removed: As of December 31,
+Added: Net loss attributable to common stockholders $ ( 12,912 ) $ ( 6,524 ) $ ( 16,343 )
+Added: Net loss per share, basic and diluted $ ( 0.43 ) $ ( 0.24 ) $ ( 0.64 )
+Added: Weighted average number of common shares outstanding, basic and diluted 29,996,861 27,209,698 25,612,724
+Added: The following common share equivalents were excluded from the weighted average shares used to calculate diluted net loss per common share because their effects would have been anti-dilutive:
+Added: Year ended December 31,
2025 2024 2023
3 unchanged sentences
Total 7,990,791 7,596,289 9,451,503
−Removed: Subsequent Events
−Removed: Repurchase of 2026 Convertible Notes
−Removed: On February 19, 2025, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of its 0.250 % Convertible Senior Notes due 2026 (the “Repurchases”) to repurchase approximately $ 27.4 million aggregate principal amount of the Notes for approximately $ 26.1 million, excluding customary transaction fees.
−Removed: The repurchase price payable by Bandwidth will be paid in cash.
−Removed: The Company has previously entered into capped call transactions with certain financial institutions in connection with the Notes.
−Removed: All of these transactions are expected to remain in effect notwithstanding the Repurchases.
Notes to Consolidated Financial Statements (continued)
−Removed: The Repurchases are expected to close on February 24, 2025, subject to the satisfaction of customary closing conditions.
−Removed: Following such closings, approximately $ 7.6 million principal amount of the Notes will remain outstanding.
+Added: Subsequent Events
+Added: On February 19, 2026, Bandwidth’s Board of Directors authorized a share repurchase program of up to $ 80.0 million of the Company’s outstanding Class A common stock, subject to market conditions, contractual restrictions and other factors.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The program does not obligate the Company to acquire any particular amount of Class A common stock, and the program may be extended, modified, suspended or terminated at any time at the Company’s discretion.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.