Bandwidth Inc. — Call Transcript 2026

Good afternoon, and welcome to the Needham Technology and Media Conference. This afternoon we're excited to have Bandwidth presenting with CEO David Morken and CFO Daryl Raiford. David, you just had a pretty big quarter here, and we'll get to all of that. Just start off with an overview of Bandwidth and how you compare and contrast to a traditional carrier. Thank you, Josh, and appreciate being here, and thank you to all the Needham folks. Bandwidth is based in Raleigh, North Carolina. We are a global provider of communications and have an owned and operated voice network in over 60 countries, and a software platform on top of that network that allows enterprise customers and large conferencing customers and large unified messaging customers, and now recently, large CRM customers, do voice calling around the world and also text messaging. We are very different from an incumbent carrier such as Verizon and AT&T and Lumen, from whom we win most of our new enterprise business, because of two important factors. The first, our footprint is around the world. Theirs is domestic only. Second, we have a software platform on top of that network that allows our enterprise customers to orchestrate call flows, to provision in real time, to configure services in ways that are both, through a GUI, through an API, and then recently, through a command line interface for the emerging agentic voice agents that we serve. Got it. Alright. One of the common questions I get is why is it important as a CPaaS vendor for you to own your own network versus kind of this fully aggregate others' networks, and how does that kind of create a competitive advantage for you? The utility and value of owning and operating your own voice network around the world, a network that's regulatorily compliant, really has two primary dimensions. The first is quality/reliability. The second is cost. On quality and reliability, by being able to control the hardware and the interconnected circuits around the world of this network, you really do have visibility and can manage the service delivery and plan and promise through an SLA the level of that service to your large enterprise customers. When Microsoft, for example, has a QBR with us and comes to the office rolling deep with 30 people, you're talking about your network's performance according to the parameters that you promised them, and you're also showing them where they may have emerging issues that only you can see throughout the guts of your network. That's the quality component. The reliability component is you get to manage your uptime by deploying capital against needs and priorities in a way that you don't get to see if you're relying on a Lumen, for example, and you're just renting or leasing the network from them. Not, I don't have anything against them, I'm just using them as an example. The second part is the cost advantage. When we went public in 2017, we had gross margins of mid-40s. We are now just below 60% gross margins for our voice service, or for our overall company, and the voice services are very similar. The reason we've grown our voice gross margins over that period of time is because we get to put every additional 1 billion minutes of month of voice traffic on our fixed infrastructure costs. The economies of scale emerge and allow you to grow your gross margin from the mid-40s toward 60%. Quality, reliability, cost, those all allow you to go to an enterprise customer as a single source around the world at a very good value. Got it. Another question I often get on you guys is why haven't the legacy carriers done more to keep up on the voice AI support kind of opportunity there? What do you think is their strategy around voice AI, and how has that static development helped your competitive dynamic? Yeah, static is a compliment. That the incumbent providers domestically have focused on the mobile opportunity for consumers. They have focused on broadband and rolling that out, they have not at all paid any attention to voice and what it means to support either cloud-based voice during the last migration from the premise to the cloud, nor the voice agent AI moment that we're in now. I've been told that they are the place where innovative software developers go to die, and because that's true, they have very little innovation or vision for what the future may or may not be. I don't see that changing. We're about to be 27 years old as a company in August, and that certainly hasn't changed for those 27 years. Got it. Alright. Before we get to some product and financial questions, maybe you could just rewind the last five years for investors since the pandemic. You know, what caused the voice revenue growth to slow post-pandemic? Now, how do you think about the re-acceleration here? How much is driven by AI versus some other market share gains or other factors? That's a lot there, I know. No, it's okay. When the pandemic hit and everyone was required to work from home, we were forced overnight to scale our network and service massively in support of customers such as Zoom and Microsoft Teams and Google. We were able to do that with our model effectively, and yet what that really did at that time was pull forward a huge amount of demand for moving from the prem to the cloud. That demand pull forward happened and we scaled massively. When everyone returned to the office or began returning to the office, that growth slowed, and you had more of a tempered pace of migration to the cloud in the intervening period. Going back now about a year, what has emerged is this moment of voice AI agents, their effectiveness, and their vitality, and that's turned voice into an enormous new opportunity as a critical infrastructure layer for the primary interface that we are all beginning to use for AI. Got it. Alright, you just had a significant may understate it, win with Salesforce Agentforce in their contact center offering. Why do you think you won that deal? How are you thinking about the ramp there? Then any other relevant information that you can share regarding the deal at this point? We are fired up to be Salesforce's partner with their announcement of Agentforce Voice Agents, and won that opportunity to partner with them precisely because of the global reach and the orchestration capability of our network and platform. The team there is very innovative. Their vision that every call should be a conference call with an intelligent voice agent as part of it really resonates deeply with our team. We think that that intelligence is meaningful in every sales conversation, and so the ability to support that is a great opportunity. They are a visionary team. They have enormous scale. They have a vision for Agentforce and Voice Agents that's compelling, and we have an asset base that was so unique globally and has high such high value that we were able to win out and be their partner and are excited about that now being GA and scaling. Alright. In terms of product innovation, you've done a lot around Maestro, trust and verification to drive total cost of ownership, but what specifically has been some of the priorities over the last few years in terms of product investments? We have invested in R&D to bring that Maestro orchestration layer to life, to have pre-integrations with all the major CCaaS providers, many of the UCaaS providers, with AI leaders, effort into that integration has been key. Footprint expansion is something that isn't valued appropriately, but getting to be able to provide regulatorily compliant PSTN service in Turkey, for example, with emergency services, is highly valued by our enterprise customers as an edge case jurisdiction, we have others that we've been building toward that we look forward to announcing in the future. Supporting the AI use cases that are emerging now has been a key area. When you have your OpenClaw or Hermes agent and you want to be able to have it, make a phone call or receive a phone call, we have a command line interface that you can go to or actually that you could point your agent at and it could sign up on your behalf. Efforts like that have been really exciting over the last several years, and seeing those come to fruition to provide a low latency global voice network for voice agents has been very rewarding. Right. One area is underappreciated is your global capabilities, which you highlighted a little bit here, and now you've continued to add a number of new countries under support. How do you think about adding new countries and ensuring direct carrier connections in these regions to support these low latency use cases? 'Cause that's really critical with the AI, the voice AI stuff. It starts with having a universal platform of the shared same components in each jurisdiction. If you are trying to stitch together various networks that you've acquired over years, that's a very challenging thing. We are excited about having come through and having a universal platform everywhere so that when we expand to a new jurisdiction, it has the uniform stack of gear and the protocols for security and jurisdictionalizing the traffic. There are countries we are not yet in which we're excited about, India being among them, where we're aggressively working toward offering the same level of service that we offer elsewhere. When we have customers, whether it's a large global enterprise or Salesforce, it's incumbent upon us to make sure we have the appropriate reach at the same level of quality and fidelity and to navigate that on their behalf. There's an enormous high value. AT&T can do that for you in the United States. Colt can do that for you in EMEA. Tata can do that for you in some jurisdictions. Nobody can touch the scale and scope of our country by country geography we serve. Got it. Maybe just touch on, you know, with voice AI, isn't this becoming an even bigger competitive advantage for you because of the low latency dynamic with all the direct carrier connections you have? How do you think about that aspect of it? It's vital. That the tech stack for inference and reasoning by itself is already 400 milliseconds to round-trip a prompt and a response, and yet the PSTN latency is understood to be about 400 milliseconds by itself. You've already spent your entire time budget for a conversation you don't get ticked off by just in getting an answer from the model. We have an advantage in our network when we can yield back to the reasoning model even 50 milliseconds or 20 milliseconds advantage. We have a thesis that there are component parts of the tech stack on the reasoning side that may be more effectively deployed closer to the core of the network where we have an advantage. Owning and operating the infrastructure and being able to drop components of the tech stack closer to where the communication is happening may yield back even more latency savings, and therefore accuracy. Those are things, even just adjusting jitter buffers to get 10 millisecond gains are vital for the improvement in accuracy and responsiveness. That's an advantage we have that others don't. Got it. That's a great point there. Alright, as you think about the progression of voice AI use cases across the ecosystem, right now they're heavily focused in customer support, and you were talking about this a little bit earlier in your meetings, but how do you see this evolution to sales and marketing use cases and other areas for enterprises developing in the next few years? It's very early in the growth of voice agents, and they originally became rationalized to save OpEx in a cost center like customer support. It was very easy for Daryl and his peers to say, "We know we can use a voice agent to render service more effectively, in a customer care context, resolving tickets, doing ticket deflection." What's happened just in the last 90 days, voice agents have gotten better and better, not just at handling customer care, but now in doing demand generation, lead creation and qualification, prospecting. That's new, and that's only in the last quarter. Those are revenue-generating upside cases. Small and medium business are deploying voice agents now during times of day when they don't have employees on station, doing roles that they otherwise wouldn't staff, whether it's appointments or calendaring or reminding. These are use cases beyond customer care that small and medium business now have access to that they're using that they would never otherwise be able to do. Got it. Alright, one concept that's gaining traction with investors right now is around the whole theme of conversational AI or guiding a call with a voice chat bot to messaging as needed, depending on the use case. How do you see that opportunity playing out over the next few years? We'll start with that. Yeah, a voice agent will be very good at tool calling. If we're having a conversation and you say, "You know what? Will you text me that?" It'll actually volunteer, "Hey, I'm gonna send you that picture," or, "I'm gonna send you that boarding pass," or, "I'm gonna send you that reminder." That'll be during the conversation, and it'll just be a tool call. You can have a messaging point solution as part of a conversational AI solution, just like it can send you an email, and it'll be a great and effective tool call during a conversation, and it's gonna be important, and that's something that we certainly have natively by providing messaging ourselves for the voice agent services we support. Alright. You now have about $25 million in ARR from high margin software add-on revenue. Can you from a high level discuss, you know, what's included in this figure and how you see that metric maybe evolving over the next few years, without giving too much guidance? You want me to take that? Go. We have, with the Maestro platform, a platform fee. You have a fixed fee for using that orchestration layer. You have more usage-based components for trust services that help large brands verify that they are who they say they are when they call. We have other services within the orchestration layer that are integrations done to every single CCaaS platform out there, pre-integrations on UCaaS, integrations done on AI. All those component parts are factors into that $25 million number and are all very gross margin accretive, and we believe that they are growing fast. Let me pause and ask Daryl to remind me how fast they're growing, the $25 million. Absolutely. Thank you, Josh. Really appreciate you invited us to the conference. It's been a wonderful event. We did exit the Q1 at a ARR exit rate of $25 million for software services. That grew from $15 million at the end of December in the fourth quarter. As David said, that's an exciting basket of features and capabilities that are primarily recognized on a monthly recurring charge basis. Those are it. We're real excited about that. We think the uptake is going to be increasing and improving, and as David said, the gross margin profile is extremely accretive to our consolidated gross margin. Got it. Alright, final product and strategic question. As we move more towards orchestration of AI across different channels being the key to success, versus simply aggregating messaging and voice volumes, how does that impact your pricing power and competitive position relative to, I don't want to say the old way of doing business, but the old world of a year ago? Some of our call flows used to just be a single call between a hotel receptionist and a guest. That same call flow with AI involved really now routes what was one call to a sentiment analysis engine, to a transcription service, to a translation service potentially, as well as to potentially recording. That becomes four legs of the call and monetization of each for us, that's a much more lucrative call flow. Our pricing power is unique in our owned and operated model, but the value of these kinds of call flows to the outcomes that the enterprise customer is looking to achieve are so high that it isn't yet, and I don't anticipate it being for a long time, a price conversation at all. That's exciting to us. There's an enormous amount of value for us to add to these new use cases. That's evident in the pricing history we've disclosed where it's favorable, and we're actually increasing price. Right, that's an important distinction, right? Because the traditional carriers, they've increased prices, but they've kind of been under price pressure themselves for a number of years. You know, you actually have pricing power going forward now relative to what maybe investors from the outside would maybe not understand that dynamic, right? It is interesting. If what David was saying, you look back at least over the last eight years, potentially more, the company every year has, on an aggregate basis, both grown its volume and its price in a price volume analysis. I'm not addressing one of 10,000 SKUs, but on aggregate, we've always been able to do that. How have we been able to do that? One is through the attachment of higher value software services and the like, as well as growing our mix towards higher value products, in terms of pricing with Enterprise, in terms of pricing with messaging. We've been very successful with that. I Obviously you've seen that with our growing margin. It's really driven our growing gross margin as well. I agree with David. When you are already How we win from the incumbents is a really nice surprise to any particular customer prospect. When they realize that we are bidding as a low-cost provider against a higher cost product that they have with the incumbent, and we're providing substantially more features, you will not believe the surprise and delight on their face when that occurs. When we are already the low-cost provider providing more features, price and commoditization is not an issue. Right. Alright. I'll just throw out there that we can leave some time for questions at the end, so if anybody wants to prepare questions in the audience, we'll leave some time at the end for that. Moving on to some financial questions, you previously gave some 3-year targets in 2023 with some ranges on revenue growth and margins. As we think about the guidance for 2026, how are you thinking about these targets now with kind of greater clarity on how the year is shaping up? We think that we're really pleased with where we're coming out. We're guiding to revenue growth of approximately, total revenue growth of approximately 18%. Our Cloud Communications growth growing at 10%. Embedded in that growth, embedded in that guide is a 60% target gross margin, which we set out on a mission to achieve in January of 2023. Embedded in that guide is a 20% EBITDA margin, again, that we set out in early 2023 to achieve, with a 15% free cash flow margin. We're really pleased to be growing for, into those medium term targets this year with an 18% total revenue growth, 31% EBITDA growth, and a substantial growth in free cash flow. You've impressively added some, large $1 million plus customers in the last few years. I guess a couple items. Are you winning these customers from legacy carriers? As we think about their ramp in 2026, what process are you using to include some of these, volumes and guidance? All these voice wins are from legacy incumbent carriers. We had a large messaging win. It was from a CPaaS competitor, where that customer just needed more deliverability insurance and reliability. We're very successful in demonstrating our capabilities with those large voice customers, whether it's in and many of them are enterprise related. We feel like we have a really pretty good pipeline moving forward on that as well. Got it. Just for some perspective, if we look at, you added 5 or 6 million-dollar plus customers last year. How would that have compared to the kind of the three or four year period before that? That was the six. The number was six. Was six. That was the, that's a record. That was a record for us in $1 million plus deals in terms of contract value. Before that we might've been 4. You know, in the law of low numbers, that would've been a 50% growth rate. How about that? Importantly, it's like, what are you doing with those customers and what is your time to revenue? We're real excited about the time to revenue and what we're seeing in terms of those contract values. By the time the Q1 occurred, one of the six had fully deployed, and fully deployed at 120% of our initial estimated total contract value. Very happy about that. The other ones are on track to deploy this quarter and into the third quarter. We're seeing a very nice, calling for a very nice, healthy, growth, acceleration rate in our Enterprise Voice category in the second half. Awesome. You mentioned this either on the call or the call back, but you have a nice pipeline of million-dollar plus customers that you can add even this year, right? You added two so far that you publicly announced during the day. Two in the Q1. One substantially over $1 million. Two in the Q1. We, you know, while we don't really guide that bookings detail, that we're very much on track to achieve what we did last year, if not overachieve. Right. That would be a positive indicator for next year's revenue, right? Absolutely. Maybe discuss, it takes 6 to 12 months. A wide range, right? The deployment rate for the largest enterprise, the largest banks in the world, the largest healthcare concerns, it does take, it will take a ramp of between three and nine months. Right. That would be a positive indicator for next year's revenue growth as a starting point. Alright. As we think about the ramp for Agentforce in your business, you know, I know you've discussed this in some of the meetings. You're taking a pretty conservative approach to the outlook there, how do you kind of anticipate that the project will be rolled out over the next couple quarters in terms of customer usage? The partnership is in place and our partner, Salesforce, has launched their offering. They have customer dialogues in place right now which lead to customer dialogues with us, and we feel like there's good traction and momentum growing with the just recently launched, it was in middle March timeframe. We feel pretty positive about that. Importantly, we have not played, we have not gotten ahead of our customer and tried to forecast adoption rates. We have not played a significant amount of financial benefit or favorability into the guide for this year. To the extent that customers with Salesforce are able to launch on the Agentforce platform, take advantage of the capabilities with the voice AI agents to the extent that that embeds itself into our second half financials, that's really all upside to what we're calling for the year. Got it. Could Salesforce have done what they need to do with this integration and Agentforce with a traditional carrier, or would it only have worked? That's maybe more of a your question. Yeah. No, they could not. It's that straightforward. The ambition is global. It is not just domestic, and the orchestration for call flows is essential to integrate with their tech stack and to deliver quality and reliability, so no. Got it. Alright. In the last quarter, Global Voice Plans revenue growth rate accelerated. What is driving the higher growth rate with those customers? Maybe you could just explain how this, that segment differs from Enterprise Voice. You're right. In the Q1 of 2026, our Global Voice Plans growth rate over the Q1 of 2025 tripled. The tripling occurred from really two dynamics: price and volume. If I take the latter one first, in terms of volume, we are seeing in Global Voice Plans, our largest customers, the power platforms, the hyperscalers, as well as the CCaaS and UCaaS providers, we are seeing favorable volume profiles from those large customers where we believe that volume is being driven by their own initiatives in terms of AI solutions being released. Those AI solutions embedded with Genesys and embedded with others in each of those customers will improve ultimately our volume. We believe we're seeing that. The 2nd thing is price. In terms of price, it's not that a SKU gets improved or increased, it's that part of that software services that we spoke about with an annual recurring revenue exit rate of $25 million in the Q1 of 2026, part of that is in Enterprise Voice and part of that is embedded in our Global Voice Plans customers as they adopt Maestro, and they're using the integrations and the like for their customers as well. We're able to embed the software services both into Global Voice Plans as well as into Enterprise Voice. That's the dynamic in GVP. It did triple its growth rate. We think that those are the two principal reasons. Turning to Enterprise Voice, Enterprise Voice is characterized as a market category where we sell directly to large enterprises. I encourage you to look at our investor deck and the like. We highlight many of those. We highlight many use cases that you can access to describe our product offering for those enterprise customers and who those are. That sector is characterized by 15% higher, percentage point higher gross margin than the company's aggregate growth, gross margin rate. Part of that is due to the global nature of our offering and the ability to enable AI as they're thinking about their use cases. As you think about, selling the voice Or not the voice, but just the software add-on products back into the Global Voice Plan customer base, because you have had more penetration thus far with the Enterprise Voice. Maybe you could explain to investors the dynamic there of the uptake of the you know, the software add-ons into that piece and how you can expand it now more into Global Voice as well. Yeah, we talked about Maestro attach rates being 100% Q4, Q1, but we have an install base of enterprise customers we've sold to prior to that, and even prior to the rollout of Maestro generally, that we need to upsell to with the use cases that are now native and are, and are more expansive in AI than they may know about or be used to. That's a deliberate motion by the sales force, and we're excited about what that represents over time. What about selling, software add-ons into the Global Voice customers? Is that an opportunity as well? Yeah, same thing. Parts of Maestro are available to the GVP customers as well, just like CRM with Salesforce contains components of orchestration. That's also something that we can upsell the GVP partners to as well. Got it. Okay, cool. Alright, as we think about capital deployment, I've pointed out to investors my expectation for a pretty healthy ramp in free cash flow in 2026 and with a nicely de-levered balance sheet. What becomes the capital allocation priorities here going forward? We have, we have expressed a very what we believe to be just a balanced and prudent capital allocation strategy. First and foremost, we, our mantra has always been, over these last five years, to grow profitably, and we've done that both in terms of gross margin, EBITDA margin, and now you see it in terms of free cash flow. To grow profitably, especially in the face of the growing Momentum and wave of voice AI-enabled usage patterns. We have been investing in R&D. This year we're making our largest investment in R&D as we roll out more features and capabilities, primarily in software services, again, at a very high margin and what is appearing to be a very nice attach rate. That's balanced against our primary capital strategy, objective of de-leveraging. We have, over the last four years, reduced hundreds and hundreds of millions of dollars of long-term debt. We finished the 1st quarter at $150 million long-term debt even on convertible notes that are due April 1st, 2028. That's against our guided EBITDA midpoint for 2026 of $122 million. We've essentially hit a 1.2 times leverage ratio on long-term debt. We're pretty close to declaring victory on that particular aspect. Recently our board has announced, as a third prong, a $80 million share repurchase program for equity, which we deployed towards that aim $11 million in March, after it was announced in the 1st quarter. We're tackling all of those things. We feel real confident. You're right, Josh, our cash flow is growing quite a bit, and we're really, really pleased with that. It gives the company a great deal of flexibility. Yes. one of the questions I get, when I'm doing a teach-in or people who are new to the story, they ask, "As the voice and revenues grow on the network, why does that not lead to, like, higher capital expenditures at a similar pace? Why are you able to scale the growth in the network and not necessarily have a lot more CapEx?" That might be helpful for people to understand. In terms, it is worth, you know, having a bit of perspective. It, we have all, last five years essentially, we have maintained around a 3%-4% of revenue, CapEx rate, which means for folks listening, around $15 million-$20 million a year in terms of CapEx. Our CapEx is actually a fairly light model. This last year in 2025, we did announce in 2024 towards the end, and in 2025 we invested in about $10 million-$12 million more CapEx for network expansion, primarily, some geographic expansion in Asia, as well as United States network efficiencies and optimization. That put us in a really good place for the next few years in terms of what we think we're looking at. It's important to know that even when we invest $10 million or $12 million, we're not investing $100 million. We're investing $10 million to $12 million on, you know, free cash flow of something that looks like $100 million. It's not really of any substantial hardship to the company to ensure that our network stays bleeding edge. Right. Exactly. Alright, any questions from the audience? Going once. Going twice. Alright. With that, we are up on time here. I wanna thank the Bandwidth team. Joshua, thank you. Thank you, sir.

Speaker 3: Good afternoon, and welcome to the Needham Technology and Media Conference. This afternoon we're excited to have Bandwidth presenting with CEO David Morken and CFO Daryl Raiford. David, you just had a pretty big quarter here, and we'll get to all of that. Just start off with an overview of Bandwidth and how you compare and contrast to a traditional carrier. Good afternoon, and welcome to the Needham Technology and Media Conference. good afternoon and welcome to the needham technology and media conference This afternoon we're excited to have Bandwidth presenting with CEO David Morken and CFO Daryl Raiford. this afternoon we're excited to have bandwidth presenting with ceo david morken and cfo daryl raiford David, you just had a pretty big quarter here, and we'll get to all of that. david you just had a pretty big quarter here and we'll get to all of that Just start off with an overview of Bandwidth and how you compare and contrast to a traditional carrier. just start off with an overview of bandwidth and how you compare and contrast to a traditional carrier

Speaker 2: Thank you, Josh, and appreciate being here, and thank you to all the Needham folks. Bandwidth is based in Raleigh, North Carolina. We are a global provider of communications and have an owned and operated voice network in over 60 countries, and a software platform on top of that network that allows enterprise customers and large conferencing customers and large unified messaging customers, and now recently, large CRM customers, do voice calling around the world and also text messaging. We are very different from an incumbent carrier such as Verizon and AT&T and Lumen, from whom we win most of our new enterprise business, because of two important factors. Thank you, Josh, and appreciate being here, and thank you to all the Needham folks. thank you josh and appreciate being here and thank you to all the needham folks Bandwidth is based in Raleigh, North Carolina. bandwidth is based in raleigh north carolina We are a global provider of communications and have an owned and operated voice network in over 60 countries, and a software platform on top of that network that allows enterprise customers and large conferencing customers and large unified messaging customers, and now recently, large CRM customers, do voice calling around the world and also text messaging. we are a global provider of communications and have an owned and operated voice network in over 60 countries and a software platform on top of that network that allows enterprise customers and large conferencing customers and large unified messaging customers and now recently large crm customers do voice calling around the world and also text messaging We are very different from an incumbent carrier such as Verizon and AT&T and Lumen, from whom we win most of our new enterprise business, because of two important factors. we are very different from an incumbent carrier such as verizon and at&t and lumen from whom we win most of our new enterprise business because of two important factors The first, our footprint is around the world. Theirs is domestic only. Second, we have a software platform on top of that network that allows our enterprise customers to orchestrate call flows, to provision in real time, to configure services in ways that are both, through a GUI, through an API, and then recently, through a command line interface for the emerging agentic voice agents that we serve. The first, our footprint is around the world. the first our footprint is around the world Theirs is domestic only. theirs is domestic only Second, we have a software platform on top of that network that allows our enterprise customers to orchestrate call flows, to provision in real time, to configure services in ways that are both, through a GUI, through an API, and then recently, through a command line interface for the emerging agentic voice agents that we serve. second we have a software platform on top of that network that allows our enterprise customers to orchestrate call flows to provision in real time to configure services in ways that are both through a gui through an api and then recently through a command line interface for the emerging agentic voice agents that we serve

Speaker 3: Got it. Alright. One of the common questions I get is why is it important as a CPaaS vendor for you to own your own network versus kind of this fully aggregate others' networks, and how does that kind of create a competitive advantage for you? Got it. got it Al right. al right One of the common questions I get is why is it important as a CPaaS vendor for you to own your own network versus kind of this fully aggregate others' networks, and how does that kind of create a competitive advantage for you? one of the common questions i get is why is it important as a cpaas vendor for you to own your own network versus kind of this fully aggregate others' networks and how does that kind of create a competitive advantage for you

Speaker 2: The utility and value of owning and operating your own voice network around the world, a network that's regulatorily compliant, really has two primary dimensions. The first is quality/reliability. The second is cost. On quality and reliability, by being able to control the hardware and the interconnected circuits around the world of this network, you really do have visibility and can manage the service delivery and plan and promise through an SLA the level of that service to your large enterprise customers. When Microsoft, for example, has a QBR with us and comes to the office rolling deep with 30 people, you're talking about your network's performance according to the parameters that you promised them, and you're also showing them where they may have emerging issues that only you can see throughout the guts of your network. The utility and value of owning and operating your own voice network around the world, a network that's regulatorily compliant, really has two primary dimensions. the utility and value of owning and operating your own voice network around the world a network that's regulatorily compliant really has two primary dimensions The first is quality/reliability. the first is quality/reliability The second is cost. the second is cost On quality and reliability, by being able to control the hardware and the interconnected circuits around the world of this network, you really do have visibility and can manage the service delivery and plan and promise through an SLA the level of that service to your large enterprise customers. on quality and reliability by being able to control the hardware and the interconnected circuits around the world of this network you really do have visibility and can manage the service delivery and plan and promise through an sla the level of that service to your large enterprise customers When Microsoft, for example, has a QBR with us and comes to the office rolling deep with 30 people, you're talking about your network's performance according to the parameters that you promised them, and you're also showing them where they may have emerging issues that only you can see throughout the guts of your network. when microsoft for example has a qbr with us and comes to the office rolling deep with 30 people you're talking about your network's performance according to the parameters that you promised them and you're also showing them where they may have emerging issues that only you can see throughout the guts of your network That's the quality component. The reliability component is you get to manage your uptime by deploying capital against needs and priorities in a way that you don't get to see if you're relying on a Lumen, for example, and you're just renting or leasing the network from them. Not, I don't have anything against them, I'm just using them as an example. That's the quality component. that's the quality component The reliability component is you get to manage your uptime by deploying capital against needs and priorities in a way that you don't get to see if you're relying on a Lumen, for example, and you're just renting or leasing the network from them. the reliability component is you get to manage your uptime by deploying capital against needs and priorities in a way that you don't get to see if you're relying on a lumen for example and you're just renting or leasing the network from them Not, I don't have anything against them, I'm just using them as an example. not i don't have anything against them i'm just using them as an example The second part is the cost advantage. When we went public in 2017, we had gross margins of mid-40s. We are now just below 60% gross margins for our voice service, or for our overall company, and the voice services are very similar. The reason we've grown our voice gross margins over that period of time is because we get to put every additional 1 billion minutes of month of voice traffic on our fixed infrastructure costs. The economies of scale emerge and allow you to grow your gross margin from the mid-40s toward 60%. Quality, reliability, cost, those all allow you to go to an enterprise customer as a single source around the world at a very good value. The second part is the cost advantage. the second part is the cost advantage When we went public in 2017, we had gross margins of mid-40s. when we went public in 2017 we had gross margins of mid-40s We are now just below 60% gross margins for our voice service, or for our overall company, and the voice services are very similar. we are now just below 60% gross margins for our voice service or for our overall company and the voice services are very similar The reason we've grown our voice gross margins over that period of time is because we get to put every additional 1 billion minutes of month of voice traffic on our fixed infrastructure costs. the reason we've grown our voice gross margins over that period of time is because we get to put every additional 1 billion minutes of month of voice traffic on our fixed infrastructure costs The economies of scale emerge and allow you to grow your gross margin from the mid-40s toward 60%. the economies of scale emerge and allow you to grow your gross margin from the mid-40s toward 60% Quality, reliability, cost, those all allow you to go to an enterprise customer as a single source around the world at a very good value. quality reliability cost those all allow you to go to an enterprise customer as a single source around the world at a very good value

Speaker 3: Got it. Another question I often get on you guys is why haven't the legacy carriers done more to keep up on the voice AI support kind of opportunity there? What do you think is their strategy around voice AI, and how has that static development helped your competitive dynamic? Got it. got it Another question I often get on you guys is why haven't the legacy carriers done more to keep up on the voice AI support kind of opportunity there? another question i often get on you guys is why haven't the legacy carriers done more to keep up on the voice ai support kind of opportunity there What do you think is their strategy around voice AI, and how has that static development helped your competitive dynamic? what do you think is their strategy around voice ai and how has that static development helped your competitive dynamic

Speaker 2: Yeah, static is a compliment. That the incumbent providers domestically have focused on the mobile opportunity for consumers. They have focused on broadband and rolling that out, they have not at all paid any attention to voice and what it means to support either cloud-based voice during the last migration from the premise to the cloud, nor the voice agent AI moment that we're in now. I've been told that they are the place where innovative software developers go to die, and because that's true, they have very little innovation or vision for what the future may or may not be. I don't see that changing. We're about to be 27 years old as a company in August, and that certainly hasn't changed for those 27 years. Yeah, static is a compliment. yeah static is a compliment That the incumbent providers domestically have focused on the mobile opportunity for consumers. that the incumbent providers domestically have focused on the mobile opportunity for consumers They have focused on broadband and rolling that out, they have not at all paid any attention to voice and what it means to support either cloud-based voice during the last migration from the premise to the cloud, nor the voice agent AI moment that we're in now. they have focused on broadband and rolling that out they have not at all paid any attention to voice and what it means to support either cloud-based voice during the last migration from the premise to the cloud nor the voice agent ai moment that we're in now I've been told that they are the place where innovative software developers go to die, and because that's true, they have very little innovation or vision for what the future may or may not be. i've been told that they are the place where innovative software developers go to die and because that's true they have very little innovation or vision for what the future may or may not be I don't see that changing. i don't see that changing We're about to be 27 years old as a company in August, and that certainly hasn't changed for those 27 years. we're about to be 27 years old as a company in august and that certainly hasn't changed for those 27 years

Speaker 3: Got it. Alright. Before we get to some product and financial questions, maybe you could just rewind the last five years for investors since the pandemic. You know, what caused the voice revenue growth to slow post-pandemic? Now, how do you think about the re-acceleration here? How much is driven by AI versus some other market share gains or other factors? That's a lot there, I know. Got it. got it Al right. al right Before we get to some product and financial questions, maybe you could just rewind the last five years for investors since the pandemic. before we get to some product and financial questions maybe you could just rewind the last five years for investors since the pandemic You know, what caused the voice revenue growth to slow post-pandemic? you know what caused the voice revenue growth to slow post-pandemic Now, how do you think about the re-acceleration here? now how do you think about the re-acceleration here How much is driven by AI versus some other market share gains or other factors? how much is driven by ai versus some other market share gains or other factors That's a lot there, I know. that's a lot there i know

Speaker 2: No, it's okay. When the pandemic hit and everyone was required to work from home, we were forced overnight to scale our network and service massively in support of customers such as Zoom and Microsoft Teams and Google. We were able to do that with our model effectively, and yet what that really did at that time was pull forward a huge amount of demand for moving from the prem to the cloud. That demand pull forward happened and we scaled massively. When everyone returned to the office or began returning to the office, that growth slowed, and you had more of a tempered pace of migration to the cloud in the intervening period. No, it's okay. no it's okay When the pandemic hit and everyone was required to work from home, we were forced overnight to scale our network and service massively in support of customers such as Zoom and Microsoft Teams and Google. when the pandemic hit and everyone was required to work from home we were forced overnight to scale our network and service massively in support of customers such as zoom and microsoft teams and google We were able to do that with our model effectively, and yet what that really did at that time was pull forward a huge amount of demand for moving from the prem to the cloud. we were able to do that with our model effectively and yet what that really did at that time was pull forward a huge amount of demand for moving from the prem to the cloud That demand pull forward happened and we scaled massively. that demand pull forward happened and we scaled massively When everyone returned to the office or began returning to the office, that growth slowed, and you had more of a tempered pace of migration to the cloud in the intervening period. when everyone returned to the office or began returning to the office that growth slowed and you had more of a tempered pace of migration to the cloud in the intervening period Going back now about a year, what has emerged is this moment of voice AI agents, their effectiveness, and their vitality, and that's turned voice into an enormous new opportunity as a critical infrastructure layer for the primary interface that we are all beginning to use for AI. Going back now about a year, what has emerged is this moment of voice AI agents, their effectiveness, and their vitality, and that's turned voice into an enormous new opportunity as a critical infrastructure layer for the primary interface that we are all beginning to use for AI. going back now about a year what has emerged is this moment of voice ai agents their effectiveness and their vitality and that's turned voice into an enormous new opportunity as a critical infrastructure layer for the primary interface that we are all beginning to use for ai

Speaker 3: Got it. Alright, you just had a significant may understate it, win with Salesforce Agentforce in their contact center offering. Why do you think you won that deal? How are you thinking about the ramp there? Then any other relevant information that you can share regarding the deal at this point? Got it. got it Al right, you just had a significant may understate it, win with Salesforce Agentforce in their contact center offering. al right you just had a significant may understate it win with salesforce agentforce in their contact center offering Why do you think you won that deal? why do you think you won that deal How are you thinking about the ramp there? how are you thinking about the ramp there Then any other relevant information that you can share regarding the deal at this point? then any other relevant information that you can share regarding the deal at this point

Speaker 2: We are fired up to be Salesforce's partner with their announcement of Agentforce Voice Agents, and won that opportunity to partner with them precisely because of the global reach and the orchestration capability of our network and platform. The team there is very innovative. Their vision that every call should be a conference call with an intelligent voice agent as part of it really resonates deeply with our team. We think that that intelligence is meaningful in every sales conversation, and so the ability to support that is a great opportunity. They are a visionary team. They have enormous scale. They have a vision for Agentforce and Voice Agents that's compelling, and we have an asset base that was so unique globally and has high such high value that we were able to win out and be their partner and are excited about that now being GA and scaling. We are fired up to be Salesforce's partner with their announcement of Agentforce Voice Agents, and won that opportunity to partner with them precisely because of the global reach and the orchestration capability of our network and platform. we are fired up to be salesforce's partner with their announcement of agentforce voice agents and won that opportunity to partner with them precisely because of the global reach and the orchestration capability of our network and platform The team there is very innovative. the team there is very innovative Their vision that every call should be a conference call with an intelligent voice agent as part of it really resonates deeply with our team. their vision that every call should be a conference call with an intelligent voice agent as part of it really resonates deeply with our team We think that that intelligence is meaningful in every sales conversation, and so the ability to support that is a great opportunity. we think that that intelligence is meaningful in every sales conversation and so the ability to support that is a great opportunity They are a visionary team. they are a visionary team They have enormous scale. they have enormous scale They have a vision for Agentforce and Voice Agents that's compelling, and we have an asset base that was so unique globally and has high such high value that we were able to win out and be their partner and are excited about that now being GA and scaling. they have a vision for agentforce and voice agents that's compelling and we have an asset base that was so unique globally and has high such high value that we were able to win out and be their partner and are excited about that now being ga and scaling

Speaker 3: Alright. In terms of product innovation, you've done a lot around Maestro, trust and verification to drive total cost of ownership, but what specifically has been some of the priorities over the last few years in terms of product investments? Al right. al right In terms of product innovation, you've done a lot around Maestro, trust and verification to drive total cost of ownership, but what specifically has been some of the priorities over the last few years in terms of product investments? in terms of product innovation you've done a lot around maestro trust and verification to drive total cost of ownership but what specifically has been some of the priorities over the last few years in terms of product investments

Speaker 2: We have invested in R&D to bring that Maestro orchestration layer to life, to have pre-integrations with all the major CCaaS providers, many of the UCaaS providers, with AI leaders, effort into that integration has been key. Footprint expansion is something that isn't valued appropriately, but getting to be able to provide regulatorily compliant PSTN service in Turkey, for example, with emergency services, is highly valued by our enterprise customers as an edge case jurisdiction, we have others that we've been building toward that we look forward to announcing in the future. Supporting the AI use cases that are emerging now has been a key area. We have invested in R&D to bring that Maestro orchestration layer to life, to have pre-integrations with all the major CCaaS providers, many of the UCaaS providers, with AI leaders, effort into that integration has been key. we have invested in r&d to bring that maestro orchestration layer to life to have pre-integrations with all the major ccaas providers many of the ucaas providers with ai leaders effort into that integration has been key Footprint expansion is something that isn't valued appropriately, but getting to be able to provide regulatorily compliant PSTN service in Turkey, for example, with emergency services, is highly valued by our enterprise customers as an edge case jurisdiction, we have others that we've been building toward that we look forward to announcing in the future. footprint expansion is something that isn't valued appropriately but getting to be able to provide regulatorily compliant pstn service in turkey for example with emergency services is highly valued by our enterprise customers as an edge case jurisdiction we have others that we've been building toward that we look forward to announcing in the future Supporting the AI use cases that are emerging now has been a key area. supporting the ai use cases that are emerging now has been a key area When you have your OpenClaw or Hermes agent and you want to be able to have it, make a phone call or receive a phone call, we have a command line interface that you can go to or actually that you could point your agent at and it could sign up on your behalf. Efforts like that have been really exciting over the last several years, and seeing those come to fruition to provide a low latency global voice network for voice agents has been very rewarding. When you have your OpenClaw or Hermes agent and you want to be able to have it, make a phone call or receive a phone call, we have a command line interface that you can go to or actually that you could point your agent at and it could sign up on your behalf. when you have your openclaw or hermes agent and you want to be able to have it make a phone call or receive a phone call we have a command line interface that you can go to or actually that you could point your agent at and it could sign up on your behalf Efforts like that have been really exciting over the last several years, and seeing those come to fruition to provide a low latency global voice network for voice agents has been very rewarding. efforts like that have been really exciting over the last several years and seeing those come to fruition to provide a low latency global voice network for voice agents has been very rewarding

Speaker 3: Right. One area is underappreciated is your global capabilities, which you highlighted a little bit here, and now you've continued to add a number of new countries under support. How do you think about adding new countries and ensuring direct carrier connections in these regions to support these low latency use cases? 'Cause that's really critical with the AI, the voice AI stuff. Right. right One area is underappreciated is your global capabilities, which you highlighted a little bit here, and now you've continued to add a number of new countries under support. one area is underappreciated is your global capabilities which you highlighted a little bit here and now you've continued to add a number of new countries under support How do you think about adding new countries and ensuring direct carrier connections in these regions to support these low latency use cases? 'Cause that's really critical with the AI, the voice AI stuff. how do you think about adding new countries and ensuring direct carrier connections in these regions to support these low latency use cases 'cause that's really critical with the ai the voice ai stuff

Speaker 2: It starts with having a universal platform of the shared same components in each jurisdiction. If you are trying to stitch together various networks that you've acquired over years, that's a very challenging thing. We are excited about having come through and having a universal platform everywhere so that when we expand to a new jurisdiction, it has the uniform stack of gear and the protocols for security and jurisdictionalizing the traffic. There are countries we are not yet in which we're excited about, India being among them, where we're aggressively working toward offering the same level of service that we offer elsewhere. It starts with having a universal platform of the shared same components in each jurisdiction. it starts with having a universal platform of the shared same components in each jurisdiction If you are trying to stitch together various networks that you've acquired over years, that's a very challenging thing. if you are trying to stitch together various networks that you've acquired over years that's a very challenging thing We are excited about having come through and having a universal platform everywhere so that when we expand to a new jurisdiction, it has the uniform stack of gear and the protocols for security and jurisdictionalizing the traffic. we are excited about having come through and having a universal platform everywhere so that when we expand to a new jurisdiction it has the uniform stack of gear and the protocols for security and jurisdictionalizing the traffic There are countries we are not yet in which we're excited about, India being among them, where we're aggressively working toward offering the same level of service that we offer elsewhere. there are countries we are not yet in which we're excited about india being among them where we're aggressively working toward offering the same level of service that we offer elsewhere When we have customers, whether it's a large global enterprise or Salesforce, it's incumbent upon us to make sure we have the appropriate reach at the same level of quality and fidelity and to navigate that on their behalf. There's an enormous high value. AT&T can do that for you in the United States. Colt can do that for you in EMEA. Tata can do that for you in some jurisdictions. Nobody can touch the scale and scope of our country by country geography we serve. When we have customers, whether it's a large global enterprise or Salesforce, it's incumbent upon us to make sure we have the appropriate reach at the same level of quality and fidelity and to navigate that on their behalf. when we have customers whether it's a large global enterprise or salesforce it's incumbent upon us to make sure we have the appropriate reach at the same level of quality and fidelity and to navigate that on their behalf There's an enormous high value. there's an enormous high value AT&T can do that for you in the United States. at&t can do that for you in the united states Colt can do that for you in EMEA. colt can do that for you in emea Tata can do that for you in some jurisdictions. tata can do that for you in some jurisdictions Nobody can touch the scale and scope of our country by country geography we serve. nobody can touch the scale and scope of our country by country geography we serve

Speaker 3: Got it. Maybe just touch on, you know, with voice AI, isn't this becoming an even bigger competitive advantage for you because of the low latency dynamic with all the direct carrier connections you have? Got it. got it Maybe just touch on, you know, with voice AI, isn't this becoming an even bigger competitive advantage for you because of the low latency dynamic with all the direct carrier connections you have? maybe just touch on you know with voice ai isn't this becoming an even bigger competitive advantage for you because of the low latency dynamic with all the direct carrier connections you have How do you think about that aspect of it? How do you think about that aspect of it? how do you think about that aspect of it

Speaker 2: It's vital. That the tech stack for inference and reasoning by itself is already 400 milliseconds to round-trip a prompt and a response, and yet the PSTN latency is understood to be about 400 milliseconds by itself. You've already spent your entire time budget for a conversation you don't get ticked off by just in getting an answer from the model. We have an advantage in our network when we can yield back to the reasoning model even 50 milliseconds or 20 milliseconds advantage. We have a thesis that there are component parts of the tech stack on the reasoning side that may be more effectively deployed closer to the core of the network where we have an advantage. It's vital. it's vital That the tech stack for inference and reasoning by itself is already 400 milliseconds to round-trip a prompt and a response, and yet the PSTN latency is understood to be about 400 milliseconds by itself. that the tech stack for inference and reasoning by itself is already 400 milliseconds to round-trip a prompt and a response and yet the pstn latency is understood to be about 400 milliseconds by itself You've already spent your entire time budget for a conversation you don't get ticked off by just in getting an answer from the model. you've already spent your entire time budget for a conversation you don't get ticked off by just in getting an answer from the model We have an advantage in our network when we can yield back to the reasoning model even 50 milliseconds or 20 milliseconds advantage. we have an advantage in our network when we can yield back to the reasoning model even 50 milliseconds or 20 milliseconds advantage We have a thesis that there are component parts of the tech stack on the reasoning side that may be more effectively deployed closer to the core of the network where we have an advantage. we have a thesis that there are component parts of the tech stack on the reasoning side that may be more effectively deployed closer to the core of the network where we have an advantage Owning and operating the infrastructure and being able to drop components of the tech stack closer to where the communication is happening may yield back even more latency savings, and therefore accuracy. Those are things, even just adjusting jitter buffers to get 10 millisecond gains are vital for the improvement in accuracy and responsiveness. That's an advantage we have that others don't. Owning and operating the infrastructure and being able to drop components of the tech stack closer to where the communication is happening may yield back even more latency savings, and therefore accuracy. owning and operating the infrastructure and being able to drop components of the tech stack closer to where the communication is happening may yield back even more latency savings and therefore accuracy Those are things, even just adjusting jitter buffers to get 10 millisecond gains are vital for the improvement in accuracy and responsiveness. those are things even just adjusting jitter buffers to get 10 millisecond gains are vital for the improvement in accuracy and responsiveness That's an advantage we have that others don't. that's an advantage we have that others don't

Speaker 3: Got it. That's a great point there. Alright, as you think about the progression of voice AI use cases across the ecosystem, right now they're heavily focused in customer support, and you were talking about this a little bit earlier in your meetings, but how do you see this evolution to sales and marketing use cases and other areas for enterprises developing in the next few years? Got it. got it That's a great point there. that's a great point there Al right, as you think about the progression of voice AI use cases across the ecosystem, right now they're heavily focused in customer support, and you were talking about this a little bit earlier in your meetings, but how do you see this evolution to sales and marketing use cases and other areas for enterprises developing in the next few years? al right as you think about the progression of voice ai use cases across the ecosystem right now they're heavily focused in customer support and you were talking about this a little bit earlier in your meetings but how do you see this evolution to sales and marketing use cases and other areas for enterprises developing in the next few years

Speaker 2: It's very early in the growth of voice agents, and they originally became rationalized to save OpEx in a cost center like customer support. It was very easy for Daryl and his peers to say, "We know we can use a voice agent to render service more effectively, in a customer care context, resolving tickets, doing ticket deflection." What's happened just in the last 90 days, voice agents have gotten better and better, not just at handling customer care, but now in doing demand generation, lead creation and qualification, prospecting. It's very early in the growth of voice agents, and they originally became rationalized to save OpEx in a cost center like customer support. it's very early in the growth of voice agents and they originally became rationalized to save opex in a cost center like customer support It was very easy for Daryl and his peers to say, "We know we can use a voice agent to render service more effectively, in a customer care context, resolving tickets, doing ticket deflection." What's happened just in the last 90 days, voice agents have gotten better and better, not just at handling customer care, but now in doing demand generation, lead creation and qualification, prospecting. it was very easy for daryl and his peers to say "we know we can use a voice agent to render service more effectively in a customer care context resolving tickets doing ticket deflection." what's happened just in the last 90 days voice agents have gotten better and better not just at handling customer care but now in doing demand generation lead creation and qualification prospecting That's new, and that's only in the last quarter. Those are revenue-generating upside cases. Small and medium business are deploying voice agents now during times of day when they don't have employees on station, doing roles that they otherwise wouldn't staff, whether it's appointments or calendaring or reminding. These are use cases beyond customer care that small and medium business now have access to that they're using that they would never otherwise be able to do. That's new, and that's only in the last quarter. that's new and that's only in the last quarter Those are revenue-generating upside cases. those are revenue-generating upside cases Small and medium business are deploying voice agents now during times of day when they don't have employees on station, doing roles that they otherwise wouldn't staff, whether it's appointments or calendaring or reminding. small and medium business are deploying voice agents now during times of day when they don't have employees on station doing roles that they otherwise wouldn't staff whether it's appointments or calendaring or reminding These are use cases beyond customer care that small and medium business now have access to that they're using that they would never otherwise be able to do. these are use cases beyond customer care that small and medium business now have access to that they're using that they would never otherwise be able to do

Speaker 3: Got it. Alright, one concept that's gaining traction with investors right now is around the whole theme of conversational AI or guiding a call with a voice chat bot to messaging as needed, depending on the use case. How do you see that opportunity playing out over the next few years? We'll start with that. Got it. got it Al right, one concept that's gaining traction with investors right now is around the whole theme of conversational AI or guiding a call with a voice chat bot to messaging as needed, depending on the use case. al right one concept that's gaining traction with investors right now is around the whole theme of conversational ai or guiding a call with a voice chat bot to messaging as needed depending on the use case How do you see that opportunity playing out over the next few years? how do you see that opportunity playing out over the next few years We'll start with that. we'll start with that

Speaker 2: Yeah, a voice agent will be very good at tool calling. If we're having a conversation and you say, "You know what? Will you text me that?" It'll actually volunteer, "Hey, I'm gonna send you that picture," or, "I'm gonna send you that boarding pass," or, "I'm gonna send you that reminder." That'll be during the conversation, and it'll just be a tool call. You can have a messaging point solution as part of a conversational AI solution, just like it can send you an email, and it'll be a great and effective tool call during a conversation, and it's gonna be important, and that's something that we certainly have natively by providing messaging ourselves for the voice agent services we support. Yeah, a voice agent will be very good at tool calling. yeah a voice agent will be very good at tool calling If we're having a conversation and you say, "You know what? if we're having a conversation and you say "you know what Will you text me that?" It'll actually volunteer, "Hey, I'm gonna send you that picture," or, "I'm gonna send you that boarding pass," or, "I'm gonna send you that reminder." That'll be during the conversation, and it'll just be a tool call. will you text me that?" it'll actually volunteer "hey i'm gonna send you that picture," or "i'm gonna send you that boarding pass," or "i'm gonna send you that reminder." that'll be during the conversation and it'll just be a tool call You can have a messaging point solution as part of a conversational AI solution, just like it can send you an email, and it'll be a great and effective tool call during a conversation, and it's gonna be important, and that's something that we certainly have natively by providing messaging ourselves for the voice agent services we support. you can have a messaging point solution as part of a conversational ai solution just like it can send you an email and it'll be a great and effective tool call during a conversation and it's gonna be important and that's something that we certainly have natively by providing messaging ourselves for the voice agent services we support

Speaker 3: Alright. You now have about $25 million in ARR from high margin software add-on revenue. Can you from a high level discuss, you know, what's included in this figure and how you see that metric maybe evolving over the next few years, without giving too much guidance? Al right. al right You now have about $25 million in ARR from high margin software add-on revenue. you now have about $25 million in arr from high margin software add-on revenue Can you from a high level discuss, you know, what's included in this figure and how you see that metric maybe evolving over the next few years, without giving too much guidance? can you from a high level discuss you know what's included in this figure and how you see that metric maybe evolving over the next few years without giving too much guidance

Speaker 2: You want me to take that? You want me to take that? you want me to take that

Speaker 1: Go. Go. go

Speaker 2: We have, with the Maestro platform, a platform fee. You have a fixed fee for using that orchestration layer. You have more usage-based components for trust services that help large brands verify that they are who they say they are when they call. We have other services within the orchestration layer that are integrations done to every single CCaaS platform out there, pre-integrations on UCaaS, integrations done on AI. All those component parts are factors into that $25 million number and are all very gross margin accretive, and we believe that they are growing fast. Let me pause and ask Daryl to remind me how fast they're growing, the $25 million. We have, with the Maestro platform, a platform fee. we have with the maestro platform a platform fee You have a fixed fee for using that orchestration layer. you have a fixed fee for using that orchestration layer You have more usage-based components for trust services that help large brands verify that they are who they say they are when they call. you have more usage-based components for trust services that help large brands verify that they are who they say they are when they call We have other services within the orchestration layer that are integrations done to every single CCaaS platform out there, pre-integrations on UCaaS, integrations done on AI. we have other services within the orchestration layer that are integrations done to every single ccaas platform out there pre-integrations on ucaas integrations done on ai All those component parts are factors into that $25 million number and are all very gross margin accretive, and we believe that they are growing fast. all those component parts are factors into that $25 million number and are all very gross margin accretive and we believe that they are growing fast Let me pause and ask Daryl to remind me how fast they're growing, the $25 million. let me pause and ask daryl to remind me how fast they're growing the $25 million

Speaker 1: Absolutely. Thank you, Josh. Really appreciate you invited us to the conference. It's been a wonderful event. We did exit the Q1 at a ARR exit rate of $25 million for software services. That grew from $15 million at the end of December in the fourth quarter. As David said, that's an exciting basket of features and capabilities that are primarily recognized on a monthly recurring charge basis. Those are it. We're real excited about that. We think the uptake is going to be increasing and improving, and as David said, the gross margin profile is extremely accretive to our consolidated gross margin. Absolutely. absolutely Thank you, Josh. thank you josh Really appreciate you invited us to the conference. really appreciate you invited us to the conference It's been a wonderful event. it's been a wonderful event We did exit the Q1 at a ARR exit rate of $25 million for software services. we did exit the q1 at a arr exit rate of $25 million for software services That grew from $15 million at the end of December in the fourth quarter. that grew from $15 million at the end of december in the fourth quarter As David said, that's an exciting basket of features and capabilities that are primarily recognized on a monthly recurring charge basis. as david said that's an exciting basket of features and capabilities that are primarily recognized on a monthly recurring charge basis Those are it. those are it We're real excited about that. we're real excited about that We think the uptake is going to be increasing and improving, and as David said, the gross margin profile is extremely accretive to our consolidated gross margin. we think the uptake is going to be increasing and improving and as david said the gross margin profile is extremely accretive to our consolidated gross margin

Speaker 3: Got it. Alright, final product and strategic question. As we move more towards orchestration of AI across different channels being the key to success, versus simply aggregating messaging and voice volumes, how does that impact your pricing power and competitive position relative to, I don't want to say the old way of doing business, but the old world of a year ago? Got it. got it Al right, final product and strategic question. al right final product and strategic question As we move more towards orchestration of AI across different channels being the key to success, versus simply aggregating messaging and voice volumes, how does that impact your pricing power and competitive position relative to, I don't want to say the old way of doing business, but the old world of a year ago? as we move more towards orchestration of ai across different channels being the key to success versus simply aggregating messaging and voice volumes how does that impact your pricing power and competitive position relative to i don't want to say the old way of doing business but the old world of a year ago

Speaker 2: Some of our call flows used to just be a single call between a hotel receptionist and a guest. That same call flow with AI involved really now routes what was one call to a sentiment analysis engine, to a transcription service, to a translation service potentially, as well as to potentially recording. That becomes four legs of the call and monetization of each for us, that's a much more lucrative call flow. Our pricing power is unique in our owned and operated model, but the value of these kinds of call flows to the outcomes that the enterprise customer is looking to achieve are so high that it isn't yet, and I don't anticipate it being for a long time, a price conversation at all. Some of our call flows used to just be a single call between a hotel receptionist and a guest. some of our call flows used to just be a single call between a hotel receptionist and a guest That same call flow with AI involved really now routes what was one call to a sentiment analysis engine, to a transcription service, to a translation service potentially, as well as to potentially recording. that same call flow with ai involved really now routes what was one call to a sentiment analysis engine to a transcription service to a translation service potentially as well as to potentially recording That becomes four legs of the call and monetization of each for us, that's a much more lucrative call flow. that becomes four legs of the call and monetization of each for us that's a much more lucrative call flow Our pricing power is unique in our owned and operated model, but the value of these kinds of call flows to the outcomes that the enterprise customer is looking to achieve are so high that it isn't yet, and I don't anticipate it being for a long time, a price conversation at all. our pricing power is unique in our owned and operated model but the value of these kinds of call flows to the outcomes that the enterprise customer is looking to achieve are so high that it isn't yet and i don't anticipate it being for a long time a price conversation at all That's exciting to us. There's an enormous amount of value for us to add to these new use cases. That's evident in the pricing history we've disclosed where it's favorable, and we're actually increasing price. That's exciting to us. that's exciting to us There's an enormous amount of value for us to add to these new use cases. there's an enormous amount of value for us to add to these new use cases That's evident in the pricing history we've disclosed where it's favorable, and we're actually increasing price. that's evident in the pricing history we've disclosed where it's favorable and we're actually increasing price

Speaker 3: Right, that's an important distinction, right? Because the traditional carriers, they've increased prices, but they've kind of been under price pressure themselves for a number of years. Right, that's an important distinction, right? right that's an important distinction right Because the traditional carriers, they've increased prices, but they've kind of been under price pressure themselves for a number of years. because the traditional carriers they've increased prices but they've kind of been under price pressure themselves for a number of years You know, you actually have pricing power going forward now relative to what maybe investors from the outside would maybe not understand that dynamic, right? You know, you actually have pricing power going forward now relative to what maybe investors from the outside would maybe not understand that dynamic, right? you know you actually have pricing power going forward now relative to what maybe investors from the outside would maybe not understand that dynamic right

Speaker 1: It is interesting. If what David was saying, you look back at least over the last eight years, potentially more, the company every year has, on an aggregate basis, both grown its volume and its price in a price volume analysis. I'm not addressing one of 10,000 SKUs, but on aggregate, we've always been able to do that. How have we been able to do that? One is through the attachment of higher value software services and the like, as well as growing our mix towards higher value products, in terms of pricing with Enterprise, in terms of pricing with messaging. We've been very successful with that. I Obviously you've seen that with our growing margin. It's really driven our growing gross margin as well. It is interesting. it is interesting If what David was saying, you look back at least over the last eight years, potentially more, the company every year has, on an aggregate basis, both grown its volume and its price in a price volume analysis. if what david was saying you look back at least over the last eight years potentially more the company every year has on an aggregate basis both grown its volume and its price in a price volume analysis I'm not addressing one of 10,000 SKUs, but on aggregate, we've always been able to do that. i'm not addressing one of 10,000 skus but on aggregate we've always been able to do that How have we been able to do that? how have we been able to do that One is through the attachment of higher value software services and the like, as well as growing our mix towards higher value products, in terms of pricing with Enterprise, in terms of pricing with messaging. one is through the attachment of higher value software services and the like as well as growing our mix towards higher value products in terms of pricing with enterprise in terms of pricing with messaging We've been very successful with that. we've been very successful with that I Obviously you've seen that with our growing margin. i obviously you've seen that with our growing margin It's really driven our growing gross margin as well. it's really driven our growing gross margin as well I agree with David. When you are already How we win from the incumbents is a really nice surprise to any particular customer prospect. When they realize that we are bidding as a low-cost provider against a higher cost product that they have with the incumbent, and we're providing substantially more features, you will not believe the surprise and delight on their face when that occurs. When we are already the low-cost provider providing more features, price and commoditization is not an issue. I agree with David. i agree with david When you are already How we win from the incumbents is a really nice surprise to any particular customer prospect. when you are already how we win from the incumbents is a really nice surprise to any particular customer prospect When they realize that we are bidding as a low-cost provider against a higher cost product that they have with the incumbent, and we're providing substantially more features, you will not believe the surprise and delight on their face when that occurs. when they realize that we are bidding as a low-cost provider against a higher cost product that they have with the incumbent and we're providing substantially more features you will not believe the surprise and delight on their face when that occurs When we are already the low-cost provider providing more features, price and commoditization is not an issue. when we are already the low-cost provider providing more features price and commoditization is not an issue

Speaker 3: Right. Alright. I'll just throw out there that we can leave some time for questions at the end, so if anybody wants to prepare questions in the audience, we'll leave some time at the end for that. Moving on to some financial questions, you previously gave some 3-year targets in 2023 with some ranges on revenue growth and margins. As we think about the guidance for 2026, how are you thinking about these targets now with kind of greater clarity on how the year is shaping up? Right. right Al right. al right I'll just throw out there that we can leave some time for questions at the end, so if anybody wants to prepare questions in the audience, we'll leave some time at the end for that. i'll just throw out there that we can leave some time for questions at the end so if anybody wants to prepare questions in the audience we'll leave some time at the end for that Moving on to some financial questions, you previously gave some 3-year targets in 2023 with some ranges on revenue growth and margins. moving on to some financial questions you previously gave some 3-year targets in 2023 with some ranges on revenue growth and margins As we think about the guidance for 2026, how are you thinking about these targets now with kind of greater clarity on how the year is shaping up? as we think about the guidance for 2026 how are you thinking about these targets now with kind of greater clarity on how the year is shaping up

Speaker 1: We think that we're really pleased with where we're coming out. We're guiding to revenue growth of approximately, total revenue growth of approximately 18%. Our Cloud Communications growth growing at 10%. Embedded in that growth, embedded in that guide is a 60% target gross margin, which we set out on a mission to achieve in January of 2023. Embedded in that guide is a 20% EBITDA margin, again, that we set out in early 2023 to achieve, with a 15% free cash flow margin. We're really pleased to be growing for, into those medium term targets this year with an 18% total revenue growth, 31% EBITDA growth, and a substantial growth in free cash flow. W e think that we're really pleased with where we're coming out. w e think that we're really pleased with where we're coming out We're guiding to revenue growth of approximately, total revenue growth of approximately 18%. we're guiding to revenue growth of approximately total revenue growth of approximately 18% Our Cloud Communications growth growing at 10%. our cloud communications growth growing at 10% Embedded in that growth, embedded in that guide is a 60% target gross margin, which we set out on a mission to achieve in January of 2023. embedded in that growth embedded in that guide is a 60% target gross margin which we set out on a mission to achieve in january of 2023 Embedded in that guide is a 20% EBITDA margin, again, that we set out in early 2023 to achieve, with a 15% free cash flow margin. embedded in that guide is a 20% ebitda margin again that we set out in early 2023 to achieve with a 15% free cash flow margin We're really pleased to be growing for, into those medium term targets this year with an 18% total revenue growth, 31% EBITDA growth, and a substantial growth in free cash flow. we're really pleased to be growing for into those medium term targets this year with an 18% total revenue growth 31% ebitda growth and a substantial growth in free cash flow

Speaker 3: You've impressively added some, large $1 million plus customers in the last few years. I guess a couple items. Are you winning these customers from legacy carriers? As we think about their ramp in 2026, what process are you using to include some of these, volumes and guidance? You've impressively added some, large $1 million plus customers in the last few years. you've impressively added some large $1 million plus customers in the last few years I guess a couple items. i guess a couple items Are you winning these customers from legacy carriers? are you winning these customers from legacy carriers As we think about their ramp in 2026, what process are you using to include some of these, volumes and guidance? as we think about their ramp in 2026 what process are you using to include some of these volumes and guidance

Speaker 1: All these voice wins are from legacy incumbent carriers. We had a large messaging win. It was from a CPaaS competitor, where that customer just needed more deliverability insurance and reliability. We're very successful in demonstrating our capabilities with those large voice customers, whether it's in and many of them are enterprise related. We feel like we have a really pretty good pipeline moving forward on that as well. All these voice wins are from legacy incumbent carriers. all these voice wins are from legacy incumbent carriers We had a large messaging win. we had a large messaging win It was from a CPaaS competitor, where that customer just needed more deliverability insurance and reliability. it was from a cpaas competitor where that customer just needed more deliverability insurance and reliability We're very successful in demonstrating our capabilities with those large voice customers, whether it's in and many of them are enterprise related. we're very successful in demonstrating our capabilities with those large voice customers whether it's in and many of them are enterprise related We feel like we have a really pretty good pipeline moving forward on that as well. we feel like we have a really pretty good pipeline moving forward on that as well

Speaker 3: Got it. Just for some perspective, if we look at, you added 5 or 6 million-dollar plus customers last year. How would that have compared to the kind of the three or four year period before that? Got it. got it Just for some perspective, if we look at, you added 5 or 6 million-dollar plus customers last year. just for some perspective if we look at you added 5 or 6 million-dollar plus customers last year How would that have compared to the kind of the three or four year period before that? how would that have compared to the kind of the three or four year period before that

Speaker 1: That was the six. The number was six. That was the six. that was the six The number was six. the number was six

Speaker 3: Was six. Was six. was six

Speaker 1: That was the, that's a record. That was a record for us in $1 million plus deals in terms of contract value. Before that we might've been 4. You know, in the law of low numbers, that would've been a 50% growth rate. How about that? Importantly, it's like, what are you doing with those customers and what is your time to revenue? We're real excited about the time to revenue and what we're seeing in terms of those contract values. By the time the Q1 occurred, one of the six had fully deployed, and fully deployed at 120% of our initial estimated total contract value. Very happy about that. The other ones are on track to deploy this quarter and into the third quarter. We're seeing a very nice, calling for a very nice, healthy, growth, acceleration rate in our Enterprise Voice category in the second half. That was the, that's a record. that was the that's a record That was a record for us in $1 million plus deals in terms of contract value. that was a record for us in $1 million plus deals in terms of contract value Before that we might've been 4. before that we might've been 4 You know, in the law of low numbers, that would've been a 50% growth rate. you know in the law of low numbers that would've been a 50% growth rate How about that? how about that Importantly, it's like, what are you doing with those customers and what is your time to revenue? importantly it's like what are you doing with those customers and what is your time to revenue We're real excited about the time to revenue and what we're seeing in terms of those contract values. we're real excited about the time to revenue and what we're seeing in terms of those contract values By the time the Q1 occurred, one of the six had fully deployed, and fully deployed at 120% of our initial estimated total contract value. by the time the q1 occurred one of the six had fully deployed and fully deployed at 120% of our initial estimated total contract value Very happy about that. very happy about that The other ones are on track to deploy this quarter and into the third quarter. the other ones are on track to deploy this quarter and into the third quarter We're seeing a very nice, calling for a very nice, healthy, growth, acceleration rate in our Enterprise Voice category in the second half. we're seeing a very nice calling for a very nice healthy growth acceleration rate in our enterprise voice category in the second half

Speaker 3: Awesome. You mentioned this either on the call or the call back, but you have a nice pipeline of million-dollar plus customers that you can add even this year, right? You added two so far that you publicly announced during the day. Awesome. awesome You mentioned this either on the call or the call back, but you have a nice pipeline of million-dollar plus customers that you can add even this year, right? you mentioned this either on the call or the call back but you have a nice pipeline of million-dollar plus customers that you can add even this year right You added two so far that you publicly announced during the day. you added two so far that you publicly announced during the day

Speaker 1: Two in the Q1. One substantially over $1 million. Two in the Q1. We, you know, while we don't really guide that bookings detail, that we're very much on track to achieve what we did last year, if not overachieve. Two in the Q1. two in the q1 One substantially over $1 million. one substantially over $1 million Two in the Q1. two in the q1 We, you know, while we don't really guide that bookings detail, that we're very much on track to achieve what we did last year, if not overachieve. we you know while we don't really guide that bookings detail that we're very much on track to achieve what we did last year if not overachieve

Speaker 3: Right. That would be a positive indicator for next year's revenue, right? Right. right That would be a positive indicator for next year's revenue, right? that would be a positive indicator for next year's revenue right

Speaker 1: Absolutely. Absolutely. absolutely

Speaker 3: Maybe discuss, it takes 6 to 12 months. A wide range, right? Maybe discuss, it takes 6 to 12 months. maybe discuss it takes 6 to 12 months A wide range, right? a wide range right

Speaker 1: The deployment rate for the largest enterprise, the largest banks in the world, the largest healthcare concerns, it does take, it will take a ramp of between three and nine months. The deployment rate for the largest enterprise, the largest banks in the world, the largest healthcare concerns, it does take, it will take a ramp of between three and nine months. the deployment rate for the largest enterprise the largest banks in the world the largest healthcare concerns it does take it will take a ramp of between three and nine months

Speaker 3: Right. That would be a positive indicator for next year's revenue growth as a starting point. Alright. As we think about the ramp for Agentforce in your business, you know, I know you've discussed this in some of the meetings. You're taking a pretty conservative approach to the outlook there, how do you kind of anticipate that the project will be rolled out over the next couple quarters in terms of customer usage? Right. right That would be a positive indicator for next year's revenue growth as a starting point. that would be a positive indicator for next year's revenue growth as a starting point Al right. al right As we think about the ramp for Agentforce in your business, you know, I know you've discussed this in some of the meetings. as we think about the ramp for agentforce in your business you know i know you've discussed this in some of the meetings You're taking a pretty conservative approach to the outlook there, how do you kind of anticipate that the project will be rolled out over the next couple quarters in terms of customer usage? you're taking a pretty conservative approach to the outlook there how do you kind of anticipate that the project will be rolled out over the next couple quarters in terms of customer usage

Speaker 1: The partnership is in place and our partner, Salesforce, has launched their offering. They have customer dialogues in place right now which lead to customer dialogues with us, and we feel like there's good traction and momentum growing with the just recently launched, it was in middle March timeframe. We feel pretty positive about that. Importantly, we have not played, we have not gotten ahead of our customer and tried to forecast adoption rates. We have not played a significant amount of financial benefit or favorability into the guide for this year. To the extent that customers with Salesforce are able to launch on the Agentforce platform, take advantage of the capabilities with the voice AI agents to the extent that that embeds itself into our second half financials, that's really all upside to what we're calling for the year. The partnership is in place and our partner, Salesforce, has launched their offering. the partnership is in place and our partner salesforce has launched their offering They have customer dialogues in place right now which lead to customer dialogues with us, and we feel like there's good traction and momentum growing with the just recently launched, it was in middle March timeframe. they have customer dialogues in place right now which lead to customer dialogues with us and we feel like there's good traction and momentum growing with the just recently launched it was in middle march timeframe We feel pretty positive about that. we feel pretty positive about that Importantly, we have not played, we have not gotten ahead of our customer and tried to forecast adoption rates. importantly we have not played we have not gotten ahead of our customer and tried to forecast adoption rates We have not played a significant amount of financial benefit or favorability into the guide for this year. we have not played a significant amount of financial benefit or favorability into the guide for this year To the extent that customers with Salesforce are able to launch on the Agentforce platform, take advantage of the capabilities with the voice AI agents to the extent that that embeds itself into our second half financials, that's really all upside to what we're calling for the year. to the extent that customers with salesforce are able to launch on the agentforce platform take advantage of the capabilities with the voice ai agents to the extent that that embeds itself into our second half financials that's really all upside to what we're calling for the year

Speaker 3: Got it. Could Salesforce have done what they need to do with this integration and Agentforce with a traditional carrier, or would it only have worked? That's maybe more of a your question. Got it. got it Could Salesforce have done what they need to do with this integration and Agentforce with a traditional carrier, or would it only have worked? could salesforce have done what they need to do with this integration and agentforce with a traditional carrier or would it only have worked That's maybe more of a your question. that's maybe more of a your question

Speaker 2: Yeah. No, they could not. It's that straightforward. The ambition is global. It is not just domestic, and the orchestration for call flows is essential to integrate with their tech stack and to deliver quality and reliability, so no. Yeah. yeah No, they could not. no they could not It's that straightforward. it's that straightforward The ambition is global. the ambition is global It is not just domestic, and the orchestration for call flows is essential to integrate with their tech stack and to deliver quality and reliability, so no. it is not just domestic and the orchestration for call flows is essential to integrate with their tech stack and to deliver quality and reliability so no

Speaker 3: Got it. Alright. In the last quarter, Global Voice Plans revenue growth rate accelerated. What is driving the higher growth rate with those customers? Maybe you could just explain how this, that segment differs from Enterprise Voice. Got it. got it Al right. al right In the last quarter, Global Voice Plans revenue growth rate accelerated. in the last quarter global voice plans revenue growth rate accelerated What is driving the higher growth rate with those customers? what is driving the higher growth rate with those customers Maybe you could just explain how this, that segment differs from Enterprise Voice. maybe you could just explain how this that segment differs from enterprise voice

Speaker 1: You're right. In the Q1 of 2026, our Global Voice Plans growth rate over the Q1 of 2025 tripled. The tripling occurred from really two dynamics: price and volume. If I take the latter one first, in terms of volume, we are seeing in Global Voice Plans, our largest customers, the power platforms, the hyperscalers, as well as the CCaaS and UCaaS providers, we are seeing favorable volume profiles from those large customers where we believe that volume is being driven by their own initiatives in terms of AI solutions being released. Those AI solutions embedded with Genesys and embedded with others in each of those customers will improve ultimately our volume. We believe we're seeing that. The 2nd thing is price. You're right. you're right In the Q1 of 2026, our Global Voice Plans growth rate over the Q1 of 2025 tripled. in the q1 of 2026 our global voice plans growth rate over the q1 of 2025 tripled The tripling occurred from really two dynamics: price and volume. the tripling occurred from really two dynamics price and volume If I take the latter one first, in terms of volume, we are seeing in Global Voice Plans, our largest customers, the power platforms, the hyperscalers, as well as the CCaaS and UCaaS providers, we are seeing favorable volume profiles from those large customers where we believe that volume is being driven by their own initiatives in terms of AI solutions being released. if i take the latter one first in terms of volume we are seeing in global voice plans our largest customers the power platforms the hyperscalers as well as the ccaas and ucaas providers we are seeing favorable volume profiles from those large customers where we believe that volume is being driven by their own initiatives in terms of ai solutions being released Those AI solutions embedded with Genesys and embedded with others in each of those customers will improve ultimately our volume. those ai solutions embedded with genesys and embedded with others in each of those customers will improve ultimately our volume We believe we're seeing that. we believe we're seeing that The 2nd thing is price. the 2nd thing is price In terms of price, it's not that a SKU gets improved or increased, it's that part of that software services that we spoke about with an annual recurring revenue exit rate of $25 million in the Q1 of 2026, part of that is in Enterprise Voice and part of that is embedded in our Global Voice Plans customers as they adopt Maestro, and they're using the integrations and the like for their customers as well. We're able to embed the software services both into Global Voice Plans as well as into Enterprise Voice. That's the dynamic in GVP. It did triple its growth rate. We think that those are the two principal reasons. In terms of price, it's not that a SKU gets improved or increased, it's that part of that software services that we spoke about with an annual recurring revenue exit rate of $25 million in the Q1 of 2026, part of that is in Enterprise Voice and part of that is embedded in our Global Voice Plans customers as they adopt Maestro, and they're using the integrations and the like for their customers as well. in terms of price it's not that a sku gets improved or increased it's that part of that software services that we spoke about with an annual recurring revenue exit rate of $25 million in the q1 of 2026 part of that is in enterprise voice and part of that is embedded in our global voice plans customers as they adopt maestro and they're using the integrations and the like for their customers as well We're able to embed the software services both into Global Voice Plans as well as into Enterprise Voice. we're able to embed the software services both into global voice plans as well as into enterprise voice That's the dynamic in GVP. that's the dynamic in gvp It did triple its growth rate. it did triple its growth rate We think that those are the two principal reasons. we think that those are the two principal reasons Turning to Enterprise Voice, Enterprise Voice is characterized as a market category where we sell directly to large enterprises. I encourage you to look at our investor deck and the like. We highlight many of those. We highlight many use cases that you can access to describe our product offering for those enterprise customers and who those are. That sector is characterized by 15% higher, percentage point higher gross margin than the company's aggregate growth, gross margin rate. Part of that is due to the global nature of our offering and the ability to enable AI as they're thinking about their use cases. Turning to Enterprise Voice, Enterprise Voice is characterized as a market category where we sell directly to large enterprises. turning to enterprise voice enterprise voice is characterized as a market category where we sell directly to large enterprises I encourage you to look at our investor deck and the like. i encourage you to look at our investor deck and the like We highlight many of those. we highlight many of those We highlight many use cases that you can access to describe our product offering for those enterprise customers and who those are. we highlight many use cases that you can access to describe our product offering for those enterprise customers and who those are That sector is characterized by 15% higher, percentage point higher gross margin than the company's aggregate growth, gross margin rate. that sector is characterized by 15% higher percentage point higher gross margin than the company's aggregate growth gross margin rate Part of that is due to the global nature of our offering and the ability to enable AI as they're thinking about their use cases. part of that is due to the global nature of our offering and the ability to enable ai as they're thinking about their use cases

Speaker 3: As you think about, selling the voice Or not the voice, but just the software add-on products back into the Global Voice Plan customer base, because you have had more penetration thus far with the Enterprise Voice. Maybe you could explain to investors the dynamic there of the uptake of the you know, the software add-ons into that piece and how you can expand it now more into Global Voice as well. As you think about, selling the voice Or not the voice, but just the software add-on products back into the Global Voice Plan customer base, because you have had more penetration thus far with the Enterprise Voice. as you think about selling the voice or not the voice but just the software add-on products back into the global voice plan customer base because you have had more penetration thus far with the enterprise voice Maybe you could explain to investors the dynamic there of the uptake of the you know, the software add-ons into that piece and how you can expand it now more into Global Voice as well. maybe you could explain to investors the dynamic there of the uptake of the you know the software add-ons into that piece and how you can expand it now more into global voice as well

Speaker 1: Yeah, we talked about Maestro attach rates being 100% Q4, Q1, but we have an install base of enterprise customers we've sold to prior to that, and even prior to the rollout of Maestro generally, that we need to upsell to with the use cases that are now native and are, and are more expansive in AI than they may know about or be used to. That's a deliberate motion by the sales force, and we're excited about what that represents over time. Yeah, we talked about Maestro attach rates being 100% Q4, Q1, but we have an install base of enterprise customers we've sold to prior to that, and even prior to the rollout of Maestro generally, that we need to upsell to with the use cases that are now native and are, and are more expansive in AI than they may know about or be used to. yeah we talked about maestro attach rates being 100% q4 q1 but we have an install base of enterprise customers we've sold to prior to that and even prior to the rollout of maestro generally that we need to upsell to with the use cases that are now native and are and are more expansive in ai than they may know about or be used to That's a deliberate motion by the sales force, and we're excited about what that represents over time. that's a deliberate motion by the sales force and we're excited about what that represents over time

Speaker 3: What about selling, software add-ons into the Global Voice customers? Is that an opportunity as well? What about selling, software add-ons into the Global Voice customers? what about selling software add-ons into the global voice customers Is that an opportunity as well? is that an opportunity as well

Speaker 1: Yeah, same thing. Parts of Maestro are available to the GVP customers as well, just like CRM with Salesforce contains components of orchestration. That's also something that we can upsell the GVP partners to as well. Yeah, same thing. yeah same thing Parts of Maestro are available to the GVP customers as well, just like CRM with Salesforce contains components of orchestration. parts of maestro are available to the gvp customers as well just like crm with salesforce contains components of orchestration That's also something that we can upsell the GVP partners to as well. that's also something that we can upsell the gvp partners to as well

Speaker 3: Got it. Okay, cool. Alright, as we think about capital deployment, I've pointed out to investors my expectation for a pretty healthy ramp in free cash flow in 2026 and with a nicely de-levered balance sheet. What becomes the capital allocation priorities here going forward? Got it. got it Okay, cool. okay cool Al right, as we think about capital deployment, I've pointed out to investors my expectation for a pretty healthy ramp in free cash flow in 2026 and with a nicely de-levered balance sheet. al right as we think about capital deployment i've pointed out to investors my expectation for a pretty healthy ramp in free cash flow in 2026 and with a nicely de-levered balance sheet What becomes the capital allocation priorities here going forward? what becomes the capital allocation priorities here going forward

Speaker 1: We have, we have expressed a very what we believe to be just a balanced and prudent capital allocation strategy. First and foremost, we, our mantra has always been, over these last five years, to grow profitably, and we've done that both in terms of gross margin, EBITDA margin, and now you see it in terms of free cash flow. To grow profitably, especially in the face of the growing Momentum and wave of voice AI-enabled usage patterns. We have been investing in R&D. This year we're making our largest investment in R&D as we roll out more features and capabilities, primarily in software services, again, at a very high margin and what is appearing to be a very nice attach rate. That's balanced against our primary capital strategy, objective of de-leveraging. We have, we have expressed a very what we believe to be just a balanced and prudent capital allocation strategy. we have we have expressed a very what we believe to be just a balanced and prudent capital allocation strategy First and foremost, we, our mantra has always been, over these last five years, to grow profitably, and we've done that both in terms of gross margin, EBITDA margin, and now you see it in terms of free cash flow. first and foremost we our mantra has always been over these last five years to grow profitably and we've done that both in terms of gross margin ebitda margin and now you see it in terms of free cash flow To grow profitably, especially in the face of the growing Momentum and wave of voice AI-enabled usage patterns. to grow profitably especially in the face of the growing momentum and wave of voice ai-enabled usage patterns We have been investing in R&D. we have been investing in r&d This year we're making our largest investment in R&D as we roll out more features and capabilities, primarily in software services, again, at a very high margin and what is appearing to be a very nice attach rate. this year we're making our largest investment in r&d as we roll out more features and capabilities primarily in software services again at a very high margin and what is appearing to be a very nice attach rate That's balanced against our primary capital strategy, objective of de-leveraging. that's balanced against our primary capital strategy objective of de-leveraging We have, over the last four years, reduced hundreds and hundreds of millions of dollars of long-term debt. We finished the 1st quarter at $150 million long-term debt even on convertible notes that are due April 1st, 2028. That's against our guided EBITDA midpoint for 2026 of $122 million. We've essentially hit a 1.2 times leverage ratio on long-term debt. We're pretty close to declaring victory on that particular aspect. Recently our board has announced, as a third prong, a $80 million share repurchase program for equity, which we deployed towards that aim $11 million in March, after it was announced in the 1st quarter. We're tackling all of those things. We feel real confident. You're right, Josh, our cash flow is growing quite a bit, and we're really, really pleased with that. It gives the company a great deal of flexibility. We have, over the last four years, reduced hundreds and hundreds of millions of dollars of long-term debt. we have over the last four years reduced hundreds and hundreds of millions of dollars of long-term debt We finished the 1st quarter at $150 million long-term debt even on convertible notes that are due April 1st, 2028. we finished the 1st quarter at $150 million long-term debt even on convertible notes that are due april 1st 2028 That's against our guided EBITDA midpoint for 2026 of $122 million. that's against our guided ebitda midpoint for 2026 of $122 million We've essentially hit a 1.2 times leverage ratio on long-term debt. we've essentially hit a 1.2 times leverage ratio on long-term debt We're pretty close to declaring victory on that particular aspect. we're pretty close to declaring victory on that particular aspect Recently our board has announced, as a third prong, a $80 million share repurchase program for equity, which we deployed towards that aim $11 million in March, after it was announced in the 1st quarter. recently our board has announced as a third prong a $80 million share repurchase program for equity which we deployed towards that aim $11 million in march after it was announced in the 1st quarter We're tackling all of those things. we're tackling all of those things We feel real confident. we feel real confident You're right, Josh, our cash flow is growing quite a bit, and we're really, really pleased with that. It gives the company a great deal of flexibility. you're right josh our cash flow is growing quite a bit and we're really really pleased with that. it gives the company a great deal of flexibility

Speaker 3: Yes. one of the questions I get, when I'm doing a teach-in or people who are new to the story, they ask, "As the voice and revenues grow on the network, why does that not lead to, like, higher capital expenditures at a similar pace? Why are you able to scale the growth in the network and not necessarily have a lot more CapEx?" That might be helpful for people to understand. Yes. one of the questions I get, when I'm doing a teach-in or people who are new to the story, they ask, "A s the voice and revenues grow on the network, why does that not lead to, like, higher capital expenditures at a similar pace? yes one of the questions i get when i'm doing a teach-in or people who are new to the story they ask "a s the voice and revenues grow on the network why does that not lead to like higher capital expenditures at a similar pace Why are you able to scale the growth in the network and not necessarily have a lot more CapEx?" That might be helpful for people to understand. why are you able to scale the growth in the network and not necessarily have a lot more capex?" that might be helpful for people to understand

Speaker 1: In terms, it is worth, you know, having a bit of perspective. It, we have all, last five years essentially, we have maintained around a 3%-4% of revenue, CapEx rate, which means for folks listening, around $15 million-$20 million a year in terms of CapEx. Our CapEx is actually a fairly light model. This last year in 2025, we did announce in 2024 towards the end, and in 2025 we invested in about $10 million-$12 million more CapEx for network expansion, primarily, some geographic expansion in Asia, as well as United States network efficiencies and optimization. That put us in a really good place for the next few years in terms of what we think we're looking at. In terms, it is worth, you know, having a bit of perspective. in terms it is worth you know having a bit of perspective It, we have all, last five years essentially, we have maintained around a 3%-4% of revenue, CapEx rate, which means for folks listening, around $15 million-$20 million a year in terms of CapEx. it we have all last five years essentially we have maintained around a 3%-4% of revenue capex rate which means for folks listening around $15 million-$20 million a year in terms of capex Our CapEx is actually a fairly light model. our capex is actually a fairly light model This last year in 2025, we did announce in 2024 towards the end, and in 2025 we invested in about $10 million-$12 million more CapEx for network expansion, primarily, some geographic expansion in Asia, as well as United States network efficiencies and optimization. this last year in 2025 we did announce in 2024 towards the end and in 2025 we invested in about $10 million-$12 million more capex for network expansion primarily some geographic expansion in asia as well as united states network efficiencies and optimization That put us in a really good place for the next few years in terms of what we think we're looking at. that put us in a really good place for the next few years in terms of what we think we're looking at It's important to know that even when we invest $10 million or $12 million, we're not investing $100 million. We're investing $10 million to $12 million on, you know, free cash flow of something that looks like $100 million. It's not really of any substantial hardship to the company to ensure that our network stays bleeding edge. It's important to know that even when we invest $10 million or $12 million, we're not investing $100 million. it's important to know that even when we invest $10 million or $12 million we're not investing $100 million We're investing $10 million to $12 million on, you know, free cash flow of something that looks like $100 million. we're investing $10 million to $12 million on you know free cash flow of something that looks like $100 million It's not really of any substantial hardship to the company to ensure that our network stays bleeding edge. it's not really of any substantial hardship to the company to ensure that our network stays bleeding edge

Speaker 3: Right. Exactly. Alright, any questions from the audience? Right. right Exactly. exactly Al right, any questions from the audience? al right any questions from the audience Going once. Going once. going once Going twice. Alright. With that, we are up on time here. I wanna thank the Bandwidth team. Going twice. going twice Al right. al right With that, we are up on time here. with that we are up on time here I wanna thank the Bandwidth team. i wanna thank the bandwidth team

Speaker 1: Joshua, thank you. Joshua, thank you. joshua thank you

Speaker 3: Thank you, sir. Thank you, sir. thank you sir